Document:

EXHIBIT 10.2

 

Innovus Pharmaceuticals,
Inc.

Amended and
Restated Non-Employee Director Compensation Plan

Effective as
of October 1, 2013

 

The following
Amended and Restated Non-Employee Director Compensation Plan (the “Plan”) replaces the Non-Employee Director Compensation
Plan, dated July 1, 2013 and is available to non-employee members (the “Participants”) of the Board of Directors (the
“Board”) of Innovus Pharmaceuticals, Inc. (the “Company”).

 

Equity Awards
for Participants 

 

Under the Innovus
Pharmaceuticals, Inc. 2013 Equity Incentive Plan (the “EIP”) each Participant shall receive a quarterly Stock Unit
Award (the “SUA”), the fair market value of which shall be equal to either (i) $3,000 for Outside Directors, as defined
below, and (ii) $6,000 for the Chairman of the Board (the “Chairman”), both awards shall be determined by the per share
closing price of the common stock on the date of award. Outside Directors are Participants who do not serve as Chairman of the
Board (“Outside Directors”). For clarification, the term “Participants”, as used in this Plan, includes
both the Outside Directors and the Chairman. Each SUA shall be granted pursuant to a Stock Unit Agreement (the “Agreement”)
between the Company and the Participant in the form approved by the Board pursuant to the EIP.

 

The SUAs shall
be granted and fully vested on the first business day following March 31, June 30, September 30, and December 31 (each a “Date
of Award”). Notwithstanding the foregoing, the SUAs will not be settled in common shares of the Company stock until: (i)
any and all tax withholding obligations are satisfied, as described in the Agreement, and (ii) the earlier of the Participant’s
voluntary or involuntary resignation from the Board or ten (10) years from the Date of Award. Further, if a Participant voluntarily
resigns from the Board prior to the completion of the three (3) month compensation period, then such Participant’s SUA for
that quarter shall be forfeited in whole but any vested, unsettled SUAs shall not be impacted. 

 

Reimbursement
for Participants

 

Participants are
also reimbursed for their out-of-pocket travel expenses for each Board or committee meeting attended.

 

Proration of
Retainer and Equity Awards

 

With respect to
Participants who join the Board during a quarter, the Board may prorate such Participant’s SUA as it deems appropriate.

 

Amendment or
Termination

 

The Board may
amend, alter, suspend, discontinue or terminate this program at any time.EXHIBIT 10.3

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT,
WHICH OPINION SHALL BE REASONABLY ACCEPTABLE TO THE ISSUER.

 

INNOVUS PHARMACEUTICALS, INC.

 

SECOND AMENDED AND RESTATED

 

8% CONVERTIBLE DEBENTURE

 

	$1,000,000	La Jolla, CA
	 	Dated as of: November 11, 2013

 

The
undersigned, Innovus Pharmaceuticals, Inc., a Nevada corporation ("Issuer"), hereby promises to pay Bassam Damaj,
Ph.D. ("Debenture Holder") or his assigns, on the Maturity Date (as hereinafter defined), up to One Million
Dollars ($1,000,000) (as such amount may be adjusted by Section 1.6, the “Maximum Principal Amount”), or so much
thereof as shall then equal the outstanding principal amount hereof following one or more advances as provided in Section
1.1(a) (such amount, as modified from time to time as provided herein, the "Principal Amount”), unless this
Amended and Restated 8% Convertible Debenture ("Debenture") is earlier converted in accordance with
Section 1.2 or Section 1.3, and interest shall accrue hereon from January 22, 2013 and be payable as provided
herein, unless earlier converted in accordance with Section 1.2 or Section 1.3 hereof or earlier repaid in
accordance with Section 1.4 hereof. This Second Amended and Restated 8% Convertible Debenture replaces the 8%
Convertible Debenture, dated January 22, 2013, the Amended and Restated 8% Convertible Debenture, dated March 18, 2013 and
the May 2013 Amendment to Amended and Restated 8% Convertible Debenture, dated May 6, 2013, between the Issuer and Debenture
Holder. As of the date of this Debenture, the Principal Amount is Three Hundred Seventy Nine Thousand, Six Hundred and One
Dollars and Twenty Seven Cents ($379,601.27).

 

1.          Terms
of the Debenture.

 

1.1           Advances;
Interest; Interest Rate; Repayment.

 

(a)          From
time to time, Issuer may request advances by Debenture Holder up to the Maximum Principal Amount. Debenture Holder may make such
advance(s) or decline to make such advance(s) in his sole and absolute discretion.

 

(b)          Notwithstanding
Section 1.1(a) above, if Issuer will have insufficient liquidity to meet any material payment obligations arising in the ordinary
course of business (“Obligations”) as they come due, then Issuer will request an advance under this Debenture in the
amount of such shortfall, and, unless the maximum Principal Amount is outstanding, Debenture Holder must make the advance so requested.
The commitments in this Section 1.1(b) shall automatically terminate on the earlier to occur (the “Release Date”) of
(i) the consummation of one or more transactions pursuant to which Issuer raises through the sale of additional equity capital
or debt net proceeds at least equal to $4,000,000 or (ii) July 1, 2016.

 

(c)          The
Principal Amount shall bear interest at the rate of eight (8%) percent (the "Interest Rate") per annum based on a 365-day
year. Interest shall be payable on the Maturity Date.

 

(d)          The
Principal Amount shall be either (a) if a PIPE Financing (as hereinafter defined) occurs before July 1, 2016, automatically converted
into securities of the Issuer at the price of such PIPE Financing on the date of closing of the PIPE Financing, subject to any
other rights described in Section 1.2 or (b) if the PIPE financing does not occur by July 1, 2016, then automatically converted
into the common stock (“Common Stock”) of the Issuer at eighty percent (80%) of the closing price of the Issuer’s
common stock on the date of signing of this Second Amended and Restate 8% Convertible Debenture, subject to any other rights described
in Section 1.3 (such earlier date being the “Maturity Date”). “PIPE Financing” shall mean the private placement
of equity, equity equivalent, convertible debt or debt financing in which Issuer receives gross proceeds, in one or more transactions,
of at least Four Million Dollars ($4,000,000).

 

(e)          The
Principal Amount and interest thereon may be prepaid in whole or in part by Issuer.

 

(f)          All
monetary payments to be made by Issuer hereunder shall be made in lawful money of the United States by check or wire transfer of
immediately available funds.

 

    	 

    	 

    

  

(g)          If
all or a portion of the principal amount of this Debenture or any interest payable thereon shall not be repaid when due, whether
on the Maturity Date, by acceleration or otherwise, such overdue amounts shall bear interest at a rate per annum that is five percent
(5%) above the Interest Rate (i.e., 13%), from the date of such non-payment until such amount is paid in full (as well after
as before judgment), subject to the provisions of Section 4.1 below.

 

1.2           Automatic
Conversion Upon PIPE Financing. Upon the PIPE Financing, the Convertible Amount, as defined below, shall be converted automatically
into securities to be issued by Issuer in the PIPE Financing at the same terms as the investors in the PIPE Financing (the "PIPE
Securities"). The “Convertible Amount” means the Principal Amount plus eight percent (8%) per annum simple interest,
based on a 365-day year, with such interest accruing for the period commencing on January 22, 2013 and ending on the date of conversion.
No fractional PIPE Securities shall be issued upon conversion. In lieu of any fractional PIPE Securities to which the Debenture
Holder would otherwise be entitled, Issuer shall pay cash in an amount equal to such amount of Debenture not converted.

 

1.3           Automatic
Conversion on July 1, 2016. If the PIPE Financing described in Section 1.2 above does not occur prior to July 1, 2016, then
on that date, the Convertible Amount shall be converted automatically into Common Stock of the Issuer at the Conversion Price,
as defined below. The “Conversion Price” means an amount equal to the closing price of the Issuer’s Common Stock
trading on either the OTC Bulletin Board or on any other exchange on the date of signing of this Second Amended and Restated 8%
Convertible Debenture, multiplied by 80%. No fractional Common Stock shall be issued upon conversion. In lieu of any fractional
Common Stock to which the Debenture Holder would otherwise be entitled, Issuer shall pay cash in an amount equal to such amount
of Debenture not converted.

 

1.4           Conversion
Procedures. Upon conversion of this Debenture as provided in Section 1.2 hereof, the Debenture Holder shall surrender
this Debenture, appropriately endorsed, to Issuer at Issuer's principal office, accompanied by written notice to Issuer setting
forth the name or names (with address(es)) in which the PIPE Securities issuable upon such conversion shall be issued and registered
on the books of Issuer. This Debenture shall be marked cancelled on the books of Issuer as of the date of the PIPE Financing, whether
or not surrendered.

 

1.5           Other
Assurances. Issuer shall not, by amendment of its Articles of Incorporation or By-laws or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issuance or sale of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms to be observed or performed hereunder by Issuer, but shall at all times in good
faith assist in the carrying out of all the provisions of this Debenture and in taking of all such actions as may be necessary
or appropriate in order to protect the rights of the Debenture Holder herein against impairment.

 

1.6           Payments
under Employment Agreement. If before the Release Date any cash salary, bonus or severance payments are actually paid to Debenture
Holder under his Employment Agreement with the Issuer dated January 22, 2013, the gross amount of such payment(s) (before any tax
withholding or deductions) shall be added to the Maximum Principal Amount.

 

2.          Events
of Default. If any of the following events (each, an "Event of Default") shall occur and be continuing:

 

(i)          Issuer
shall fail to pay any amount payable under this Debenture, including but limited to installments of interest and/or principal,
within three (3) business days after such payment becomes due (at the Maturity Date, an Interest Payment Date or other date) in
accordance with the terms hereof;

 

(ii)         Issuer
shall fail to pay when due (following the expiration of applicable notice and cure periods), whether upon acceleration, prepayment
obligation or otherwise, any indebtedness for money due, individually or in the aggregate, involving an amount in excess of $50,000;

 

(iii)        Any
representation, warranty, covenant or agreement made by Issuer that this Debenture was incorrect in any material respect on or
as of the date made;

 

(iv)        Issuer
shall default, in any material respect, in the observance or performance of any other agreement contained in this Debenture or
any other agreement or instrument contemplated by this Debenture, and such default shall continue unremedied for a period of fifteen
(15) days after written notice to Issuer of such default;

 

    	 

    	 

    

  

(v)         (a) Issuer
shall commence any case, proceeding or other action (x) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (y) seeking
appointment or a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part
of its assets, or Issuer shall make a general assignment for the benefit of its creditors; or (b) there shall be commenced
against Issuer any case, proceeding or other action of a nature referred to in clause (a) above that (A) results in the entry
of an order for relief of any such adjudication of appointment or (B) remains undismissed, undischarged or unbonded for a
period of ninety (90) days; or (c) there shall be commenced against Issuer any case, proceeding other action seeking issuance
of a warrant of attachment, execution, distrait or similar process against all or any substantial part of its assets that results
in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal
within ninety (90) days from the entry thereof; or (d) Issuer shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in any of the acts set forth in clauses (a), (b) or (c) above; or (e) Issuer shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due then, and in any such
event, (x) if such event is an Event of Default specified in subsection (v) above of this Section 2, automatically
this Debenture (with all accrued and unpaid interest thereon) and all other amounts owing under this Debenture shall immediately
become due and payable, and (y) if such event is any other Event of Default, the Debenture Holder may, by written notice to
Issuer, declare this Debenture (with all accrued and unpaid interest thereon) and all other amounts owing under this Debenture
to be due and payable forthwith, whereupon the same shall immediately become due and payable. Except as expressly provided above
in this Section 2, presentation, demand, protest and all other notices of any kind are hereby expressly waived by Issuer.

 

3.          Reservation
of Stock.

 

3.1           Reservation
of Common Stock. The Issuer covenants that it will at all times reserve and keep available out of its authorized and unissued
shares of Common Stock solely for the purpose of issuance upon conversion of the Debenture, free from preemptive rights or any
other actual contingent purchase rights of persons other than the Holder, not less than such number of shares of the Common Stock
as shall be issuable upon the conversion of the outstanding principal amount of the Debenture. The Issuer covenants that all shares
of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid and nonassessable.

 

4.          Miscellaneous.

 

4.1           Interest
Rate. Any interest payable hereunder that is in excess of the maximum interest rate permitted under applicable law shall be
reduced to the maximum interest rate permitted under such applicable law.

 

4.2           Notices.
All notices and other communications hereunder shall be in writing and shall be deemed to have been given when delivered by hand
or by facsimile transmission, when telexed, or upon receipt when mailed by registered or certified mail (return receipt requested),
postage prepaid, to the parties at the following addresses (or at such other address for a party as shall be specified by like
notice):

 

If to Issuer:

 

Innovus Pharmaceuticals, Inc.

4275 Executive Square, Suite 200

La Jolla, CA 92037

Attn: Chief Financial Officer

Facsimile: 858-964-2301

 

With a copy (which copy shall not
constitute notice) to:

 

Innovus Pharmaceuticals, Inc.

4275 Executive Square, Suite 200

La Jolla, CA 92037

Attn: Legal Department

Facsimile: (858) 964-2301

 

If to Debenture Holder at
its address as furnished to Issuer.

 

    	 

    	 

    

 

4.3           Further
Indebtedness. No indebtedness of the Issuer is senior to this Debenture in right of payment, whether with respect to interest,
damages or upon liquidation or dissolution or otherwise. Without the Debenture Holder's consent, the Issuer will not, directly
or indirectly, enter into, create, incur, assume or suffer to exist any indebtedness of any kind, on or with respect to any of
its property or assets now owned or hereafter acquired or any interest therein or any income or profits there from that is senior
or paripassu in any respect to the obligations of the Issuer under this Debenture.

 

4.4           Entire
Agreement; Exercise of Rights.

 

(a)          This
Debenture embodies the entire agreement and understanding of the parties hereto with respect to the subject matter hereof. No amendment
of any provision of this Debenture shall be effective unless it is in writing and signed by each of the parties; and no waiver
of any provision of this Debenture, nor consent to any departure by either party from it, shall be effective unless it is in writing
and signed by the affected party, and then such waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

 

(b)          No
failure on the part of a party to exercise, and no delay in exercising, any right under this Debenture, or any agreement contemplated
hereby, shall operate as a waiver hereof by such party, nor shall any single or partial exercise of any right under this Debenture,
or any agreement contemplated hereby, preclude any other or further exercise thereof or the exercise of any other right.

 

4.5           Governing
Law. This Debenture shall be governed by and construed in accordance with the laws of the State of California applicable to
agreements made and to be performed entirely within such state, without regards to its conflicts of law provisions.

 

4.6           Transferability.
This Debenture shall not be transferable in any manner without the express written consent of Issuer, which consent may not be
unreasonably withheld.

 

********************************

 

    	 

    	 

    

 

IN WITNESS WHEREOF, the parties hereto have
executed this Debenture on the date first above written.

 

	 	INNOVUS PHARMACEUTICALS, INC.
	 	 	 
	 	By:	/s/ Henry Esber
	 	 	Name: Henry Esber, Ph.D.
	 	 	Title: Chairman of the Board

 

 

	 	DEBENTURE HOLDER
	 	 	 
	 	By:	/s/ Bassam Damaj
	 	 	Name: Bassam Damaj, Ph.D.

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