Document:

Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

 

This SUBSCRIPTION
AGREEMENT (this “Agreement”) is dated as of January 29, 2018 by and among Innovate Biopharmaceuticals,
Inc., a Delaware corporation (the “Company”), and each purchaser listed on Annex A hereto
(each, including its successors and permitted assigns, a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS

 

A.           The
Company and each Purchaser party hereto are executing and delivering this Agreement in reliance upon the exemption from securities
registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”)
and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States Securities
and Exchange Commission (the “Commission”) under the Securities Act.

 

B.           Each
Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated
in this Agreement, (i) that aggregate number of shares of the Company’s common stock, par value $0.001 per share (the “Common
Stock” or the “Shares”), and (ii) a warrant, substantially in the form attached hereto
as Exhibit G, to purchase an aggregate number of Shares (the “Warrants”) of the Company equal
to the product obtained by multiplying (x) 20% by (y) the number of Shares purchased for cash by such Purchaser, rounded down to
the nearest whole share (excluding all Shares issued in respect of the conversion of Convertible Notes and any Shares issued or
issuable pursuant to any Warrant), and with a per share exercise price equal to 125% of the Purchase Price, determined as set forth
in Section 2.1(a) below (which aggregate amount of Shares and Warrants for all Purchasers shall collectively be referred
to herein as the “Securities”).

 

C.           Certain
of the Purchasers listed on Annex A-1 are holders of convertible debt instruments (the “Convertible Notes”)
issued by the Company (each such holder, a “Converting Holder” and collectively, the “Converting
Holders”) and have agreed to convert their indebtedness into Securities subject to the conversion terms therein and
otherwise in accordance with the terms and conditions of this Agreement.

 

NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser hereby agree as follows:

 

Article 1

 

Definitions

 

1.1           Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this Section 1.1:

 

“Actual
Cash Subscription Amount” with respect to a Purchaser (other than a Converting Holder) shall mean the amount set
forth opposite such Purchaser’s name under the column “Actual Cash Subscription Amount” on Annex A.

 

“Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls,
is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 144. With
respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment
manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

 

    	 	 	 

     

    

 

“Business
Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction
of business.

 

“Closing”
means the closing of sale by the Company of Shares to such Purchasers pursuant to this Agreement on the Closing Date as provided
in Section 2.1(a) hereof.

 

“Closing
Date” means January 29, 2018 or such earlier or later date as the parties hereto shall mutually agree.

 

“Common
Stock” has the meaning set forth in the Recitals.

 

“Company
Counsel” means Wilson Sonsini Goodrich & Rosati, P.C.

 

“Company
Deliverables” has the meaning set forth in Section 2.2(a).

 

“Company’s
Knowledge” means with respect to any statement made to the knowledge of the Company, that the statement is based
upon the actual knowledge of Christopher Prior and Steve Laumas or any of the foregoing individuals would reasonably be expected
to know such fact in the ordinary course of the performance of such individual’s employment capacity.

 

“Compliance
Certificate” has the meaning set forth in Section 2.2(a)(vii).

 

“Disclosure
Schedules” has the meaning set forth in Section 3.1.

 

“Disqualification
Event” has the meaning set forth in Section 3.1(j).

 

“Encumbrance”
means any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, claim, infringement, interference, option,
right of first refusal, preemptive right, community property interest or restriction of any nature (including any restriction on
the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any
income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer
of any other attribute of ownership of any asset).

 

“Escrow
Account” means the escrow account established by the Company with Delaware Trust Company, Delaware Trust Company
serving as escrow agent, which escrow (as more particularly described in Section 2.2(c) hereof) shall be conducted pursuant to
the terms of an escrow agreement entered into by the Company, the escrow agent and the Placement Agents.

 

“GAAP”
means U.S. generally accepted accounting principles, as applied by the Company.

 

“Governmental
Authority” means any court or tribunal, governmental, quasi-governmental or regulatory body, administrative agency
or bureau, commission or authority or other body exercising similar powers or authority.

 

    	 	 	 

     

    

 

“Governmental
Body” means any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction
of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental body of
any nature (including any governmental division, department, agency, commission, instrumentality, official, ministry, fund, foundation,
center, organization, unit, body or entity and any court or other tribunal, and for the avoidance of doubt, any Tax authority);
or (d) self-regulatory organization (including NASDAQ and the Financial Industry Regulatory Authority).

 

“Legal
Proceeding” means any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation commenced, brought, conducted or
heard by or before, or otherwise involving, any court or other Governmental Body or any arbitrator or arbitration panel.

 

“Legal
Requirement” means any federal, state, foreign, material local or municipal or other law, statute, constitution,
principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted,
promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body.

 

“Material
Adverse Effect” means any effect that, considered together with all other effects that have occurred prior to the
date of determination of the occurrence of the Material Adverse Effect, is or would reasonably be expected to be materially adverse
to, or has or would reasonably be expected to have or result in a material adverse effect on: (a) the business, condition (financial
or otherwise), capitalization, assets, operations or financial performance of the Company and its Subsidiaries taken as a whole;
or (b) the ability of the Company to consummate the Merger or any transactions contemplated by this Agreement or the Merger Agreement
or to perform any of its covenants or obligations under this Agreement or the Merger Agreement in all material respects; provided,
however, that effects from the following shall not be deemed to constitute (nor shall effects from any of the following
be taken into account in determining whether there has occurred) a Material Adverse Effect: (i) any rejection by a Governmental
Body of a registration or filing by the Company relating to the IP Rights; (ii) any change in the cash position of the Company
which results from operations in the ordinary course of business; (iii) conditions generally affecting the industries in which
the Company and its Subsidiaries participate or the United States or global economy or capital markets as a whole, to the extent
that such conditions do not have a disproportionate impact on the Company and its Subsidiaries taken as a whole; (iv) any failure
by the Company or any of its Subsidiaries to meet internal projections or forecasts on or after the date of this Agreement (it
being understood, however, that any effect causing or contributing to any such failure to meet projections or forecasts may constitute
a Material Adverse Effect and may be taken into account in determining whether a Material Adverse Effect has occurred); (v) the
execution, delivery, announcement or performance of the obligations under this Agreement or the Merger Agreement or the announcement,
pendency or anticipated consummation of the Merger or the consummation of the transactions contemplated by this Agreement; (vi)
any natural disaster or any acts of terrorism, sabotage, military action or war or any escalation or worsening thereof; or (vii)
any changes (after the date of this Agreement) in GAAP or applicable Legal Requirements.

 

“Merger”
means the transaction whereby a wholly owned subsidiary (“Merger Sub”) of Monster Digital, Inc., a Delaware
corporation (“Monster”), will merge with and into the Company, with the Company surviving the merger
as a wholly owned subsidiary of Monster, and pursuant to which all of the outstanding shares of the Company’s capital stock
will be exchanged for shares of the common stock, $0.001 par value per share, of Monster (“Monster Common Stock”)
in accordance with the terms and conditions set forth in the Agreement and Plan of Merger and Reorganization by and among the Company,
Monster, and Merger Sub dated as of July 3, 2017, as amended (the “Merger Agreement”).

 

“Minimum
Offering Amount” means an amount equal to at least $17,000,000 minus an amount equal to the Company’s unrestricted
cash as of the Closing Date.

 

    	 	 	 

     

    

 

“Person”
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, Governmental Authority or any other form of entity not specifically
listed herein.

 

“Purchase
Price” means $0.9609 per share of Common Stock.

 

“Purchaser
Deliverables” has the meaning set forth in Section 2.2(b).

 

“Required
Approvals” has the meaning set forth in Section 3.1(c).

 

“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Secretary’s
Certificate” has the meaning set forth in Section 2.2(a)(vi).

 

“Stock
Certificates” has the meaning set forth in Section 2.2(a)(i).

 

“Tax”
means any federal, state, local, foreign or other tax, including any income tax, franchise tax, capital gains tax, gross receipts
tax, value-added tax, surtax, estimated tax, unemployment tax, national health insurance tax, excise tax, ad valorem tax, transfer
tax, stamp tax, sales tax, use tax, property tax, business tax, withholding tax, payroll tax, customs duty, alternative or add-on
minimum or other tax of any kind whatsoever, and including any fine, penalty, addition to tax or interest, whether disputed or
not.

 

“Transaction
Documents” means this Agreement, the Investor Questionnaire attached as Exhibit A-1 hereto, the Stock
Certificate Questionnaire attached as Exhibit A-2 hereto, the Placement Agent Questionnaire attached as Exhibit B
hereto, the Secretary’s Certificate and the Compliance Certificate.

 

“Transfer
Agent” means the transfer agent for the Company, any successor transfer agent for the Company, or the Company, if
the Company functions as its transfer agent.

 

Article 2

 

Purchase
and Sale

 

2.1           Closing.

 

(a)          Cash
Purchasers. Subject to the terms and conditions set forth in this Agreement, at the Closing, the Company shall issue and sell
to each Purchaser (other than the Converting Holders) listed on Annex A hereto, as it may be amended, and each Purchaser
listed on Annex A hereto, as it may be amended, shall, severally and not jointly, purchase from the Company, such number
of Shares equal to the quotient resulting from dividing (i) the Actual Cash Subscription Amount for such Purchaser, as indicated
opposite such Purchaser’s name on Annex A hereto, by (ii) the Purchase Price, which Share amount shall be rounded
down to the nearest whole share.

 

    	 	 	 

     

    

 

(b)          Converting
Noteholders. Subject to the terms and conditions set forth in this Agreement, at the Closing the Company shall issue and sell
to each Purchaser that constitutes a Converting Holder listed on Annex A-1 hereto, and each such Converting Holder
listed on Annex A-1 hereto, shall, severally and not jointly, acquire from the Company, by converting such Convertible
Note(s) held by such Converting Holder, such number of Shares as indicated opposite such Converting Holder’s name on Annex A
hereto (the “Note Conversion”). At the Closing, the Company shall issue to each Purchaser a Warrant,
substantially in the form attached hereto as Exhibit G, to purchase an aggregate number of Shares equal to the product obtained
by multiplying (x) 20% by (y) the number of Shares purchased for cash by such Purchaser (excluding all Shares issued in respect
of the conversion of Convertible Notes and any Shares issued or issuable pursuant to any Warrant), with a per share exercise price
equal to 125% of the Purchase Price, rounded down to the nearest whole share.

 

(c)          Closing
Time and Place. The Closing of the purchase and sale of the Shares and Warrants shall take place at the offices of Company
Counsel, 12235 El Camino Real, San Diego, California 92130, on the Closing Date or at such other locations or remotely by facsimile
transmission or other electronic means as the parties may mutually agree.

 

2.2           Closing
Deliveries.

 

(a)          On
or prior to each Closing, the Company shall issue, deliver or cause to be delivered to each Purchaser (other than the Converting
Holders with respect to Section 2.2(a)(ii) – (iv)) the following (the “Company Deliverables”):

 

(i)          book
entry evidence of the Shares or a copy of the stock certificates, free and clear of all restrictive and other legends except as
provided in Section 4.1(b) hereof, evidencing the Shares subscribed for by the Purchasers hereunder to be registered
in the names provided by the Purchasers as set forth on the Stock Certificate Questionnaire attached as Exhibit A-2
hereto (the “Stock Certificates”), with the original Stock Certificates, if the Shares will be represented
by stock certificates instead of book entry evidence, to be delivered to the addresses provided by the Purchasers on such Stock
Certificate Questionnaires within five Business Days following the Closing. Upon closing of the Merger, the Shares purchased pursuant
to this Agreement will be treated as Innovate Common Stock (as defined in the Merger Agreement), which will be converted into Monster
Common Stock in accordance with the terms of the Merger Agreement;

 

(ii)         this
Agreement duly executed by the Company;

 

(iii)        a
Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 20% of the number
of Shares purchased for cash by such Purchaser, pursuant to this Agreement (excluding all Shares issued in respect of the conversion
of Convertible Notes and any Shares issued or issuable pursuant to any Warrant), such Warrant having a per share exercise price
equal to $1.2011 per Share, subject to adjustment therein (such Warrant may be delivered within three Trading Days of the applicable
Closing Date). The Warrants issued pursuant to this Agreement will constitute Innovate Warrants (as defined in the Merger Agreement),
and will be converted into warrants to purchase Monster Common Stock in accordance with the terms of the Merger Agreement;

 

(iv)        90–day
Lock-Up Agreements executed by each of the officers and directors of the Company;

 

(v)         the
Declaration of Registration Rights Agreement substantially in the form attached hereto as Exhibit E duly executed by the
Company;

 

(vi)        a
certificate of the Company’s Secretary (the “Secretary’s Certificate”), dated as of the Closing
Date, (A) certifying the resolutions adopted by the Company’s Board of Directors or a duly authorized committee thereof
approving the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Shares, (B) certifying
the current versions of the Company’s certificate of incorporation and bylaws (as the same may have been amended between
the date hereof and the Closing Date) and (C) certifying as to the signatures and authority of persons signing the Transaction
Documents and related documents on behalf of the Company, in the form attached hereto as Exhibit C;

 

    	 	 	 

     

    

 

(vii)       a
certificate (the “Compliance Certificate”), dated as of the Closing Date and signed by an authorized
officer of the Company, certifying to the fulfillment of the conditions specified in Sections 5.1(a) and 5.1(b)
in the form attached hereto as Exhibit D; and

 

(viii)      a
certificate evidencing the good standing of the Company issued by the Secretary of State of the State of Delaware, as of a date
within five days of the Closing Date.

 

(b)          On
or prior to the applicable Closing, each Purchaser (other than Converting Holders) shall deliver or cause to be delivered to the
Company (the “Purchaser Deliverables”), a fully completed and duly executed Investor Questionnaire and
Stock Certificate Questionnaire in the forms attached hereto as Exhibits A-1 and A-2, respectively.

 

(c)          At
least 2 days before each Closing Date, each Purchaser (other than Converting Holders) shall deliver its Actual Cash Subscription
Amount in United States dollars and in immediately available funds by wire transfer to the following Escrow Account:

 

PNC Bank

300 Delaware Avenue

Wilmington, DE 19899

ABA #: 031100089

Account Number: 5605012373

Account Name: Delaware
Trust Company

FFC: Innovate Biopharmaceuticals,
Inc. Acct #: 79-3232

(MUST INCLUDE SUBSCRIBER’S
NAME)

 

provided
that if the Closing or Merger is not consummated by 5:00 p.m., New York City time, on the Outside Date, as defined
in the Merger Agreement, upon request by a Purchaser (other than Converting Holders), the Company shall, within three (3) Business
days thereof, return, or cause to be returned, the Actual Cash Subscription Amount (in United States dollars and in immediately
available funds by wire transfer) paid by such Purchaser to an account specified by such Purchaser.

 

(d)          On
or prior to the Closing, each Placement Agent shall deliver or cause to be delivered to the Company, a fully completed and duly
executed Placement Agent Questionnaire in the form attached hereto as Exhibit B.

 

2.3           Note
Conversion. Notwithstanding any provision in the Convertible Notes, each Converting Holder listed on Annex A-1 hereby
acknowledges and agrees that: (a) the Convertible Notes are hereby automatically exchanged for the number of shares of Common Stock
listed opposite such Converting Holder’s name on the Schedule of Purchasers; (b) all rights, title and interest arising under
each such Convertible Note held by such Converting Holder is hereby canceled, released, extinguished and of no further force and
effect; (c) upon the Closing, the Company will be forever released from any and all of its obligations and liabilities under the
Convertible Notes and such Convertible Notes shall be extinguished and cancelled; (d) no fractional Shares shall be issued upon
conversion of the Convertible Notes and the right to receive cash in lieu of any fractional Share shall be waived; and (e) each
Converting Holder hereby waives in connection with such conversion any notices required by the terms of such Convertible Notes.
For the avoidance of doubt, each Converting Holder hereby acknowledges that no Warrants will be issued to Converting Holder for
Shares issued in respect of the conversion of the Convertible Notes.

 

    	 	 	 

     

    

 

Article 3

 

Representations
and Warranties

 

3.1           Representations
and Warranties of the Company. The Company represents and warrants to each of the Purchasers as follows, except as set forth
in the disclosure schedules delivered by the Company to the Purchasers at the applicable Closing (the “Disclosure Schedules”)
(it being understood that the representations and warranties in this Article 3 are qualified by: (x) any exceptions
and disclosures set forth in the section or subsection of the Disclosure Schedules corresponding to the particular section or subsection
in this Article 3 in which such representation and warranty appears; (y) any exceptions or disclosures explicitly cross-referenced
in such section or subsection of the Disclosure Schedules by reference to another section or subsection of the Disclosure Schedules;
and (z) any exceptions or disclosures set forth in any other section or subsection of the Disclosure Schedules to the extent it
is reasonably apparent from the wording of such exception or disclosure that such exception or disclosure qualifies such representation
and warranty). The inclusion of any information in the Disclosure Schedules shall not be deemed to be an admission or acknowledgement,
in and of itself, that such information is required by the terms hereof to be disclosed, is material, has resulted in or would
result in a Material Adverse Effect, or is outside the ordinary course of business.

 

(a)          Authorization;
Enforcement; Validity. The Company has the requisite corporate power to enter into and to consummate the transactions contemplated
by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of each of the Transaction Documents to which it is a party by the Company and the consummation by it
of the transactions contemplated hereby and thereby (including, but not limited to, the sale and delivery of the Shares) have been,
or will be prior to the Closing, duly authorized by all necessary corporate action on the part of the Company, and no further corporate
action is required by the Company, its Board of Directors or its stockholders in connection therewith other than in connection
with the Required Approvals. Each of the Transaction Documents to which it is a party has been (or upon delivery will have been)
duly executed by the Company and is, or when delivered in accordance with the terms hereof, will, constitute the legal, valid and
binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting
generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application or insofar
as indemnification and contribution provisions may be limited by applicable Legal Requirements. There are no shareholder agreements,
voting agreements, or other similar arrangements with respect to the Company’s capital stock to which the Company is a party.

 

(b)          No
Conflicts. The Company is not in violation or default of any term of its charter documents, each as amended, or of any provision
of any mortgage, indenture, contract, lease, agreement, instrument or contract to which it is party or by which it is bound or
of any judgment, decree, order or writ, other than any such violation that would not have a Material Adverse Effect. The execution,
delivery, and performance of and compliance with the Transaction Documents and the issuance and sale of the Shares and Warrants
pursuant to this Agreement will not, with or without the passage of time or giving of notice, result in any such violation, or
be in conflict with or constitute a material default under any such term or provision, or result in the creation of any Encumbrance
upon any of the properties or assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any
permit, license, authorization or approval applicable to the Company, its business or operations or any of its assets or properties.

 

    	 	 	 

     

    

 

(c)          Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any Governmental Authority or other Person in connection with the execution, delivery
and performance by the Company of the Transaction Documents (including the issuance of the Shares and Warrants), other than (i)
filings required by applicable state securities laws, (ii) the filing of a Notice of Sale of Shares on Form D with the Commission
under Regulation D and (iii) those that have been made or obtained prior to the date of this Agreement (collectively, the
“Required Approvals”).

 

(d)          Issuance
of the Shares and Warrants. The Shares and Warrants have been duly authorized and, when issued and paid for in accordance with
the terms of the Transaction Documents, will be duly and validly issued, fully paid and nonassessable and free and clear of all
Encumbrances imposed or permitted by the Company, other than restrictions on transfer provided for in the Transaction Documents
or imposed by applicable securities laws, and shall not be subject to preemptive or similar rights. Assuming the accuracy of the
representations and warranties of the Purchasers in this Agreement, the Shares and Warrants will be issued in compliance with all
applicable federal and state securities laws. The Company has reserved from its duly authorized capital stock the maximum
number of shares of Common Stock issuable pursuant to this Agreement and the Warrants.

 

(e)          Additional
Representations and Warranties. The Company’s representations and warranties set forth in the Merger Agreement in Section 2.1
(Due Organization; Organizational Documents), 2.4 (Capitalization), 2.5 (Financial Statements), Section 2.6 (Absence of Changes),
Section 2.7 (Title to Assets), Section 2.8 (Real Property; Leaseholds), 2.9 (Intellectual Property), Section 2.10
(Material Contracts), Section 2.11 (Undisclosed Liabilities), Section 2.12 (Compliance; Permits; Restrictions), Section 2.13
(Tax Matters), Section 2.14 (Employee and Labor Matters; Benefit Plans), Section 2.15 (Insurance), Section 2.16
(Legal Proceedings; Orders) and Section 2.18 (No Financial Advisor) are hereby incorporated by reference and are qualified
by the disclosures in the Innovate Disclosure Schedules (as defined in the Merger Agreement), provided that for purposes of this
Agreement any representation as to the making available or delivery of documents to Monster shall mean the making available or
delivery of documents to each Purchaser and all such representations and warranties are made as of the date of this Agreement (and
not as of the date of the Merger Agreement) except for those representations and warranties that speak as of a different specified
date (which representations and warranties shall be made as of such different specified date).

 

(f)          Certain
Fees. Other than GP Nurmenkari Inc., and H.C. Wainwright & Co., LLC (each a “Placement Agent”
and together the “Placement Agents”) in each of their capacities as placement agent, no Person will have,
as a result of the Company’s issuance of the Shares and Warrants pursuant to the terms of this Agreement, any valid right,
interest or claim against or upon the Company or a Purchaser for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of the Company. The Company shall indemnify, pay, and hold each Purchaser
harmless against, any liability, loss or expense (including, without limitation, attorneys’ fees and out-of-pocket expenses)
arising in connection with any such right, interest or claim.

 

    	 	 	 

     

    

 

(g)          Private
Placement. Assuming the accuracy of the representations and warranties of Purchasers contained in Section 3.2 hereof,
the accuracy of the information disclosed by each Purchaser in the Investor Questionnaires delivered pursuant to Section 2.2(b)
and Section 5.2(d) and the accuracy of the information disclosed by Placement Agents in the Placement Agent Questionnaire
delivered pursuant to Section 2.2(d) and Section 5.2(h), the offer, sale and issuance of the Shares and
Warrants will be exempt from the registration requirements of the Securities Act, and will have been registered or qualified (or
are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable
state securities laws. Neither the Company nor any agent on its behalf has solicited or will solicit any offers to sell or has
offered to sell or will offer to sell all or any part of the Shares or Warrants to any person or persons so as to bring the sale
of such Shares and Warrants by the Company within the registration provisions of the Securities Act or any state securities laws.
Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2 (without giving
effect to any materiality qualifiers therein), neither the Company nor any Person acting on its behalf has, directly or indirectly,
at any time within the past six months, made any offers or sales of any Company security or solicited any offers to buy any security
under circumstances that would eliminate the availability of the exemption from registration under Regulation D in connection
with the offer and sale by the Company of the Shares and Warrants as contemplated hereby.

 

(h)          Investment
Company. The Company is not required to be registered as, and is not an Affiliate of, and immediately following the Closing
and the Merger will not be required to register as, an “investment company” within the meaning of the Investment Company
Act of 1940, as amended.

 

(i)          Foreign
Corrupt Practices. Neither the Company, nor to the Company’s Knowledge, any agent or other person acting on behalf of
the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials
or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation
of law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

(j)          No
Disqualification Events. The Company has exercised reasonable care, in accordance with Commission rules and guidance, to determine
whether any Covered Person (as defined below) is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i)
through (viii) under the Securities Act (“Disqualification Events”). To the Company’s Knowledge,
no Covered Person is subject to a Disqualification Event, except for a Disqualification Event covered by Rule 506(d)(2) or
(d)(3) under the Securities Act. The Company has complied, to the extent applicable, with any disclosure obligations under Rule 506(e)
under the Securities Act. “Covered Persons” are those persons specified in Rule 506(d)(1) under
the Securities Act, including the Company; any predecessor or Affiliate of the Company; any director, executive officer, other
officer participating in the offering, general partner or managing member of the Company; any beneficial owner of 20% or more of
the Company’s outstanding voting equity securities, calculated on the basis of voting power; any promoter (as defined in
Rule 405 under the Securities Act) connected with the Company in any capacity at the time of the sale of the Shares; and any
person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the
sale of the Shares (a “Solicitor”), any general partner or managing member of any Solicitor, and any
director, executive officer or other officer participating in the offering of any Solicitor or general partner or managing member
of any Solicitor.

 

(k)          Merger
Agreement. Except for that certain Amendment to Agreement and Plan of Merger and Reorganization, dated January 3, 2018, by
and among the Company, Monster, and Merger Sub, the Merger Agreement has not been amended or modified. The Merger Agreement is
in full force and effect and represents a valid, binding and enforceable obligation of the Company and, to the Company’s
Knowledge, of each party thereto, subject to the qualification that such enforceability may be limited by bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting rights of creditors.

 

    	 	 	 

     

    

 

(l)          Shell
Company Status. Monster is not an issuer identified in Rule 144(i)(1) or of the Securities Act or a shell company as defined
in Rule 12b-2 of the Exchange Act (as defined in the Merger Agreement).

 

(m)          FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under
the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is
manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company, Monster or any of their subsidiaries
(each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged,
labeled, tested, distributed, sold and/or marketed by the Company or Monster, as applicable, in compliance with all applicable
requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance,
licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing,
quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance could not have
a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge, threatened, action (including any lawsuit,
arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company, Monster
or any of their Subsidiaries, and none of the Company, Monster or any of their subsidiaries has received any notice, warning letter
or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration,
or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling
and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or
withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii)
imposes a clinical hold on any clinical investigation by the Company, Monster or any of their subsidiaries, (iv) enjoins production
at any facility of the Company, Monster or any of their subsidiaries, (v) enters or proposes to enter into a consent decree of
permanent injunction with the Company, Monster or any of their subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company, Monster or any of their subsidiaries, and which, either individually or in the aggregate,
could have a Material Adverse Effect. The properties, business and operations of the Company, and Monster have been and are being
conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA.  Neither the
Company nor Monster has been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States
of any product proposed to be developed, produced or marketed by the Company or Monster nor has the FDA expressed any concern as
to approving or clearing for marketing any product being developed or proposed to be developed by the Company or Monster.

 

(n)          Form
S-3 Eligibility. Following the Merger, Monster will be eligible to register the resale of the Securities for resale by the
Purchasers on Form S-3 promulgated under the Securities Act.

 

3.2           Representations
and Warranties of the Purchasers. Each Purchaser hereby represents and warrants severally and not jointly to the Company as
follows:

 

(a)          Requisite
Power and Authority. Such Purchaser has all necessary power and authority to execute and deliver the Transaction Documents
to which such Purchaser is a party and to carry out their provisions. All action on such Purchaser’s part required for the
lawful execution and delivery of the Transaction Documents to which such Purchaser is a party has been taken. Upon their execution
and delivery, the Transaction Documents will be valid and binding obligations of such Purchaser, enforceable against such Purchaser
in accordance with their respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors’ rights, (b) as limited by general principles of
equity that restrict the availability of equitable remedies, and (c) to the extent that the enforceability of the indemnification
provisions may be limited by applicable Legal Requirements.

 

    	 	 	 

     

    

 

(b)          Investment
Representations. Such Purchaser understands that the Securities have not been registered under the Securities Act. Such Purchaser
also understands that the Securities are being offered and sold pursuant to an exemption from registration contained in the Securities
Act based in part upon such Purchaser’s representations contained in the Agreement and in such Purchaser’s Investor
Questionnaire. Such Purchaser hereby represents and warrants as follows:

 

(i)          Purchaser
Bears Economic Risk. Such Purchaser has substantial experience in evaluating and investing in private placement transactions
of securities in companies similar to the Company so that such Purchaser is capable of evaluating the merits and risks of
such Purchaser’s investment in the Company and has the capacity to protect such Purchaser’s own interests. Such Purchaser
must bear the economic risk of this investment indefinitely unless the Shares and the shares underlying the Warrants (the “Warrant
Shares”) are registered pursuant to the Securities Act, or an exemption from registration is available. Such Purchaser
also understands that there is no assurance that any exemption from registration under the Securities Act will be available and
that, even if available, such exemption may not allow such Purchaser to transfer all or any portion of the Shares, Warrants or
Warrant Shares under the circumstances, in the amounts or at the times such Purchaser might propose.

 

(ii)         Acquisition
for Own Account. Such Purchaser is acquiring the Shares and Warrants for Purchaser’s own account for investment only,
and not with a view towards their distribution.

 

(iii)        Purchaser
Can Protect Its Interest. Such Purchaser represents that by reason of such Purchaser’s, or of such Purchaser’s
management’s, business or financial experience, such Purchaser has the capacity to protect such Purchaser’s own interests
in connection with the transactions contemplated in the Transaction Documents. Further, such Purchaser is aware of no publication
of any advertisement in connection with the transactions contemplated in the Agreement.

 

(iv)        Accredited
Investor. Such Purchaser represents that such Purchaser is an accredited investor within the meaning of Regulation D under
the Securities Act.

 

(v)         Company
Information. Such Purchaser has received and read the applicable financial statements of the Company and has had an opportunity
to discuss the Company’s business, management and financial affairs with directors, officers and management of the Company
and has had the opportunity to review the Company’s operations and facilities. Such Purchaser has also had the opportunity
to ask questions of and receive answers from, the Company and its management regarding the terms and conditions of this investment.

 

(vi)        Rule 144.
Such Purchaser acknowledges and agrees that the Shares, Warrants and Warrant Shares are “restricted securities”
as defined in Rule 144 promulgated under the Securities Act as in effect from time to time and must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption from such registration is available. Such Purchaser has
been advised or is aware of the provisions of Rule 144, which permits limited resale of shares purchased in a private placement
subject to the satisfaction of certain conditions, including, among other things: the availability of certain current public information
about the Company, the resale occurring following the required holding period under Rule 144 and the number of shares being
sold during any three-month period not exceeding specified limitations.

 

    	 	 	 

     

    

 

(vii)       “Bad
Actor” Matters. Such Purchaser hereby represents that no Disqualification Events are applicable to such Purchaser or
any of such Purchaser’s Rule 506(d) Related Parties (as defined below), except, if applicable, for a Disqualification
Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable. Such Purchaser hereby agrees that such Purchaser shall
notify the Company promptly in writing in the event a Disqualification Event becomes applicable to such Purchaser or any of such
Purchaser’s Rule 506(d) Related Parties, except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii)
or (iii) or (d)(3) is applicable. For purposes of this Section 3.2(b), “Rule 506(d) Related Party”
shall mean a Person that is a beneficial owner of Purchaser’s securities for purposes of Rule 506(d) of the Securities
Act.

 

(viii)      Residence.
If such Purchaser is an individual, then such Purchaser resides in the state or province identified in the address of such
Purchaser set forth on Annex A; if such Purchaser is a partnership, corporation, limited liability company or other
entity, then the office or offices of such Purchaser in which such Purchaser’s investment decision was made is located at
the address or addresses of such Purchaser set forth on Annex A.

 

(ix)         Foreign
Investors. If such Purchaser is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue
Code of 1986, as amended, or if such Purchaser is a U.S. subsidiary or Affiliate of a foreign parent company, “Foreign
Purchaser”), such Purchaser hereby represents that such Purchaser has satisfied itself as to the full observance
of the laws of such Purchaser’s jurisdiction in connection with any invitation to subscribe for the Shares or any use of
this Agreement, including (i) the legal requirements within such Purchaser’s jurisdiction for the purchase of the Shares
and Warrants, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any government or other consents that may
need to be obtained, and (iv) the Tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or
transfer of the Shares, Warrants and Warrant Shares. Each Foreign Purchaser further represents that either (x) such Purchaser does
not now, nor will such Purchaser after any Closing, hold 10% or greater, directly or indirectly, of the voting interest in the
Company or (y) if such Purchaser does or will, such Foreign Purchaser shall notify the Company and shall provide such information
as the Company may request to comply with state, federal, or local regulations. The Company’s offer and sale and such Foreign
Purchaser’s subscription and payment for and continued beneficial ownership of the Shares, Warrants and Warrant Shares will
not violate any applicable securities or other laws of such Foreign Purchaser’s jurisdiction.

 

(c)          Brokers
and Finders. No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest
or claim against or upon the Company or any Purchaser for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of such Purchaser.

 

(d)          Independent
Investment Decision. Such Purchaser has independently evaluated the merits of such Purchaser’s decision to purchase Shares
and Warrants pursuant to the Transaction Documents, and such Purchaser confirms that such Purchaser has not relied on the advice
of any other Purchaser’s business and/or legal counsel in making such decision. Such Purchaser understands that nothing in
this Agreement or any other materials presented by or on behalf of the Company to such Purchaser in connection with the purchase
of the Shares and Warrants constitutes legal, tax or investment advice. Such Purchaser has consulted such legal, tax and investment
advisors as such Purchaser, in such Purchaser’s sole discretion, has deemed necessary or appropriate in connection with such
Purchaser’s purchase of the Shares and Warrants. Neither such inquiries nor any other investigation conducted by or on behalf
of such Purchaser or such Purchaser’s 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 (as qualified by the Disclosure Schedules).

 

    	 	 	 

     

    

 

(e)          Reliance
on Exemptions. Such Purchaser understands that the Shares are being offered and sold to such Purchaser in reliance on specific
exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying
in part upon the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgements and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions
and the eligibility of such Purchaser to acquire the Shares and Warrants.

 

(f)          No
Governmental Review. Such Purchaser understands that no Governmental Authority has passed on or made any recommendation or
endorsement of the Shares and Warrants or the fairness or suitability of the investment in the Shares and Warrants nor has any
such authority passed upon or endorsed the merits of the offering of the Shares and Warrants.

 

(g)          Acknowledgment.
Such Purchaser acknowledges that such Purchaser is entering into this Agreement without any representation or warranty, express
or implied, by the Company or Monster or any of their respective Affiliates, except as expressly set forth Section 3.2 or in any
certificate or other document or instrument to be delivered to such Purchaser pursuant to this Agreement. Such Purchaser is not
relying, nor has such Purchaser relied, on any representation or warranty (or the accuracy or completeness thereof), express or
implied, with respect to the Company or Monster or any of their respective Affiliates, except as expressly set forth Section 3.2
or in any certificate or other document or instrument to be delivered to such Purchaser pursuant to this Agreement.

 

(h)          Risk
Factors. Such Purchaser recognizes that the purchase of the Common Stock and Warrants involves a high degree of risk including,
but not limited to, those risks set forth in the Statement of Risk Factors annexed hereto as Annex C.

 

The Company and each
of the Purchasers acknowledge and agree that no party to this Agreement has made or makes any representations or warranties with
respect to the transactions contemplated hereby other than those specifically set forth in this Article 3 and the Transaction
Documents.

 

Article 4

 

Other
Agreements of the Parties

 

4.1           Transfer
Restrictions.

 

(a)          Compliance
with Laws. Notwithstanding any other provision of the Transaction Documents, until the Shares are converted into shares of
Monster Common Stock (as defined in the Merger Agreement) and the Warrants are converted into warrants to purchase shares of Monster
Common Stock in accordance with the terms of the Merger Agreement, each Purchaser covenants that the Shares and Warrants may be
disposed of only pursuant to an effective registration statement under, and in compliance with the requirements of, the Securities
Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities
Act, and in compliance with any applicable state and federal securities laws. In connection with any transfer of the Shares or
Warrants other than (i) pursuant to an effective registration statement or (ii) to the Company, the Company may require the transferor
thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the
form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not
require registration of such transferred Shares or Warrants under the Securities Act. As a condition of transfer, any such transferee
shall agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser under this Agreement.

 

    	 	 	 

     

    

 

(b)          Legends.
Stock Certificates evidencing the Shares, Warrants and Warrant Shares shall bear any legend as required by the “Blue
Sky” laws of any state and a restrictive legend in substantially the following form until such time as they are not required
under Section 4.1(c) (and a stock transfer order may be placed against transfer of the Stock Certificates for the Shares):

 

THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE, AND THE TRANSFER THEREOF, ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVISIONS
OF THE BYLAWS OF THE COMPANY, INCLUDING A RIGHT OF FIRST REFUSAL IN FAVOR OF THE COMPANY AND/OR ITS ASSIGNEE(S), A COPY OF WHICH
IS ON FILE IN, AND MAY BE EXAMINED AT, THE PRINCIPAL OFFICE OF THE COMPANY.

 

In addition, if any
Purchaser is an Affiliate of the Company, Stock Certificates evidencing the Shares or Warrant Shares issued to such Purchaser shall
bear a customary “affiliates” legend.

 

(c)          Removal
of Legends. Subject to the Company’s right to request an opinion of counsel as set forth in Section 4.1(a),
the legend set forth in Section 4.1(b) above shall be removable and the Company shall issue or cause to be issued a
Stock Certificate without such legend or any other legend (except for any “affiliates” legend as set forth in Section 4.1(b))
to the holder of the applicable Shares upon which it is stamped, if (i) such Shares or Warrant Shares are registered for resale
and resold pursuant to an effective registration statement under the Securities Act, (ii) such Shares or Warrant Shares are sold
or transferred in compliance with Rule 144 (if the transferor is not an Affiliate of the Company), including without limitation
in compliance with the current public information requirements of Rule 144 if applicable to the Company at the time of such
sale or transfer, and the holder and its broker have delivered customary documents reasonably requested by counsel to the Company
in connection with such sale or transfer, or (iii) such Shares or Warrant Shares are eligible for sale under Rule 144 without
the requirement that the Company be in compliance with the current public information requirements of Rule 144 and without
other restriction and counsel to the Company has provided written confirmation of such eligibility to the Company. Any fees (with
respect to the counsel to the Company or otherwise) associated with the removal of such legend shall be borne by the Company.

 

4.2           Form D
and Blue Sky. The Company agrees to timely file a Form D with respect to the Shares as required under Regulation D
and to provide a copy thereof to each Purchaser who requests a copy in writing promptly after such filing. The Company shall take
such action as the Company shall reasonably determine is necessary in order to qualify the Shares for sale to the Purchasers at
the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States
(or to obtain an exemption from such qualification), which, subject to the accuracy of the Company’s and the Purchaser’s
representations and warranties set forth herein, shall consist of the submission of all filings and reports relating to the offer
and sale of the Shares pursuant to Rule 506 of Regulation D required under applicable securities or “Blue Sky”
laws of the states of the United States following the Closing Date, and shall provide evidence of any such action so taken to the
Purchasers who request in writing such evidence.

 

    	 	 	 

     

    

 

4.3           No
Integration. The Company shall not, and shall use its commercially reasonable efforts to ensure that Monster and the Affiliates
of the Company and the Affiliates of Monster, 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 will be integrated with the offer or sale of
the Shares and Warrants in a manner that would require the registration under the Securities Act of the sale of the Shares and
Warrants to the Purchasers.

 

4.4           Use
of Proceeds. The Company intends to use the net proceeds from the sale of the Shares and Warrants hereunder for general working
capital.

 

4.5           Declaration
of Registration Rights.  At, or promptly following, the Closing, the Company will cause Monster to execute and deliver to the
Purchasers the declaration of registration rights in substantially the form attached hereto as Exhibit E.

 

4.6           Listing
of Monster Common Stock. Following the Merger, the Company hereby agrees to use commercially reasonable efforts to maintain
the listing or quotation of common stock of Monster (the “Monster Common Stock”) on the trading market
on which Monster is currently listed. In connection with the closing of the Merger, the Company shall use commercially reasonable
efforts to apply to list or quote all of the Shares and Warrant Shares on such trading market and promptly secure the listing of
all of the Shares and Warrant Shares on such trading market. The Company further agrees, if the Company applies to have the Monster
Common Stock traded on any other trading market, it will then include in such application all of the Shares and Warrant Shares,
and will take such other action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted on such other
trading market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing or quotation
and trading of the Monster Common Stock on a trading market and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the trading market. The Company agrees to maintain the eligibility of
the Monster Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation,
including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation
in connection with such electronic transfer.

 

4.7           Furnishing
of Information; Public Information. Following the closing of the Merger and until the earliest of the time that (i) no Purchaser
owns Securities or (ii) the Warrants have expired, the Company covenants to cause Monster to maintain the registration of the Monster
Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by Monster after the date hereof pursuant to the Exchange
Act. As long as any Purchaser owns Securities, if the Company is not required to file reports pursuant to the Exchange Act, it
will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required
for the Purchasers to sell the Securities, including without limitation, under Rule 144. The Company further covenants that it
will take such further action as any holder of Securities may reasonably request, to the extent required from time to time to enable
such Person to sell such Securities without registration under the Securities Act, including without limitation, within the requirements
of the exemption provided by Rule 144.

 

Article 5

 

Conditions
Precedent to Closing

 

5.1           Conditions
Precedent to the Obligations of the Purchasers (other than Converting Holders) to Purchase Shares and Warrants at Closing. The
obligation of each Purchaser (other than Converting Holders) to acquire Shares and Warrants at the Closing is subject to the fulfillment,
on or prior to the applicable Closing Date, of each of the following conditions, any of which may be waived by such Purchaser (as
to itself only):

 

    	 	 	 

     

    

 

(a)          Representations
and Warranties. The representations and warranties of the Company are true and correct in all respects as of the date of this
Agreement and are true and correct in all respects on and as of the applicable Closing Date with the same force and effect as if
made on the Closing Date, except (i) for those representations and warranties which address matters only as of a particular
date (which representations were so true and correct as of such particular date); and (ii) where the failure of those representations
and warranties would not have a Material Adverse Effect (disregarding all materiality qualifiers included in such representations
and warranties).

 

(b)          Performance.
The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by it on or prior to the Closing Date.

 

(c)          No
Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any Governmental Authority of competent jurisdiction that prohibits the consummation of the sale of the Shares.

 

(d)          Consents.
The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary for consummation
of the purchase and sale of the Shares at the Closing (except for the Required Approvals that may be obtained after the Closing),
all of which shall be and remain so long as necessary in full force and effect.

 

(e)          Company
Deliverables. The Company shall have delivered the Company Deliverables in accordance with Section 2.2(a).

 

(f)          Merger.
Each of the conditions to the consummation of the Merger set forth in the Merger Agreement shall have been satisfied or waived
and the parties to the Merger Agreement shall be ready, willing and able to consummate the Merger immediately after the Closing
on the terms and conditions set forth therein.

 

(g)          Termination.
This Agreement shall not have been terminated as to such Purchaser in accordance with Section 6.16.

 

(h)          Aggregate
Actual Cash Subscription Amounts. At the Closing, the aggregate Actual Cash Subscription Amounts from all Purchasers shall
be no less than the Minimum Offering Amount, and no more than $30,000,000 (the “Maximum Offering Amount”).

 

(i)          Funding.
The Actual Cash Subscription Amount with respect to each Purchaser (other than Converting Holders) shall have been received
by the Company (or its agent or other designee) in accordance with Section 2.2(c).

 

5.2           Conditions
Precedent to the Obligations of the Company to sell Shares and Warrants at each Closing. The Company’s obligation to
sell and issue the Shares and Warrants to each Purchaser (other than Converting Holders) at a Closing is subject to the fulfillment
on or prior to the applicable Closing Date of the following conditions, any of which may be waived by the Company:

 

(a)          Representations
and Warranties. The representations and warranties made by such Purchaser in Section 3.2 hereof shall be true and
correct in all material respects (except for those representations and warranties which are qualified as to materiality, in which
case such representations and warranties shall be true and correct in all respects) as of the date of this Agreement, and as of
the applicable Closing Date as though made on and as of such date, except for representations and warranties that speak as of a
different specified date (which representations shall have been so true and correct as of such specified date).

 

    	 	 	 

     

    

 

(b)          Performance.
Such Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by such Purchaser on or prior to the applicable
Closing Date.

 

(c)          No
Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any Governmental Authority of competent jurisdiction that prohibits the consummation of the sale of the Shares or
Warrants.

 

(d)          Purchaser
Deliverables. Such Purchaser shall have delivered its Purchaser Deliverables in accordance with Section 2.2(b).

 

(e)          Merger.
Each of the conditions to the consummation of the Merger set forth in the Merger Agreement shall have been satisfied or waived
and the parties to the Merger Agreement shall be ready, willing and able to consummate the Merger immediately after the Closing,
on the terms and conditions set forth therein.

 

(f)          Termination.
This Agreement shall not have been terminated as to such Purchaser in accordance with Section 6.16.

 

(g)          Receipt
of Funds. The Actual Cash Subscription Amount with respect to each Purchaser (other than Converting Holders) shall have been
received by the Company (or its agent or other designee) in accordance with Section 2.2(c).

 

(h)          Placement
Agent Questionnaire. Each Placement Agent shall have delivered the Placement Agent Questionnaire in accordance with Section 2.2(d).

 

Article 6

 

Miscellaneous

 

6.1           Fees
and Expenses. The Company and the Purchasers shall each pay the fees and expenses of their respective advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement.

 

6.2           Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of
the parties with respect to the subject matter thereof and supersede all prior agreements, understandings, discussions and representations,
oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and
schedules. At or after the Closing, and without further consideration, the Company and the Purchasers will execute and deliver
to the other such further documents as may be reasonably requested in order to give practical effect to the intention of the parties
under the Transaction Documents.

    	 	 	 

     

    

 

 

6.3           Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered
via facsimile (provided the sender receives a machine-generated confirmation of successful transmission) or e-mail delivery of
a .PDF format data file at the facsimile number or e-mail address, as applicable, specified in this Section 6.3 during
the recipient’s normal business hours on a Business Day, (b) the next Business Day after the date of transmission, if such
notice or communication is delivered via facsimile (provided the sender receives a machine-generated confirmation of successful
transmission) or e-mail delivery of a .PDF format data file at the facsimile number or e-mail address, as applicable, specified
in this Section 6.3 on a day that is not a Business Day or not during the recipient’s normal business hours on
any Business Day, (c) the Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service
with next day delivery specified, (d) two Business Days after deposit with an internationally recognized expedited delivery services
company, freight prepaid for delivery to a non-U.S. address, specifying next available Business Day delivery, with written verification
of receipt, or (e) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and
communications shall be as follows:

 

	If to the Company:	Innovate Biopharmaceuticals Inc.
	 	8480 Honeycutt Road
	 	Suite 120
	 	Raleigh, NC 27615
	 	Telephone No.:(919) 275-1933
	 	E-Mail:corplegal@innovatebiopharma.com
	 	Attention: Christopher Prior
	 	 
	With a copy to:	Wilson Sonsini Goodrich & Rosati, P.C.:
	 	12235 El Camino Real
	 	San Diego, CA 92130
	 	Attention:  Martin J. Waters
	 	Facsimile No.:  (858) 350-2399
	 	Email: mwaters@wsgr.com
	 	 
	If to a Purchaser:	To the address set forth under such Purchaser’s name on its signature page hereof or such other address as may be designated in writing hereafter, in the same manner, by such Person.

 

6.4           Amendments;
Waivers; No Additional Consideration. No provision of this Agreement may be waived or amended except in a written instrument
signed by the Company and the Purchasers holding at least a majority of the then outstanding Shares sold pursuant to this Agreement,
provided, however, that additional Purchasers may become parties to this Agreement without any amendment of this Agreement
pursuant to this paragraph or any consent or approval of any other Purchasers. Any such amendment or waiver effected in accordance
with this paragraph shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding
(including securities into which such securities have been converted or exchanged or for which such securities have been exercised)
and each future holder of all such securities. Each Purchaser acknowledges that by the operation of this paragraph, the Purchasers
holding at least a majority of the Shares issued pursuant to this Agreement will have the right and power to diminish or eliminate
all rights of such Purchaser under this Agreement. No waiver 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 subsequent default or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder
in any manner impair the exercise of any such right. No consideration shall be offered or paid to any Purchaser to amend or consent
to a waiver or modification of any provision of any Transaction Document unless the same consideration is also offered to all Purchasers
who then hold Shares, Warrants or Warrant Shares.

 

    	 	 	 

     

    

 

6.5           Construction.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction will be applied against any party.

 

6.6           Successors
and Assigns. The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their successors
and permitted assigns. This Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the prior
written consent of the Purchasers (other than by merger or consolidation or to an entity which acquires the Company, including
by way of acquiring all or substantially all of the Company’s assets). Any Purchaser may assign its rights hereunder in whole
or in part to any Person to whom such Purchaser assigns or transfers any Shares, Warrants or Warrant Shares in compliance with
the Transaction Documents and applicable Legal Requirements, provided such transferee shall agree in writing to be bound, with
respect to the transferred Shares, by the terms and conditions of this Agreement that apply to the Purchasers.

 

6.7           Third-Party
Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and, except as provided in the immediately preceding Section 6.6 and the immediately succeeding sentence, is
not for the benefit of, nor may any provision hereof be enforced by, any other Person. Notwithstanding the foregoing, the parties
acknowledge and agree that Monster shall be an express and intended third party beneficiary under this Agreement, with the right
of enforcement of the terms and conditions of this Agreement.

 

6.8           Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed
by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of
conflicts of law thereof. Each party agrees that all Legal Proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto
or its respective Affiliates, employees or agents) shall be commenced exclusively in the state and federal courts located in the
State of Delaware. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts located
in the State of Delaware for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Legal Proceeding, any claim that it is not personally subject to the jurisdiction of the
state or federal courts located in the State of Delaware, or that such Legal Proceeding has been commenced in an improper or inconvenient
forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such
Legal Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) 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 contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

6.9           Survival.
The representations and warranties contained herein shall terminate at the Closing and only the agreements and covenants contained
herein that by their terms survive the Closing shall survive the applicable Closing in accordance with their terms.

 

    	 	 	 

     

    

 

6.10         Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it
being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile
transmission, or by e-mail delivery of a .PDF format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or .PDF signature
page were an original thereof.

 

6.11         Severability.
If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will
attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor and achieves that same or substantially
the same effect or result, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

6.12         Replacement
of Shares, Warrants and Warrant Shares. If any Stock Certificate, Warrant or other instrument evidencing any Shares, Warrants
or Warrant Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution
for and upon cancellation thereof, or in lieu of and substitution therefor, a new Stock Certificate, Warrant or other instrument,
but only upon receipt of evidence reasonably satisfactory to the Company and the Transfer Agent, if other than the Company, of
such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit of that fact
and an agreement to indemnify and hold harmless the Company and the Transfer Agent, if other than the Company, for any losses in
connection therewith or, if required by the Transfer Agent, a bond in such form and amount as is required by the Transfer Agent.
The applicants for a new Stock Certificate, Warrant or other instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement Shares or Warrants. If a replacement Stock Certificate, Warrant
or other instrument evidencing any Shares or Warrants is requested due to a mutilation thereof, the Company may require delivery
of such mutilated Stock Certificate, Warrant or other instrument as a condition precedent to any issuance of a replacement.

 

6.13         Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each
of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
irreparable damage may occur in the event that any of the provisions of the Transaction Documents were not performed in accordance
with their specific terms or were otherwise breached and that monetary damages may not be adequate compensation for any loss incurred
by the Purchasers, the Company by reason of any breach of any such provisions.

 

6.14         Adjustments
in Share Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution payable in shares of Common
Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination, recapitalization, merger, consolidation or other reorganization or similar event occurring after
the date hereof, each reference in any Transaction Document to the Shares, Warrants or Warrant Shares, a number of shares, a price
per share or the class or type of securities with respect to the Shares or Warrant Shares shall be deemed to be amended to appropriately
account for such event.

 

    	 	 	 

     

    

 

6.15         Independent
Nature of the Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are
several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
of the obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser to purchase Shares and
Warrants pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser and independently
of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities,
results of operations, condition (financial or otherwise) or prospects of the Company which may have been made or given by any
other Purchaser or by any agent or employee of any other Purchaser, and no Purchaser and any of its agents or employees shall have
any liability to any other Purchaser (or any other Person) relating to or arising from any such information, materials, statement
or opinions. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto
or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by the Transaction Documents. Each Purchaser acknowledges that no other Purchaser has acted as
agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such
Purchaser in connection with monitoring its investment in the Shares or enforcing its rights under the Transaction Documents. Each
Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out
of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined
as an additional party in any Proceeding for such purpose. The Company acknowledges that each of the Purchasers has been provided
with the same Transaction Documents for the purpose of closing a transaction with multiple Purchasers and not because it was required
or requested to do so by any Purchaser. The Company’s obligations to each Purchaser under this Agreement and the other Transaction
Documents are identical to its obligations to each other Purchaser other than such differences resulting solely from the number
of Shares and Warrants purchased by such Purchaser.

 

6.16         Termination.
This Agreement may be terminated and the sale and purchase of the Shares and Warrants abandoned (a) with respect to a particular
Purchaser, at any time prior to the Closing, by mutual written consent of the Company and such Purchaser; (b) if the Closing has
not been consummated on or prior to 5:00 p.m., New York City time, on the Outside Date, as defined in the Merger Agreement,
by any Purchaser (with respect to itself only), upon written notice to the Company; (c) if the Merger has not been consummated
on or prior to 5:00 p.m., New York City time, on the Outside Date, as defined in the Merger Agreement, by any Purchaser (with
respect to itself only), or (d) by either the Company or any Purchaser (with respect to such Purchaser only) upon written notice
to the other if consummation of the transactions contemplated hereby would violate any nonappealable order, degree or judgment
of any Governmental Authority having competent jurisdiction; provided, however, that the right to terminate this Agreement under
this Section 6.16 shall not be available to any Person whose failure to comply with its obligations under this Agreement
has been the cause of or resulted in the failure of the Closing to occur on or before such time. Nothing in this Section 6.16
shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement
or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Transaction Documents. In the event of a termination pursuant to this Section 6.16,
the Company shall promptly notify all non-terminating Purchasers. Upon a termination in accordance with this Section 6.16,
the Company and the terminating Purchaser(s) shall not have any further obligation or liability (including arising from such termination)
to the other, and no Purchaser will have any liability to any other Purchaser under the Transaction Documents as a result therefrom.

 

6.17         Waiver
of Conflicts. Each Purchaser acknowledges that: (a) it has read this Agreement; (b) it has been represented in the preparation,
negotiation and execution of this Agreement by legal counsel of its own choice or has voluntarily declined to seek such counsel;
and (c) it understands the terms and consequences of this Agreement and is fully aware of the legal and binding effect of this
Agreement. Each Purchaser understands that the Company has been represented in the preparation, negotiation and execution of this
Agreement by Company Counsel and that Company Counsel now or may in the future represent one or more Purchasers or their Affiliates
in matters unrelated to the transactions contemplated by this Agreement, including the representation of such Purchasers or their
Affiliates in matters of a nature similar to those contemplated by this Agreement. The Company and each Purchaser hereby acknowledge
that they have had an opportunity to ask for and have obtained information relevant to such representation, including disclosure
of the reasonably foreseeable adverse consequences of such representation, and hereby waives any conflict arising out of such representation
solely with respect to the matters contemplated by this Agreement.

 

[Signature Pages Follow]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	INNOVATE BIOPHARMACEUTICALS, INC.
	 	 	 
	 	By:	/s/ Jay Madan
	 	Name:	Jay Madan
	 	Title:	President

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Adolfo & Donna Carmona
	 	 	 
	 	By:	/s/Adolfo & Donna Carmona
	 	Name:	Adolfo & Donna Carmona
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Alan Mcintyre
	 	 	 
	 	By:	/s/Alan McIntyre
	 	Name:	Alan McIntyre
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Alexander J. Brown Trust
	 	 	 
	 	By:	/s/ Robin L. Brown
	 	Name:	Robin L. Brown
	 	Title:	Trustee

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Alexandra Koeppel
	 	 	 
	 	By:	/s/ Alexandra Koeppel
	 	Name:	Alexandra Koeppel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Andrew and Melissa Fisher
	 	 	 
	 	By:	/s/ Andrew and Melissa Fisher
	 	Name:	Andrew and Melissa Fisher
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Argjent Mena & Lara Sabani
	 	 	 
	 	By:	/s/ Argjent Mena & Lara Sabani
	 	Name:	Argjent Mena & Lara Sabani
	 	Title:	 

  

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Barry Shemaria
	 	 	 
	 	By:	/s/ Barry Shemaria
	 	Name:	Barry Shemaria
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Basil Palmeri
	 	 	 
	 	By:	/s/ Basil Palmeri
	 	Name:	Basil Palmeri
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Bozarth LLC
	 	 	 
	 	By:	/s/ Donna Bozarth
	 	Name:	Donna Bozarth
	 	Title:	Manager

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Brenda & Dave Rickey Family Foundation
	 	 	 
	 	By:	/s/David M. Rickey
	 	Name:	David M. Rickey
	 	Title:	Trustee

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Brian & Andrea Fischhoff
	 	 	 
	 	By:	/s/ Brian & Andrea Fischhoff
	 	Name:	Brian & Andrea Fischhoff
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Bruce & Mitsie Levy
	 	 	 
	 	By:	/s/ Bruce & Mitsie Levy
	 	Name:	Bruce & Mitsie Levy
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Carl J. Domino
	 	 	 
	 	By:	/s/ Carl J. Domino
	 	Name:	Carl J. Domino
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Casimir S. Skrzypczak
	 	 	 
	 	By:	/s/ Casimir S. Skrzypczak
	 	Name:	Casimir S. Skrzypczak
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Christopher Washburn
	 	 	 
	 	By:	/s/ Christopher Washburn
	 	Name:	Christopher Washburn
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Clay Lebhar
	 	 	 
	 	By:	/s/ Clay Lebhar
	 	Name:	Clay Lebhar
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Dennis R. DeLoach, Jr. & Faye M. DeLoach
	 	 	 
	 	By:	/s/ Dennis R. DeLoach, Jr. & Faye M. DeLoach
	 	Name:	Dennis R. DeLoach, Jr. & Faye M. DeLoach
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Donald Sesterhenn
	 	 	 
	 	By:	/s/ Donald Sesterhenn
	 	Name:	Donald Sesterhenn
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Douglas Rivers
	 	 	 
	 	By:	/s/ Douglas Rivers
	 	Name:	Douglas Rivers
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Dyke Rogers
	 	 	 
	 	By:	/s/ Dyke Rogers
	 	Name:	Dyke Rogers
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Edward O'Connell
	 	 	 
	 	By:	/s/ Edward O'Connell
	 	Name:	Edward O'Connell
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Edward P. Swyer LLC
	 	 	 
	 	By:	/s/ Edward P. Swyer LLC
	 	Name:	Edward P. Swyer LLC
	 	Title:	Manager

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Foster Family Trust
	 	 	 
	 	By:	/s/ Michael L. Foster
	 	Name:	Michael L. Foster
	 	Title:	Trustee

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	FourJr Investments LTD
	 	 	 
	 	By:	/s/ Robert Burke
	 	Name:	Robert Burke
	 	Title:	Manager

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Frederick B. Epstein
	 	 	 
	 	By:	/s/ Frederick B. Epstein
	 	Name:	Frederick B. Epstein
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Gubbay Investments, LLC
	 	 	 
	 	By:	/s/ David Gubay
	 	Name:	David Gubay
	 	Title:	Manager

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Gwen Swenson-Hale
	 	 	 
	 	By:	/s/ Gwen Swenson-Hale
	 	Name:	Gwen Swenson-Hale
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Howard & Susan Kalka
	 	 	 
	 	By:	/s/ Howard & Susan Kalka
	 	Name:	Howard & Susan Kalka
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Howard Stringer
	 	 	 
	 	By:	/s/ Howard Stringer
	 	Name:	Howard Stringer
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Irwin Gruverman
	 	 	 
	 	By:	/s/ Irwin Gruverman
	 	Name:	Irwin Gruverman
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	James H. Wiesenberg
	 	 	 
	 	By:	/s/ James H. Wiesenberg
	 	Name:	James H. Wiesenberg
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Jan Arnett
	 	 	 
	 	By:	/s/ Jan Arnett
	 	Name:	Jan Arnett
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	James J. Watson
	 	 	 
	 	By:	/s/ James J. Watson
	 	Name:	James J. Watson
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	James L. Dritz
	 	 	 
	 	By:	/s/ James L. Dritz
	 	Name:	James L. Dritz
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Jimmy R. Hasley
	 	 	 
	 	By:	/s/ Jimmy R. Hasley
	 	Name:	Jimmy R. Hasley
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Jay M. Haft
	 	 	 
	 	By:	/s/ Jay M. Haft
	 	Name:	Jay M. Haft
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Joan L Bonanno TTE U/A DTD 12/05/2002 By Joan L Bonanno
	 	 	 
	 	By:	/s/ Joan L Bonanno
	 	Name:	Joan L Bonanno
	 	Title:	Trustee

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	John Q Joubert & Terri L Joubert
	 	 	 
	 	By:	/s/ John Q Joubert & Terri L Joubert
	 	Name:	John Q Joubert & Terri L Joubert
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	John E. Kyees
	 	 	 
	 	By:	/s/ John E. Kyees
	 	Name:	John E. Kyees
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	John V. Wagner, Jr.
	 	 	 
	 	By:	/s/ John V. Wagner, Jr.
	 	Name:	John V. Wagner, Jr.
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Juli-Ann Cialone
	 	 	 
	 	By:	/s/ Juli-Ann Cialone
	 	Name:	Juli-Ann Cialone
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Kara Lynn Hart
	 	 	 
	 	By:	/s/ Kara Lynn Hart
	 	Name:	Kara Lynn Hart
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Keith J. Gelles
	 	 	 
	 	By:	/s/ Keith J. Gelles
	 	Name:	Keith J. Gelles
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Lars Bader
	 	 	 
	 	By:	/s/ Lars Bader
	 	Name:	Lars Bader
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Lee J. Seidler Revocable Trust DTD 4/12/1990
	 	 	 
	 	By:	/s/ Lee J. Seidler
	 	Name:	Lee J. Seidler
	 	Title:	Trustee

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Mackie Klingbeil
	 	 	 
	 	By:	/s/ Mackie Klingbeil
	 	Name:	Mackie Klingbeil
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Meryle Evans Family Trust
	 	 	 
	 	By:	/s/ Steven Evans
	 	Name:	Steven Evans
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Michael J. Pierce
	 	 	 
	 	By:	/s/ Michael J. Pierce
	 	Name:	Michael J. Pierce
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Michael M. Mainero
	 	 	 
	 	By:	/s/ Michael M. Mainero
	 	Name:	Michael M. Mainero
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Michael Stark
	 	 	 
	 	By:	/s/ Michael Stark
	 	Name:	Michael Stark
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	N. Michael Wolsonovich, Jr.
	 	 	 
	 	By:	/s/ N. Michael Wolsonovich, Jr.
	 	Name:	N. Michael Wolsonovich, Jr.
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Northlea Partners LLLP
	 	 	 
	 	By:	/s/ John Abeles
	 	Name:	John Abeles
	 	Title:	Manager of General Partner

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	OHB Family Trust
	 	 	 
	 	By:	/s/ Lisa O’Connell
	 	Name:	Lisa O’Connell
	 	Title:	Trustee

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Pamela M. Baker & Russell S. Baker
	 	 	 
	 	By:	/s/ Pamela M. Baker & Russell S. Baker
	 	Name:	Pamela M. Baker & Russell S. Baker
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	The Peierls Bypass Trust
	 	UD E.F. Peierls for Brian E. Peierls
	 	UD E.F. Peierls for E. Jeffrey Peierls
	 	UD J.N. Peierls for Brian Eliot Peierls
	 	UD J.N. Peierls for E. Jeffrey Peierls
	 	UW J.N. Peierls for Brian E. Peierls
	 	UW J.N. Peierls for E. Jeffrey Peierls
	 	UD Ethel F. Peierls Charitable Lead Trust
	 	UD E.S. Peierls for E.F. Peierls et al
	 	UW E.S. Peierls for Brian E. Peierls - Accumulation
	 	UW E.S. Peierls for E. Jeffrey Peierls - Accumulation
	 	 	 
	 	By:	/s/ Deserae B. Smith
	 	Name:	Deserae B. Smith
	 	Title:	Vice President, The Northern Trust Company of Delaware, As Trustee

  

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Peter S. Kastner
	 	 	 
	 	By:	/s/ Peter S. Kastner
	 	Name:	Peter S. Kastner
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Provident Trust Group LLC FBO Universal Technology Inc. 401K Plan FBO Robert G. Curtin
	 	 	 
	 	By:	/s/ Robert G. Curtin
	 	Name:	Robert G. Curtin
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Raphael Tshibangu
	 	 	 
	 	By:	/s/ Raphael Tshibangu
	 	Name:	Raphael Tshibangu
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Raymond J Bonanno TTE U/A DTD 12/05/2002 By Raymond J Bonanno
	 	 	 
	 	By:	/s/ Raymond J Bonanno
	 	Name:	Raymond J Bonanno
	 	Title:	Trustee

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Renald J. & Catherine C. Anelle
	 	 	 
	 	By:	/s/ Renald J. & Catherine C. Anelle
	 	Name:	Renald J. & Catherine C. Anelle
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Richard A Brown Trust
	 	 	 
	 	By:	/s/ Richard A Brown Trust
	 	Name:	Richard A Brown Trust
	 	Title:	Trustee

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Rickey Family Trust dtd 3/22/16
	 	 	 
	 	By:	/s/ David M Rickey
	 	Name:	David M. Ricket
	 	Title:	Trustee

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Richard David
	 	 	 
	 	By:	/s/ Richard David
	 	Name:	Richard David
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Robert Caione
	 	 	 
	 	By:	/s/ Robert Caione
	 	Name:	Robert Caione
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Robert G. Curtin
	 	 	 
	 	By:	/s/ Robert G. Curtin
	 	Name:	Robert G. Curtin
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Robert Harrigan
	 	 	 
	 	By:	/s/ Robert Harrigan
	 	Name:	Robert Harrigan
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	RS & VS LTD
	 	 	 
	 	By:	/s/ Rodney Schorlemmer
	 	Name:	Rodney Schorlemmer
	 	Title:	Manager

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Russell S. Dritz
	 	 	 
	 	By:	/s/ Russell S. Dritz
	 	Name:	Russell S. Dritz
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Sal DeStefano
	 	 	 
	 	By:	/s/ Sal DeStefano
	 	Name:	Sal DeStefano
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Satterfield Vintage Investments, LP
	 	 	 
	 	By:	/s/ Thomas A. Satterfield
	 	Name:	Thomas A. Satterfield
	 	Title:	Managing Partner

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	SDL Ventures, LLC
	 	 	 
	 	By:	/s/ Donald R. Scifres
	 	Name:	Donald R. Scifres
	 	Title:	Managing Director

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Stephen A. Dichiara
	 	 	 
	 	By:	/s/ Stephen A. Dichiara
	 	Name:	Stephen A. Dichiara
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Steven M. Cohen
	 	 	 
	 	By:	/s/ Steven M. Cohen
	 	Name:	Steven M. Cohen
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Suresh Patel
	 	 	 
	 	By:	/s/ Suresh Patel
	 	Name:	Suresh Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	The Fourys Co. LTD
	 	 	 
	 	By:	/s/ Alan Yanowitz
	 	Name:	Alan Yanowitz
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Walter G. Gans
	 	 	 
	 	By:	/s/ Walter G. Gans
	 	Name:	Walter G. Gans
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Yisroel Brauner & Chana Brauner
	 	 	 
	 	By:	/s/ Yisroel Brauner & Chana Brauner
	 	Name:	Yisroel Brauner & Chana Brauner
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	B3 Group LLC
	 	 	 
	 	By:	/s/Stephen Saft
	 	Name:	Stephen Saft
	 	Title:	Manager

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Nomis Bay LTD
	 	 	 
	 	By:	/s/ Peter Poole
	 	Name:	Peter Poole
	 	Title:	Director

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	MITZ ZHU YAN,LP
	 	 	 
	 	By:	/s/Stephen Saft
	 	Name:	Stephen Saft
	 	Title:	President of the General Partner

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Charmi Vijapura
	 	 	 
	 	By:	/s/ Charmi Vijapura
	 	Name:	Charmi Vijapura
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	GSB Holdings, Inc.
	 	 	 
	 	By:	/s/ David H. Clarke
	 	Name:	David H. Clarke
	 	Title:	Vice President

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Jai V. Desai
	 	 	 
	 	By:	/s/ Jai V. Desai
	 	Name:	Jai V. Desai
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Jayesh K. Patel & Bela J. Patel
	 	 	 
	 	By:	/s/ Jayesh K. Patel & Bela J. Patel
	 	Name:	Jayesh K. Patel & Bela J. Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Jesal Kothari
	 	 	 
	 	By:	/s/ Jesal Kothari
	 	Name:	Jesal Kothari
	 	Title:	Individual

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Mahendra Doobay
	 	 	 
	 	By:	/s/ Mahendra Doobay
	 	Name:	Mahendra Doobay
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Rameshchandra Dabhi
	 	 	 
	 	By:	/s/ Rameshchandra Dabhi
	 	Name:	Rameshchandra Dabhi
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Saha Living LLC
	 	 	 
	 	By: 	/s/ C.K. Singla
	 	Name: 	C.K. Singla
	 	Title: 	General Partner

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	UKR Partners LLC
	 	 	 
	 	By: 	/s/Irene Mazue
	 	Name: 	Irene Mazue
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	RS Irrevocable Trust
	 	 	 
	 	By: 	/s/ RS Irrevocable Trust
	 	Name: 	RS Irrevocable Trust
	 	Title: 	Trustee

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Valley Forge Investments LLC
	 	 	 
	 	By: 	/s/ Valley Forge Investments LLC
	 	Name: 	Valley Forge Investments LLC
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	V.M. Patel and Tejal Patel
	 	 	 
	 	By: 	/s/ V.M. Patel and Tejal Patel
	 	Name: 	V.M. Patel and Tejal Patel
	 	Title: 	MA

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Sphera Global Healthcare Master Fund
	 	 	 
	 	By: 	/s/Doran Breen
	 	Name: 	Doran Breen
	 	Title: 	Director

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Intracoastal Capital, LLC
	 	 	 
	 	By: 	/s/ Keith A. Goodman
	 	Name: 	Keith A. Goodman
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Iroquois Capital Investment Group LLC
	 	 	 
	 	By: 	/s/ Richard Abbe
	 	Name: 	Richard Abbe
	 	Title: 	Managing Member

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Iroquois Master Fund Ltd
	 	 	 
	 	By: 	/s/ Kim Page
	 	Name: 	Kim Page
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Amit Patel
	 	 	 
	 	By: 	/s/ Amit Patel
	 	Name: 	Amit Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Anthony Barrett
	 	 	 
	 	By: 	/s/ Anthony Barrett
	 	Name: 	Anthony Barrett
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Ashit Vijapura
	 	 	 
	 	By: 	/s/ Ashit Vijapura
	 	Name: 	Ashit Vijapura
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Atul and Namrata Wadhwa
	 	 	 
	 	By: 	/s/ Atul and Namrata Wadhwa
	 	Name: 	Atul and Namrata Wadhwa
	 	Title: 	Investors

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Atul Wadhwa
	 	 	 
	 	By: 	/s/ Atul Wadhwa
	 	Name: 	Atul Wadhwa
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Bearing Circle Capital LLC
	 	 	 
	 	By: 	/s/ Bearing Circle Capital LLC
	 	Name: 	Bearing Circle Capital LLC
	 	Title: 	Member

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Bhavesh Patel
	 	 	 
	 	By: 	/s/ Bhavesh Patel
	 	Name: 	Bhavesh Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Bijal Patel
	 	 	 
	 	By: 	/s/ Bijal Patel
	 	Name: 	Bijal Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Bhikabhai Nayi
	 	 	 
	 	By: 	/s/ Bhikabhai Nayi
	 	Name: 	Bhikabhai Nayi
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Bindu Sangani
	 	 	 
	 	By: 	/s/ Bindu Sangani
	 	Name: 	Bindu Sangani
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Charles Mosseri-Marlio
	 	 	 
	 	By: 	/s/ Charles Mosseri-Marlio
	 	Name: 	Charles Mosseri-Marlio
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	David Cassimus
	 	 	 
	 	By:	/s/ David Cassimus
	 	Name:	David Cassimus
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	David Purdy
	 	 	 
	 	By:	/s/
    David Purdy
	 	Name:	David
    Purdy
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Deepen R. Patel
	 	 	 
	 	By: 	/s/ Deepen R. Patel
	 	Name: 	Deepen R. Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Himanshu M. Patel
	 	 	 
	 	By:	/s/ Himanshu M. Patel
	 	Name:	Himanshu M. Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Hiren K. Patel
	 	 	 
	 	By: 	/s/ Hiren K. Patel
	 	Name: 	Hiren K. Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Howard Yee
	 	 	 
	 	By: 	/s/ Howard Yee
	 	Name: 	Howard Yee
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Hygient Corporation
	 	 	 
	 	By: 	/s/ Hygient Corporation
	 	Name: 	Hygient Corporation
	 	Title: 	President

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Janet League Katzin
	 	 	 
	 	By: 	/s/ Janet League Katzin
	 	Name: 	Janet League Katzin
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Jay Madan
	 	 	 
	 	By: 	/s/ Jay Madan
	 	Name: 	Jay Madan
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Jigar J. Patel
	 	 	 
	 	By: 	/s/ Jigar J. Patel
	 	Name: 	Jigar J. Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Jonathan Barrett
	 	 	 
	 	By: 	/s/ Jonathan Barrett
	 	Name: 	Jonathan Barrett
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	JRK Inc.
	 	 	 
	 	By:	/s/ JRK Inc.
	 	Name:	JRK Inc.
	 	Title:	President

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Justin Prior
	 	 	 
	 	By: 	/s/ Justin Prior
	 	Name: 	Justin Prior
	 	Title: 	Mechanical Engineer

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Karl Pinto
	 	 	 
	 	By: 	/s/ Karl Pinto
	 	Name: 	Karl Pinto
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Kumar Patel
	 	 	 
	 	By: 	/s/ Kumar Patel
	 	Name: 	Kumar Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Malika Sangani
	 	 	 
	 	By:	/s/ Malika Sangani
	 	Name:	Malika Sangani
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Malur R. Balaji
	 	 	 
	 	By: 	/s/ Malur R. Balaji
	 	Name: 	Malur R. Balaji
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Marilyn Hemani
	 	 	 
	 	By: 	/s/ Marilyn Hemani
	 	Name: 	Marilyn Hemani
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Mary Cheeran
	 	 	 
	 	By:	/s/ Mary Cheeran
	 	Name:	Mary Cheeran
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Michael Mindlin
	 	 	 
	 	By: 	/s/ Michael Mindlin
	 	Name: 	Michael Mindlin
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Nalini Krishnankutty
	 	 	 
	 	By: 	/s/ Nalini Krishnankutty
	 	Name: 	Nalini Krishnankutty
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Niranjana Patel
	 	 	 
	 	By: 	/s/ Niranjana Patel
	 	Name: 	Niranjana Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	ONE by NP
	 	 	 
	 	By: 	/s/ ONE by NP
	 	Name: 	ONE by NP
	 	Title: 	Member

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Parul T. Patel
	 	 	 
	 	By: 	/s/ Parul T. Patel
	 	Name: 	Parul T. Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Piyush Patel
	 	 	 
	 	By: 	/s/ Piyush Patel
	 	Name: 	Piyush Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Praful Patel
	 	 	 
	 	By: 	/s/ Praful Patel
	 	Name: 	Praful Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Prentice Lending II LLC
	 	 	 
	 	By: 	/s/ Prentice Lending II LLC
	 	Name: 	Prentice Lending II LLC
	 	Title: 	Mark Hossein, CFO

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Raj S. Shah
	 	 	 
	 	By: 	/s/ Raj S. Shah
	 	Name: 	Raj S. Shah
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Rajesh and Suny Patel
	 	 	 
	 	By: 	/s/ Rajesh and Suny Patel
	 	Name: 	Rajesh and Suny Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Rajesh Patel
	 	 	 
	 	By: 	/s/ Rajesh Patel
	 	Name: 	Rajesh Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Rakesh Shah
	 	 	 
	 	By: 	/s/ Rakesh Shah
	 	Name: 	Rakesh Shah
	 	Title: 	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Ramesh Donthamsetty
	 	 	 
	 	By: 	/s/ Ramesh Donthamsetty
	 	Name: 	Ramesh Donthamsetty
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Rathin Patel
	 	 	 
	 	By: 	/s/ Rathin Patel
	 	Name: 	Rathin Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Saurabh Shah
	 	 	 
	 	By: 	/s/ Saurabh Shah
	 	Name: 	Saurabh Shah
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	SDS Capital Partners II, LLC
	 	 	 
	 	By: 	/s/ SDS Capital Partners II, LLC
	 	Name: 	SDS Capital Partners II, LLC
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Sebastian Prior
	 	 	 
	 	By: 	/s/ Sebastian Prior
	 	Name: 	Sebastian Prior
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Sireesh Appajosyula
	 	 	 
	 	By: 	/s/ Sireesh Appajosyula
	 	Name: 	Sireesh Appajosyula
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Subhashini Chandran
	 	 	 
	 	By: 	/s/ Subhashini Chandran
	 	Name: 	Subhashini Chandran
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Suchin Bajaj
	 	 	 
	 	By: 	/s/ Suchin Bajaj
	 	Name: 	Suchin Bajaj
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Sujata Shah
	 	 	 
	 	By: 	/s/ Sujata Shah
	 	Name: 	Sujata Shah
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Sunil Kumar S. Reddy
	 	 	 
	 	By: 	/s/ Sunil Kumar S. Reddy
	 	Name: 	Sunil Kumar S. Reddy
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Todd Gallinek
	 	 	 
	 	By: 	/s/ Todd Gallinek
	 	Name: 	Todd Gallinek
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Vijay Taunk
	 	 	 
	 	By:	/s/ Vijay Taunk
	 	Name:	Vijay Taunk
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Vikram Patel
	 	 	 
	 	By:	/s/ Vikram Patel
	 	Name:	Vikram Patel
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

	 	PURCHASER:
	 	 
	 	Wallace R. Nelms
	 	 	 
	 	By:	/s/ Wallace R. Nelms
	 	Name:	Wallace R. Nelms
	 	Title:	 

 

[Signature Page to Subscription Agreement]

 

    	 	 	 

     

    

 

	ANNEX A:	-	Schedule of Purchasers
	ANNEX A-1:	-	Schedule of Converting Holders
	ANNEX B:	-	Agreement and Plan of Merger and Reorganization
	ANNEX C:	-	Statement of Risk Factors

 

EXHIBITS:

 

	A-1:	-	Investor Questionnaire
	 	 	 
	A-2:	-	Stock Certificate Questionnaire
	 	 	 
	B:	-	Placement Agent Questionnaire
	 	 	 
	C:	-	Form of Secretary’s Certificate
	 	 	 
	D:	-	Form of Compliance Certificate
	 	 	 
	E:	-	Form of Declaration of Registration Rights 
	 	 	 
	F:	-	Form of Lock-Up Agreement 
	 	 	 
	G:	-	Form of Warrant 

 

    	 	 	 

     

    

 

ANNEX A

 

SCHEDULE OF PURCHASERS

 

    	 	 	 

     

    

 

ANNEX A-1

 

SCHEDULE OF CONVERTING HOLDERS

 

    	 	 	 

     

    

 

ANNEX B

 

AGREEMENT AND PLAN
OF MERGER AND REORGANIZATION

 

    	 	 	 

     

    

 

ANNEX C

 

RISK FACTORS

 

    	 	 	 

     

    

  

STATEMENT
OF RISK FACTORS

 

You should carefully consider the following risk factors.
If any of the following risks and uncertainties develops into actual events, these events could have a material adverse effect
on Innovate’s businesses, financial conditions or results of operations. In addition, past financial performance may not
be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future
periods.

 

We believe that Monster will likely be delisted
from NASDAQ prior to the closing of this offering. , The delisting could adversely affect the market liquidity of Monster’s
common stock, impair the value of your investment, adversely affect our ability to raise needed funds (following the closing of
the anticipated Merger) and subject us (following the closing of the anticipated Merger) to additional trading restrictions and
regulations.

 

Companies listed on The NASDAQ Stock Market,
or NASDAQ, are subject to delisting for, among other things, failure to maintain a minimum stockholders’ equity of $2.5 million.
On April 17, 2017, Monster received a deficiency notice from NASDAQ notifying Monster that, based on Monster’s Form 10-K
for the year ended December 31, 2016, NASDAQ determined that Monster’s stockholders’ equity does not comply with the
minimum $2.5 million stockholders’ equity requirement for continued listing on the NASDAQ Capital Market. NASDAQ provided
Monster with 45 calendar days, or until June 1, 2017, to submit a plan to regain compliance with the minimum stockholders’
equity standard. The plan to regain compliance was accepted and NASDAQ granted an extension until October 14, 2017 to provide evidence
of compliance. By letter dated October 19, 2017, NASDAQ informed Monster that based upon Monsters’s continued non-compliance
with the minimum $2.5 million stockholders equity requirement for continued listing on the Nasdaq Capital Market, Monster’s
common stock would be subject to delisting from NASDAQ unless Monster timely requests a hearing before the NASDAQ Hearings Panel
(the “Panel”).

 

On October 24, 2017, Monster requested a
hearing before the Panel, which request would stay any delisting action by the NASDAQ at least pending the issuance of the Panel’s
decision following the hearing and the expiration of any extension period that may be granted by the Panel. By letter dated October
25, 2017, the request for a hearing before the Panel was granted, and such hearing was held on December 7, 2017. At the hearing,
NASDAQ provided Monster until January 3, 2017 to regain compliance with the minimum stockholders’ equity standard.

 

On June 15, 2017, Monster received a letter
from NASDAQ notifying Monster that it is not in compliance with NASDAQ Listing Rule 5810(b) that requires Monster to maintain a
minimum bid price of One Dollar ($1.00) per share. This determination was based upon the closing bid price of Monster’s common
stock for the preceding thirty (30) consecutive business days. NASDAQ provided Monster with 180 calendar days, or until December
12, 2017, to regain compliance by maintaining a closing bid price of One Dollar ($1.00) for at least ten (10) consecutive business
days.

 

As of January 3, 2017, Monster has failed
to regain compliance with the minimum stockholders’ equity standard and a minimum bid price of One Dollar ($1.00) per share.
Monster requested an additional extension period to regain compliance, which is under consideration by NASDAQ. We believe that
is unlikely that NASDAQ will grant this extension and, as such, we believe Monster’s common stock will delisted from The
Nasdaq Capital Market prior to the closing of this offering and the merger with Monster (the “Merger”). Therefore,
at the closing of the Merger, Monster common stock shares that will be issued in respect of the Innovate common stock shares will
likely not be traded on NASDAQ.

 

    	 	 	 

     

    

 

Monster’s common stock is currently
traded on the NASDAQ Capital Market under the trading symbol “MSDI.” Monster has filed an application and is taking
the steps necessary to have its common stock quoted for trading in the OTCQB US Market (“OTCQB”), operated by OTC Markets,
Inc., under the same trading symbol of “MSDI.” Monster expects to hear back from the Panel during the week of January
8, 2017, but cannot give any assurance that a decision will be reached by then. If the Panel does not grant an extension and Monster’s
common stock is delisted from the NASDAQ Capital Market, trading will commence on the OTCQB the next trading day. To the extent
that Monster’s common stock is delisted and following commencement of trading of its common stock on the OTCQB, Monster’s
common stock will continue to be registered under the Exchange Act and Monster will continue to file financial reports that will
be available on the SEC’s website, www.sec.gov.

 

If Monster’s shares are delisted from
the NASDAQ Capital Market and then traded on the OTCQB, investors that purchase Innovate common stock shares in this offering will
receive Monster’s common stock shares that are trading on the OTCQB. Trading Monster common stock shares on the OTCQB may
be difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and any security
analysts’ coverage may be reduced. In addition, in the event Monster common stock is delisted, broker-dealers have certain
regulatory burdens imposed upon them, which may discourage broker-dealers from effecting transactions in such common stock, further
limiting the liquidity. These factors could result in lower prices and larger spreads in the bid and ask prices for Monster common
stock. Such delisting from the NASDAQ Capital Market and continued or further declines in Monster’s share price could also
greatly impair Monster ability to raise additional necessary capital through equity or debt financing and could significantly increase
the ownership dilution to shareholders caused by our issuing equity in a financing or other transactions.

 

Risks Related to Innovate’s Capital Requirements
and Financial Condition

 

Innovate has a limited operating history and has
incurred significant losses since inception, and expects that it will continue to incur losses for the foreseeable future, which
makes it difficult to assess Innovate’s future viability.

 

Innovate is a clinical development-stage
biopharmaceutical company with a limited operating history upon which to evaluate its business and prospects. Innovate has not
been profitable since it commenced operations in 2012, and may never achieve or sustain profitability. In addition, Innovate has
limited history as an organization and has not yet demonstrated an ability to successfully overcome many of the risks and uncertainties
frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical industry. Drug development
is a highly speculative undertaking and involves a substantial degree of risk. Innovate has not yet obtained any regulatory approvals
for any of its product candidates, commercialized any of its product candidates, or generated any revenue from sales of products.
Innovate has devoted significant resources to research and development and other expenses related to its ongoing clinical trials
and operations, in addition to acquiring product candidates.

 

Since inception, most of Innovate’s
resources have been dedicated to the acquisition and development of its product candidates, INN-202 (Larazotide Acetate), INN-108
and INN-329 (Secretin). Innovate will require significant additional capital to continue operations and to execute on its current
business strategy to develop INN-202 through to regulatory approval and further develop INN-108 and INN-329 for eventually seeking
regulatory approval. Innovate cannot estimate with reasonable certainty the actual amounts necessary to successfully complete the
development and commercialization of its product candidates and there is no certainty that Innovate will be able to raise the necessary
capital on reasonable terms or at all.

 

    	 	 	 

     

    

 

Innovate’s auditor has expressed substantial
doubt about its ability to continue as a going concern.

 

The
audit report on Innovate’s financial statements for the years ended December 31, 2016 and 2015 includes an explanatory paragraph
related to Innovate’s recurring losses from operations and dependence on additional financing to continue as a going concern. Innovate
has incurred net losses for the years ended December 31, 2016 and 2015, and had an accumulated deficit of $7.7 million as of December
31, 2016.  In view of these matters, Innovate’s ability to continue as a going concern is dependent upon its ability
to raise additional debt or equity financing or enter into strategic partnerships. Since its inception, Innovate has financed its
operations through convertible debt financings. Innovate intends to continue to finance its operations through debt or equity financing
and/or strategic partnerships.  The failure to obtain sufficient financing or strategic partnerships could adversely affect
Innovate’s ability to achieve its business objectives and continue as a going concern.

 

Innovate will require substantial additional financing
to obtain regulatory approval for INN-202 for celiac disease, and for further development of INN-108 (for ulcerative colitis) and
INN-329 (for magnetic resonance cholangiopancreatography or MRCP),
and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force Innovate to delay, limit,
reduce or terminate Innovate’s product development efforts or other operations.

 

For the year ended December 31, 2016,
and the nine months ended September 30, 2017, Innovate incurred losses from operations of $5.4 million and $8.9 million, respectively,
and net cash used in operating activities was $2.2 million and $3.2 million, respectively. At September 30, 2017, Innovate
had an accumulated deficit of $17 million, its cash, cash equivalents and investment securities were $1.5 million, and its working
capital deficit was $11.1 million. Innovate expects to continue to incur substantial operating losses for the next several years
as it advances its product candidates through clinical development, US and other regional regulatory approvals, and commercialization.
No revenue from operations will likely be available until, and unless, one of its product candidates is approved by the FDA or
another regulatory agency and successfully marketed, or Innovate enters into an arrangement that provides for licensing revenue
or other partnering-related funding, outcomes which Innovate may not achieve on a timely basis, or at all.

 

Innovate’s capital requirements for
the foreseeable future will depend in large part on, and could increase significantly as a result of, its expenditures on its development
programs. Future expenditures on its development programs are subject to many uncertainties, and will depend on, and could increase
significantly as a result of, many factors, including:

 

		·	the number, size, complexity, results and timing of its drug development programs;

 

		·	the number of clinical and nonclinical studies necessary to demonstrate acceptable evidence of the safety and efficacy of its
product candidates;

 

		·	the terms of any collaborative or other strategic arrangement that Innovate may establish;

 

		·	changes in standards of care which could increase the size and complexity of clinical studies;

 

		·	the ability to locate patients to participate in a study given the limited number of patients available for orphan or ultra-orphan
indications;

 

		·	the number of patients who participate, the rate of enrollment, and the ratio of randomized to evaluable patients in each clinical
study;

 

    	 	 	 

     

    

 

		·	the number and location of sites and the rate of site initiation in each study;

 

		·	the duration of patient treatment and follow-up;

 

		·	the potential for additional safety monitoring or other post-marketing studies that may be requested by regulatory agencies;

 

		·	the time and cost to manufacture clinical trial material and commercial product, including process development and scale-up
activities, and to conduct stability studies, which can last several years;

 

		·	the degree of difficulty and cost involved in securing alternate manufacturers or suppliers of drug product, components or
delivery devices, as necessary to meet FDA requirements and/or commercial demand;

 

		·	the costs, requirements, timing of, and the ability to, secure regulatory approvals;

 

		·	the extent to which Innovate increases its workforce and the costs involved in recruiting, training and incentivizing new employees;

 

		·	the costs related to developing, acquiring and/or contracting for sales, marketing and distribution capabilities, supply chain
management capabilities, and regulatory compliance capabilities, if Innovate obtains regulatory approval for a product candidate
and commercializes it without a partner;

 

		·	the costs involved in evaluating competing technologies and market developments or the loss in sales in case of such competition;
and

 

		·	the costs involved in establishing, enforcing or defending patent claims and other proprietary rights.

 

Additional capital may not be available
when Innovate needs it, on terms that are acceptable to it or at all. If adequate funds are not available to Innovate on a timely
basis, it will be required to delay, limit, reduce or terminate its establishment of sales and marketing, manufacturing or distribution
capabilities, development activities or other activities that may be necessary to commercialize its product candidates, conduct
preclinical or clinical studies, or other development activities.

 

If Innovate raises additional capital through
marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties,
it may have to relinquish certain valuable rights to its product candidates, technologies, future revenue streams or research programs
or grant licenses on terms that may not be favorable. If Innovate raises additional capital through public or private equity offerings,
the ownership interest of its stockholders will be diluted and the terms of any new equity securities may have preferential rights
over its common stock. If Innovate raises additional capital through debt financing, it may be subject to covenants limiting or
restricting its ability to take specific actions, such as incurring additional debt or making capital expenditures, or subject
to specified financial ratios, any of which could restrict its ability to develop and commercialize its product candidates or operate
as a business.

 

    	 	 	 

     

    

 

Innovate has not generated any revenue from product
sales and may never be profitable.

 

Innovate has no products approved for commercialization
and has never generated any revenue from product sales. Innovate’s ability to generate revenue and achieve profitability
depends on its ability, alone or with strategic collaboration partners, to successfully complete the development of, and obtain
the requisite regulatory approvals necessary to commercialize, one or more of its product candidates.

 

Innovate has not paid cash dividends in the past
and does not expect to pay dividends in the future. Any return on investment may be limited to the value of its common stock.

 

Innovate has never paid cash dividends on
our common stock and does not anticipate paying cash dividends in the near future. The payment of dividends on its common stock
will depend on earnings, financial condition and other business and economic factors affecting Innovate at such time as the board
of directors may consider relevant. If Innovate does not pay dividends, its common stock may be less valuable because a return
on your investment will only occur if its stock price appreciates.

 

Risks Related to Innovate’s Business Strategy and
Operations

 

Innovate does not have any products that are approved
for commercial sale.

 

Innovate currently does not have any therapeutic
products approved for commercial sale. Innovate has not received, and may not receive within the next several years, if at all,
any revenues from the commercialization of its product candidates if approved.

 

Innovate is substantially dependent upon the clinical,
regulatory and commercial success of its three product candidates, INN-202, INN-108 and INN-329. Clinical drug development involves
a lengthy and expensive process with an uncertain outcome, results of earlier studies and trials may not be predictive of future
trial results, and Innovate’s clinical trials may fail to adequately demonstrate to the satisfaction of regulatory authorities
the safety and efficacy of its three product candidates.

 

The success of Innovate’s business
is dependent on its ability to advance the clinical development of INN-202 for the treatment of celiac disease, INN-108 for the
treatment of mild to moderate ulcerative colitis, and INN-329 for MRCP. INN-202 has had successful completion of Phase 2 trials
and Phase 3 pivotal studies and long-term safety studies remain to be conducted. INN-108 will be entering into Phase 2 efficacy
trials for mild to moderate ulcerative colitis. INN-329 requires some additional studies to be performed for completion of Phase
3 trials.

 

Clinical testing is expensive and can take
many years to complete. The outcome of this testing is inherently uncertain. A failure of one or more of Innovate’s clinical
trials can occur at any time during the clinical trial process. The results of preclinical studies and early clinical trials of
Innovate’s product candidates may not necessarily be predictive of the results of later-stage clinical trials. There is a
high failure rate for drugs proceeding through clinical trials, and product candidates in later stages of clinical trials may fail
to show the required safety and efficacy despite having progressed through preclinical studies and initial clinical trials. Many
companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy
or adverse safety profiles, notwithstanding promising results in earlier clinical trials, and Innovate cannot be certain that it
will not face similar setbacks. Even if Innovate’s clinical trials are completed, the results may not be sufficient to obtain
regulatory approval for its product candidates.

 

    	 	 	 

     

    

 

Because of the developmental nature of Innovate’s
product candidates, Innovate is subject to risks associated with initiating, completing and achieving positive outcomes from its
current and future clinical trials, including:

 

		·	inability to enroll enough patients in the clinical trials;

 

		·	slow implementation, enrollment and completion of the clinical trials;

 

		·	low patient compliance and adherence to dosing and reporting requirements, such as incomplete reporting of patient reported
outcomes in the clinical trials or missed doses;

 

		·	lack of safety and efficacy in the clinical trials;

 

		·	delays in the manufacture of supplies for drug components due to delays in formulation, process development, or manufacturing
activities;

 

		·	requirements for additional nonclinical or clinical studies based on changes to formulation and/or changes to regulatory requirements;

 

		·	requirements for additional clinical studies based on inconclusive clinical results or changes in market, standard of care,
and/or regulatory requirements;

 

If Innovate successfully completes the necessary
clinical trials for its product candidates, its success will be subject to the risks associated with obtaining regulatory approvals,
product launch, and commercialization, including:

 

		·	delays during regulatory review and/or requirements for additional CMC, nonclinical, or clinical studies, resulting in increased
costs and/or delays in marketing approval and subsequent commercialization of the product candidates in the United States and other
markets;

 

		·	FDA rejection of Innovate’s New Drug Application (“NDA”) submissions for its product candidates;

 

		·	regulatory rejection in the EU, Japan, and other markets;

 

		·	inability to consistently manufacture commercial supplies of drug and delivery devices resulting in slowed market development
and lower revenue;

 

		·	poor commercial sales due to:

 

		o	the ability of Innovate’s future sales organization or its potential commercialization partners to effectively sell the
product candidates;

 

		o	Innovate’s lack of success in educating physicians and patients about the benefits, administration, and use of its product
candidates;

 

		o	low patient demand for the product candidates;

 

		o	the availability, perceived advantages, relative cost, relative safety and relative efficacy of other products or treatments
for the targeted indications of the product candidates;

 

    	 	 	 

     

    

 

		o	poor prescription coverage and inadequate reimbursement for its product candidates;

 

		·	Innovate’s inability to enforce its intellectual property rights in and to its product candidates; and

 

		·	reduction in the safety profile of its product candidates following approval.

 

Many of these clinical, regulatory and commercial
matters are beyond Innovate’s control and are subject to other risks described elsewhere in this “Risk Factors”
annex. Accordingly, Innovate cannot assure that it will be able to advance its product candidates further through final clinical
development, or obtain regulatory approval of, commercialize or generate significant revenue from them. If Innovate cannot do so,
or is significantly delayed in doing so, its business will be materially harmed.

 

If Innovate fails to attract and retain senior management
and key scientific personnel, it may be unable to successfully develop and commercialize its product candidates. 

 

Innovate has historically operated with
a limited number of employees. As of July 31, 2017, Innovate had four full-time employees, including one employee engaged in research
and development. Therefore, institutional knowledge is concentrated within a small number of employees. Innovate’s success
depends in part on its continued ability to attract, retain and motivate highly qualified management, clinical and scientific personnel.
Innovate’s future success is highly dependent upon the contributions of its senior management team. The loss of services
of any of these individuals could delay or prevent the successful development of its product pipeline, completion of its planned
clinical trials or the commercialization of its product candidates.

 

There may be intense competition from other
companies and organizations for qualified personnel. Other companies and organizations with which Innovate competes for personnel
may have greater financial and other resources and different risk profiles than Innovate, and a history of successful development
and commercialization of its product candidates. Replacing key employees may be difficult and costly; and Innovate may not have
other personnel with the capacity to assume all the responsibilities of a key employee upon his/her departure. If Innovate cannot
attract and retain skilled personnel, as needed, Innovate may not achieve its development and other goals.

 

In addition, the success of Innovate’s
business will depend on its ability to develop and maintain relationships with respected service providers and industry-leading
consultants and advisers. If Innovate cannot develop and maintain such relationships, as needed, the rate and success at which
Innovate can develop and commercialize product candidates may be limited. In addition, its outsourcing strategy, which has included
engaging consultants to manage key functional areas, may subject Innovate to scrutiny under labor laws and regulations, which may
divert management time and attention and have an adverse effect on its business and financial condition.

 

    	 	 	 

     

    

 

Innovate has identified a material weakness in its internal
control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an
effective system of internal control, which may impair its ability to produce accurate financial statements or prevent fraud. 

 

Currently, Innovate is a private company
and has limited resources to address its internal controls and procedures and relies on part-time consultants to assist Innovate
with its financial accounting and compliance obligations. In connection with the preparation of Innovate’s audited financial
statements for the year ended December 31, 2016, Innovate’s independent auditors advised management that a material weakness
existed in internal controls over financial reporting due to Innovate’s inability to adequately segregate duties as a result
of Innovate’s limited number of accounting personnel. A material weakness is a deficiency, or a combination of deficiencies,
in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the subject
company’s annual or interim financial statements will not be prevented or detected on a timely basis. Although Innovate is
committed to continuing to improve its internal control processes and intends to implement a plan to remediate this material weakness,
Innovate cannot be certain of the effectiveness of such plan or that, in the future, additional material weaknesses or significant
deficiencies will not exist or otherwise be discovered. If Innovate is unable to maintain proper and effective internal controls,
it may not be able to produce timely and accurate financial statements and prevent fraud.

 

Innovate’s employees, independent contractors and
consultants, principal investigators, CROs, CMOs and other vendors, and any future commercial partners may engage in misconduct
or other improper activities, including noncompliance with regulatory standards and requirements, which could cause significant
liability for Innovate and harm its reputation. 

 

Innovate is exposed to the risk that its
employees, independent contractors and consultants, principal investigators, clinical research organizations (CROs), contract manufacturing
organizations (CMOs) and other vendors, and any future commercial partners may engage in fraudulent conduct or other misconduct.
This type of misconduct may include intentional failures to comply with FDA regulations or similar regulations of comparable foreign
regulatory authorities, to provide accurate information to the FDA or comparable foreign regulatory authorities, to comply with
manufacturing standards required by cGMP or Innovate standards, to comply with federal and state healthcare fraud and abuse laws
and regulations and similar laws and regulations established and enforced by comparable foreign regulatory authorities, and to
report financial information or data accurately or disclose unauthorized activities to them. The misconduct of its employees and
other Innovate service providers could involve the improper use of information obtained in the course of clinical trials, which
could result in regulatory sanctions and serious harm to its reputation. Innovate intends to adopt a code of business ethics and
conduct, but it is not always possible to identify and deter such misconduct, and the precautions Innovate takes to detect and
prevent this activity, such as the implementation of a quality system which entails vendor audits by quality experts, may not be
effective in controlling unknown or unmanaged risks or losses or in protecting Innovate from governmental investigations or other
actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted
against them, and Innovate is not successful in defending itself or asserting its rights, those actions could have a significant
impact on its business and results of operations, including the imposition of significant fines or other sanctions.

 

Innovate does not have, and does not have plans to establish
manufacturing facilities. Innovate completely relies on third parties for the manufacture and supply of its clinical trial drug
and delivery device supplies and, if approved, commercial product materials. The loss of any of these vendors or a vendor’s
failure to provide Innovate with an adequate supply of clinical trial or commercial product material in a timely manner and on
commercially acceptable terms, or at all, could harm its business. 

 

Innovate outsources the manufacture of its
product candidates and does not plan to establish its own manufacturing facilities. To manufacture Innovate’s product candidates,
Innovate has made numerous custom modifications at CMOs, making Innovate highly dependent on these CMOs. For clinical and commercial
supplies, if approved, Innovate has supply agreements with third party CMOs for drug substance and finished drug product. While
Innovate has secured long-term commercial supply agreements with many of the third party CMOs, Innovate would need to negotiate
agreements for commercial supply with several important CMOs, and Innovate may not be able to reach agreement on acceptable terms.
In addition, Innovate relies on these third parties to conduct or assist Innovate in key manufacturing development activities,
including qualification of equipment, developing and validating methods, defining critical process parameters, releasing component
materials and conducting stability testing, among other things. If these third parties are unable to perform their tasks successfully
in a timely manner, whether for technical, financial or other reasons, Innovate may be unable to secure clinical trial material,
or commercial supply material if approved, which likely would delay the initiation, conduct or completion of its clinical studies
or prevent Innovate from having enough commercial supply material for sale, which would have a material and adverse effect on its
business.

 

    	 	 	 

     

    

 

Currently, Innovate does not have alternative
vendors to back up its primary vendors of clinical trial material or, if approved, commercial supply material. Identification of
and discussions with other vendors may be protracted and/or unsuccessful, or these new vendors may be unsuccessful in producing
the same results as the current primary vendors producing the material. Therefore, if its primary vendors become unable or unwilling
to perform their required activities, Innovate could experience protracted delays or interruptions in the supply of clinical trial
material and, ultimately, product for commercial sale, which would materially and adversely affect its development programs, commercial
activities, operating results and financial condition. In addition, the FDA or regulatory authorities outside of the United States
may require Innovate to have an alternate manufacturer of a drug product before approving it for marketing and sale in the United
States or abroad and securing such alternate manufacturer before approval of an NDA could result in considerable additional time
and cost prior to NDA approval.

 

Any new manufacturer or supplier of finished
drug product or its component materials, including drug substance and delivery devices, would be required to qualify under applicable
regulatory requirements and would need to have sufficient rights under applicable intellectual property laws to the method of manufacturing
of such product or ingredients required by Innovate. The FDA or foreign regulatory agency may require Innovate to conduct additional
clinical studies, collect stability data and provide additional information concerning any new supplier, or change in a validated
manufacturing process, including scaling-up production, before Innovate could distribute products from that manufacturer or supplier
or revised process. For example, if Innovate were to engage a third party other than its current CMOs to supply the drug substance
or drug product for future clinical trial, or commercial product, the FDA or regulatory authorities outside of the United States
may require Innovate to conduct additional clinical and nonclinical studies to ensure comparability of the drug substance or drug
product manufactured by its current CMOs to that manufactured by the new supplier.

 

The manufacture of pharmaceutical products
requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process
controls. Manufacturers of pharmaceutical products often encounter difficulties in production, particularly in scaling-up initial
production. These problems include difficulties with production costs and yields, quality control, including stability of the product
candidate and quality assurance testing, and shortages of qualified personnel. Innovate’s product candidates have not been
manufactured at the scale Innovate believes will be necessary to maximize its commercial value and, accordingly, Innovate may encounter
difficulties in attempting to scale-up production and may not succeed in that effort on a timely basis or at all. In addition,
the FDA or other regulatory authorities may impose additional requirements as Innovate scales-up initial production capabilities,
which may delay its scale-up activities and/or add expense.

 

All manufacturers of Innovate’s clinical
trial material and, if approved, commercial product, including drug substance manufacturers, must comply with cGMP requirements
enforced by the FDA through its facilities inspection program and applicable requirements of foreign regulatory authorities. These
requirements include quality control, quality assurance and the maintenance of records and documentation. Manufacturers of Innovate’s
clinical trial material may be unable to comply with these cGMP requirements and with other FDA, state and foreign regulatory requirements.
While Innovate or its representatives generally monitor and audit its manufacturers’ systems, Innovate does not have full
control over their ongoing compliance with these regulations. And while the responsibility to maintain cGMP compliance is shared
between Innovate and the third-party manufacturer, Innovate bears ultimate responsibility for its supply chain and compliance with
regulatory standards. Failure to comply with these requirements may result in fines and civil penalties, suspension of production,
suspension or delay or failure to obtain product approval, product seizure or recall, or withdrawal of product approval.

 

    	 	 	 

     

    

 

If Innovate’s manufacturers encounter
any of the aforementioned difficulties or otherwise fail to comply with their contractual obligations or there are delays entering
commercial supply agreements due to capital constraints, Innovate may have insufficient quantities of material to support ongoing
and/or planned clinical studies or to meet commercial demand, if approved. In addition, any delay or interruption in the supply
of materials necessary or useful to manufacture its product candidates could delay the completion of its clinical studies, increase
the costs associated with its development programs and, depending upon the period of delay, require Innovate to commence new clinical
studies at significant additional expense or terminate the studies completely. Delays or interruptions in the supply of commercial
product could result in increased cost of goods sold and lost sales. Innovate cannot provide assurance that manufacturing or quality
control problems will not arise in connection with the manufacture of its clinical trial material or commercial product, if approved,
or that third-party manufacturers will be able to maintain the necessary governmental licenses and approvals to continue manufacturing
such clinical trial material or commercial product, as applicable. In addition, if Innovate products are manufactured entirely
or partially outside the United States, Innovate may experience interruptions in supply due to shipping or customs difficulties
or regional instability. Furthermore, changes in currency fluctuations, shipping costs, or import tariffs could adversely affect
cost of goods sold. Any of the above factors could cause Innovate to delay or suspend anticipated or ongoing trials, regulatory
submissions or commercialization of its product candidates, entail higher costs or result in Innovate being unable to effectively
commercialize its products. Innovate’s dependence upon third parties for the manufacture of its clinical trial material may
adversely affect its future costs and its ability to develop and commercialize its product candidates on a timely and competitive
basis.

 

Innovate currently relies significantly on third parties
to conduct its nonclinical testing and clinical studies and other aspects of its development programs and if those third parties
do not satisfactorily perform their contractual obligations or meet anticipated deadlines, the development of its product candidates
could be adversely affected. 

 

Innovate does not currently employ personnel
or possess the facilities necessary to conduct many of the activities associated with its programs. Innovate engages consultants,
advisors, clinical research organizations (CROs), and others to assist in the design and conduct of nonclinical and clinical studies
of its product candidates, with interpretation of the results of those studies and with regulatory activities, and Innovate expects
to continue to outsource all or a significant amount of such activities. As a result, many important aspects of its development
programs are and will continue to be outside its direct control, and its third-party service providers may not perform their activities
as required or expected including the maintenance of GCP, GLP and GMP compliance, which are ultimately Innovate’s responsibility
to ensure. Further, such third parties may not be as committed to the success of Innovate’s programs as Innovate’s
own employees and, therefore, may not devote the same time, thoughtfulness or creativity to completing projects or problem-solving
as Innovate’s own employees would. To the extent Innovate is unable to successfully manage the performance of third-party
service providers, its business may be adversely affected.

 

    	 	 	 

     

    

 

The CROs that Innovate may engage to execute
its clinical studies play a significant role in the conduct of the studies, including the collection and analysis of study data,
and Innovate likely will depend on CROs and clinical investigators to conduct future clinical studies and to assist in analyzing
data from completed studies and developing regulatory strategies for its product candidates. Individuals working at the CROs with
which it will contract, as well as investigators at the sites at which its studies are conducted, are not Innovate’s employees,
and Innovate has limited control over the amount or timing of resources that they devote to their programs. If Innovate’s
CROs, study investigators, and/or third-party sponsors fail to devote sufficient time and resources to studies of its product candidates,
if Innovate and/or its CROs do not comply with all GLP and GCP regulatory and contractual requirements, or if their performance
is substandard, it may delay commencement and/or completion of these studies, submission of applications for regulatory approval,
regulatory approval, and commercialization of its product candidates. Failure of CROs to meet their obligations to Innovate could
adversely affect development of its product candidates.

 

In addition, CROs Innovate engages may have
relationships with other commercial entities, some of which may compete with Innovate. Through intentional or unintentional means,
Innovate’s competitors may benefit from lessons learned on the Innovate project that could ultimately harm Innovate’s
competitive position. Moreover, if a CRO fails to properly, or at all, perform its activities during a clinical study, Innovate
may not be able to enter into arrangements with alternative CROs on acceptable terms or in a timely manner, or at all. Switching
CROs may increase costs and divert management time and attention. In addition, there likely would be a transition period before
a new CRO commences work. These challenges could result in delays in the commencement or completion of Innovate’s clinical
studies, which could materially impact its ability to meet its desired and/or announced development timelines and have a material
adverse impact on its business and financial condition.

 

Innovate may not achieve its projected development
goals within the time frames that Innovate has announced.

 

Innovate has set goals for accomplishing
certain objectives material to the successful development of its product candidates. The actual timing of these events may vary
due to many factors, including delays or failures in its nonclinical testing, clinical studies and manufacturing and regulatory
activities and the uncertainties inherent in the regulatory approval process. From time to time, Innovate creates estimates for
the completion of enrollment of or announcement of data from clinical studies of its product candidates. However, predicting the
rate of enrollment or the time from completion of enrollment to announcement of data for any clinical study requires Innovate to
make significant assumptions that may prove to be incorrect. As discussed in other risk factors above, its estimated enrollment
rates and the actual rates may differ materially and the time required to complete enrollment of any clinical study may be considerably
longer than Innovate estimates. Such delays may adversely affect its financial condition and results of operations.

 

Even if Innovate completes a clinical study
with successful results, Innovate may not achieve its projected development goals within the periods Innovate initially anticipates
or announces. If a development plan for a product candidate becomes more extensive and costly than anticipated, Innovate may determine
that the associated time and cost are not financially justifiable and, as a result, may discontinue development in a particular
indication or of the product candidate as a whole. In addition, even if a study did complete with successful results, changes may
occur in regulatory requirements or policy during the period of product development and/or regulatory review of an NDA that relate
to the data required to be included in NDAs which may require additional studies that may be costly and time consuming. Any of
these actions may be viewed negatively, which could adversely impact its financial condition.

 

Further, throughout development, Innovate
must provide adequate assurance to the FDA and other regulatory authorities that Innovate can consistently develop and produce
its product candidates in conformance with GLP, GCP, cGMP, and other regulatory standards. As discussed above, Innovate relies
on CMOs for the manufacture of clinical, and future commercial, quantities of its product candidates. If future FDA or other regulatory
authority inspections identify cGMP compliance deficiencies at these third-party facilities, production of its clinical trial material
or, in the future, commercial product, could be disrupted, causing potentially substantial delay in or failure of development or
commercialization of its product candidates.

 

    	 	 	 

     

    

 

Innovate currently has limited marketing capabilities
and no sales organization. If Innovate is unable to establish sales and marketing capabilities on its own or through third parties,
it will be unable to successfully commercialize its products, if approved, or generate product revenue.

 

To commercialize Innovate’s products,
if approved, in the United States and other jurisdictions it seeks to enter, Innovate must build its marketing, sales, managerial
and other non-technical capabilities or make arrangements with third parties to perform these services, and it may not be successful
in doing so. If Innovate’s products receive regulatory approval, it expects to market such products in the United States
through a focused, specialized sales force, which will be costly and time consuming. Innovate has no prior experience in the marketing
and sale of pharmaceutical products and there are significant risks involved in building and managing a sales organization, including
its ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to
sales and marketing personnel and effectively manage a geographically dispersed sales and marketing team. Outside of the United
States, Innovate may consider collaboration arrangements. If Innovate is unable to enter into such arrangements on acceptable terms
or at all, it may not be able to successfully commercialize its products in certain markets. Any failure or delay in the development
of its internal sales, marketing and distribution capabilities would adversely impact the commercialization of its products. If
Innovate is not successful in commercializing its products, either on its own or through collaborations with one or more third
parties, its future product revenue will suffer and it would incur significant additional losses.

 

To establish a sales and marketing infrastructure and
expand its manufacturing capabilities, Innovate will need to increase the size of its organization, and Innovate may experience
difficulties in managing this growth. 

 

As of July 31, 2017, Innovate had four full-time
employees, including one employee engaged in research and development. As Innovate advances its product candidates through the
development process and to commercialization, it will need to continue to expand its development, regulatory, quality, managerial,
sales and marketing, operational, finance and other resources to manage its operations and clinical trials, continue its development
activities and commercialize its product candidates, if approved. As its operations expand, Innovate expects that it will need
to manage additional relationships with various manufacturers and collaborative partners, suppliers and other organizations.

 

Due to Innovate’s limited financial
resources and its limited experience in managing a company with such anticipated growth, Innovate may not be able to effectively
manage the expansion of its operations or recruit and train additional qualified personnel. In addition, the physical expansion
of its operations may lead to significant costs and may divert its management and resources. Any inability to manage growth could
delay the execution of its development and strategic objectives, or disrupt its operations, which could materially impact its business,
revenue and operating results.

 

    	 	 	 

     

    

 

Innovate’s product candidates may cause undesirable
side effects or adverse events, or have other properties that could delay or prevent its clinical development, regulatory approval
or commercialization. 

 

As with many pharmaceutical products, undesirable
side effects or adverse events caused by Innovate’s product candidates could interrupt, delay or halt clinical studies and
could result in the denial of regulatory approval by the FDA or other regulatory authorities for any or all indications, and in
turn prevent Innovate from commercializing its product candidates. A significant challenge in clinical development is that the
patient population in early studies, where small numbers of patients are required, is different from the patient population observed
in later stage studies, where larger groups of patients are required. For example, patients in earlier stage studies may be sicker,
more compliant, or otherwise motivated than patients in larger studies.

 

If undesirable side effects occur, they
could possibly prevent approval, which would have a material and adverse effect on its business.

 

If any of its product candidates receive
marketing approval and Innovate or others later identify undesirable side effects caused by the product:

 

		·	regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication;

 

		·	Innovate may be required to change the way the product is administered, conduct additional clinical studies or change the labeling
of the product; and

 

		·	regulatory authorities may withdraw approval of the product;

 

		·	its reputation may suffer.

 

Any of these events could prevent Innovate
from achieving or maintaining market acceptance of the affected product or could substantially increase the costs and expenses
of commercializing the product, which in turn could delay or prevent Innovate from generating significant revenue from its sale.

 

Innovate’s business and operations would suffer
in the event of third-party computer system failures, cyber-attacks on third-party systems or deficiency in its cyber security.

 

Innovate relies on information technology
systems, including third-party “cloud based” service providers, to keep financial records, maintain laboratory data,
clinical data and corporate records, to communicate with staff and external parties, and to operate other critical functions. This
includes critical systems such as email, other communication tools, electronic document repositories, and archives. If any of these
third-party information technology (IT) providers are compromised due to computer viruses, unauthorized access, malware, natural
disasters, fire, terrorism, war and telecommunication failures, electrical failures, cyber-attacks or cyber-intrusions over the
internet, then sensitive emails or documents could be exposed or deleted. Similarly, Innovate could incur business disruption if
its access to the internet is compromised and Innovate is unable to connect with third-party IT providers. The risk of a security
breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments,
and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from
around the world have increased. In addition, Innovate relies on those third parties to safeguard important confidential personal
data regarding its employees and patients enrolled in its clinical trials. If a disruption event were to occur and cause interruptions
in a third-party IT provider’s operations, it could result in a disruption of its drug development programs. For example,
the loss of clinical trial data from completed, ongoing or planned clinical trials could result in delays in its regulatory approval
efforts and significantly increase its costs to recover or reproduce the data. To the extent that any disruption or security breach
results in a loss of or damage to its data or applications, or inappropriate disclosure of confidential or proprietary information,
Innovate could incur liability and development of its product candidates could be delayed, or could fail.

 

    	 	 	 

     

    

 

Risks Related to Drug Development and Commercialization

 

Innovate depends on the successful completion of clinical
studies of its product candidates, and any positive results in prior clinical studies do not ensure that ongoing or future clinical
studies will be successful. 

 

Pharmaceutical products are subject to stringent
regulatory requirements covering quality, safety, and efficacy. The burden of proof is on the manufacturer, such as Innovate, to
show with substantial clinical data that the risk/benefit profile for any new drug is favorable. Only after successfully completing
extensive pharmaceutical development, nonclinical testing, and clinical studies may a product be considered for regulatory approval.

 

If Innovate licenses rights to develop its
product candidates to independent third parties or otherwise permit such third parties to evaluate its product candidates in clinical
studies, Innovate may have limited control over those clinical studies. Any safety or efficacy concern identified in a third-party
sponsored study could adversely affect its or another licensee’s development of its product candidate and prospects for its
regulatory approval, even if the data from that study are subject to varying interpretations and analyses.

 

There is significant risk that ongoing and
future clinical studies of its product candidates are unsuccessful. Negative or inconclusive results could cause the FDA and other
regulatory authorities to require Innovate to repeat or conduct additional clinical studies, which could significantly increase
the time and expense associated with development of that product candidate or cause Innovate to elect to discontinue one or more
clinical programs. Failure to complete a clinical study of a product candidate or an unsuccessful result of a clinical study could
have a material adverse effect on its business.

 

Clinical drug development involves a lengthy and expensive
process, with an uncertain outcome. We may incur additional costs or experience delays in completing, or ultimately be unable to
complete, the development and commercialization of our drug candidates.

 

Clinical studies are expensive, difficult
to design and implement, may take many years to complete, and outcomes are inherently uncertain. A drug product may fail to demonstrate
positive results at any stage of testing despite having progressed satisfactorily through nonclinical testing and initial clinical
studies. There is significant risk in clinical development where later stage clinical studies are designed and powered based on
the analysis of data from earlier studies, with these earlier studies involving a smaller number of patients, and the results of
the earlier studies being driven primarily by a subset of responsive patients. In addition, interim results of a clinical study
do not necessarily predict final results. Further, clinical study data frequently are susceptible to varying interpretations. Medical
professionals and/or regulatory authorities may analyze or weigh study data differently than the sponsor company, resulting in
delay or failure to obtain marketing approval for a product candidate. Additionally, the possible lack of standardization across
multiple investigative sites may induce variability in the results, which can interfere with the evaluation of treatment effects.

 

Delays in commencement and completion of clinical studies
are common and have many causes. Delays in clinical studies of Innovate’s product candidates could increase overall development
costs and jeopardize its ability to obtain regulatory approval and successfully commercialize any approved products. 

 

Clinical studies may not commence on time
or be completed on schedule, if at all. The commencement and completion of clinical studies can be delayed for a variety of reasons,
including:

 

    	 	 	 

     

    

 

		·	inability to raise sufficient funding to initiate or to continue a clinical study;

 

		·	delays in obtaining regulatory approval to commence a clinical study;

 

		·	delays in identifying and reaching agreement on acceptable terms with prospective contract research organizations, or CROs,
and clinical study sites and investigators, which agreements can be subject to extensive negotiation and may vary significantly
among study sites;

 

		·	delays in obtaining regulatory approval in a prospective country;

 

		·	delays in obtaining ethic committee approval to conduct a clinical study at a prospective site;

 

		·	delays in reaching agreements on acceptable terms with prospective contract manufacturing organizations, or CMOs, or other
vendors for the production and supply of clinical trial material and, if necessary, drug administration devices, which agreements
can be subject to extensive negotiation;

 

		·	delays in the production or delivery of sufficient quantities of clinical trial material from its CMOs and other vendors to
initiate or continue a clinical study;

 

		·	delays due to product candidate recalls as a result of stability failure, excessive product complaints or other failures of
the product candidate during its use or testing;

 

		·	invalidation of clinical data caused by premature unblinding or integrity issues;

 

		·	invalidation of clinical data caused by mixing up of the active drug and placebo through randomization or manufacturing errors;

 

		·	delays on the part of its CROs, CMOs, and other third-party contractors in developing procedures and protocols or otherwise
conducting activities in accordance with applicable policies and procedures and in accordance with agreed upon timelines;

 

		·	delays in identifying and hiring or engaging, as applicable, additional employees or consultants to assist in managing clinical
study-related activities;

 

		·	delays in recruiting and enrolling individuals to participate in a clinical study, which historically can be challenging in
orphan diseases;

 

		·	delays caused by patients dropping out of a clinical study due to side effects, concurrent disorders, difficulties in adhering
to the study protocol, unknown issues related to different patient profiles than in previous studies, or otherwise;

 

		·	delays in having patients complete participation in a clinical study, including returning for post-treatment follow-up;

 

		·	delays resulting from study sites dropping out of a trial, providing inadequate staff support for the study, problems with
shipment of study supplies to clinical sites, or focusing its staff’s efforts on enrolling studies that compete for the same
patient population;

 

    	 	 	 

     

    

 

		·	suspension of enrollment at a study site or the imposition of a clinical hold by the FDA or other regulatory authority following
an inspection of clinical study operations at study sites or finding of a drug-related serious adverse event; and

 

		·	delays in quality control/quality assurance procedures necessary for study database lock and analysis of unblinded data.

 

Innovate may experience difficulties in the enrollment
of patients in its clinical trials, which may delay or prevent Innovate from obtaining regulatory approval. 

 

Innovate may not be able to continue clinical
trials for its product candidates if Innovate is unable to locate and enroll a sufficient number of eligible patients to participate
in these trials as required by the FDA or similar regulatory authorities outside the United States. In particular, because Innovate
is focused on diseases in genomically defined patient populations, our ability to enroll eligible patients may be limited or may
result in slower enrollment than we anticipate. In addition, some of our competitors have ongoing clinical trials for drug candidates
that treat the same indications as our drug candidates, and patients who would otherwise be eligible for our clinical trials may
instead enroll in clinical trials of our competitors’ drug candidates.

 

Patient enrollment, a critical component
to successful completion of a clinical study, is affected by many factors, including:

 

		·	the size of the target patient population;

 

		·	other ongoing studies competing for the same patient population;

 

		·	the eligibility criteria for the clinical trial;

 

		·	the design of the clinical study;

 

		·	the perceived risks and benefits of the product candidate under study;

 

		·	the efforts to facilitate timely enrollment in clinical trials;

 

		·	the proximity and availability of clinical trial sites for prospective patients; and

 

		·	the ability to monitor patients adequately during and after treatment.

 

Clinical studies may not begin on time or
be completed in the time frames Innovate anticipates. The length of time necessary to successfully complete clinical studies varies
significantly and is difficult to predict accurately. Innovate may make statements regarding anticipated timing for completion
of enrollment in and/or availability of results from its clinical studies, but such predictions are subject to a number of significant
assumptions and actual timing may differ materially for a variety of reasons, including patient enrollment rates, length of time
needed to prepare raw study data for analysis and then to review and analyze it, and other factors described above. If Innovate
experiences delays in the completion of a clinical study, if a clinical study is terminated, or if failure to conduct a study in
accordance with regulatory requirements or the study’s protocol leads to deficient safety and/or efficacy data, the regulatory
approval and/or commercial prospects for its product candidates may be harmed and its ability to generate product revenue will
be delayed. In addition, any delays in completing its clinical studies likely will increase its development costs. Further, many
of the factors that cause, or lead to, a delay in the commencement or completion of clinical studies may ultimately lead to the
denial of regulatory approval of a product candidate. Even if Innovate ultimately commercializes its product candidates, the standard
of care may have changed or other therapies for the same indications may have been introduced to the market in the interim and
may establish a competitive threat to Innovate or may diminish the need for Innovate’s products.

 

    	 	 	 

     

    

 

Clinical studies are very expensive, difficult to design
and implement, often take many years to complete, and the outcome is inherently uncertain. 

 

Clinical development of pharmaceutical products
for humans is generally very expensive, takes many years to complete and failures can occur at any stage of clinical testing. Innovate
estimates that clinical development of its product candidates will take several additional years to complete, but because of the
variety of factors that can affect the design, timing, and outcome of clinical studies, Innovate is unable to estimate the exact
funds required to complete research and development, to obtain regulatory approval and to commercialize all of its product candidates.
Innovate will need significant additional capital to continue to advance its products as per current business plans.

 

Failure at any stage of clinical testing
is not uncommon and Innovate may encounter problems that would require additional, unplanned studies or cause Innovate to abandon
a clinical development program.

 

In addition, a clinical study may be suspended
or terminated by Innovate, an IRB, a data safety monitoring board, the FDA or other regulatory authorities due to a number of factors,
including:

 

		·	lack of adequate funding to continue the study;

 

		·	failure to conduct the study in accordance with regulatory requirements or the study’s protocol;

 

		·	inspection of clinical study operations or sites by the FDA or other regulatory authorities resulting in the imposition of
a clinical hold;

 

		·	unforeseen safety issues, including adverse side effects; or

 

		·	changes in governmental regulations or administrative actions.

 

Changes in governmental regulations and
guidance relating to clinical studies may occur and Innovate may need to amend study protocols to reflect these changes, or Innovate
may amend study protocols for other reasons. Amendments may require Innovate to resubmit protocols to IRBs for reexamination and
approval or renegotiate terms with CROs, study sites and investigators, all of which may adversely impact the costs or timing of
or its ability to successfully complete a trial.

 

There is significant uncertainty regarding the regulatory
approval process for any investigational new drug, substantial further testing and validation of its product candidates and related
manufacturing processes may be required, and regulatory approval may be conditioned, delayed or denied, any of which could delay
or prevent Innovate from successfully marketing its product candidates and substantially harm its business.

 

Pharmaceutical products generally are subject
to rigorous nonclinical testing and clinical studies and other approval procedures mandated by the FDA and foreign regulatory authorities.
Various federal and foreign statutes and regulations also govern or materially influence the manufacturing, safety, labeling, storage,
record keeping and marketing of pharmaceutical products. The process of obtaining these approvals and the subsequent compliance
with appropriate U.S. and foreign statutes and regulations is time-consuming and requires the expenditure of substantial resources.

 

    	 	 	 

     

    

 

Innovate is preparing INN-202, larazotide
acetate, for a Phase 3 clinical trial, the success of which will be needed for FDA approval to market INN-202 in the United States
to treat celiac disease in patients with persistent symptoms while adhering to a gluten free diet. While significant communication
with the FDA on the Phase 3 study design has occurred, even if the Phase 3 clinical study meets all of its statistical goals and
protocol end points, the FDA may not view the results as robust and convincing. They may require additional clinical studies and/or
other costly studies, which could require Innovate to expend substantial additional resources and could significantly extend the
timeline for clinical development prior to market approval. Additionally, Innovate is required by the FDA to conduct a long-term
safety study. The results of this study will not be known until a short time prior to potential submission of an NDA for INN-202.
If the safety study cannot be completed for technical or other reasons, or provides results that the FDA determines to be concerning,
this may cause a delay or failure in obtaining approval for INN-202.

 

INN-108 plans to initiate Phase 2 clinical
trials for mild to moderate ulcerative colitis. Concurrently, Innovate plans to make formulation changes to INN-108 that would
simplify the composition for use in pediatric patients. While this change is expected by Innovate to reduce studies and/or other
documentation requirements, the regulatory agencies may require additional clinical or nonclinical studies prior to approval, even
if current clinical studies are deemed successful, which could require Innovate to expend substantial additional resources and
significantly extend the timeline for clinical development of INN-108.

 

Innovate is preparing INN-329, secretin,
for additional testing in its Phase 3 clinical trial, the success of which will be needed for FDA approval to market INN-329 in
the United States for MRCP procedures. While significant communication with the FDA on the Phase 3 study design has occurred in
the past, Innovate will be required to initiate communication with the FDA to finalize the study design and to seek their approval
for the additional Phase 3 trial design. Even if the Phase 3 clinical study meets all of its statistical goals and protocol end
points, the FDA may not view the results as robust and convincing. The FDA may require additional clinical studies and/or other
costly studies, which could require Innovate to expend substantial additional resources and could significantly extend the timeline
for clinical development prior to market approval. Additionally, Innovate is required by the FDA to conduct a long term safety
study. The results of this study will not be known until a short time prior to potential submission of an NDA for INN-329. If the
safety study cannot be completed for technical or other reasons, or provides results that the FDA determines to be concerning,
this may cause a delay or failure in obtaining approval for INN-329.

 

Significant uncertainty exists with respect
to the regulatory approval process for any investigational new drug, including INN-202, INN-108 and INN-329. Regardless of any
guidance the FDA or foreign regulatory agencies may provide a drug’s sponsor during its development, the FDA or foreign regulatory
agencies retain complete discretion in deciding whether to accept an NDA or the equivalent foreign regulatory approval submission
for filing or, if accepted, approve an NDA. There are many components to an NDA or marketing authorization application submission
in addition to clinical study data. For example, the FDA or foreign regulatory agencies will review the sponsor’s internal
systems and processes, as well as those of its CROs, CMOs and other vendors, related to development of its product candidates,
including those pertaining to its clinical studies and manufacturing processes. Before accepting an NDA for review or before approving
the NDA, the FDA or foreign regulatory agencies may request that Innovate provide additional information that may require significant
resources and time to generate and there is no guarantee that its product candidates will be approved for any indication for which
Innovate may apply. The FDA or foreign regulatory agencies may choose not to approve an NDA for any of a variety of reasons, including
a decision related to the safety or efficacy data, manufacturing controls or systems, or for any other issues that the agency may
identify related to the development of its product candidates. Even if one or more Phase 3 clinical studies are successful in providing
statistically significant evidence of the efficacy and safety of the investigational drug, the FDA or foreign regulatory agencies
may not consider efficacy and safety data from the submitted studies adequate scientific support for a conclusion of effectiveness
and/or safety and may require one or more additional Phase 3 or other studies prior to granting marketing approval. If this were
to occur, the overall development cost for the product candidate would be substantially greater and its competitors may bring products
to market before Innovate, which could impair its ability to generate revenues from the product candidates, or even seek approval,
if blocked by a competitor’s Orphan Drug exclusivity, which would have a material adverse effect on Innovate’s business,
financial condition and results of operations.

 

    	 	 	 

     

    

 

Further, development of Innovate’s
product candidates and/or regulatory approval may be delayed for reasons beyond its control. For example, U.S. federal government
shut-down or budget sequestration, such as one that occurred during 2013, may result in significant reductions to the FDA’s
budget, employees and operations, which may lead to slower response times and longer review periods, potentially affecting Innovate’s
ability to progress development of its product candidates or obtain regulatory approval for its product candidates.

 

Even if the FDA or foreign regulatory agencies
grant approvals for Innovate’s product candidates, the conditions or scope of the approval(s) may limit successful commercialization
of the product candidates and impair Innovate’s ability to generate substantial sales revenue. The FDA or foreign regulatory
agencies may also only grant marketing approval contingent on the performance of costly post-approval nonclinical or clinical studies,
or subject to warnings or contraindications that limit commercialization. Additionally, even after granting approval, the manufacturing
processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for its
products will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and
other post-marketing information and reports, registration, and continued compliance with current good manufacturing processes,
or cGMP, good clinical practices, international conference on harmonization regulations and good laboratory practices, which are
regulations and guidelines that are enforced by the FDA or foreign regulatory agencies for all of its clinical development and
for any clinical studies that Innovate conducts post-approval. The FDA or foreign regulatory agencies may decide to withdraw approval,
add warnings or narrow the approved indications in the product label, or establish risk management programs that could restrict
distribution of its products. These actions could result from, among other things, safety concerns, including unexpected side effects
or drug-drug interaction problems, or concerns over misuse of a product. If any of these actions were to occur following approval,
Innovate may have to discontinue commercialization of the product, limit its sales and marketing efforts, implement risk minimization
procedures, and/or conduct post-approval studies, which in turn could result in significant expense and delay or limit its ability
to generate sales revenues.

 

Regulations may be changed prior to submission
of an NDA that require higher hurdles than currently anticipated. These may occur as a result of drug scandals, recalls, or a political
environment unrelated to Innovate’s products.

 

    	 	 	 

     

    

 

Even if Innovate receives regulatory approval for a product
candidate, Innovate may face regulatory difficulties that could materially and adversely affect its business, financial condition
and results of operations. 

 

Even if initial regulatory approval is obtained,
as a condition to the initial approval the FDA or a foreign regulatory agency may impose significant restrictions on a product’s
indicated uses or marketing or impose ongoing requirements for potentially costly post-approval studies or marketing surveillance
programs, any of which would limit the commercial potential of the product. Its product candidates also will be subject to ongoing
FDA requirements related to the manufacturing processes, labeling, packaging, storage, distribution, advertising, promotion, record-keeping
and submission of safety and other post-market information regarding the product. For instance, the FDA may require changes to
approved drug labels, require post-approval clinical studies and impose distribution and use restrictions on certain drug products.
In addition, approved products, manufacturers and manufacturers’ facilities are subject to continuing regulatory review and
periodic inspections. If previously unknown problems with a product are discovered, such as adverse events of unanticipated severity
or frequency, or problems with the facility where the product is manufactured, the FDA may impose restrictions on that product
or Innovate, including requiring withdrawal of the product from the market. If Innovate or a CMO of Innovate’s fails to comply
with applicable regulatory requirements, a regulatory agency may:

 

		·	issue warning letters or untitled letters;

 

		·	impose civil or criminal penalties;

 

		·	suspend or terminate any ongoing clinical studies;

 

		·	close the facilities of a CMO;

 

		·	refuse to approve pending applications or supplements to approved applications;

 

		·	suspend or withdraw regulatory approval;

 

		·	exclude its product from reimbursement under government healthcare programs, including Medicaid or Medicare;

 

		·	impose restrictions or affirmative obligations on Innovate’s or its CMO’s operations, including costly new manufacturing
requirements; or

 

		·	seize or detain products or require a product recall.

 

If any of Innovate’s product candidates for which
Innovate receives regulatory approval fails to achieve significant market acceptance among the medical community, patients or third-party
payers, the revenue Innovate generates from its sales will be limited and its business may not be profitable. 

 

Innovate’s success will depend in
substantial part on the extent to which its product candidates, if approved, are accepted by the medical community and patients
and reimbursed by third-party payers, including government payers. Innovate cannot predict with reasonable accuracy whether physicians,
patients, healthcare insurers or health maintenance organizations, or the medical community in general, will accept or utilize
any of its products, if approved. If its product candidates are approved but do not achieve an adequate level of acceptance by
these parties, Innovate may not generate sufficient revenue to become or to remain profitable. In addition, its efforts to educate
the medical community and third-party payers regarding benefits of its products may require significant resources and may never
be successful.

 

The degree of market acceptance with respect
to each of its approved products, if any, will depend upon a number of factors, including:

 

		·	the safety and efficacy of its products as demonstrated in clinical studies;

 

    	 	 	 

     

    

 

		·	acceptance in the medical and patient communities of its products as a safe and effective treatment;

 

		·	the perceived advantages of its product over alternative treatments, including with respect to the incidence and severity of
any adverse side effects and the cost of treatment;

 

		·	the indications for which its product is approved;

 

		·	claims or other information (including limitations or warnings) in its product’s approved labeling;

 

		·	reimbursement and coverage policies of government and other third-party payers;

 

		·	smaller than expected market size due to lack of disease awareness of a rare disease, or the patient population with a specific
rare disease being smaller than anticipated;

 

		·	availability of alternative treatments;

 

		·	pricing and cost-effectiveness of its product relative to alternative treatments;

 

		·	inappropriate diagnostic efforts due to limited knowledge and/or resources among clinicians;

 

		·	the prevalence of off-label substitution of chemically equivalent products or alternative treatments; and

 

		·	the resources Innovate devotes to marketing its product and restrictions on promotional claims Innovate can make with respect
to the product.

 

If Innovate determines that a product candidate
may not achieve adequate market acceptance or that the potential market size does not justify additional expenditure on the program,
Innovate may reduce its expenditures on the development and/or the process of seeking regulatory approval of the product candidate
while Innovate evaluates whether and on what timeline to move the program forward.

 

Even if Innovate receives regulatory approval to market
one or more of its product candidates in the United States, Innovate may never receive approval or commercialize its products outside
of the United States, which would limit its ability to realize the full commercial potential of its product candidates. 

 

In order to market products outside of the
United States, Innovate must establish and comply with the numerous and varying regulatory requirements of other countries regarding
safety and efficacy. Approval procedures vary among countries and can involve additional product testing and validation and additional
administrative review periods. The time required to obtain approval in other countries generally differs from that required to
obtain FDA approval. The regulatory approval process in other countries may include all of the risks detailed above regarding FDA
approval in the United States, as well as other risks. Regulatory approval in one country does not ensure regulatory approval in
another, but a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process
in others. Failure to obtain regulatory approval in other countries or any delay or setback in obtaining such approval could have
the same adverse effects detailed above regarding FDA approval in the United States. As described above, such effects include the
risks that its product candidates may not be approved for all indications requested, which could limit the uses of its product
candidates and have an adverse effect on product sales, and that such approval may be subject to limitations on the indicated uses
for which the product may be marketed or require costly, post-marketing follow-up studies.

 

    	 	 	 

     

    

 

Conversely, if the product candidates do
receive approval outside the US in the future, Innovate may not meet the FDA requirements in the United States for approval.

 

Innovate must comply with the U.S. Foreign Corrupt Practices
Act and similar foreign anti-corruption laws.

 

The U.S. Foreign Corrupt Practices Act,
to which Innovate is subject, prohibits corporations and individuals from engaging in certain activities to obtain or retain business
or to influence a person working in an official capacity. It is illegal to pay, to offer to pay or to authorize the payment of
anything of value to any foreign government official, government staff member, political party or political candidate in an attempt
to obtain or retain business or to otherwise influence a person working in an official capacity. Other countries, such as the U.K.,
have similar laws with which Innovate must comply. Innovate faces the risk that an employee or agent could be accused of violating
one or more of these laws, particularly in geographies where significant overlap exists between local government and healthcare
industries. Such an accusation, even if unwarranted, could prove disruptive to Innovate’s developmental and commercialization
efforts.

 

Risks Related to Innovate’s Intellectual Property

 

Innovate’s success will depend in part on obtaining
and maintaining effective patent and other intellectual property protection for its product candidates and proprietary technology.

 

Innovate relies on patents and other intellectual
property to maintain exclusivity for its product candidates. INN-202 and INN-108 are covered by several issued patents in the U.S.
as well as patents outside the U.S., with patent applications pending in several jurisdictions. INN-329 is not protected by patents.
Further, the INN-202 primary end point is a proprietary Patient Report Outcome measure (CeD PRO) that is protected by copyright.
Intellectual property relating to the INN-202 program is exclusively licensed from Alba Therapeutics Corp. Intellectual property
relating to INN-108 program is exclusively licensed from Seachaid Pharmaceuticals Inc. Innovate’s success will depend in
part on its ability to:

 

		·	obtain and maintain patents and other exclusivity with respect to its products;

 

		·	prevent third parties from infringing upon its proprietary rights;

 

		·	maintain proprietary know-how and trade secrets;

 

		·	operate without infringing upon the patents and proprietary rights of others; and

 

		·	obtain and maintain appropriate licenses to patents or proprietary rights held by third parties if infringement would otherwise
occur or if necessary to secure exclusive rights to them, both in the United States and in foreign countries.

 

The patent and intellectual property positions
of biopharmaceutical companies generally are highly uncertain, involve complex legal and factual questions, and have been and continue
to be the subject of much litigation. There is no guarantee that Innovate has or will develop or obtain the rights to products
or processes that are patentable, that patents will issue from any pending applications or that claims issued will be sufficient
to protect the technology Innovate develops or has developed or that is used by Innovate, its CMOs or its other service providers.
In addition, any patents that are issued and/or licensed to Innovate may be limited in scope or challenged, invalidated, infringed
or circumvented, including by its competitors, and any rights Innovate has under issued and/or licensed patents may not provide
competitive advantages to Innovate. If competitors can develop and commercialize technology and products similar to Innovate’s,
its ability to successfully commercialize its technology and products may be impaired.

 

    	 	 	 

     

    

 

Patent applications in the United States
are confidential for a period of time until they are published, and publication of discoveries in scientific or patent literature
typically lags actual discoveries by several months. As a result, Innovate cannot be certain that the inventors listed in any patent
or patent application owned or licensed by Innovate were the first to conceive of the inventions covered by such patents and patent
applications (for U.S. patent applications filed before March 16, 2013), or that such inventors were the first to file patent
applications for such inventions outside the United States and, after March 15, 2013, in the United States. In addition, changes
in or different interpretations of patent laws in the United States and foreign countries may affect Innovate’s patent rights
and limit the patents Innovate can obtain, which could permit others to use its discoveries or to develop and to commercialize
Innovate’s technology and products without any compensation to Innovate.

 

Innovate also relies on unpatented know-how
and trade secrets and continuing technological innovation to develop and maintain its competitive position, which Innovate seeks
to protect, in part, through confidentiality agreements with employees, consultants, collaborators and others. Innovate also has
invention or patent assignment agreements with its employees and certain consultants. The steps Innovate has taken to protect its
proprietary rights, however, may not be adequate to preclude misappropriation of or otherwise protect its proprietary information
or prevent infringement of its intellectual property rights, and Innovate may not have adequate remedies for any such misappropriation
or infringement. In addition, it is possible that inventions relevant to Innovate’s business could be developed by a person
not bound by an invention assignment agreement with Innovate or independently discovered by a competitor.

 

Innovate also intends to rely on regulatory
exclusivity for protection of its product candidates, if approved for commercial sale. Implementation and enforcement of regulatory
exclusivity, which may consist of regulatory data protection and market protection, varies widely from country to country. Failure
to qualify for regulatory exclusivity, or failure to obtain or to maintain the extent or duration of such protections that Innovate
expects for its product candidates, if approved, could affect its decision on whether to market the products in a particular country
or countries or could otherwise have an adverse impact on its revenue or results of operations.

 

Innovate may rely on trademarks, trade names
and brand names to distinguish its products, if approved for commercial sale, from the products of its competitors. However, Innovate’s
trademark applications may not be approved. Third parties may also oppose Innovate’s trademark applications or otherwise
challenge its use of the trademarks in which case Innovate may expend substantial resources to defend its proposed or approved
trademarks and may enter into agreements with third parties that may limit Innovate’s use of its trademarks. In the event
that Innovate’s trademarks are successfully challenged, Innovate could be forced to rebrand its products, which could result
in loss of brand recognition and could require Innovate to devote significant resources to advertising and marketing these new
brands. Further, Innovate’s competitors may infringe its trademarks or Innovate may not have adequate resources to enforce
its trademarks.

 

    	 	 	 

     

    

 

Innovate’s success depends on its ability to prevent
competitors from duplicating or developing and commercializing equivalent versions of its product candidates, and intellectual
property protection may not be sufficient or effective to exclude this competition. 

 

Innovate has patent protection in the United
States and other countries to cover the composition of matter, formulation and method of use for INN-202 and INN-108. However,
these patents may not provide Innovate with significant competitive advantages, because the validity, scope, term, or enforceability
of the patents may be challenged and, if instituted, one or more of the challenges may be successful. Patents may be challenged
in the United States under post-grant review proceedings, inter partes reexamination, ex parte re-examination, or
challenged in district court. Any patents issued in foreign jurisdictions may be subjected to comparable proceedings lodged in
various foreign patent offices, or courts. These proceedings could result in either loss of the patent or loss or reduction in
the scope of one or more of the claims of the patent. Even if a patent issues, and is held valid and enforceable, competitors may
be able to design around Innovate’s patent rights, such as by using pre-existing or newly developed technology, in which
case competitors may not infringe Innovate’s issued claims and may be able to market and sell products that compete directly
with Innovate’s before and after its patents expire.

 

Further, the INN-202 primary end point is
a proprietary Patient Report Outcome measure (CeD PRO) that is protected by copyright. However, copyright protection may not be
sufficient to exclude others from developing products that compete with INN-202.

 

The patent prosecution process is expensive
and time-consuming. Innovate and any future licensors and licensees may not apply for or prosecute patents on certain aspects of
its product candidates at a reasonable cost, in a timely fashion, or at all. Innovate may not have the right to control the preparation,
filing and prosecution of some patent applications related to its product candidates or technologies. As a result, these patents
and patent applications may not be prosecuted and enforced in a manner consistent with the best interests of Innovate. It is also
possible that Innovate or any future or present licensors or licensees will fail to identify patentable aspects of inventions made
in the course of development and commercialization activities before it is too late to obtain patent protection on them. Further,
it is possible that defects of form in the preparation or filing of Innovate’s patent applications may exist, or may arise
in the future, such as with respect to proper priority claims, inventorship, assignment, term or claim scope. If there are material
defects in the form or preparation of its patents or patent applications, such patents or applications may be invalid or unenforceable.
In addition, one or more parties may independently develop similar technologies or methods, duplicate its technologies or methods,
or design around the patented aspects of its products, technologies or methods. Any of these circumstances could impair Innovate’s
ability to protect its products, if approved, in ways which may have an adverse impact on Innovate’s business, financial
condition and operating results.

 

Furthermore, the issuance of a patent is
not conclusive as to its inventorship, scope, validity or enforceability, and Innovate’s owned and licensed patents may be
challenged in the courts or patent offices in and outside of the United States. Such challenges may result in loss of exclusivity
or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit
Innovate’s ability to use its patents to stop others from using or commercializing similar or identical products or technology,
or to limit the duration of the patent protection of its technology and drugs. Given the amount of time required for the development,
testing and regulatory review of new drug candidates, patents protecting such candidates might expire before or shortly after such
candidates are commercialized. As a result, Innovate’s owned and licensed patent portfolio may not provide Innovate with
sufficient rights to exclude others from commercializing drugs similar to or identical to those of Innovate.

 

Enforcement of intellectual property rights
in certain countries outside the United States, including China in particular, has been limited or non-existent. Future enforcement
of patents and proprietary rights in many other countries will likely be problematic or unpredictable. Moreover, the issuance of
a patent in one country does not assure the issuance of a similar patent in another country. Claim interpretation and infringement
laws vary by nation, so the extent of any patent protection is uncertain and may vary in different jurisdictions.

 

    	 	 	 

     

    

 

Obtaining and maintaining patent protection depends on
compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies,
and Innovate’s patent protection could be reduced or eliminated for non-compliance with these requirements. 

 

Periodic maintenance fees, renewal fees,
annuity fees and various other governmental fees on patents and applications are required to be paid to the United States Patent
and Trademark Office, or USPTO, and various governmental patent agencies outside of the United States in several stages over the
lifetime of the patents and applications. The USPTO and various non-U.S. governmental patent agencies require compliance with a
number of procedural, documentary, fee payment and other similar provisions during the patent application process and after a patent
has issued. There are situations in which non-compliance can result in decreased patent term or in abandonment or lapse of the
patent or patent application, leading to partial or complete loss of patent rights in the relevant jurisdiction.

 

Third parties may claim that Innovate’s products,
if approved, infringe on their proprietary rights and may challenge the approved use or uses of a product or its patent rights
through litigation or administrative proceedings, and defending such actions may be costly and time consuming, divert management
attention away from Innovate’s business, and result in an unfavorable outcome that could have an adverse effect on Innovate’s
business. 

 

Innovate’s commercial success depends
on its ability and the ability of its CMOs and component suppliers to develop, manufacture, market and sell its products and product
candidates and use its proprietary technologies without infringing the proprietary rights of third parties. Numerous U.S. and foreign
issued patents and pending patent applications, which are owned by third parties, exist in the fields in which Innovate is or may
be developing products. Because patent applications can take many years to publish and issue, there currently may be pending applications,
unknown to Innovate, that may later result in issued patents that its products, product candidates or technologies infringe, or
that the process of manufacturing its products or any of its respective component materials, or the component materials themselves,
infringe, or that the use of its products, product candidates or technologies infringe.

 

Innovate or its CMOs or component material
suppliers may be exposed to, or threatened with, litigation by third parties alleging that Innovate’s products, product candidates
and/or technologies infringe its patents and/or other intellectual property rights, or that one or more of the processes for manufacturing
its products or any of its respective component materials, or the component materials themselves, or the use of its products, product
candidates or technologies, infringe its patents and/or other intellectual property rights. If a third-party patent or other intellectual
property right is found to cover its products, product candidates, technologies or its uses, or any of the underlying manufacturing
processes or components, Innovate could be required to pay damages and could be unable to commercialize its products or to use
its technologies or methods unless Innovate is able to obtain a license to the patent or intellectual property right. A license
may not be available to Innovate in a timely manner or on acceptable terms, or at all. In addition, during litigation, the third-party
alleging infringement could obtain a preliminary injunction or other equitable remedy that could prohibit Innovate from making,
using, selling or importing its products, technologies or methods.

 

There generally is a substantial amount
of litigation involving patent and other intellectual property rights in the industries in which Innovate operates and the cost
of such litigation may be considerable. Innovate can provide no assurance that its product candidates or technologies will not
infringe patents or rights owned by others, licenses to which might not be available to Innovate in a timely manner or on acceptable
terms, or at all. If a third party claims that Innovate or its CMOs or component material suppliers infringe its intellectual property
rights, Innovate may face a number of issues, including, but not limited to:

 

    	 	 	 

     

    

 

		·	infringement and other intellectual property claims which, with or without merit, may be expensive and time consuming to litigate
and may divert management’s time and attention from Innovate’s core business;

 

		·	substantial damages for infringement, including the potential for treble damages and attorneys’ fees, which Innovate
may have to pay if it is determined that the product and/or its use at issue infringes or violates the third party’s rights;

 

		·	a court prohibiting Innovate from selling or licensing the product unless the third-party licenses its intellectual property
rights to Innovate, which it may not be required to do;

 

		·	if a license is available from the third party, Innovate may have to pay substantial royalties, fees and/or grant cross-licenses
to the third party; and

 

		·	redesigning Innovate’s products or processes so they do not infringe, which may not be possible or may require substantial
expense and time.

 

No assurance can be given that patents do
not exist, have not been filed, or could not be filed or issued, which contain claims covering Innovate’s products, product
candidates or technology or those of its CMOs or component material suppliers or the use of its products, product candidates or
technologies. Because of the large number of patents issued and patent applications filed in the industries in which Innovate operates,
there is a risk that third parties may allege they have patent rights encompassing Innovate’s products, product candidates
or technologies, or those of its CMOs or component material suppliers, or uses of its products, product candidates or technologies.

 

In the future, it may be necessary for Innovate
to enforce its proprietary rights, or to determine the scope, validity and unenforceability of other parties’ proprietary
rights, through litigation or other dispute proceedings, which may be costly, and to the extent Innovate is unsuccessful, adversely
affect its rights. In these proceedings, a court or administrative body could determine that its claims, including those related
to enforcing patent rights, are not valid or that an alleged infringer has not infringed its rights. The uncertainty resulting
from the mere institution and continuation of any patent- or other proprietary rights-related litigation or interference proceeding
could have a material and adverse effect on its business prospects, operating results and financial condition.

 

Risks Related to Innovate’s Industry

 

Innovate is subject to uncertainty relating to healthcare
reform measures and reimbursement policies that, if not favorable to its products, could hinder or prevent its products’
commercial successes, if any of its product candidates are approved. 

 

The unavailability or inadequacy of third-party
payer coverage and reimbursement could negatively affect the market acceptance of its product candidates and the future revenues
Innovate may expect to receive from those products. The commercial success of its product candidates, if approved, will depend
in part on the extent to which the costs of such products will be covered by third-party payers, such as government health programs,
commercial insurance and other organizations. Third-party payers are increasingly challenging the prices and examining the medical
necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. If these third-party
payers do not consider its products to be cost-effective compared to other therapies, Innovate may not obtain coverage for its
products after approval as a benefit under the third-party payers’ plans or, even if Innovate does, the level of coverage
or payment may not be sufficient to allow Innovate to sell its products on a profitable basis.

 

    	 	 	 

     

    

 

Significant uncertainty exists as to the
reimbursement status for newly approved drug products, including coding, coverage and payment. There is no uniform policy requirement
for coverage and reimbursement for drug products among third-party payers in the United States, therefore coverage and reimbursement
for drug products can differ significantly from payer to payer. The coverage determination process is often a time-consuming and
costly process that will require Innovate to provide scientific and clinical support for the use of its products to each payer
separately, with no assurance that coverage and adequate payment will be applied consistently or obtained. The process for determining
whether a payer will cover and how much it will reimburse a product may be separate from the process of seeking approval of the
product or for setting the price of the product. Even if reimbursement is provided, market acceptance of its products may be adversely
affected if the amount of payment for its products proves to be unprofitable for healthcare providers or less profitable than alternative
treatments or if administrative burdens make its products less desirable to use. Third-party payer reimbursement to providers of
its products, if approved, may be subject to a bundled payment that also includes the procedure of administering its products or
third-party payers may require providers to perform additional patient testing to justify the use of its products. To the extent
there is no separate payment for its product(s), there may be further uncertainty as to the adequacy of reimbursement amounts.

 

The continuing efforts of governments, private
insurance companies, and other organizations to contain or to reduce costs of healthcare may adversely affect:

 

		·	Innovate’s ability to set an appropriate price for its products;

 

		·	the rate and scope of adoption of its products by healthcare providers;

 

		·	its ability to generate revenue or achieve or maintain profitability;

 

		·	the future revenue and profitability of its potential customers, suppliers and collaborators; and

 

		·	its access to additional capital.

 

Innovate’s ability to successfully
commercialize its products will depend in part on the extent to which governmental authorities, private health insurers and other
organizations establish what Innovate believes are appropriate coverage and reimbursement for its products. The containment of
healthcare costs has become a priority of federal and state governments worldwide and the prices of drug products have been a focus
in this effort. For example, there have been several recent U.S. Congressional inquiries and proposed bills designed to, among
other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs,
and reform government program reimbursement methodologies for drugs, and the new U.S. President has stated that reducing drug pricing
is a priority for his administration. Innovate expects that federal, state and local governments in the United States, as well
as in other countries, will continue to consider legislation directed at lowering the total cost of healthcare. In addition, in
certain foreign markets, the pricing of drug products is subject to government control and reimbursement may in some cases be unavailable
or insufficient. It is uncertain whether and how future legislation, whether domestic or abroad, could affect prospects for its
product candidates or what actions federal, state, or private payers for healthcare treatment and services may take in response
to any such healthcare reform proposals or legislation. Adoption of price controls and cost-containment measures, and adoption
of more restrictive policies in jurisdictions with existing controls and measures reforms may prevent or limit its ability to generate
revenue, attain profitability or commercialize its product candidates, especially in light of Innovate’s plans to price its
product candidates at a high level.

 

    	 	 	 

     

    

 

Furthermore, Innovate expects that Congress
will again attempt to pass reform measures that may be adopted in the future, including the possible repeal and replacement of
the Affordable Care Act, which the Trump administration has stated is a priority. These potential courses of action are unpredictable;
and the potential impact of new legislation on Innovate’s operations and financial position is uncertain, but may result
in more rigorous coverage criteria, lower reimbursement, and additional downward pressure on the price Innovate may receive for
an approved product. Any reduction in reimbursement from Medicare or other government-funded programs may result in a similar reduction
in payments from private payers. The implementation of cost containment measures or other healthcare reforms may prevent Innovate
from being able to generate revenue, attain profitability or commercialize its products, if approved.

 

Innovate expects competition in the marketplace for its
product candidates, should any of them receive regulatory approval.

 

Larazotide Acetate has issued patents for
composition of matter, method of use and its formulation in the United States, Innovate’s primary market. INN-202 has either
been issued patents or is prosecuting patent applications in numerous countries outside the United States. The barrier to entry
for any company developing larazotide acetate for celiac disease is very high. Innovate believes that INN-202 is the first drug
entering into Phase 3 clinical trials for celiac disease. Additionally, if Innovate has the first drug approved for celiac disease,
any competitor bringing any other molecule into market for celiac disease may need to license or to seek approval from Innovate
for the usage of its CeD-PRO as an endpoint.

 

Innovate has applied for Orphan Drug Designation
from the FDA for INN-108. Orphan Drug Designation will provide market exclusivity in the U.S. for seven years, but only if (1)
INN-108 receives market approval before a competitor using the same active compound for the same indication, (2) Innovate is able
to produce sufficient supply to meet demand in the marketplace, and (3) another product with the same active ingredient(s) is not
deemed clinically superior.

 

INN-329, secretin, has received Orphan Drug
Designation from the FDA. Orphan Drug Designation will provide market exclusivity in the U.S. for seven years, but only if (1)
INN-329 receives market approval before a competitor using the similar peptide for the same indication, (2) Innovate is able produce
sufficient supply to meet demand in the marketplace, and (3) another product with the same active ingredient is not deemed clinically
superior.

 

The industries in which Innovate operates
(biopharmaceutical, specialty pharmaceutical, biotechnology and pharmaceutical) are highly competitive and subject to rapid and
significant change. Developments by others may render potential application of any of its product candidates in a particular indication
obsolete or noncompetitive, even prior to completion of its development and approval for that indication.

 

If successfully developed and approved,
Innovate expects its product candidates will face competition. Innovate may not be able to compete successfully against organizations
with competitive products, particularly large pharmaceutical companies. Many of its potential competitors have significantly greater
financial, technical and human resources than Innovate, and may be better equipped to develop, manufacture, market and distribute
products. Many of these companies operate large, well-funded research, development and commercialization programs, have extensive
experience in nonclinical and clinical studies, obtaining FDA and other regulatory approvals and manufacturing and marketing products,
and have multiple products that have been approved or are in late-stage development. These advantages may enable them to receive
approval from the FDA or any foreign regulatory agency before Innovate and prevent Innovate from competing due to their orphan
drug protections. Smaller companies may also prove to be significant competitors, particularly through collaborative arrangements
with large pharmaceutical and biotechnology companies. Furthermore, heightened awareness on the part of academic institutions,
government agencies and other public and private research organizations of the potential commercial value of their inventions have
led them to actively seek to commercialize the technologies they develop, which increases competition for investment in Innovate’s
programs. Competitive products may be more effective, easier to dose, or more effectively marketed and sold, than theirs, which
would have a material adverse effect on Innovate’s ability to generate revenue.

 

    	 	 	 

     

    

 

Innovate faces potential product liability exposure and,
if successful claims are brought against it, Innovate may incur substantial liability for a product or product candidate and may
have to limit its commercialization. In the future, Innovate anticipates that it will need to obtain additional or increased product
liability insurance coverage and it is uncertain whether such increased or additional insurance coverage can be obtained on commercially
reasonable terms, if at all. 

 

Innovate’s business (in particular,
the use of its product candidates in clinical studies and the sale of any products for which it obtains marketing approval) will
expose Innovate to product liability risks. Product liability claims might be brought against Innovate by patients, healthcare
providers, pharmaceutical companies or others selling or involved in the use of its products. If Innovate cannot successfully defend
itself against any such claims, Innovate will incur substantial liabilities. Regardless of merit or eventual outcome, liability
claims may result in:

 

		·	significant costs of related litigation;

 

		·	decreased demand for its products and loss of revenue;

 

		·	impairment of its business reputation;

 

		·	a “clinical hold,” suspension or termination of a clinical study or amendments to a study design;

 

		·	delays in enrolling patients to participate in its clinical studies;

 

		·	withdrawal of clinical study participants;

 

		·	substantial monetary awards to patients or other claimants; and

 

		·	the inability to commercialize its products and product candidates.

 

Innovate maintains limited product liability
insurance for its clinical studies, but its insurance coverage may not reimburse Innovate or may not be sufficient to reimburse
Innovate for all expenses or losses it may suffer. Moreover, insurance coverage is becoming increasingly expensive and, in the
future, Innovate may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect itself
against losses.

 

Innovate expects that it will expand its
insurance coverage to include the sale of commercial products if it obtains marketing approval for any of its product candidates,
but Innovate may be unable to obtain product liability insurance on commercially acceptable terms or may not be able to maintain
such insurance at a reasonable cost or in sufficient amounts to protect Innovate against potential losses. Large judgments have
been awarded in class action lawsuits based on drug products that had unanticipated side effects. A successful product liability
claim or series of claims brought against Innovate, if judgments exceed its insurance coverage, could decrease its cash and adversely
affect its business.

 

    	 	 	 

     

    

 

Risks Related to this Offering and Our
Common Stock

 

An active trading market for Monster common stock that
you would receive upon the closing of the Merger may not develop.

 

The offering price for our common stock
was determined through negotiations with investors and may bear no relationship to the price at which the Monster common stock
that you would receive upon the closing of the Merger will trade following the closing of the Merger. An active trading market
for the Monster common stock that you would receive upon the closing of the Merger may never develop or be sustained. If an active
market for such shares does not develop, it may be difficult for you to sell the Monster common stock that you would receive upon
the closing of the Merger without depressing the market price for such common stock or to sell your shares at all.

 

The market price of the Monster common stock you would
receive upon the closing of the Merger is likely to be volatile, and you may not be able to sell such shares at or above the effective
price per share that you receive them.

 

The offering price of our common stock will
not necessarily reflect the price at which investors in the public market will be willing to buy and sell the shares of Monster
common stock that you would receive in connection with the closing of the Merger. The stock market in general and the market for
pharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance
of particular companies. A certain degree of market price volatility may also occur as a result of the completion of the Merger
and listing of the shares of the combined company following this offering. As a result of this volatility, investors may not be
able to sell their common stock at or above the effective price per share that you receive them. The market price of the
Monster common stock following the closing of the Merger may be highly volatile and could be subject to wide fluctuations in response
to various factors, some of which are beyond our control, including:

 

		·	regulatory or legal developments in the United States and foreign countries;

 

		·	results from or delays in clinical trials of our product candidates;

 

		·	announcements of regulatory approval or disapproval of INN-202 (for celiac disease), INN-108 (for ulcerative colitis), INN-329
(for magnetic resonance cholangiopancreatography or MRCP) or any future product candidates;

 

		·	commercialization of our product candidates;

 

		·	FDA or other U.S. or foreign regulatory actions affecting us or our industry;

 

		·	introductions and announcements of new products by us, any commercialization partners or our competitors, and the timing of
these introductions and announcements;

 

		·	variations in our financial results or those of companies that are perceived to be similar to us;

 

		·	changes in the structure of healthcare payment systems;

 

		·	announcements by us or our competitors of significant acquisitions, licenses, strategic partnerships, joint ventures or capital
commitments;

 

    	 	 	 

     

    

 

		·	market conditions in the pharmaceutical and biopharmaceutical sectors and issuance of securities analysts’ reports or
recommendations;

 

		·	actual or anticipated quarterly variations in our results of operations or those of our future competitors;

 

		·	changes in financial estimates or guidance, including our ability to meet our future revenue and operating profit or loss estimates
or guidance;

 

		·	sales of substantial amounts of our stock by insiders and large stockholders, or the expectation that such sales might occur;

 

		·	general economic, industry and market conditions;

 

		·	additions or departures of key personnel;

 

		·	intellectual property, product liability or other litigation against us;

 

		·	expiration or termination of our potential relationships with strategic partners; and

 

		·	the other factors described in this “Risk Factors” annex.

 

If securities or industry analysts do not publish research
or publish unfavorable research about our business, the Monster common stock stock price and trading volume could decline.

 

Equity research analysts do not currently
provide research coverage of the Monster common stock, and we cannot assure you that any equity research analysts will provide
research coverage of the Monster common stock after the closing of the Merger. In particular, as a smaller company, it may be difficult
for us to attract the interest of equity research analysts. A lack of research coverage may adversely affect the liquidity of and
market price of the Monster common stock. To the extent we obtain equity research analyst coverage, we will not have any control
of the analysts or the content and opinions included in their reports. The market price of the Monster stock could decline if one
or more equity research analysts downgrade the Monster common stock or issue other unfavorable commentary or research. If one or
more equity research analysts ceases coverage of our company, or fails to publish reports on us regularly, demand for the Monster
common stock could decrease, which in turn could cause the market price of the Monster common stock or trading volume to decline.

 

Sales of substantial amounts of the Monster common stock
in the public markets, or the perception that such sales might occur, could cause the market price of the Monster common stock
to drop significantly, even if our business is doing well.

 

Sales of a substantial number of shares
of Monster common stock following the Merger in the public market could occur at any time. If our stockholders sell, or the market
perceives that our stockholders intend to sell, substantial amounts of the Monster common stock in the public market following
the closing of the Merger, the market price of the Monster common stock could decline significantly.

 

    	 	 	 

     

    

 

Claims for indemnification by our directors and officers
may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available
to us.

 

Our certificate of incorporation and restated
bylaws following as they will be in effect following this offering and Merger provide that we will indemnify our directors and
officers, in each case to the fullest extent permitted by Delaware law.

 

To the extent that a claim for indemnification
is brought by any of our directors or officers, it would reduce the amount of funds available for use in our business.

 

If you purchase our common stock in this offering, because
the offering price of our common stock will be substantially higher than our pro forma as adjusted net tangible book value per
share following this offering, you will incur immediate and substantial dilution in the book value of your shares. 

 

Investors purchasing common stock in this
offering will pay a price per share that substantially exceeds the net tangible book value per share. Net tangible book value is
our tangible assets after subtracting our liabilities. As a result, investors purchasing common stock in this offering will incur
immediate dilution, based on the difference between the initial public offering price and the pro forma as adjusted net tangible
book value per share of our outstanding common stock as.

 

This dilution is due to our investors who
purchased shares prior to this offering having paid substantially less than the price offered to the public in this offering when
they purchased their shares. In addition, options to purchase shares of our common stock and warrants to purchase shares of our
common stock were outstanding. The exercise of any of these options would result in additional dilution. As a result of the dilution
to investors purchasing shares in this offering, investors may receive significantly less than the purchase price paid in this
offering, if anything, in the event of our liquidation. Further, because we will need to raise additional capital to fund our clinical
development programs, we may in the future sell substantial amounts of common stock or securities convertible into or exchangeable
for common stock.

 

These future issuances of common stock or
common stock-related securities, together with the exercise of outstanding options and any additional shares issued in connection
with acquisitions, if any, may result in further dilution.

 

If Monster sells shares of Monster common stock in future
financings, stockholders may experience immediate dilution and, as a result, the market price of Monster common stock may decline.

 

Monster may from time to time issue additional
shares of its common stock at a discount from the current trading price of its common stock or the effective price at which you
would receive shares of Monster common stock in connection with the closing of the Merger. As a result, our stockholders would
experience immediate dilution upon the purchase of any shares of such common stock sold at such discount. In addition, as opportunities
present themselves, Monster may enter into financing or similar arrangements in the future, including the issuance of debt securities,
preferred stock or common stock. If Monster issue common stock or securities convertible into common stock, our common stockholders
would experience additional dilution and, as a result, the market price of Monster common stock may decline.

 

    	 	 	 

     

    

 

Concentration of ownership of our common stock among our
existing principal stockholders after this offering may effectively limit the voting power of other stockholders, including purchasers
in this offering.

 

Upon the closing of this offering, our executive
officers, directors and current beneficial owners of 5% or more of our common stock will, in aggregate, beneficially own approximately
12.5% of our outstanding common stock, assuming exercise of the underwriters’ option to purchase additional shares. Accordingly,
these stockholders, acting together, will continue to be able to significantly influence all matters requiring stockholder approval,
including the election and removal of directors and any merger or other significant corporate transactions. These stockholders
may therefore delay or prevent a change of control of us, even if such a change of control would benefit our other stockholders.
The significant concentration of stock ownership may adversely affect the market price of our common stock due to investors’
perception that conflicts of interest may exist or arise.

 

Anti-takeover provisions in our corporate charter documents
and under Delaware law could make an acquisition of us more difficult, which could discourage takeover attempts and lead to management
entrenchment, and the market price of our common stock may be lower as a result. 

 

Certain provisions in our certificate of
incorporation and bylaws that will be in effect upon the closing of this offering may make it difficult for a third party to acquire,
or attempt to acquire, control of our company, even if a change in control was considered favorable by you and other stockholders.
For example, our board of directors will have the authority to issue up to 10,000,000 shares of preferred stock. Our board of directors
can fix the price, rights, preferences, privileges, and restrictions of the preferred stock without any further vote or action
by our stockholders. The issuance of shares of preferred stock may delay or prevent a change in control transaction. As a result,
the market price of our common stock and the voting and other rights of our stockholders may be adversely affected. An issuance
of shares of preferred stock may result in the loss of voting control to other stockholders.

 

Our charter documents will also contain other provisions that
could have an anti-takeover effect, including provisions that:

 

		·	establish that our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving
staggered three year terms;

 

		·	provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though
less than a quorum;

 

		·	provide that our directors may only be removed for cause;

 

		·	eliminate cumulative voting in the election of directors;

 

		·	authorize our board of directors to issues shares of preferred stock and determine the price and other terms of those shares,
including preferences and voting rights, without stockholder approval;

 

		·	provide our board of directors with the exclusive right to elect a director to fill a vacancy or newly created directorship;

 

		·	permit stockholders to only take actions at a duly called annual or special meeting and not by written consent;

 

		·	prohibit stockholders from calling a special meeting of stockholders;

 

		·	require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings;

 

		·	authorize our board of directors, by a majority vote, to amend the bylaws; and

 

    	 	 	 

     

    

 

		·	require the affirmative vote of at least 66 2/3% or more of the outstanding common stock to amend many of the provisions described
above.

 

In addition, we are subject to the anti-takeover
provisions of Section 203 of the Delaware General Corporation Law, which limits the ability of stockholders owning in excess
of 15% of our outstanding voting stock to merge or combine with us. Finally, our amended and restated certificate of incorporation
will also provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes
between us and our stockholders. These provisions could discourage potential acquisition proposals and could delay or prevent a
change in control transaction. They could also have the effect of discouraging others from making tender offers for our common
stock, including transactions that may be in your best interests. These provisions may also prevent changes in our management or
limit the price that certain investors are willing to pay for our stock.

 

We will have broad discretion in the use of proceeds from
this offering and may invest or spend the proceeds in ways with which you do not agree and in ways that may not yield a return.

 

We will have broad discretion in the application
of the net proceeds from this offering. You may not agree with our decisions, and our use of the proceeds may not improve our results
of operation or enhance the value of our common stock. We intend to use the net proceeds from this offering to fund our ongoing
and planned clinical development and commercialization of INN-202, to fund the costs of the clinical development of INN-108, to
fund the costs of the clinical development of INN-329, and the remainder of the net proceeds for the research and development of
other product candidates, working capital, capital expenditures and other general corporate purposes. We may also use a portion
of our net proceeds to acquire and invest in complementary products or businesses; however, we currently have no agreements or
commitments to complete any such transaction. You will not have the opportunity to influence our management’s decisions on
how to use the net proceeds from this offering. Our failure to apply the net proceeds of this offering effectively could result
in financial losses that could materially impair our ability to pursue our growth strategy, cause the market price of our common
stock to decline, delay development of our product candidates or require us to raise additional capital.

 

We may be subject to securities litigation, which is expensive
and could divert management attention. 

 

The market price of our common stock may
be volatile, and in the past companies that have experienced volatility in the market price of their stock have been subject to
securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against
us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously
harm our business.

 

Because we do not anticipate paying any cash dividends
on our common stock in the foreseeable future, capital appreciation, if any, will be your sole source of gains.

 

We have not declared or paid cash dividends
on our common stock to date. We currently intend to retain our future earnings, if any, to fund the development and growth of our
business. In addition, our loan and security agreement with Square 1 contains a negative covenant which prohibits us from paying
cash dividends without the prior written consent of Square 1. As a result, capital appreciation, if any, of our common stock will
be your sole source of gain for the foreseeable future.

 

    	 	 	 

     

    

 

Our ability to use our net operating loss carryforwards
and certain other tax attributes to offset future taxable income may be subject to certain limitations. 

 

As of December 31, 2017 we had U.S. federal
and California net operating loss carryforwards, or NOLs, which expire in various years if not utilized. As of December 31, 2017,
we had federal and California research and development credit carryforwards. The federal research and development credit carryforwards
expire in various years if not utilized. The California research and development credit will carry forward indefinitely. Under
Sections 382 and 383 of Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership
change,” the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes, such as research
tax credits, to offset its future post-change income and taxes may be limited. In general, an “ownership change” occurs
if there is a cumulative change in our ownership by “5% shareholders” that exceeds 50 percentage points over a rolling
three-year period. Similar rules may apply under state tax laws. We believe we have experienced certain ownership changes in the
past and have reduced our deferred tax assets related to NOLs and research and development tax credit carryovers accordingly. In
the event that it is determined that we have in the past experienced additional ownership changes, or if we experience one or more
ownership changes as a result of this offering or future transactions in our stock, then we may be further limited in our ability
to use our NOLs and other tax assets to reduce taxes owed on the net taxable income that we earn in the event that we attain profitability.
Any such limitations on the ability to use our NOLs and other tax assets could adversely impact our business, financial condition
and operating results in the event that we attain profitability.

 

We will incur costs as a result of operating as a public
company and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices,
including maintaining an effective system of internal control over financial reporting.

 

As a public company listed in the United
States, and increasingly after we are no longer an “emerging growth company,” we will incur significant additional
legal, accounting and other expenses that we did not incur as a private company. In addition, changing laws, regulations and standards
relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act and regulations implemented by the SEC
and the exchange on which the shares of our Common Stock may trade, may increase legal and financial compliance costs and make
some activities more time consuming. These laws, regulations and standards are subject to varying interpretations and, as a result,
their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. We intend to
invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and
administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance
activities. If notwithstanding our efforts to comply with new laws, regulations and standards, we fail to comply, regulatory authorities
may initiate legal proceedings against us and our business may be harmed.

 

As a public company in the United States,
we will be required, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, to furnish a report by
management on, among other things, the effectiveness of our internal control over financial reporting. We will need to disclose
any material weaknesses identified by our management in our internal control over financial reporting, and, when we are no longer
an “emerging growth company,” we will need to provide a statement that our independent registered public accounting
firm has issued an opinion on our internal control over financial reporting. We expect that our first report on compliance with
Section 404 will be furnished in connection with our financial statements for the year ending December 31, 2018.

 

The controls and other procedures are designed
to ensure that information required to be disclosed by us in the reports that we file with the Securities and Exchange Commission,
or SEC, is disclosed accurately and is recorded, processed, summarized and reported within the time periods specified in SEC rules
and forms. We are in the early stages of conforming our internal control procedures to the requirements of Section 404 and
we may not be able to complete our evaluation, testing and any required remediation needed to comply with Section 404 in a
timely fashion. Our independent registered public accounting firm was not engaged to perform an audit of our internal control over
financial reporting for the year ended December 31, 2017 or for any other period. Accordingly, no such opinion was expressed.

 

    	 	 	 

     

    

 

Even after we develop these new procedures,
these new controls may become inadequate because of changes in conditions or the degree of compliance with these policies or procedures
may deteriorate and material weaknesses in our internal control over financial reporting may be discovered. We may err in the design
or operation of our controls, and all internal control systems, no matter how well designed and operated, can provide only reasonable
assurance that the objectives of the control system are met. Because there are inherent limitations in all control systems, there
can be no absolute assurance that all control issues have been or will be detected. If we are unable, or are perceived as unable,
to produce reliable financial reports due to internal control deficiencies, investors could lose confidence in our reported financial
information and operating results, which could result in a negative market reaction.

 

To fully comply with Section 404, we
will need to retain additional employees to supplement our current finance staff, and we may not be able to do so in a timely manner,
or at all. In addition, in the process of evaluating our internal control over financial reporting, we expect that certain of our
internal control practices will need to be updated to comply with the requirements of Section 404 and the regulations promulgated
thereunder, and we may not be able to do so on a timely basis, or at all. In the event that we are not able to demonstrate compliance
with Section 404 in a timely manner, or are unable to produce timely or accurate financial statements, we may be subject to
sanctions or investigations by regulatory authorities, such as the SEC or the stock exchange on which our stock is listed, and
investors may lose confidence in our operating results and the price of our common stock could decline. Furthermore, if we are
unable to certify that our internal control over financial reporting is effective and in compliance with Section 404, we may
be subject to sanctions or investigations by regulatory authorities, such as the SEC or stock exchanges, and we could lose investor
confidence in the accuracy and completeness of our financial reports, which could hurt our business, the price of our common stock
and our ability to access the capital markets.

 

We also expect that being a public company
will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced
coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract
and retain qualified persons to serve on our board of directors, on committees of our board of directors or as members of senior
management.

 

We are an “emerging growth company,” and the
reduced disclosure requirements applicable to emerging growth companies could make our common stock could be less attractive to
investors.

 

We are an “emerging growth company,”
as defined in the Jumpstart Our Business Startups, or JOBS, Act enacted in April 2012, and may remain an “emerging growth
company” for up to five years following the completion of this offering, although, if we have more than $1.0 billion in annual
revenue, the market value of our common stock that is held by non-affiliates exceeds $700 million as of June 30 of any year, or
we issue more than $1.0 billion of non-convertible debt over a three-year period before the end of that five-year period, we would
cease to be an “emerging growth company” as of the following December 31. For as long as we remain an “emerging
growth company,” we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable
to other public companies that are not “emerging growth companies.” These exemptions include:

 

    	 	 	 

     

    

 

		·	being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial
statements, with correspondingly reduced “Management’s discussion and analysis of financial condition and results of
operations” disclosure;

 

		·	not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial
reporting;

 

		·	not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding
mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and
the financial statements;

 

		·	reduced disclosure obligations regarding executive compensation; and

 

		·	exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of
any golden parachute payments not previously approved.

 

In addition, the JOBS Act provides that
an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards,
delaying the adoption of these accounting standards until they would apply to private companies. We have irrevocably elected not
to avail ourselves of this exemption and, as a result, our financial statements may not be comparable to the financial statements
of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public
companies. We cannot predict whether investors will find our common stock less attractive as a result of our reliance on these
exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for
our common stock and the market price of our common stock may be reduced or more volatile.

 

Risks Related to the Merger

 

The market price of Monster common stock following
the Merger may decline as a result of the merger.

 

The market price of Monster common stock
may decline as a result of the Merger for a number of reasons including if:

 

		·	investors react negatively to the prospects of the combined organization’s business and prospects from the Merger;

 

		·	the effect of the Merger on the combined organization’s business and prospects is not consistent with the expectations
of financial or industry analysts; or

 

		·	the combined organization does not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by
financial or industry analysts.

 

Monster and Innovate stockholders may not realize
a benefit from the Merger commensurate with the ownership dilution they will experience in connection with the Merger.

 

If the combined organization is unable to
realize the full strategic and financial benefits currently anticipated from the Merger, Monster and Innovate stockholders will
have experienced substantial dilution of their ownership interests in their respective companies without receiving any commensurate
benefit, or only receiving part of the commensurate benefit to the extent the combined organization is able to realize only part
of the strategic and financial benefits currently anticipated from the Merger.

 

    	 	 	 

     

    

 

Because the lack of a public market for Innovate
shares makes it difficult to evaluate the fairness of the Merger, the stockholders of Innovate may receive consideration in the
Merger that is less than the fair market value of the Innovate shares.

 

The outstanding capital stock of Innovate
is privately held and is not traded in any public market. The lack of a public market makes it extremely difficult to determine
the fair market value of Innovate. Because the percentage of Monster equity to be issued to Innovate stockholders was determined
based on negotiations between the parties, it is possible that the value of Monster common stock to be received by Innovate stockholders
in the Merger will be less than the fair market value of Innovate.

 

    	 	 	 

     

    

 

EXHIBIT A-1

 

Investor
Questionnaire

 

    	 	2	 

     

    

 

EXHIBIT A-2

 

Stock
Certificate Questionnaire

 

    	 	3	 

     

    

 

EXHIBIT B

 

Placement
Agent Questionnaire 

 

    	 	4	 

     

    

 

EXHIBIT C

 

Form
of Secretary’s Certificate

 

    	 	5	 

     

    

 

EXHIBIT D

 

Form
of Compliance Certificate

 

    	 	6	 

     

    

 

EXHIBIT E

 

MONSTER DIGITAL, INC.

 

DECLARATION OF REGISTRATION
RIGHTS

 

This
Declaration of Registration Rights (this “Declaration”) is provided by Monster Digital, Inc.,
a Delaware corporation (the “Company”) on January 29, 2018 in connection with the Subscription Agreement
(the “Subscription Agreement”), dated as of January 29, 2018 by and among Innovate Biopharmaceuticals
Inc., a Delaware corporation (“Innovate”) and each purchaser listed on Annex A set forth
on Schedule A thereto (each a
“Stockholder,” and collectively, the “Stockholders”). Unless otherwise defined
herein, capitalized terms used in this Agreement have the meanings ascribed to them in the Subscription Agreement. This Declaration
is provided for the benefit of each of the Stockholders identified on Schedule 1 attached hereto and entitled to receive
Common Stock pursuant to the terms set forth in the Subscription Agreement.

 

RECITALS

 

Whereas,
pursuant to the Subscription Agreement, each Stockholder will, at the applicable Closing, receive that number of shares of Common
Stock as set forth opposite such Stockholder’s name on Schedule
1 hereto; and

 

Whereas,
in connection with the execution and delivery of the Subscription Agreement and the consummation of the transactions contemplated
thereby, the Company has agreed to grant the Stockholders certain registration rights as set forth below.

 

Now,
Therefore, in consideration of the mutual promises and covenants herein contained, and other consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

 

Article
I.

Definitions

 

1.1           Definitions.
As used in this Declaration, the following terms shall have the meanings set forth below:

 

(a)          “Additional
Shares” means any shares of Common Stock issued to the Stockholders pursuant to a stock split, stock dividend or
other distribution with respect to, or in exchange or in replacement of, the Shares.

 

(b)          “Affiliate”
means, with respect to any specified Person, any other Person who or which, directly or indirectly, controls, is controlled by,
or is under common control with such specified Person, including, without limitation, any general partner, limited partner, member,
officer, director or manager of such Person and any venture capital or private equity fund now or hereafter existing that is controlled
by one or more general partners or managing members of, or shares the same management company with, such Person. For purposes of
this definition, the terms “controls,” “controlled by,” or “under
common control with” means the possession, direct or indirect, of power to direct or cause the direction of management
or policies (whether through ownership of voting securities, by contract or otherwise).

 

    	 	7	 

     

    

 

(c)          “Business
Day” means a weekday on which banks are open for general banking business in San Diego, California.

 

(d)          “Entity”
means any corporation (including any nonprofit corporation), general partnership, limited partnership, limited liability partnership,
joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise,
association, organization or entity.

 

(e)          “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder,
as the same may be amended from time to time.

 

(f)          “Governmental
Body” means any domestic or foreign multinational, federal, state, provincial, municipal or local government
(or any political subdivision thereof) or any domestic or foreign governmental, regulatory or administrative authority or any department,
commission, board, agency, court, tribunal, judicial body or instrumentality thereof, or any other body exercising, or entitled
to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature
(including any arbitral body).

 

(g)          “Holder”
(collectively, “Holders”) means any Stockholder and any transferee permitted under Section 3.1, in each
case, to the extent holding Registrable Securities.

 

(h)          “Person”
means any individual, Entity, trust, Governmental Body or other organization.

 

(i)          “register,”
“registered” and “registration” refer to a registration effected by filing
with the SEC a registration statement in compliance with the Securities Act, and the declaration or ordering by the SEC of the
effectiveness of such registration statement.

 

(j)          “Registrable
Securities” means: (i) the Shares, and (ii) any Additional Shares; provided, however, that Shares or
Additional Shares shall cease to be treated as Registrable Securities (and the Company shall not be required to maintain the effectiveness
of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with
respect to the sale of such Registrable Securities is declared effective by the SEC under the Securities Act and such Registrable
Securities have been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities
have been previously sold in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale
restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect,
addressed, delivered and acceptable to the Transfer Agent and the affected Holders (assuming that such securities and any securities
issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable,
were at no time held by any Affiliate of the Company), as reasonably determined by the Company, upon the advice of counsel to the
Company.

 

    	 	8	 

     

    

 

(k)          “Registration
Expenses” means any and all expenses incident to the performance
of or compliance with this Declaration, including without limitation: (i) all registration and filing fees; (ii) all fees and expenses
associated with a required listing of the Registrable Securities on any securities exchange; (iii) fees and expenses with respect
to filings required to be made with an exchange or any securities industry self-regulatory body; (iv) fees and expenses of compliance
with securities or “blue sky” laws (including reasonable fees and disbursements of counsel for the underwriters or
holders of securities in connection with blue sky qualifications of the securities and determination of their eligibility for investment
under the laws of such jurisdictions); (v) printing, messenger, telephone and delivery expenses of the Company; (vi) fees and disbursements
of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company
(including the expenses of any comfort letters, or costs associated with the delivery by independent certified public accountants
of a comfort letter or comfort letters, if such comfort letter or comfort letters is required by the managing underwriter); (vii)
securities acts liability insurance, if the Company so desires; (viii) all internal expenses of the Company (including, without
limitation, all salaries and expenses of its officers and employees performing legal or accounting duties); (ix) the expense of
any annual audit; and (x) the fees and expenses of any Person, including special experts, retained by the Company; provided,
however that “Registration Expenses” shall not include underwriting fees, discounts or commissions
attributable to the sale of such Registrable Securities or any legal fees and expenses of counsel to the Holders.

 

(l)          “Rule
144” means Rule 144 under the Securities Act.

 

(m)         “SEC”
means the Securities and Exchange Commission.

 

(n)          “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as the same
may be amended from time to time.

 

(o)          “Shares”
means, collectively, (i) any and all shares of Common Stock issuable pursuant to the Subscription Agreement, (ii) any and all shares
of Common Stock issuable pursuant to the Warrants (as defined in the Subscription Agreement), and (iii) any and all shares of Common
Stock issuable pursuant to the warrants to purchase Common Stock issued by the Company to GP Nurmenkari Inc. and H.C. Wainwright
& Co., LLC in connection with their services provided to the Company with respect to shares sold pursuant to the Subscription
Agreement.

 

Article
II.

Registration Rights

 

2.1           Resale
Registration Statement. Within 45 days following the date of the Final
Closing, the Company shall (a) file with the SEC, or (b) have filed with the SEC, a Resale Registration Statement (the “Resale
Registration Statement”) pursuant to Rule 415 under the Securities Act pursuant to which all of the Registrable Securities
shall be included (on the initial filing or by supplement thereto) to enable the public resale on a delayed or continuous basis
of the Registrable Securities by the Holders. The Company shall file the Resale Registration Statement on such form as the Company
may then utilize under the rules of the SEC and use its commercially reasonable efforts to have the Resale Registration Statement
declared effective under the Securities Act as soon as practicable, but in no event more than 90 days following the initial filing
of the Registration Statement. In the event the Company is notified by the SEC that the Resale Registration Statement will
not be reviewed or is no longer subject to further review and comments, the Company shall use its commercially reasonable efforts
to have the Resale Registration Statement declared effective by the 5th trading day following the date on which the
Company is so notified if such date precedes the dates otherwise required above. The
Company agrees to use its commercially reasonable efforts to maintain the effectiveness of the
Resale Registration Statement, including by filing any necessary post-effective amendments and prospectus supplements, or, alternatively,
by filing new registration statements relating to the Registrable Securities as required by Rule 415 under the Securities Act,
continuously until the date (the “Resale Registration Expiration Date”) that is the earlier of (i) three
(3) years following the date of effectiveness of the Resale Registration Statement, or (ii) the date on which the Holders no longer
hold any Registrable Securities covered by such Resale Registration Statement.

 

    	 	9	 

     

    

 

2.2           Provisions
Relating to Registration.

 

(a)          If
the Company fails to comply with its obligations in Section 2.1, the Stockholders shall be entitled to a payment from the Company,
as liquidated damages and not as a penalty, in the amount per month equal to a half of a percent (0.5%) of the purchase price of
the Shares, from (i) the date the Company was required to file the Registration Statement until it is actually filed and pro-rated
for any partial month, and (ii) from the date the Registration Statement was required to be declared effective until it is actually
declared effective and pro-rated for any partial month. The maximum penalty payable by the Company for all such failures shall
not exceed five percent (5%) of the purchase price of the Shares in the aggregate. If the Company fails to pay any partial liquidated
damages pursuant to this Section in full within seven (7) days after the date payable, the Company will pay interest thereon at
a rate of 12% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing
daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full.

 

(b)          Notwithstanding
any other provisions of this Declaration to the contrary, the Company shall cause (i) the Resale Registration Statement (as of
the effective date of the Resale Registration Statement), any amendment thereof (as of the effective date thereof) or supplement
thereto (as of its date), (A) to comply in all material respects with the applicable requirements of the Securities Act and the
rules and regulations of the SEC, and (B) not to contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein not misleading, and (ii) any related prospectus,
preliminary prospectus and any amendment thereof or supplement thereto, as of its date, (A) to comply in all material respects
with the applicable requirements of the Securities Act and the rules and regulations of the SEC, and (B) not to contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided, however, the Company
shall have no such obligations or liabilities with respect to any written information pertaining to a Holder and furnished to the
Company by or on behalf of such Holder specifically for inclusion therein.

 

(c)          The
Company shall notify the Holders: (i) when the Resale Registration Statement or any amendment thereto has been filed with the SEC
and when the Resale Registration Statement or any post-effective amendment thereto has become effective; (ii) of any request by
the SEC for amendments or supplements to the Resale Registration Statement or the prospectus included therein or for additional
information; (iii) of the issuance by the SEC of any stop order suspending the effectiveness of the Resale Registration Statement
or the initiation of any proceedings for that purpose and of any other action, event or failure to act that would cause the Resale
Registration Statement not to remain effective; and (iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose.

 

    	 	10	 

     

    

 

(d)          As
promptly as practicable after becoming aware of such event, the Company shall notify the Holders of the happening of any event
(a “Suspension Event”), of which the Company has knowledge, as a result of which the prospectus included
in the Resale Registration Statement as then in effect, includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements therein not misleading, and use its best efforts
promptly to prepare a supplement or amendment to the Resale Registration Statement to correct such untrue statement or omission,
and deliver such number of copies of such supplement or amendment to the Holders as the Holders may reasonably request; provided,
however, that, for not more than 45 consecutive trading days (or a total of not more than 90 trading days in any twelve
(12) month period), the Company may delay the disclosure of material non-public information concerning the Company (as well as
prospectus or Resale Registration Statement updating), the disclosure of which at the time is not, in the good faith opinion of
the Company, in the best interests of the Company; provided, further, that, if the Resale Registration Statement
was not filed on Form S-3, such number of days shall not include the fifteen (15) calendar days following the filing of any Current
Report on Form 8-K, Quarterly Report on Form 10-Q or Annual Report on Form 10-K, or other comparable form, for purposes of filing
a post-effective amendment to the Resale Registration Statement.

 

(e)          Upon
a Suspension Event, the Company shall give written notice (a ”Suspension Notice”) to the Holders to suspend
sales of the Registrable Securities, and such notice shall state that such suspension shall continue only for so long as the Suspension
Event or its effect is continuing and the Company is pursuing with reasonable diligence the completion of the matter giving rise
to the Suspension Event or otherwise taking all reasonable steps to terminate suspension of the effectiveness or use of the Resale
Registration Statement. In no event shall the Company, without the prior written consent of the Holders, disclose to the Holders
any of the facts or circumstances giving rise to the Suspension Event. The Holders shall not effect any sales of the Registrable
Securities pursuant to such Resale Registration Statement (or such filings), at any time after it has received a Suspension Notice
and prior to receipt of an End of Suspension Notice. The Holders may resume effecting sales of the Registrable Securities under
the Resale Registration Statement (or such filings), following further notice to such effect (an “End of Suspension
Notice”) from the Company. This End of Suspension Notice shall be given by the Company to the Holders in the manner
described above promptly following the conclusion of any Suspension Event and its effect.

 

(f)          Notwithstanding
any provision herein to the contrary, if the Company gives a Suspension Notice pursuant to this Section 2.2 with respect to the
Resale Registration Statement, the Company shall extend the period during which such Resale Registration Statement shall be maintained
effective under this Declaration by the number of days during the period from the date of the giving of the Suspension Notice to
and including the date when the Holders shall have received the End of Suspension Notice and copies of the supplemented or amended
prospectus necessary to resume sales.

 

(g)          If
Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register
the resale of the Registrable Securities on another appropriate form, and (ii) undertake to register the Registrable Securities
on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement
then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective
by the SEC.

 

(h)          Notwithstanding
anything to the contrary contained herein, in no event shall the Company be permitted to name any Holder or affiliate of a Holder
as any Underwriter without the prior written consent of such Holder unless such Holder indicates in writing that it is a registered
broker-dealer or affiliated with a registered broker-dealer and therefore may be named as a “statutory underwriter”
in the Registration Statement.

 

(i)          The
Company shall bear all Registration Expenses incurred by the Company in connection with the registration of the Registrable Securities
pursuant to this Declaration.

 

(j)          Notwithstanding
anything to the contrary contained in this Declaration, the Company shall not be required to include Registrable
Securities in the Resale Registration Statement unless the Holder owning such shares furnishes to the Company, at least
10 Business Days prior to the scheduled filing date of such Resale Registration Statement, an executed stockholder questionnaire
in the form attached hereto as Exhibit A.

 

    	 	11	 

     

    

 

2.3           Indemnification.

 

(a)          In
the event of the offer and sale of the Registrable Securities held by the Holders
under the Securities Act, the Company agrees to indemnify and hold harmless each Holder and its directors, officers, employees,
Affiliates and agents and each Person who controls such Holder within the meaning of the Securities Act or the Exchange Act (collectively,
the “Holder Indemnified Parties”) from and against any
losses, claims, damages or liabilities, joint or several, or any actions in respect thereof to which each Holder
Indemnified Party may become subject under the Securities Act or the Exchange Act, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained
in the Resale Registration Statement or in any amendment thereof, in each case at the time such became effective under the Securities
Act, or in any the preliminary prospectus or other information that is deemed, under Rule 159 promulgated under the Securities
Act to have been conveyed to purchasers of securities at the time of sale of such securities (“Disclosure Package”),
prospectus or in any amendment thereof or supplement thereto, or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein (in the case of a Disclosure Package or
any prospectus, in the light of the circumstances under which they were made) not misleading, and shall reimburse, as incurred,
the Holder Indemnified Parties for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in
respect thereof; provided, however, that the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of or is based upon any untrue statement or omission made in the Resale Registration
Statement, the Disclosure Package, any prospectus or in any amendment thereof or supplement thereto in reliance upon and in conformity
with written information pertaining to a Holder and furnished to
the Company by or on behalf of such Holder Indemnified Party specifically
for inclusion therein; provided further, however, that the Company shall not be liable in any such case to the extent that
such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission
or alleged omission made in the Disclosure Package, where (A) such statement or omission had been eliminated or remedied in
any subsequently filed amended prospectus or prospectus supplement (the Disclosure Package, together with such updated documents,
the “Updated Disclosure Package”), the filing of which such Holder had been notified in accordance with
the terms of this Declaration, (B) such Updated Disclosure Package was available at the time such Holder
sold Registrable Securities under the Resale Registration Statement, (C) such Updated Disclosure Package was not furnished
by such Holder to the Entity asserting the loss, liability, claim, damage or liability, or an underwriter involved in the distribution
of such Securities, at or prior to the time such furnishing is required by the Securities Act, and (D) the Updated Disclosure
Package would have cured the defect giving rise to such loss, liability, claim, damage or action; and provided further,
however, that this indemnity agreement will be in addition to any liability that the Company may otherwise have to such
Holder Indemnified Party. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf
of any Holder Indemnified Parties and shall survive the transfer
of the Registrable Securities by any Holder.

 

    	 	12	 

     

    

 

(b)          As
a condition to including any Registrable Securities to be offered by a Holder
in any registration statement filed pursuant to this Declaration, such Holder agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers who signs the Resale Registration Statement, as well as any officers, employees, Affiliates
and agents of the Company, and each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange
Act (a “Company Indemnified Party”) from and against any losses, claims, damages or liabilities or any
actions in respect thereof, to which a Company Indemnified Party may become subject under the Securities Act or the Exchange Act,
insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Resale Registration Statement or in any amendment thereof, in each
case at the time such became effective under the Securities Act, or in any Disclosure Package, prospectus or in any amendment thereof
or supplement thereto, or (ii) the omission or alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in the case of the Disclosure Package or any prospectus, in the light of the circumstances
under which they were made) not misleading, but in each case only to the extent that the untrue statement or omission or alleged
untrue statement or omission was made in reliance upon and in conformity with written information pertaining to such Holder and
furnished to the Company by or on behalf of the such Holder specifically for inclusion therein; and, subject to the limitation
immediately preceding this clause, shall reimburse, as incurred, the Company Indemnified Parties for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any loss, claim, damage, liability or action in respect
thereof. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Holder,
or any such director, officer, employees, Affiliates and agents and shall survive the transfer of such Registrable Securities by
such Holder, and such Holder shall reimburse the Company, and each such director, officer, employees, Affiliates and agents for
any legal or other expenses reasonably incurred by them in connection with investigating, defending, or settling and such loss,
claim, damage, liability, action, or proceeding; provided, however, that the indemnity agreement contained in this Section
2.3 shall in no event exceed the gross proceeds from the offering received by such Holder. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer, employees,
Affiliates and agents and shall survive the transfer by a Holder of such Registrable Securities.

 

(c)          Promptly
after receipt by a Holder Indemnified Party or a Company Indemnified Party (each, an “Indemnified Party”)
of notice of the commencement of any action or proceeding (including a governmental investigation), such Indemnified Party will,
if a claim in respect thereof is to be made against the indemnifying party under this Section 2.3, notify the indemnifying party
of the commencement thereof; but the omission to so notify the indemnifying party will not relieve the indemnifying party from
liability under Sections 2.3(a) or 2.3(b)  unless and to the extent it did not otherwise learn of such action and the indemnifying
party has been materially prejudiced by such failure. In case any such action is brought against any Indemnified Party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and,
to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Party (who shall not, except with the consent of the Indemnified Party, be
counsel to the indemnifying party), and after notice from the indemnifying party to such Indemnified Party of its election so to
assume the defense thereof the indemnifying party will not be liable to such Indemnified Party under this Section 2.3 for any legal
or other expenses, other than reasonable costs of investigation, subsequently incurred by such Indemnified Party in connection
with the defense thereof; provided, however, if such Indemnified Party shall have been advised by counsel that there
are one or more defenses available to it that are in conflict with those available to the indemnifying party (in which case the
indemnifying party shall not have the right to direct the defense of such action on behalf of the Indemnified Party), the reasonable
fees and expenses of such Indemnified Party’s counsel shall be borne by the indemnifying party. In no event shall the indemnifying
party be liable for the fees and expenses of more than one counsel (together with appropriate local counsel) at any time for any
Indemnified Party in connection with any one action or separate but substantially similar or related actions arising in the same
jurisdiction out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent
of the Indemnified Party (not to be unreasonably withheld or delayed), effect any settlement of any pending or threatened action
in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such
Indemnified Party unless such settlement (i) includes an unconditional release of such Indemnified Party from all liability
on any claims that are the subject matter of such action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any Indemnified Party. If the indemnification provided for in this Section 2.3
is unavailable or insufficient to hold harmless an Indemnified Party under Sections 2.3(a) or 2.3(b), then each indemnifying party
shall contribute to the amount paid or payable by such Indemnified Party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to in Sections 2.3(a) or 2.3(b) in such proportion as is appropriate to reflect the relative
fault of the indemnifying party or parties on the one hand and the Indemnified Party on the other in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other
relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company on the one hand or a Holder or Holder Indemnified Party, as the case may be, on the other,
and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission. The amount paid by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the
first sentence of this Section 2.3 shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any action or claim that is the subject of this Section 2.3(c). The parties
agree that it would not be just and equitable if contributions were determined by pro rata allocation (even if a Holder
was treated as one Entity for such purpose) or any other method of allocation that does not take account of the equitable considerations
referred to above. Notwithstanding any other provision of this Section 2.3(c), no Holder shall be required to contribute any amount
in excess of the amount by which the net proceeds received by such Holder from the sale of the Registrable Securities pursuant
to the Resale Registration Statement exceeds the amount of damages that such Holder has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.

 

    	 	13	 

     

    

 

(d)          The
agreements contained in this Section 2.3 shall survive the sale of the Registrable Securities pursuant to the Resale Registration
Statement and shall remain in full force and effect, regardless of any termination or cancellation of this Declaration or any investigation
made by or on behalf of any Indemnified Party.

 

Article
III.

Miscellaneous.

 

3.1           Governing
Law. This Declaration shall be governed by, and construed in accordance with, the laws of the State of California, regardless
of the laws that might otherwise govern under applicable principles of conflicts of laws.

 

3.2           Titles
and Subtitles. The titles and subtitles used in this Declaration are for convenience only and are not to be considered in construing
or interpreting this Declaration.

 

3.3           Notices.
All notices, requests, claims, demands, consents, waivers and other communications required or permitted by this Declaration shall
be in writing and shall be deemed given to a party to this Declaration when (a) delivered to the appropriate address by hand or
by nationally recognized overnight courier service (costs prepaid), or (b) sent e-mail with confirmation of transmission by the
transmitting equipment confirmed with a copy delivered as provided in clause (a), (i) in the case of the Company, to Chris Prior,
Chief Executive Officer, with a copy (which shall not constitute notice) to Wilson Sonsini Goodrich & Rosati, P.C., Attention:
Martin J. Waters, Email: mwaters@wsgr.com; and (ii) in the case of a Holder, to the address or e-mail address and marked to the
attention of such Holder (by name or title) as set forth on Schedule
1 hereto (or to such other address or e-mail address as such party shall have specified in a written notice given to
the other parties hereto).

 

    	 	14	 

     

    

 

3.4           Amendments
and Waivers. This registration rights granted hereunder may only be amended or terminated and the observance of any
term hereof may be waived (either generally or in a particular instance, and either retroactively or prospectively) only by a written
instrument executed by the Company and the holders of a majority of the Registrable Securities then outstanding.

 

3.5           Severability.
In case any one or more of the provisions contained in this Declaration is for any reason held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Declaration, and
such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable
to the maximum extent permitted by law.

 

3.6           Termination.
This Declaration shall terminate on the date when there are no longer any remaining Registrable Securities or upon the dissolution
of liquidation of the Company; provided that Section 2.3 of this Declaration shall survive such termination.

 

3.7           Parties
in Interest. None of the provisions of this Declaration are intended to provide any rights or remedies to any Person other
than the parties to this Declaration and their respective successors and assigns (if any).

 

[The
remainder of this page intentionally left blank]

 

    	 	15	 

     

    

 

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

 

	 	THE COMPANY:
	 	 
	 	Monster Digital, Inc.,
	 	a Delaware corporation
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

[Signature Page
to Registration Rights Agreement]

 

    	 	 	 

     

    

 

EXHIBIT F

 

Form of Lock-up
Agreement

 

__________, 2018

 

RE:Innovate Biopharmaceuticals,
Inc. (the “Company”)

 

Ladies & Gentlemen:

 

 

The undersigned is
an owner of shares of common stock, par value $0.001 per share, of the Company (“Shares”) or of securities convertible
into or exchangeable or exercisable for Shares. The Company proposes to conduct an offering of Shares pursuant to a proposed Subscription
Agreement (the “Subscription Agreement”) by and among the Company and the Purchasers (as defined in the Subscription
Agreement) (the “Offering”). The undersigned recognizes that the Offering will benefit each of the Company and
the undersigned. The undersigned acknowledges that the Purchasers are relying on the representations and agreements of the undersigned
contained in this letter agreement (this “Agreement”) in conducting the Offering.

 

Annex A sets forth
definitions for capitalized terms used in this Agreement that are not defined in the body of this Agreement. Those definitions
are a part of this Agreement.

 

In consideration of
the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned hereby agrees that, during the Lock-up Period, the undersigned will not (and will cause any Family Member or Affiliate
not to):

 

		·	Sell or Offer to Sell any Shares or Related Securities currently or hereafter owned either of record
or beneficially (as defined in Rule 13d-3 under the Exchange Act) by the undersigned or such Family Member or Affiliate,

 

		·	enter into any Swap,

 

		·	make any demand for, or exercise any right with respect to, the registration under the Securities
Act of the offer and sale of any Shares or Related Securities, or cause to be filed a registration statement, prospectus or prospectus
supplement (or an amendment or supplement thereto) with respect to any such registration, in each case other than the Resale Registration
Statement (as defined in the Declaration of Registration Rights Agreement attached as Exhibit E to the Subscription Agreement),
or

 

		·	publicly announce any intention to do any of the foregoing.

 

    	 	 	 

     

    

 

The
foregoing will not apply to the registration of the offer and sale of the Shares as contemplated by the Subscription Agreement.
In addition, notwithstanding the foregoing, the undersigned may transfer any of the Shares or Related Securities (i) as
a bona fide gift or gifts or charitable contribution(s), (ii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family member of the undersigned, (iii) if the undersigned is a corporation, partnership, limited liability company,
trust or other business entity (1) to another corporation, partnership, limited liability company, trust or other business entity
that is a direct or indirect affiliate (as defined in Rule 405 promulgated under the Securities Act) of the undersigned or (2)
as distributions of Shares or Related Securities to limited partners, limited liability company members or stockholders of the
undersigned or holders of similar equity interests in the undersigned, (iv) if the undersigned is a trust, to the beneficiary of
such trust, (v) by testate succession or intestate succession, (vi) to any immediate family member, any investment fund, family
partnership, family limited liability company or other entity controlled or managed by the undersigned, (vii) to a nominee or custodian
of a person or entity to whom a disposition or transfer would be permissible under clauses (i) through (vi), (viii) to the Company
in a transaction exempt from Section 16(b) of the Exchange Act upon a vesting event of the Shares or Related Securities or upon
the exercise of options or warrants to purchase Shares on a “cashless” or “net exercise” basis or to cover
tax withholding obligations of the undersigned in connection with such vesting or exercise (but for the avoidance of doubt, excluding
all manners of exercise that would involve a sale in the open market of any securities relating to such options or warrants, whether
to cover the applicable aggregate exercise price, withholding tax obligations or otherwise), (ix) acquired by the undersigned in
open market transactions after the date hereof, (x) pursuant to a bona fide third party tender offer, merger, consolidation or
other similar transaction made to all holders of the Company’s capital stock involving a Change of Control of the Company,
provided that in the event that such tender offer, merger, consolidation or other such transaction is not completed, the
Shares or Related Securities shall remain subject to the restrictions contained in this Agreement, or (xi) by operation of law,
such as pursuant to a qualified domestic order or in connection with a divorce settlement or any other court order; provided,
in the case of clauses (i)-(vii), that (A) such transfer shall not involve a disposition for value and (B) the transferee agrees
in writing with the Company to be bound by the terms of this Agreement.

 

In addition, the foregoing
restrictions shall not apply to (i) the exercise of stock options granted pursuant to the Company’s equity incentive
plans (but for the avoidance of doubt, excluding all manners of exercise that would involve a sale in the open market of any securities
relating to such options, whether to cover the applicable aggregate exercise price, withholding tax obligations or otherwise);
provided that the foregoing restrictions shall apply to any of the securities issued upon such exercise, (ii) conversion
or exercise of warrants into Shares or into any other security convertible into or exercisable for Shares that are outstanding
as of the date hereof (but for the avoidance of doubt, excluding all manners of conversion or exercise that would involve a sale
in the open market of any securities relating to such warrants, whether to cover the applicable aggregate exercise price, withholding
tax obligations or otherwise); provided that the foregoing restrictions shall apply to any of the Securities issued upon
such conversion or exercise, or (iii) the establishment of any contract, instruction or plan (a “Plan”) that
satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act; provided that no sales of the Securities
shall be made pursuant to such a Plan prior to the expiration of the applicable Lock-Up Period, and such a Plan may only be established
if no public announcement of the establishment or existence thereof and no filing with the Securities and Exchange Commission or
other regulatory authority in respect thereof or transactions thereunder or contemplated thereby, by the undersigned, the Company
or any other person, shall be required, and no such announcement or filing is made voluntarily, by the undersigned, the Company
or any other person, prior to the expiration of the applicable Lock-Up Period.

 

The undersigned also
agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the
transfer of Shares or Related Securities held by the undersigned and the undersigned's Family Members or Affiliates, if any, except
in compliance with the foregoing restrictions.

 

The undersigned confirms
that the undersigned has not, and has no knowledge that any Family Member or Affiliate has, directly or indirectly, taken any action
designed to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the
sale of the Shares. The undersigned will not, and will cause any Family Member or Affiliate not to take any such action.

 

    	 	 	 

     

    

 

Whether or not the
Offering occurs as currently contemplated or at all depends on market conditions and other factors. The Offering will only be made
pursuant to the Subscription Agreement, the terms of which are subject to negotiation between the Company and the Purchasers.

 

The undersigned hereby
represents and warrants that the undersigned has full power, capacity and authority to enter into this Agreement. This Agreement
is irrevocable and will be binding on the undersigned and the successors, heirs, personal representatives and assigns of the undersigned.
This Agreement will automatically terminate upon the earliest to occur, if any, of (a) the date the Company advises the Purchasers
in writing, prior to the execution of the Subscription Agreement, that it has determined not to proceed with the Offering, (b)
the date of the termination of the Subscription Agreement if prior to the closing of the Offering and (c) January 26, 2018 if the
Subscription Agreement has not been executed and delivered by the Company by such date.

 

This Agreement shall
be governed by, and construed in accordance with, the laws of the State of Delaware.

 

    	 	 	 

     

    

 

	 	Very truly yours,
	 	 
	 	 
	 	Name of Security Holder (Print exact name) 
	 	 	 
	 	By:	 
	 	 	Signature

 

    	 	 	 

     

    

 

EXHIBIT G

 

Form
of WARRANTExhibit 10.2

 

EXECUTION COPY

 

NOTE PURCHASE
AGREEMENT

 

This NOTE PURCHASE
AGREEMENT (the “Agreement”), dated as of January 29 2018, is by and among Innovate Biopharmaceuticals Inc.,
a Delaware corporation with offices located at 8480 Honeycutt Rd, Suite 120, Raleigh, NC 27615 (the “Company”),
and each of the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively,
the “Buyers”).

 

RECITALS

 

A.       The
Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506(b) of Regulation
D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the 1933 Act.

 

B.       The
Company has authorized a new series of senior notes of the Company, in the aggregate original principal amount of $4,800,000, substantially
in the form attached hereto as Exhibit A (the “Notes”).

 

C.       Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, a Note in the
aggregate original principal amount set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:

 

1.       PURCHASE
AND SALE OF NOTES.

 

(a)       Purchase
of Notes. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall
issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date
(as defined below) a Note in the original principal amount as is set forth opposite such Buyer’s name in column (3) on the
Schedule of Buyers.

 

(b)       Closing.
The closing (the “Closing”) of the purchase of the Notes by the Buyers shall occur at the offices of Kelley
Drye & Warren LLP, 101 Park Avenue, New York, NY 10178. The date and time of the Closing (the “Closing Date”)
shall be 10:00 a.m., New York time, on the first (1st) Business Day on which the conditions to the Closing set forth in Sections
6 and 7 below are satisfied or waived (or such other date as is mutually agreed to by the Company and each Buyer). As used herein
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York,
New York are authorized or required by law to remain closed.

 

     

     

    

 

(c)       Purchase
Price. The aggregate purchase price for the Notes to be purchased by each Buyer (the “Purchase Price”) shall
be the amount set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers.

 

(d)       Form
of Payment. On the Closing Date, (i) each Buyer shall pay its respective Purchase Price (less, in the case of any Buyer, the
amounts withheld pursuant to Section 4(f)) to the Company for the Notes to be issued and sold to such Buyer at the Closing,
by wire transfer of immediately available funds in accordance with the by wire transfer of immediately available funds in accordance
with the Flow of Funds Letter (as defined below) and (ii) the Company shall deliver to each Buyer a Note in the aggregate
original principal amount as is set forth opposite such Buyer’s name in column (3) of the Schedule of Buyers duly executed
on behalf of the Company and registered in the name of such Buyer or its designee.

 

(e)       Residency.
Such Buyer is a resident of that jurisdiction specified below its address of the Schedule of Buyers.

 

2.       BUYER’S
REPRESENTATIONS AND WARRANTIES.

 

Each Buyer, severally
and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and as of the Closing
Date:

 

(a)       Organization;
Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.

 

(b)       No
Public Sale or Distribution. Such Buyer is acquiring its Note for its own account and not with a view towards, or for resale
in connection with, the public sale or distribution thereof in violation of applicable securities laws, except pursuant to sales
registered or exempted under the 1933 Act; provided, however, by making the representations herein, such Buyer does not agree,
or make any representation or warranty, to hold any of the Notes for any minimum or other specific term and reserves the right
to dispose of the Notes at any time in accordance with or pursuant to a registration statement or an exemption from registration
under the 1933 Act. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person
to distribute any of the Notes in violation of applicable securities laws. For purposes of this Agreement, “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and any Governmental Entity or any department or agency thereof.

 

(c)       Accredited
Investor Status. Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.

 

(d)       Reliance
on Exemptions. Such Buyer understands that the Notes are being offered and sold to it in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the
truth and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and
understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of
such Buyer to acquire the Notes.

 

    2 

     

    

 

(e)       Information.
Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of
the Company and materials relating to the offer and sale of the Notes that have been requested by such Buyer. Such Buyer and its
advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other due
diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect
such Buyer's right to rely on the Company's representations and warranties contained herein. Such Buyer understands that its investment
in the Notes involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has considered necessary
to make an informed investment decision with respect to its acquisition of the Notes.

 

(f)       No
Governmental Review. Such Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Notes or the fairness or suitability of the investment in
the Notes nor have such authorities passed upon or endorsed the merits of the offering of the Notes.

 

(g)       Transfer
or Resale. Such Buyer understands that, except as may be contemplated in connection with a Public Company Date (as defined
below): (i) the Notes have not been and are not being registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered
to the Company (if requested by the Company) an opinion of counsel, in a form reasonably acceptable to the Company, to the effect
that such Notes to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration,
or (C) such Buyer provides the Company with reasonable assurance that such Notes can be sold, assigned or transferred pursuant
to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”);
(ii) any sale of the Notes made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further,
if Rule 144 is not applicable, any resale of the Notes under circumstances in which the seller (or the Person through whom the
sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company nor
any other Person is under any obligation to register the Notes under the 1933 Act or any state securities laws or to comply with
the terms and conditions of any exemption thereunder. Notwithstanding the foregoing, the Notes may be pledged in connection with
a bona fide margin account or other loan or financing arrangement secured by the Notes and such pledge of Notes shall not be deemed
to be a transfer, sale or assignment of the Notes hereunder, and no Buyer effecting a pledge of Notes shall be required to provide
the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction
Document (as defined in Section 3(b)), including, without limitation, this Section 2(g).

 

(h)       Validity;
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of such Buyer and shall
constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer in accordance with their respective
terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies.

 

    3 

     

    

 

(i)       No
Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the consummation by such Buyer of the
transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Buyer,
or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which could not, individually or in the aggregate, reasonably be expected to have a material adverse
effect on the ability of such Buyer to perform its obligations hereunder.

 

3.       REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

 

The Company represents
and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date.

 

(a)       Organization
and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing and in
good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their
properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company
and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction
in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse
Effect (as defined below). As used in this Agreement, “Material Adverse Effect” means any material adverse effect
on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise)
or prospects of the Company or any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or in
any of the other Transaction Documents or any other agreements or instruments to be entered into in connection herewith or therewith
or (iii) the authority or ability of the Company to perform its obligations under any of the Transaction Documents (as defined
below). Other than the Persons (as defined below) set forth on Schedule 3(a), the Company has no Subsidiaries. “Subsidiaries”
means any Person in which the Company, directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity
or similar interest of such Person or (II) controls or operates all or any part of the business, operations or administration of
such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.”

 

(b)       Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents and to issue the Notes in accordance with the terms hereof and thereof. The execution
and delivery of this Agreement and the other Transaction Documents by the Company, and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of the Notes) have been duly authorized by the Company’s
board of directors or other governing body, as applicable, and (other than the filing of a Form D with the SEC and the filing(s)
required by applicable state “blue sky” securities laws, rules and regulations (together the “Securities Filings”))
no further filing, consent or authorization is required by the Company, its Subsidiaries, their respective boards of directors
or their stockholders or other governing body. This Agreement has been, and the other Transaction Documents to which it is a party
will be prior to the Closing, duly executed and delivered by the Company, and each constitutes the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with its respective terms, except as such enforceability may be limited
by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification
and to contribution may be limited by federal or state securities law. “Transaction Documents” means, collectively,
this Agreement, the Notes, and each of the other agreements and instruments entered into or delivered by any of the parties hereto
in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.

 

    4 

     

    

 

(c)       Issuance
of Securities. The issuance of the Notes are duly authorized and upon issuance in accordance with the terms of the Transaction
Documents shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, mortgages, defects,
claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances (collectively
“Liens”) with respect to the issuance thereof. Subject to the accuracy of the representations and warranties
of the Buyers in this Agreement, the offer and issuance by the Company of the Notes is exempt from registration under the 1933
Act.

 

(d)       No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes) will not
(i) result in a violation of the Certificate of Incorporation (as defined below) (including, without limitation, any certificate
of designation contained therein), Bylaws (as defined below), certificate of formation, memorandum of association, articles of
association, bylaws or other organizational documents of the Company or any of its Subsidiaries, or any capital stock or other
securities of the Company or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice
or lapse of time or both would become a default) in any respect under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party,
or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, foreign,
federal and state securities laws and regulations) applicable to the Company or any of its Subsidiaries or by which any property
or asset of the Company or any of its Subsidiaries is bound or affected.

 

(e)       Consents.
Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or
registration with (other than the Securities Filings), any Governmental Entity (as defined below) or any regulatory or self-regulatory
agency or any other Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated
by the Transaction Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders,
filings and registrations which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been
or will be obtained or effected on or prior to the Closing Date, and neither the Company nor any of its Subsidiaries are aware
of any facts or circumstances which might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the
registration, application or filings contemplated by the Transaction Documents. “Governmental Entity” means
any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state, local,
municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body
exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority
or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a
government or a public international organization or any of the foregoing.

 

    5 

     

    

 

(f)       Acknowledgment
Regarding Buyer’s Purchase of Notes. The Company acknowledges and agrees that each Buyer is acting solely in the capacity
of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby
and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate” (as
defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more
than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended
(the “1934 Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary
of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions
contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase
of the Notes. The Company further represents to each Buyer that the Company’s and each Subsidiary’s decision to enter
into the Transaction Documents to which it is a party has been based solely on the independent evaluation by the Company, each
Subsidiary and their respective representatives.

 

(g)       No
General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Subsidiaries or affiliates, nor any
Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offer or sale of the Notes. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer or its
investment advisor) relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold each Buyer
harmless against, any liability, loss or expense (including, without limitation, attorney's fees and out-of-pocket expenses) arising
in connection with any such claim. Neither the Company nor any of its Subsidiaries has engaged any placement agent or other agent
in connection with the offer or sale of the Notes.

 

(h)       No
Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their behalf
has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances
that would require registration of any of the Notes under the 1933 Act, whether through integration with prior offerings or otherwise,
or cause this offering of the Notes to require approval of stockholders of the Company for purposes of the 1933 Act or under any
applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the Notes of the Company are listed or designated for quotation. None of the Company, its Subsidiaries,
their affiliates nor any Person acting on their behalf will take any action or steps that would require registration of any of
the Notes under the 1933 Act or cause the offering of any of the Notes to be integrated with other offerings of securities of the
Company.

 

    6 

     

    

 

(i)       Transactions
With Affiliates. No current or former employee, partner, director, officer or stockholder (direct or indirect) of the Company
or its Subsidiaries, or any associate, or, to the knowledge of the Company, any affiliate of any thereof, or any relative with
a relationship no more remote than first cousin of any of the foregoing, is presently, or has ever been, (i) a party to any transaction
with the Company or its Subsidiaries (including any contract, agreement or other arrangement providing for the furnishing of services
by, or rental of real or personal property from, or otherwise requiring payments to, any such director, officer or stockholder
or such associate or affiliate or relative Subsidiaries (other than for ordinary course services as employees, officers or directors
of the Company or any of its Subsidiaries)) or (ii) the direct or indirect owner of an interest in any corporation, firm, association
or business organization which is a competitor, supplier or customer of the Company or its Subsidiaries (except for a passive investment
(direct or indirect) in less than 5% of the common stock of a company whose securities are traded on or quoted through a NMS stock
exchange), nor does any such Person receive income from any source other than the Company or its Subsidiaries which relates to
the business of the Company or its Subsidiaries or should properly accrue to the Company or its Subsidiaries. No employee, officer,
stockholder or director of the Company or any of its Subsidiaries or member of his or her immediate family is indebted to the Company
or its Subsidiaries, as the case may be, nor is the Company or any of its Subsidiaries indebted (or committed to make loans or
extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for
reasonable expenses incurred on behalf of the Company, (iii) for other standard employee benefits made generally available to all
employees or executives (including stock option agreements outstanding under any stock option plan approved by the Board of Directors
of the Company); and (iv) other than convertible promissory notes issued by the Company to affiliates of the Company’s directors
and officers.

 

(j)Environmental
Laws. (i) The Company and its Subsidiaries (A) are in compliance with any and all Environmental Laws (as defined below), (B)
have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the
foregoing clauses (A), (B) and (C), the failure to so comply could be reasonably expected to have, individually or in the aggregate,
a Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating
to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand
letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated
or approved thereunder.

 

    7 

     

    

 

(ii)       No
Hazardous Materials:

 

(A)       have
been disposed of or otherwise released from any Property of the Company or any of its Subsidiaries in violation of any Environmental
Laws; or

 

(B)       are
present on, over, beneath, in or upon a Property or any portion thereof in quantities that would constitute a violation of any
Environmental Laws. No prior use by the Company or any of its Subsidiaries of any Property has occurred that violates any Environmental
Laws, which violation would have a material adverse effect on the business of the Company or any of its Subsidiaries.

 

(iii)       Neither
the Company nor any of its Subsidiaries knows of any other person who or entity which has stored, treated, recycled, disposed of
or otherwise located on any Property any Hazardous Materials, including, without limitation, such substances as asbestos and polychlorinated
biphenyls.

 

(iv)       None
of the Properties are on any federal or state “Superfund” list or Liability Information System (“CERCLIS”)
list or any state environmental agency list of sites under consideration for CERCLIS, nor subject to any environmental related
Liens.

 

(k)       U.S.
Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any
of the Notes are held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning of Section 897
of the Code, and the Company and each Subsidiary shall so certify upon any Buyer’s request.

 

(l)       Transfer
Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be
paid in connection with the issuance, sale and transfer of the Notes to be sold to each Buyer hereunder will be, or will have been,
fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

 

(m)       Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as
amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total
equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any
of its Subsidiaries or affiliates exercises a controlling influence over the management or policies of a bank or any entity that
is subject to the BHCA and to regulation by the Federal Reserve.

 

    8 

     

    

 

(n)       Illegal
or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the best of the
Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees,
agents or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which
the Company or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment,
contribution or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe
to any Person or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public office
except for personal political contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.

 

(o)       Money
Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act
of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, without limitation, the
laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including,
but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations
contained in 31 CFR, Subtitle B, Chapter V.

 

(p)       Acknowledgement
Regarding Buyers' Trading Activity. It is understood and acknowledged by the Company (a) (i) that none of the Buyers have been
asked by the Company or its Subsidiaries to agree, nor has any Buyer agreed with the Company or its Subsidiaries, to desist from
purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Notes for any specified term; and (ii) that each Buyer shall not be deemed to have any affiliation
with or control over any arm's length counter party in any “derivative” transaction. The Company further understands
and acknowledges that following the public disclosure of the transactions contemplated by the Transaction Documents pursuant to
the Press Release (as defined below) one or more Buyers may engage in hedging and/or trading activities at various times during
the period that the Notes are outstanding, and such hedging and/or trading activities, if any, can reduce the value of the existing
stockholders’ equity interest in the Company both at and after the time the hedging and/or trading activities are being conducted.
The Company acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement,
the Notes or any other Transaction Document or any of the documents executed in connection herewith or therewith.

 

(q)       Management.
Except as set forth in Schedule 3(q) hereto, during the past five year period, no current officer or director of the
Company or any of its Subsidiaries has been the subject of:

 

(i)       a
petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before
the filing of such petition or such appointment, or any corporation or business association of which such person was an executive
officer at or within two years before the time of the filing of such petition or such appointment;

 

    9 

     

    

 

(ii)       a
conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do not
relate to driving while intoxicated or driving under the influence);

 

(iii)       any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining any such person from, or otherwise limiting, the following activities:

 

(1)       Acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person
of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;

 

(2)       Engaging
in any particular type of business practice; or

 

(3)       Engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of securities
laws or commodities laws;

 

(iv)       any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise limiting
for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph,
or to be associated with persons engaged in any such activity;

 

(v)       a
finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities
law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently
reversed, suspended or vacated; or

 

(vi)       a
finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or
vacated.

 

(r)No Disqualification
Events. With respect to Notes to be offered and sold hereunder in reliance on Rule 506(b) under the 1933 Act (“Regulation
D Securities”), none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer,
other officer of the Company participating in the offering contemplated hereby, any beneficial owner of 20% or more of the Company's
outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule
405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”
and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person
is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under
Rule 506(e), and has furnished to the Buyers a copy of any disclosures provided thereunder.

 

    10 

     

    

 

(s)       Other
Covered Persons(b). The Company is not aware of any Person that has been or will be paid (directly or indirectly) remuneration
for solicitation of Buyers or potential purchasers in connection with the sale of any Regulation D Securities.

 

(t)       Public
Utility Holding Act. None of the Company nor any of its Subsidiaries is a “holding company,” or an “affiliate”
of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.

 

(u)       Federal
Power Act. None of the Company nor any of its Subsidiaries is subject to regulation as a “public utility” under
the Federal Power Act, as amended.

 

(v)       Ranking
of Notes. Except for Permitted Senior Indebtedness (as defined in the Notes), no Indebtedness of the Company, at the Closing,
will be senior to, or pari passu with, the Notes in right of payment, whether with respect to payment or redemptions, interest,
damages, upon liquidation or dissolution or otherwise.

 

(w)       Disclosure.
No statement made by the Company in this Agreement, any other Transaction Document or the exhibits and schedules attached hereto
or in any certificate or schedule furnished or to be furnished by or on behalf of the Company to the Investors or any of their
representatives in connection with the transactions contemplated hereby contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained herein or therein not misleading. The due diligence
materials previously provided by or on behalf of the Company to each Buyer (the “Due Diligence Materials”),
have been prepared in a good faith effort by the Company to describe the Company's present and proposed products, and projected
growth of the Company and do not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements therein not misleading, except that with respect to assumptions, projections and expressions of opinion or
predictions contained in the Due Diligence Materials, the Company represents only that such assumptions, projections, expressions
of opinion and predictions were made in good faith and that the Company believes there is a reasonable basis therefor. The Company
acknowledges and agrees that no Buyer makes or has made any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 2.

 

(x)       Additional
Representations and Warranties. The Company hereby makes, as of the date hereof, to each Buyer the representations and warranties
of the Company set forth in Section 3.1(e), and Sections 3.1(h) through 3.1(m) of that certain Subscription Agreement by and among
the Company and each of the purchasers listed on Annex A attached thereto and dated as of the date of this Agreement (the
“Subscription Agreement”), subject in all respect to the disclosures of the Company set forth on the Company’s
Disclosure Schedules (as defined in the Subscription Agreement), which representations, warranties and disclosure are hereby incorporated
by reference in this Agreement, mutatis mutandis.

 

    11 

     

    

 

4.       COVENANTS.

 

(a)       Reasonable
Best Efforts. Each Buyer shall use its reasonable best efforts to timely satisfy each of the covenants hereunder and conditions
to be satisfied by it as provided in Section 6 of this Agreement. The Company shall use its reasonable best efforts to timely satisfy
each of the covenants hereunder and conditions to be satisfied by it as provided in Section 7 of this Agreement.

 

(b)       Form
D and Blue Sky. The Company shall file a Form D with respect to the Notes as required under Regulation D and to provide a copy
thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Notes for sale to the Buyers at
the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States
(or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyers on or
prior to the Closing Date. Without limiting any other obligation of the Company under this Agreement, the Company shall timely
make all filings and reports relating to the offer and sale of the Notes required under all applicable securities laws (including,
without limitation, all applicable federal securities laws and all applicable “Blue Sky” laws), and the Company shall
comply with all applicable foreign, federal, state and local laws, statutes, rules, regulations and the like relating to the offering
and sale of the Notes to the Buyers.

 

(c)       Reporting
Status. Immediately following the date the Common Stock of the Company is initially registered (or is exchanged into a class
of securities registered) under the 1934 Act (whether by registration, merger or otherwise) (the “Public Company Date”)
and until the date on which a Buyer or any transferee or assignee thereof to which a Buyer assigns its rights as a holder of Notes
under this Agreement (each an “Investor,” and collectively, the “Investors”) no longer holds
any Notes (the “Reporting Period”), the Company shall timely file all reports required to be filed with the
SEC pursuant to the 1934 Act.

 

(d)       Use
of Proceeds. The Company will use the proceeds from the sale of the Notes for general corporate purposes, but not, directly
or indirectly, for (i) except as set forth on Schedule 4(d), the satisfaction of any indebtedness of the Company or any of its
Subsidiaries, (ii) the redemption or repurchase of any securities of the Company or any of its Subsidiaries, or (iii) the settlement
of any outstanding litigation.

 

(e)       Financial
Information. From and after the Public Company Date, the Company agrees to send the following to each Investor during the Reporting
Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the EDGAR system,
within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly Reports
on Form 10-Q, any interim reports or any consolidated balance sheets, income statements, stockholders’ equity statements
and/or cash flow statements for any period other than annual, any Current Reports on Form 8-K and any registration statements (other
than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) unless the following are either filed with the SEC through
EDGAR or are otherwise widely disseminated via a recognized news release service (such as PR Newswire), on the same day as the
release thereof, facsimile copies of all press releases issued by the Company or any of its Subsidiaries and (iii) unless the following
are filed with the SEC through EDGAR, copies of any notices and other information made available or given to the stockholders of
the Company generally, contemporaneously with the making available or giving thereof to the stockholders.

 

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(f)       Fees.
The Company shall reimburse the lead Buyer for all costs and expenses not to exceed $20,000.00 incurred by it or its affiliates
in connection with the structuring, documentation, negotiation and closing of the transactions contemplated by the Transaction
Documents (including, without limitation, as applicable, all reasonable legal fees of outside counsel and disbursements of Kelley
Drye & Warren LLP, counsel to the lead Buyer, any other reasonable fees and expenses in connection with the structuring, documentation,
negotiation and closing of the transactions contemplated by the Transaction Documents and due diligence and regulatory filings
in connection therewith) (the “Transaction Expenses”) and shall be withheld by the lead Buyer from its Purchase
Price at the Closing; provided, that the Company shall promptly reimburse Kelley Drye & Warren LLP on demand for all Transaction
Expenses not so reimbursed through such withholding at the Closing. The Company shall be responsible for the payment of any placement
agent’s fees or financial advisory fees relating to or arising out of the transactions contemplated hereby. The Company shall
pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys’
fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment. Except as otherwise set forth
in the Transaction Documents, each party to this Agreement shall bear its own expenses in connection with the sale of the Notes
to the Buyers.

 

(g)       Pledge
of Notes. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that the
Notes may be pledged by an Investor in connection with a bona fide margin agreement or other loan or financing arrangement that
is secured by the Notes. The pledge of Notes shall not be deemed to be a transfer, sale or assignment of the Notes hereunder, and
no Investor effecting a pledge of Notes shall be required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement or any other Transaction Document, including, without limitation, Section 2(g)
hereof; provided that an Investor and its pledgee shall be required to comply with the provisions of Section 2(g) hereof
in order to effect a sale, transfer or assignment of Notes to such pledgee. The Company hereby agrees to execute and deliver such
documentation as a pledgee of the Notes may reasonably request in connection with a pledge of the Notes to such pledgee by a Buyer.

 

(h)       Disclosure
of Transactions and Other Material Information.

 

(i)       Disclosure
of Transaction. The Company shall, on or before the fourth (4th) Business Day after the date of this Agreement, file a Current
Report on Form 8-K describing all the material terms of the transactions contemplated by the Transaction Documents in the form
required by the 1934 Act and attaching all the material Transaction Documents (including, without limitation, this Agreement (and
all schedules to this Agreement), the form of Notes and the form of the Warrants) (including all attachments, the “8-K
Filing”). From and after the filing of the 8-K Filing, the Company shall have disclosed all material, non-public information
(if any) provided to any of the Buyers by the Company or any of its Subsidiaries or any of their respective officers, directors,
employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon
the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under
any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors,
affiliates, employees or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand, shall terminate.

 

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(ii)       Limitations
on Disclosure. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective
officers, directors, employees and agents not to, provide any Buyer with any material, non-public information regarding the Company
or any of its Subsidiaries from and after the date hereof without the express prior written consent of such Buyer (which may be
granted or withheld in such Buyer’s sole discretion). In the event of a breach of any of the foregoing covenants, or any
of the covenants or agreements contained in any other Transaction Document, by the Company, any of its Subsidiaries, or any of
its or their respective officers, directors, employees and agents (as determined in the reasonable good faith judgment of such
Buyer), in addition to any other remedy provided herein or in the Transaction Documents, such Buyer shall have the right to make
a public disclosure, in the form of a press release, public advertisement or otherwise, of such breach or such material, non-public
information, as applicable, without the prior approval by the Company, any of its Subsidiaries, or any of its or their respective
officers, directors, employees or agents. No Buyer shall have any liability to the Company, any of its Subsidiaries, or any of
its or their respective officers, directors, employees, affiliates, stockholders or agents, for any such disclosure. To the extent
that the Company delivers any material, non-public information to a Buyer without such Buyer's consent, the Company hereby covenants
and agrees that such Buyer shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis of,
such material, non-public information. Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue
any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, the
Company shall be entitled, without the prior approval of any Buyer, to make the Press Release and any press release or other public
disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith
and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted
by the Company in connection with any such press release or other public disclosure prior to its release). Without the prior written
consent of the applicable Buyer (which may be granted or withheld in such Buyer’s sole discretion), the Company shall not
(and shall cause each of its Subsidiaries and affiliates to not) disclose the name of such Buyer in any filing, announcement, release
or otherwise. Notwithstanding anything contained in this Agreement to the contrary and without implication that the contrary would
otherwise be true, the Company expressly acknowledges and agrees that no Buyer shall have (unless expressly agreed to by a particular
Buyer after the date hereof in a written definitive and binding agreement executed by the Company and such particular Buyer (it
being understood and agreed that no Buyer may bind any other Buyer with respect thereto)), any duty of confidentiality with respect
to, or a duty not to trade on the basis of, any material, non-public information regarding the Company or any of its Subsidiaries.

 

(i)       Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect.

 

(j)       Passive
Foreign Investment Company. The Company shall conduct its business, and shall cause its Subsidiaries to conduct their respective
businesses, in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment company
within the meaning of Section 1297 of the Code.

 

(k)       Restriction
on Redemption and Cash Dividends. So long as any Notes are outstanding, the Company shall not, directly or indirectly, redeem,
or declare or pay any cash dividend or distribution on, any securities of the Company without the prior express written consent
of the Buyers, except for the repurchase of common stock from employees, directors, consultants, and advisor in connection with
termination of services to the Company.

 

(l)       Corporate
Existence. So long as any Buyer beneficially owns any Notes, the Company shall not be party to any Fundamental Transaction
(as defined in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions
set forth in the Notes.

 

(m)      General Solicitation.
None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act) or any person acting on behalf of the
Company or such affiliate will solicit any offer to buy or offer or sell the Notes by means of any form of general solicitation
or general advertising within the meaning of Regulation D, including: (i) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar medium or broadcast over television or radio; and (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising, unless otherwise permitted by applicable law.

 

(n)      Notice of
Disqualification Events. The Company will notify the Buyers in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person.

 

(o)      Books and
Records(b). The Company will keep proper books of record and account, in which full and correct entries shall be made of
all financial transactions and the asset and business of the Company and its Subsidiaries in accordance with GAAP.

 

(p)      Confidentiality,
Non-Compete, Non-Solicit and Assignment of Inventions Agreements. The Company shall cause every employee and consultant
to be hired by the Company after the date hereof to enter into a Confidentiality, Non-Compete, Non-Solicit and Assignment of Inventions
Agreement prior to being hired. The Company shall not amend, waive or terminate any material provision of any Confidentiality,
Non-Compete, Non-Solicit and Assignment of Inventions Agreement and shall enforce the provisions of each the Confidentiality, Non-Compete,
Non-Solicit and Assignment of Inventions Agreements in accordance with its terms. If any party to a Confidentiality, Non-Compete,
Non-Solicit and Assignment of Inventions Agreement breaches any material provision of a Confidentiality, Non-Compete, Non-Solicit
and Assignment of Inventions Agreement, the Company shall promptly use its best efforts to specific performance of the terms of
such Confidentiality, Non-Compete, Non-Solicit and Assignment of Inventions Agreement.

 

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(q)      Financial
Statements and Inspection.

 

(i)       The
Company shall deliver to each Buyer (unless any such Buyer has elected by written notice to the Company that it does not want to
receive any or all of the following):

 

(1)       as
soon as practicable following the end of each fiscal quarter (other than the fourth fiscal quarter of each fiscal year), but in
no event later than fifteen (15) days after the end of such fiscal quarter, the Company's consolidated unaudited balance sheet,
income statement, a statement of stockholder's equity and a statement of cash flows for such quarter, such quarter-end financial
reports to be in reasonable detail, prepared in accordance with GAAP (except that such financial statements may (A) be subject
to normal year-end audit adjustments and (B) not contain all notes thereto that may be required in accordance with GAAP);

 

(2)       as
soon as practicable following the end of each fiscal year, but in no event later than ninety (90) days following the end of such
fiscal year, the Company's audited consolidated balance sheet, income statement, a statement of stockholder's equity and a statement
of cash flows for such year and, if applicable, the immediately preceding fiscal year, such year-end financial reports to be in
reasonable detail, prepared in accordance with GAAP, and audited by independent public accountants of nationally recognized standing
selected by the Company and reasonably acceptable to the Required Holders;

 

(3)       as
soon as practicable, all material communications with stockholders or the financial community, including press releases, but in
no event later than three (3) days after the date of each such communication;

 

(4)       as
soon as practicable, (x) all material reports prepared for the Company by outside consultants, and (y) all reports prepared for
the Company by outside legal counsel and auditors, but in no event later than three (3) days after receipt thereof by the Company,
provided that the Company shall have no obligation to deliver to any Investor any report prepared by outside legal counsel to the
extent such report is privileged communication and is subject to the attorney/client privilege, in the reasonable opinion of such
legal counsel;

 

(5)       as
soon as practicable (but in no event later than two (2) Business Days after any such communication), all material communications
with and from United States federal or state or foreign regulatory agencies or other governmental or quasi-governmental authorities
of any kind;

 

    15 

     

    

 

(6)       as
soon as practicable, notice of any material events, including any pending or threatened litigation and/or events that is reasonably
likely to materially delay the advancement of the business objectives of the Company or any of its Subsidiaries, but in no event
later than five (5) Business Days after the occurrence thereof; and

 

(7)       notice
of any Material Adverse Effect as soon as practicable after upon the occurrence thereof, but in no event later than five (5) Business
Days thereafter.

 

(ii)       The
Company shall notify the Buyers in writing of (i) any default under any of the Company's agreements governing its Indebtedness
and (ii) the receipt by the Company of any default notices in connection therewith, in each case promptly and in no event later
than five (5) Business Days after the occurrence of any such default or the receipt of any such default notice.

 

(iii)       The
Company shall permit each Buyer to visit and inspect the Company's properties, to examine its books of account, records, contracts
and agreements and to discuss the Company's affairs, finances and accounts with its Chief Executive Officer or Chief Financial
Officer, all at such times as may be reasonably requested by the Investor.

 

(iv)       The
covenants set forth in this Section 4(q) shall terminate as to Buyers and be of no further force or effect upon the earlier of
the Public Company Date and the time when no Notes are outstanding.

 

(r)       Closing
Documents. On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause to be
delivered, to each Buyer and Kelley Drye & Warren LLP a complete closing set of the executed Transaction Documents, Notes and
any other document required to be delivered to any party pursuant to Section 7 hereof or otherwise.

 

5.       REGISTER;
LEGEND.

 

(a)       Register.
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to each holder of Notes), a register for the Notes in which the Company shall record the name and address of the Person
in whose name the Notes have been issued (including the name and address of each transferee) and the principal amount of the Notes
held by such Person. The Company shall keep the register open and available at all times during business hours for inspection of
any Buyer or its legal representatives.

 

(b)       Legends.
Each Buyer understands that the Notes have been issued pursuant to an exemption from registration or qualification under the 1933
Act and applicable state securities laws, and except as set forth below, the Notes shall bear any legend as required by the “blue
sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificates):

 

    16 

     

    

 

THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY),
IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE
TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

6.       CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL.

 

(a)       The
obligation of the Company hereunder to issue and sell the Notes to each Buyer at the Closing is subject to the satisfaction, at
or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole
benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof: 

 

(i)       Such
Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.

 

(ii)       Such
Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts
withheld pursuant to Section 4(f)) for the Note being purchased by such Buyer at the Closing by wire transfer of immediately
available funds in accordance with the Flow of Funds Letter.

 

(iii)       The
representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as
of the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific
date, which shall be true and correct as of such specific date), and such Buyer shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied
with by such Buyer at or prior to the Closing Date.

 

7.       CONDITIONS
TO EACH BUYER’S OBLIGATION TO PURCHASE.

 

(a)       The
obligation of each Buyer hereunder to purchase its Note at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit and may be waived
by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof: 

 

    17 

     

    

 

(i)       The
Company and each Subsidiary (as the case may be) shall have duly executed and delivered to such Buyer each of the Transaction Documents
to which it is a party and the Company shall have duly executed and delivered to such Buyer the Note (in such original principal
amount as is set forth across from such Buyer’s name in column (3) of the Schedule of Buyers) being purchased by such Buyer
at the Closing pursuant to this Agreement.

 

(ii)       The
Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company in such entity’s
jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of formation as of a date
within ten (10) days of the Closing Date.

 

(iii)       The
Company shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by the Secretary of the
Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s
board of directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation of the Company and (iii) the
Bylaws of the Company, each as in effect at the Closing.

 

(iv)       Each
and every representation and warranty of the Company shall be true and correct as of the date when made and as of the Closing Date
as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall
be true and correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects with
the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the
Closing Date. Such Buyer shall have received a certificate, duly executed by the Chief Executive Officer of the Company, dated
as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the
form acceptable to such Buyer.

 

(v)       The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Notes.

 

(vi)       No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.

 

(vii)       Since
the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result
in a Material Adverse Effect.

 

(viii)       Such
Buyer shall have received a letter or other correspondence setting forth the wire amounts of each Buyer and the wire transfer instructions
of the Company (the “Flow of Funds Letter”).

 

(ix)       The
Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to the
transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.

 

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8.       TERMINATION.

 

In the event that the
Closing shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such Buyer shall have the
right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business on
such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under
this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have
been consummated by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale
and purchase of the Notes shall be applicable only to such Buyer providing such written notice, provided further that no such termination
shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the expenses described in Section 4(f)
above. Nothing contained in this Section 8 shall be deemed to release any party from any liability for any breach by such
party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel
specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.

 

9.       MISCELLANEOUS.

 

(a)       Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address
for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted
by law. Nothing contained herein shall be deemed or operate to preclude any Buyer from bringing suit or taking other legal action
against the Company in any other jurisdiction to collect on the Company’s obligations to such Buyer or to enforce a judgment
or other court ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT
TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION
WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

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

 

(c)       Headings;
Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision
in which they are found.

 

(d)       Severability;
Maximum Payment Amounts. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified
continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations
or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
Notwithstanding anything to the contrary contained in this Agreement or any other Transaction Document (and without implication
that the following is required or applicable), it is the intention of the parties that in no event shall amounts and value paid
by the Company and/or any of its Subsidiaries (as the case may be), or payable to or received by any of the Buyers, under the Transaction
Documents (including without limitation, any amounts that would be characterized as “interest” under applicable law)
exceed amounts permitted under any applicable law. Accordingly, if any obligation to pay, payment made to any Buyer, or collection
by any Buyer pursuant the Transaction Documents is finally judicially determined to be contrary to any such applicable law, such
obligation to pay, payment or collection shall be deemed to have been made by mutual mistake of such Buyer, the Company and its
Subsidiaries and such amount shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest,
as the case may be, as would not be so prohibited by the applicable law. Such adjustment shall be effected, to the extent necessary,
by reducing or refunding, at the option of such Buyer, the amount of interest or any other amounts which would constitute unlawful
amounts required to be paid or actually paid to such Buyer under the Transaction Documents. For greater certainty, to the extent
that any interest, charges, fees, expenses or other amounts required to be paid to or received by such Buyer under any of the Transaction
Documents or related thereto are held to be within the meaning of “interest” or another applicable term to otherwise
be violative of applicable law, such amounts shall be pro-rated over the period of time to which they relate.

 

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(e)       Entire
Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and thereto
and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the
Company, its Subsidiaries, their affiliates and Persons acting on their behalf, including, without limitation, any transactions
by any Buyer with respect to Common Stock or the Notes, and the other matters contained herein and therein, and this Agreement,
the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and
therein contain the entire understanding of the parties solely with respect to the matters covered herein and therein; provided,
however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect
on any agreements any Buyer has entered into with, or any instruments any Buyer has received from, the Company or any of its Subsidiaries
prior to the date hereof with respect to any prior investment made by such Buyer in the Company or (ii) waive, alter, modify or
amend in any respect any obligations of the Company or any of its Subsidiaries, or any rights of or benefits to any Buyer or any
other Person, in any agreement entered into prior to the date hereof between or among the Company and/or any of its Subsidiaries
and any Buyer, or any instruments any Buyer received from the Company and/or any of its Subsidiaries prior to the date hereof,
and all such agreements and instruments shall continue in full force and effect. Except as specifically set forth herein or therein,
neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. For
clarification purposes, the Recitals are part of this Agreement. No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the Required Holders (as defined below), and any amendment to any provision of
this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all Buyers and holders of Notes;
provided that no such amendment shall be effective to the extent that it (A) applies to less than all of the holders of the Notes
then outstanding or (B) imposes any obligation or liability on any Buyer without such Buyer’s prior written consent (which
may be granted or withheld in such Buyer’s sole discretion). No waiver shall be effective unless it is in writing and signed
by an authorized representative of the waiving party, provided that the Required Holders may waive any provision of this Agreement,
and any waiver of any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding
on all Buyers and holders of Notes, provided that no such waiver shall be effective to the extent that it (1) applies to less than
all of the holders of the Notes then outstanding (unless a party gives a waiver as to itself only) or (2) imposes any obligation
or liability on any Buyer without such Buyer’s prior written consent (which may be granted or withheld in such Buyer’s
sole discretion). No consideration (other than reimbursement of legal fees) 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 also is
offered to all of the parties to the Transaction Documents, all holders of the Notes. From the date hereof and while any Notes
are outstanding, the Company shall not be permitted to receive any consideration from a Buyer or a holder of Notes that is not
otherwise contemplated by the Transaction Documents in order to, directly or indirectly, induce the Company or any Subsidiary (i)
to treat such Buyer or holder of Notes in a manner that is more favorable than to other similarly situated Buyers or holders of
Notes, or (ii) to treat any Buyer(s) or holder(s) of Notes in a manner that is less favorable than the Buyer or holder of Notes
that is paying such consideration; provided, however, that the determination of whether a Buyer has been treated more or less favorably
than another Buyer shall disregard any securities of the Company purchased or sold by any Buyer. The Company has not, directly
or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated by the
Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that,
except as set forth in this Agreement, no Buyer has made any commitment or promise or has any other obligation to provide any financing
to the Company, any Subsidiary or otherwise. As a material inducement for each Buyer to enter into this Agreement, the Company
expressly acknowledges and agrees that (x) no due diligence or other investigation or inquiry conducted by a Buyer, any of its
advisors or any of its representatives shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner
or be an exception to any of, the Company’s representations and warranties contained in this Agreement or any other Transaction
Document and (y) nothing contained in any of the Due Diligence Materials shall affect such Buyer’s right to rely on, or shall
modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained in this
Agreement or any other Transaction Document. “Required Holders” means (I) prior to the Closing Date, each Buyer
entitled to purchase Notes at the Closing and (II) on or after the Closing Date, holders of a majority of the aggregate principal
amount of Notes then outstanding.

 

(f)       Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party) or electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party
and the sending party does not receive an automatically generated message from the recipient's email server that such e-mail could
not be delivered to such recipient); or (iii) one (1) Business Day after deposit with an overnight courier service with next day
delivery specified, in each case, properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail
addresses for such communications shall be:

 

    20 

     

    

 

If to the Company:

 

Innovate Biopharmaceuticals Inc.

8480 Honeycutt Rd, Suite 120

Raleigh, NC 27615

Telephone: (919) 275-1933

Attention: President

E-Mail: corplegal@innovatebiopharma.com

 

With a copy (for informational purposes only) to:

 

Wilson Sonsini Goodrich & Rosati, P.C.:

12235 El Camino Real

San Diego, CA 92130

Telephone: (858) 350-2308

Facsimile: (858) 350-2399

Attention: Martin J. Waters

E-Mail: mwaters@wsgr.com

 

If to a Buyer, to its address, e-mail address
and facsimile number set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on the
Schedule of Buyers,

 

with a copy (for informational purposes only) to:

 

Kelley Drye & Warren LLP

101 Park Avenue

New York, NY 10178

Telephone: (212) 808-7540

Facsimile: (212) 808-7897

Attention: Michael A. Adelstein, Esq.

E-mail: madelstein@kelleydrye.com

 

    21 

     

    

 

or to such other address, e-mail address
and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given
to each other party five (5) days prior to the effectiveness of such change, provided that Kelley Drye & Warren LLP shall only
be provided copies of notices sent to the lead Buyer. Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine or
e-mail containing the time, date, recipient facsimile number and, with respect to each facsimile transmission, an image of the
first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.

 

(g)       Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of any of the Notes. The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Required Holders, including, without limitation, by way of a Fundamental Transaction
(as defined in the Notes) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions
set forth in the Notes). A Buyer may assign some or all of its rights hereunder in connection with any transfer of any of its Notes
without the consent of the Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned
rights.

 

(h)       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, other than
the Indemnitees referred to in Section 9(k).

 

(i)       Survival.
The representations, warranties, agreements and covenants shall survive the Closing. Each Buyer shall be responsible only for its
own representations, warranties, agreements and covenants hereunder.

 

(j)       Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

(k)       Indemnification.

 

(i)       In
consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Notes thereunder and
in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless each Buyer and each holder of any Notes and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including,
without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation
or warranty made by the Company or any Subsidiary in any of the Transaction Documents, (ii) any breach of any covenant, agreement
or obligation of the Company or any Subsidiary contained in any of the Transaction Documents or (iii) any cause of action, suit,
proceeding or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action
brought on behalf of the Company or any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results from
(A) the execution, delivery, performance or enforcement of any of the Transaction Documents, (B) any transaction financed or to
be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Notes, (C) any disclosure properly
made by such Buyer pursuant to Section 4(h), or (D) the status of such Buyer or holder of the Notes either as an investor
in the Company pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement (including,
without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief).
To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

 

    22 

     

    

 

(ii)       Promptly
after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is
to be made against the Company under this Section 9(k), deliver to the Company a written notice of the commencement thereof, and
the Company shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense
thereof with counsel mutually satisfactory to the Company and the Indemnitee; provided, however, that an Indemnitee shall have
the right to retain its own counsel with the fees and expenses of such counsel to be paid by the Company if: (A) the Company has
agreed in writing to pay such fees and expenses; (B) the Company shall have failed promptly to assume the defense of such Indemnified
Liability and to employ counsel reasonably satisfactory to such Indemnitee in any such Indemnified Liability; or (C) the named
parties to any such Indemnified Liability (including any impleaded parties) include both such Indemnitee and the Company, and such
Indemnitee shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent
such Indemnitee and the Company (in which case, if such Indemnitee notifies the Company in writing that it elects to employ separate
counsel at the expense of the Company, then the Company shall not have the right to assume the defense thereof and such counsel
shall be at the expense of the Company), provided further, that in the case of clause (C) above the Company shall not be responsible
for the reasonable fees and expenses of more than one (1) separate legal counsel for the Indemnitees. The Indemnitee shall reasonably
cooperate with the Company in connection with any negotiation or defense of any such action or Indemnified Liability by the Company
and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such action or Indemnified
Liability. The Company shall keep the Indemnitee reasonably apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. The Company shall not be liable for any settlement of any action, claim or proceeding effected
without its prior written consent, provided, however, that the Company shall not unreasonably withhold, delay or condition its
consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter
into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnitee of a release from all liability in respect to such Indemnified Liability or litigation, and such settlement
shall not include any admission as to fault on the part of the Indemnitee. Following indemnification as provided for hereunder,
the Company shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or corporations relating
to the matter for which indemnification has been made. The failure to deliver written notice to the Company within a reasonable
time of the commencement of any such action shall not relieve the Company of any liability to the Indemnitee under this Section
9(k), except to the extent that the Company is materially and adversely prejudiced in its ability to defend such action.

 

(iii)       The
indemnification required by this Section 9(k) shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, within ten (10) days after bills are received or Indemnified Liabilities are incurred.

 

(iv)       The
indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against
the Company or others, and (B) any liabilities the Company may be subject to pursuant to the law.

 

(l)       Construction.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality
or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common Stock
and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after
the date of this Agreement. It is expressly understood and agreed that for all purposes of this Agreement, and without implication
that the contrary would otherwise be true, neither transactions nor purchases nor sales shall include the location and/or reservation
of borrowable shares of Common Stock.

 

(m)       Remedies.
Each Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Notes, shall have all
rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted at
any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any
rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted
by law. Furthermore, the Company recognizes that in the event that it or any Subsidiary fails to perform, observe, or discharge
any or all of its or such Subsidiary’s (as the case may be) obligations under the Transaction Documents, any remedy at law
would inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to specific performance and/or
temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such
case without the necessity of proving actual damages and without posting a bond or other security. The remedies provided in this
Agreement and the other Transaction Documents shall be cumulative and in addition to all other remedies available under this Agreement
and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief).

 

    23 

     

    

 

(n)       Withdrawal
Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company or any
Subsidiary does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be),
any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

(o)       Payment
Set Aside; Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to any of
the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment
or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other
Transaction Documents are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement
and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be
converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange
Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the
U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation.

 

(p)       Judgment
Currency.

 

(i)       If
for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other Transaction
Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter
in this Section 9(p) referred to as the “Judgment Currency”) an amount due in US Dollars under this Agreement,
the conversion shall be made at the Exchange Rate prevailing on the Business Day immediately preceding:

 

(1)       the
date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or

 

    24 

     

    

 

(2)       the
date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as
of which such conversion is made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the “Judgment
Conversion Date”).

 

(ii)       If
in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(2) above, there is a change
in the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the Exchange Rate prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with
the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion
Date.

 

(iii)       Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Agreement or any other Transaction Document.

 

(q)       Independent
Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under the Transaction Documents are several and
not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations
of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action
taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that the
Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption
that the Buyers are in any way acting in concert or as a group or entity, and the Company shall not assert any such claim with
respect to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges
that the Buyers are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such
obligations or the transactions contemplated by the Transaction Documents. The decision of each Buyer to purchase Notes pursuant
to the Transaction Documents has been made by such Buyer independently of any other Buyer. Each Buyer acknowledges that no other
Buyer has acted as agent for such Buyer in connection with such Buyer making its investment hereunder and that no other Buyer will
be acting as agent of such Buyer in connection with monitoring such Buyer’s investment in the Notes or enforcing its rights
under the Transaction Documents. The Company and each Buyer confirms that each Buyer has independently participated with the Company
and its Subsidiaries in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors.
Each Buyer shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising
out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be joined
as an additional party in any proceeding for such purpose. The use of a single agreement to effectuate the purchase and sale of
the Notes contemplated hereby was solely in the control of the Company, not the action or decision of any Buyer, and was done solely
for the convenience of the Company and its Subsidiaries and not because it was required or requested to do so by any Buyer. It
is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between
the Company, each Subsidiary and a Buyer, solely, and not between the Company, its Subsidiaries and the Buyers collectively and
not between and among the Buyers.

 

[signature pages follow]

 

    25 

     

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.

 

	 	COMPANY:
	 	 	 
	 	INNOVATE BIOPHARMACEUTICALS INC.
	 	 	 
	 	 	 
	 	By:	/s/ Christopher Prior, Ph.D.
	 	 	Name: Christopher Prior, Ph.D.
	 	 	Title: Chief Executive Officer

 

     

     

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.

 

	 	BUYER:
	 	 	 
	 	Gustavia capital partners llc
	 	 	 
	 	 	 
	 	 	 
	 	By:	/s/ Eli Hassett
	 	 	Name: 
	 	 	Title: 

 

     

     

    

 

SCHEDULE
OF BUYERS

 

	(1)	 	(2)	 	(3)	 	(4)	 	(5)
	 	 	 	 	 	 	 	 	 
	Buyer	 	Address and Facsimile Number	 	Original 

Principal 

Amount of Notes	 	Purchase Price	 	Legal Representative’s
 Address and Facsimile Number
	 	 	 	 	 	 	 	 	 
	Gustavia Capital Partners LLC	 	123 Grove Avenue 
Suite 101 
Cedarhurst, New York 11516	 	$4,800,000	 	$3,000,000	 	Kelley Drye & Warren LLP 
101 Park Avenue 
New York, NY 10178 
Telephone: (212) 808-7540 
Facsimile: (212) 808-7897 
Attention: Michael A. Adelstein, Esq.

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