Document:

PHARMACEUTICAL
ROYALTY AGREEMENT

 

This
Pharmaceutical Royalty Agreement dated as of December 17, 2020 (the “Royalty Agreement”) is made by and between Neuropathix,
Inc., (“NPTX”) a Delaware corporation, having its principal place of business at 3805 Old Easton Road, Doylestown,
PA 18902; and Fox Chase Chemical Diversity Center, Inc. (“FOX”) located at the PBC at 3805 Old Easton Road, Doylestown,
PA 18902; and Advanced Neural Dynamics, Inc. (“AND”) located at the Pennsylvania Biotechnology Center (“PBC”)
at 3805 Old Easton Road, Doylestown, PA 18902, collectively (the “INVENTORS”)

 

Introduction

 

INVENTORS
have developed and owns patent rights to certain Drug Technology (as defined below). Pursuant to the signed Intellectual Property
Rights Purchase and Transfer Agreement (the “IP Purchase Agreement”) dated on November 30, 2020 between INVENTORS
and NPTX, NPTX is acquiring the INVENTORS’ ownership of certain technology described in the IP Purchase Agreement –
Exhibit A – Schedule of Assets. Such acquisition of the technology and patent rights from INVENTORS also includes the right
to develop, market, make, use, and sell certain drug formulations which are applied to humans through the use of the Drug Technology.
As part of the acquisition of the INVENTORS’ Technology, NPTX agrees to the mutual covenants and promises contained in this
Royalty Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, NPTX
and INVENTORS agree as follows:

 

I.
       Definitions

 

As
used in this Royalty Agreement, the following terms, whether used in the singular or plural, shall have the following meanings:

 

I.1       “Confidential
Information” means all materials, trade secrets, or other information, including, without limitation, proprietary information
and materials (whether or not patentable) regarding a Party’s technology, products, business information, or objectives,
which is designated as confidential in writing by the disclosing Party, whether by letter or by the use of an appropriate stamp
or legend, prior to or at the time any such material, trade secret, or other information is disclosed by the disclosing Party
to the other Party. Notwithstanding the foregoing to the contrary, materials, trade secrets, or other information which is orally
or visually disclosed by a Party, or is disclosed in writing without an appropriate letter, stamp, or legend, shall constitute
Confidential Information if the disclosing Party, within thirty (30) days after such disclosure, delivers to the other Party a
written document or documents describing the materials, trade secrets, or other information and referencing the place and date
of such oral, visual, or written disclosure and the names of the persons to whom such disclosure was made.

I.2.
       “Drug Technology” means any technology owned and assignable by INVENTORS
which relates to pharmaceutical compositions described in Exhibit A of the IP Purchase Agreement.

 

I.3.
       “INVENTORS’ Patent Rights” means all patents and patent applications
(which for all purposes of this Royalty Agreement shall be deemed to include certificates of invention, applications for certificates
of invention, and utility models) throughout the world, covering or relating to the Drug Technology, including any substitutions,
extensions, reissues, reexaminations, renewals, divisions, continuations, or continuations-in-part, which INVENTORS own or control,
and under which INVENTORS have the right to grant sublicenses to NPTX, as of the date of this Royalty Agreement and thereafter
including, but not limited to, the assets to be purchased (“Assets To Be Purchased”), as described in the Binding
Letter of Intent – Terms and Conditions dated, November 17, 2020 and listed on Exhibit A – Schedule of Assets in the
IP Purchase Agreement dated November 30, 2020. All current patents and patent applications in the INVENTORS’ Patent Rights
are also listed in Schedule A hereto.

 

I.4.
       “INVENTORS’ Technology Rights” means all technical information owned
or possessed by INVENTORS as of the date of this Royalty Agreement and thereafter, whether patentable or otherwise, relating to
the Drug Technology, which information is necessary or useful for NPTX and its sublicensees to develop, manufacture, use, and/or
sell Manufactured Products hereunder.

 

I.5.
       “Field” means the human use of the Manufactured Products in pharmaceutical
preparations, including but not limited to per os (oral tablets or capsules), intravenous, topical skin, intranasal cavaties,
anal suppositories, or subcutaneous implants.

 

I.6.
       “Manufactured Products” means a product which, or the manufacture, use,
or sale of which, is covered by a Valid Claim of any of the INVENTORS’ Patent Rights in the country where the product is
manufactured, used or sold and/or embodies any INVENTORS’ Technology Rights.

 

I.7.
       “Net Sales” shall mean the gross amount actually received by NPTX on sales
of Manufactured Products, less: (a) credits or allowances, if any, actually granted; (b) discounts actually allowed; (c) freight,
postage, and insurance charges and additional special packaging charges; (d) customs duties, and excises, sales, taxes, duties
or other taxed imposed upon and paid with respect to such sales (excluding what is commonly known as income taxes); and (e) any
royalties fees, credits and/or discounts payable to the United States Government through the National Institutes of Health (“NIH”)
in accordance with Paragraph 5(C) of the IP Purchase Agreement. In the case of any Manufactured Products supplied to NPTX by INVENTORS,
“Net Sales” shall mean the amount as defined in the preceding sentence, less the amount paid by NPTX to INVENTORS
for INVENTORS’ to supply the Manufactured Products.

 

 

I.8.
       “Party” means NPTX or INVENTORS; “Parties” means NPTX and INVENTORS.

 

I.9.
       “Valid Claim” means a claim of any unexpired United States or foreign patent
or patent application which shall not have been withdrawn, canceled, or disclaimed, nor held invalid by a court of competent jurisdiction
in an unappealed or unappealable decision.

 

II.
Assignment

 

II.1.
Assignment.

 

Subject
to the fulfillment of the terms and conditions contained in the corresponding IP Purchase Agreement, INVENTORS irrevocably sell,
transfer and assign to NPTX all of the INVENTORS’ Patent Rights and INVENTORS’ Technology Rights, including the right
to sublicense any or all of such rights, to make, have made, use, have used, sell, and have sold the Drug Technology in the Field.

 

To
the extent that any invention included within Exhibit A has been funded in whole or in part by the United States government through
the National Institutes of Health (“NIH”), the United States government retains certain rights in such invention as
set forth in 35 U.S.C. §200-212 and all regulations promulgated thereunder, as amended, and any successor statutes and regulations. 
NPTX acknowledges and shall comply with these regulations, including the obligation that commercial products derived thereof used
or sold in the United States be manufactured substantially in the United States.  Nothing contained in this Agreement obligates
or shall obligate AND or FOX to take any action that would conflict in any respect with its past, current or future obligations
to the United States Government.

 

II.2.
Assistance.

 

INVENTORS
shall provide NPTX with all information related to the INVENTORS’ Patent Rights and INVENTORS’ Technology Rights as
may be known or possessed by INVENTORS and as may be reasonably necessary for NPTX to exploit the licenses granted in Section
II.1., including any materials related to the acquisition of any government approvals for the Manufactured Products.

 

INVENTORS
shall provide NPTX with reasonable technical assistance in connection with such transfer of the information related to the INVENTORS’
Patent Rights and INVENTORS’ Technology Rights.

 

 

 

III.
Royalties; Sublicense Fees; Reversion Rights and Milestone Payments

 

III.1.
Royalties.

 

(a)              
NPTX shall pay to each FOX and AND, during the applicable term described in Section III.1(b) below, a royalty of 1% of Net Sales
by NPTX of Manufactured Products coverd by a Valid Claim of a patent or patent application of the INVENTORS’ Patent. The
royalty shall be paid up to $500,000 per year, per participant (total of 2% of Net Sales up to a $1,000,000 per year maximum payout
for both Fox Chase Chemical Diversity Center, Inc. and Advanced Neural Dynamics, Inc., (the “CO-INVENTORS”). The combined
Royalty Fee payable to the CO-INVENTORS shall not exceed two percent (2%) of Net Sales and limted to a maximum payout of One Million
Dollars ($1,000,000) per year, and shall continue in force in perpetuity but shall discontinue immediately upon an outright sale
of the technology and/or any Reversion which eliminates on going revenue streams to Neuropathix, Inc.

 

(b)              
The obligation of NPTX to pay royalties on sales of Manufactured Products covered by a Valid Claim of a patent of the INVENTORS’
Patent Rights shall terminate on a country-by-country basis concurrently with the expiration or termination of the applicable
Valid Claim under the INVENTORS’ Patent Rights in the country in which the product is manufactured, used, or sold. The obligation
of NPTX to pay royalties on sales of Manufactured Products covered by a Valid Claim of a patent application of the INVENTORS’
Patent Rights shall terminate on a country-by-country basis concurrently with the withdrawal, cancellation, or disclaiming of
the applicable Valid Claim under the INVENTORS’ Patent Rights in the country in which the product is manufactured, used,
or sold.

 

(c)
       In no event shall more than one royalty be due INVENTORS for any Assigned Product sold
by NPTX.

 

(d)
       Upon the expiration of the royalty obligations of Section III.1(a) in accordance with
Section III.1(b) for all or any portion of the INVENTORS’ Patent Rights, the licenses granted pursuant to Section II.1 shall
become, with respect to such INVENTORS’ Patent Rights and the INVENTORS’ Technology Rights, or portion thereof, fully
paid.

 

III.2.
Sublicense Fees.

 

NPTX
shall pay to each of INVENTORS one percent (1.0%) of all upfront sublicense fees paid to NPTX on account of sublicenses under
the INVENTORS’ Patent Rights and INVENTORS’ Technology.

 

 

III.3.Reversion
and Milestone Payments.

 

NPTX
shall pay to each of INVENTORS one percent (1%) of future milestone payments received in connection with monetization of AND-Fox
Chase Intellectual Property, per participant. NPTX shall not pay more than the aggregate total of two percent (2%) of Reversion
Rights for all INVENTORS. This includes receipt of payments by Neuropathix, Inc. from any third parties for option rights; initiation
fees; milestone payments; up-front fees; minimum annual royalties (in absence of actual commercial royalty streams); up-front
licensing rights; sales and marketing rights, or outright sale of the technology.

 

IV.
Representations, Warranties, and Covenants

 

IV.1.
Representations and Warranties of INVENTORS. 

 

INVENTORS
hereby represent and warrant that: (i) INVENTORS have the authority to grant to NPTX all of the rights granted hereunder; (ii)
Except as subject to the Government Support Clause, INVENTORS own or control all rights to the INVENTORS’ Patent Rights
and the INVENTORS’ Technology Rights; and (iii) INVENTORS are unaware of any rights superior to INVENTORS’ rights
in the Drug Technology which would prevent NPTX from fully exercising the rights assigned to it herein.

 

IV.2.
Covenant of NPTX. 

 

NPTX,
at its own expense hereby covenants and agrees to use reasonable efforts to develop, and obtain all necessary regulatory approvals
and intellectual property protection for, and commercialize certain formulations which can be delivered to humans through Manufactured
Products. In the event that NPTX breaches its obligations under this Section IV.2, NPTX shall not be liable for any damages or
other compensation as a result thereof, and INVENTORS’ sole and exclusive remedy shall be the termination of this Royalty
Agreement pursuant to Section VII.2.

 

V.
       Intellectual Property Rights

 

V.1.
Original Co-Ownership.

 

Subject
ot the Government Support Clause, FOX and AND are co-owners of the entire right, title, and interest in and to all INVENTORS’
Patent Rights and INVENTORS’ Technology Rights subject to sale, transfer, assignment to NPTX pursuant to the IP Purchase
Agreement dated November 30, 2020.

 

 

V.2.
Right of NPTX to Prosecute Applications.

 

NPTX
agrees that as part of the IP Purchase Agreement and during the term of this Royalty Agreement, NPTX shall provide INVENTORS with
copies of all substantive communications to and from patent offices regarding applications or patents relating to the Drug Technology
promptly after the receipt thereof. Copies of proposed substantive communications to such patent offices shall be provided to
INVENTORS in sufficient time before the due date in order to enable INVENTORS an opportunity to comment on the content thereof.
NPTX shall use reasonable efforts to incorporate INVENTORS’ comments into any substantive communications. INVENTORS shall
timely notify NPTX (but in no event less than 30 days prior to the expiration of any priority rights period) if it intends not
to seek patent protection on the Drug Technology in any country. INVENTORS’ shall have the right, at its expense and in
NPTX’s name, to file, prosecute, maintain, and enforce in such country patents relating to the Drug Technology.

 

V.3.
Assistance.

 

INVENTORS
shall provide to NPTX or NPTX’s authorized attorneys, agents, or representatives reasonable assistance, as necessary for
NPTX to exploit its right under Section V.2 to file, prosecute, maintain and enforce patent applications and patents. INVENTORS
shall use its best efforts to have signed all legal documents necessary to file, prosecute, maintain, and enforce patent applications
or patents at no charge to NPTX.

 

V.4.
Infringement:

 

(a)
Each Party shall promptly report in writing to each other Party during the term of this Royalty Agreement any: (i) known infringement
or suspected infringement of any of the INVENTORS’ Patent Rights in the Field; or (ii) unauthorized use or misappropriation
of the INVENTORS’ Technology Rights in the Field by a third party of which it becomes aware, and shall provide each other
Party with all available evidence supporting said infringement, suspected infringement or unauthorized use or misappropriation.
Within 30 days after INVENTORS become, or is made, aware of any of the foregoing, then INVENTORS shall notifiy NPTX. NPTX shall
decide whether or not to initiate an infringement or other appropriate suit and shall advise INVENTORS of its decision in writing.

 

(b)
At NPTX’s request, INVENTORS shall offer reasonable assistance to NPTX in connection therewith at no charge to NPTX except
for reimbursement of reasonable out-of-pocket expenses incurred in rendering such assistance. Without limiting the generality
of the preceding sentence, INVENTORS shall cooperate fully in order to enable NPTX to institute any action hereunder. INVENTORS
shall have the right to be represented in any such suit by its own counsel at its own expense.

VI.
Confidential Information

 

VI.1.
Treatment of Confidential Information.

 

Each
Party hereto shall maintain the Confidential Information of the other party in confidence, and shall not disclose, divulge or
otherwise communicate such Confidential Information to others, or use it for any purpose, except pursuant to, and in order to
carry out, the terms and objectives of this Royalty Agreement, and hereby agrees to exercise every reasonable precaution to prevent
and restrain the unauthorized disclosure (except to the extent required to use or distribute Manufactured Products) of such Confidential
Information by any of its directors, officers, employees, consultants, subcontractors, sublicensees, or agents.

 

VI.2.
Release from Restrictions.

 

The
provisions of Section VI.1 shall not apply to any Confidential Information disclosed hereunder which:

 

(a)
was known or used by the receiving Party prior to its date of disclosure to the receiving Party, as evidenced by the prior written
records of the receiving Party; or

 

(b)
either before or after the date of the disclosure to the receiving Party is lawfully disclosed to the receiving Party by sources
other than the disclosing Party rightfully in possession of the Confidential Information; or

 

(c)
either before or after the date of the disclosure to the receiving Party becomes published or generally known to the public, other
than through the sale of Manufactured Products in the ordinary course, through no fault or omission on the part of the receiving
Party or an affiliated party; or

 

(d)
is independently developed by or for the receiving Party without reference to or reliance upon the Confidential Information; or

 

(e)
is required to be disclosed by the receiving Party to comply with applicable laws, to defend or prosecute litigation or to comply
with governmental regulations, provided that the receiving Party provides prior written notice of such disclosure to the other
party and takes reasonable and lawful actions to avoid and/or minimize the degree of such disclosure.

 

 

 

 

VII.
Termination

 

VII.1.
Term.

 

This
Royalty Agreement shall remain in effect in perpetuity or until terminated in accordance with the exhaustion of the commercial
life of the Manufactured Products or the outright sale of the Manufactured Products.

 

VII.2.
Termination for Breach.

 

NPTX
shall be entitled to terminate this Royalty Agreement by written notice to INVENTORS in the event that INVENTORS shall be in default
of any of its obligations hereunder and shall fail to remedy any such default within 60 days after notice thereof by NPTX. INVENTORS
shall be entitled to terminate this Royalty Agreement by written notice to NPTX in the event that NPTX shall be in default of
any of its obligations hereunder and shall fail to remedy any such default within 60 days after notice thereof by INVENTORS. Upon
termination of this Royalty Agreement pursuant to this Section VII.2, no Party shall be relieved of any obligations incurred prior
to such termination.

 

VII.3.
Survival of Obligations; Return of Confidential Information.

 

Notwithstanding
any termination of this Royalty Agreement, the obligations of the Parties with respect to the protection and nondisclosure of
Confidential Information (Article VI) and product liability indemnification (Section VIII.1), as well as any other provisions
which by their nature are intended to survive any such termination, shall survive and continue to be enforceable. Upon any termination
by NPTX pursuant to Section VII.2, the license granted pursuant to Section II.1 shall survive and shall be deemed full paid. Upon
any termination of this Royalty Agreement pursuant to Section VII.2, each Party shall promptly return to each other Party all
written Confidential Information, and all copies thereof, of such other Party.

 

VIII.
Miscellaneous

 

VIII.1.
Product Liability Indemnification.

 

NPTX
(the “Manufacturing Party” or “Indemnifying Party”) shall defend the other Party (the “Indemnified
Party”) at the Manufacturing Party’s cost and expense, and will indemnify and hold harmless the Indemnified Party,
from and against any and all claims, losses, costs, damages, fees, or expenses arising out of or in connection with the manufacture
or design of the Manufactured Products (other than claims based on infringement or misappropriation), including, but not limited
to, any actual or alleged injury, damage, death, or other consequence occurring to any legal or natural person or property, as
a result, directly or indirectly, of the possession, use or consumption of any Manufactured Products, claimed by reason of breach
of warranty, negligence, product defect, or other similar cause of action, regardless of the form in which any such claim is made.
The Party distributing the Manufactured Products under this Royalty Agreement (the “Distributing Party” or “Indemnifying
Party”) shall defend the other Party (the “Indemnified Party”) at the Distributing Party’s cost and expense,
and will indemnify and hold harmless the Indemnified Party, from and against any and all claims, losses, costs, damages, fees,
or expenses arising out of or in connection with the commercialization, marketing or sale of the Manufactured Products (other
than claims based on infringement or misappropriation), including, but not limited to, any actual or alleged injury, damage, death,
or other consequence occurring to any legal or natural person or property, as a result, directly or indirectly, of the possession,
use or consumption of any Manufactured Products, claimed by reason of breach of warranty, negligence, product defect or other
similar cause of action, regardless of the form in which any such claim is made. In the event of any such claim against an Indemnified
Party, such Indemnified Party shall promptly notify the Indemnifying Party in writing of the claim and the Indemnifying Party
shall manage and control, at its sole expense, the defense of the claim and its settlement. The Indemnified Party shall cooperate
with the Indemnifying Party and may, at its option and expense, be represented in any such action or proceeding. The Indemnifying
Party shall not be liable for any litigation costs or expenses incurred by the Indemnified Party without the Indemnifying Party’s
written authorization.

 

VIII.2.
Reports and Payments.

 

NPTX
shall deliver to INVENTORS within 60 days after the end of each calendar quarter a written report showing its computation of royalties
and sublicense fees due under this Royalty Agreement for such calendar quarter. Simultaneously with the delivery of each such
report, NPTX shall tender payment of all amounts shown to be due thereon. The royalty payments and sublicense fees due on sales
in currencies other than U.S. dollars shall be calculated using the appropriate exchange rate for such currency quoted by the
Citibank foreign exchange desk on the close of business on the business day immediately preceding the date of such report. All
amounts due under this Royalty Agreement shall be paid to INVENTORS in United States dollars (U.S. $) by wire transfer to an account
in a United States bank designated by INVENTORS, or in such other form and/or manner as INVENTORS may reasonably request. During
the term of this Royalty Agreement, INVENTORS shall have the right from time to time (not to exceed once during each calendar
year) to have an independent certified public accountant inspect, during normal business hours, and upon reasonable advance notice
(not less than 72 hours), such books, records and other supporting data of NPTX as may be necessary to verify NPTX’s computation
of royalties and sublicense fees due under this Royalty Agreement.

 

 

VIII.3.
Governing Law.

 

This
Royalty Agreement shall be governed by and interpreted in accordance with the laws of the State of Pennsylvania.

 

VIII.4.
Waiver.

 

The
waiver by any Party of a breach or a default of any provision of this Royalty Agreement by any other Party shall not be construed
as a waiver of any succeeding breach of the same or any other provision, nor shall any delay or omission on the part of a Party
to exercise or avail itself of any right, power or privilege that it has or may have hereunder operate as a waiver of any right,
power or privilege by such Party.

 

VIII.5.
Notices.

 

Any
notice or other communication in connection with this Royalty Agreement must be in writing and if by mail, by certified mail,
return receipt requested, and shall be effective when delivered to the addressee at the address listed below or such other address
as the addressee shall have specified in a notice actually received by the addressor.

 

If
to FOX:Fox

Chase Chemical Diversity Center, Inc.

3805
Old Easton Road

Doylestown,
PA 18902

c/o:
Allen Reitz, CEO

Email:
Areitz@fc-cdci.com

 

In
to AND:

Advanced Neural Dynamics

3805
Old Easton Road

Doylestown,
PA 18902

c/o
Doug Brenneman, CEO

Email:
dbrenneman@advneuraldynamics.com

 

If
to NPTX:

Neuropathix, Inc.

 3805 Old Easton Road

Doylestown,
PA 18902

c/o:
Dean Petkanas, CEO

Email:
dean@neuropathix.co 

 

VIII.6.
No Agency.

 

Nothing
herein shall be deemed to constitute NPTX, on the one hand, or INVENTORS, on the other hand, as the agent or representative of
the other, or as joint venturers or partners for any purpose. Neither NPTX, on the one hand, nor INVENTORS, on the other hand,
shall be responsible for the acts or omissions of the other. No Party will have authority to speak for, represent or obligate
the other Party in any way without prior written authority from such other Party.

 

VIII.7.
Entire Agreement.

 

This
Royalty Agreement and the Schedules hereto (which Schedules are deemed to be a part of this Royalty Agreement for all purposes)
contain the full understanding of the Parties with respect to the subject matter hereof and supersede all prior understandings
and writings relating thereto. No waiver, alteration or modification of any of the provisions hereof shall be binding unless made
in writing and signed by the Parties.

 

VIII.8.
Headings.

 

The
headings contained in this Royalty Agreement are for convenience of reference only and shall not be considered in construing this
Royalty Agreement.

 

VIII.9.
Severability.

 

In
the event that any provision of this Royalty Agreement is held by a court of competent jurisdiction to be unenforceable because
it is invalid or in conflict with any law of any relevant jurisdiction, the validity of the remaining provisions shall not be
affected.

 

VIII.10.
       Assignment.

 

No
Party to this Royalty Agreement may assign its rights or obligations hereunder without the prior written consent of each other
Party; provided, however, that each Party may assign its rights and obligations hereunder without the prior written consent of
the other Party in connection with the sale of all or substantially all of the business or assets of the assigning Party relating
to the development, manufacture, use, or sale of Manufactured Products.

 

VIII.11.
       Successors and Assigns.

 

This
Royalty Agreement shall be binding upon and inure to the benefit of the Parties hereto and their successors and permitted assigns.

VIII.12.
       Counterparts.

 

This
Royalty Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of such together
shall constitute one and the same instrument.

 

VIII.13.
       Force Majeure.

 

No
Party to this Royalty Agreement shall be responsible to the other Party for nonperformance or delay in performance of the terms
or conditions of this Royalty Agreement due to acts of God, acts of governments, war, riots, strikes, accidents in transportation,
or other causes beyond the reasonable control of such Party.

 

VIII.14.Publication

 

Other
than the press release and 8-K SEC filings required to disclose any material agreement, including but not limited to the Binding
Term Sheet signed by the Parties on November 17, 2020 and the corresponding press release and 8-K SEC filing, neither NPTX, AND
or FOX will make any press release or other public disclosure regarding this Agreement or the transaction contemplated hereby
without the other party’s express prior written consent, which consent shall not be unreasonably withheld by either party.
Nothing contained herein shall obstruct NPTX from making any timely filing regarding any material agreement between the parties
and, or as required under Laws or by any governmental agency, or by the rules of any stock exchange on the which the securities
of the disclosing party are listed.  Notwithstanding the foregoing, NPTX, AND and FOX agree to issue a joint press release
regarding the Agreement with wording to be mutually agreed upon.

 

 

[SIGNATURE
PAGE TO FOLLOW]

 

 

    	 	1	 

     

    

 

IN
WITNESS WHEREOF, the Parties hereto have caused this Royalty Agreement to be executed in their names by their properly and duly
authorized officers or representatives as of the date first above written.

 

NEUROPATHIX,
INC. 

 

/s/
Dean Petkanas 

By:Dean
Petkanas

Its:CEO

 

 

INVENTORS:

 

FOX
CHASE CHEMICAL DIVERSITY CENTER, INC. 

 

/s/
Akken B. Reitz 

By:
Allen B. Reitz, Ph.D.

Its:CEO

 

ADVANCED
NEURAL DYNAMICS, INC. 

 

 /s/ Douglas Brenneman

By:
Douglas Brenneman, Ph.D.

Its:CEO

 

    	 	2	 

     

    

 

SCHEDULE
A

Patents
and Patent Applications

(as
outlined in EXHIBIT A – Schedule of Assets of the IP Purchase Agreement)

 

All
patents, patents applications, trademarks, research and development materials including in issued patents, published patent applications
or that are unpublished, and raw materials, including compounds in storage, comprised of the anti-seizure and neuroprotective
compounds listed in the attached Excel spreadsheet entitled “AND-FCCDC Anticonvulsants 10 Dec 2020”, including, but
not limited to, AND-257, AND-283, AND-287, AND-302, AND-363, AND-378, AND-380, AND-381, AND-383, AND-406, AND-407, and AND-408,
also referenced in and by the following (the “Intellectual Property” or “IP”):

 

		(a.)	Issued
                                         US Patent 8,609,849 B2 (Dec. 17, 2013) – “Novel Hydroxylated Sulfamides Exhibiting
                                         Neuroprotective Action and Their Method of Use”;

 

		(b.)	Know-how,
                                         compounds, and strategy described in the following published and absondoned patent applications:

 

US
2012/0302546 A1 (Nov. 29 2012),

WO
2011/097337 A1 (Aug. 11, 2011),

US
2013/0253022 A1 (Sept. 26, 2013), and

WO
2012/074784 A2 (June 7, 2012).

 

		(c.)	All
                                         technology and conceptions described in the attached strategy section of a Phase 2 SBIR
                                         grant application pertaining to the aforementioned body of Intellectual Property.

 

    	 	3	 

     

    

 

EXHIBIT
B – SCHEDULE ISSUANCE OF SHARES

 

	Terms
    of Acquisition 	Fox
                                         Chase Chemical Diversity Center, Inc. (“Fox Chase”)

         
	Douglas
    Brenneman (“Brenneman”) / Advanced Neural Dynamics (“AND”)
	Upfront
    Stock Grant in Consideration for the Sale of the Assets in Exhibit A 	Fox
                                         Chase Chemical Diversity Center, Inc. Closing Date for issuance of shares to be scheduled
                                         on or before December 11, 2020, Fox Chase Chemical Diversity Center, Inc. shall be issued,
                                         1,000,000 shares of Neuropathix, Inc. Common Stock, par value $.001 per share at a price
                                         of $.30 per share.

         

         

         
	Brenneman-AND
                                         Initial Closing Date for issuance of shares to be scheduled on or about January 5, 2021,
                                         Brenneman-AND shall be issued such amount of shares as equal to the compliment of $60,000
                                         divided by the average ten (10) day closing price of Neuropathix, Inc. Common Stock,
                                         par value $.001, prior to January 5, 2021 (the “Initial Installment Issuance”).

         

        In
        no case will the Initial Installment Issuance price be a price below $.30 per share or higher than $.60 per share.

         

        For
        subsequent closings, the share price for issuance of additional tranches of $60,000 (in year 2, 3, 4 and year 5) in value,
        will be determined by the average ten (10) day closing price of Neuropathix, Inc. Common Stock prior to each scheduled
        Installment Issuance Date. There will be no floor or ceiling in the range of price per share.

         

	Schedule
    of Installments 	Single
    Installment Issuance Date: on or before December 11, 2020.	Initial
                                         Installment Issuance Date: January 5, 2021.

        Second
        Installment Issuance Date: January 4, 2022.

        Third
        Installment Issuance Date: January 3, 2023.

        Fourth
        Installment Issuance Date: January 2, 2024.

        Fifth
        Installment Issuance Date: January 2, 2025.

         

	Cash
                                         Payments to Offset

        Tax
        on Shares

         

         

         

         

         
	None.	Fifteen
    Thousand Five Hundred Dollars ($15,000) in cash annually, payable in quarterly installments of Three Thousand One Seven Hundred
    Fifty ($3,750), payable on March 30; June 30; September 30 and December 31 of each year of an installment issuance (the “Quarterly
    Due Offset Payments”). Quarterly Due Offset payments are to be netted out against actual tax costs incurred based upon
    the issuance of Common Stock at a cost exceeding Doug Brenneman and/or AND’s basis. 
	Ten
    Percent (10%) Penalty For Failure to Pay Offset Fees	None.	In
                                         the event a Quarterly Due Offset Payment is not made within thirty (30) days of the due
                                         date of such Quarterly Due Offset Payment (“Offset Default”), the amount
                                         payable will be Four Thousand One Hundred Twenty Five Dollars ($4,125) in total for each
                                         such Offset Default.

         

 

    	 	4Exhibit 10.1

 

SEPARATION AGREEMENT AND
RELEASE

 

This SEPARATION AGREEMENT
AND RELEASE (this “Agreement”) is entered into by and between ProPetro Holding Corp., a Delaware corporation
(the “Company”), and David Sledge (“Sledge”). Sledge and the Company are sometimes
referred to herein individually as a “Party” and collectively as the “Parties.”

 

WHEREAS, Sledge has
agreed to resign his employment with the Company effective as of December 31, 2020 (the “Separation Date”);

 

WHEREAS, the Parties
wish for Sledge to receive certain compensation in connection with his separation as set forth in this Agreement, which compensation
is conditioned upon Sledge’s timely execution of and compliance with the terms of this Agreement; and

 

WHEREAS, the Parties
wish to resolve any and all claims or causes of action that Sledge may have against the Company, including any claims or causes
of action that Sledge may have arising out of Sledge’s employment or end of such employment.

 

NOW, THEREFORE, in
consideration of the promises and benefits set forth herein, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by Sledge and the Company, the Parties agree as follows:

 

1.                 
Separation from Employment; Deemed Resignations. The Parties acknowledge and agree that as of the Separation
Date, Sledge was no longer employed by the Company or any other Company Party. The Parties further acknowledge and agree that,
as of the Separation Date, Sledge was automatically deemed to have resigned, to the extent applicable, (i) as an officer of
the Company and each of its Affiliates (as defined below) for which Sledge served as an officer, (ii) from the board of directors
or board of managers (or similar governing body) of the Company and each of its Affiliates for which Sledge served as a director
or manager, and (iii) from the board of directors or board of managers (or similar governing body) of any corporation, limited
liability entity, unlimited liability entity, or other entity in which the Company or any of its Affiliates holds an equity interest
and with respect to which board of directors or board of managers (or similar governing body) Sledge served as the Company's or
such other subsidiary’s member's designee or other representative.

 

2.                 
Separation Payment. Provided that Sledge (x) executes this Agreement and returns a signed copy of it to the
Company, care of Newton W. “Trey” Wilson III, ProPetro Holding Corp., 1706 S. Midkiff, Bldg. B, Midland, Texas 79701
(e-mail: trey.wilson@propetroservices.com) on the date that is 21 days after Sledge receives this Agreement, and it is not subsequently
revoked by Sledge in accordance with Section 5; (y) timely executes and returns the Confirming Release (as defined below) to the
Company as set forth in Section 18 below (and does not exercise his revocation right as described in the Confirming Release); and
(z) satisfies the other terms and conditions set forth in this Agreement, Sledge shall receive the following consideration:

 

(a)              
During the period beginning on the expiration of the Confirming Release Revocation Period and ending on the first (1st)
anniversary of the Separation Date (the “Payment Period”), the Company will pay to Sledge an aggregate
amount equal to $1,015,000, less applicable taxes and other withholdings (the “Separation Payment”).
The Separation Payment shall be paid in substantially equal installments during the Payment Period, beginning on the first regularly
scheduled payroll date of the Company following the expiration of the Confirming Release Revocation Period (the “First
Payment Date”), at the same time and in the same manner as Sledge would have been paid had Sledge remained employed
by the Company during the Payment Period, in accordance with the Company’s normal payroll practices. For purposes of Section
409A (including, without limitation, for purposes of Section 1.409A-2(b)(2)(iii) of the Department of Treasury Regulations), Sledge’s
right to receive the Separation Payment in the form of installment payments (the “Installment Payments”)
shall be treated as a right to receive a series of separate payments and, accordingly, each Installment Payment shall at all times
be considered a separate and distinct payment.

 

     

    

    

 

(b)              
Sledge shall remain eligible to receive an annual bonus under the Amended and Restated ProPetro Holding Corp. Executive
Incentive Bonus Plan (the “Bonus Plan”) for the 2020 calendar year (the “2020 Bonus”).
The amount of the 2020 Bonus shall be determined based on the Company’s and Sledge’s achievement of the applicable
performance metrics during the 2020 calendar year, as certified by the Compensation Committee of the Company’s Board of Directors
(the “Board”), and shall not be prorated for partial service during the 2020 calendar year. The amount
of the 2020 Bonus earned in accordance with the preceding sentence, if any, shall be paid at such time the annual bonuses are paid
to other participants in the Bonus Plan (such date to occur no later than March 15, 2021). For the avoidance of doubt, Sledge shall
not be entitled to an annual bonus under the Bonus Plan for the 2021 calendar year.

 

(c)              
During the portion of the eighteen (18) months following the Separation Date (the “COBRA Period”),
if any, that Sledge elects to continue coverage for Sledge and Sledge’s spouse and eligible dependents, if any, under the
Company's group health plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
the Company shall promptly reimburse Sledge on a monthly basis for the difference between the amount Sledge pays to effect and
continue such coverage and the employee contribution amount that current employees of the Company pay for the same or similar coverage
under such group health plans, less applicable taxes and withholdings (the “COBRA Benefit”). Each payment
of the COBRA Benefit shall be paid to Sledge on the Company’s first regularly scheduled pay date in the calendar month immediately
following the calendar month in which Sledge submits to the Company documentation of the applicable premium payment having been
paid by Sledge, which documentation shall be submitted by Sledge to the Company within thirty (30) days following the date on which
the applicable premium payment is paid. Sledge shall be eligible to receive such reimbursement payments until the earliest of:
(i) the last day of the COBRA Period; (ii) the date Sledge is no longer eligible to receive COBRA continuation coverage;
or (iii) the date on which Sledge becomes eligible to receive coverage under a group health plan sponsored by another employer
(and any such eligibility shall be promptly reported to the Company by Sledge); provided, however, that the election
of COBRA continuation coverage and the payment of any premiums due with respect to such COBRA continuation coverage shall remain
Sledge’s sole responsibility, and the Company shall not assume any obligation for payment of any such premiums relating to
such COBRA continuation coverage.

 

    2 

    

    

 

(d)              
As of the Separation Date, (i) the 30,034 restricted stock units granted to Sledge under the ProPetro Holding Corp. 2017
Incentive Award Plan (the “Incentive Plan”) that are outstanding as of the Separation Date and scheduled
to vest during the Payment Period in accordance with the terms of the applicable award agreements governing such awards (the “RSUs”,
which, for the avoidance of doubt, include 8,671 restricted stock units granted on April 18, 2018, 8,824 restricted stock units
granted on March 18, 2019, and 12,539 restricted stock units granted on February 11, 2020) shall become immediately fully vested
upon the Separation Date; (ii) the 26,012 target number of performance restricted stock units originally granted on April 18, 2018
and cancelled and regranted on June 4, 2020 and the 26,471 target number of performance restricted stock units originally granted
on March 18, 2019 and cancelled and regranted on June 4, 2020, in each case, to Sledge under the Incentive Plan and outstanding
as of the Separation Date (collectively, the “PSUs”) shall become immediately fully vested with respect
to the service component of the vesting requirement for such awards but shall remain outstanding and the number of PSUs that actually
vest shall be determined based on the Company’s actual performance as compared to the performance metrics outlined in the
applicable award agreement over the relevant performance period and such vested PSUs, if any, shall be settled at the time originally
specified in the applicable award agreement (such date to occur no later than March 15 of the calendar year following the last
calendar year of the applicable performance period); and (iii) the 29,997 stock options granted to Sledge on March 16, 2017 under
the Incentive Plan that are outstanding as of the Separation Date and scheduled to vest during the Payment Period in accordance
with the terms of the award agreement governing such award shall become immediately fully vested upon the Separation Date. For
the avoidance of doubt, but for the execution of this Agreement, Sledge is not otherwise entitled to the provisions of this Section
2(d) and would otherwise forfeit all unvested equity awards granted to him under the Incentive Plan upon the Separation Date, including
the PSUs that shall remain outstanding and eligible to vest at the end of the applicable performance period pursuant to this Section
2(d).

 

(e)              
Prior to the Separation Date, the exercise period applicable to the stock options granted to Sledge under the Stock Option
Plan of ProPetro Holding Corp. (the “Option Plan”) and the Incentive Plan (collectively, the “Equity
Plans”) that have become vested and are outstanding as of the Separation Date (the “Vested Options”,
which, for the avoidance of doubt, include 586,755 stock options granted on June 14, 2013 and 231,019 stock options granted on
July 19, 2016, in each case, under the Option Plan, and 119,988 stock options granted on March 16, 2017 under the Incentive Plan)
shall be extended such that the Vested Options shall not be forfeited or cancelled upon the ninety-first (91st) day following the
Separation Date pursuant to the terms of the Equity Plans but, instead, shall remain outstanding and exercisable until June 14,
2023, provided, however, that in no case shall the extension of the exercise period applicable to the Vested Options
pursuant to this Section 2(e) violate Section 409A (as defined below).

 

Notwithstanding anything
in this Agreement, Sledge acknowledges and agrees that if Sledge fails to comply with his ongoing obligations to the Company, including
those in Sections 6-8 of this Agreement, then (i) any unexercised Vested Options shall immediately be forfeited and cancelled upon
notice from the Company and may not be exercised at any point and (ii) Sledge shall pay to the Company the fair market value of
any shares of the Company’s common stock, par value $0.001, acquired through the exercise of the Vested Options.

 

Sledge acknowledges
and agrees that the consideration described in this Section 2 represents the entirety of the amounts Sledge is eligible to receive
as severance pay from the Company or any other Company Party, including under the Equity Plans and the Employment Agreement between
the Parties dated April 17, 2013, as amended by that certain letter agreement between the Parties dated April 9, 2020 (the “Employment
Agreement”). Sledge acknowledges that he is aware of the ongoing obligations he may have under the Company’s
Insider Trading Policy, applicable securities laws and any other applicable requirements related to any trading in the Company’s
securities.

 

    3 

    

    

 

3.               
Complete Release of Claims.

 

(a)               
In exchange for the consideration received by Sledge herein, which consideration Sledge was not entitled to but for Sledge’s
entry into this Agreement, Sledge hereby releases, discharges and forever acquits the Company and its Affiliates (as defined below)
and subsidiaries, and each of the foregoing entities’ respective past, present and future members, partners (including general
partners and limited partners), directors, trustees, officers, managers, employees, agents, attorneys, heirs, legal representatives,
insurers, benefit plans (and their fiduciaries, administrators and trustees), and the successors and assigns of the foregoing,
in their personal and representative capacities (collectively, the “Company Parties”), from liability
for, and hereby waives, any and all claims, damages, or causes of action of any kind related to Sledge’s ownership of any
interest in any Company Party, Sledge’s employment with any Company Party, the termination of such employment, and any other
acts or omissions related to any matter occurring on or prior to the date that Sledge executes this Agreement, including (i) any
alleged violation through such date of: (A) any federal, state or local anti-discrimination law or anti-retaliation law, regulation
or ordinance including Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, Sections 1981 through
1988 of Title 42 of the United States Code, as amended and the Americans with Disabilities Act of 1990, as amended; (B) the Employee
Retirement Income Security Act of 1974, as amended; (C) the Immigration Reform Control Act, as amended; (D) the National Labor
Relations Act, as amended; (E) the Occupational Safety and Health Act, as amended; (F) the Family and Medical Leave Act of 1993;
(G) the Texas Labor Code (specifically including the Texas Payday Law, the Texas Anti-Retaliation Act, Chapter 21 of the Texas
Labor Code, and the Texas Whistleblower Act); (H) any federal, state or local wage and hour law; (I) the Age Discrimination in
Employment Act of 1967, as amended; (J) any other local, state or federal law, regulation or ordinance; or (K) any public policy,
contract, tort, or common law claim; (ii) any allegation for costs, fees, or other expenses including attorneys’ fees incurred
in or with respect to a Released Claim; (iii) any and all rights, benefits or claims Sledge may have under any employment contract,
severance plan, incentive compensation plan, or equity-based plan with any Company Party (including any award agreement) or to
any ownership interest in any Company Party; and (iv) any claim for compensation or benefits of any kind not expressly set forth
in this Agreement (collectively, the “Released Claims”). This Agreement is not intended to indicate that
any such claims exist or that, if they do exist, they are meritorious. Rather, Sledge is simply agreeing that, in exchange for
any consideration received by him pursuant to Section 2, any and all potential claims of this nature that Sledge may have against
the Company Parties, regardless of whether they actually exist, are expressly settled, compromised and waived. Notwithstanding
the foregoing, the Released Claims do not include (1) any existing rights to indemnification and advancement of expenses incurred
in connection with the same that Sledge has under Delaware law or any agreement with the Company, ‎(2) any rights or Claims
for ‎vested compensation or benefits arising under any qualified ‎employee ‎pension benefit plan or employee welfare
benefit plan maintained within the meaning of the ‎Employee Retirement Income Security Act of 1974, as amended, or (3) any
other ‎Claims that cannot be released as a matter ‎of law‎. THIS RELEASE INCLUDES MATTERS ATTRIBUTABLE TO THE SOLE
OR PARTIAL NEGLIGENCE (WHETHER GROSS OR SIMPLE) OR OTHER FAULT, INCLUDING STRICT LIABILITY, OF ANY OF THE COMPANY PARTIES.

 

    4 

    

    

 

For purposes of this
Agreement, “Affiliate” shall mean, with respect to any Person (as defined below), any other Person directly
or indirectly controlling, controlled by, or under common control with, such Person where “control” shall have the
meaning given such term under Rule 405 of the Securities Act of 1933, as amended from time to time. For purposes of this Agreement,
 “Person” shall mean any individual, natural person, corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any company
limited by shares, limited liability company, or joint stock company), incorporated or unincorporated association, governmental
authority, firm, society or other enterprise, organization, or other entity of any nature.

 

(b)              
Notwithstanding this release of liability, nothing in this Agreement prevents Sledge from filing any non-legally waivable
claim (including a challenge to the validity of this Agreement) with the Equal Employment Opportunity Commission (“EEOC”)
or comparable state or local agency or participating in (or cooperating with) any investigation or proceeding conducted by the
EEOC or comparable state or local agency or cooperating in any such investigation or proceeding; however, Sledge understands and
agrees that Sledge is waiving any and all rights to recover any monetary or personal relief or recovery from a Company Party as
a result of such EEOC or comparable state or local agency or proceeding or subsequent legal actions. Further, nothing in this Agreement
prohibits or restricts Sledge from filing a charge or complaint with, or cooperating in any investigation with, the Securities
and Exchange Commission, the Financial Industry Regulatory Authority, or any other securities regulatory agency or authority (each,
a “Government Agency”). This Agreement does not limit Sledge’s right to receive an award for information
provided to a Government Agency. Further, in no event shall the Released Claims include (i) any claim which arises after the date
that this Agreement is executed by Sledge or (ii) any claim to vested benefits under an employee benefit plan. Finally, the Released
Claims shall not include the Company’s obligations or Sledge’s rights under the Indemnification Agreement dated October
4, 2019 between the Company and Sledge, which shall continue in full force and effect notwithstanding the execution of this Agreement.

 

(c)               
Sledge hereby represents and warrants that, as of the time Sledge executes this Agreement, Sledge has not brought or joined
any lawsuit or filed any charge or claim against any of the Company Parties in any court or before any Government Agency or arbitrator
for or with respect to a matter, claim, or incident that occurred or arose out of one or more occurrences that took place on or
prior to the time at which Sledge signs this Agreement. Sledge warrants and represents that (i) he is the sole owner of each and
every claim, cause of action, and right compromised, settled, released or assigned pursuant to this Section 3 and has not previously
assigned, sold, transferred, conveyed, or encumbered same; (ii) he has the full right, power, capacity, and authority to enter
into and execute this Agreement; and (iii) he fully understands this Agreement releases any and all past claims regardless of whether
he is now aware of such claims.

 

4.                
Sledge’s Representations.

 

    5 

    

    

 

(a)              
Sledge represents that Sledge has received all leaves (paid and unpaid) that Sledge was owed or could be owed by the Company
and each of the other Company Parties and Sledge has received all salary, bonuses and other compensation that Sledge has been owed
by the Company Parties as of the date that Sledge executes this Agreement (which amount does not include the consideration described
in Section 2 above).

 

(b)              
By executing and delivering this Agreement, Sledge expressly acknowledges that:

 

(i)                
Sledge has carefully read this Agreement;

 

(ii)               
No material changes have been made to this Agreement since it was first provided to Sledge and Sledge has had at least 21
days to consider this Agreement before the execution and delivery hereof to Company;

 

(iii)              
Sledge is receiving, pursuant to this Agreement, consideration in addition to anything of value to which he is already entitled,
and Sledge is not otherwise entitled to the consideration set forth in this Agreement, but for his entry into this Agreement;

 

(iv)             
Sledge has been advised, and hereby is advised in writing, to discuss this Agreement with an attorney of Sledge’s
choice and Sledge has had an adequate opportunity to do so prior to executing this Agreement;

 

(v)              
Sledge fully understands the final and binding effect of this Agreement; the only promises made to Sledge to sign this Agreement
are those stated herein; and Sledge is signing this Agreement knowingly, voluntarily and of Sledge’s own free will, and that
Sledge understands and agrees to each of the terms of this Agreement;

 

(vi)             
The only matters relied upon by Sledge and causing Sledge to sign this Agreement are the provisions set forth in writing
within the four corners of this Agreement; and

 

(vii)            
No Company Party has provided any tax or legal advice regarding this Agreement and Sledge has had an adequate opportunity
to receive sufficient tax and legal advice from advisors of Sledge’s own choosing such that Sledge enters into this Agreement
with full understanding of the tax and legal implications thereof.

 

(c)               
Other than matters previously disclosed to the Board and outside auditors, Sledge is not aware of any material act or omission
on the part of any Company employee (including Sledge), director or agent that may have violated any applicable law or regulation
or otherwise exposed the Company or any other Company Party to any liability, whether criminal or civil, whether to any government,
individual, shareholder or other entity.

 

5.                 Revocation
Right.Notwithstanding the initial effectiveness of this Agreement, Sledge may revoke the delivery (and therefore
the effectiveness) of this Agreement within the seven-day period beginning on the date Sledge executes this Agreement (such seven
day period being referred to herein as the “Release Revocation Period”). To be effective, such revocation
must be in writing signed by Sledge and must be received by the Company, care of Newton W. “Trey” Wilson III, ProPetro
Holding Corp., 1706 S. Midkiff, Bldg. B, Midland, Texas 79701 (e-mail: trey.wilson@propetroservices.com) before 11:59 p.m., central
time, on the last day of the Release Revocation Period. If an effective revocation is delivered in the foregoing manner and timeframe,
the release of claims set forth in Section 3 above will be of no force or effect, Sledge will not receive the consideration set
forth in Section 2 above, and the remainder of this Agreement will be in full force and effect.

 

    6 

    

    

 

6.                 Affirmation
of Restrictive Covenants.Sledge acknowledges and agrees that he has continuing obligations to the Company and each
of its Affiliates, including obligations with respect to confidentiality, non-competition, non-solicitation, and non-disparagement,
pursuant to the Employment Agreement and the stock option agreements, the restricted stock unit agreements, and the performance
restricted stock unit agreements, in each case, pursuant to which awards were granted to Sledge under the Incentive Plan. In entering
into this Agreement, Sledge specifically acknowledges the validity, binding effect, and enforceability of (a) Section 6 of the
Employment Agreement, (b) Article V of the award agreements documenting the stock options granted to Sledge under the Incentive
Plan, (c) Article III of the award agreements documenting the RSUs and (d) Article IV of the award agreements documenting the
PSUs.

 

7.                 Additional
Restrictive Covenants.

 

(a)              
In addition to the existing restrictive covenants described in Section 6, Sledge hereby agrees that Sledge shall not
at any time during the Additional Noncompetition Restricted Period (as defined below), directly or indirectly engage in, have any
interest in (including without limitation, through the investment of capital or lending of money or property), or manage, operate
or otherwise render any services to, any Person (whether on his own or in association with others, as a principal, director, officer,
employee, agent, representative, partner, member, security holder, consultant, advisor, independent contractor, owner, investor,
participant, or in any other capacity) that engages in (either directly or through any subsidiary or Affiliate thereof) any business
or activity, within any of the states or territories within the United States or any other country, territory or state in which
the Company or any of its subsidiaries operate, (i) that creates, designs, invents, engineers, develops, sources, markets,
manufactures, distributes or sells any product or provides any service that may be used as a substitute for or otherwise competes
with any product or service of the Company or any entity owned by the Company, or (ii) which the Company of any of its Affiliates
has taken active steps to engage in or acquire, but only if Sledge directly or indirectly engages in, has any interest in (including,
without limitation, through the investment of capital or lending of money or property), or manages, operates or otherwise renders
any services in connection with, such business or activity (whether on his own or in association with others, as a principal, director,
officer, employee, agent, representative, partner, member, security holder, consultant, advisor, independent contractor, owner,
investor, participant or in any other capacity). Notwithstanding the foregoing, Sledge shall be permitted to acquire a passive
stock or equity interest in such business; provided that such stock or other equity interest acquired is not more than five percent
(5%) of the outstanding interest in such business. The Additional Noncompetition Restricted Period shall mean the
period from the Separation Date through the fifth (5th) anniversary of the Separation Date.

 

    7 

    

    

 

(b)              
In addition to the existing restrictive covenants described in Section 6, Sledge hereby agrees that Sledge shall not
at any time during the Additional Nonsolicitation Restricted Period (as defined below), directly or indirectly, either for himself
or on behalf of any other Person, (i) recruit or otherwise solicit or induce any employee, customer or supplier of the Company
to terminate its employment or arrangement with the Company, or otherwise change its relationship with the Company, or (ii) hire,
or cause to be hired, any person who was employed by the Company at any time during the twelve (12)-month period immediately prior
to the Separation date or who thereafter becomes employed by the Company. The “Additional Nonsolicitation Restricted
Period” shall mean the period from the Separation Date through the fifth (5th) anniversary of the Separation Date.

 

8.                 
Non-Disparagement. Sledge shall refrain from publishing any oral or written statements about the Company,
any Company Party or any of their respective directors, officers, employees, consultants, agents, or representatives that (a) are
slanderous, libelous, or defamatory, (b) disclose confidential information of or regarding the Company’s or any Company Party’s
business affairs, directors, officers, managers, members, employees, consultants, agents, or representatives, or (c) place the
Company, any Company Party, or any of their respective directors, officers, managers, members, employees, consultants, agents,
or representatives in a false light before the public. Nothing herein limits Sledge from cooperating with any investigation by
any Government Agency. Conversely, the Company will instruct its officers and directors to refrain from making any oral or written
statements about Sledge that are not privileged internal company discussions and are (i) slanderous, libelous or defamatory, (ii)
are otherwise likely to damage the personal or professional reputation of Sledge, or (iii) place him in a false light before the
public. Nothing herein limits the Company from cooperating with any investigation by any Government Agency or from making any disclosure
necessary or appropriate under applicable securities laws.

 

9.                 
No Waiver. No failure by any Party hereto at any time to give notice of any breach by any other Party of,
or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time.

 

10.              
Applicable Law. This Agreement is entered into under, and shall be governed for all purposes by, the laws
of the State of Texas without reference to the principles of conflicts of law thereof.

 

11.               
Severability. To the extent permitted by applicable law, the Parties agree that any term or provision (or
part thereof) of this Agreement that renders such term or provision (or part thereof) or any other term or provision of this Agreement
(or part thereof) invalid or unenforceable in any respect shall be modified to the extent necessary to avoid rendering such term
or provision (or part thereof) invalid or unenforceable, and such modification shall be accomplished in the manner that most nearly
preserves the benefit of the Parties’ bargain hereunder.

 

12.              
Withholding of Taxes and Other Employee Deductions. The Company may withhold from any payments made pursuant
to Section 2 hereof all federal, state, local, and other taxes and withholdings as may be required pursuant to any law or governmental
regulation or ruling.

 

    8 

    

    

 

13.              
Arbitration. Any dispute or controversy based on, arising under or relating to this Agreement shall be settled
exclusively by final and binding arbitration, conducted before a single neutral arbitrator in Houston, Texas in accordance with
the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association (the “AAA”)
then in effect. Arbitration may be compelled, and judgment may be entered on the arbitration award in any court having jurisdiction;
provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation of the provisions of (a) Article III of the award agreements documenting
the RSUs, (b) Article IV of the award agreements documenting the PSUs, in each case of clauses (a) and (b), pursuant to which awards
were granted to Sledge under the Incentive Plan, or (c) Section 7 of this Agreement, and Sledge hereby consents that such restraining
order or injunction may be granted without requiring the Company to post a bond. Only individuals who are (i) lawyers engaged full-time
in the practice of law and (ii) on the AAA roster of arbitrators shall be selected as an arbitrator. Within 20 days of the conclusion
of the arbitration hearing, the arbitrator shall prepare written findings of fact and conclusions of law. Each party shall bear
its own costs and attorneys’ fees in connection with an arbitration; provided that the Company shall bear the cost of the
arbitrator and the AAA’s administrative fees.

 

14.              
Continued Cooperation. Following the Separation Date, Sledge will provide the Company and, as applicable,
the other Company Parties, with assistance, when reasonably requested by the Company, with respect to any matters related to Sledge’s
job responsibilities and otherwise providing information Sledge obtained during the provision of the duties Sledge performed for
the Company and the other Company Parties, subject to reimbursement of Sledge’s reasonable expenses incurred in complying
with such requests for assistance.

 

15.              
Reasonable Assistance with Claims. Sledge shall provide reasonable assistance to the Company and any other
Company Party and its counsel in any litigation or accounting matters in which such Sledge may be a witness or potential witness
or with respect to which such Sledge may have knowledge of relevant facts or evidence, subject to reimbursement of Sledge’s
reasonable expenses incurred in complying with such requests for assistance.

 

16.              
Counterparts. This Agreement may be executed in one or more counterparts (including portable document format
(.pdf) and facsimile counterparts), each of which shall be deemed to be an original, but all of which together will constitute
one and the same Agreement.

 

17.              
Third-Party Beneficiaries. This Agreement shall be binding upon and inure to the benefit of the Company and
each other Company Party that is not a signatory hereto, as each other Company Party that is not a signatory hereto shall be a
third-party beneficiary of Sledge’s release of claims, representations and covenants set forth in this Agreement.

 

18.              
Confirming Release. No earlier than the Separation Date and no later than January 7, 2021, Sledge shall execute
the Confirming Release that is attached as Exhibit A (the “Confirming Release”) and return the
executed Confirming Release to the Company care of Newton W. “Trey” Wilson III, ProPetro Holding Corp., 1706 S. Midkiff,
Bldg. B, Midland, Texas 79701 (e-mail: trey.wilson@propetroservices.com).

 

19.              
Section 409A. Notwithstanding anything herein to the contrary: (a) Sledge’s termination of employment
on the Separation Date is intended to constitute a “separation from service” within the meaning of Section 1.409A-1(h)
of the Department of Treasury Regulations and (b) it is the intent of the Parties that the amounts deliverable pursuant to Section
2 of this Agreement constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended, and the applicable Treasury regulations and administrative guidance issued thereunder (collectively,
 “Section 409A”) and will be settled in a manner compliant with Section 409A. Notwithstanding the foregoing,
the Company makes no representations that the payments and benefits provided under this Agreement are compliant with Section 409A,
and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest, or other expenses that may
be incurred by Sledge on account of non-compliance with Section 409A.

 

    9 

    

    

 

 

20.          Amendment;
Entire Agreement. This Agreement may not be changed orally but only by an agreement in writing agreed to and signed by
Sledge and the Company. This Agreement constitutes the entire agreement of the Parties with regard to the subject matters hereof.
Notwithstanding the foregoing, this Agreement complements (and do not supersede or replace) any other agreements between the Company
or any of its Affiliates and Sledge that impose restrictions on Sledge with regard to confidentiality, non-competition, non-solicitation,
or non-disparagement (including the award agreements referenced in Section 6 above).

 

There are no oral agreements
between Sledge and the Company. No promises or inducements have been offered except as set forth in this Agreement. Sledge and
the Company acknowledge that, in executing this Agreement, neither Party has relied upon any representations or warranties of any
other Party. No promise or agreement which is not expressed in this Agreement has been made by the Company to Sledge or by Sledge
to the Company in executing this Agreement. Each Party agrees that any omissions of fact concerning the matters covered by this
Agreement is of no consequence in the decision to execute this Agreement.

 

21.         
Interpretation. The section headings in this Agreement have been inserted for purposes of convenience and
shall not be used for interpretive purposes. The words “herein”, “hereof”, “hereunder,” and
words of similar import, when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision
of this Agreement. The use herein of the word “including” following any general statement, term, or matter shall not
be construed to limit such statement, term, or matter to the specific items or matters set forth immediately following such word
or to similar items, or matters, whether or not non-limiting language (such as “without limitation”, “but not
limited to”, or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other
items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter. The word
 “or” as used herein is not exclusive and is deemed to have the meaning “and/or.” References in this Agreement
to any agreement, instrument, or other document mean such agreement, instrument, or other document as amended, supplemented, and
modified from time to time to the extent permitted by the provisions thereof and not prohibited by this Agreement. No provision,
uncertainty or ambiguity in or with respect to this Agreement shall be construed or resolved against any Party hereto, whether
under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by each of the Parties hereto and
shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes
and intentions of the Parties.

 

    10

     

    

 

22.         
Return of Property. Sledge acknowledges and agrees that he will return to the Company all documents, files
(including electronically stored information), and other materials constituting or reflecting confidential or proprietary information
of the Company or any other Company Party, and any other property belonging to the Company or any other Company Party, including
all computer files, electronically stored information, and other materials, and Sledge shall not maintain a copy of any such materials
in any form.

 

23.         
Assignment. This Agreement is personal to Sledge and may not be assigned by Sledge. The Company may assign
its rights and obligations under this Agreement without Sledge’s consent, including to any other Company Party and to any
successor (whether by merger, purchase, or otherwise) to all or substantially all of the equity, assets, or businesses of the Company.

 

24.         
Legal Fees.The Company agrees to pay all reasonable legal costs incurred by Sledge for the review of this
Agreement upon receipt of any invoice for the same.

 

[Signatures begin on the following page]

 

    11

     

    

 

IN WITNESS WHEREOF,
the Parties have executed this Agreement as of the date(s) set forth beneath their signatures below.

 

	 	PROPETRO HOLDING CORP.

 

	 	By:	/s/ Phillip A Gobe

	 	Name:	Phillip
A. Gobe

	 	Title:	Chairman and Chief Executive Officer

 

	 	Date:	December 17, 2020_

 

	 	DAVID SLEDGE
	 	   
	 	/s/ David Sledge
	 	David Sledge

 

	 	Date:	December 17, 2020

 

Signature
Page to

Separation
Agreement and Release 

 

    

     

    

 

EXHIBIT A

 

CONFIRMING RELEASE

This Confirming Release
Agreement (this “Confirming Release”) is that certain Confirming Release referenced in Section 18 of
the Separation Agreement and General Release of Claims (the “Separation Agreement”) entered into by and
between ProPetro Holding Corp., a Delaware corporation (the “Company”), and David Sledge (“Sledge”).
Capitalized terms used herein that are not otherwise defined have the meanings assigned to them in the Separation Agreement.

 

(a)         
In exchange for the consideration received by Sledge herein, which consideration Sledge was not entitled to but for Sledge’s
entry into the Separation Agreement and this Confirming Release, Sledge hereby releases, discharges and forever acquits the Company
and its Affiliates (as defined below) and subsidiaries, and each of the foregoing entities’ respective past, present and
future members, partners (including general partners and limited partners), directors, trustees, officers, managers, employees,
agents, attorneys, heirs, legal representatives, insurers, benefit plans (and their fiduciaries, administrators and trustees),
and the successors and assigns of the foregoing, in their personal and representative capacities (collectively, the “Company
Parties”), from liability for, and hereby waives, any and all claims, damages, or causes of action of any kind related
to Sledge’s ownership of any interest in any Company Party, Sledge’s employment with any Company Party, the termination
of such employment, and any other acts or omissions related to any matter occurring on or prior to the date that Sledge executes
this Confirming Release, including (i) any alleged violation through such date of: (A) any federal, state or local anti-discrimination
law or anti-retaliation law, regulation or ordinance including Title VII of the Civil Rights Act of 1964, as amended, the Civil
Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, as amended and the Americans with Disabilities
Act of 1990, as amended; (B) the Employee Retirement Income Security Act of 1974, as amended; (C) the Immigration Reform Control
Act, as amended; (D) the National Labor Relations Act, as amended; (E) the Occupational Safety and Health Act, as amended; (F)
the Family and Medical Leave Act of 1993; (G) the Texas Labor Code (specifically including the Texas Payday Law, the Texas Anti-Retaliation
Act, Chapter 21 of the Texas Labor Code, and the Texas Whistleblower Act); (H) any federal, state or local wage and hour law; (I)
the Age Discrimination in Employment Act of 1967, as amended; (J) any other local, state or federal law, regulation or ordinance;
or (K) any public policy, contract, tort, or common law claim; (ii) any allegation for costs, fees, or other expenses including
attorneys’ fees incurred in or with respect to a Confirming Released Claim; (iii) any and all rights, benefits or claims
Sledge may have under any employment contract, severance plan, incentive compensation plan, or equity-based plan with any Company
Party (including any award agreement) or to any ownership interest in any Company Party; and (iv) any claim for compensation or
benefits of any kind not expressly set forth in this Confirming Release (collectively, the “Confirming Released Claims”).
This Confirming Release is not intended to indicate that any such claims exist or that, if they do exist, they are meritorious.
Rather, Sledge is simply agreeing that, in exchange for any consideration received by him pursuant to Section 2, any and all potential
claims of this nature that Sledge may have against the Company Parties, regardless of whether they actually exist, are expressly
settled, compromised and waived. Notwithstanding the foregoing, the Confirming Released Claims do not include (1) any existing
rights to indemnification and advancement of expenses incurred in connection with the same that Sledge has under Delaware law or
any agreement with the Company, ‎(2) any rights or Claims for ‎vested compensation or benefits arising under any qualified
 ‎employee ‎pension benefit plan or employee welfare benefit plan maintained within the meaning of the ‎Employee Retirement
Income Security Act of 1974, as amended, or (3) any other ‎Claims that cannot be released as a matter ‎of law‎. THIS
CONFIRMING RELEASE INCLUDES MATTERS ATTRIBUTABLE TO THE SOLE OR PARTIAL NEGLIGENCE (WHETHER GROSS OR SIMPLE) OR OTHER FAULT, INCLUDING
STRICT LIABILITY, OF ANY OF THE COMPANY PARTIES.

 

Exhibit
A: Confirming Release 

 

    

     

    

 

(b)          Notwithstanding this release of liability, nothing in this Confirming Release prevents Sledge from filing any non-legally
waivable claim (including a challenge to the validity of this Confirming Release) with the Equal Employment Opportunity Commission
(“EEOC”) or comparable state or local agency or participating in (or cooperating with) any investigation
or proceeding conducted by the EEOC or comparable state or local agency or cooperating in any such investigation or proceeding;
however, Sledge understands and agrees that Sledge is waiving any and all rights to recover any monetary or personal relief or
recovery from a Company Party as a result of such EEOC or comparable state or local agency or proceeding or subsequent legal actions.
Further, nothing in this Confirming Release prohibits or restricts Sledge from filing a charge or complaint with, or cooperating
in any investigation with, the Securities and Exchange Commission, the Financial Industry Regulatory Authority, or any other securities
regulatory agency or authority (each, a “Government Agency”). This Confirming Release does not limit
Sledge’s right to receive an award for information provided to a Government Agency. Further, in no event shall the Confirming
Released Claims include (i) any claim which arises after the date that this Confirming Release is executed by Sledge or (ii) any
claim to vested benefits under an employee benefit plan. Finally, the Confirming Released Claims shall not include the Company’s
obligations or Sledge’s rights under the Indemnification Agreement dated October 4, 2019 between the Company and Sledge,
which shall continue in full force and effect notwithstanding the execution of this Confirming Release.

 

(c)         
Sledge hereby represents and warrants that, as of the time Sledge executes this Confirming Release, Sledge has not brought
or joined any lawsuit or filed any charge or claim against any of the Company Parties in any court or before any Government Agency
or arbitrator for or with respect to a matter, claim, or incident that occurred or arose out of one or more occurrences that took
place on or prior to the time at which Sledge signs this Confirming Release. Sledge warrants and represents that (i) he is the
sole owner of each and every claim, cause of action, and right compromised, settled, released or assigned pursuant to this Section
3 and has not previously assigned, sold, transferred, conveyed, or encumbered same; (ii) he has the full right, power, capacity,
and authority to enter into and execute this Confirming Release; and (iii) he fully understands this Confirming Release releases
any and all past claims regardless of whether he is now aware of such claims.

 

25.         
Sledge’s Representations.

 

(a)         
Sledge represents that Sledge has received all leaves (paid and unpaid) that Sledge was owed or could be owed by the Company
and each of the other Company Parties and Sledge has received all salary, bonuses and other compensation that Sledge has been owed
by the Company Parties as of the date that Sledge executes this Confirming Release (which amount does not include the consideration
described in Section 2 of the Separation Agreement).

 

Exhibit
A: Confirming Release 

 

    

     

    

 

(b)         
By executing and delivering this Confirming Release, Sledge expressly acknowledges that:

 

(i)             
Sledge has carefully read this Confirming Release;

 

(ii)            
No material changes have been made to this Confirming Release since it was first provided to Sledge and Sledge has had at
least 21 days to consider this Confirming Release before the execution and delivery hereof to Company;

 

(iii)          
Sledge has been advised, and hereby is advised in writing, to discuss the Separation Agreement and this Confirming Release
with an attorney of Sledge’s choice and Sledge has had an adequate opportunity to do so prior to executing this Confirming
Release;

 

(iv)           
Sledge fully understands the final and binding effect of this Confirming Release; the only promises made to Sledge to sign
this Confirming Release are those stated herein; and Sledge is signing this Confirming Release knowingly, voluntarily and of Sledge’s
own free will, and that Sledge understands and agrees to each of the terms of this Confirming Release;

 

(v)            
The only matters relied upon by Sledge and causing Sledge to sign this Confirming Release are the provisions set forth in
writing within the four corners of this Confirming Release and the Separation Agreement; and

 

(c)         
Other than matters previously disclosed to the Board and outside auditors, Sledge is not aware of any material act or omission
on the part of any Company employee (including Sledge), director or agent that may have violated any applicable law or regulation
or otherwise exposed the Company or any other Company Party to any liability, whether criminal or civil, whether to any government,
individual, shareholder or other entity.

 

26.         
Revocation Right.Notwithstanding the initial effectiveness of this Confirming Release, Sledge may
revoke the delivery (and therefore the effectiveness) of this Confirming Release within the seven-day period beginning on the date
Sledge executes this Confirming Release (such seven day period being referred to herein as the “Confirming Release
Revocation Period”). To be effective, such revocation must be in writing signed by Sledge and must be received by
the Company, care of Newton W. “Trey” Wilson III, ProPetro Holding Corp., 1706 S. Midkiff, Bldg. B, Midland, Texas
79701 (e-mail: trey.wilson@propetroservices.com) before 11:59 p.m., central time, on the last day of the Confirming Release Revocation
Period. If an effective revocation is delivered in the foregoing manner and timeframe, the release of claims set forth in Section
1 above will be of no force or effect, Sledge will not receive the consideration set forth in Section 2 of the Separation Agreement,
and the remainder of the Separation Agreement will be in full force and effect.

 

27.         
IN WITNESS WHEREOF, Sledge has executed this Confirming Release with the intent to be legally bound.

 

Exhibit
A: Confirming Release 

 

    

     

    

 

	 	DAVID SLEDGE
	 	 
	 	 
	 	David Sledge

 

	 	Date:	 

 

Exhibit
A: Confirming Release

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