Document:

Exhibit 10.1

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT,
MARKED BY [***], HAS BEEN OMITTED PURSUANT TO ITEM 601(b)(10)(iv) OF REGULATION S-K PROMULGATED UNDER THE SECURITIES ACT OF 1933
BECAUSE IT IS BOTH (i) NOT MATERIAL AND (ii) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the
“Agreement”) is made and entered into as of July 17, 2020 (the “Effective Date”), by and
between Jonathan Kaufman (the “Executive”) and LIPELLA PHARMACEUTICALS, INC., a Delaware corporation (the “Company”).

 

WHEREAS, the Company desires to
employ the Executive on the terms and conditions set forth herein; and

 

WHEREAS, the Executive desires to
be employed by the Company on such terms and conditions.

 

NOW, THEREFORE, in consideration
of the mutual covenants, promises, and obligations set forth herein, the parties agree as follows:

 

1.         Term.
The Executive’s employment hereunder shall be effective as of the Effective Date and shall continue until the second anniversary
thereof, unless terminated earlier pursuant to Section 5 of this Agreement; provided that, on such first anniversary of the Effective
Date and each annual anniversary thereafter (such date and each annual anniversary thereof, a “Renewal Date”),
the Agreement shall be deemed to be automatically extended, upon the same terms and conditions, for successive periods of one year,
unless either party provides written notice of its intention not to extend the term of the Agreement at least 90 days’ prior
to the applicable Renewal Date. The period during which the Executive is employed by the Company hereunder is hereinafter referred
to as the “Employment Term.”

 

		2.	Position and Duties.

 

2.1       Position.
During the Employment Term, the Executive shall serve as the Chief Execute Officer of the Company, reporting to the board of directors
of the Company (the “Board”). In such position, the Executive shall have such duties, authority, and responsibility
as shall be determined from time to time by the Board, which duties, authority, and responsibility are consistent with the Executive’s
position.

 

2.2       Duties.
During the Employment Term, the Executive shall devote substantially all of his business time and attention to the performance
of the Executive’s duties hereunder and will not engage in any other business, profession, or occupation for compensation
or otherwise which would conflict or interfere with the performance of such services either directly or indirectly without the
prior written consent of the Board. Notwithstanding the foregoing, the Executive will be permitted to (a) with the prior written
consent of the Board (which consent will not be unreasonably withheld or delayed) act or serve as a director, trustee, committee
member, or principal of any type of business, civic, or charitable organization, and (b) purchase or own less than five percent
(5%) of the publicly traded securities of any corporation; provided that, such ownership represents a passive investment and that
the Executive is not a controlling person of, or a member of a group that controls, such corporation.

 

3.    
    Place of Performance. The principal place of Executive’s employment shall be the
Company’s principal executive office currently located in Pittsburgh, Pennsylvania; provided that, the Executive
may be required to travel on Company business during the Employment Term.

 

     

     

    

		4.	Compensation.

 

4.1       Base
Salary. Subject to adjustment based on the Offering as defined below, the Company shall pay the Executive an annual rate of
base salary of $183,300 in periodic installments in accordance with the Company’s customary payroll practices and applicable
wage payment laws, but no less frequently than monthly. The Executive’s annual base salary, as in effect from time to time,
is hereinafter referred to as “Base Salary”.

 

4.2       Annual
Bonus. For each calendar year of the Employment Term, the Executive shall be eligible to receive an annual bonus (the “Annual
Bonus”). However, the decision to provide any Annual Bonus and the amount and terms of any Annual Bonus shall be in the
sole and absolute discretion of the Board.

 

4.3       Equity
Awards. During the Employment Term, the Executive shall be eligible to participate in the 2008 Stock Incentive Plan or any
successor plan, subject to the terms of the 2008 Stock Incentive Plan or successor plan, as determined by the Board, in its discretion.

 

4.4       Fringe
Benefits and Perquisites. During the Employment Term, the Executive shall be entitled to fringe benefits and perquisites consistent
with the practices of the Company, and to the extent the Company provides similar benefits or perquisites (or both) to similarly
situated executives of the Company all as approved by the Board.

 

4.5       Employee
Benefits. During the Employment Term, the Executive shall be entitled to participate in all employee benefit plans, practices,
and programs maintained by the Company, as in effect from time to time (collectively, “Employee Benefit Plans”),
to the extent consistent with applicable law and the terms of the applicable Employee Benefit Plans. The Company reserves the right
to amend or cancel any Employee Benefit Plans at any time in its sole discretion, subject to the terms of such Employee Benefit
Plan and applicable law.

 

4.6       Vacation;
Paid Time-Off. During the Employment Term, the Executive will be entitled to paid vacation on a basis that is at least as favorable
as that provided to other similarly situated executives of the Company. The Executive shall receive other paid time-off in accordance
with the Company’s policies for executive officers as such policies may exist from time to time.

 

4.7       Business
Expenses. The Executive shall be entitled to reimbursement for all reasonable and necessary out-of-pocket business, entertainment,
and travel expenses incurred by the Executive in connection with the performance of the Executive’s duties hereunder in accordance
with the Company’s expense reimbursement policies and procedures.

 

5.       Termination
of Employment. The Employment Term and the Executive’s employment hereunder may be terminated by either the Company or
the Executive at any time and for any reason; provided that, unless otherwise provided herein, either party shall be required
to give the other party at least 90 days advance written notice of any termination of the Executive’s employment. Upon termination
of the Executive’s employment during the Employment Term, the Executive shall be entitled to the compensation and benefits
described in this Section 5 and shall have no further rights to any compensation or any other benefits from the Company or any
of its affiliates.

 

    2 

     

    

		5.1	For Cause or Without Good Reason.

 

(a)           The
Executive’s employment hereunder may be terminated by the Company for Cause or by the Executive without Good Reason. If the
Executive’s employment is terminated, by the Company for Cause or by the Executive without Good Reason, the Executive shall
be entitled to receive:

 

(i)         any
accrued but unpaid Base Salary which shall be paid on the pay date immediately following the Termination Date (as defined below)
in accordance with the Company’s customary payroll procedures;

 

(ii)        reimbursement
for unreimbursed business expenses properly incurred by the Executive, which shall be subject to and paid in accordance with the
Company’s expense reimbursement policy; and

 

(iii)       such
employee benefits (including equity compensation), if any, to which the Executive may be entitled under the Company’s employee
benefit plans as of the Termination Date; provided that, in no event shall the Executive be entitled to any payments in the nature
of severance or termination payments except as specifically provided herein.

 

Items 5.1(a)(i) through 5.1(a)(iv)
are referred to herein collectively as the “Accrued Amounts”.

 

		(b)	For purposes of this Agreement, “Cause” shall mean:

 

(i)         the
Executive’s willful failure to perform his duties (other than any such failure resulting from incapacity due to physical
or mental illness);

 

(ii)        the
Executive’s willful failure to comply with any valid and legal directive of the Board;

 

(iii)       the
Executive’s willful engagement in dishonesty, illegal conduct, or gross misconduct, which is, in each case, materially injurious
to the Company;

 

(iv)       the
Executive’s embezzlement, misappropriation, or fraud, whether or not related to the Executive’s employment with the
Company;

 

(v)        the
Executive’s conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent)
or a crime that constitutes a misdemeanor involving moral turpitude, if such felony or other crime is work-related, materially
impairs the Executive’s ability to perform services for the Company or results in material harm to the Company;

 

    3 

     

    

(vi)       the
Executive’s willful unauthorized disclosure of Confidential Information (as defined below); or

 

(vii)       the
Executive’s material breach of any material obligation under this Agreement or any other written agreement between the Executive
and the Company.

 

For purposes of this provision,
no act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to
be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best
interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board
or upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive
in good faith and in the best interests of the Company.

 

Termination of the Executive’s
employment shall not be deemed to be for Cause unless and until the Company delivers to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than all of the Board excluding the Executive if he is a director on the Board (after
reasonable written notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be
heard before the Board). Any such action by the Company will not constitute Good Reason.

 

(c)           For
purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following, in each case during
the Employment Term without the Executive’s written consent:

 

(i)    
   a material reduction in the Executive’s Base Salary other than a general reduction in Base Salary
that affects all similarly situated executives in substantially the same proportions;

 

(ii)       a
relocation of the Executive’s principal place of employment by more than 150 miles;

 

(iii)       any
material breach by the Company of any material provision of this Agreement or any material provision of any other agreement between
the Executive and the Company;

 

(iv)       the
Company’s failure to obtain an agreement from any successor to the Company to assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to perform if no succession had taken place, except
where such assumption occurs by operation of law;

 

    4 

     

    

(v)       the
Company’s failure to nominate the Executive for election to the Board and to use its best efforts to have him elected and
re-elected, as applicable; or

 

(vi)       a
material, adverse change in the Executive’s title, authority, duties, or responsibilities (other than temporarily while the
Executive is physically or mentally incapacitated or as required by applicable law).

 

The Executive cannot terminate
his employment for Good Reason unless he has provided written notice to the Company of the existence of the circumstances providing
grounds for termination for Good Reason within 15 days of the initial existence of such grounds and the Company has had at least
15 days from the date on which such notice is provided to cure such circumstances.

 

For the avoidance of doubt, non-renewal
of the Agreement in accordance with Section 1 shall be considered termination by the Company without Cause or termination by Executive
without Good Reason.

 

5.2           Without
Cause or for Good Reason. The Employment Term and the Executive’s employment hereunder may be terminated by the Executive
for Good Reason or by the Company without Cause. In the event of such termination, the Executive shall be entitled to receive
the Accrued Amounts and subject to the Executive’s compliance with Section 6, Section 7, Section 8, and Section 9 of this
Agreement and his execution of a release of claims in favor of the Company, its affiliates and their respective officers and directors
in a form provided by the Company (the “Release”) and such Release becoming effective within 30 days following
the Termination Date (such 30-day period, the “Release Execution Period”), the Executive shall be entitled
to receive the following:

 

(a)       continued
Base Salary for six months following the Termination Date payable in equal installments in accordance with the Company’s
normal payroll practices, which shall commence within 30 days following the Termination Date;

 

(b)       If
the Executive timely and properly elects health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act
of 1985 (“COBRA”), the Company shall reimburse the Executive for the monthly COBRA premium paid by the Executive
for himself and his dependents. The Executive shall be eligible to receive such reimbursement until the earliest of: (i) the six-month
anniversary of the Termination Date; (ii) the date the Executive is no longer eligible to receive COBRA continuation coverage;
and (iii) the date on which the Executive receives substantially similar coverage from another employer or other source.

 

(c)       Notwithstanding
the terms of the 2008 and 2020 Stock Incentive Plans or any applicable award agreements all outstanding unvested stock options
granted to the Executive during the Employment Term shall become fully vested and exercisable for the remainder of their full term.

 

    5 

     

    

		5.3	Death or Disability.

 

(a)       The
Executive’s employment hereunder shall terminate automatically upon the Executive’s death during the Employment Term,
and the Company may terminate the Executive’s employment on account of the Executive’s Disability.

 

(b)       If
the Executive’s employment is terminated during the Employment Term on account of the Executive’s death or Disability,
the Executive (or the Executive’s estate and/or beneficiaries, as the case may be) shall be entitled to receive the Accrued
Amounts. Notwithstanding any other provision contained herein, all payments made in connection with the Executive’s Disability
shall be provided in a manner which is consistent with federal and state law.

 

(c)       For
purposes of this Agreement, “Disability” shall mean the Executive’s inability, due to physical or mental
incapacity, to perform the essential functions of his job, for one hundred eighty (180) days out of any three hundred sixty-five
(365) day period or one hundred twenty (120) consecutive days; provided however, in the event that the Company temporarily replaces
the Executive, or transfers the Executive’s duties or responsibilities to another individual on account of the Executive’s
inability to perform such duties due to a mental or physical incapacity which is, or is reasonably expected to become, a Disability,
then the Executive’s employment shall not be deemed terminated by the Company and the Executive shall not be able to resign
with Good Reason as a result thereof. Any question as to the existence of the Executive’s Disability as to which the Executive
and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to the Executive
and the Company. If the Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such
a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability
made in writing to the Company and the Executive shall be final and conclusive for all purposes of this Agreement.

 

		5.4	Change in Control Termination.

 

(a)       Notwithstanding any other provision contained
herein, if the Executive’s employment hereunder is terminated by the Executive for Good Reason or by the Company without
Cause (other than on account of the Executive’s death or Disability), in each case within twelve (12) months following a
Change in Control, the Executive shall be entitled to receive the Accrued Amounts and subject to the Executive’s compliance
with Section 6, Section 7, Section 8 and Section 9 of this Agreement and his execution of a Release which becomes effective within
30 days following the Termination Date, the Executive shall be entitled to receive the following:

 

(i)       a
lump sum payment equal to two (2) times the sum of the Executive’s Base Salary for the year in which the Termination Date
occurs (or if greater, the year immediately preceding the year in which the Change in Control occurs), which shall be paid
within 60 days following the Termination Date; and

 

    6 

     

    

(ii)       If
the Executive timely and properly elects health continuation coverage under COBRA, the Company shall reimburse the Executive for
the monthly COBRA premium paid by the Executive for himself and his dependents. The Executive shall be eligible to receive such
reimbursement until the earliest of: (i) the eighteen-month anniversary of the Termination Date; (ii) the date the Executive is
no longer eligible to receive COBRA continuation coverage; and (iii) the date on which the Executive receives substantially similar
coverage from another employer or other source.

 

(b)       Notwithstanding
the terms of any equity incentive plan or award agreements, as applicable, all outstanding unvested stock options granted to the
Executive during the Employment Term shall become fully vested and exercisable for the remainder of their full term.

 

(c)       For
purposes of this Agreement, “Change in Control” shall mean the occurrence of any of the following after the
Effective Date:

 

(i)       one
person (or more than one person acting as a group) acquires ownership of stock of the Company that, together with the stock held
by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of such corporation;
provided that, a Change in Control shall not occur if any person (or more than one person acting as a group) owns more than 50%
of the total fair market value or total voting power of the Company’s stock and acquires additional stock;

 

(ii)       a
majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is
not endorsed by a majority of the Board before the date of appointment or election; or

 

		(iii)	the sale of all or substantially all of the Company’s assets.

 

5.5           Notice
of Termination. Any termination of the Executive’s employment hereunder by the Company or by the Executive during the
Employment Term (other than termination pursuant to Section 5.3(a) on account of the Executive’s death) shall be communicated
by written notice of termination (“Notice of Termination”) to the other party hereto in accordance with Section
20. The Notice of Termination shall specify:

 

		(a)	The termination provision of this Agreement relied upon;

 

(b)           To
the extent applicable, the facts and circumstances claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated; and

 

		(c)	The applicable Termination Date.

 

    7 

     

    

		5.6	Termination Date. The Executive’s “Termination Date” shall be:

 

(a)       If
the Executive’s employment hereunder terminates on account of the Executive’s death, the date of the Executive’s
death;

 

(b)       If
the Executive’s employment hereunder is terminated on account of the Executive’s Disability, the date that it is determined
that the Executive has a Disability;

 

(c)       If
the Company terminates the Executive’s employment hereunder for Cause, the date the Notice of Termination is delivered to
the Executive;

 

(d)       If
the Company terminates the Executive’s employment hereunder without Cause, the date specified in the Notice of Termination,
which shall be no less than 30 days following the date on which the Notice of Termination is delivered;

 

(e)       If
the Executive terminates his employment hereunder with or without Good Reason, the date specified in the Executive’s Notice
of Termination, which shall be no less than 30 days following the date on which the Notice of Termination is delivered; provided
that, the Company may waive all or any part of the 30 day notice period for no consideration by giving written notice to the Executive
and for all purposes of this Agreement, the Executive’s Termination Date shall be the date determined by the Company; and

 

(f)      
If the Executive’s employment hereunder terminates because either party provides notice of non-renewal pursuant to
Section 1, the Renewal Date immediately following the date on which the applicable party delivers notice of non-renewal.

 

Notwithstanding
anything contained herein, the Termination Date shall not occur until the date on which the Executive incurs a “separation
from service” within the meaning of Section 409A.

 

6.         Cooperation.
The parties agree that certain matters in which the Executive will be involved during the Employment Term may necessitate the Executive’s
cooperation in the future. Accordingly, following the termination of the Executive’s employment for any reason, to the extent
reasonably requested by the Board, the Executive shall cooperate with the Company in connection with matters arising out of the
Executive’s service to the Company; provided that, the Company shall make reasonable efforts to minimize disruption of the
Executive’s other activities. The Company shall reimburse the Executive for reasonable expenses incurred in connection with
such cooperation and, to the extent that the Executive is required to spend substantial time on such matters, the Company shall
compensate the Executive at an hourly rate based on the Executive’s Base Salary on the Termination Date.

 

7.         Confidential
Information. The Executive understands and acknowledges that during the Employment Term, he will have access to and learn about
Confidential Information, as defined below.

 

    8 

     

    

		7.1	Confidential Information Defined.

 

		(a)	Definition.

 

For purposes of this Agreement,
“Confidential Information” includes, but is not limited to, all information not generally known to the public,
in spoken, printed, electronic or any other form or medium, relating directly or indirectly to: business processes, practices,
methods, policies, plans, publications, documents, research, operations, services, strategies, techniques, agreements, contracts,
terms of agreements, transactions, potential transactions, know-how, trade secrets, work-in-process, databases, manuals, records,
articles, systems, material, sources of material, supplier information, vendor information, financial information, results, accounting
information, accounting records, legal information, marketing information, advertising information, pricing information, credit
information, design information, payroll information, staffing information, personnel information, employee lists, supplier lists,
vendor lists, developments, reports, internal controls, market studies, sales information, revenue, costs, formulae, notes, communications,
algorithms, product plans, designs, styles, models, ideas, audiovisual programs, inventions, unpublished patent applications, original
works of authorship, discoveries, experimental processes, experimental results, specifications, customer information, customer
lists, client information, client lists, manufacturing information, factory lists, distributor lists, and buyer lists of the Company
or its businesses or any existing or prospective customer, supplier, investor or other associated third party, or of any other
person or entity that has entrusted information to the Company in confidence.

 

The Executive understands that
the above list is not exhaustive, and that Confidential Information also includes other information that is marked or otherwise
identified as confidential or proprietary, or that would otherwise appear to a reasonable person to be confidential or proprietary
in the context and circumstances in which the information is known or used.

 

The Executive understands and
agrees that Confidential Information includes information developed by him in the course of his employment by the Company as if
the Company furnished the same Confidential Information to the Executive in the first instance. Confidential Information shall
not include information that is generally available to and known by the public at the time of disclosure to the Executive; provided
that, such disclosure is through no direct or indirect fault of the Executive or person(s) acting on the Executive’s behalf.

 

    9 

     

    

		(b)	Disclosure and Use Restrictions.

 

The Executive agrees and covenants:
(i) to treat all Confidential Information as strictly confidential; (ii) not to directly or indirectly disclose, publish, communicate,
or make available Confidential Information, or allow it to be disclosed, published, communicated, or made available, in whole or
part, to any entity or person whatsoever (including other employees of the Company) not having a need to know and authority to
know and use the Confidential Information in connection with the business of the Company and, in any event, not to anyone outside
of the direct employ of the Company except as required in the performance of the Executive’s authorized employment duties
to the Company or with the prior consent of the Board in each instance (and then, such disclosure shall be made only within the
limits and to the extent of such duties or consent); and (iii) not to access or use any Confidential Information, and not to copy
any documents, records, files, media, or other resources containing any Confidential Information, or remove any such documents,
records, files, media, or other resources from the premises or control of the Company, except as required in the performance of
the Executive’s authorized employment duties to the Company or with the prior consent of the Board (and then, such disclosure
shall be made only within the limits and to the extent of such duties or consent). Nothing herein shall be construed to prevent
disclosure of Confidential Information as may be required by applicable law or regulation, or pursuant to the valid order of a
court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of
disclosure required by such law, regulation, or order. The Executive shall promptly provide written notice of any such order to
the Board.

 

		8.	Restrictive Covenants.

 

8.1           Acknowledgement.
The Executive understands that the nature of the Executive’s position gives him access to and knowledge of Confidential Information
and places him in a position of trust and confidence with the Company. The Executive understands and acknowledges that the intellectual
services he provides to the Company are unique, special, or extraordinary.

 

The Executive further understands
and acknowledges that the Company’s ability to reserve these for the exclusive knowledge and use of the Company is of great
competitive importance and commercial value to the Company, and that improper use or disclosure by the Executive is likely to result
in unfair or unlawful competitive activity.

 

8.2           Non-Competition.
Because of the Company’s legitimate business interest as described herein and the good and valuable consideration offered
to the Executive, during the Employment Term and for the two years, to run consecutively, beginning on the last day of the Executive’s
employment with the Company, for any reason or no reason and whether employment is terminated at the option of the Executive or
the Company, the Executive agrees and covenants not to engage in Prohibited Activity within the United States of America.

 

For purposes of this Section
8, “Prohibited Activity” is activity in which the Executive contributes his knowledge, directly or indirectly,
in whole or in part, as an employee, employer, owner, operator, manager, advisor, consultant, agent, employee, partner, director,
stockholder, officer, volunteer, intern, or any other similar capacity to an entity engaged in the same or similar business as
the Company, including those engaged in the business of intravesical liposomal drug delivery platforms. Prohibited Activity also
includes activity that may require or inevitably requires disclosure of trade secrets, proprietary information or Confidential
Information.

 

    10 

     

    

Nothing herein shall prohibit
the Executive from purchasing or owning less than five percent (5%) of the publicly traded securities of any corporation, provided
that such ownership represents a passive investment and that the Executive is not a controlling person of, or a member of a group
that controls, such corporation.

 

This Section 8 does not, in any
way, restrict or impede the Executive from exercising protected rights to the extent that such rights cannot be waived by agreement
or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized
government agency, provided that such compliance does not exceed that required by the law, regulation, or order. The Executive
shall promptly provide written notice of any such order to the Board.

 

8.3       Non-Solicitation
of Employees. The Executive agrees and covenants not to directly or indirectly solicit, hire, recruit, attempt to hire or recruit,
or induce the termination of employment of any employee of the Company during two years, to run consecutively, beginning on the
last day of the Executive’s employment with the Company.

 

9.         Non-Disparagement.
The Executive agrees and covenants that he will not at any time make, publish or communicate to any person or entity or in any
public forum any defamatory or disparaging remarks, comments, or statements concerning the Company or its businesses, or any of
its employees, officers.

 

This Section 9 does not, in any
way, restrict or impede the Executive from exercising protected rights to the extent that such rights cannot be waived by agreement
or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized
government agency, provided that such compliance does not exceed that required by the law, regulation, or order.

 

The Company agrees and covenants
that it shall cause its officers and directors to refrain from making any defamatory or disparaging remarks, comments, or statements
concerning the Executive to any third parties.

 

10.       Acknowledgement.
The Executive acknowledges and agrees that the services to be rendered by him to the Company are of a special and unique character;
that the Executive will obtain knowledge and skill relevant to the Company’s industry, methods of doing business and marketing
strategies by virtue of the Executive’s employment; and that the restrictive covenants and other terms and conditions of
this Agreement are reasonable and reasonably necessary to protect the legitimate business interest of the Company.

 

The Executive further acknowledges
that the amount of his compensation reflects, in part, his obligations and the Company’s rights under Section 7, Section
8, and Section 9 of this Agreement; that he has no expectation of any additional compensation, royalties or other payment of any
kind not otherwise referenced herein in connection herewith; and that he will not be subject to undue hardship by reason of his
full compliance with the terms and conditions of Section 7, Section 8, and Section 9 of this Agreement or the Company’s enforcement
thereof.

 

11.       Remedies.
In the event of a breach or threatened breach by the Executive of Section 7, Section 8, or Section 9 of this Agreement, the Executive
hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary
or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction,
without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the
necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal
remedies, monetary damages, or other available forms of relief.

 

    11 

     

    

		12.	Proprietary Rights.

 

12.1       Work
Product. The Executive acknowledges and agrees that all right, title, and interest in and to all writings, works of authorship,
technology, inventions, discoveries, processes, techniques, methods, ideas, concepts, research, proposals, materials, and all other
work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived, or reduced to
practice by the Executive individually or jointly with others during the period of his employment by the Company and relate in
any way to the business or contemplated business, products, activities, research, or development of the Company or result from
any work performed by the Executive for the Company (in each case, regardless of when or where prepared or whose equipment or other
resources is used in preparing the same), all rights and claims related to the foregoing, and all printed, physical and electronic
copies, and other tangible embodiments thereof (collectively, “Work Product”), as well as any and all rights
in and to US and foreign (a) patents, patent disclosures and inventions (whether patentable or not), (b) trademarks, service marks,
trade dress, trade names, logos, corporate names, and domain names, and other similar designations of source or origin, together
with the goodwill symbolized by any of the foregoing, (c) copyrights and copyrightable works (including computer programs), and
rights in data and databases, (d) trade secrets, know-how, and other confidential information, and (e) all other intellectual property
rights, in each case whether registered or unregistered and including all registrations and applications for, and renewals and
extensions of, such rights, all improvements thereto and all similar or equivalent rights or forms of protection in any part of
the world (collectively, “Intellectual Property Rights”), shall be the sole and exclusive property of the Company.

 

12.2       Work
Made for Hire; Assignment. The Executive acknowledges that, by reason of being employed by the Company at the relevant times,
to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is “work made for hire”
as defined in 17 U.S.C. § 101 and such copyrights are therefore owned by the Company. To the extent that the foregoing does
not apply, the Executive hereby irrevocably assigns to the Company, for no additional consideration, the Executive’s entire
right, title, and interest in and to all Work Product and Intellectual Property Rights therein, including the right to sue, counterclaim,
and recover for all past, present, and future infringement, misappropriation, or dilution thereof, and all rights corresponding
thereto throughout the world. Nothing contained in this Agreement shall be construed to reduce or limit the Company’s rights,
title, or interest in any Work Product or Intellectual Property Rights so as to be less in any respect than that the Company would
have had in the absence of this Agreement.

 

    12 

     

    

12.3       Further
Assurances; Power of Attorney. During and after his employment, the Executive agrees to reasonably cooperate with the Company
to (a) apply for, obtain, perfect, and transfer to the Company the Work Product as well as any and all Intellectual Property Rights
in the Work Product in any jurisdiction in the world; and (b) maintain, protect and enforce the same, including, without limitation,
giving testimony and executing and delivering to the Company any and all applications, oaths, declarations, affidavits, waivers,
assignments, and other documents and instruments as shall be requested by the Company. The Executive hereby irrevocably grants
the Company power of attorney to execute and deliver any such documents on the Executive’s behalf in his name and to do all
other lawfully permitted acts to transfer the Work Product to the Company and further the transfer, prosecution, issuance, and
maintenance of all Intellectual Property Rights therein, to the full extent permitted by law, if the Executive does not promptly
cooperate with the Company’s request (without limiting the rights the Company shall have in such circumstances by operation
of law). The power of attorney is coupled with an interest and shall not be affected by the Executive’s subsequent incapacity.

 

12.4       No
License. The Executive understands that this Agreement does not, and shall not be construed to, grant the Executive any license
or right of any nature with respect to any Work Product or Intellectual Property Rights or any Confidential Information, materials,
software, or other tools made available to him by the Company.

 

13.       Governing
Law: Jurisdiction and Venue. This Agreement, for all purposes, shall be construed in accordance with the laws of the Commonwealth
of Pennsylvania without regard to conflicts of law principles. Any action or proceeding by either of the parties to enforce this
Agreement shall be brought only in a state or federal court located in the Commonwealth of Pennsylvania, county of Allegheny. The
parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the
maintenance of any such action or proceeding in such venue.

 

14.       Entire
Agreement. Unless specifically provided herein, this Agreement contains all of the understandings and representations between
the Executive and the Company pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings,
agreements, representations and warranties, both written and oral, with respect to such subject matter. The parties mutually agree
that the Agreement can be specifically enforced in court and can be cited as evidence in legal proceedings alleging breach of the
Agreement.

 

15.       Modification
and Waiver. No provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in
writing and signed by the Executive and approved by the Board of the Company. No waiver by either of the parties of any breach
by the other party hereto of any condition or provision of this Agreement to be performed by the other party hereto shall be deemed
a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time, nor shall the failure
of or delay by either of the parties in exercising any right, power, or privilege hereunder operate as a waiver thereof to preclude
any other or further exercise thereof or the exercise of any other such right, power, or privilege.

 

    13 

     

    

16.       Severability.
Should any provision of this Agreement be held by a court of competent jurisdiction to be enforceable only if modified, or if any
portion of this Agreement shall be held as unenforceable and thus stricken, such holding shall not affect the validity of the remainder
of this Agreement, the balance of which shall continue to be binding upon the parties with any such modification to become a part
hereof and treated as though originally set forth in this Agreement.

 

The parties further agree that any
such court is expressly authorized to modify any such unenforceable provision of this Agreement in lieu of severing such unenforceable
provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending
provision, adding additional language to this Agreement, or by making such other modifications as it deems warranted to carry out
the intent and agreement of the parties as embodied herein to the maximum extent permitted by law.

 

The parties expressly agree that
this Agreement as so modified by the court shall be binding upon and enforceable against each of them. In any event, should one
or more of the provisions of this Agreement be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not affect any other provisions hereof, and if such provision or provisions are not modified as provided
above, this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions had not been set forth herein.

 

17.       Captions.
Captions and headings of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of
this Agreement is to be construed by reference to the caption or heading of any section or paragraph.

 

18.       Counterparts.
This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which taken together
shall constitute one and the same instrument.

 

19.       Successors
and Assigns. This Agreement is personal to the Executive and shall not be assigned by the Executive. Any purported assignment
by the Executive shall be null and void from the initial date of the purported assignment. The Company may assign this Agreement
to any successor or assign (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially
all of the business or assets of the Company. This Agreement shall inure to the benefit of the Company and permitted successors
and assigns.

 

20.       Notice.
Notices and all other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent
by registered or certified mail, return receipt requested, or by overnight carrier to the parties at the addresses set forth below
(or such other addresses as specified by the parties by like notice):

 

If to the Company:

Lipella Pharmaceuticals Inc.

400 N. Lexington Ave, Suite LL103

Pittsburgh, PA 15208

 

    14 

     

    

If to the Executive:

Jonathan Kaufman

[***] 

[***]

 

21.       Withholding.
The Company shall have the right to withhold from any amount payable hereunder any Federal, state, and local taxes in order for
the Company to satisfy any withholding tax obligation it may have under any applicable law or regulation.

 

22.       Survival.
Upon the expiration or other termination of this Agreement, the respective rights and obligations of the parties hereto shall survive
such expiration or other termination to the extent necessary to carry out the intentions of the parties under this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

    15 

     

    

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

 

	 	LIPELLA PHARMACEUTICALS, INC.
	 	 	 
	 	By	/s/ Jonathan Kaufman
	 	Name:	Jonathan Kaufman
	 	Title:	Chief Executive Officer

 

	EXECUTIVE	 
	 	 	 
	Signature:	/s/Jonathan Kaufman	 
	Print Name:	Jonathan Kaufman	 

 

    16Exhibit 10.2

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT,
MARKED BY [***], HAS BEEN OMITTED PURSUANT TO ITEM 601(b)(10)(iv) OF REGULATION S-K PROMULGATED UNDER THE SECURITIES ACT OF 1933
BECAUSE IT IS BOTH (i) NOT MATERIAL AND (ii) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL

 

EMPLOYMENT
AGREEMENT

 

This Employment Agreement (the “Agreement”)
is made and entered into as of July 17, 2020 (the “Effective Date”), by and between Michael Chancellor (the
“Executive”) and LIPELLA PHARMACEUTICALS, INC., a Delaware corporation (the “Company”).

 

WHEREAS, the Company desires to
employ the Executive on the terms and conditions set forth herein; and

 

WHEREAS, the Executive desires to
be employed by the Company on such terms and conditions.

 

NOW, THEREFORE, in consideration
of the mutual covenants, promises, and obligations set forth herein, the parties agree as follows:

 

1.          Term.
The Executive’s employment hereunder shall be effective as of the Effective Date and shall continue until the second anniversary
thereof, unless terminated earlier pursuant to Section 5 of this Agreement; provided that, on such first anniversary of the Effective
Date and each annual anniversary thereafter (such date and each annual anniversary thereof, a “Renewal Date”),
the Agreement shall be deemed to be automatically extended, upon the same terms and conditions, for successive periods of one year,
unless either party provides written notice of its intention not to extend the term of the Agreement at least 90 days’ prior
to the applicable Renewal Date. The period during which the Executive is employed by the Company hereunder is hereinafter referred
to as the “Employment Term.”

 

		2.	Position and Duties.

 

2.1       Position.
During the Employment Term, the Executive shall serve as the Chief Medical Officer of the Company, reporting to the Chief Executive
Officer and the board of directors of the Company (the “Board”). In such position, the Executive shall have
such duties, authority, and responsibility as shall be determined from time to time by the Board, which duties, authority, and
responsibility are consistent with the Executive’s position.

 

2.2       Duties.
During the Employment Term, the Executive shall devote substantial time and attention to the performance of the Executive’s
duties hereunder and will not engage in any other business, profession, or occupation for compensation or otherwise which would
conflict or interfere with the performance of such services either directly or indirectly without the prior written consent of
the Board. Notwithstanding the foregoing, the Executive will be permitted to (a) with the prior written consent of the Board (which
consent will not be unreasonably withheld or delayed) act or serve as a director, trustee, committee member, or principal of any
type of business, civic, or charitable organization, (b) purchase or own less than five percent (5%) of the publicly traded securities
of any corporation; provided that, such ownership represents a passive investment and that the Executive is not a controlling person
of, or a member of a group that controls, such corporation, and (c) hold an academic appointment (and associated part-time employment)
with a medical school and/or associated medical center.

 

     

     

    

3.       Place
of Performance. The principal place of Executive’s employment shall be the Company’s principal executive office
currently located in Pittsburgh, Pennsylvania; provided that, the Executive may be required to travel on Company business during
the Employment Term.

 

		4.	Compensation.

 

4.1       Base
Salary. Subject to adjustment based on the Offering as defined below, the Company shall pay the Executive an annual rate of
base salary of $45,650 in periodic installments in accordance with the Company’s customary payroll practices and applicable
wage payment laws, but no less frequently than monthly. The Company is scheduled to begin a private placement offering on August
18, 2020 (the “Offering”), which has a maximum possible capital raise of $3,000,000. Notwithstanding the foregoing,
if the Company acheives adequate financial liquidity and net working capital via the Offering, as determined by the Company’s
Chief Executive Officer, the Executive’s annual base salary shall increase to $175,000. The Executive’s annual base
salary, as in effect from time to time, is hereinafter referred to as “Base Salary”.

 

4.2       Annual
Bonus. For each calendar year of the Employment Term, the Executive shall be eligible to receive an annual bonus (the “Annual
Bonus”). However, the decision to provide any Annual Bonus and the amount and terms of any Annual Bonus shall be in the
sole and absolute discretion of the Board.

 

4.3       Equity
Awards. During the Employment Term, the Executive shall be eligible to participate in the 2008 and 2020 Stock Incentive Plans
or any successor plan, subject to the terms of the 2008 and 2020 Stock Incentive Plans or successor plan, as determined by the
Board, in its discretion.

 

4.4       Fringe
Benefits and Perquisites. During the Employment Term, the Executive shall be entitled to fringe benefits and perquisites consistent
with the practices of the Company, and to the extent the Company provides similar benefits or perquisites (or both) to similarly
situated executives of the Company all as approved by the Board.

 

4.5       Employee
Benefits. During the Employment Term, the Executive shall be entitled to participate in all employee benefit plans, practices,
and programs maintained by the Company, as in effect from time to time (collectively, “Employee Benefit Plans”),
to the extent consistent with applicable law and the terms of the applicable Employee Benefit Plans. The Company reserves the right
to amend or cancel any Employee Benefit Plans at any time in its sole discretion, subject to the terms of such Employee Benefit
Plan and applicable law.

 

4.6       Vacation;
Paid Time-Off. During the Employment Term, the Executive will be entitled to paid vacation on a basis that is at least as favorable
as that provided to other similarly situated executives of the Company. The Executive shall receive other paid time-off in accordance
with the Company’s policies for executive officers as such policies may exist from time to time.

 

    2 

     

    

4.7       Business
Expenses. The Executive shall be entitled to reimbursement for all reasonable and necessary out-of-pocket business, entertainment,
and travel expenses incurred by the Executive in connection with the performance of the Executive’s duties hereunder in accordance
with the Company’s expense reimbursement policies and procedures.

 

5.          Termination
of Employment. The Employment Term and the Executive’s employment hereunder may be terminated by either the Company or
the Executive at any time and for any reason; provided that, unless otherwise provided herein, either party shall be required to
give the other party at least 90 days advance written notice of any termination of the Executive’s employment. Upon termination
of the Executive’s employment during the Employment Term, the Executive shall be entitled to the compensation and benefits
described in this Section 5 and shall have no further rights to any compensation or any other benefits from the Company or any
of its affiliates.

 

		5.1	For Cause or Without Good Reason.

 

(a)           The
Executive’s employment hereunder may be terminated by the Company for Cause or by the Executive without Good Reason. If the
Executive’s employment is terminated, by the Company for Cause or by the Executive without Good Reason, the Executive shall
be entitled to receive:

 

(i)       any
accrued but unpaid Base Salary which shall be paid on the pay date immediately following the Termination Date (as defined below)
in accordance with the Company’s customary payroll procedures;

 

(ii)       reimbursement
for unreimbursed business expenses properly incurred by the Executive, which shall be subject to and paid in accordance with the
Company’s expense reimbursement policy; and

 

(iii)       such
employee benefits (including equity compensation), if any, to which the Executive may be entitled under the Company’s employee
benefit plans as of the Termination Date; provided that, in no event shall the Executive be entitled to any payments in the nature
of severance or termination payments except as specifically provided herein.

 

Items 5.1(a)(i) through 5.1(a)(iv)
are referred to herein collectively as the “Accrued Amounts”.

 

		(b)	For purposes of this Agreement, “Cause” shall mean:

 

(i)       the
Executive’s willful failure to perform his duties (other than any such failure resulting from incapacity due to physical
or mental illness);

 

(ii)       the
Executive’s willful failure to comply with any valid and legal directive of the Board;

 

    3 

     

    

(iii)       the
Executive’s willful engagement in dishonesty, illegal conduct, or gross misconduct, which is, in each case, materially injurious
to the Company;

 

(iv)       the
Executive’s embezzlement, misappropriation, or fraud, whether or not related to the Executive’s employment with the
Company;

 

(v)       the
Executive’s conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent)
or a crime that constitutes a misdemeanor involving moral turpitude, if such felony or other crime is work-related, materially
impairs the Executive’s ability to perform services for the Company or results in material harm to the Company;

 

(vi)       the
Executive’s willful unauthorized disclosure of Confidential Information (as defined below); or

 

(vii)       the
Executive’s material breach of any material obligation under this Agreement or any other written agreement between the Executive
and the Company.

 

For purposes of this provision,
no act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to
be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best
interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board
or upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive
in good faith and in the best interests of the Company.

 

Termination of the Executive’s
employment shall not be deemed to be for Cause unless and until the Company delivers to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than all of the Board excluding the Executive if he is a director on the Board (after
reasonable written notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be
heard before the Board). Any such action by the Company will not constitute Good Reason.

 

(c)           For
purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following, in each case during
the Employment Term without the Executive’s written consent:

 

(i)       a
material reduction in the Executive’s Base Salary other than a general reduction in Base Salary that affects all similarly
situated executives in substantially the same proportions;

 

(ii)       a
relocation of the Executive’s principal place of employment by more than 150 miles;

 

    4 

     

    

(iii)       any
material breach by the Company of any material provision of this Agreement or any material provision of any other agreement between
the Executive and the Company;

 

(iv)       the
Company’s failure to obtain an agreement from any successor to the Company to assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to perform if no succession had taken place, except
where such assumption occurs by operation of law;

 

(v)       the
Company’s failure to nominate the Executive for election to the Board and to use its best efforts to have him elected and
re-elected, as applicable; or

 

(vi)       a
material, adverse change in the Executive’s title, authority, duties, or responsibilities (other than temporarily while the
Executive is physically or mentally incapacitated or as required by applicable law).

 

The Executive cannot terminate
his employment for Good Reason unless he has provided written notice to the Company of the existence of the circumstances providing
grounds for termination for Good Reason within 15 days of the initial existence of such grounds and the Company has had at least
15 days from the date on which such notice is provided to cure such circumstances.

 

For the avoidance of doubt, non-renewal
of the Agreement in accordance with Section 1 shall be considered termination by the Company without Cause or termination by Executive
without Good Reason.

 

5.2           Without
Cause or for Good Reason. The Employment Term and the Executive’s employment hereunder may be terminated by the Executive
for Good Reason or by the Company without Cause. In the event of such termination, the Executive shall be entitled to receive the
Accrued Amounts and subject to the Executive’s compliance with Section 6, Section 7, Section 8, and Section 9 of this Agreement
and his execution of a release of claims in favor of the Company, its affiliates and their respective officers and directors in
a form provided by the Company (the “Release”) and such Release becoming effective within 30 days following
the Termination Date (such 30-day period, the “Release Execution Period”), the Executive shall be entitled to
receive the following:

 

(a)       continued
Base Salary for six months following the Termination Date payable in equal installments in accordance with the Company’s
normal payroll practices, which shall commence within 30 days following the Termination Date;

 

(b)       If
the Executive timely and properly elects health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act
of 1985 (“COBRA”), the Company shall reimburse the Executive for the monthly COBRA premium paid by the Executive
for himself and his dependents. The Executive shall be eligible to receive such reimbursement until the earliest of: (i) the six-month
anniversary of the Termination Date; (ii) the date the Executive is no longer eligible to receive COBRA continuation coverage;
and (iii) the date on which the Executive receives substantially similar coverage from another employer or other source.

 

    5 

     

    

(c)       Notwithstanding
the terms of the 2008 and 2020 Stock Incentive Plans or any applicable award agreements all outstanding unvested stock options
granted to the Executive during the Employment Term shall become fully vested and exercisable for the remainder of their full term.

 

		5.3	Death or Disability.

 

(a)       The
Executive’s employment hereunder shall terminate automatically upon the Executive’s death during the Employment Term,
and the Company may terminate the Executive’s employment on account of the Executive’s Disability.

 

(b)       If
the Executive’s employment is terminated during the Employment Term on account of the Executive’s death or Disability,
the Executive (or the Executive’s estate and/or beneficiaries, as the case may be) shall be entitled to receive the Accrued
Amounts. Notwithstanding any other provision contained herein, all payments made in connection with the Executive’s Disability
shall be provided in a manner which is consistent with federal and state law.

 

(c)       For
purposes of this Agreement, “Disability” shall mean the Executive’s inability, due to physical or mental
incapacity, to perform the essential functions of his job, for one hundred eighty (180) days out of any three hundred sixty-five
(365) day period or one hundred twenty (120) consecutive days; provided however, in the event that the Company temporarily replaces
the Executive, or transfers the Executive’s duties or responsibilities to another individual on account of the Executive’s
inability to perform such duties due to a mental or physical incapacity which is, or is reasonably expected to become, a Disability,
then the Executive’s employment shall not be deemed terminated by the Company and the Executive shall not be able to resign
with Good Reason as a result thereof. Any question as to the existence of the Executive’s Disability as to which the Executive
and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to the Executive
and the Company. If the Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such
a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability
made in writing to the Company and the Executive shall be final and conclusive for all purposes of this Agreement.

 

    6 

     

    

		5.4	Change in Control Termination.

 

(a)           Notwithstanding
any other provision contained herein, if the Executive’s employment hereunder is terminated by the Executive for Good Reason
or by the Company without Cause (other than on account of the Executive’s death or Disability), in each case within twelve
(12) months following a Change in Control, the Executive shall be entitled to receive the Accrued Amounts and subject to the Executive’s
compliance with Section 6, Section 7, Section 8 and Section 9 of this Agreement and his execution of a Release which becomes effective
within 30 days following the Termination Date, the Executive shall be entitled to receive the following:

 

(i)       a
lump sum payment equal to two (2) times the sum of the Executive’s Base Salary for the year in which the Termination Date
occurs (or if greater, the year immediately preceding the year in which the Change in Control occurs), which shall be paid within
60 days following the Termination Date; and

 

(ii)       If
the Executive timely and properly elects health continuation coverage under COBRA, the Company shall reimburse the Executive for
the monthly COBRA premium paid by the Executive for himself and his dependents. The Executive shall be eligible to receive such
reimbursement until the earliest of: (i) the eighteen-month anniversary of the Termination Date; (ii) the date the Executive is
no longer eligible to receive COBRA continuation coverage; and (iii) the date on which the Executive receives substantially similar
coverage from another employer or other source.

 

(b)           Notwithstanding
the terms of any equity incentive plan or award agreements, as applicable, all outstanding unvested stock options granted to the
Executive during the Employment Term shall become fully vested and exercisable for the remainder of their full term.

 

(c)           For
purposes of this Agreement, “Change in Control” shall mean the occurrence of any of the following after the
Effective Date:

 

(i)       one
person (or more than one person acting as a group) acquires ownership of stock of the Company that, together with the stock held
by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of such corporation;
provided that, a Change in Control shall not occur if any person (or more than one person acting as a group) owns more than 50%
of the total fair market value or total voting power of the Company’s stock and acquires additional stock;

 

(ii)       a
majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is
not endorsed by a majority of the Board before the date of appointment or election; or

 

		(iii)	the sale of all or substantially all of the Company’s assets.

 

5.5       Notice
of Termination. Any termination of the Executive’s employment hereunder by the Company or by the Executive during the
Employment Term (other than termination pursuant to Section 5.3(a) on account of the Executive’s death) shall be communicated
by written notice of termination (“Notice of Termination”) to the other party hereto in accordance with Section
20. The Notice of Termination shall specify:

 

    7 

     

    

 (a)       The termination provision of this Agreement relied upon;

 

(b)       To
the extent applicable, the facts and circumstances claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated; and

 

 (c)       The applicable Termination Date.

 

		5.6	Termination Date. The Executive’s “Termination Date” shall be:

 

(a)       If
the Executive’s employment hereunder terminates on account of the Executive’s death, the date of the Executive’s
death;

 

(b)       If
the Executive’s employment hereunder is terminated on account of the Executive’s Disability, the date that it is determined
that the Executive has a Disability;

 

(c)       If
the Company terminates the Executive’s employment hereunder for Cause, the date the Notice of Termination is delivered to
the Executive;

 

(d)       If
the Company terminates the Executive’s employment hereunder without Cause, the date specified in the Notice of Termination,
which shall be no less than 30 days following the date on which the Notice of Termination is delivered;

 

(e)       If
the Executive terminates his employment hereunder with or without Good Reason, the date specified in the Executive’s Notice
of Termination, which shall be no less than 30 days following the date on which the Notice of Termination is delivered; provided
that, the Company may waive all or any part of the 30 day notice period for no consideration by giving written notice to the Executive
and for all purposes of this Agreement, the Executive’s Termination Date shall be the date determined by the Company; and

 

(f)        If
the Executive’s employment hereunder terminates because either party provides notice of non-renewal pursuant to Section 1,
the Renewal Date immediately following the date on which the applicable party delivers notice of non-renewal.

 

Notwithstanding
anything contained herein, the Termination Date shall not occur until the date on which the Executive incurs a “separation
from service” within the meaning of Section 409A.

 

6.          Cooperation.
The parties agree that certain matters in which the Executive will be involved during the Employment Term may necessitate the Executive’s
cooperation in the future. Accordingly, following the termination of the Executive’s employment for any reason, to the extent
reasonably requested by the Board, the Executive shall cooperate with the Company in connection with matters arising out of the
Executive’s service to the Company; provided that, the Company shall make reasonable efforts to minimize disruption of the
Executive’s other activities. The Company shall reimburse the Executive for reasonable expenses incurred in connection
with such cooperation and, to the extent that the Executive is required to spend substantial time on such matters, the Company
shall compensate the Executive at an hourly rate based on the Executive’s Base Salary on the Termination Date.

 

    8 

     

    

7.          Confidential
Information. The Executive understands and acknowledges that during the Employment Term, he will have access to and learn about
Confidential Information, as defined below.

 

		7.1	Confidential Information Defined.

 

		(a)	Definition.

 

For purposes of this Agreement,
“Confidential Information” includes, but is not limited to, all information not generally known to the public,
in spoken, printed, electronic or any other form or medium, relating directly or indirectly to: business processes, practices,
methods, policies, plans, publications, documents, research, operations, services, strategies, techniques, agreements, contracts,
terms of agreements, transactions, potential transactions, know-how, trade secrets, work-in-process, databases, manuals, records,
articles, systems, material, sources of material, supplier information, vendor information, financial information, results, accounting
information, accounting records, legal information, marketing information, advertising information, pricing information, credit
information, design information, payroll information, staffing information, personnel information, employee lists, supplier lists,
vendor lists, developments, reports, internal controls, market studies, sales information, revenue, costs, formulae, notes, communications,
algorithms, product plans, designs, styles, models, ideas, audiovisual programs, inventions, unpublished patent applications, original
works of authorship, discoveries, experimental processes, experimental results, specifications, customer information, customer
lists, client information, client lists, manufacturing information, factory lists, distributor lists, and buyer lists of the Company
or its businesses or any existing or prospective customer, supplier, investor or other associated third party, or of any other
person or entity that has entrusted information to the Company in confidence.

 

The Executive understands that
the above list is not exhaustive, and that Confidential Information also includes other information that is marked or otherwise
identified as confidential or proprietary, or that would otherwise appear to a reasonable person to be confidential or proprietary
in the context and circumstances in which the information is known or used.

 

The Executive understands and
agrees that Confidential Information includes information developed by him in the course of his employment by the Company as if
the Company furnished the same Confidential Information to the Executive in the first instance. Confidential Information shall
not include information that is generally available to and known by the public at the time of disclosure to the Executive; provided
that, such disclosure is through no direct or indirect fault of the Executive or person(s) acting on the Executive’s behalf.

 

    9 

     

    

		(b)	Disclosure and Use Restrictions.

 

The Executive agrees and covenants:
(i) to treat all Confidential Information as strictly confidential; (ii) not to directly or indirectly disclose, publish, communicate,
or make available Confidential Information, or allow it to be disclosed, published, communicated, or made available, in whole or
part, to any entity or person whatsoever (including other employees of the Company) not having a need to know and authority to
know and use the Confidential Information in connection with the business of the Company and, in any event, not to anyone outside
of the direct employ of the Company except as required in the performance of the Executive’s authorized employment duties
to the Company or with the prior consent of the Board in each instance (and then, such disclosure shall be made only within the
limits and to the extent of such duties or consent); and (iii) not to access or use any Confidential Information, and not to copy
any documents, records, files, media, or other resources containing any Confidential Information, or remove any such documents,
records, files, media, or other resources from the premises or control of the Company, except as required in the performance of
the Executive’s authorized employment duties to the Company or with the prior consent of the Board (and then, such disclosure
shall be made only within the limits and to the extent of such duties or consent). Nothing herein shall be construed to prevent
disclosure of Confidential Information as may be required by applicable law or regulation, or pursuant to the valid order of a
court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of
disclosure required by such law, regulation, or order. The Executive shall promptly provide written notice of any such order to
the Board.

 

		8.	Restrictive Covenants.

 

8.1       Acknowledgement.
The Executive understands that the nature of the Executive’s position gives him access to and knowledge of Confidential Information
and places him in a position of trust and confidence with the Company. The Executive understands and acknowledges that the intellectual
services he provides to the Company are unique, special, or extraordinary.

 

The Executive further understands
and acknowledges that the Company’s ability to reserve these for the exclusive knowledge and use of the Company is of great
competitive importance and commercial value to the Company, and that improper use or disclosure by the Executive is likely to result
in unfair or unlawful competitive activity.

 

8.2       Non-Competition.
Because of the Company’s legitimate business interest as described herein and the good and valuable consideration offered
to the Executive, during the Employment Term and for the two years, to run consecutively, beginning on the last day of the Executive’s
employment with the Company, for any reason or no reason and whether employment is terminated at the option of the Executive or
the Company, the Executive agrees and covenants not to engage in Prohibited Activity within the United States of America.

 

    10 

     

    

For purposes of this Section
8, “Prohibited Activity” is activity in which the Executive contributes his knowledge, directly or indirectly,
in whole or in part, as an employee, employer, owner, operator, manager, advisor, consultant, agent, employee, partner, director,
stockholder, officer, volunteer, intern, or any other similar capacity to an entity engaged in the same or similar business as
the Company, including those engaged in the business of intravesical liposomal drug delivery platforms. Prohibited Activity also
includes activity that may require or inevitably requires disclosure of trade secrets, proprietary information or Confidential
Information.

 

Nothing herein shall prohibit
the Executive from purchasing or owning less than five percent (5%) of the publicly traded securities of any corporation, provided
that such ownership represents a passive investment and that the Executive is not a controlling person of, or a member of a group
that controls, such corporation.

 

This Section 8 does not, in any
way, restrict or impede the Executive from exercising protected rights to the extent that such rights cannot be waived by agreement
or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized
government agency, provided that such compliance does not exceed that required by the law, regulation, or order. The Executive
shall promptly provide written notice of any such order to the Board.

 

8.3       Non-Solicitation
of Employees. The Executive agrees and covenants not to directly or indirectly solicit, hire, recruit, attempt to hire or recruit,
or induce the termination of employment of any employee of the Company during two years, to run consecutively, beginning on the
last day of the Executive’s employment with the Company.

 

9.          Non-Disparagement.
The Executive agrees and covenants that he will not at any time make, publish or communicate to any person or entity or in any
public forum any defamatory or disparaging remarks, comments, or statements concerning the Company or its businesses, or any of
its employees, officers.

 

This Section 9 does not, in any
way, restrict or impede the Executive from exercising protected rights to the extent that such rights cannot be waived by agreement
or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized
government agency, provided that such compliance does not exceed that required by the law, regulation, or order.

 

The Company agrees and covenants
that it shall cause its officers and directors to refrain from making any defamatory or disparaging remarks, comments, or statements
concerning the Executive to any third parties.

 

10.        Acknowledgement.
The Executive acknowledges and agrees that the services to be rendered by him to the Company are of a special and unique character;
that the Executive will obtain knowledge and skill relevant to the Company’s industry, methods of doing business and marketing
strategies by virtue of the Executive’s employment; and that the restrictive covenants and other terms and conditions of
this Agreement are reasonable and reasonably necessary to protect the legitimate business interest of the Company.

 

    11 

     

    

The Executive further acknowledges
that the amount of his compensation reflects, in part, his obligations and the Company’s rights under Section 7, Section
8, and Section 9 of this Agreement; that he has no expectation of any additional compensation, royalties or other payment of any
kind not otherwise referenced herein in connection herewith; and that he will not be subject to undue hardship by reason of his
full compliance with the terms and conditions of Section 7, Section 8, and Section 9 of this Agreement or the Company’s enforcement
thereof.

 

11.        Remedies.
In the event of a breach or threatened breach by the Executive of Section 7, Section 8, or Section 9 of this Agreement, the Executive
hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or
permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction,
without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the
necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal
remedies, monetary damages, or other available forms of relief.

 

		12.	Proprietary Rights.

 

12.1       Work
Product. The Executive acknowledges and agrees that all right, title, and interest in and to all writings, works of authorship,
technology, inventions, discoveries, processes, techniques, methods, ideas, concepts, research, proposals, materials, and all other
work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived, or reduced to
practice by the Executive individually or jointly with others during the period of his employment by the Company and relate in
any way to the business or contemplated business, products, activities, research, or development of the Company or result from
any work performed by the Executive for the Company (in each case, regardless of when or where prepared or whose equipment or other
resources is used in preparing the same), all rights and claims related to the foregoing, and all printed, physical and electronic
copies, and other tangible embodiments thereof (collectively, “Work Product”), as well as any and all rights
in and to US and foreign (a) patents, patent disclosures and inventions (whether patentable or not), (b) trademarks, service marks,
trade dress, trade names, logos, corporate names, and domain names, and other similar designations of source or origin, together
with the goodwill symbolized by any of the foregoing, (c) copyrights and copyrightable works (including computer programs), and
rights in data and databases, (d) trade secrets, know-how, and other confidential information, and (e) all other intellectual property
rights, in each case whether registered or unregistered and including all registrations and applications for, and renewals and
extensions of, such rights, all improvements thereto and all similar or equivalent rights or forms of protection in any part of
the world (collectively, “Intellectual Property Rights”), shall be the sole and exclusive property of the Company.

 

12.2       Work
Made for Hire; Assignment. The Executive acknowledges that, by reason of being employed by the Company at the relevant times,
to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is “work made for hire”
as defined in 17 U.S.C. § 101 and such copyrights are therefore owned by the Company. To the extent that the foregoing does
not apply, the Executive hereby irrevocably assigns to the Company, for no additional consideration, the Executive’s entire
right, title, and interest in and to all Work Product and Intellectual Property Rights therein, including the right to sue,
counterclaim, and recover for all past, present, and future infringement, misappropriation, or dilution thereof, and all rights
corresponding thereto throughout the world. Nothing contained in this Agreement shall be construed to reduce or limit the Company’s
rights, title, or interest in any Work Product or Intellectual Property Rights so as to be less in any respect than that the Company
would have had in the absence of this Agreement.

 

    12 

     

    

12.3       Further
Assurances; Power of Attorney. During and after his employment, the Executive agrees to reasonably cooperate with the Company
to (a) apply for, obtain, perfect, and transfer to the Company the Work Product as well as any and all Intellectual Property Rights
in the Work Product in any jurisdiction in the world; and (b) maintain, protect and enforce the same, including, without limitation,
giving testimony and executing and delivering to the Company any and all applications, oaths, declarations, affidavits, waivers,
assignments, and other documents and instruments as shall be requested by the Company. The Executive hereby irrevocably grants
the Company power of attorney to execute and deliver any such documents on the Executive’s behalf in his name and to do all
other lawfully permitted acts to transfer the Work Product to the Company and further the transfer, prosecution, issuance, and
maintenance of all Intellectual Property Rights therein, to the full extent permitted by law, if the Executive does not promptly
cooperate with the Company’s request (without limiting the rights the Company shall have in such circumstances by operation
of law). The power of attorney is coupled with an interest and shall not be affected by the Executive’s subsequent incapacity.

 

12.4       No
License. The Executive understands that this Agreement does not, and shall not be construed to, grant the Executive any license
or right of any nature with respect to any Work Product or Intellectual Property Rights or any Confidential Information, materials,
software, or other tools made available to him by the Company.

 

13.        Governing
Law: Jurisdiction and Venue. This Agreement, for all purposes, shall be construed in accordance with the laws of the Commonwealth
of Pennsylvania without regard to conflicts of law principles. Any action or proceeding by either of the parties to enforce this
Agreement shall be brought only in a state or federal court located in the Commonwealth of Pennsylvania, county of Allegheny. The
parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the
maintenance of any such action or proceeding in such venue.

 

14.        Entire
Agreement. Unless specifically provided herein, this Agreement contains all of the understandings and representations between
the Executive and the Company pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings,
agreements, representations and warranties, both written and oral, with respect to such subject matter. The parties mutually agree
that the Agreement can be specifically enforced in court and can be cited as evidence in legal proceedings alleging breach of the
Agreement.

 

15.        Modification
and Waiver. No provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in
writing and signed by the Executive and approved by the Board of the Company. No waiver by either of the parties of any
breach by the other party hereto of any condition or provision of this Agreement to be performed by the other party hereto shall
be deemed a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time, nor shall the
failure of or delay by either of the parties in exercising any right, power, or privilege hereunder operate as a waiver thereof
to preclude any other or further exercise thereof or the exercise of any other such right, power, or privilege.

 

    13 

     

    

16.        Severability.
Should any provision of this Agreement be held by a court of competent jurisdiction to be enforceable only if modified, or if any
portion of this Agreement shall be held as unenforceable and thus stricken, such holding shall not affect the validity of the remainder
of this Agreement, the balance of which shall continue to be binding upon the parties with any such modification to become a part
hereof and treated as though originally set forth in this Agreement.

 

The parties further agree that any
such court is expressly authorized to modify any such unenforceable provision of this Agreement in lieu of severing such unenforceable
provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending
provision, adding additional language to this Agreement, or by making such other modifications as it deems warranted to carry out
the intent and agreement of the parties as embodied herein to the maximum extent permitted by law.

 

The parties expressly agree that
this Agreement as so modified by the court shall be binding upon and enforceable against each of them. In any event, should one
or more of the provisions of this Agreement be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not affect any other provisions hereof, and if such provision or provisions are not modified as provided
above, this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions had not been set forth herein.

 

17.        Captions.
Captions and headings of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of
this Agreement is to be construed by reference to the caption or heading of any section or paragraph.

 

18.        Counterparts.
This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which taken together
shall constitute one and the same instrument.

 

19.        Successors
and Assigns. This Agreement is personal to the Executive and shall not be assigned by the Executive. Any purported assignment
by the Executive shall be null and void from the initial date of the purported assignment. The Company may assign this Agreement
to any successor or assign (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially
all of the business or assets of the Company. This Agreement shall inure to the benefit of the Company and permitted successors
and assigns.

 

20.        Notice.
Notices and all other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent
by registered or certified mail, return receipt requested, or by overnight carrier to the parties at the addresses set forth below
(or such other addresses as specified by the parties by like notice):

 

    14 

     

    

If to the Company:

Lipella Pharmaceuticals Inc.

400 N. Lexington Ave, Suite LL103 Pittsburgh, PA 15208

 

If to the Executive:

Michael Chancellor

[***]

[***]

 

21.        Withholding.
The Company shall have the right to withhold from any amount payable hereunder any Federal, state, and local taxes in order for
the Company to satisfy any withholding tax obligation it may have under any applicable law or regulation.

 

22.        Survival.
Upon the expiration or other termination of this Agreement, the respective rights and obligations of the parties hereto shall survive
such expiration or other termination to the extent necessary to carry out the intentions of the parties under this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

    15 

     

    

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

 

	 	LIPELLA PHARMACEUTICALS, INC.
	 	 	 
	 	By	/s/ Jonathan Kaufman
	 	Name:	Jonathan Kaufman
	 	Title:	Chief Executive Officer

 

	EXECUTIVE	 
	 	 	 
	Signature:	/s/ Michael Chancellor	 
	Print Name:	Michael Chancellor	 

 

    16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00346-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00346-of-00352.parquet"}]]