Document:

Exhibit 10.4

 

APAZA

 

LICENSE AGREEMENT

 

between

 

SEACHAID PHARMACEUTICALS, INC.

 

and

 

GI THERAPEUTICS, INC.

 

Dated as of April 19, 2013

 

     

     

    

APAZA

LICENSE AGREEMENT

 

This License Agreement
(the “Agreement”) is entered into this 19th day of April, 2013 (the “Effective Date”),
by and among Seachaid Pharmaceuticals, Inc., a Delaware corporation (“Licensor”), and GI Therapeutics, Inc.,
a North Carolina corporation (“Licensee”). Licensee and Licensor may each be referred to in this Agreement individual
as a “Party” and collectively as the “Parties.”

 

BACKGROUND

 

A.         Biocon
Limited (“Biocon”) acquired certain patent rights, know-how and other intellectual property with respect to
the compound known as Apaza from Nobex Corporation (“Nobex”) pursuant to an Asset Purchase Agreement dated December
1, 2005.

 

B.          Biocon
licensed such patent rights, know-how and other intellectual property to Licensor pursuant to that certain License Agreement dated
as of July 29, 2008 (the “Biocon License Agreement”).

 

C.          Licensee
desires to obtain, with respect to the Territory, an exclusive license under patent rights and intellectual property controlled
by Licensor with respect to Apaza, and Licensor is willing to grant, with respect to the Territory, an exclusive license to Licensee
under such patent rights and other intellectual property with respect to Apaza, all as more particularly described in, and subject
to, the terms and conditions set forth in this Agreement.

 

AGREEMENT

 

NOW THEREFORE, in consideration
of the mutual promises and covenants set forth below and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereby agree as follows:

 

		1.	DEFINITIONS

 

1.1         “Affiliate(s)”
means, with respect to a Person, another Person that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person. For the purposes of this definition only, “control” means,
with respect to a Person, the ownership by another Person of greater than 50% of the income or voting interests of such Person
or such other arrangement as constitutes the direct or indirect ability to direct the management, affairs or actions of such Person.

 

1.2         “Agreement”
has the meaning set forth in the opening paragraph.

 

1.3         “Apaza
Compound” means a compound that is (i) the molecule known as “Apaza” comprised of 4-APAA linked to 5-ASA,
or (ii) a compound that is a derivative, analog, fragment or metabolite or a combination thereof, including, without limitation,
the compounds generically or specifically described in the Licensed Patents, alone or in combination with other molecules, provided
that the compound is a primary active moiety in such combination.

 

     

     

    

 

1.4         “Apaza
Know-How” means Know-How used in connection with or related to the Apaza Compounds or Licensed Products that Licensor
or any of its Affiliates Controls as of the Effective Date and includes, without limitation, the information identified on Exhibit
B.

 

1.5         “Bankruptcy
Code” has the meaning set forth in Section 14.16.

 

1.6         “Biocon”
has the meaning set forth in Recital A.

 

1.7         “Biocon
License Agreement” has the meaning set forth in Recital B.

 

1.8         “Commercialization”
or “Commercialize” means the commercial-scale manufacturing, obtaining pricing and reimbursement approvals,
marketing, promoting, distributing, importing, exporting, offering for sale or selling a human pharmaceutical product.

 

1.9         “Competing
Business” means the Development or Commercialization of a product in the Territory that [***].

 

1.10       “Confidential
Information” means all trade secrets, processes, formulae, data, know-how, improvements, inventions, chemical or biological
materials, chemical structures, techniques, marketing plans, strategies, or other information that has been created, discovered,
or developed by a Party, or has otherwise become known to a Party, or to which rights have been assigned to a Party, as well as
any other information and materials that are deemed confidential or proprietary to or by a Party (including, without limitation,
all information and materials of a Party’s customers and any other Third Party and their consultants), in each case that
are disclosed by such Party to the other Party, regardless of whether any of the foregoing are marked “confidential”
or “proprietary” or communicated to the other by the disclosing Party in oral, written, graphic, or electronic form.

 

1.11       “Control”
or “Controlled” means with respect to any (a) item of information, including, without limitation, Know-How,
or (b) intellectual property right, the possession (whether by ownership or license, other than pursuant to this Agreement) by
a Party of the right to grant to the other Party access and/or a license on the terms and conditions provided in this Agreement
under such item or right without violating the terms of any agreement or other arrangements with any Third Party (including any
Regulatory Authority or Governmental Entity) existing before the Effective Date.

 

1.12       “Development”
means pre-clinical and clinical drug development activities reasonably related to the discovery and development of pharmaceutical
compounds and submission of information to a Regulatory Authority, including, without limitation, toxicology, pharmacology and
other discovery and pre-clinical efforts, test method development and stability testing, manufacturing process development, formulation
development, delivery system development, quality assurance and quality control development, statistical analysis, clinical studies
(including, without limitation, pre- and post-approval studies) and activities relating to obtaining Regulatory Approval but excluding
other Commercialization activities. When used as a verb “Develop” means to engage in Development.

 

 

[***] Confidential treatment requested pursuant
to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately
with the Commission.

     

     

    

 

1.13      “Disclosing
Party” has the meaning set forth in Section 12.1

 

1.14       “Effective
Date” has the meaning set forth in the opening paragraph.

 

1.15       “EMEA”
means to the European Medicines Agency headquartered in London or any successor agency thereto, responsible for the protection
and promotion of public and animal health, through the evaluation and supervision of medicines for human and veterinary use.

 

1.16       “European
Union” or “EU” means the countries compromising the European Union as it may be constituted from time
to time, together with those additional countries included in the European Economic Area as it may be constituted from time to
time, and any successors to, or new countries created from, any of the foregoing.

 

1.17       “Expiration”
has the meaning set forth in Section 13.1

 

1.18       “FDA”
means the United States Food and Drug Administration or any successor agency thereto.

 

1.19       “First
Commercial Sale” of each Licensed Product means, on a country-by-country basis, the date of the first arm’s length
transaction, offering for sale, transfer or disposition for value to a Third Party of a Licensed Product by or on behalf of Licensee
or its Affiliates in such country. For purposes of clarity, the use of any Licensed Product in clinical trials, pre-clinical studies
or other research, development, manufacturing, or promotion activities or the disposal or transfer of a Licensed Product for a
bona fide charitable purpose or for purposes of a commercially reasonable sampling program shall not be deemed to be an arm’s
length transaction, transfer or disposition for value for purposes of this definition.

 

1.20       “Force
Majeure” has the meaning set forth in Section 14.6

 

1.21       “GAAP”
shall mean the generally accepted accounting principles and accepted practices of the accounting profession in the United States,
including without limitation the definitive pronouncements of accounting issued by the Financial Accounting Standards Board.

 

1.22       “Governmental
Entity” means any arbitrator, court, judicial, legislative, administrative or regulatory agency, commission, department,
board or bureau or body or other governmental authority or instrumentality or any person or entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government, whether foreign, federal, state provincial, local
or other (including without limitation any domestic or foreign governmental Regulatory Authority involved in the granting of approvals
for the manufacture, sale, reimbursement and/or pricing of a pharmaceutical product such as the FDA).

 

1.23       “Improvement”
means any discovery, invention, improvement or modification (whether or not patentable) which is related to the Licensed Technology
or the Licensed Products.

 

     

     

    

 

1.24       “IND”
means any Investigational New Drug Application, as defined in the United States Food, Drug and Cosmetic Act, filed with the FDA
pursuant to Part 312 of Title 21 of the U.S. Code of Federal Regulations, including any amendments thereto. References herein to
IND shall include, to the extent applicable, any comparable filing(s) outside the U.S. (such as a CTA in the European Union).

 

1.25       “Indemnitor”
and “Indemnitee” have the meanings given to them in Section 11.4.1

 

1.26       “Initial
Payment” has the meaning set forth in Section 3.1.

 

1.27       “Joint
Improvements” has the meaning set forth in Section 7.3.

 

1.28       “Know-How”
means all non-patented trade secrets, inventions, discoveries, data (including data from scientific and clinical studies and other
research), ideas, information, formulation data, specifications, processes, methods, techniques, materials, technology, results,
customer lists, vendor and supplier information, marketing studies, market research, business and marketing plans and proposals,
information technology, and all other information and know-how, whether or not patentable or protected as a trade secret, including
without limitation, biological, chemical, biochemical, toxicological, pharmacological, metabolic, formulation, clinical, analytical
and stability information, manufacturing processes, production batch records, standard operating procedures and protocols relating
to the research scale, pilot scale and commercial scale synthesis of a compound or product (other than such information and data
which is or becomes the subject of a patent or patent application). Know-How includes know-how in the possession of vendors, service
providers, former owners and other Third Parties, where such Know-How is Controlled by the relevant Party.

 

1.29       “Licensed
Patents” means all patents owned or Controlled by Licensor claiming rights related to the composition, formulation or
use of any Apaza Compound, including without limitation those patents and patent applications listed on Exhibit A including any
and all Patent Rights related thereto.

 

1.30       “Licensed
Products” means any products the manufacture, use or sale of which is covered by a Valid Claim of one or more Licensed
Patents.

 

1.31       “Licensed
Technology” means the Licensed Patents and the Apaza Know-How.

 

1.32       “Licensee”
has the meaning set forth in the opening paragraph.

 

1.33       “Licensee
Improvements” has the meaning set forth in Section 7.3.

 

1.34       “Licensor”
has the meaning set forth in the opening paragraph.

 

1.35       “Licensor
Improvements” has the meaning set forth in Section 7.3.

 

1.36       “Lien”
means any mortgage, pledge, lien, security interest, charge, claim, encumbrance, or restriction on transfer.

 

     

     

    

 

1.37       “Losses”
means any and all damages (including all incidental, consequential, statutory and treble damages except as otherwise specifically
limited in this Agreement), awards, deficiencies, settlement amounts, defaults, assessments, fines, dues, penalties, costs, fees,
liabilities, obligations, taxes, liens, losses, lost profits and expenses (including, without limitation, court costs, interest
and reasonable fees of attorneys, accountants and other experts), together with all documented out-of-pocket costs and expenses
incurred in complying with any judgments, orders, decrees, stipulations and injunctions.

 

1.38       “MAA”
means a Marketing Authorization Application filed with the EMEA for approval to market and sell a drug product in the European
Union.

 

1.39       “Material
Underpayment” has the meaning set forth in Section 5.2.2.

 

1.40       “NDA”
means a New Drug Application filed with the FDA for approval to market and sell a drug product in the United States.

 

1.41       “Net
Sales” means with respect to a Licensed Product, the gross amount invoiced for sales or other transfers of such Licensed
Product by Licensee, its Affiliates and all Sublicensees to Third Parties, after deduction of the following and in each case in
accordance with GAAP:

 

(a)       normal
and customary trade, quantity or cash discounts actually allowed or paid;

 

(b)       refunds,
rebates, chargebacks, retroactive price adjustments and service allowances actually allowed or paid;

 

(c)       actual
rebates and similar payments made to managed care entities and any Governmental Entity such as, by way of illustration and not
in limitation of the Parties’ rights hereunder, federal or state Medicaid, Medicare or similar state programs in the United
States or equivalent governmental programs in any other country;

 

(d)       amounts
actually repaid or credited by reason of rejection, returns or recalls of goods;

 

(e)       actual
write-offs and reserves (without duplication) for doubtful accounts;

 

(f)       excise
taxes, sales taxes, consumption taxes and other similar taxes, customs duties, customs levies and export and import fees borne
on the sale, transfer, use or distribution of such products to Third Parties; and

 

(g)       charges
for transportation costs included in the invoiced amount, including shipping, freight, special packaging and related charges, transit
insurance charges, distribution expenses, and other costs directly related to the distribution of any such products actually borne
by the Licensee, its Affiliates and Sublicensees.

 

Sales of Licensed Products by and between Licensee
and its Affiliates or Sublicensees are not sales to Third Parties and shall be excluded from Net Sales calculations for all purposes,
except where the Affiliate or Sublicensee is a retail pharmacy, hospital or similar entity that is in the business of selling the
Licensed Products directly to consumers. The obligation to pay royalties to Licensor under this Agreement is imposed only once
with respect to the same unit of Licensed Product. A Net Sale shall be deemed to have occurred upon Licensee, it Affiliate or sublicensee’s
receipt of invoiced amounts.

 

     

     

    

 

1.42       
“Nobex” has the meaning set forth in Recital A.

 

1.43       “Non-Royalty
Sublicensing Revenue” means, with respect to any Licensed Product, the aggregate upfront cash payments directly received
by Licensee and its Affiliates in consideration for the Licensee or its Affiliates entering into a sublicense agreement under the
Licensed Technology with a Third Party sublicensee with respect to such Licensed Product in the Territory. For the avoidance of
doubt, “Non-Royalty Sublicensing Revenue” shall not include (a) any royalties received by Licensee; (b) development
and commercial milestone payments, including without limitation, those set forth in sections 3.2 and 3.3; (c) reasonable amounts
received by Licensee or its Affiliates to perform research, development, regulatory, marketing, or manufacturing or other services,
(d) amounts received in reimbursement of patent or other out-of-pocket expenses actually incurred, and (e) amounts received in
consideration for the purchase of any securities of the Licensee or its Affiliates at fair market value.

 

1.44       “Party”
and “Parties” have the meaning set forth in the opening paragraph.

 

1.45       “Patent
Claims” has the meaning set forth in Section 9.4.

 

1.46       “Patent
Rights” mean:

 

(a)       All
patent applications (including provisional patent applications and PCT patent applications) and patents in any country or supranational
jurisdiction and all divisions, continuations of these applications, all patents issues from these applications, divisions, and
continuations, and any reissues, reexaminations, substitutions, renewals, confirmations, supplementation protection certificates,
registrations, revalidations, additions of or to and extensions of all such patents and any other form of government-issued right
substantially equivalent to any of the foregoing;

 

(b)       To
the extent that the following contain one or more claims directed to the invention(s) disclosed in 1.46(a):

 

		(i)	continuations-in-part of 1.46(a);

 

		(ii)	all divisions and continuations-in-part;

 

		(iii)	all patents issuing from these continuations in part, divisions and continuations;

 

		(iv)	priority patent application(s) of 1.46(a); and

 

		(v)	any reissues, reexaminations, substitutions, renewals, confirmations, supplementation protection
certificates, registrations, revalidations, additions of or to and extensions of these patents;

 

     

     

    

 

(c)       
to the extent that the following contain one or more claims directed to the invention(s) disclosed in 1.46(a): all counterpart
foreign and U.S. patent applications and patents to 1.46 (a) and 1.46(b).

 

1.47       “Payments”
has the meaning set forth in Section 5.1.3.

 

1.48       “Person”
means (as the context requires) an individual, a corporation, a partnership, an association, a trust, a limited liability company,
or other entity or organization, including Governmental Entity.

 

1.49       “Phase
II Trial” means a human clinical trial of a compound in any country that would satisfy the requirements of 21 C.F.R.
312.21(b) and is intended to explore a variety of doses, dose response, and/or duration of effect, and/or to generate initial evidence
of clinical safety and activity in a target patient population or the equivalent Regulatory Filings with similar requirements in
a country other than the United States.

 

1.50       “Phase
III Trial” means a human clinical trial of a compound, performed after preliminary evidence of suggesting effectiveness
of the compound has been obtained, conducted for inclusion in: (i) that portion of an FDA submission and approval process which
provides for the continued trials of a product on sufficient numbers of human patients to confirm with statistical significance
the safety and efficacy of a product sufficient to support a Regulatory Approval for the proposed indication, as more fully described
in 21 C.F.R. 312.21(c), or (ii) equivalent Regulatory Filings with similar requirements in a country other than the United States.

 

1.51       “Receiving
Party” has the meaning set forth in Section 12.1.

 

1.52       “Regulatory
Approval” means, in relation to any Licensed Product, the registrations, authorizations and approvals of any Regulatory
Authority that are required to be obtained prior to the marketing or sale of product in a jurisdiction in the Territory. Neither
a tentative approval nor an approvable letter shall be considered “Regulatory Approval.”

 

1.53       “Regulatory
Authority” means, with respect to any particular country, the Governmental Entity of such country, with the primary responsibility
over the Development and/or Commercialization of the Apaza Compound or a Licensed Product, including such Governmental Entities
that have jurisdiction over the pricing of the Licensed Product.

 

1.54       “Regulatory
Filing” means, in relation to any Licensed Product, any filing with a Regulatory Authority relating to or to permit or
request, as applicable, the clinical evaluation or Regulatory Approval of a pharmaceutical product. Regulatory Filings include
without limitation Investigational New Drug Applications, Clinical Trial Authorizations, MAAs and NDAs.

 

1.55       “Remedies”
has the meaning set forth in Section 9.2.

 

1.56       “Royalty
Term” has the meaning set forth in Section 4.3.

 

1.57       “Sublicensee”
means a Third Party to whom Licensee has granted rights under Section 2.

 

     

     

    

 

1.58       “Sublicensing
Proceeds” has the meaning set forth in Section 4.2.

 

1.59       “Tax”
or “Taxes” means all taxes, fees, levies, duties, tariffs, imposts, and governmental impositions or charges
of any kind in the nature of (or similar to) taxes, payable to any federal, state, local or foreign taxing authority, whether disputed
or not, including (without limitation) (i) income, franchise, profits, gross receipts, ad valorem, net worth, value added, sales,
use, service, real or personal property, special assessments, capital stock, license, payroll, withholding, employment, social
security (or similar), workers’ compensation, unemployment compensation, disability, utility, severance, productions, excise,
stamp, occupation, premiums, windfall profits, environmental, customs duties, registration, alternative and add on minimum, estimated,
transfer and gains taxes, or other tax of any kind whatsoever and (ii) in all cases, including interest, penalties, additional
taxes and additions to tax imposed with respect thereto.

 

1.60       “Territory”
means the United States, Canada, Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany,
Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland,
Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland and United Kingdom of Great Britain and Northern Ireland.

 

1.61       “Third
Part(y/ies)” means any person(s) or entit(y/ies) other than Licensee, Licensor, or their respective Affiliates.

 

1.62       “Third
Party Claims” have the meaning set forth in Section 11.4.2.

 

1.63       “Valid
Claim” means, with respect to a Licensed Patent, any claim from (a) an issued and unexpired or issued and extended patent
in the Territory that has not lapsed, been revoked or cancelled, or held unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction against which appeal is not, or is no longer, possible or that has not been disclaimed,
denied or admitted to be invalid or unenforceable through reissue, or disclaimer or otherwise; or (b) a pending patent application
in the Territory being prosecuted in good faith that has not been cancelled, withdrawn, abandoned, finally rejected and that has
not been pending for more than [***] ([***]) years from the date of its first priority filing anywhere in the world. If a claim
of a patent application that ceased to be a Valid Claim under item (b) because of the passage of time that later issues as part
of a patent within item (a), then it shall again be considered a Valid Claim effective as of the earlier of the grant, allowance
or issuance of such patent.

 

		2.	LICENSES

 

2.1         License
Grants. Subject to the terms of this Agreement, Licensor hereby grants to Licensee a license, with the right to grant
sublicenses pursuant to Section 2.2 (Sublicensing), under the Licensed Technology to: (a) Commercialize Licensed Products and
to otherwise exploit the Licensed Technology in the Territory on an exclusive basis (including with regard to Licensor,
Biocon, Nobex and their respective Affiliates); and (b) use, research, Develop, export and make and have made Licensed
Products worldwide for purposes of clause (a) above, on a non-exclusive basis.

 

 

[***] Confidential treatment
requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.

 

     

     

    

 

2.2         Sublicensing.
Licensee may sublicense only in the Territory the rights granted to it under Section 2.1 (License Grants) through one or more
tiers to one or more of its Affiliates or Third Parties at any time. Any such sublicense must be in writing, and shall be
consistent with the terms of this Agreement. If this Agreement terminates for any reason, any sublicense granted by the
Licensee under this Agreement shall survive such termination provided that such sublicense shall be automatically assigned by
the Licensee to Licensor upon such termination, and at no cost to Licensor, provided further that any sublicense granted by
the Licensee under this Agreement that contains any provision preventing such assignment, shall stand terminated promptly and
automatically from the effective date of the termination of this Agreement.

 

2.3         No
Other Licenses. Except for the license rights granted under this Article 2, Licensor grants no other rights or licenses
of whatsoever nature and Licensee shall not be entitled to any other right or license under this Agreement.

 

		3.	MILESTONE PAYMENTS

 

3.1         Initial
Payment. Upon the earlier of (a) ten (10) days following the closing of Licensee’s first equity financing that
brings the total equity financing raised to [***] dollars ($[***]), or (b) the eighteen (18) month anniversary of the
Effective Date, Licensee shall make a non-refundable payment of [***] dollars ($[***]) (the “Initial
Payment”) to the Licensor. In the event Licensee does not make the Initial Payment when it becomes due,
Licensor’s sole remedy shall be to terminate this Agreement upon thirty (30) days written notice; provided, however,
that such termination shall not be effective if Licensee makes the Initial Payment prior to the expiration of such thirty
(30) day notice period.

 

3.2         Development
Milestone Payments. Licensee shall pay to Licensor, without any offset, non-refundable, one-time milestone payments
specified below with respect to the Development by Licensee and its Sublicensees of a Licensed Product as a human therapeutic
no later than forty (40) days after the following events have each initially occurred. Licensee will only pay each of the
Development milestones listed below once.

 

	Apaza Milestone Event	 	Milestone Payment	 
	[***]	 	 	[***]	 
	First filing of an NDA with the FDA and acceptance by FDA of such NDA	 	$	1,000,000	 
	[***]	 	 	[***]	 
	[***]	 	 	[***]	 
	[***]	 	 	[***]	 

 

 

[***] Confidential treatment requested
pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been
filed separately with the Commission.

 

     

     

    

 

3.3         Commercialization
Milestone Payments. Licensee shall pay to Licensor, without any offset, non-refundable, one-time milestone payments
specified below with respect to the Commercialization by Licensee and its Sublicensees of Licensed Products as a human
therapeutic no later than forty (40) days after the following events have each initially occurred. Licensee will only pay
each of the Commercialization milestones listed below once.

 

	Apaza Milestone Event	 	Milestone Payment	 
	Upon aggregate Net Sales of Licensed Products in the Territory reaching [***] Dollars (US$[***]) in a single calendar year	 	$	2,000,000	 
	Upon aggregate Net Sales of Licensed Products in the Territory reaching [***] Dollars (US$[***]) in a single calendar year	 	$	2,500,000	 
	Upon aggregate Net Sales of Licensed Products in the Territory reaching [***] Dollars (US$[***]) in a single calendar year	 	$	1,000,000	 

 

4.       ROYALTIES

 

4.1         Royalty
Payment on Net Sales. During the relevant Royalty Term, for each Licensed Product in the Territory, Licensee shall pay or cause
to be paid to Licensor a royalty on Net Sales of Licensed Products made by Licensee, its Affiliates and its Sublicensees at the
following rates:

 

4.1.1   [***]
percent ([***]%) of the first [***] Dollars ($[***]) of Net Sales made in the Territory during a calendar year; and

 

4.1.2   [***]
percent ([***]%) of Net Sales made in the Territory during a calendar year in excess of [***] Dollars ($[***]); provided, however,
that in the event a generic for a Licensed Product is launched in a country in the Territory, Licensee’s royalty obligation
with respect to sales in such country shall be reduced by [***] percent ([***]%) (i.e., upon launch of a generic for the Licensed
Product in a country, the royalty rates set forth above shall be [***]% and [***]% respectively in such country). The term “generic”
refers to a product that has the same or substantially the same active ingredient(s), in the same or substantially the same dosage
form and strength.

 

4.2         Non-Royalty
Sublicensing Revenue. For each sublicense that Licensee or its Affiliates grants pursuant to Section 2.2 above, Licensee shall
pay to Licensor [***] percent ([***]%) of Non-Royalty Sublicensing Revenue (with such portion referred to as “Sublicensing
Proceeds”) received by Licensee or its Affiliates during the Royalty Term on a product-by-product, country-by-country basis.
Sublicensing Proceeds, if any, for any Licensed Product shall be credited towards any amounts that Licensee otherwise owed to,
or that subsequently become due to, Licensor under Section 3 and Section 4.1.

 

4.3         Royalty
Term. For each Licensed Product, the obligation of Licensee to pay Licensor royalties with respect to a given country in the
Territory shall commence on the date of the First Commercial Sale of such Licensed Product by the Licensee or its Affiliates or
Sublicensee in such country and shall continue until the earlier of (i) the date of expiration of the last to expire Valid Claim
for such Licensed Product (in the case of the U.S., based on the FDA’s Orange Book), and (ii) the date that one or more generic
equivalents of the Licensed Product in the aggregate makes up fifty percent (50%) or more of sales in the applicable country in
a calendar year (the “Royalty Term”). Upon Expiration of the applicable Royalty Term in any country, the license
granted pursuant to Section 2.1 shall become irrevocable and royalty-free in such country.

 

 

[***] Confidential treatment
requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.

 

     

     

    

 

4.4        Compulsory
Licenses. If Licensee is required to grant a compulsory license to a Third Party as required by the applicable laws of any
country in the Territory under the Licensed Patents, and the royalty rate payable to Licensee for sales of Licensed Product by
such Third Party is lower than the royalty rate payable by Licensee to Licensor for such sales, then the royalty rate payable hereunder
by Licensee for sales of Licensed Products by such Third Party in such country shall be no greater than the rate payable by such
Third Party to Licensee for such country.

 

4.5        Third
Party Royalty Obligations. If (a) in order to avoid infringement of any patent not licensed hereunder, Licensee reasonably
determines that it is necessary to obtain a license from a Third Party in order to Develop or Commercialize a Licensed Product
in a country in the Territory and to pay a royalty or other consideration under such license (including in connection with the
settlement of a patent infringement claim), or (b) Licensee shall be subject to a court or other similar binding order or ruling
requiring any payments, including the payment of a royalty to a Third Party patent holder in respect of sales of any Licensed Product
in a country in the Territory, then the amount of Licensee’s payments with respect to Net Sales for such Licensed Product
in such country, prior to the application of any credits, shall be reduced by [***] percent ([***]%) of the amounts payable to
such Third Party. Licensee shall have the right to carry forward and apply any unused offset or deduction to which Licensee is
entitled under this Section 4.5, against future royalties or other payments due to Licensor under Section 4.1 until the full amount
of the offset or deduction to which Licensee is entitled is satisfied, provided that the aggregate off-set in any calendar year
for any Licensed Product shall not exceed [***] percent ([***]%) of the amounts payable for that Licensed Product in that calendar
year, and provided further that any remaining off-set shall be offset in subsequent calendar years subject to the maximum aggregate
off-set in any calendar year not exceeding [***] percent ([***]%) of the amounts payable for that Licensed Product in that calendar
year.

 

		5.	MILESTONE AND ROYALTY REPORTS AND ACCOUNTING

 

5.1         Reports
and Payments.

 

5.1.1    Royalty
Payments and Statements. With respect to each Licensed Product, after the First Commercial Sale and until the Royalty Term
expires, Licensee shall deliver to Licensor within forty (40) days after the end of each calendar year, the total royalties due
from Licensee to Licensor for such year, along with a report setting forth for such year the following information:

 

 

[***] Confidential treatment requested
pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been
filed separately with the Commission.

 

     

     

    

 

(a)       the
gross sales and Net Sales of each Licensed Product in the Territory in local currency and in U.S. Dollars;

 

(b)       information
regarding any compulsory licenses, Third Party licenses or other deductions or set-offs described in Section 4;

 

(c)       the
Sublicensing Proceeds received by Licensee;

 

(d)       the
calculation of net royalty due from Licensee under Section 4.1 payable in U.S. Dollars;

 

(e)       withholding
taxes, if any, required by law to be deducted with respect to such Net Sales; and

 

(f)       the
calculation of the conversion of payments into U.S. Dollars, if applicable.

 

5.1.2   Milestone
Payments and Statements. Licensee shall notify Licensor of the occurrence of each milestone event and shall make milestone
payments to Licensor as described in Section 3 above. Upon Licensor’s request from time to time, but not more than once in
any three month period, Licensee shall provide Licensor with an update on the status of its Development activities related to such
milestone events.

 

5.1.3   Taxes
and Withholding. All amounts payable by Licensee to Licensor or its designee pursuant to this Agreement (“Payments”)
are inclusive of, and shall be made subject to any deduction or withholding for or on account of, any Tax required by applicable
laws or regulations. Licensee shall not be required to gross up any Payments or to pay any additional amounts to account for such
deduction or withholding. Licensor (or its Affiliates) alone shall be responsible for paying any and all Taxes levied on account
of, or measured in whole or in part by reference to, any Payments they receive If Licensee does deduct or withhold as set forth
above, Licensee shall (i) promptly notify Licensor of such deduction or withholding, (ii) pay to the relevant authorities the full
amount deducted or withheld, and (iii) promptly forward to Licensor an official receipt (or certified copy) or other documentation
evidencing such payment to such authorities Licensor retains the right to respond to and challenge any such Tax.

 

5.1.4   Currency.
All dollar amounts set forth herein and all Payments required under this Agreement shall be made in U.S. Dollars. For the purpose
of computing the Net Sales of Licensed Products received in a currency other than U.S. Dollars, such amount shall be converted
from local currency to U.S. Dollars by Licensee using the average rate of exchange for such currencies for the relevant period
as sourced from www.oanda.com. Licensee may modify the currency conversion methodology from time to time, provided that Licensee
obtains Licensor’s prior written consent, which shall not be unreasonable withheld or delayed, and provided that any such
modification apply prospectively only.

 

     

     

    

 

5.1.5       Delayed
Payment. In the event Licensee fails to make, defaults in making or otherwise delays the making of any Payments pursuant to
this Agreement for more than thirty (30) days after the due date, Licensee shall pay such amount to Licensor plus interest, which
shall accrue at a rate of [***] % per month compounded monthly ([***]% per annum) until such unpaid portion is paid to Licensor
in full, and Licensee shall be responsible for reasonable legal fees and expenses incurred by Licensor in connection with the collection
thereof.

 

5.2         Maintenance
of Records; Audits.

 

5.2.1       Record
Keeping and Audits. Licensee shall keep and shall cause its Affiliates and sublicensees to keep books and accounts of record
in connection with the sale of Licensed Products and in sufficient detail to permit accurate determination of all figures necessary
for verification of all Payments to be paid hereunder. Such books and records shall be made available upon Licensor’s reasonable
request (but not more than once in any twelve month period) and at Licensor’s expense for inspection by Licensor’s
independent auditors that are reasonably acceptable to Licensee. Such inspections shall be during normal business hours, at times
mutually acceptable to both Parties, and last no longer than two (2) business days. Such auditors must have agreed in writing to
maintain all information learned in confidence, except as necessary to disclose to Licensor such compliance or noncompliance by
the Licensee. Licensee and its Affiliates shall maintain such records for a period of at least two (2) years after the end of the
period for which they were generated or longer if required by law or regulation, and Licensee shall procure that all Sublicensees
of Licensee or its Affiliates maintain such records for a period of at least two (2) years after the end of the period for which
they were generated or longer if required by law or regulation.

 

5.2.2       Underpayments/Overpayments.

 

(a)          If
any audit by Licensor’s auditors concludes that additional Payments were due by Licensee to Licensor, Licensee shall pay
to Licensor the additional Payments within thirty (30) days of the date Licensee receives notice from Licensor of such conclusion,
with interest from the date such amount should have been due at a rate of [***]% per month compounded monthly ([***]% per annum)
until such unpaid portion is paid to Licensor in full. Any such underpayment that exceeds [***] percent ([***]%) of the amount
actually due to Licensor for the year under audit shall be considered a “Material Underpayment.” If Licensee makes
a Material Underpayment more than once, Licensee shall reimburse Licensor for the actual cost of the audit for such period or US$[***],
whichever is less. For the avoidance of doubt, Licensee shall have no obligation to reimburse audit costs related to the first
Material Underpayment, if any.

 

 

[***] Confidential treatment requested
pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been
filed separately with the Commission.

 

     

     

    

 

(b)          If
such audit concludes that Licensee overpaid any Payments to Licensor, Licensor shall refund such overpayments to Licensee, within
thirty (30) days of the date of the conclusion of such audit.

 

5.3         Disputes.
In the event that Licensee disputes in good faith any Payment amount that Licensor claims to be due pursuant to this
Agreement, Licensee may withhold payment of such disputed amount, provided; however, that if any such disputed amount is
ultimately paid, Licensee shall pay such amount to Licensor plus interest and reasonable legal fees and expenses incurred by
Licensor in connection with the collection thereof all in accordance with Section 5.1.5. Any Payment dispute shall be
submitted to an independent accounting firm mutually acceptable to the Parties for resolution. Licensee and Licensor shall
instruct the independent accounting firm to resolve such disputed matter within forty-five (45) days of having the disputed
matter referred to it, and in connection therewith, each Party shall use commercially reasonable efforts to cooperate with
the independent accounting firm. The independent accounting firm’s determination of the disputed matter referred to it
shall be final and binding upon the Parties, and any amount shown due by such determination shall be paid by the Party owing
such amount within twenty (20) days after such determination, and the Parties shall share the cost of such independent
accounting firm’s review equally.

 

		6.	REGULATORY MATTERS

 

6.1        Transfer
of the Product Regulatory Findings; Technical Assistance. Promptly following the Effective Date, the Parties shall file, and
shall cause their Affiliates and agents to file, with the FDA, the EMEA and any other relevant Regulatory Authority all of the
documents and information required by the Regulatory Authorities to effect the transfer of the Regulatory Filings in the Territory
to Licensee or an Affiliate or agent of Licensee designated by Licensee. To Licensor’s knowledge, all such Regulatory Filings
are described on Exhibit B. Promptly following the Effective Date, Licensor shall transfer, and shall cause its Affiliates
and agents to transfer to Licensee, all of the documents and the information described in Exhibit B in accordance with any
applicable Regulatory Authorities’ guidelines. Licensor shall file a letter with Regulatory Authorities acknowledging the
transfer of ownership of the Regulatory Filings, and Licensee shall file the information required of a new owner. Each of Licensee
and Licensor shall take, and shall cause their respective Affiliates and agents to take, any and all other actions required by
the Regulatory Authorities to effect the transfer of the Regulatory Filings from Licensor or its Affiliates or agents to Licensee
or its designated Affiliate or agents as soon as reasonably practicable. Licensor shall be entitled to obtain and retain at its
expense an archival copy of the Regulatory Filings in existence on the Effective Date, including supplements and records that are
required to be kept under applicable law. In the event that Licensor locates or obtains any additional information related to Apaza
Compound or Licensed Product (including without limitation any information identified on Exhibit B as “empty” or “missing”),
Licensor shall promptly provide such information to Licensee. From the Effective Date until the First Commercial Sale of Licensed
Product, Licensor agrees to make available to Licensee those personnel of Licensor knowledgeable with respect to the development
of Apaza Compound (including [***] and [***]) as requested by Licensee for consulting or technical help regarding Licensed Product.
Licensor shall be entitled to reasonable, mutually agreed compensation for the provision of such services. Licensor further agrees
that in the event that such personnel cease to be employed by Licensor, Licensee may engage such personnel and such persons may
provide assistance to Licensee or its designees related to Licensed Product without restriction of any confidentiality, noncompetition
or similar obligation.

 

 

[***] Confidential treatment requested
pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been
filed separately with the Commission.

 

     

     

    

 

6.2         Responsibility
for the Products. Form and after the Effective Date, Licensee shall have all regulatory responsibilities under applicable
laws and regulations, reporting and otherwise, in connection with the Licensed Products in the Territory.

 

6.3         Communications
with Regulatory Agencies. From and after the Effective Date, Licensee shall have responsibility for all communication
with the FDA and other applicable Regulatory Authorities with respect to all matters relating to the Licensed Products in the
Territory, and Licensor shall not make any such communications with the FDA or other applicable Regulatory Authority without
the prior written consent of Licensee. From and after the Effective Date, each Party shall, or shall cause its Affiliates or
agents to, promptly make available to the other Party copies of all correspondence with any Regulatory Authority regarding
regulatory warning letters, withdrawal of any Licensed Product, and correspondence bearing on the safety and efficacy of the
Licensed Product.

 

6.4         Additional
Information. From and after the Effective Date and at Licensor’s expense, Licensor shall, and shall cause its
Affiliates and agents to, undertake good faith efforts to provide to Licensee information existing on the Effective Date and
Controlled by Licensor that Licensee reasonably requests regarding the Development of the Licensed Products and which is
needed for Licensee to comply with applicable reporting requirements of the FDA and other Regulatory Authorities in the
Territory.

 

6.5         Government
Approvals. At Licensee’s expense, Licensor and its Affiliates and agents shall cooperate with the other Party and
use commercially reasonable efforts to make all registrations, filings and applications, to give all notices and to obtain as
soon as practicable all governmental and other consents, transfers, approvals, orders, qualifications, authorizations,
permits and waivers, if any, and to do all other things necessary or desirable for the consummation of the transactions as
contemplated by this Agreement.

 

		7.	DEVELOPMENT AND COMMERCIALIZATION

 

7.1         Development
and Commercialization.

 

7.1.1       Licensee
Responsibility. Licensee shall have the sole responsibility, authority and discretion to Develop, seek Regulatory Approvals
for and Commercialize the Licensed Products in the Territory and to make all decisions relating to such matters, including termination.

 

7.1.2       United
States. Subject to Section 7.2 below, Licensee shall use commercially reasonable efforts to Develop and Commercialize the Licensed
Products in the United States.

 

     

     

    

 

7.2        Abandoned
Products and Countries. Licensee may, in its sole discretion and for whatever reason, discontinue Development or
Commercialization of a Licensed Product in a particular country in the Territory. In such event, Licensee shall promptly
notify Licensor of its decision and the Parties shall terminate this Agreement with respect to affected Licensed Products in
affected countries in accordance with Section 13.2.2 below.

 

7.3         Ownership
of Licensee Improvements. Title to all Improvements conceived solely by or on behalf of Licensee (“Licensee
Improvements”) shall be owned exclusively by Licensee. Title to all Improvements conceived by Licensor personnel
(“Licensor Improvements”) shall be owned exclusively by Licensor; provided, however, that Licensor
Improvements shall be subject to the license granted to Licensee pursuant to Section 2.1. Title to all Improvements conceived
jointly by Licensee personnel and Licensor personnel (“Joint Improvements”) shall be owned jointly by
Licensee and Licensor; provided, however, that Licensor’s interest in Joint Improvements shall be subject to the
license granted to Licensee pursuant to Section 2.1.

 

7.4        Non-Competition
Applicable to Licensor. For [***] ([***]) years following the Effective Date, Licensor covenants that it shall not, and
shall cause its Affiliates not to, engage in a Competing Business, directly or indirectly, including the sublicensing of
rights to engage in a Competing Business. Licensor acknowledges that the noncompetition and other restrictive covenants and
agreements set forth in this Agreement are necessary to protect the rights being granted to Licensee pursuant to this
Agreement, and are reasonable in scope.

 

7.5        Non-Competition
Applicable to Licensee. During [***], Licensee covenants that it shall not, and shall cause its Affiliates not to, engage
in a Biocon Competing Business (as defined below), directly or indirectly [***]. For the purpose of this paragraph, a
“Biocon Competing Business” means [***]. Licensee acknowledges that the noncompetition and other
restrictive covenants and agreements set forth in this Agreement are necessary to protect the rights being granted to
Licensee pursuant to this Agreement, and are reasonable in scope. Notwithstanding the foregoing, the Agreement shall not
preclude Licensee or any of its Affiliates from owning or acquiring 5% of the outstanding equity securities in any publicly
traded company that engages in a Biocon Competing Business or acquiring an ownership interest in any company that engages in
a Biocon Competing Business where the competition is not material to Biocon or where Licensee agrees to divest and does
divest such Biocon Competing Business as soon as commercially reasonable but in no event more than two years from the date
the acquisition is consummated.

 

7.6         Licensee’s
Clinical Data. The parties acknowledge that as a result of this Agreement, Licensee may generate clinical trial data
relating to the Licensed Products (“Licensee Clinical Data”), which shall be owned by Licensee and shall
be considered Licensee’s Confidential Information.

 

 

[***] Confidential treatment requested
pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been
filed separately with the Commission.

     

     

    

 

7.7         No
Implied Obligation. Licensor acknowledges and agrees that nothing in this Agreement shall be construed as representing an
estimate or projection of the anticipated development, approvals or sales of any Licensed Product. LICENSEE MAKES NO
REPRESENTATION OR WARRANTY THAT IT SHALL SUCCEEED IN THE DEVELOPMENT OR COMMERCIALIZATION ACTIVITIES, ACHIEVING ANY MILESTONE
OR ACHIEVING ANY PARTICULAR SALES LEVEL OF SUCH LICENSED PRODUCTS. Licensor acknowledges and agrees that except as expressly
set forth herein, Licensee has no duties or obligations to Licensor or its Affiliates, and is not a fiduciary of Licensor or
its Affiliates.

 

7.8         Adverse
Event Reporting. If Licensee elects to Commercialize a Licensed Product, the Parties will prepare a standard operating
procedure governing the collection, investigation, reporting, and exchange of information concerning adverse drug reactions,
quality and other complaints, sufficient to permit each Party to comply with its legal and regulatory obligations. Such
standard operating procedure will be promptly updated if required by changes in legal or regulatory requirements. Subject to
the foregoing, each Party shall promptly inform the other Party about any adverse drug reactions, as well as any non-adverse
serious (e.g. from Licensed Product overdose) and any toxicity, sensitivity, failure of expected pharmacological action, or
laboratory abnormality which is, or is thought by the reporter, to be serious or associated with relevant clinical signs or
symptoms, in each case of which such Party becomes aware or is informed about regarding the use of a Licensed Product. Each
Party shall ensure that is Affiliates and sublicensees shall comply with the foregoing obligations as if a Party.

 

		8.	PATENT RIGHTS

 

8.1.        Licensed
Patents in the Territory.

 

8.1.1       Ownership,
Prosecution and Maintenance of Licensed Patents in the Territory. Subject to Section 8.1.2, Licensee shall have the first right,
but not the obligation, at its sole expense, to prosecute any and all patent applications within the Licensed Patents and all patentable
inventions included in Licensor Improvements, Licensee Improvements and Joint Improvements, in each case, in the Territory with
respect to Licensed Patents and Licensor Improvements and worldwide with respect to Licensee Improvements and Joint Improvements,
including but not limited to, the right to conduct interferences, oppositions, reissue proceedings and reexaminations, to obtain
patents thereon, and to maintain all patents included therein. Such prosecution and maintenance may be performed by outside counsel
of Licensee’s choosing. Licensor’s comments regarding the choice of such outside counsel shall be considered, but Licensee’s
decision in this regard shall be final. Licensor will not file any additional patents claiming any compound related to the Apaza
Compound without prior consent from Licensee. Licensee shall keep Licensor fully informed in a timely manner, and, as is reasonably
practicable, of the progress regarding the prosecution of each patent application included within the Licensed Patents and patent
applications with respect to Joint Improvements and Licensor Improvements. Licensor shall have the right to review all pending
patent applications and other proceedings, and to make recommendations to Licensee regarding the prosecution of such patent applications;
provided that all final decisions regarding the prosecution and maintenance of such patent applications shall be made by Licensee.

 

     

     

    

 

8.1.2       Discontinuation;
Abandonment of Licensed Patents in the Territory. If Licensee wishes to discontinue the prosecution of any patent application
or to abandon any patent within the Licensed Patents or patentable inventions included in Licensor Improvements or Joint Improvements,
Licensee shall inform Licensor at least ninety (90) days prior to such discontinuance and Licensor shall, at its option, have the
exclusive right to prosecute such patent application and/or maintain such patent at its expense prior to the date that such discontinuance
would otherwise take effect, and such Patent Rights included in the Licensed Patents and related to Licensor Improvement and Joint
Improvements shall stand excluded from the license granted to the Licensee under this Agreement, and Exhibit A shall stand
automatically and accordingly amended, notwithstanding any provisions to the contrary under this Agreement. Licensor shall advise
Licensee in writing of its decision regarding the opportunity to prosecute and/or maintain such application or patent within thirty
(30) days of the date of discontinuance and in the absence of a written decision from Licensor, Licensee shall have the right to
discontinue or abandon such application or patent. In the event Licensor timely elects to prosecute and maintain such patent or
patent application, Licensee shall, if required, execute an assignment transferring ownership of any patent or patent application
to Licensor in each such country. Licensee’s cancellation or amendment of a claim or claims during the prosecution of a patent
application in a country within the Licensed Patents or a patent application with respect to a Licensor Improvement or Joint Improvement
in the Territory shall not constitute a discontinuance or abandonment under this section, provided that such cancellation or abandonment
does not prejudice the ability to obtain granted claims to the cancelled subject matter in a related continuation, divisional,
or other application in such country.

 

8.3         Status
of Patents; Other Actions.

 

8.3.1       Initial.
Prior to the Effective Date, Licensor advised Licensee as to the current status of any patent applications and patents included
within the Licensed Patents, and, as of the Effective Date, there has been no change. To the extent it has not previously done
so, Licensor shall promptly make available to Licensee on a confidential basis, and subject to the other provisions of this Agreement,
all documentation Controlled by Licensor and relating to such patent applications and patents, including, but not limited to, copies
of all patent applications, relevant prior art, search reports, freedom to operate analyses or opinions, official actions and examination
reports, and all correspondence to and from local agents or attorneys responsible for local prosecution of such applications.

 

8.3.2       Ongoing.
At any time upon a Party’s request, and no more than four (4) times per calendar year, each Party shall, within thirty (30)
days: (i) advise the other Party as to the then-current status of any patent applications or patents within the Licensed Patents
specifically relevant to any Licensed Product; and (ii) to the extent the other Party requests, make available to the other Party
materially relevant documentation relating to such patent applications and patents, including, but not limited to, copies thereof.

 

     

     

    

 

8.3.3       Notices.
Licensor will execute and file at Licensee’s expense those notices and other filings as Licensee shall reasonably request
be made, from time to time with any patent office or patent agency in the Territory, and in all other respects shall reasonably
cooperate with Licensee, to effect the further prosecution and maintenance of Patent Rights associated with the Licensed Patents,
Licensor Improvements and Joint Improvements, and the other rights granted to Licensee under this Agreement. Licensee will execute
and file at Licensor’s expense those notices and other filings as Licensor shall reasonably request be made, from time to
time with any patent office or patent agency outside the Territory, and in all other respects shall reasonably cooperate with Licensor,
to effect the further prosecution and maintenance of the Licensed Patents outside the Territory.

 

8.3.4       Power
of Attorney. Upon the Effective Date, Licensor shall execute, and shall cause Biocon to execute, as applicable, a specific
power of attorney in favor of Licensee (or any Affiliate or agents as directed by Licensee) for purposes of prosecution and maintenance
of the Patent Rights associated with the Licensed Patents, Licensor Improvement or Joint Improvement, and taking other actions
contemplated by this Agreement.

 

8.4         Patent
Term Extension. Licensee shall have the exclusive right to seek, at Licensee’s expense, patent term extensions or supplemental
patent protection, including supplementary protection certificates, in any country in the Territory in relation to the Licensed
Products. Licensor and Licensee shall cooperate in connection with all such activities, and Licensee, its agents and attorneys
will give due consideration to all timely suggestions and comments of Licensor regarding any such activities; provided that all
final decisions in this regard shall be made by Licensee.

 

8.5         Orange
Book Listings for Licensed Patents. With respect to filings in the FDA Orange Book (and foreign equivalents) for issued patents
for a Licensed Product, Licensee shall be solely responsible at its expense for fulfilling its obligations under applicable law
to list any applicable Licensed Patents in a timely manner and make all applicable filings regarding the Licensed Patents required
to be filed by it under applicable law. Licensee will be solely responsible for any such filings and listings, and for any and
all decisions with respect to such filings and listings.

 

8.6         Notification
of Patent Certification for Licensed Patents. If a Party becomes aware that any certification filed pursuant to 21 U.S.C. §
355(b)(2)(A) or 355(j)(2)(A)(vii)(IV), or any notice under any future analogous provisions of United States law relating to regulation
or approval of drug products (or any amendment or successor statute thereto) claiming that any Licensed Patents covering a Licensed
Product are invalid or otherwise unenforceable, or that infringement will not arise from the manufacture, use, import or sale of
a product by a Third Party, such Party shall promptly notify the other Party in writing after its receipt thereof.

 

8.7         Limitation
on Patent Actions. Neither Party shall be required to take any action pursuant to Sections 8.4, 8.5 or 8.6 hereof that such
Party reasonably determines in its sole judgment and discretion conflicts with or violates any court or government order or decree
that such Party is then subject to or otherwise may create legal liability on the part of such Party.

 

     

     

    

 

8.8         Registration
of License. Licensor hereby authorizes Licensee to record a brief, mutually acceptable memorandum disclosing the existence
of this Agreement and the license granted herein in the title records of the relevant patent to the extent required for the licenses
granted herein to be effective against Third Parties under applicable law. Any such recordation shall disclose as little regarding
the terms and conditions of this Agreement as necessary to properly register or record this Agreement under applicable law.

 

9.       INFRINGEMENT

 

9.1         Notice.
Each Party shall promptly report in writing to the other Party any known or suspected (i) infringement of any of the Patents Rights
associated with the Licensed Patents, Licensor Improvements, Licensee Improvements and Joint Improvements, or (ii) unauthorized
use or misappropriation of any of the Apaza Know-How of which such Party becomes aware, and shall provide the other Party with
all available evidence supporting such known or suspected infringement or unauthorized use.

 

9.2         Third
Party Infringement in the Territory. If a Third Party infringes any of the Patent Rights associated with the Licensed Patents,
Licensor Improvements, Licensee Improvements or Joint Improvements in the Territory, Licensee will have the first right (but not
the obligation), at its own expense, to pursue any and all injunctive relief, and any or all compensatory and other remedies and
relief (collectively, “Remedies”), against such Third Party, and Licensor will have the right to participate
in such action at its own expense. Should Licensee determine not to pursue Remedies with respect to any such infringement or misappropriation
of Licensed Technology, Licensor Improvements or Joint Improvements within thirty (30) days after receipt of written notice from
Licensor requesting Licensee to do so, then, unless Licensee is engaged in active negotiations regarding the grant of a sublicense
to the infringer, Licensor will have the right (but not the obligation), at its own expense, to pursue Remedies against such Third
Party, and Licensee shall have the right to participate in such action at its own expense. If a Party pursues Remedies hereunder
with respect to infringement or misappropriation, the other Party will use all reasonable efforts to assist and cooperate with
the Party pursuing such Remedies, including joining in any action or providing a power of attorney if necessary. Each Party will
bear its own costs and expenses relating to such pursuit. Any damages or other amounts collected will be distributed, first, to
the Party that pursued Remedies to cover its costs and expenses; and second, to the other Party to cover its costs and expenses,
if any, relating to the pursuit of such Remedies; and any remaining amount will be distributed to the Party or Parties that pursued
the Remedies. [***].

 

9.3        Third
Party Invalidity Claim. Each of the Parties shall promptly notify the other in the event of any legal or administrative
action by any Third Party against Patents Rights associated with the Licensed Patents, Licensor Improvements, Licensee
Improvements or Joint Improvements in the Territory of which it becomes aware, including any nullity, revocation,
reexamination or compulsory license proceeding. Licensee shall have the first right, but not the obligation, to defend
against any such action involving such Patent Rights in the Territory in its own name, and the costs of any such defense
shall be at Licensee’s expense. Licensor, upon request of Licensee, agrees to join in any such action and to cooperate
reasonably with Licensee; provided that Licensee shall promptly reimburse all out-of-pocket expenses (including reasonable
counsel fees and expenses) actually incurred by Licensor in connection with such cooperation. If Licensee does not defend
against any such action involving a Licensed Patent, Joint Improvement or a Licensor Improvement in the Territory, then
Licensor shall have the right, but not the obligation, to defend such action and any such defense shall be at
Licensor’s expense. Licensee, upon request of Licensor, agrees to join in any such action and to cooperate reasonably
with Licensor; provided that Licensor shall promptly reimburse all out-of-pocket expenses (including reasonable counsel fees
and expenses) actually incurred by Licensee in connection with such cooperation. [***].

 

 

[***] Confidential treatment requested
pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been
filed separately with the Commission.

     

     

    

 

9.4         Infringement
of Third Party Rights. Each Party shall promptly notify the other in writing of any allegation by a Third Party that the
activity of either of the Parties or their Affiliates or a Sublicensee in connection with the Development or
Commercialization of the Licensed Products infringes the issued patent rights (or would infringe the claims, if issued, of a
pending patent application) of any Third Party in the Territory (“Patent Claims”). In the event of a
litigation in accordance with this Section 9.4, Licensee shall have the right, but not obligation, to defend and/or settle
any such Patent Claims. Notwithstanding the foregoing, in the event Licensor determines in its reasonable judgment that
Licensee is not using diligent efforts to defend and/or settle any such Patent Claim, Licensor may, but shall not be required
to, take over the defense or settlement negotiations upon written notice to Licensee at Licensor’s sole cost and
expense.

 

		10.	REPRESENTATIONS, WARRANTIES, AND COVENANTS

 

10.1       Representations
Warranties and Covenants of Each Party. Each Party hereby represents, warrants and covenants to the other Party as
follows:

 

10.1.1       Such
Party: (a) is duly formed and in good standing under the laws of the jurisdiction of its formation; (b) has the power and authority
and the legal right to enter into this Agreement and perform its obligations hereunder; and (c) has taken all necessary action
on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder.
This Agreement has been duly executed and delivered on behalf of such Party and constitutes a legal, valid and binding obligation
of such Party and is enforceable against it in accordance with its terms.

 

10.1.2       All
necessary consents, approvals and authorizations of all Regulatory Authorities and other Persons required to be obtained by such
Party in connection with the execution and delivery of this Agreement and the performance of its obligations hereunder have been
obtained except for Regulatory Approvals for the Commercialization of the Product.

 

10.1.3       The
execution and delivery of this Agreement, the performance of such Party’s obligations hereunder, and any actions or omissions
of such Party related to the activities contemplated hereunder and the circumstances surrounding this Agreement: (a) do not and
will not conflict with or violate any applicable law or any provision of the articles of incorporation, bylaws or other governing
charter documents of such Party; and (b) do not and will not conflict with, violate, or breach, or constitute a default or require
any consent under, any contractual obligation or court or administrative order by which such Party is bound.

 

     

     

    

 

10.1.4       Each
Party agrees not to engage in any action that is in violation or inconsistent with the terms and conditions of this Agreement or
that interferes with the consummation of the transactions contemplated under this Agreement.

 

10.1.5       Neither
Party nor any of its Affiliates is a Party to or otherwise bound by any oral or written contract or agreement that will result
in any Third Party obtaining any interest in, or that would give to any Third Party any right to assert any claim in or with respect
to, any of the Parties’ rights under this Agreement.

 

10.2       Additional
Licensor Representations, Warranties and Covenants. Licensor represents, warrants and covenants to Licensee as
follows:

 

10.2.1       Licensor
has not received and is not aware of any written notice of any claim by a Third Party alleging infringement or misappropriation
of any intellectual property of any Third Party based on the Licensed Technology.

 

10.2.2       Licensor
and its Affiliates have the right to grant the licenses granted to Licensee herein, and Licensor exclusively owns all right, title
and interest in and to, or has an exclusive license or sublicense to use and license, all of the Licensed Technology.

 

10.2.3       To
the best of Licensor’s knowledge, the inventors listed in the Licensed Patents are the sole inventors with respect to inventions
incorporated therein.

 

10.2.4       Licensor
shall at all times comply with the terms of and its obligations under the Biocon License Agreement, and shall not agree to amend
the Biocon License Agreement without the prior written consent of Licensee.

 

10.2.5       To
the best of Licensor’s knowledge, the Licensed Technology is free from all Liens or encumbrances of any kind.

 

10.2.6       It
shall not, and it shall cause its officers, employees and subcontractors not to, make any untrue statement of material fact to
any Regulatory Authority with respect to the Licensed Products, or knowingly fail to disclose a material fact required to be disclosed
to any Regulatory Authority with respect to the Licensed Products.

 

10.2.7       It
shall not employ any personnel, or knowingly use a contractor or consultant, debarred by the FDA (or subject to a similar sanction
of a Regulatory Authority outside the United States), or who is subject of an FDA debarment investigation or proceeding (or similar
proceeding of a Regulatory Authority outside the United States).

 

     

     

    

 

10.3       Additional
Licensee Representations, Warranties and Covenants. Licensee represents, warrants and covenants to Licensor as
follows:

 

10.3.1       It
shall not, and it shall cause its officers, employees and subcontractors not to, make any untrue statement of material fact to
any Regulatory Authority with respect to the Licensed Products, or knowingly fail to disclose a material fact required to be disclosed
to any Regulatory Authority with respect to the Licensed Products.

 

10.3.2       It
shall not employ any personnel, or knowingly use a contractor or consultant, debarred by the FDA (or subject to a similar sanction
of a Regulatory Authority outside the United States), or who is subject of an FDA debarment investigation or proceeding (or similar
proceeding of a Regulatory Authority outside the United States).

 

10.4       Disclaimer.
EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
ARISING BY LAW OR OTHERWISE, AND BOTH PARTIES HEREBY DISCLAIM ALL IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, (I) ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, (II) ANY IMPLIED WARRANTY ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, (III) IMPLIED WARRANTY OF NONINFRINGEMENT, AND (IV) IMPLIED WARRANTY OF
TITLE.

 

		11.	INDEMNIFICATION

 

11.1       Indemnification
by Licensee. Licensee shall defend, indemnify and hold harmless Licensor and its Affiliates and each of their respective
officers, directors, shareholders, employees, successors and assigns from and against all claims or demands made by a Third
Party (“Third Party Claims”), and all associated Losses, to the extent arising out of: (a) a breach of
this Agreement by Licensee; (b) the development, testing, manufacture, storage, use, handling, distribution, labeling,
promotion, marketing, sale or other disposition of any Licensed Product or component thereof by Licensee after the Effective
Date; or (c) the Commercialization of the Licensed Products in the Territory; provided, however, that in case of (b) or (c)
of this Section 11.1, Licensee shall not be liable to indemnify Licensor for any Losses to the extent that such Losses were
caused by (i) the negligence or willful misconduct or intentional wrongdoing of Licensor, its Affiliates or their respective
employees or contractors, or (ii) any breach of this Agreement by Licensor, or (iii) the Licensed Technology infringing upon
the intellectual property rights of any Third Party.

 

11.2       Indemnification
by Licensor. Licensor shall defend, indemnify and hold harmless Licensee and its Affiliates and each of their respective
officers, directors, shareholders, employees, successors and assigns from and against all Third Party Claims, and all
associated Losses, to the extent arising out of: (a) the negligence or willful misconduct of Licensor, its Affiliates or
their respective employees or contractors in performing any of its obligations under this Agreement; (b) a breach of this
Agreement by Licensor; (c) any payment obligations under or pursuant to the Biocon Agreement; or (d) any use of or activity
related to Licensed Product prior to the Effective Date.

 

     

     

    

 

11.3       Biocon
License Agreement. For the avoidance of doubt, Licensor shall be solely liable for all payment obligations under and
pursuant to the Biocon License Agreement, and Licensee shall have no obligation with respect thereto. Without limiting the
foregoing and without creating any future course of dealing between the Parties, Licensee may, but shall not be obligated to,
make any payment due hereunder directly to Biocon in satisfaction of Licensor’s obligation thereunder, and Licensee may
credit any such amount so paid against any amounts due and payable hereunder to Licensor.

 

11.4       Procedure
for Indemnification.

 

11.4.1       Notice.
In the case of a Third Party Claim for which a Party (the “Indemnitor”) may be obligated to provide indemnification
pursuant to this Agreement, such Person seeking indemnification hereunder (“Indemnitee”) will notify the Indemnitor
in writing of the Third Party Claim (and specifying in reasonable detail the factual basis for the Third Party Claim and to the
extent known, the amount of the Third Party Claim) reasonably promptly after becoming aware of such Third Party Claim; provided,
however, that failure to give such notification will not affect the indemnification provided hereunder except to the extent the
Indemnitor shall have been actually materially prejudiced as a result of such failure.

 

11.4.2       Defense
of Claim. If a Third Party Claim is made against an Indemnitee, the Indemnitor will be entitled, within thirty (30) days after
receipt of written notice from the Indemnitee of the commencement or assertion of any such Third Party Claim, to assume the defense
thereof by providing written notice to Indemnitee of its intention to assume the defense of such Third Party Claims within such
thirty (30) day period (at the expense of the Indemnitor) with counsel selected by the Indemnitor and reasonably satisfactory to
the Indemnitee for so long as the Indemnitor is conducting a good faith and diligent defense. Should the Indemnitor so elect to
assume the defense of a Third Party Claim, the Indemnitor will not be liable to the Indemnitee for any legal or other expenses
subsequently incurred by the Indemnitee in connection with the defense thereof; provided, however, that if under applicable standards
of professional conduct a conflict of interest exists between the Indemnitor and the Indemnitee in respect of such claim, such
Indemnitee shall have the right to employ separate counsel to represent such Indemnitee with respect to the matters as to which
a conflict of interest exists and in that event the reasonable fees and expenses of such separate counsel shall be paid by such
Indemnitor; provided, further, that the Indemnitor shall only be responsible for the reasonable fees and expenses of one separate
counsel for such Indemnitee. If the Indemnitor assumes the defense of any Third Party Claim, the Indemnitee shall have the right
to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnitor.
If the Indemnitor assumes the defense of any Third Party Claim, the Indemnitor will promptly supply to the Indemnitee copies of
all correspondence and documents relating to or in connection with such Third Party Claim and keep the Indemnitee informed of developments
relating to or in connection with such Third Party Claim, as may be reasonably requested by the Indemnitee (including, without
limitation, providing to the Indemnitee on reasonable request updates and summaries as to the status thereof). If the Indemnitor
chooses to defend a Third Party Claim, all Indemnitees shall reasonably cooperate with the Indemnitor in the defense thereof (such
cooperation to be at the expense, including reasonable legal fees and expenses, of the Indemnitor). If the Indemnitor does not
elect to assume control by written acknowledgement of the defense of any Third Party Claim within the thirty (30) day period set
forth above, or if such good faith and diligent defense is not being or ceases to be conducted by the Indemnitor, the Indemnitee
shall have the right, at the expense of the Indemnitor, after three (3) business days’ written notice to the Indemnitor of
its intent to do so, to undertake the defense of the Third Party Claim for the account of the Indemnitor (with counsel selected
by the Indemnitee), and to compromise or settle such Third Party Claim, exercising reasonable business judgment.

 

     

     

    

 

11.4.3       Settlement
of Claims. If the Indemnitor acknowledges in writing its obligation to indemnify the Indemnitee for a Third Party Claim, the
Indemnitee will agree to any settlement, compromise or discharge of such Third Party Claim that the Indemnitor may recommend that
by its terms obligates the Indemnitor to pay the full amount of Losses (whether through settlement or otherwise) in connection
with such Third Party Claim and unconditionally and irrevocably releases the Indemnitee completely from all Losses in connection
with such Third Party Claim; provided, however, that, without the Indemnitee’s prior written consent, the Indemnitor shall
not consent to any settlement, compromise or discharge (including, without limitation, the consent to entry of any judgment), that
provides for injunctive or other nonmonetary relief affecting the Indemnitee.

 

11.5       Insurance.
Immediately upon the First Commercial Sale of a Licensed Product in the Territory, during the Term and for a period of [***]
([***]) years after the termination or expiration of this Agreement, Licensee shall obtain and/or maintain at its sole cost
and expense, product liability insurance (including any self-insured arrangements) in amount of no less than [***] dollars
($[***]). All insurance policies reflecting such insurance shall be written on a “per occurrence” or
“claims made” basis with an insurance company rated at least A-3 by Best’s rating guide. If requested,
Licensee shall provide Licensor with a certificate of insurance and shall keep such policy current. Licensee shall use
commercially reasonable efforts to ensure that each such insurance policy shall provide for at least thirty (30) calendar
days prior written notice to Licensor of the cancellation or any substantial modification of the terms of coverage. Such
product liability insurance (or self-insured arrangements) shall insure against all liability, including without limitation
personal injury, physical injury, or property damage arising out of the manufacture, sale, distribution, or marketing of a
Licensed Product.

 

 

[***] Confidential treatment requested
pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been
filed separately with the Commission.

 

     

     

    

 

11.6       Limitation
of Liability. EXCEPT (I) AS EXPRESSLY SET FORTH IN THIS AGREEMENT, (II) WITH RESPECT TO A PARTY’S INDEMNIFCATION
OBLIGATIONS SET FORTH IN THIS SECTION 11, OR (III) TO THE EXTENT CAUSED BY FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN
NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER OR ANY OF ITS AFFILIATES FOR ANY LOST PROFITS OR REVENUES OR
CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES.

 

		12.	CONFIDENTIALITY

 

12.1       General.
Pursuant to the terms of this Agreement, each of Licensor and Licensee (in such capacity, the “Disclosing
Party”) has disclosed and will be disclosing to the other Party, and to the officers, directors, employees, agents
and/or representatives of each (in such capacity, the “Receiving Party”) its Confidential Information. The
Receiving Party shall make no use of any Confidential Information of the Disclosing Party except in the exercise of its
rights and the performance of its obligations set forth in this Agreement. The Receiving Party: (a) shall keep and hold as
confidential, and shall cause its officers, directors, employees, agents and representatives to keep and hold as
confidential, all Confidential Information of the Disclosing Party; and (b) shall not disclose, and shall cause its officers,
directors, employees, agents and representatives not to disclose, any Confidential Information of the Disclosing Party.
Confidential Information disclosed by the Disclosing Party shall remain the sole and absolute property of the Disclosing
Party, subject to the rights granted in this Agreement.

 

12.2       Exceptions.
The above restrictions set forth in Section 12.1 on the use and disclosure of Confidential Information shall not apply to any
information which: (a) is already known to the Receiving Party at the time of disclosure by the Disclosing Party, as
demonstrated by competent proof (other than as a result of prior disclosure under any agreement between the Parties with
respect to confidentiality); (b) is or becomes generally known or available to the public other than through any act or
omission of the Receiving Party in breach of this Agreement; (c) is acquired by the Receiving Party from a Third Party who is
not directly or indirectly under an obligation of confidentiality to the Disclosing Party with respect to same, or (iv) is
developed independently by the Receiving Party without the use, direct or indirect, of the Disclosing Party’s
Confidential Information. In addition, nothing in this Section 12 shall be interpreted to limit the ability of either Party
to disclose its own Confidential Information to any other Person on such terms and subject to such conditions as it deems
advisable or appropriate.

 

12.3       Permitted
Disclosures. It shall not be a breach of Section 12.1 if a Receiving Party discloses Confidential Information of a
Disclosing Party: (a) pursuant to applicable law, including securities laws, to any Regulatory Authority or the listing
standards or agreements of any national or international securities exchange or The NASDAQ Stock Market or other governmental
authority; or (b) in a judicial, administrative or arbitration proceeding to enforce such Party’s rights under this
Agreement; provided, however, that the Receiving Party (i) provides the Disclosing Party with as much advance written notice
as possible of the required disclosure, (ii) reasonably cooperates with the Disclosing Party, at the Disclosing Party’s
expense, in any attempt to prevent, limit or seek confidential treatment for the disclosure, and (iii) discloses only the
minimum amount of Confidential Information necessary for compliance.

 

     

     

    

 

12.4       Confidential
Terms. Each Party acknowledges and agrees that this Agreement, including the terms and conditions thereof, shall be
considered Confidential Information of each Party and shall be treated accordingly. Notwithstanding the foregoing, each Party
acknowledges and agrees that the other may be required to disclose some or all of the information included in this Agreement
in order to comply with its obligations under securities laws or the listing standards or agreements of any national or
international securities exchange or The NASDAQ Stock Market, and hereby consents to such disclosure to the extent deemed
advisable or appropriate by its respective counsel (but only after consulting with the other to the extent practicable). The
Parties may also disclose the existence of this Agreement and terms thereof to their directors, investors, officers,
employees, attorneys, accountants and other advisers on a need to know basis and may, upon obtaining a written
confidentiality agreement from a Third Party or written consent from the other Party, further disclose the existence and
terms of this Agreement to the Third Party to whom it may be relevant in connection with financings, acquisitions and similar
transactions.

 

12.5       Equitable
Remedies. Each Party specifically recognizes that any breach by it of this Section 12 may cause irreparable injury to the
other Party and that actual damages may be difficult to ascertain, and in any event, may be inadequate. Accordingly (and
without limiting the availability of legal or equitable, including injunctive, remedies under any other provisions of this
Agreement), each Party agrees that in the event of any such breach, the other Party shall be entitled to seek injunctive
relief and such other legal and equitable remedies as may be available.

 

		13.	TERM AND TERMINATION

 

13.1       Term.
This Agreement shall become binding upon the Effective Date and on a country-by-country basis, shall continue thereafter in
full force and effect, unless terminated sooner pursuant to this Section 13, until the expiration of the Royalty Term for
such product and such country (such expiration without termination, “Expiration”).

 

13.2       Licensee’s
Right to Terminate.

 

13.2.1       For
Material Breach. Licensee may terminate this Agreement, in whole or in part, at any time if (i) Licensor materially breaches
the Agreement and (ii) such material breach is not cured by Licensor within sixty (60) days after Licensee provides Licensor with
written notice of such breach.

 

13.2.2       For
Abandonment. In the event Licensee elects to abandon a Licensed Product in a particular country in the Territory in accordance
with Section 7.2 above, Licensee may terminate this Agreement with respect to affected countries or products upon written notice
to Licensor. In such event, all terminated rights transfer back to Licensor. Licensee will assist Licensor with the transfer of
rights at Licensee’s expense.

 

13.2.3       Without
Cause. Licensee may terminate this Agreement in whole for any reason or no reason at all upon thirty (30) days prior written
notice to Licensor. In such event, all terminated rights transfer back to Licensor. Licensee will assist Licensor with the transfer
of rights at Licensee’s expense.

 

     

     

    

 

13.3       Licensor’s
Right to Terminate.

 

13.3.1     For
Material Breach. Licensor may terminate this Agreement with respect to affected countries and products at any time if (i) Licensee
materially breaches the Agreement and (ii) such material breach is not cured by Licensee within sixty (60) days after Licensor
provides Licensee with written notice of such breach.

 

13.3.2     For
Bankruptcy, Liquidation, or Dissolution. Licensor may terminate this Agreement upon (i) the bankruptcy, liquidation or dissolution
of Licensee (without further action by Licensor); or (ii) the filing of any voluntary petition for bankruptcy, dissolution, liquidation
or winding-up of the affairs of Licensee which is not dismissed within one hundred twenty (120) days after the date on which it
is filed or commenced.

 

13.3.3     For
Challenge to Certain Patents. Licensor may terminate this Agreement with respect to affected countries at any time if Licensee
initiates a challenge or contest to the validity of the Licensed Patent Rights or Licensor’s or Biocon’s rights therein
before a court, any patent authority or similar forum.

 

13.4       Rights
Upon Expiration and Termination.

 

13.4.1     Upon
Expiration of this Agreement with respect to a Licensed Product in a country in the Territory, the licenses granted pursuant to
Section 2 for such product in such country shall become perpetual, fully paid and irrevocable. Notwithstanding a termination by
Licensee with respect to a Licensed Product in a country in the Territory pursuant Section 12.3.1 (Licensor uncured breach), the
licenses granted pursuant to Section 2 shall, at Licensee’s option, continue and, until such time as the Biocon License Agreement
is terminated and this Agreement is assigned to Biocon in accordance with Section 2.4 of the Biocon License Agreement, be fully
paid and royalty free.

 

13.4.2     Upon
termination of the Biocon License Agreement for any reason other than a material breach by Biocon, the licenses granted pursuant
to Section 2 shall stand automatically assigned by the Licensor to Biocon upon such termination.

 

13.4.3     Upon
termination of this Agreement by Licensor under Section 13.3 (Licensor’s Right to Terminate) or upon termination of this
Agreement by Licensee pursuant to Section 13.2.2 or 13.2.3, with respect to a Licensed Product in a country in the Territory;

 

(a)       Licensee,
each Licensee Affiliate and Sublicensee shall return to Licensor the copies of and documentation and embodiments of the Apaza Know-How
that Licensor provided to Licensee in accordance with Section 6.1 and that solely related to the terminated Licensed Products in
the affected countries; and

 

(b)       Licensor
shall receive a perpetual, fully paid, irrevocable, and royalty-free license to use the Licensee Clinical Data solely for the purpose
of Developing and Commercializing such terminated Licensed Products in the affected countries;

 

     

     

    

 

13.4.4       Upon
Expiration or termination of this Agreement, the following Sections and Articles shall survive such expiration or termination,
subject to any later termination dates provided for therein: Sections 1 (to the extent applicable), 2.2 (Sublicensing), 5 (Milestone
and Royalty Reports and Accounting, with respect to any periods prior to the Expiration or termination of this Agreement), 7 (Development
and Commercialization, other than Sections 7.1 and 7.2), 8 (Patent Rights), 9 (Infringement), 10 (Representations, Warranties,
and Covenants), 11 (Indemnification), 12 (Confidentiality), 13 (Term and Termination), and 14 (Miscellaneous).

 

13.4.5       Expiration
or termination of the Agreement shall not relieve the Parties of any obligation accruing before such expiration or termination.
Any Expiration or early termination of this Agreement shall be without prejudice to the rights of either Party against the other
accrued or accruing under this Agreement before termination.

 

		14.	MISCELLANEOUS

 

14.1       Independent
Contractor. Neither Licensor nor Licensee, together in each case with their respective employees or representatives, are
under any circumstances to be considered as employees, partners, joint venturers, agents or representatives of the other by
virtue of this Agreement, and neither shall have the authority or power to bind the other or contract in the other’s
name.

 

14.2       Notices.
Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed given when so
delivered in person, by overnight courier, by facsimile transmission (with receipt confirmed by automatic transmission
report) or two (2) business days after being sent by registered or certified mail (postage prepaid, return receipt
requested), as follows:

 

	If to Licensee:	GI Therapeutics, Inc.
	 	c/o H&M Holdings, LLC
	 	5410 Trinity Road, Suite 400
	 	Raleigh, NC 27612
	 	Attention: President

 

With a copy to:

 

	 	Hutchison PLLC
	 	Attn: William N. Wofford
	 	5410 Trinity Road, Suite 400
	 	Raleigh, NC 27607
	 	Facsimile No.: 919-829-9696

 

     

     

    

 

	If to Licensor:	Seachaid Pharmaceuticals, Inc.
	 	c/o Aisling Capital
	 	888 Seventh Ave, 30th Floor
	 	New York, NY 10106
	 	Attention: Steve Elms
	 	Chief Executive Officer
	 	Telephone: (212) 652-6380
	 	Facsimile: (212) 651-6379

 

With a copy to:

 

	 	Seachaid Pharmaceuticals, Inc.
	 	Attn: Radha Krishnan
	 	801 Capitola Drive, Ste 5
	 	Durham, NC 27713
	 	Facsimile: (919) 354-1830

 

Either Party may by notice given in accordance
with this Section 14.3 to the other Party designate another address or person for receipt of notices hereunder.

 

14.3       Binding
Effect; No Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns. Neither Licensor nor Licensee may assign any of its rights or delegate any of its
liabilities or obligations hereunder, without the prior written consent of the other Party except that, without the prior
consent of the other Party: (a) either Party may assign this Agreement in connection with the transfer or sale of all or
substantially all of the business of such Party to which this Agreement relates, whether by merger, sale of stock, sale of
assets or otherwise; and (b) either Party may assign this Agreement and/or its rights and obligations under this Agreement,
in whole or in part, to any of its Affiliates. Any purported assignment or transfer in violation of this Section will be void
ab initio and of no force or effect.

 

14.4       No
Implied Waivers; Rights Cumulative. No failure on the part of Licensor or Licensee to exercise and no delay in exercising
any right, power, remedy or privilege under this Agreement, or provided by statute or at law or in equity or otherwise,
including the right or power to terminate this Agreement, shall impair, prejudice or constitute a waiver of any such right,
power, remedy or privilege or be construed as a waiver of any breach of this Agreement or as an acquiescence therein, nor
shall any single or partial exercise of any such right, power, remedy or privilege preclude any other or further exercise
thereof or the exercise of any other right, power, remedy or privilege.

 

14.5       Severability.
If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable.
The Parties further agree to replace such invalid or unenforceable provision of this Agreement with a valid and enforceable
provision that shall achieve, to the extent possible, the economic, business and other purposes of such invalid or
unenforceable provision.

 

     

     

    

 

14.6       Force
Majeure. Neither Party shall be liable for delay in delivery or nonperformance, in whole or in part, nor shall the other
Party have the right to terminate this Agreement except as otherwise specifically provided in this Section 14.6, to the
extent that such delay in delivery or nonperformance is caused by any event reasonably beyond the control of such Party and
without the fault or negligence of such Party, including fires, floods, embargoes, shortages, epidemics, quarantines, war,
acts of war (whether war be declared or not), terrorism, insurrections, riots, civil commotion, strikes, lockouts or other
labor disturbances, acts of God or acts, omissions or delays in acting by any Regulatory Authority, in each case, to the
extent such events are reasonably beyond the control of such Party (a “Force Majeure”); provided, however,
that the Party affected by such a condition shall, within ten (10) days of its occurrence, give written notice to the other
Party stating the nature of the condition, its anticipated duration and any action being taken to avoid or minimize its
effect. The suspension of performance shall be of no greater scope and no longer duration than is reasonably required and the
nonperforming Party shall use its commercially reasonable efforts to remedy its inability to perform; provided, however, that
in the event the suspension of performance continues for a period of ninety (90) consecutive calendar days after the date of
the occurrence, and such failure to perform would constitute a material breach of this Agreement in the absence of such Force
Majeure event, the nonaffected Party may terminate this Agreement immediately by written notice to the other Party.

 

14.7       Amendment.
This Agreement may not be amended except by an instrument signed by a duly authorized representative of each of the Parties
hereto.

 

14.8       Rules
of Construction. The Parties hereto agree that they have been represented by counsel during the negotiation and execution
of this Agreement and, therefore, waive the application of any law, regulation, holding or ruling of construction providing
that ambiguities in an agreement or other document shall be construed against the Party drafting such agreement or
document.

 

14.9       Expenses.
Except as expressly set forth herein, each Party shall bear all fees and expenses incurred by such Party in connection with,
relating to or arising out of the execution, delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, including attorneys’, accountants’ and other professional fees and
expenses.

 

14.10     Governing
Law; Submission to Jurisdiction; Waiver. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of North Carolina without regard to its conflict of laws principles. In the event any action shall
be brought to enforce or interpret the terms of this Agreement, the Parties agree that such action will be brought in the
State or Federal courts located in Raleigh, North Carolina. Each of Licensor and Licensee hereby irrevocably submits with
regard to any action or proceeding for itself and in respect to its property, generally and unconditionally, to the exclusive
jurisdiction of the aforesaid courts. Each of Licensor and Licensee hereby irrevocably waives, and agrees not to assert, by
way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement: (a) any
claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure
to lawfully serve process; (b) that it or its property is exempt or immune from jurisdiction of any such court or from any
legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise); and (c) to the fullest extent permitted by applicable law, that
(i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action
or proceeding is improper, and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.

 

     

     

    

 

14.11     Except
as expressly provided in this Agreement:

 

14.11.1 each party specifically disclaims
all representations and warranties of any kind regarding the Licensed Products or otherwise in connection with this Agreement including,
without limitation, any warranties of merchantability or fitness for a particular purpose;

 

14.11.2 the parties make no representation
or warranty regarding the suitability of any Licensed Product for Licensee’s or any Third Party’s requirements; and

 

14.11.3 the parties make no representation
or warranty as to whether or not any Licensed Product infringes on the intellectual property rights of any Third Party.

 

14.12     Dispute
Settlement. Except as otherwise expressly provided in this Section 14.11, any Dispute that the Parties cannot settle by
mutual negotiations shall be resolved by binding arbitration in accordance with this Section 14.10. All disputes arising out
of or in connection with the present Agreement shall be finally settled under the rules of arbitration of the American
Arbitration Association by one or more arbitrators appointed in accordance with these rules. The arbitration proceedings
shall be conducted in English, and in Raleigh, North Carolina. Either Party may apply to any court having jurisdiction for an
order confirming, or to enforce, the decision and award of the arbitrator(s). Subject to Section 14.14, the Parties waive any
right to other judicial or court action on any matter subject to arbitration hereunder, except suit to confirm or enforce the
decision and award of the arbitrator(s). The arbitrator(s) shall not extend, modify or suspend any of the terms of this
Agreement. A notice of, or request for, arbitration will not operate to stay, postpone or rescind the effectiveness of any
demand for performance.

 

14.13     Entire
Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter
thereof and shall supersede all previous negotiations, commitments, and writings with respect to such subject matter.

 

14.14     Specific
Performance. Each of the Parties acknowledges and agrees that the other Party may be damaged irreparably in the event any
of the provisions of the Agreement are not performed in accordance with their specific terms or otherwise are breached.
Accordingly, each of the Parties agrees that the other Party shall be entitled to seek an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions
hereof in any action instituted in any court having jurisdiction over the Parties and the subject matter hereof in addition
to any other remedy to which it may be entitled, at law or in equity.

 

14.15     Entire
Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and
supersede all prior agreements, written or oral, between the Parties with respect to the subject matter hereof.

 

     

     

    

 

14.16     Third
Party Beneficiaries. Except as otherwise expressly set forth herein, none of the provisions of this Agreement, express or
implied, is intended to be or shall be for the benefit of or enforceable by any Person (including, without limitation, any
creditor of either Party hereto) other than Licensee and Licensor and their respective successors and permitted assigns. No
such Person shall obtain any right under any provision of this Agreement or shall by reasons of any such provision make any
claim in respect of any debt, liability or obligation (or otherwise) against either Party hereto.

 

14.17     Rights
in Bankruptcy. The Parties acknowledge that all rights and licenses granted under or pursuant to any Section of this
Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11 of the United States Code and
other similar foreign laws (collectively, the “Bankruptcy Code”), licenses of rights to be
“intellectual property” as defined under the Bankruptcy Code or such foreign laws. If a case is commenced during
the Term by or against Licensor or its Affiliates under a Bankruptcy Code then, unless and until this Agreement is rejected
as provided in such Bankruptcy Code, Licensor (in any capacity, including debtor-in-possession) and its successors and
assigns (including, without limitation, a trustee) shall perform all of the obligations provided in this Agreement to be
performed by such Party. If a Bankruptcy Code case is commenced during the term by or against Licensor, this Agreement is
rejected as provided in the Bankruptcy Code, and Licensee elects to retain its rights hereunder as provided in the Bankruptcy
Code, then Licensor, subject to the Bankruptcy Code case (in any capacity, including debtor-in-possession) and its successors
and assigns (including, without limitation, a Title 11 trustee), shall provide to Licensee copies of all information
necessary for Licensee to prosecute, maintain and enjoy its license under the Licensed Technology under the terms of this
Agreement held by Licensor and such successors and assigns promptly upon Licensee’s written request therefor. All
rights, powers and remedies of Licensee, as a licensee hereunder, provided herein are in addition to and not in substitution
for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including,
without limitation, the Bankruptcy Code) in the event of the commencement of a Bankruptcy Code case by or against
Licensor.

 

14.18     Counterparts;
Signatures. This Agreement may be executed in multiple counterparts, all of which, when executed, shall be deemed to be
an original and all of which together shall constitute one and the same document. Signatures provided by facsimile or e-mail
transmission shall be deemed to be original signatures.

 

14.19     Press
Release. Neither Party shall make or publish any announcement or press release concerning the terms of this Agreement
without the prior written consent of the other Party and without the prior written consent of Biocon, unless otherwise
required by law.

 

 

[Signature Page Follows]

 

     

     

    

  

IN WITNESS WHEREOF, the
Parties have owed this Agreement to be executed by their duly authorized representatives, effective as of the Effective Date.

 

	 	GI THERAPEUTICS, INC.
	 	 
	 	By:	/s/ Jay P. Madan
	 		Name: Jay P. Madan
	 		Title: President
	 	 
	 	SEACHAID PHARMACEUTICALS, INC.
	 	 
	 	By:	/s/ Steve Elms
	 		Name: Steve Elms
	 		Title: CEO and Chairman

 

[Signature Page to Apaza License Agreement]

 

     

     

    

 

Exhibit A

 

[***]

 

 

[***] Confidential treatment requested pursuant
to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately
with the Commission.

 

     

     

    

 

Exhibit B

 

[***]

 

 

[***] Confidential treatment requested pursuant
to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately
with the Commission.

 

     

     

    

 

FIRST AMENDMENT TO

APAZA LICENSE AGREEMENT

 

This First Amendment (this
“First Amendment”) to the Apaza License Agreement (the “Agreement”) dated April 3, 2013,
by and between Innovate Biopharmaceuticals, Inc., a Delaware corporation, formerly GI Therapeutics, Inc., a North Carolina corporation
(“Licensee”), and Seachaid Pharmaceuticals, Inc., a Delaware corporation (“Licensor”), is
entered into this 8th day of June, 2015.

 

WHEREAS, the parties desire
to amend the Agreement in order to change the terms of the Initial Payment to be made to Licensor by Licensee.

 

NOW THEREFORE, in consideration
of the mutual promises and covenants set forth below and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereby agree as follows:

 

1.     Amendment
of Section 3.1. The first sentence of Section 3.1 shall be deleted in its entirety and the following substituted in lieu thereof:

 

“Licensee
shall make a non-refundable payment of two hundred thousand dollars ($200,000) (the “Initial Payment”) to the
Licensor in three installments as follows: (i) fifty thousand dollars ($50,000) within 30 days of full execution of this agreement,
(ii) twenty-five thousand dollars ($25,000) by August 31, 2015 and (iii) one hundred twenty-five thousand dollars ($125,000) upon
the earlier of (a) ten (10) days following the closing of Licensee’s first equity financing that brings the total equity
financing raised to [***] dollars ($[***]) or (b) September 30, 2015.”

 

2.     Miscellaneous.

 

2.1. Defined Terms.
Capitalized terms undefined herein shall have the meaning ascribed to them in the Agreement.

 

2.2. No Other Amendment;
Effectiveness. Except as expressly amended herein, the Agreement remains in full force and effect according to its original
terms.

 

2.3. Governing Law.
This First Amendment shall be governed by and construed in accordance with the internal laws of the State of North Carolina without
regard to its conflict of laws principles.

 

2.4. Severability.
If any provision of this First Amendment is held invalid or unenforceable by any court of competent jurisdiction, the other provisions
of this First Amendment shall remain in full force and effect. Any provision of this First Amendment held invalid or unenforceable
only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable. The Parties further
agree to replace such invalid or unenforceable provision of this First Amendment with a valid and enforceable provision that shall
achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable provision.

 

 

[***] Confidential treatment requested pursuant
to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately
with the Commission.

 

     

     

    

 

2.5. Counterparts.
This First Amendment may be executed in multiple counterparts, all of which, when executed, shall be deemed to be an original and
all of which together shall constitute one and the same document. Signatures provided by facsimile or e-mail transmission shall
be deemed to be original signatures.

 

IN WITNESS WHEREOF, the
parties have caused this First Amendment to be executed by their duly authorized representatives as of the date first set forth
above.

 

	 	INNOVATE BIOPHARMACEUTICALS, INC.
	 	 
	 	By	/s/ Jay P. Madan
	 	Name: Jay P. Madan
	 	Title: President
	 	 
	 	SEACHAID PHARMACEUTICALS, INC.
	 	 
	 	By:	/s/ Steve Elms
	 	Name: Steve Elms
	 	Title: CEO and Chairman

 

     

     

    

 

SECOND AMENDMENT TO

APAZA LICENSE AGREEMENT

 

This Second Amendment (this
“Second Amendment”) to the Apaza License Agreement dated April 3, 2013, as amended by the First Amendment to
Apaza License Agreement dated June 8, 2015 (the “Agreement”), by and between Innovate Biopharmaceuticals, Inc.,
a Delaware corporation, formerly GI Therapeutics, Inc., a North Carolina corporation (“Licensee”), and Seachaid
Pharmaceuticals, Inc., a Delaware corporation (“Licensor”), is entered into this 21st day of September,
2015.

 

WHEREAS, the parties desire
to further amend the Agreement in order to change the terms of the Initial Payment to be made to Licensor by Licensee.

 

NOW THEREFORE, in consideration
of the mutual promises and covenants set forth below and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereby agree as follows:

 

1.     Amendment
of Section 3.1. The first sentence of Section 3.1 shall be deleted in its entirety and the following substituted in lieu thereof:

 

“Licensee
shall make a non-refundable payment of two hundred thousand dollars ($200,000) (the “Initial Payment”) to the
Licensor in four installments as follows: (i) fifty thousand dollars ($50,000) by July 8, 2015, (ii) twenty-five thousand dollars
($25,000) by August 31, 2015, (iii) twenty-five thousand dollars ($25,000) by October 31, 2015 and (iv) one hundred thousand dollars
($100,000) upon the earlier of (a) ten (10) days following the closing of Licensee’s first equity financing that brings the
total equity financing raised to [***] dollars ($[***]) or (b) November 30, 2015.”

 

2.    Miscellaneous.

 

		2.1.	Defined Terms. Capitalized terms undefined herein shall have the meaning ascribed to them
in the Agreement.

 

		2.2.	No Other Amendment; Effectiveness. Except as expressly amended herein, the Agreement remains
in full force and effect according to its original terms.

 

		2.3	Governing Law. This Second Amendment shall be governed by and construed in accordance with
the internal laws of the State of North Carolina without regard to its conflict of laws principles.

 

		2.4.	Severability.If any provision of this Second Amendment is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions of this Second Amendment shall remain in full force and effect. Any
provision of this Second Amendment held invalid or unenforceable only in part or degree shall remain in full force and effect to
the extent not held invalid or unenforceable. The Parties further agree to replace such invalid or unenforceable provision of this
Second Amendment with a valid and enforceable provision that shall achieve, to the extent possible, the economic, business and
other purposes of such invalid or unenforceable provision.

 

 

[***] Confidential treatment requested pursuant
to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately
with the Commission.

     

     

    

 

		2.5	Counterparts. This Second Amendment may be executed in multiple counterparts, all of which,
when executed, shall be deemed to be an original and all of which together shall constitute one and the same document. Signatures
provided by facsimile or e-mail transmission shall be deemed to be original signatures.

 

IN WITNESS WHEREOF, the
parties have caused this Second Amendment to be executed by their duly authorized representatives as of the date first set forth
above.

 

	 	INNOVATE BIOPHARMACEUTICALS, INC.
	 	 
	 	By	/s/ Jay P. Madan
	 	Name: Jay P. Madan
	 	Title: President
	 	 
	 	SEACHAID PHARMACEUTICALS, INC.
	 	 
	 	By	/s/ Steve Elms
	 	Name: Steve Elms
	 	Title: CEO and ChairmanExhibit 10.11

 

INNOVATE BIOPHARMACEUTICALS INC.

 

2015 STOCK INCENTIVE PLAN

 

		1.	Purpose

 

The purpose of this
2015 Stock Incentive Plan (the “Plan”) of Innovate Biopharmaceuticals Inc., a Delaware corporation (the
“Company”), is to advance the interests of the Company’s stockholders by enhancing the Company’s
ability to attract, retain and motivate persons who are expected to make important contributions to the Company and by providing
such persons with equity ownership opportunities and performance-based incentives that are intended to align their interests with
those of the Company’s stockholders. Except where the context otherwise requires, the term “Company” includes
the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal
Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”) and other business
ventures (including, without limitation, any joint venture or limited liability company) in which the Company has a controlling
interest, as determined by the Board of Directors of the Company (the “Board”).

 

		2.	Eligibility

 

All of the Company’s
employees, officers, directors, and individual consultants and advisors (each a “Service Provider”) are eligible
to receive options, restricted stock, restricted stock units and other stock-based awards (each, an “Award”)
under the Plan. Each person who receives an Award under the Plan is deemed a “Participant.”

 

		3.	Administration and Delegation

 

(a)          Administration
by Board of Directors. The Plan shall be administered by the Board. The Board shall have authority to grant Awards and to adopt,
amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board
may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent
it shall deem expedient to carry the Plan into effect and it shall be the sole and final judge of such expediency. All decisions
by the Board shall be made in the Board’s sole discretion and shall be final and binding on all persons having or claiming
any interest in the Plan or in any Award. No director or person acting pursuant to the authority delegated by the Board shall be
liable for any action or determination relating to or under the Plan made in good faith.

 

(b)          Appointment
of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to
one or more committees or subcommittees of the Board (a “Committee”). All references in the Plan to the “Board”
shall mean the Board or a Committee of the Board to the extent that the Board’s powers or authority under the Plan have been
delegated to such Committee.

 

    	 	 	 

     

    

 

		4.	Stock Available for Awards.

 

(a)          Subject
to adjustment under Section 8, Awards may be made under the Plan for up to 3,600,000 shares of the common stock of the Company
(the “Common Stock”). If any Award expires or is terminated, surrendered or canceled without having been fully
exercised or is forfeited in whole or in part (including as the result of shares of Common Stock subject to such Award being repurchased
by the Company at the original issuance price pursuant to a contractual repurchase right) or results in any Common Stock not being
issued, the unused Common Stock covered by such Award shall again be available for the grant of Awards under the Plan. Further,
shares of Common Stock tendered to the Company by a Participant to exercise an Award shall be added to the number of shares of
Common Stock available for the grant of Awards under the Plan. However, in the case of Incentive Stock Options (as hereinafter
defined), the foregoing provisions shall be subject to any limitations under the Code. Shares issued under the Plan may consist
in whole or in part of authorized but unissued shares or treasury shares.

 

(b)          Substitute
Awards. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property
or stock of an entity, the Board may grant Awards in substitution for any options or other stock or stock-based awards granted
by such entity or an affiliate thereof. Substitute Awards may be granted on such terms as the Board deems appropriate in the circumstances,
notwithstanding any limitations on Awards contained in the Plan. Substitute Awards shall not count against the overall share limit
set forth in Section 4(a), except as may be required by reason of Section 422 and related provisions of the Code.

 

		5.	Stock Options

 

(a)          General.
The Board may grant options to purchase Common Stock (each, an “Option”) and determine the number of shares
of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to
the exercise of each Option, including conditions relating to applicable federal or state securities laws, as it considers necessary
or advisable. An Option, or portion of an Option, which is not intended to be or fails to qualify as an Incentive Stock Option
(as hereinafter defined) shall be designated a “Nonstatutory Stock Option.”

 

(b)          Incentive
Stock Options. An Option that the Board intends to be an “incentive stock option” as defined in Section 422 of
the Code (an “Incentive Stock Option”) shall only be granted to employees of the Company and any other entities
the employees of which are eligible to receive Incentive Stock Options under the Code, and shall be subject to and shall be construed
consistently with the requirements of Section 422 of the Code. A Participant who owns more than 10% of the total combined voting
power of all classes of outstanding stock of the Company shall not be eligible for the grant of an Incentive Stock Option unless
(i) the exercise price is at least 110% of the Fair Market Value (as defined below) on the date the Option is granted and
(ii) such Incentive Stock Option by its terms is not exercisable after the expiration of five years from the date the Option
is granted. The Company shall have no liability to a Participant, or any other party, if an Option (or any part thereof) that is
intended to be an Incentive Stock Option is not an Incentive Stock Option or for any action taken by the Board pursuant to Section
9(g), including without limitation the conversion of an Incentive Stock Option to a Nonstatutory Stock Option.

 

(c)          Exercise
Price. The Board shall establish the exercise price of each Option and specify such exercise price in the applicable option
agreement. The exercise price shall be not less than 100% of the Fair Market Value on the date the Option is granted unless the
Board specifically determines that the exercise price is intended to be less than such Fair Market Value, in which case the option
agreement shall contain provisions complying with Section 409A of the Code; provided that if the Board approves the grant of an
Option with an exercise price to be determined on a future date, the exercise price shall be not less than 100% of the Fair Market
Value on such future date. The term “Fair Market Value” shall mean, as of a given date: (i) if the Common Stock
is listed on a national securities exchange, the last sale price of the Common Stock in the principal trading market for the Common
Stock on such date; (ii) if the Common Stock is not listed on a national securities exchange, but is traded in the over-the counter
market, the closing bid price for the Common Stock on such date, as reported by the OTC Bulletin Board or the National Quotation
Bureau, Incorporated or similar publisher of such quotations; or (iii) if the Common Stock is not listed on a national securities
exchange or traded in the over-the-counter market, such price as shall be determined by (or in a manner approved by) the Board
in good faith and in compliance with applicable provisions of the Code and the regulations issued thereunder.

 

    	 	2	 

     

    

 

(d)           Duration
of Options. Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify
in the applicable option agreement.

 

(e)           Exercise
of Option. Options may be exercised by delivery to the Company of a written notice of exercise signed by the proper person
or by any other form of notice (including electronic notice) approved by the Board together with payment in full as specified in
Section 5(f) for the number of shares of Common Stock for which the Option is exercised. Shares of Common Stock subject to the
Option will be delivered by the Company following exercise either as soon as practicable or, subject to such conditions as the
Board shall specify, on a deferred basis (with the Company’s obligation to be evidenced by an instrument providing for future
delivery of the deferred shares at the time or times specified by the Board).

 

(f)           Payment
Upon Exercise. Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for as follows:

 

(1)         in
cash or by check, payable to the order of the Company;

 

(2)         except
as may otherwise be provided in the applicable option agreement, by (i) delivery of an irrevocable and unconditional undertaking
by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding
or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker
to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding;

 

(3)         when
the Common Stock is registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and
to the extent provided for in the applicable option agreement or approved by the Board, in its sole discretion, by delivery (either
by actual delivery or attestation) of shares of Common Stock owned by the Participant valued at their Fair Market Value, provided
(i) such method of payment is then permitted under applicable law, (ii) such Common Stock, if acquired directly from the Company,
was owned by the Participant for such minimum period of time, if any, as may be established by the Board in its discretion and
(iii) such Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;

 

(4)         to
the extent permitted by applicable law and provided for in the applicable option agreement or approved by the Board, in its sole
discretion, by (i) delivery of a promissory note of the Participant to the Company on terms determined by the Board, or (ii) payment
of such other lawful consideration as the Board may determine; or

 

(5)         by
any combination of the above permitted forms of payment.

 

    	 	3	 

     

    

 

		6.	Restricted Stock; Restricted Stock Units

 

(a)          General.
The Board may grant Awards entitling recipients to acquire shares of Common Stock (“Restricted Stock”), subject
to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price (or
to require forfeiture of such shares if issued at no cost) from the recipient in the event that conditions specified by the Board
in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board
for such Award. Instead of granting Awards for Restricted Stock, the Board may grant Awards entitling the recipient to receive
shares of Common Stock to be delivered at the time such shares of Common Stock vest (“Restricted Stock Units”)
(Restricted Stock and Restricted Stock Units are each referred to herein as a “Restricted Stock Award”).

 

(b)          Terms
and Conditions. The Board shall determine the terms and conditions of a Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any.

 

(c)          Additional
Provisions Relating to Restricted Stock.

 

(1)         Dividends.
Participants holding shares of Restricted Stock will be entitled to all ordinary cash dividends paid with respect to such shares,
unless otherwise provided by the Board. If any such dividends or distributions are paid in shares, or consist of a dividend or
distribution to holders of Common Stock other than an ordinary cash dividend, the shares, cash or other property will be subject
to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were
paid. Each dividend payment will be made no later than the end of the calendar year in which the dividends are paid to stockholders
of that class of stock or, if later, the 15th day of the third month following the date the dividends are paid to stockholders
of that class of stock.

 

(2)         Stock
Certificates. The Company may require that any stock certificates issued in respect of a Restricted Stock Award shall be registered
in the name of the Participant and be deposited by the Participant, together with a stock power endorsed in blank, with the Company
(or its designee). After the expiration of the applicable restriction periods, upon request of a Participant or as otherwise determined
by the Company, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant
or if the Participant has died, to the beneficiary designated, in a manner determined by the Board, by a Participant to receive
amounts due or exercise rights of the Participant in the event of the Participant’s death (the “Designated Beneficiary”).
In the absence of an effective designation by a Participant, “Designated Beneficiary” shall mean the Participant’s
then living spouse, or, if none, the Participant’s estate.

 

		7.	Other Stock-Based Awards

 

Other Awards of shares
of Common Stock, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, shares of Common
Stock or other property, may be granted hereunder to Participants (“Other Stock-Based Awards”), including without
limitation stock appreciation rights and Awards entitling recipients to receive shares of Common Stock to be delivered in the future.
Such Other Stock-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the
Plan or as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock-Based Awards may be paid in
shares of Common Stock or cash, as the Board shall determine. Subject to the provisions of the Plan, the Board shall determine
the conditions of each Other Stock-Based Award, including any purchase price applicable thereto.

 

    	 	4	 

     

    

 

		8.	Adjustments for Changes in Common Stock and Certain
Other Events

 

(a)          Changes
in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders
of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under this Plan, (ii) the
number and class of securities and exercise price per share of each outstanding Option, (iii) the number of shares subject to and
the repurchase price per share subject to each outstanding Restricted Stock Award, and (iv) the terms of each other outstanding
Award shall be equitably adjusted by the Company (or substituted Awards may be made, if applicable) in the manner determined by
the Board. Without limiting the generality of the foregoing, in the event the Company effects a split of the Common Stock by means
of a stock dividend and the exercise price of and the number of shares subject to an outstanding Option are adjusted as of the
date of the distribution of the dividend (rather than as of the record date for such dividend), then an optionee who exercises
an Option between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution
date, the stock dividend with respect to the shares of Common Stock acquired upon such Option exercise, notwithstanding the fact
that such shares were not outstanding as of the close of business on the record date for such stock dividend.

 

(b)          Change
in Control

 

(1)           Definition.
Unless otherwise specifically provided in an Award agreement, a “Change in Control” shall be deemed to have
occurred upon the first to occur of:

 

(i)          any
“person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act) becoming a “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing either (A)
more than a majority of the voting power of the then outstanding securities of the Company, or (B) more than a majority of the
aggregate fair market value of the then outstanding securities of the Company; provided, however, that a Change in
Control shall not be deemed to occur as a result of (x) a transaction in which the Company becomes a subsidiary of another corporation
and in which the stockholders of the Company, immediately prior to the transaction, will beneficially own, immediately after the
transaction, shares entitling such stockholders to more than majority of all votes to which all stockholders of the parent corporation
would be entitled in the election of directors, or (y) a transaction in which the person acquires newly issued securities of the
Company in exchange for an investment in the Company; or

 

(ii)         the
consummation of either: (A) a merger, share exchange, consolidation or reorganization of the Company where the stockholders of
the Company, immediately prior to the merger or consolidation, will not beneficially own, immediately after the merger, share exchange,
consolidation or reorganization, shares entitling such stockholders to either (x) more than a majority of all votes to which all
stockholders of the surviving corporation would be entitled in the election of directors, or (y) more than a majority of the aggregate
fair market value of then outstanding securities of the Company; or (B) a sale or other disposition of all or substantially all
of the assets of the Company.

 

    	 	5	 

     

    

 

(2)         Consequences
of a Change in Control on Awards Other than Restricted Stock Awards. In connection with a Change in Control, the Board may
take any one or more of the following actions as to all (or any portion of) outstanding Awards other than Restricted Stock Awards
on such terms as the Board determines: (i) provide that Awards shall be assumed, or substantially equivalent Awards shall
be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) in compliance with the applicable provisions
of the Code, including Code Sections 409A, 422 and 424, (ii) upon written notice to a Participant, provide that the Participant’s
unexercised Options or other unexercised Awards will terminate immediately prior to the consummation of such Change in Control
unless exercised by the Participant within a specified period following the date of such notice, (iii) provide that outstanding
Awards shall become exercisable, realizable or deliverable, or restrictions applicable to an Award shall lapse, in whole or in
part prior to or upon such Change in Control, (iv) in the event of a Change in Control under the terms of which holders of
Common Stock will receive upon consummation thereof a cash payment for each share surrendered in the Change in Control (the “Acquisition
Price”), make or provide for a cash payment to a Participant equal to the excess, if any, of (A) the Acquisition
Price times the number of shares of Common Stock subject to the Participant’s Options or other Awards (to the extent the
exercise price does not exceed the Acquisition Price) less (B) the aggregate exercise price of all such outstanding Options or
other Awards and any applicable tax withholdings, in exchange for the termination of such Options or other Awards, (v) provide
that, in connection with a liquidation or dissolution of the Company, Awards shall convert into the right to receive liquidation
proceeds (if applicable, net of the exercise price thereof) and (vi) any combination of the foregoing. In taking any of the actions
permitted under this Section 8(b), the Board shall not be obligated by the Plan to treat all Awards, or all Awards of the same
type, identically.

 

For purposes of
clause (i) above, an Option shall be considered assumed if, following consummation of the Change in Control, the Option confers
the right to purchase, for each share of Common Stock subject to the Option immediately prior to the consummation of the Change
in Control, the consideration (whether cash, securities or other property) received as a result of the Change in Control by holders
of Common Stock for each share of Common Stock held immediately prior to the consummation of the Change in Control (and if holders
were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares
of Common Stock); provided, however, that if the consideration received as a result of the Change in Control is not
solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of
the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise of Options to consist solely
of common stock of the acquiring or succeeding corporation (or an affiliate thereof) with equivalent in value (as determined by
the Board) to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Change in
Control.

 

(3)         Consequences
of a Change in Control on Restricted Stock Awards. Upon the occurrence of a Change in Control other than a liquidation or dissolution
of the Company, the repurchase and other rights of the Company under each outstanding Restricted Stock Award shall inure to the
benefit of the Company’s successor and shall, unless the Board determines otherwise, apply to the cash, securities or other
property which the Common Stock was converted into or exchanged for pursuant to such Change in Control in the same manner and to
the same extent as they applied to the Common Stock subject to such Restricted Stock Award. Upon the occurrence of a Change in
Control involving the liquidation or dissolution of the Company, except to the extent specifically provided to the contrary in
the instrument evidencing any Restricted Stock Award or any other agreement between a Participant and the Company, all restrictions
and conditions on all Restricted Stock Awards then outstanding shall automatically be deemed terminated or satisfied.

 

		9.	General Provisions Applicable to Awards

 

(a)          Transferability
of Awards. Except as the Board may otherwise expressly determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law,
except by will or the laws of descent and distribution or, other than in the case of an Incentive Stock Option, pursuant to a qualified
domestic relations order, and, during the life of the Participant, shall be exercisable only by the Participant. References to
a Participant, to the extent relevant in the context, shall include references to authorized transferees.

 

    	 	6	 

     

    

 

(b)           Documentation.
Unless otherwise expressly determined by the Board, each Incentive Stock Option shall be evidenced by a Notice of Incentive Stock
Option and Incentive Stock Option Agreement substantially in the form attached as Exhibit A, each Nonstatutory Stock
Option shall be evidenced by a Notice of Nonstatutory Stock Option and Nonstatutory Stock Option Agreement substantially in the
form attached as Exhibit B, and each Restricted Stock Award shall be evidenced by a Summary of Restricted Stock Purchase
and Restricted Stock Purchase Agreement substantially in the form attached as Exhibit C. Each Award may contain terms
and conditions in addition to those set forth in the Plan.

 

(c)           Board
Discretion. Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other
Award. The terms of each Award need not be identical, and the Board need not treat Participants uniformly.

 

(d)           Termination
of Status. The Board shall determine the effect on an Award of the disability, death, termination of employment, authorized
leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during
which, the Participant, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise
rights under the Award.

 

(e)           Withholding.
The Participant must satisfy all applicable federal, state, and local or other income and employment tax withholding obligations
before the Company will deliver stock certificates or otherwise recognize ownership of Common Stock under an Award. The Company
may decide to satisfy the withholding obligations through additional withholding on salary or wages. If the Company elects not
to or cannot withhold from other compensation, the Participant must pay the Company the full amount, if any, required for withholding
or have a broker tender to the Company cash equal to the withholding obligations. Payment of withholding obligations is due before
the Company will issue any shares on exercise or release from forfeiture of an Award or, if the Company so requires, at the same
time as is payment of the exercise price unless the Company determines otherwise. If provided for in an Award or approved by the
Board in its sole discretion, a Participant may satisfy such tax obligations in whole or in part by delivery of shares of Common
Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value; provided,
however, except as otherwise provided by the Board, that the total tax withholding where stock is being used to satisfy
such tax obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum statutory withholding
rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income). Shares
surrendered to satisfy tax withholding requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other
similar requirements.

 

(f)           Amendment
of Award.

 

(1)         The
Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of
the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory
Stock Option, provided that the Participant’s consent to such action shall be required unless the Board determines that the
action, taking into account any related action, would not materially and adversely affect the Participant.

 

(2)         The
Board may, without stockholder approval, amend any outstanding Award granted under the Plan to provide an exercise price per share
that is lower than the then-current exercise price per share of such outstanding Award provided that such amended exercise price
is at least equal to the then-current Fair Market Value. The Board may also, without stockholder approval, cancel any outstanding
award (whether or not granted under the Plan) and grant in substitution new Awards under the Plan covering the same or a different
number of shares of Common Stock and having an exercise price per share lower than the then-current exercise price per share of
the cancelled award.

 

    	 	7	 

     

    

 

(g)          Conditions
on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to
the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection
with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable
stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such
representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules,
regulations or contracts of the Company.

 

(h)          Acceleration.
The Board may at any time provide that any Award shall become immediately exercisable in full or in part, free of some or all restrictions
or conditions, or otherwise realizable in full or in part, as the case may be.

 

		10.	Miscellaneous

 

(a)          No
Right To Employment or Other Status. No person shall have any claim or right to be granted an Award, and the grant of an Award
shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The
Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from
any liability or claim under the Plan, except as expressly provided in the applicable Award.

 

(b)          No
Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have
any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming
the record holder of such shares. Notwithstanding the foregoing, in the event the Company effects a split of the Common Stock by
means of a stock dividend or otherwise and the exercise price of and the number of shares subject to such Option are adjusted as
of the effective date of the stock dividend or split (rather than as of the record date for such stock dividend or split), then
an optionee who exercises an Option between the record date and the distribution date for such stock dividend or split shall be
entitled to receive, on the distribution date, the stock dividend or split with respect to the shares of Common Stock acquired
upon such Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record
date for such stock dividend or split.

 

(c)          Effective
Date and Term of Plan. The Plan shall become effective on the date on which it is adopted by the Board. No Awards shall be
granted under the Plan after the expiration of 10 years from the earlier of (i) the date on which the Plan was adopted by the Board
or (ii) the date the Plan was approved by the Company’s stockholders, but Awards previously granted may extend beyond that
date.

 

(d)          Amendment
of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time; provided, however,
that if at any time the approval of the Company’s stockholders is required as to any modification or amendment under Section
422 of the Code or any successor provision with respect to Incentive Stock Options, the Board may not effect such modification
or amendment without such approval. Unless otherwise specified in the amendment, any amendment to the Plan adopted in accordance
with this Section 10(d) shall apply to, and be binding on the holders of, all Awards outstanding under the Plan at the time the
amendment is adopted, provided the Board determines that such amendment does not materially and adversely affect the rights of
Participants under the Plan.

 

    	 	8	 

     

    

 

(e)          Authorization
of Sub-Plans. The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable
blue sky, securities or tax laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements to
this Plan containing (i) such limitations on the Board’s discretion under the Plan as the Board deems necessary or desirable
or (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable.
All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Participants
within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any
jurisdiction which is not the subject of such supplement.

 

(f)          Non-Plan
Equity-Based Awards. Nothing in this Plan is intended to, or shall, impair or affect the Board’s ability to make non-Plan
equity-based awards.

 

(g)          Compliance
with Code Section 409A. It is intended that all Awards granted hereunder be either exempt from, or issued in compliance with,
Code Section 409A. The Company shall have no liability to a Participant, or any other party, if an Award that is intended to be
exempt from, or compliant with, Code Section 409A is not so exempt or compliant, or for any action taken by the Board.

 

(h)          Governing
Law. The provisions of the Plan and all Awards made hereunder shall be governed by and construed in accordance with the General
Corporation Law of the State of Delaware, as to matters within the scope thereof, and the internal laws of the State of North Carolina
(without reference to conflict of law provisions), as to all other matters.

 

*  *  *  *  *  *  *  *

 

    	 	9	 

     

    

 

INNOVATE BIOPHARMACEUTICALS INC.

 

2015 STOCK INCENTIVE PLAN

 

CALIFORNIA SUPPLEMENT

 

Pursuant to Section
10(e) of the Plan, the Board has adopted this supplement for purposes of satisfying the requirements of Section 25102(o) of the
California Corporations Code, as amended:

 

Any Awards granted
under the Plan to a Participant who is a resident of the State of California on the date of grant (a “California Participant”)
shall be subject to the following additional limitations, terms and conditions:

 

		1.	Additional Limitations on Awards.

 

(a)          Generally.
The terms of all Awards granted to a California Participant under Sections 5, 6 or 7 of the Plan shall comply, to the extent applicable,
with Section 260.140.41 or Section 260.140.42 of the California Regulations.

 

(b)          Maximum
Duration of Options. No Options granted to California Participants shall have a term in excess of 10 years measured from the
Option grant date.

 

(c)          Minimum
Exercise Period Following Termination. Unless a California Participant’s employment is terminated for cause (as defined
by applicable law, the terms of any contract of employment between the Company and such Participant, or in the instrument evidencing
the grant of such Participant’s Option), in the event of termination of employment of such Participant, such Participant
shall have the right to exercise an Option, to the extent that he or she was otherwise entitled to exercise such Option on the
date employment terminated, until the earlier of the Option expiration date or: (i) at least six months from the date of termination,
if termination was caused by such Participant’s death or “permanent and total disability” (within the
meaning of Section 22(e)(3) of the Code) and (ii) at least 30 days from the date of termination, if termination was caused other
than by such Participant’s death or “permanent and total disability” (within the meaning of Section 22(e)(3)
of the Code).

 

2.            Additional
Requirement to Provide Information to California Participants. Unless the Plan or agreement complies with all conditions of
Rule 701 of the Securities Act of 1933, as amended (“Rule 701”), the Company shall provide to each California
Participant and to each California Participant who acquires Common Stock pursuant to the Plan, not less frequently than annually,
copies of annual financial statements (which need not be audited). The Company shall not be required to provide such statements
to key employees whose duties in connection with the Company assure their access to equivalent information or when the Plan or
agreement complies with all conditions of Rule 701.

 

3.            Additional
Limitations on Timing of Awards. No Award granted to a California Participant shall become exercisable, vested or realizable,
as applicable to such Award, unless the Plan has been approved by the holders of at least a majority of the Company’s outstanding
voting securities by the later of (i) within 12 months before or after the date the Plan was adopted by the Board or the agreement
entered into; and (ii) prior to or within 12 months of the granting of any option or issuance of any security under the Plan or
agreement to a California Participant.

 

4.            Additional
Restriction Regarding Recapitalizations, Stock Splits, Etc. For purposes of Section 8 of the Plan, in the event of a stock
split, reverse stock split, stock dividend, recapitalization, combination, reclassification or other distribution of the Company's
securities, the number of securities allocated to each California Participant must be adjusted proportionately and without the
receipt by the Company of any consideration from any California Participant.

 

    	 	 	 

     

    

  

EXHIBIT A

 

Notice of Incentive Stock Option

and

Incentive Stock Option Agreement

 

[Filed as Exhibit 10.12 to the Form 10-K
for the year ended December 31, 2017]

 

    	 	 	 

     

    

 

EXHIBIT B

 

Notice of Nonstatutory Stock Option

and

Nonstatutory Stock Option Agreement

 

[Filed as Exhibit 10.13 to the Form 10-K
for the year ended December 31, 2017]

 

    	 	 	 

     

    

 

EXHIBIT C

 

Summary of Restricted Stock Purchase
and Restricted Stock Purchase Agreement

 

[Filed as Exhibit 10.14 to the Form 10-K
for the year ended December 31, 2017]

 

    	 	 	 

     

    

 

FIRST AMENDMENT TO THE

INNOVATE BIOPHARMACEUTICALS INC.

2015 STOCK INCENTIVE PLAN

 

February 2, 2016

 

THIS FIRST AMENDMENT
to the Innovate Biopharmaceuticals Inc. 2015 Stock Incentive Plan (the “Plan”) is effective as of the date set
forth above.

 

WHEREAS, the Board
of Directors (the “Board”) of Innovate Biopharmaceuticals Inc., a Delaware corporation (the “Company”),
has adopted and the stockholders of the Company have approved the Plan; and

 

WHEREAS, the Board
and the requisite stockholders of the Company have approved this amendment of the Plan in order to increase the number of shares
of Common Stock authorized for issuance under the Plan by 1,400,000 shares, from 3,600,000 shares to 5,000,000 shares.

 

NOW, THEREFORE, the
Plan shall be amended as follows:

 

1.           The
first sentence of Paragraph 4(a) of the Plan shall be deleted in its entirety and the following substituted in lieu thereof:

 

“(a)          Subject
to adjustment under Section 8, Awards may be made under the Plan for up to 5,000,000 shares of the common stock of the Company
(the “Common Stock”).”

 

2.           Except
as amended herein, the terms and provisions of the Plan shall remain unchanged and in full force and effect.

 

[Remainder of Page Intentionally Left Blank]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the undersigned has executed this First Amendment to the Innovate Biopharmaceuticals Inc. 2015 Stock Incentive Plan as of the date
set forth above.

 

	 	INNOVATE BIOPHARMACEUTICALS INC.
	 	 	 
	 	By:  	/s/ Jay P. Madan
	 	 	Jay P. Madan, President  

 

    	 	 	 

     

    

 

SECOND AMENDMENT TO THE

INNOVATE BIOPHARMACEUTICALS INC.

2015 STOCK INCENTIVE PLAN

 

February 22, 2017

 

THIS SECOND AMENDMENT
to the Innovate Biopharmaceuticals Inc. 2015 Stock Incentive Plan (the “Plan”) is effective as of the date set
forth above.

 

WHEREAS, the Board
of Directors (the “Board”) of Innovate Biopharmaceuticals Inc., a Delaware corporation (the “Company”),
has adopted and the stockholders of the Company have approved the Plan; and

 

WHEREAS, the Board
and the requisite stockholders of the Company have approved this amendment of the Plan in order to (i) increase the number of shares
of Common Stock authorized for issuance under the Plan by 5,000,000 shares, from 15,000,000 shares to 20,000,000 shares, (ii) allow
the Company to make awards to entities under the Plan and (iii) clarify that a reverse merger transaction does not constitute a
“Change in Control” for purposes of the Plan.

 

NOW, THEREFORE, the
Plan shall be amended as follows:

 

1.           The
first sentence of Paragraph 4(a) of the Plan shall be deleted in its entirety and the following substituted in lieu thereof:

 

“(a)          Subject
to adjustment under Section 8, Awards may be made under the Plan for up to 20,000,000 shares of the common stock of the Company
(the “Common Stock”).”

 

2.           The
first sentence of Paragraph 2 of the Plan shall be deleted in its entirety and the following substituted in lieu thereof:

 

“All of the Company’s
employees, officers, directors, and consultants and advisors (each a “Service Provider”) are eligible to receive
options, restricted stock, restricted stock units and other stock-based awards (each, an “Award”) under the
Plan.”

 

3.           The
following sentence shall be added to the end of Paragraph 8(b)(1) of the Plan:

 

“For purposes
of clarity, a reverse merger transaction in which the Company merges into another entity and the stockholders of the Company immediately
prior to such merger will beneficially own, immediately after the merger, shares entitling such stockholders to a majority of all
votes to which all stockholders of the surviving corporation would be entitled in the election of directors does not constitute
a Change in Control.         

 

4.           Except
as amended herein, the terms and provisions of the Plan shall remain unchanged and in full force and effect.

 

[Remainder of Page Intentionally Left Blank]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the undersigned has executed this Second Amendment to the Innovate Biopharmaceuticals Inc. 2015 Stock Incentive Plan as of the
date set forth above.

 

	 	INNOVATE BIOPHARMACEUTICALS INC.
	 	 	 
	 	By:	/s/ Jay P. Madan
	 	 	Jay P. Madan, President

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