Document:

Exhibit

Exhibit 10.5
EVELO BIOSCIENCES, INC. 
EXECUTIVE SEVERANCE PLAN

		
	I.
	PURPOSE

The purpose of this Evelo Biosciences, Inc. Executive Severance Plan (the “Plan”) is to encourage certain employees of Evelo Biosciences, Inc. (the “Company”) to remain in the employ of the Company by providing severance protections to such employees in the event their employment is terminated under the circumstances described in this Plan.
		
	II.
	DEFINITIONS

For purposes of this Plan, the following terms shall have the meanings set forth below:
1.“Administrator” means the Committee, or any committee designated by the Board to administer the Plan.

2.“Affiliate” means with respect to any person or entity, any other person or entity that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such person or entity.  For purposes of this definition, “control,” when used with respect to any person or entity, means the power to direct the management and policies of such person or entity, directly or indirectly, whether through ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
3.“Base Salary” means, with respect to any Participant, the Participant’s base salary at the rate in effect on the Participant’s Termination Date.

4.“Board” means the Board of Directors of the Company.

5.“Cause” for this Plan only means any one or more of the following actions: (i) the Participant’s material breach of the terms and conditions of any agreement with the Company; (ii) the Participant’s willful, malfeasant, dishonest or reckless conduct, in each case, that relates to the Company and causes the Company material harm or damage; (iii) the Participant’s commission of an act of fraud, theft, misappropriation or embezzlement, or conviction, or pleading nolo contendere to a felony or any other crime involving moral turpitude, (iv) the Participant’s failure to substantially perform the Participant’s duties or comply with a lawful directive of the Board or the Company’s Chief Executive Officer, (v) the Participant’s commission any felony or crime involving moral turpitude or (vi) the Participant’s unlawful use (including being under the influence) or possession of illegal drugs on the Company’s or any of its Affiliates’ premises or while performing duties and responsibilities for the Company or its Affiliate. 

6.“Change in Control” means a “Change in Control” as defined in the Company’s 2018 Incentive Award Plan.  Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any amount payable hereunder which constitutes or provides for the deferral of compensation and is subject to Section 409A, the transaction or event with respect to such amount must also constitute a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5) to the extent required by Section 409A.

7.“CIC Severance Multiplier” means the number set forth opposite such Participant’s Employment Level under the heading “CIC Severance Multiplier” on Schedule A.

8.“CIC Severance Period” means the period of time set forth opposite such Participant’s Employment Level under the heading “CIC Severance Period” on Schedule A.

9.“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

10.“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto, and the regulations promulgated thereunder, as in effect from time to time.

11.“Committee” means the Compensation Committee of the Board.

12.“Disability” means, at any time the Company or any of its Affiliates sponsors a long-term disability plan for the Company’s employees, “disability” as defined in such long-term disability plan for the purpose of determining a participant’s eligibility for benefits, provided, however, if the long-term disability plan contains multiple definitions of disability, “Disability” 

shall refer to that definition of disability which, if a Participant qualified for such disability benefits, would provide coverage for the longest period of time.  The determination of whether the Participant has a Disability shall be made by the person or persons required to make disability determinations under the long-term disability plan.  At any time the Company does not sponsor a long-term disability plan for its employees, “Disability” shall mean the Participant’s inability to perform, with or without reasonable accommodation, the essential functions of the Participant’s positions for a total of three months during any six-month period as a result of incapacity due to mental or physical illness as determined by a physician selected by the Company or its insurers.  Any refusal by the Participant to submit to a medical examination for the purpose of determining Disability shall be deemed to constitute conclusive evidence of the Participant’s Disability.

13.“Employment Level” means, with respect to any Participant, the Participant’s employment level within the Company as in effect at the time of the Participant’s Qualifying Termination.

14.“Good Reason” means the Participant has complied with the Good Reason Process following the occurrence of any of the following actions undertaken by the Company without the Participant’s express written consent: (i) the material diminution in the Participant’s responsibilities, authority and function; (ii) a material reduction in Participant’s base salary or annual bonus opportunity (which reduction shall be disregarded when determining the amount of payments due following a termination of employment for Good Reason); or (iii) a requirement by the Company that the Participant relocate the Participant’s principal location of employment to a location that is more than fifty (50) miles from the Participant’s principal work location immediately prior to such relocation.

15.“Good Reason Process” means that (i) the Participant has reasonably determined in good faith that a Good Reason condition has occurred; (ii) the Participant has notified the Company in writing of the first occurrence of the Good Reason condition within thirty (30) days of the first occurrence of such condition; (iii) the Participant has provided the Company a period of not less than thirty (30) days following such notice (the “Cure Period”) to remedy the condition following which Cure Period the Good Reason condition continues to exist; and (iv) the Participant terminates the Participant’s employment within thirty (30) days after the end of the Cure Period.  If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

16.“Qualifying Termination” means, with respect to any Participant, a termination by the Company or its Affiliates of the Participant’s employment without Cause or a resignation by the Participant for Good Reason.

17.“Restrictive Covenant Agreement” means the Employee Proprietary Information and Inventions Assignment Agreement entered, or to be entered, into between the Company and a Participant in a form satisfactory to the Company, which, except for Participants residing in California, includes a non-competition restriction for 12 months following Participant’s Termination Date.
18.“Section 409A” means Section 409A of the Code.

19.“Severance Period” means the period of time set forth opposite such Participant’s Employment Level under the heading “Severance Period” on Schedule A.

20.“Successor” means any employer (whether or not the employer is an Affiliate of the Company) which acquires (through merger, consolidation, reorganization, transfer, sublease, assignment or otherwise) all or substantially all of the business or assets of the Company or of a division or business of the Company.

21.“Target Bonus Amount” means a Participant’s target annual bonus amount, if any, in effect at the time of Participant’s Qualifying Termination.

22.“Termination Date” means the date on which the termination of a Participant’s employment, in accordance with the terms of this Plan, is effective.

		
	III.
	   Eligibility

The participants in this Plan (“Participants”) are all regular U.S. full-time employees of the Company or its subsidiaries at the Employment Level of Vice President or above who are not otherwise entitled to severance payments or benefits under applicable law or any binding contract, agreement or arrangement with the Company or its Affiliates

		
	IV.
	   Severance Benefits

Qualifying Termination Generally
If a Participant has a Qualifying Termination that does not occur on the date of or within 12 months following a Change in Control, then subject to Sections V, VI, VII and VIII, the Participant will be entitled to receive the following payments and benefits:
1.Continued payment of the Participant’s Base Salary in accordance with the Company’s ordinary payroll practices for the duration of the Severance Period

2.If the Participant properly elects to receive continued coverage under the Company’s group health plans pursuant to COBRA, direct payment of or reimbursement to the Participant for a portion of the Participant’s COBRA premiums at the Company’s normal rate of contribution for employees for the Participant’s (and the Participant’s covered dependents’) coverage at the level in effective immediately prior to the Participant’s termination for the period commencing on the Participant’s Termination Date and ending on the earliest of (a) the final day of the Severance Period, (b) the date the Participant and/or the Participant’s covered dependents become no longer eligible for COBRA and (c) the date the Participant becomes eligible to receive comparable healthcare coverage from a subsequent employer (and the Participant agrees to promptly notify the Company of such eligibility).  Notwithstanding the foregoing, if the Company determines that it cannot provide the foregoing benefit without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act) or incurring an excise tax, the Company shall in lieu thereof pay to the Participant taxable monthly payments in an amount equal to the portion of the healthcare premiums that the Company paid for the Participant’s and the Participant’s covered dependents’ group health care coverage for the month in which the Participant’s termination occurred, which payments shall be made regardless of whether the Participant elects COBRA continuation coverage and will commence in the month following the month in which the Termination Date occurs and will end on the earliest of (i) the end of the Severance Period, (ii) the date that the Participant and/or the Participant’s covered dependents become no longer eligible for COBRA and (iii) the date the Participant becomes eligible to receive comparable healthcare coverage from a subsequent employer (and the Participant agrees to promptly notify the Company of such eligibility); and

3.Payment to the Participant of any earned but unpaid Base Salary and any other amounts or benefits, including accrued paid time off to the extent payable upon termination pursuant to the Company’s policies, under the Company’s employee benefit plans, programs or arrangements to which the Participant is entitled pursuant to the terms of such plans, programs or arrangements or applicable law, payable in accordance with the terms of such plans, programs or arrangements or as otherwise required by applicable law (collectively, the “Accrued Rights”).

Qualifying Termination in Connection with a Change in Control
If a Participant has a Qualifying Termination that occurs on the date of or within 12 months following a Change in Control, then subject to Sections V, VI, VII and VIII, the Participant shall be entitled to receive the following payments and benefits:
1.An amount in cash equal to the CIC Severance Multiplier times the sum of (A) the Participant’s annual Base Salary and (B) the Participant’s Target Bonus Amount, payable in substantially equal installments in accordance with the Company’s ordinary payroll practices for the duration of the CIC Severance Period;

2.If the Participant properly elects to receive continued coverage under the Company’s group health plans pursuant to COBRA, direct payment of or reimbursement to the Participant for a portion of the Participant’s COBRA premiums at the Company’s normal rate of contribution for employees for the Participant’s (and the Participant’s covered dependents’) coverage at the level in effective immediately prior to the Participant’s termination for the period commencing on the Participant’s Termination Date and ending on the earliest of (a) the end of the CIC Severance Period, (b) the date the Participant and/or the Participant’s covered dependents become no longer eligible for COBRA, and (c) the date the Participant becomes eligible to receive comparable healthcare coverage from a subsequent employer (and the Participant agrees to promptly notify the Company of such eligibility).  Notwithstanding the foregoing, if the Company determines that it cannot provide the foregoing benefit without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act) or incurring an excise tax, the Company shall in lieu thereof pay to the Participant taxable monthly payments in an amount equal to the portion of the healthcare premiums that the Company paid for the Participant’s and the Participant’s covered dependents’ group health care coverage for the month in which the Participant’s termination occurred, which payments shall be made regardless of whether the Participant elects COBRA continuation coverage and will commence in the month following the month in which the Termination Date occurs and will end on the earliest of (i) the end of the CIC Severance Period, (ii) the date that the Participant and/or the Participant’s covered dependents become no longer eligible for COBRA and (iii) the date the Participant becomes eligible to receive comparable healthcare coverage from a subsequent employer (and the Participant agrees to promptly notify the Company of such eligibility),

3.The Participant’s Accrued Rights; and

4.All unvested equity or equity-based awards under any Company equity compensation plans that vest solely based upon the passage of time shall immediately become 100% vested (for the avoidance of doubt, with any such awards that vest in whole or in part based upon the attainment of performance vesting conditions being governed by the terms of the applicable award agreement).

		
	V.
	 Release of Claims; RESTRICTIVE COVENANT AGREEMENT

Notwithstanding any provision of this Plan to the contrary, any payments and benefits provided to a Participant under this Plan, other than the Accrued Rights, shall be subject to and contingent upon the Participant’s execution and delivery following the Termination Date of a separation agreement in a form provided by and satisfactory to the Company which form will include, among other standard provisions, a complete release of all claims (that becomes effective and irrevocable within sixty (60) days following the Termination Date), and covenants of non-disparagement, confidentiality and cooperation by the Participant.  In addition, Participant shall be required at the option of the Company, either to (i) affirm the Participant’s covenants and obligations under an existing Restrictive Covenant Agreement or (ii) execute a new agreement incorporating substantially the same terms and conditions as the existing Restrictive Covenant Agreement, and in each case to deliver the same no later than the time at which Participant delivers the separation agreement.  
		
	VI.
	 Other Terminations

If a Participant’s employment is terminated in any circumstance other than a Qualifying Termination (including as a result of Participant’s death or Disability), the Participant will not be entitled to any compensation or benefits under this Plan.
		
	VII.
	 Offers of Employment

The Participant shall not be entitled to any compensation or benefits under this Plan if the Participant rejects or fails to accept a written offer of employment from a Successor or from any Affiliate of the Company made on or before his or her Termination Date that is for substantially comparable employment.
		
	VIII.
	Tax Matters

Withholding
The Company may deduct and withhold from any amounts payable under this Plan such federal, state, local, foreign or other taxes as are required to be withheld pursuant to any applicable law or regulation.
Non-Qualified Deferred Compensation
The payments and benefits under this Plan are intended to comply with or be exempt from Section 409A and, accordingly, to the maximum extent permitted, this Plan shall be interpreted to be in compliance therewith.  Notwithstanding any provision of this Plan to the contrary, in the event that the Administrator determines that any amounts payable hereunder will be immediately taxable to any Participant under Section 409A, the Administrator may (without any obligation to do so or to indemnify the Participant for failure to do so) (A) adopt such amendments to this Plan or adopt such other policies and procedures (including amendments, policies and procedures with retroactive effect) that it determines to be necessary or appropriate to preserve the intended tax treatment of the benefits provided by this Plan, to preserve the economic benefits of this Plan and to avoid less favorable accounting or tax consequences for the Company and/or (B) take such other actions it determines to be necessary or appropriate to exempt the amounts payable hereunder from Section 409A or to comply with the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder.
Notwithstanding any provision of this Plan to the contrary, no termination or other similar payments and benefits under this Plan will be payable to a Participant unless the Participant’s termination of employment constitutes a “separation from service” within the meaning of Section 409A (a “Separation from Service”) and, except as provided below or if the Administrator otherwise determines, any payments or benefits payable to the Participant under this Plan will not be paid, or, in the case of installments, will not commence payment, until the first ordinary payroll date that occurs at least days following the Participant’s Separation from Service (the “First Payment Date”).  Any installment payments that would have been made to a Participant during the 60-day period immediately following the Participant’s Separation from Service but for the preceding sentence will be paid to the Participant on the First Payment Date and the remaining payments will be made as provided in this Plan.

Notwithstanding any provision of this Plan to the contrary, if a Participant is deemed by the Company at the time of the Participant’s Separation from Service to be a “specified employee” for purposes of Section 409A, to the extent delayed commencement of any portion of the benefits to which the Participant is entitled under this Plan is required in order to avoid a prohibited distribution under Section 409A, such portion of the Participant’s benefits will not be provided to the Participant prior to the earlier of (i) the expiration of the six-month period measured from the date of the Participant’s Separation from Service or (ii) the date of the Participant’s death.  Upon the first ordinary payroll date following the expiration of the applicable Section 409A period, all payments and benefits deferred pursuant to the preceding sentence will be paid in a lump sum to a Participant (or the Participant’s estate), and any remaining payments due to the Participant under this Plan will be paid as otherwise provided herein.
A Participant’s right to receive any installment payments under this Plan shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment as permitted under Section 409A.
Potential Reduction of Certain “Parachute Payments”
1.Notwithstanding any other provisions of this Plan or any Company equity plan or agreement, in the event that any payment or benefit by the Company or otherwise to or for the benefit of a Participant, whether paid or payable or distributed or distributable pursuant to the terms of this Plan or otherwise (all such payments and benefits, including the payments and benefits under Section IV of the Plan, being hereinafter referred to as the “Total Payments”), would be subject (in whole or in part) to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Total Payments shall be reduced (in the order provided in subsection 2 below) to the minimum extent necessary to avoid the imposition of the Excise Tax on the Total Payments, but only if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income and employment taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income and employment taxes on such Total Payments and the amount of the Excise Tax to which the Participant would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).

2.The Total Payments shall be reduced in the following order: (i) reduction on a pro-rata basis of any cash severance payments that are exempt from Section 409A, (ii) reduction on a pro-rata basis of any non-cash severance payments or benefits that are exempt from Section 409A, (iii) reduction on a pro-rata basis of any other payments or benefits that are exempt from Section 409A, and (iv) reduction of any payments or benefits otherwise payable to the Participant on a pro-rata basis or such other manner that complies with Section 409A; provided, in case of clauses (ii), (iii) and (iv), that reduction of any payments attributable to the acceleration of vesting of Company equity awards shall be first applied to Company equity awards that would otherwise vest last in time.

3.All determinations regarding the application of Sections VIII.1-4 shall be made by an accounting firm or consulting group with experience in performing calculations regarding the applicability of Section 280G of the Code and the Excise Tax selected by the Company (the “Independent Advisors”).  For purposes of determinations, no portion of the Total Payments shall be taken into account which, in the opinion of the Independent Advisors, (i) does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) or (ii) constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as defined in Section 280G(b)(3) of the Code) allocable to such reasonable compensation.  The costs of obtaining such determination and all related fees and expenses (including related fees and expenses incurred in any later audit) shall be borne by the Company.

4.In the event it is later determined that a greater reduction in the Total Payments should have been made to implement the objective and intent of Sections VIII.1-4, the excess amount shall be returned promptly by the Participant to the Company.

		
	IX.
	  Duration; Termination; Amendment; Modification

This Plan shall become effective on consummation of the Company’s initial public offering of stock pursuant to an effective registration statement filed under the Securities Act of 1933, as amended (the “Effective Date”).  The Board or the Administrator may amend, modify or terminate this Plan at any time; provided that, except as otherwise provided in Section VIII:

1.No amendment, modification or termination may affect any right of any Participant to claim benefits under this Plan as in effect prior to such amendment, modification or termination with respect to a Termination Date that occurs prior to the date of such amendment, modification or termination; and

2.During the 12 months following a Change in Control, this Plan may not be amended or modified in any manner that decreases the payments or benefits payable to any Participant or otherwise adversely affects any Participant’s economic rights or terminated.

		
	X.
	  Relation to Other Plans

Nothing in this Plan will prevent or limit a Participant’s continuing or future participation in any plan, practice, policy or program provided by the Company or any Affiliate thereof for which the Participant may qualify, nor will anything in this Plan limit or otherwise affect any rights the Participant may have under any contract or agreement with the Company or any Affiliate thereof.  Vested benefits and other amounts a Participant is otherwise entitled to receive under any incentive compensation (including any equity award agreement), deferred compensation, retirement, pension or other plan, practice, policy or program of, or any contract or agreement with, the Company or any Affiliate thereof shall be payable in accordance with the terms of each such plan, practice, policy, program, contract or agreement, as the case may be.
		
	XI.
	   Notices

All notices or other communications required or permitted by this Plan will be made in writing and all such notices or communications will be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows: 
		
	If to the Company:
	Evelo Biosciences, Inc.

620 Memorial Drive
Cambridge, MA 02139
Attention: General Counsel

		
	If to the Participant:
	The Participant’s last known address as set forth in the Company’s records.

		
	XII.
	Administration

This Plan is designed to be an “employee welfare benefit plan,” as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  This Plan is governed by ERISA and, to the extent applicable, the laws of the Commonwealth of Massachusetts, without regard to the conflicts of laws principles that would result in the applicable of the laws of another jurisdiction.
This document constitutes the official plan document and the required summary plan description under ERISA.
The Plan will be interpreted in accordance with its terms and their intended meanings.  However, the Administrator and all Plan fiduciaries will have the discretion to interpret or construe ambiguous, unclear, or implied (but omitted) terms in any fashion they deem to be appropriate in their reasonable discretion, and to make any findings of fact needed in the administration of the Plan.  The validity of any such interpretation, construction, decision, or finding of fact shall not be given de novo review if challenged in court, by arbitration, or in any other forum, and shall be upheld unless clearly arbitrary or capricious.  All determinations by the Administrator will be final and conclusive upon all persons and be given the maximum possible deference allowed by law.  The Administrator is the “named fiduciary” of the Plan for purposes of ERISA and will be subject to the fiduciary standards of ERISA when acting in such capacity.  If, due to errors in drafting, any Plan provision does not accurately reflect its intended meaning, as demonstrated by consistent interpretations or other evidence of intent, or as determined by the Administrator in its reasonable discretion, the provision shall be considered ambiguous and shall be interpreted by the Administrator and all Plan fiduciaries in a fashion consistent with its intent, as determined in the reasonable discretion of the Administrator.  The Administrator shall amend the Plan retroactively to cure any such ambiguity.
Source of Benefits
The Plan is unfunded, and all severance benefits will be paid from the general assets of the Company or its successor.  No contributions are required under the Plan.

Claims Procedure
If an individual believes that the individual has been incorrectly denied a benefit or is entitled to a greater benefit than the benefit received under the Plan the individual or his or her duly authorized representative (a “Claimant”) who wishes to assert a claim for benefits under this Plan may file a signed written application for benefits at the following address:
Evelo Biosciences, Inc.
620 Memorial Drive
Cambridge, MA 02139
Attention: General Counsel

The application for benefits must identify the Plan benefits claimed and the facts and circumstances which the Claimant believes entitle him or her to those benefits.  If the Claimant did not receive a Release (or received one providing for benefits in an amount less than the amount the Participant believes is due), his or her claim must be filed within 180 days after the date of the termination of employment on which the claim is based.  In all other cases, the claim must be filed no later than 180 days after the date on which payment of benefits under this Plan were discontinued or reduced.

The Administrator will notify the Claimant of its decision within 90 days after its receipt of the claim or, if special circumstances exist, within 180 days after its receipt of the claim (provided that written notice of the need and reason for the extension is provided to the Claimant within the initial 90-day period).  If a claim is denied (in whole or in part), the Claimant will be provided a written notice of claim denial that will give specific reasons for the denial; identify the specific Plan provision involved; describe any additional materials or information needed for the Claimant to perfect his or her claim; and explain why the materials or information are necessary.  The notice of claim denial will also provide an explanation of the appeals procedure.  The Claimant is entitled to see all documents, records and other information that affect his or her claim.  Free copies of such documents, records or other information will be provided to the Claimant, provided that the Claimant requests the copies in writing to the above address within 60 days after receiving the notice of claim denial.

Appeals Procedure
If a Claimant receives a notice of claim denial and he or she disagrees with the decision, the Claimant is entitled to appeal and have the denial of the claim reviewed.  Any appeal must be made in writing to the Administrator within 60 days after the Claimant’s receipt of the notice of claim denial, and should be sent to the following address:
Evelo Biosciences, Inc.
620 Memorial Drive
Cambridge, MA 02139
Attention: General Counsel
The Claimant must be provided the opportunity to submit written comments, documents, records, and other information that affect his or her claim.  The Administrator’s review of the claim must take into account all such information submitted, regardless of whether such information was submitted or considered in the initial claim denial.
The Administrator must evaluate and decide the appeal within 60 days after receipt of the appeal, or, if special circumstances exist, within 120 days after receipt of the appeal (provided that written notice of the need and reason for the extension is provided to the Claimant within the initial 60-day period).  The Administrator must provide a written decision on the appeal.  If the appeal is denied, the decision must state the reason(s) for the decision and any applicable Plan provision or other material on which it is based.  The decision must also include a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information that affect his or her claim
The Administrator has full authority and discretion to decide claims and appeals, including to construe, interpret and apply the terms of the Plan, to determine all questions concerning eligibility for and entitlement to benefits under this Plan.  The Administrator’s decisions are final and binding.
The Claims Procedure and Appeals Procedure described in this Section must be exhausted before commencing any legal action.  Furthermore, any legal action asserting a claim of entitlement to benefits under this Plan must be commenced within 180 days after the date on which the Administrator issues its decision on the Claimant’s appeal.  Failure to commence a legal action within that 180-day period, or failure to submit a timely claim and timely appeal under the procedures described above, will result in the loss of any otherwise existing right to contested Plan benefits, unless the Administrator determines in its discretion that extenuating circumstances require a different result.

Assistance with Questions
Claimants with questions about this Plan should contact the Administrator.  Claimants with questions about this statement or about his or her rights under ERISA, or in need of assistance in obtaining documents from the Administrator should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in the telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.  A Participant may also obtain certain publications about his or her rights or responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration at 1-866-444-EBSA (3272).
If a Participant must take legal action for any reason regarding his or her Plan benefits, legal process may be served on the Administrator in care of: 

Evelo Biosciences, Inc.
620 Memorial Drive
Cambridge, MA 02139
Attention: General Counsel
If a Participant has any questions about this Plan, the Participant may contact the Company’s human resources department.
Rights under ERISA
Participants in this Plan are entitled to certain rights and protections under ERISA.  ERISA provides that all Participants shall be entitled to the following:
1.A Participant can examine, without charge, at the Administrator’s office and at other specified locations, such as worksites, all documents governing this Plan and a copy of the latest annual report (Form 5500 Series) filed by this Plan with the U.S. Department of Labor and available at the Employee Benefits Security Administration. This Plan also constitutes the official Plan document governing benefits; therefore, there are no other Plan documents that govern a Participant’s benefits.

2.A Participant can obtain, upon written request to the Administrator, copies of documents governing the operation of the Plan, and copies of the latest annual report (Form 5500 Series) and updated summary plan description. The Administrator may make a reasonable charge for the copies.

3.The Administrator is required by law to furnish each Participant with a copy of the summary of the Plan’s annual financial report.

4.In addition to creating rights for Participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate this Plan, called “fiduciaries” of this Plan, have a duty to do so prudently and in the interest of Participants and beneficiaries. No one, including an employer, may fire a Participant or otherwise discriminate against a Participant in any way to prevent such Participant from obtaining a Plan benefit or exercising his or her rights under ERISA.

5.If a Participant’s claim for a benefit under this Plan is denied or ignored, in whole or in part, he or she has a right to know why the claim was denied or ignored, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

6.Under ERISA, there are steps a Participant can take to enforce the above rights. For instance, if a Participant requests a copy of Plan documents or the latest annual report from the Plan and does not receive it within 30 days, such Participant may file suit in a federal court. In such a case, the court may require the Administrator to provide the materials and pay such Participant up to $110 a day until the Participant receives the materials, unless the materials were not sent because of reasons beyond the control of the Administrator.

7.If a Participant has a claim for benefits that is denied or ignored, in whole or in part, such Participant may file suit in a state or federal court.

8.If it should happen that Plan fiduciaries misuse the Plan’s money, or if a Participant is discriminated against for asserting the Participant’s rights, such Participant may seek assistance from the U.S. Department of Labor or may file suit in a federal court. The court will decide who should pay court costs and legal fees. If the Participant is successful, the court may order 

the person such Participant has sued to pay these costs and fees. If the Participant loses, the court may order the Participant to pay these costs and fees if, for example, it finds that the Participant’s claim is frivolous.

Additional Plan Information
	
		
	Name of Plan:
	Evelo Biosciences, Inc. Executive Severance Plan

	Sponsor:
	Evelo Biosciences, Inc.
620 Memorial Drive
Cambridge, MA 02139

	Plan Administrator:
	The Administrator is the Plan administrator. The business address and telephone number of the Administrator are: Evelo Biosciences, Inc., 620 Memorial Drive, Cambridge, MA 02139; Tel: (617) 577-0300.

	Employer Identification Number:
	46-5594527

	Plan number
	501

	Plan Year:
	Calendar year

	Plan Costs:
	The costs of the Plan are paid by the Company

	Type of Administration:
	Self-administration by the Administrator

* * * * *

Schedule A
	
				
	Employment Level
	Severance Period
	CIC Severance Multiplier
	CIC Severance Period

	C-Suite Executive or Senior Vice President
	9 months following the Termination Date
	1
	12 months following the Termination Date

	Vice President
	6 months following the Termination Date
	0.75
	9 months following the Termination dateExhibit
10.1

 

NEITHER
THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS.

 

VERUS
INTERNATIONAL, INC.

 

CONVERTIBLE
NOTE

 

	Issuance
    Date: February 10, 2020	Original
    Principal Amount:	$420,000
	Note
    No. VRUS-1	Consideration
    Paid at Close:	$350,000

 

FOR
VALUE RECEIVED, Verus International, Inc., a Delaware corporation with a par value of $0.000001 per common share (“Par
Value”) (the “Company”), hereby promises to pay to the order of [___] or registered assigns (the “Holder”)
the amount set out above as the Original Principal Amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion
or otherwise, the “Principal”) when due, whether upon the Maturity Date (as defined below), acceleration, redemption
or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”) on any outstanding
Principal at the applicable Interest Rate from the date set out above as the Issuance Date (the “Issuance Date”)
until the same becomes due and payable, upon the Maturity Date or acceleration, conversion, redemption or otherwise (in each case
in accordance with the terms hereof).

 

The
Original Principal Amount is $420,000 (four hundred twenty thousand) plus accrued and unpaid interest and any other fees. The
Consideration is $350,000 (three hundred fifty thousand) payable by wire transfer (there exists a $70,000 original issue discount
(the “OID”)). The Holder shall pay $350,000 of Consideration upon closing of this Note. For purposes hereof, the term
“Outstanding Balance” means the Original Principal Amount, as reduced or increased, as the case may be, pursuant to
the terms hereof for conversion, breach hereof or otherwise, plus any accrued but unpaid interest, collection and enforcements
costs, and any other fees, penalties, damages or charges incurred under this Note.

 

(1)
GENERAL TERMS

 

(a)
Payment of Principal. The “Maturity Date” shall be nine months from the Issuance Date, and may extended
to twelve months from the Issuance Date at the option of the Holder.

 

(b)
Interest. A one-time interest charge of four percent (4%) (“Interest Rate”) shall be applied on the Issuance
Date to the Outstanding Balance. Interest hereunder shall be paid on the Maturity Date (or sooner as provided herein) to the Holder
or its assignee in whose name this Note is registered on the records of the Company regarding registration and transfers of Notes
in cash or converted into share of common stock of the Company (“Common Stock”) at the Conversion Price provided the
Equity Conditions are satisfied.

 

    	 

    	 

    

 

(c)
Security. This Note shall not be secured by any collateral or any assets pledged to the Holder

 

(d)
Notification of Variable Securities Issuances. If, at any time while this Note is outstanding, the Company makes any Variable
Security Issuances (as defined below) to any person or entity other than Investor, the Company must notify the Investor, in writing,
of such issuance within three business days of making such issuance. “Variable Security Issuance” shall mean any issuance
of any security that (i) has or may have conversion rights of any kind, contingent, conditional or otherwise, in which the number
of shares that may be issued pursuant to such conversion right varies with the market price of the Common Stock, or (ii) is or
may become convertible into Common Stock (including without limitation convertible debt, debentures, warrants or convertible preferred
stock), with a conversion price that varies with the market price of the Common Stock, even if such security only becomes convertible
following an event of default, the passage of time, or another trigger event or condition. For avoidance of doubt, the issuance
of shares of Common Stock under, pursuant to, in exchange for or in connection with any contract or instrument, whether convertible
or not, is deemed a Variable Security Issuance for purposes hereof if the number of shares of Common Stock to be issued is based
upon or related in any way to the market price of the Common Stock, including, but not limited to, Common Stock issued in connection
with a Section 3(a)(9) exchange, a Section 3(a)(10) settlement, or any other similar settlement or exchange.

 

(2)
EVENTS OF DEFAULT.

 

(a)
An “Event of Default”, wherever used herein, means any one of the following events (whatever the reason and
whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental body):

 

(i)
The Company’s failure to pay to the Holder any amount of Principal, Interest, or other amounts when and as due under this
Note (including, without limitation, the Company’s failure to pay any redemption payments or amounts hereunder);

 

(ii)
A Conversion Failure as defined in section 3(b)(ii)

 

(iii)
The Company or any subsidiary of the Company shall commence, or there shall be commenced against the Company or any subsidiary
of the Company under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the
Company or any subsidiary of the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect
relating to the Company or any subsidiary of the Company or there is commenced against the Company or any subsidiary of the Company
any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of 61 days; or the Company or any subsidiary
of the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding
is entered; or the Company or any subsidiary of the Company suffers any appointment of any custodian, private or court appointed
receiver or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of sixty
one (61) days; or the Company or any subsidiary of the Company makes a general assignment for the benefit of creditors; or the
Company or any subsidiary of the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay,
its debts generally as they become due; or the Company or any subsidiary of the Company shall call a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its debts; or the Company or any subsidiary of the Company
shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or
any corporate or other action is taken by the Company or any subsidiary of the Company for the purpose of effecting any of the
foregoing;

 

    	 	2	 

    	 

    

 

(iv)
The Company or any subsidiary of the Company shall default in any of its obligations under any other Note or any mortgage, credit
agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or
by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring
arrangement of the Company or any subsidiary of the Company in an amount exceeding $100,000, whether such indebtedness now exists
or shall hereafter be created; and

 

(v)
The Common Stock is suspended or delisted for trading on the Over the Counter OTCQB Venture Marketplace or OTCPink Open Marketplace
(the “Primary Market”).

 

(vi)
The Company loses its ability to deliver shares via “DWAC/FAST” electronic transfer.

 

(vii)
The Company loses its status as “DTC Eligible.”

 

(viii)
The Company shall become late or delinquent in its filing requirements as a fully-reporting issuer registered with the Securities
& Exchange Commission.

 

(ix)
The Company shall fail to reserve and keep available out of its authorized Common Stock a number of shares equal to at least 3
(three) times the full number of shares of Common Stock issuable upon conversion of all outstanding amounts under this Note.

 

(x)
The Company shall fail to meet all requirements to satisfy the availability of Rule 144 to the Holder or its assigns including
but not limited to timely fulfillment of its filing requirements as a fully-reporting issuer registered with the SEC, requirements
for XBRL filings, and requirements for disclosure of financial statements on its website.

 

(xi)
Failure to comply with Section 1(d) of this Note.

 

(b)
Upon the occurrence of any Event of Default (without the need for any party to give any notice or take any other action), the
Outstanding Balance shall immediately and automatically increase to 120% of the Outstanding Balance immediately prior to the occurrence
of the Event of Default (the “Default Sum”). Upon the occurrence of any Event of Default, the Note shall become immediately
due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to
the Outstanding Balance, all without demand, presentment or notice, all of which hereby are expressly waived, together with all
costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all
other rights and remedies available at law or in equity, and the Conversion Price shall be redefined to equal the Market Price,
as defined herein.

 

(3)
CONVERSION OF NOTE. This Note shall be convertible into shares of the Company’s Common Stock, on the terms and conditions
set forth in this Section 3.

 

(a)
Conversion Right. Subject to the provisions of Section 3(c), at any time or times on or after the Issuance Date, the Holder
shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into fully paid and
nonassessable shares of Common Stock in accordance with Section 3(b), at the Conversion Price (as defined below). The number of
shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to this Section 3(a) shall be equal to the quotient
of dividing the Conversion Amount by the Conversion Price. The Company shall not issue any fraction of a share of Common Stock
upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall
round such fraction of a share of Common Stock up to the nearest whole share. The Company shall pay any and all transfer agent
fees, legal fees, costs and any other fees or costs that may be incurred or charged in connection with the issuance of shares
of the Company’s Common Stock to the Holder arising out of or relating to the conversion of this Note.

 

    	 	3	 

    	 

    

 

(i)
“Conversion Amount” means the portion of the Original Principal Amount and Interest to be converted, plus any
penalties, redeemed or otherwise with respect to which this determination is being made.

 

(ii)
“Conversion Price” shall equal the $.0125 per share, subject to adjustments as provided in this note.

 

(b)
Mechanics of Conversion.

 

(i)
Optional Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall (A) transmit by email, facsimile (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York, NY
Time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit A (the “Conversion
Notice”) to the Company. On or before the third Business Day following the date of receipt of a Conversion Notice (the
“Share Delivery Date”), the Company shall (A) if legends are not required to be placed on certificates of Common
Stock pursuant to the then existing provisions of Rule 144 of the Securities Act of 1933 (“Rule 144”) and provided
that the Transfer Agent is participating in the Depository Trust Company’s (“DTC”) Fast Automated Securities
Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled to the Holder’s
or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system or (B) if the Transfer
Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to the address as specified
in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common
Stock to which the Holder shall be entitled which certificates shall not bear any restrictive legends unless required pursuant
the Rule 144. If this Note is physically surrendered for conversion and the outstanding Principal of this Note is greater than
the Principal portion of the Conversion Amount being converted, then the Company shall, upon request of the Holder, as soon as
practicable and in no event later than three (3) Business Days after receipt of this Note and at its own expense, issue and deliver
to the holder a new Note representing the outstanding Principal not converted. The Person or Persons entitled to receive the shares
of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such
shares of Common Stock upon the transmission of a Conversion Notice.

 

(ii)
Company’s Failure to Timely Convert. If within two (2) Trading Days after the Company’s receipt of the facsimile
or email copy of a Conversion Notice the Company shall fail to issue and deliver to Holder via “DWAC/FAST” electronic
transfer the number of shares of Common Stock to which the Holder is entitled upon such holder’s conversion of any Conversion
Amount (a “Conversion Failure”), the Original Principal Amount of the Note shall increase by $2,000 per day
until the Company issues and delivers a certificate to the Holder or credit the Holder’s balance account with DTC for the
number of shares of Common Stock to which the Holder is entitled upon such holder’s conversion of any Conversion Amount
(under Holder’s and Company’s expectation that any damages will tack back to the Issuance Date). Company will not
be subject to any penalties once its transfer agent processes the shares to the DWAC system. If the Company fails to deliver
shares in accordance with the timeframe stated in this Section, resulting in a Conversion Failure, the Holder, at any time prior
to selling all of those shares, may rescind any portion, in whole or in part, of that particular conversion attributable to the
unsold shares and have the rescinded conversion amount returned to the Outstanding Balance with the rescinded conversion shares
returned to the Company (under Holder’s and Company’s expectations that any returned conversion amounts will tack
back to the original date of the Note).

 

    	 	4	 

    	 

    

 

(iii)
DWAC/FAST Eligibility. If the Company fails for any reason to deliver to the Holder the Shares by DWAC/FAST electronic
transfer (such as by delivering a physical stock certificate), or if there is a Conversion Failure as defined in Section 3(b)(ii),
and if the Holder incurs a Market Price Loss, then at any time subsequent to incurring the loss the Holder may provide the Company
written notice indicating the amounts payable to the Holder in respect of the Market Price Loss and the Company must make the
Holder whole by either of the following options at Holder’s election:

 

Market
Price Loss = [(High trade price for the period between the day of conversion and the day the shares clear in the Holder’s
brokerage account) x (Number of shares receivable from the conversion)] – [(Net Sales price realized by Holder) x (Number
of shares receivable from the conversion)].

 

Option
A – Pay Market Price Loss in Cash. The Company must pay the Market Price Loss by cash payment, and any such cash payment
must be made by the third business day from the time of the Holder’s written notice to the Company.

 

Option
B – Add Market Price Loss to Outstanding Balance. The Company must pay the Market Price Loss by adding the Market Price
Loss to the Outstanding Balance (under Holder’s and the Company’s expectation that any Market Price Loss amounts will
tack back to the Issuance Date).

 

In
the case that conversion shares are not deliverable by DWAC/FAST electronic transfer an additional 10% discount to the Conversion
Price will apply.

 

(iv)
DTC Eligibility & Sub-Penny. If the Company fails to maintain its status as “DTC Eligible” for any reason,
or, if the closing price of the Company’s common stock (as reported by QuotesMedia, Inc.) is less than $0.01 at any time
(regardless of whether or not a Conversion Notice has been submitted to the Company), the Principal Amount of the Note shall increase
by ten thousand dollars ($10,000) (under Holder’s and Company’s expectation that any Principal Amount increase will
tack back to the Issuance Date). In addition, the Conversion Price shall be permanently redefined to equal the lesser of (a) $0.01
or (b) the Market Price. The Market Price shall be defined as 50% of the lowest closing price occurring during the twenty (20)
consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part
of this Note, subject to adjustment as provided in this Note.

 

(v)
Par Value True-Up. In the event that the Conversion Price is less than Par Value on the Conversion Date, the Holder may
elect to submit a Conversion Notice (attached hereto as Exhibit A) with a conversion price equal to the Company’s Par Value.
In addition, upon written notice from the Holder in the form attached hereto as Exhibit B (the “True-Up Notice”),
the Holder may require the Company, at the Holder’s election, to either (A) issue and deliver to the Holder a number of
shares of Common Stock as equals (X) the Conversion Amount divided by 60% of the lowest closing price occurring during the twenty
(20) consecutive Trading Days immediately preceding the applicable Conversion Date, less (Y) the Conversion Amount divided by
the Par Value (Any additional shares of Common Stock issuable pursuant to this Section 3(b)(v) shall be referred to herein as
“True-Up Shares”), or (B) add to the Outstanding Balance a dollar amount equal to the number of True-Up Shares (as
calculated above) multiplied by the high trade price on the Conversion Date (Any dollar amount added to the Outstanding Balance
pursuant to this Section 3(b)(v) shall be referred to herein as the “True-Up Balance”) (under Holder’s and the
Company’s expectation that any True-Up Balance amounts will tack back to the Issuance Date).

 

    	 	5	 

    	 

    

 

(vi)
Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Note in accordance
with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A) the full Conversion
Amount represented by this Note is being converted or (B) the Holder has provided the Company with prior written notice (which
notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of this Note. The Holder
and the Company shall maintain records showing the Principal and Interest converted and the dates of such conversions or shall
use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this
Note upon conversion.

 

(c)
Limitations on Conversions or Trading.

 

(i)
Beneficial Ownership. The Company shall not effect any conversions of this Note and the Holder shall not have the right
to convert any portion of this Note or receive shares of Common Stock as payment of interest hereunder to the extent that after
giving effect to such conversion or receipt of such interest payment, the Holder, together with any affiliate thereof, would beneficially
own (as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder) in excess of 4.99%
of the number of shares of Common Stock outstanding immediately after giving effect to such conversion or receipt of shares as
payment of interest. Since the Holder will not be obligated to report to the Company the number of shares of Common Stock it may
hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of shares of Common Stock
in excess of 4.99% of the then outstanding shares of Common Stock without regard to any other shares which may be beneficially
owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether the restriction
contained in this Section will limit any particular conversion hereunder and to the extent that the Holder determines that the
limitation contained in this Section applies, the determination of which portion of the principal amount of this Note is convertible
shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion Notice for a principal amount
of this Note that, without regard to any other shares that the Holder or its affiliates may beneficially own, would result in
the issuance in excess of the permitted amount hereunder, the Company shall notify the Holder of this fact and shall honor the
conversion for the maximum principal amount permitted to be converted on such Conversion Date in accordance with Section 3(a)
and, any principal amount tendered for conversion in excess of the permitted amount hereunder shall remain outstanding under this
Note. In the event that the Market Capitalization of the Company falls below $2,500,000, the term “4.99%” above shall
be permanently replaced with “9.99%”. “Market Capitalization” shall be defined as the product of (a) the
closing price of the Common Stock of the Common stock multiplied by (b) the number of shares of Common Stock outstanding as reported
on the Company’s most recently filed Form 10-K or Form 10-Q. The provisions of this Section may be waived by Holder upon
not less than 65 days prior written notification to the Company.

 

(ii)
Capitalization. So long as this as this Note is outstanding, upon written request of the Holder, the Company shall furnish
to the Holder the then-current number of common shares issued and outstanding, the then-current number of common shares authorized,
and the then-current number of shares reserved for third parties.

 

(d)
Other Provisions.

 

(i)
Share Reservation. The Company shall at all times reserve and keep available out of its authorized Common Stock a number
of shares equal to at least 3 (three) times the full number of shares of Common Stock issuable upon conversion of all outstanding
amounts under this Note at the Market Price; and within 3 (three) Business Days following the receipt by the Company of a Holder’s
notice that such minimum number of shares of Common Stock is not so reserved, the Company shall promptly reserve a sufficient
number of shares of Common Stock to comply with such requirement.

 

    	 	6	 

    	 

    

 

(ii)
Prepayment. During the first 180 days this Note is in effect, upon 10 business days’ notice to Holder (“Notice
Period”), the Company may redeem this Note by paying to the Holder an amount as follows (“Redemption Amount”):
(i) if the redemption is within the first 90 days this Note is in effect, then for an amount equal to 105% of the Outstanding
Balance of this Note along with any interest that has accrued during that period, (ii) if the redemption is on or between the
91st and 120th day this Note is in effect, then for an amount equal to 110% of the Outstanding Balance of
this Note along with any accrued interest, (iii) if the redemption is on or between the 121st and 150th
day this Note is in effect, then for an amount equal to 115% of the Outstanding Balance of this Note along with any accrued interest,
(iv) if the redemption is on or between the 151st and 180th day this Note is in effect, then for an amount
equal to 120% of the Outstanding Balance of this Note along with any accrued interest. This Note may not be redeemed after 180
days without written consent of the Holder. The redemption must be closed and paid for within 3 business days following the Notice
Period or the redemption will be deemed invalid and the Company may not redeem this Note. In the event that this Note is not redeemed
prior to the 180th day from the Issuance Date, the Conversion Price shall be redefined to equal the lesser of $0.0125
or the Market Price, as defined in this Note. The Holder may convert this Note pursuant to the terms hereof at all times, including
during the Notice Period, until the Redemption Amount has been received in full.

 

(iii)
Terms of Future Issuances. So long as this Note is outstanding, upon any issuance by the Company or any of its subsidiaries
of any promissory note, debenture or security (each referred to as a “Security”) (or upon any amendment to or conversion
of any existing Security) with any term more favorable to the holder of such Security or with a term in favor of the holder of
such Security that was not similarly provided to the Holder in this Note, then the Company shall notify the Holder of such additional
or more favorable term and such term, at Holder’s option, shall become a part of the Note. The types of terms contained
in another Security that may be more favorable to the holder of such Security include, but are not limited to, terms addressing
conversion discounts, conversion lookback periods, conversions or exchanges of existing notes or debentures, interest rates, original
issue discounts, stock sale price, private placement price per share, and warrant coverage.

 

(iv)
Dilutive Issuances. If the Company or any Subsidiary thereof, as applicable, at any time while this Note is outstanding,
shall sell or grant any option to purchase, or sell or grant any right to re-price, or otherwise dispose of or issue (or announce
any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents entitling
any Person to acquire shares of Common Stock, at an effective price per share less than the then Conversion Price (such lower
price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”) (if the holder of
the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share
which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share
which is less than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on
such date of the Dilutive Issuance), then the Conversion Price shall be reduced and only reduced to equal the Base Share Price.
Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. The Company shall notify the
Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject
to this Section 3(d)(iv), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion
price and other pricing terms (such notice the “Dilutive Issuance Notice”). For purposes of clarification, whether
or not the Company provides a Dilutive Issuance Notice pursuant to this Section 3(d)(iv), upon the occurrence of any Dilutive
Issuance, after the date of such Dilutive Issuance the Holder is entitled to receive a number of shares based upon the Base Share
Price regardless of whether the Holder accurately refers to the Base Share Price in the Conversion Notice.

 

(v)
All calculations under this Section 3 shall be rounded up to the nearest $0.00001 or whole share.

 

    	 	7	 

    	 

    

 

(vi)
Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section
2 herein for the Company’s failure to deliver certificates representing shares of Common Stock upon conversion within the
period specified herein and such Holder shall have the right to pursue all remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief, in each case without the need to post a bond or
provide other security. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant
to any other Section hereof or under applicable law.

 

(4)
RESERVED.

 

(5)
PIGGYBACK REGISTRATION RIGHTS. The Company shall include on the next registration statement the Company files with SEC
(or on the subsequent registration statement if such registration statement is withdrawn) all shares issuable upon conversion
of this Note. Failure to do so will result in liquidated damages of 25% of the outstanding principal balance of this Note, but
not less than $25,000, being immediately due and payable to the Holder at its election in the form of cash payment or addition
to the balance of this Note.

 

(6)
REISSUANCE OF THIS NOTE.

 

(a)
Assignability. The Company may not assign this Note. This Note will be binding upon the Company and its successors and
will inure to the benefit of the Holder and its successors and assigns and may be assigned by the Holder to anyone of its choosing
without Company’s approval.

 

(b)
Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking
by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver to the Holder a new Note representing the outstanding Principal.

 

(7)
NOTICES. Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof
must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt,
when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by
the sending party) (iii) upon receipt, when sent by email; or (iv) one (1) Trading Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be those set forth in the communications and documents that each party has provided the other immediately
preceding the issuance of this Note or at such other address and/or facsimile number and/or to the attention of such other person
as the recipient party has specified by written notice given to each other party three (3) Business Days prior to the effectiveness
of such change. Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other communication,
(ii) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (iii) provided by a nationally recognized overnight delivery service,
shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.

 

    	 	8	 

    	 

    

 

The
addresses for such communications shall be:

 

If
to the Company, to:

 

Verus
International, Inc.

9841
Washingtonian Boulevard #390

Gaithersburg,
MD 20878 Attn: Anshu Bhatnagar, CEO

Email:
Anshu Bhatnagar <ab@verusfoods.com>

 

If
to the Holder:

 

[___]

Attn:
[___]

 

(8)
APPLICABLE LAW AND VENUE. This Note shall be governed by and construed in accordance with the laws of the State of Nevada,
without giving effect to conflicts of laws thereof. Any action brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of California or in the federal courts located in the
city and county of San Diego, in the State of California. Both parties and the individuals signing this Agreement agree to submit
to the jurisdiction of such courts.

 

(9)
WAIVER. Any waiver by the Holder of a breach of any provision of this Note shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Holder to
insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. Any waiver must be
in writing.

 

(10)
LIQUIDATED DAMAGES. Holder and Company agree that in the event Company fails to comply with any of the terms or provisions
of this Note, Holder’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the
parties’ inability to predict future interest rates, future share prices, future trading volumes and other relevant factors.
Accordingly, Holder and Company agree that any fees, balance adjustments, default interest or other charges assessed under this
Note are not penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages (under Holder’s
and Company’s expectations that any such liquidated damages will tack back to the Closing Date for purposes of determining
the holding period under Rule 144).

 

(11)
ADJUSTMENTS. Notwithstanding anything to the contrary, any references herein to share numbers or share prices shall be
appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

 

(12)
PUBLIC DISCLOSURES. The Company shall be obligated to disclose this Note, and any amendments to this Note, by filing a
form 8-K with the Securities and Exchange Commission within five business days from the date of this Note or any amendments to
this Note. Failure to comply with this Section 12 shall constitute an Event of Default.

 

[Signature
Page Follows]

 

    	 	9	 

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Convertible Note to be duly executed by a duly authorized officer as of the date
set forth above.

 

	 	COMPANY:
	 	 
	 	Verus
    International, Inc.
	 	 	 
	 	By:	 
	 	 	 
	 	Name:
    	Anshu
    Bhatnagar
	 	 	 
	 	Title:
    	Chief
    Executive Officer
	 	 	 
	 	HOLDER:
	 	 	 
	 	[___]	 
	 	 	 
	 	By:	 
	 	 	 
	 	Name:
    	[___]
	 	 	 
	 	Title:
    	[___]

 

[Signature
Page to Convertible Note No. VRUS-1]

 

    	 

    	 

    

 

EXHIBIT
A

CONVERSION
NOTICE

 

[Company
Contact, Position]

Verus
International, Inc.

[Company
Address]

[Contact
Email Address}

 

The
undersigned hereby elects to convert a portion of the $                    Convertible
Note issued to [___] on                                                                into
Shares of Common Stock of                               according
to the conditions set forth in such Note as of the date written below.

 

By
accepting this notice of conversion, you are acknowledging that the number of shares to be delivered represents less than 10%
(ten percent) of the common stock outstanding. If the number of shares to be delivered represents more than 9.99% of the common
stock outstanding, this conversion notice shall immediately automatically extinguish and debenture Holder must be immediately
notified.

 

	Date
    of Conversion: 	 	 
	 	 	 
	Conversion
    Amount: 	 	 
	 	 	 
	Conversion
    Price: 	 	 
	 	 	 
	Shares
    to be Delivered:	 	 

 

Shares
delivered in name of:

 

[___]

 

	Signature:	 
	 	By:
	 	Title:

 

    	 

    	 

    

 

EXHIBIT
B

TRUE-UP
NOTICE

 

[Company
Contact, Position]

Verus
International, Inc.

[Company
Address]

[Contact
Email Address}

 

The
undersigned hereby gives notice to Verus International, Inc., a                    corporation
(the “Company”), pursuant to that certain Note dated                      ,
20   by and between the Company and the Holder (the “Note”), that the Holder elects to:

 

	          	Receive
    fully paid and non-assessable True-Up Shares pursuant to Section 3(b)(v) of the Note (such Additional Origination Shares shall
    be calculated as set forth below), or
	 	 
	          	Add
    to the Outstanding Balance a dollar amount equal to the True-Up Amount (such True-Up Amount shall be calculated as set forth
    below).

 

The
number of True-Up Shares Holder is entitled to receive is calculated as follows:

 

	 	Conversion
    Amount ($           ) /             %
    of the lowest trade occurring during the                         (    )
    consecutive Trading Days immediately preceding the applicable Conversion Date ($_. ) - Conversion Amount ($   )
    divided by the Par Value ($_. ) =
	 	 
	 	                         True-Up
    Shares

 

The
amount of True-Up Balance to be added to the Outstanding Balance is calculated as follows:

 

	 	Number
    of True-Up Shares (   ) * high trade price on the Conversion Date ($_. )=
	 	 
	 	                       True-Up
    Balance

 

Shares
delivered in name of:

 

[___]

 

	Signature:	 
	 	By:
	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00304-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00304-of-00352.parquet"}]]