Document:

Exhibit 10.10

 

SECURITY
AGREEMENT

 

THIS
SECURITY AGREEMENT (this "Agreement"), is entered into as of May 1, 2017, by and between ADial Pharmaceuticals,
LLC, a Virginia limited liability company (the "Borrower"), FirstFire Global Opportunities Fund LLC, a Delaware
limited liability company (individually, a "Secured Party" and, collectively, the "Secured Parties").
All capitalized terms not otherwise defined herein shall the meanings ascribed to them in that certain Securities Purchase Agreement
and Note (as defined below) by and between Borrower and the Secured Party of even date (the "Note Purchase Agreement").

 

RECITALS

 

WHEREAS,
the Secured Parties have loaned monies to Borrower, as more particularly described in the Note Purchase Agreement and as evidenced
by the 2% Senior Secured Promissory Note in the principal amount of $287,500.00 issued by Borrower to the Secured Party (the "Note");

 

WHEREAS,
the term "Secured Party" as used in this Agreement shall mean, collectively, all holders of the Note, including those
persons who become holders of Note subsequent to the date hereof; and

 

WHEREAS,
this Agreement is being executed and delivered by Borrower to secure the Note.

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the parties
hereto hereby agrees as follows:

 

1.
Obligations Secured. This Agreement secures, in part, the prompt payment and performance of all obligations of Borrower
under the Note, and all renewals, extensions, modifications, amendments, and/or supplements thereto (collectively, the "Secured
Obligations").

 

2.  Grant of Security.

 

a.
Collateral. Borrower hereby grants, pledges, and assigns for the benefit of the Secured Parties, and there is hereby created
in favor of each of the Secured Parties, a security interest in and to all of Borrower's right, title, and interest in, to, and
under all of the collateral set forth on Exhibit A hereto (collectively, "Collateral").

 

b.Effective
Date.This grant of security shall be effective as of the date hereof.

 

c. Subordination.
The Note and the Secured Obligations shall not be subordinated, or junior in interest, to any other obligations of Borrower.

 

d. Filings
to Perfect Security. The Company will (and is hereby authorized to) file with any filing office such financing
statements, amendments, addenda, continuations, terminations, assignments and other records (whether or not executed by
Borrower) to perfect and to maintain perfected security interests in the Collateral by the Secured Parties, whereby (a)
promptly upon the execution of this Agreement, a Financing Statement on Form UCC-1 (the "Financing Statement'')
shall be filed with the Virginia Secretary of State on behalf of the Secured Parties with respect to the Collateral; The
Financing Statement shall designate each of the Secured Parties as a Secured Party and Borrower as the debtor, shall identify
the security interest in the Collateral, and contain any other items required by law.

 

     

     

    

  

The
 Financing Statement shall contain a description of collateral consistent with the description set forth herein and shall not
describe the collateral as "all assets" or "all personal property."

 

3.
Transfers and Other Liens. Except as set forth herein or in the Note, Borrower shall not, without the prior written consent
of all of the Secured Parties, at their sole and absolute discretion:

 

a. Sell,
transfer, assign, or dispose of (by operation of law or otherwise), any of the Collateral other than a Permitted Disposition;

 

b.
 Create or suffer to exist any lien, security interest, or other charge or encumbrance upon or with respect to any of the Collateral,
except Permitted Liens or the security interests created hereby; or

 

c.
Permit any of the Collateral to be levied upon under any legal process.

 

For
the purposes hereof, “Permitted Disposition” means (i) dispositions of inventory or used, obsolete, warn out
or surplus equipment, in the ordinary course of business, (ii) licensing, sublicensing, on a non-exclusive basis of intellectual
property in the ordinary course of business, (iii) leasing or subleasing of assets in the ordinary course of business, (iv) the
disposition of cash and cash equivalents in the ordinary course of business, (v) (v) the lapse or abandonment of intellectual
property to the extent not economically desirable in the conduct of the Borrower’s business so long such lapse is not materially
adverse to the interests of the Secured Party; (vi) the sale of equipment to the extent that such equipment is exchanged for credit
against the purchase price of similar replacement equipment, or the proceeds of such sale are applied with reasonable promptness
to the purchase price of such replacement equipment or other capital expenditures; (vii) the disposition, forgiveness or discount
of delinquent notes or accounts receivable in the ordinary course of business for purposes of collection only; (viii) dispositions
permitted by Secured Party in writing; (ix) other dispositions of property in any fiscal year during the term of this Agreement
whose net book value in the aggregate does not exceed 10% of Borrower’s total consolidated assets as shown on the balance
sheet for the immediately preceding fiscal year; and (x) (A) the surrender of contractual rights in the ordinary course of business
and (B) the settlement, release or surrender of any contract, tort or other litigation claims in the ordinary course of business
other than any commercial tort claim pledged to the Secured Party; and (xi) disposition or transfer of any leasehold interest
at the natural expiration of such lease or upon the earlier termination of the lease as provided therein.

 

    -2-

     

    

 

For
the purposes hereof, “Permitted Liens” means: (i) statutory Liens of landlords, carriers, warehousemen, processors,
mechanics, materialmen or suppliers incurred in the ordinary course of business and securing amounts not yet due or declared to
be due by the claimant thereunder or amounts which are being contested in good faith and by appropriate proceedings and for which
Borrower has maintained adequate reserves; (ii) Liens or security interests in favor of Secured Party; (iii) zoning restrictions
and easements, licenses, covenants and other restrictions affecting the use of real property and not interfering in any material
respect with ordinary conduct of business of Borrower; (iv) Liens in connection with purchase money indebtedness and capitalized
leases otherwise having a principal amount not exceeding $200,000 in the aggregate outstanding at any time, provided, that such
Liens attach only to the assets the purchase of which was financed by such purchase money indebtedness or which is the subject
of such capitalized leases and proceeds and replacement thereof; (v) Liens specifically permitted by Secured Party in writing;
(vi) Liens for taxes, assessments and other government charges or levies not yet due and payable or which are being contested
in good faith and by appropriate proceedings and for which Borrower has maintained adequate reserves; (vii) Liens consisting of
deposits or pledges made in the ordinary course of business in connection with workers’ compensation, unemployment, social
security and similar laws, or to secure the performance of statutory obligations, bids, leases, government contracts, trade contracts,
and other similar obligations (exclusive of obligations for the payment of borrowed money); (viii) licenses (with respect to intellectual
property and other property), leases, subleases and usage arrangements granted to third parties in the ordinary course of business;
(ix) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection
with the importation of goods; (x) Liens of collecting banks under the UCC on items in the course of collection, statutory Liens
and rights of set-off of banks; (xi) non-exclusive licenses of intellectual property rights in the ordinary course of business;
and (xii) Liens arising from filing UCC financing statements relating solely to leases not prohibited by this Agreement.

 

4.
Representations and Warranties. Borrower hereby represents and warrants to the Secured Parties as follows: (a) to Borrower'
s knowledge, Borrower is the owner of the Collateral (or, in the case of after-acquired Collateral, at the time Borrower acquires
rights in the Collateral, will be the owner thereat) and that, except as expressly provided herein, no other person has (or, in
the case of after-acquired Collateral, at the time Borrower acquires rights therein, will have) any right, title, claim or interest
(by way of Lien or otherwise) in, against or to the Collateral; (b) to Borrower's knowledge, except as expressly provided herein,
upon the filing of a Financing Statement with the Virginia Secretary of State, the Secured Parties (or in the case of after-acquired
Collateral, at the time Borrower acquires rights therein, will have) will have a perfected security interest in the Collateral
to the extent that a security interest in the Collateral can be perfected by such filing; (c) all Accounts Receivable (as defined
in Exhibit A) are genuine and enforceable against the party obligated to pay the same; (d) Borrower has full power
and authority to enter into the transactions provided for in this Agreement and the Note; (e) this Agreement and the Note, when
executed and delivered by Borrower, will constitute the legal, valid and binding obligations of Borrower enforceable in accordance
with their terms; (t) the execution and delivery by Borrower of this Agreement and the Note and the performance and consummation
of the transactions contemplated hereby and thereby do not and will not violate Borrower's Certificate of Incorporation or Bylaws
or any material judgment, order, writ, decree, statute, rule or regulation applicable to Borrower (g) there does not exist any
default or violation by Borrower of or under any of the terms, conditions or obligations of (i) any indenture, mortgage, deed
of trust, franchise, permit, contract, agreement, or other instrument to which Borrower is a party or by which Borrower is bound,
or (ii) any law, ordinance, regulation, ruling, order, injunction, decree, condition or other requirement applicable to or imposed
upon Borrower by any law, the action of any court or any governmental authority or agency; and the execution, delivery and performance
of this Agreement will not result in any such default or violation; (h) there is no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand pending or, to the knowledge of Borrower, threatened which adversely affects Borrower's business
or financial condition and there is no basis known to Borrower for any action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand which could result in the same; and (i) this Agreement and the Note do not contain any untrue statement
of material fact or omit to state a material fact necessary in order to make the statements contained in this Agreement and the
Note not misleading.

 

    -3-

     

    

 

 

5.
Events of Default. For purposes of this Agreement, the term "Event of Default" shall mean and refer to any of
the following:

 

a.
Failure of Borrower to perform or observe any covenant set forth in this Agreement, or to perform or observe any other term, condition,
covenant, warranty, agreement or other provision contained in this Agreement, where such failure continues for fifteen (15) days
after receipt of written notice from Lender specifying such failure;

 

b.
Any material representation or warranty made or furnished by Borrower in writing in connection with this Agreement and the Note
or any statement or representation made in any certificate, report or opinion delivered pursuant to this Agreement or in connection
with this Agreement is false, incorrect or incomplete in any material respect at the time it is furnished; or

 

c.
Occurrence of any other Event of Default as defined in the Note.

 

6.
Remedies. Upon the occurrence and during the continuance of an Event of Default (subject to the notice and cure provisions
provided for herein, if any), each Secured Party shall have the rights of a secured creditor under the Virginia Uniform Commercial
Code, all rights granted by the Note, this Security Agreement and by law, including the right to require Borrower to assemble
the Collateral and make it available to the Secured Parties at a place to be designated by Borrower. The rights and remedies provided
in this Agreement and the Note are cumulative and may be exercised independently or concurrently, and are not exclusive of any
other right or remedy provided at law or in equity. No failure to exercise or delay by the Secured Parties in exercising any right
or remedy under this Agreement or the Note shall impair or prohibit the exercise of any such rights or remedies in the future
or be deemed to constitute a waiver or limitation of any such right or remedy or acquiescence therein. Every right and remedy
granted to the Secured Parties under this Agreement and the Note or by law or in equity may be exercised by any Secured Party
at any time and from time to time.

 

7. Further
Assurances. Borrower agrees that, from time to time, at its own expense, it will:

 

a.
Protect and defend the Collateral against all claims and demands of all persons at any time claiming the same or any interest
therein, and preserve and protect Secured Party's security interest in the Collateral.

 

b.
Promptly execute and deliver to Secured Parties all instruments and documents, and take all further action necessary or desirable,
as any Secured Party may reasonably request to (i) continue, perfect, or protect any security interest granted or purported to
be granted hereby, and (ii) enable a Secured Party to exercise and enforce any of Secured Party's rights and remedies hereunder
with respect to any Collateral.

 

c. Permit a Secured Party's representatives to inspect and make copies of all books and records
relating to the Collateral, wherever such books and records are located, and to conduct an audit relating to the Collateral at
any reasonable time or times.

 

    -4-

     

    

 

8.
Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed telex, e-mail or facsimile if sent during normal business
hours of the recipient, if not, then on the next business day, (c) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All communications shall be sent as follows:

 

If to the Borrower,
to:

 

ADIAL
PHARMACEUTICALS, LLC

204
E. High Street

Charlottesville,
VA 22902

Attention:
William Stilley

e-mail:
wstilley@adialpharma.com

 

If
to the Secured Party:

 

FIRSTFIRE
GLOBAL OPPORTUNITIES FUND, LLC

1040
First Avenue, Suite 190

New
York, NY 10022

Attn:
Eli Fireman

e-mail:
eli@firstfirecapital.com

 

With
a copy by e-mail only to (which copy shall not constitute notice):

 

LEGAL
& COMPLIANCE, LLC

330
Clematis Street, Suite 217

West
Palm Beach, FL 33401

Attn:
Chad Friend, Esq., LL.M.

e-mail:
CFriend@LegalandCompliance.com

 

or
to such other address or telecopy number as the party to whom notice is to be given may have furnished to the other party in writing
in accordance herewith.

 

10.
Amendments and Waivers. No modification, amendment or waiver of any provision of, or consent required by, this Agreement,
nor any consent to any departure herefrom, shall be effective unless it is in writing and signed by each of the parties hereto.
Such modification, amendment, waiver or consent shall be effective only in the specific instance and for the purpose for which
given.

 

11.
Exclusivity and Waiver of Rights. No failure to exercise and no delay in exercising on the part of any party, any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or
privilege preclude any other right, power or privilege. The rights and remedies herein provided are cumulative and are not exclusive
of any other rights or remedies provided by law.

 

    -5-

     

    

 

12.
Invalidity. Any term or provision of this Agreement shall be ineffective to the extent it is declared invalid or unenforceable,
without rendering invalid or enforceable the remaining terms and provisions of this Agreement.

 

13.
Headings. Headings used in this Agreement are inserted for convenience only and shall not affect the meaning of any term
or provision of this Agreement.

 

14.
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original instrument,
but all of which collectively shall constitute one and the same agreement.

 

15.
Assignment. Except in connection with the Borrower’s conversion or reincorporation by merger to Delaware corporation,
this Agreement and the rights and obligations hereunder shall not be assignable or transferable by the any of the parties without
the prior written consent of all Secured Parties, at their sole and absolute discretion.

 

16.
Survival. Unless otherwise expressly provided herein, all representations warranties, agreements and covenants contained
in this Agreement shall survive the execution hereof and shall remain in full force and effect until the earliest to occur of
(a) the payment in full of the Note, and (b) the conversion of the principal and accrued and unpaid interest and all other amounts
owing under the Note into common stock of Borrower.

 

17.
Miscellaneous. This Agreement shall inure to the benefit of each of the parties hereto and all their respective successors
and permitted assigns. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation
any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained.

 

18.
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAWS PROVISIONS).

 

19.
CONSENT TO JURISDICTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON- EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE AND COUNTY OF NEW YORK. EACH OF THE PARTIES HERETO AGREES THAT ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY MUST BE LITIGATED EXCLUSIVELY IN ANY SUCH
STATE OR FEDERAL COURT, AND ACCORDINGLY, EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH LITIGATION IN ANY SUCH COURT.

 

20. WAIVER
OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT. EACH OF THE PARTIES HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND EACH OF THE OTHER PARTIES HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT,
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 20.

 

    -6-

     

    

 

21.
Attorneys' Fees. In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing
party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of
such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses
of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

 

22.
Entire Agreement. This Agreement contains the entire agreement among the parties with respect to the transactions contemplated
by this Agreement and supersedes all prior agreements or understandings among the parties with respect to the subject matter hereof.

 

[SIGNATURE
PAGE(S) FOLLOW]

 

    -7-

     

    

 

IN
WITNESS WHEREOF, this Security Agreement has been executed as of the date first set written above.

  

“SECURED
PARTY” 

 

FIRSTFIRE
GLOBAL OPPORTUNITIES FUND, LLC

 

By:
FirstFire Capital Management LLC, its manager

 

	By:	/s/ Eli Fireman	 
	 	ELI FIREMAN	 

 

"BORROWER"

 

ADIAL
PHARMACEUTICALS, LLC

 

	By:	/s/ William Stilley	 
	 	Name:
WILLIAM
STILLEY

	 
	 	Title: CHIEF
EXECUTIVE
OFFICER

	 

 

    -8-

     

    

 

EXHIBIT
A

 

COLLATERAL

 

Borrower
hereby grants, pledges, and assigns for the benefit of each Secured Party, and there is hereby created in favor of the Secured
Parties, a security interest in and to all of Borrower's right, title, and interest in, to, and under all assets and all personal
property of Borrower, whether now or hereafter existing, or now owned or hereafter acquired, including but not limited to the
following (collectively, "Collateral"):

 

1.
All accounts, chattel paper, contracts, contract rights, accounts receivable, tax refunds, Note receivable, documents, other choses
in action and general intangibles, including, but not limited to, proceeds of inventory and returned goods and proceeds from the
sale of goods and services, and all rights, liens, securities, guaranties, remedies and privileges related thereto, including
the right of stoppage in transit and rights and property of any kind forming the subject matter of any of the foregoing ("Accounts
Receivable");

 

2.
All time, savings, demand, certificate of deposit or other accounts in the name of Borrower or in which Borrower has any right,
title or interest, including but not limited to all sums now or at any time hereafter on deposit, and any renewals, extensions
or replacements of and all other property which may from time to time be acquired directly or indirectly using the proceeds of
any of the foregoing;

 

3.
All inventory and equipment of every type or description wherever located, including, but not limited to all raw materials, parts,
containers, work in process, finished goods, goods in transit, wares, merchandise furniture, fixtures, hardware, machinery, tools,
parts, supplies, automobiles, trucks, other intangible property of whatever kind and wherever located associated with the Borrower's
business, tools and goods returned for credit, repossessed, reclaimed or otherwise reacquired by Borrower;

 

4.
All documents of title and other property from time to time received, receivable or otherwise distributed in respect of, exchange
or substitution for or addition to any of the foregoing including, but not limited to, any documents of title;

 

5.
All know-how, information, permits, patents, copyrights, goodwill, trademarks, trade names, licenses and approvals held by Borrower,
including all other intangible property of Borrower;

 

6.
 All assets of any type or description that may at any time be assigned or delivered to or come into possession of Borrower for
any purpose for the account of Borrower or as to which Borrower may have any right, title, interest or power, and property in
the possession or custody of or in transit to anyone for the account of Borrower, as well as all proceeds and products thereof
and accessions and annexations thereto; and

 

7.
All proceeds (including but not limited to insurance proceeds) and products of and accessions and annexations to any of the foregoing.

 

    -9-

     

    

 

8.
All of the following assets of the Borrower:

 

AD04
Clinical Trial Material – Active

 

Approximately
26,000 blister packs of 18 tablets each stored in palletized cartons at controlled room temperature.

Location:        Catalent
Pharma Solutions

         3031
Red Lion Rd

         Philadelphia,
PA 19114

 

AD04
Clinical Trial Material – Placebo

 

Approximately
26,000 blister packs of 18 tablets each stored in palletized cartons at controlled room temperature.

 

Location:
        Catalent Pharma Solutions

          3031
Red Lion Rd

          Philadelphia,
PA 19114

 

Computers,
printers, polycom telephones, regulatory files, and corporate files.

 

Location:          204
E. High Street

          Charlottesville,
VA 22902

          and

          308
Pleasant Place

          Charlottesville,
VA 22902

 

Electronic
files in ADial’s Sharevault account and ADial’s Dropbox account.

 

 

-10-Exhibit 10.11 

 

SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS

 

This Settlement Agreement and Release Of Claims (this "Settlement
Agreement") is made and entered into as of January 25, 2016 by and between Bankole Johnson ("Johnson") and ADial
Pharmaceuticals, LLC ("ADial")(collectively, the "Parties").

 

WHEREAS, Johnson commenced a lawsuit against ADial in the Circuit
Court for Albemarle County, Virginia, Case No: CL14000695-00, seeking relief for breach of the contract for Johnson's consulting
services and ADial filed counterclaims thereto (the lawsuit and counterclaim being sometimes referred to herein as the “Litigation”);
and

 

WHEREAS, the Parties now desire to settle fully and finally all
claims and possible claims that Johnson may have against ADial, and any claims and possible claims ADial may have against Johnson
relating to the aforementioned Litigation, without further resort to litigation or other proceedings, based on the settlement agreement
set forth below.

 

“Affiliates” shall mean any entity controlled by a Party
or that controls a Party through an equitable ownership of 50% or more.

 

NOW THEREFORE, in consideration of the promises and agreements herein
contained, the value and sufficiency of which is agreed by the Parties, the Parties agree as follows:

 

		1.	Cash Payment. The amount of fifteen thousand five hundred ninety-six dollars ($15,596.00) will be paid to Johnson
by ADial upon execution of this Agreement.

		2.	Johnson Services. 

		2.1.	In addition to Johnson’s activities as Chairman of the ADial Board, Johnson agrees to provide occasional consultation
by e-mail or phone outside of Board meetings upon request of the Company and subject to Johnson’s reasonable availability.

		2.2.	In consideration of the services in 2.1 above, Johnson will be allocated 1.25% of the ADial’s Performance Bonus Plan
(the “PBP”) approved on February 17, 2015 and the current PBP shall be replaced with the PBP attached as Exhibit A
attached hereto.

		2.3.	Johnson may pursue other consulting work as long as it is not for the pharmacogenetic treatment of alcohol addiction.

		3.	Johnson Release. In consideration for the promises set forth herein Johnson agrees to and hereby does, for himself
and for his Affiliates, officers, directors and agents in their representative capacities, as well as his and their successors
and assigns (the “Johnson Parties”), forever and irrevocably fully release and discharge ADial and all present and
former officers, directors, employees, agents, attorneys, predecessors, successors, assigns, benefit plans, Affiliates, and representatives
thereof (the “ADial Parties”), from the subject matter of the Litigation and any and all other grievances, liens, suits,
judgments, claims, demands, debts, defenses, actions or causes of action, obligations, damages, and liabilities whatsoever (specifically
including, without limitation, payment of any additional escrow account funds), with the sole exception of acts of scientific fraud,
which he now has, has had, or may have against them, whether the same be known or unknown, accrued or unaccrued, at law, in equity,
or mixed, arising from acts occurring through the date hereof; provided however, that Johnson may take action to enforce this Settlement
Agreement. It is expressly understood and agreed that Johnson’s Consulting Agreement and the PEPCO agreement are terminated
and all claims or obligations arising thereunder are hereby released.

    	 		 

    	 

    

 

 

		4.	ADial Release. In consideration for the promises set forth herein, ADial agrees to and hereby does, for itself
and for the ADial Parties, forever and irrevocably fully release and discharge the Johnson Parties from the subject matter of the
Litigation and any and all other grievances, liens, suits, judgments, claims, demands, debts, defenses, actions or causes of action,
obligations, damages, and liabilities whatsoever, with the sole exception of acts of scientific fraud, which it now has, has had,
or may have against them, whether the same be known or unknown, accrued or unaccrued, at law, in equity, or mixed, arising from
acts occurring through the date hereof; provided however, that ADial may take action to enforce this Settlement Agreement. It is
expressly understood and agreed that Johnson’s Consulting Agreement and the PEPCO agreement are terminated and all claims
or obligations arising thereunder are hereby released.

		5.	Suit Dismissal. In exchange for the promises set forth in this Settlement Agreement, the Parties acknowledge
and agree that an order of dismissal with prejudice will be filed with the Court upon the execution of this Agreement. Each Party
shall bear their own fees and costs in the litigation. Any Party who takes action to enforce this Settlement Agreement shall be
entitled to collect its reasonable costs and attorney’s fees in any action to enforce this Settlement Agreement in which
such Party substantially prevails. The parties agree to keep the terms of this Settlement Agreement confidential, except as may
be deemed necessary by either party for business purposes, or as required by law.

 

		6.	Entire Agreement. This Settlement Agreement sets forth the entire understanding between the Parties, and fully
supersedes any and all prior agreements or understandings between the Parties or any of them, whether written or oral, pertaining
to the Litigation and may not be modified or amended except in writing signed by each of the parties hereto.

 

		7.	Law & Venue. This Settlement Agreement shall in all respects be interpreted, enforced and governed under
the laws of the Commonwealth of Virginia, and shall be interpreted in accordance with the plain meaning of its terms and not strictly
for or against any of the Parties hereto. Any actions under this agreement shall be pursued in the Circuit Court for Albemarle
County, Virginia and the parties hereto waive any arguments against choice of such venue.

 

		8.	Attorneys. The Parties each represent that they have read and fully understand all of the provisions of this
Settlement Agreement; that prior to signing this Settlement Agreement, each has had a full opportunity to discuss thoroughly all
of its terms with their attorney. This Settlement Agreement may be signed in counterparts.

 

    	 	2	 

    	 

    

 

IN WITNESS WHEREOF, the undersigned, pursuant to due and proper
authority, have signed this Settlement Agreement as of the dates hereinafter set forth.

 

	 	 	 	For ADial Pharmaceuticals, LLC
	 	 	 	 	 
	By:	/s/ Bankole Johnson 	 	By:	/s/ William
    B. Stilley
	 	Bankole Johnson 	 	 	William
    B. Stilley
	 	Date: January 26, 2015	 	 	CEO 
	 	 	 	 	 January 25, 2016

 

    	 	3	 

    	 

    

 

Exhibit A

 

Performance Bonus Plan

 

The Company hereby modifies the bonus plan (the “Plan”)
as described herein.

 

Purpose:

To provide incentive for Company personnel and motivate Company
personnel to achieve the goals of the Company, which are to bring in funds to the Company through one or more transactions that
provide funds to the Company and/or its members with such funds received at the time of the transaction and/or in the future (each
and any a “Transaction”). The purpose includes, without limitation, to create motivation to position the Company to
achieve future Transactions and Transactions that have the possibility of contingent future payments.

 

Bonus Pool:

A bonus pool (the “Pool”) will be created as follows:

		·	5.25% of funds received related to any Transaction will be set aside
as the Pool for payment as bonuses.

		·	Once a total of $735,000 has been paid in bonuses under the Plan (i.e.
$14,700 million has been received from Transactions), no more bonuses will be paid and the Plan will terminate.

 

Bonuses under the Plan will be awarded from the Pool at the discretion
of the CEO subject to the following:

		1.	23.8% of the Pool will be awarded to Bankole Johnson (i.e. 1.25% of funds received related to any Transaction).

		2.	No more than 60% of the Pool may be awarded to the CEO.

		3.	Subject to the above, the award percentages will be determined by the CEO at the time of any Transaction and will carry forward
if any funds related to Transaction (including follow-on Transactions deriving from an original Transaction) are received in the
future, even if the personnel have left the Company at the time of actual receipt of the funds (i.e. they will be “residuals”
due the personnel).

		4.	There will be a 12 month “tail” for transactions for the current CEO if he is terminated without cause (defined
as gross negligence or material willful misconduct) by the Company equal to 60% of the Pool for transactions in first 6 months
following termination and equal to 30% of the Pool for transactions that occur 7-12 months out from termination.

		5.	There will be a 12 month “tail” for transactions for Bankole Johnson if he is terminated as chairman without cause
(defined as a pattern of severe gross negligence or material willful misconduct) by the Company equal to 23.8% of the Pool for
transactions in first 6 months following termination and equal to 11.9% of the Pool for transactions that occur 7-12 months out
from termination.

 

It is understood that the Plan is being approved as part of the
contract with current Company personnel in order to retain them and may not be adversely modified without the permission of any
affected persons.

 

    	 	4

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