Document:

Exhibit 10.18

 

AGREEMENT FOR CONSULTING SERVICES

 

 

This CONSULTING
AGREEMENT (this “Agreement”) is made by and among INNOVATE BIOPHARMACEUTICALS, INC. (“COMPANY”),
a Delaware corporation, with its principal place of business at 8480 Honeycutt Road, Suite 120, Raleigh, NC 27615, and DAVID
OLERT (“CONSULTANT”) effective as of this 17th day of February, 2018. Capitalized terms used by not defined
herein shall have the meanings ascribed to such terms in the Agreement and Plan of Merger and Reorganization by and among Monster
Digital, Inc. (now Innovate Biopharmaceuticals, Inc.), a wholly owned subsidiary of Monster Digital, Inc., Monster Merger Sub,
Inc., a Delaware corporation, and Innovate Biopharmaceuticals Inc. (now IB Pharmaceuticals Inc.), a Delaware corporation (the “MERGER
AGREEMENT”).

 

WITNESSETH

 

WHEREAS, prior
to the completion of the MERGER AGREEMENT, CONSULTANT served as the Chief Financial Officer of Monster Digital, Inc.;

 

WHEREAS, COMPANY
desires and may in the future desire to engage CONSULTANT to perform the consulting services described herein; and

 

WHEREAS, CONSULTANT
desires to render professional consulting services to COMPANY in the solution of agreed upon problems and the performance of agreed
upon tasks as hereinafter provided;

 

NOW, THEREFORE,
in consideration of the premises and of the mutual promises and covenants herein contained, the parties hereto agree as follows:

 

		1.	Consulting Services.  COMPANY hereby offers to engage CONSULTANT, and CONSULTANT
hereby accepts engagement by COMPANY, to perform the professional and consulting services identified on Exhibit A hereto. Services
that CONSULTANT agrees to perform hereunder shall be performed subject to and in accordance with this Agreement. CONSULTANT shall
use commercially reasonable efforts to keep COMPANY advised of the progress of the services, to permit representatives of COMPANY
to inspect from time to time and at reasonable times such results of said consulting services as are susceptible of inspection,
and to keep records of time worked and out-of-pocket expenses incurred that the parties have agreed in writing shall be reimbursed
by COMPANY and to make such records available to COMPANY at reasonable times and on reasonable advance notice. CONSULTANT shall
report to Joanne Zach and such other persons at COMPANY as designated by COMPANY.

 

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		2.	Payment of Consulting Fees/Reimbursement of Expenses.

 

(a)          In
consideration for CONSULTANT’S acceptance of this Agreement and the performance by CONSULTANT of the professional consulting
services as contemplated hereby, COMPANY shall pay CONSULTANT consulting fees based on each hour of consulting services performed
by CONSULTANT at the rate of one-hundred, twenty-five dollars ($125) per hour, payable in accordance with the provisions of this
Agreement. In addition, upon CONSULTANT’s continued and satisfactory service through the end of the Initial Term, including
through the filing of the Form 10-K, CONSULTANT shall be eligible to be paid the sum of ten-thousand dollars ($10,000) as a completion
bonus (the “Completion Bonus”).

 

(b)          COMPANY
shall reimburse CONSULTANT for all reasonable and customary out-of-pocket expenses incurred by CONSULTANT in performing his professional
services hereunder, provided that such expenses are pre-approved in writing by COMPANY and CONSULTANT provides COMPANY with supporting
receipts and documentation for such expenses that is satisfactory to COMPANY. COMPANY shall reimburse CONSULTANT for such expenses
within thirty (30) days of receipt of adequate documentation.

 

(c)          CONSULTANT
shall submit to the COMPANY a statement and invoice detailing the services provided and the time incurred by the fifth day of the
month after the month in which services are rendered. COMPANY shall make payment by check or wire transfer delivered to CONSULTANT
within thirty (30) days after receipt of CONSULTANT’s invoice. The COMPANY shall pay the Completion Bonus, if earned, in
lump sum within fifteen (15) days of the end of the Initial Term.

 

		3.	Confidentiality; Proprietary Rights. The terms of that certain Confidentiality Agreement
dated February 17, 2018, between COMPANY and CONSULTANT with respect to confidential information, proprietary information and intellectual
property rights] shall continue in full force and effect and apply to CONSULTANT and his provision of services under this Agreement.

 

		4.	Term. Unless earlier terminated as hereinafter provided, the term of CONSULTANT’S
engagement under this Agreement shall begin as of the date of the Separation, and continue until the date on which COMPANY files
its Form 10-K of the fiscal year ended December 31, 2017 (the “Initial Term”), with such term automatically renewing
for successive three month periods thereafter unless earlier terminated as provided herein (the “Term”).

 

		5.	Termination.  COMPANY reserves the right to discontinue at any time any work with
respect to which CONSULTANT shall have been performing consulting services hereunder by giving CONSULTANT written notice of such
discontinuance. In addition, immediately if COMPANY materially breaches this Agreement, or upon 45 days’ prior written notice
following completion of the Initial Term, CONSULTANT may terminate this Agreement. The failure by COMPANY to pay when due any amounts
payable to CONSULTANT hereunder shall constitute a material breach of this Agreement. In the event of the discontinuance of services
by COMPANY or termination by CONSULTANT (as the case may be) of this Agreement as hereinbefore provided, COMPANY shall be obligated
to pay CONSULTANT (in accordance with the provisions for and limitations with respect to payment set forth herein) all amounts
payable to CONSULTANT hereunder up to and including the date on which CONSULTANT receives actual notice of such discontinuance
by COMPANY or the date of such termination by CONSULTANT, whichever is applicable. COMPANY’S obligations hereunder shall
survive the termination of this Agreement.

 

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		6.	Relationship of the Parties.  The business relationship between CONSULTANT and
COMPANY shall be that of independent contractor and not employer-employee or principal-agent. CONSULTANT is not and will not be
an employee of COMPANY under the meaning of any federal or state unemployment or insurance laws or workers’ compensation
laws or otherwise, and CONSULTANT shall not be entitled to or shall not be provided any medical coverage, insurance of any kind,
vacation pay, pension benefits or any other type of employee benefit by COMPANY. Neither party shall have the authority to legally
bind the other in contract, debt or otherwise or to represent itself as an agent, employee or in any other capacity of the other.

 

		7	Taxes. CONSULTANT will be responsible for the payment of taxes on CONSULTANT’s entire
compensation under this Agreement, including income taxes, employment and unemployment, Medicare and social security taxes and
other or similar taxes required by application of law. COMPANY shall not withhold any taxes in connection with the compensation
paid to CONSULTANT hereunder. Such payments shall be the sole responsibility of CONSULTANT, and CONSULTANT agrees to file all required
forms and make all required payments appropriate to CONSULTANT’s tax status when and as they become due. CONSULTANT agrees
to indemnify COMPANY, and each of its officers, directors and employees from and against all payments, losses, costs, liability,
expenses, damages, fines, penalties and judgments (including, without limitation, actual attorneys’ fees and expenses) incurred
by COMPANY or any of its officers, directors or employees as a result of a failure by CONSULTANT (a) to pay all the taxes due in
connection with the compensation paid to CONSULTANT under this Agreement, (b) to respond to any administrative inquiry concerning
CONSULTANT’s payment of such taxes, or (c) to defend against any administrative or judicial proceeding with respect to CONSULTANT’s
payment of such taxes.

 

		8.	Entire Agreement/Binding Effect.  This Agreement contains the complete understanding
between the parties with respect to the subject matter hereof, and supersedes all other agreements, whether written or oral, between
the parties concerning such subject matter; provided, however, that for the avoidance of doubt CONSULTANT acknowledges and agrees
that the execution of this Agreement does not alter his obligations under any other agreements (including, without limitation,
any employment, severance, confidentiality or other similar agreements) between CONSULTANT and COMPANY. This Agreement shall be
binding on and inure to the benefit of the parties and their respective successors and permitted assigns. This Agreement shall
not amend in any way the Separation Agreement and Release of Claims that CONSULTANT and COMPANY entered into on January 26, 2018.
In addition, the parties intend that CONSULTANT incurred a “Separation from Service” within the meaning of Section
409A of the Internal Revenue Code (the “Code”) from COMPANY on the Separation date, and that the parties do not intend
that the level of services provided by CONSULTANT under this Agreement, or otherwise, will alter or affect such Separation from
Service.

 

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		9.	Modifications.  No waiver or modification of this Agreement or any provision hereof
shall be valid and no evidence of waiver or modification shall be offered or received in evidence in any proceeding, arbitration
or litigation between the parties hereto arising out of or affecting this Agreement or the rights or obligations of the parties
hereunder, unless such waiver or modification is in writing duly signed by both parties.

 

		10.	Assignment.  This Agreement is not assignable by CONSULTANT or COMPANY without
the prior written consent of the other party; provided, however, that COMPANY may assign this Agreement to any affiliate of COMPANY
without the consent of CONSULTANT. Any assignment in violation of this Section 10 shall be void.

 

		11.	Governing Law; Jurisdiction.  This Agreement shall be interpreted and construed
in accordance with the laws of the State of North Carolina. Any and all claims, controversies and causes of action arising out
of or relating to this Agreement, whether sounding in contract, tort or statute, shall be governed by the laws of the State of
North Carolina, including its statutes of limitations, without giving effect to any conflict-of-laws or other rule that would result
in the application of the laws of a different jurisdiction. The parties consent and agree to submit and be subject to the exclusive
jurisdiction of the Federal and State courts located in Wake County, North Carolina for the resolution of all claims, controversies
and causes of action arising out of or relating to this Agreement.

 

		12.	Notices.  All notices and other communications under this agreement shall be in
writing and shall be given to the parties at their respective addresses set forth below, or to such other address or telecopy number
as either party may designate by written notice in the manner provided herein, and shall be sent by (a) hand delivery, (b) certified
mail, return receipt requested, postage prepaid, (c) a recognized overnight delivery service, or (d) telecopy or other means of
facsimile or by email.

 

IF TO CONSULTANT:

David Olert 

PO box 1401

Thousand Oaks, CA 91358

Dolert@hotmail.com

 

IF TO COMPANY:

Innovate
Biopharmaceuticals, Inc.

8480 Honeycutt
Road, Suite 120

Raleigh,
NC 27615

Attn:
Kendyle Woodard

Email: kwoodard@innovatebiopharma.com

 

		13.	Representations of CONSULTANT.  CONSULTANT represents that it is under no obligation,
contractual or otherwise, to any other person, institution or other entity that would prohibit the rendering of services called
for in this Agreement or that would prohibit the payments for professional services in the amount and the manner as set forth herein.

 

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		14.	No Waiver. No failure or delay by a party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise thereof or the exercise of any right, power or privilege
hereunder.

 

		15.	If any term or provision of this Agreement is held to by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms and provisions of this letter agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.

 

		16.	Survival.  In addition to the provisions of this Agreement that, by their terms,
survive the termination or expiration of this Agreement, Sections 7–15, and COMPANY’S obligation to pay CONSULTANT’S
fees and expenses as provided herein, shall survive the termination or expiration of this Agreement.

 

[Signature
page follows]

 

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IN WITNESS WHEREOF
the parties hereto have caused this Agreement to be duly executed as of the date set forth above.

 

	Innovate Biopharmaceuticals, Inc.	 	David Olert
	 	 	 	 	 
	By:	/s/ Kendyle Woodard	 	By:	/s/ David Olert
	 	 	 	 	 
	Name:	Kendyle Woodard	 	Name:	David Olert
	 	 	 	 	 
	Title:	Director	 	Title:	Consultant

 

    	 	 	 

     

    

 

EXHIBIT A

 

CONSULTANT will perform such services related
to the preparation of COMPANY’s financial statements, filings with the Securities and Exchange Commission, filings with the
Nasdaq Stock Market and other related matters as requested by COMPANY from time to time, including, without limitation, preparing
specified sections of COMPANY’s 2017 Annual Report on Form 10-K, coordinating with COMPANY’s independent auditor and
other related matters. CONSULTANT acknowledges and agrees that the provision of these services and the completion of these items
in accordance with the timelines provided by COMPANY is critical so that COMPANY is able to meet its regulatory and contractual
obligations.Exhibit 10.20

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT
AGREEMENT (the “Agreement”), is entered into as of November 2, 2015 (the “Effective Date”)
by and between Innovate Biopharmaceuticals, Inc., a Delaware corporation (the “Company”), and Christopher P.
Prior, Ph.D. (the “Executive”), an individual residing in Delaware County, Pennsylvania.

 

WITNESSETH:

 

WHEREAS, the Company
wishes to employ the Executive, and the Executive desires to accept employment with the Company, upon the terms and conditions
of this Agreement.

 

NOW, THEREFORE, in
consideration of the foregoing, of the mutual promises herein, and of other good and valuable consideration, including the employment
of the Executive by the Company and the compensation to be received by the Executive from the Company from time to time, and specifically
the compensation to be received by the Executive pursuant to Section 4 hereof, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending legally to be bound, hereby agree as follows:

 

1.            Employment.
As of the Effective Date, the Company hereby employs the Executive and the Executive hereby accepts employment as the Chief Executive
Officer (“CEO”) of the Company upon the terms and conditions of this Agreement. The Executive and shall report
to the Board of Directors of the Company (the “Board”).

 

2.            Duties.
The Executive shall faithfully perform all duties of the Company related to the position or positions held by the Executive, including
but not limited to all duties set forth in this Agreement and/or in the Bylaws of the Company related to the position or positions
held by the Executive and all additional duties that are prescribed from time to time by the Board or other designated officers
of the Company. The Executive shall devote the Executive’s full time and attention to the performance of the Executive’s
duties and responsibilities on behalf of the Company and in furtherance of its best interests; provided, however, that the Executive,
subject to the Executive’s obligations hereunder, shall also be permitted to make personal investments, perform reasonable
volunteer services and, with the prior consent of the Company, serve on outside boards of directors for non-profit corporations.
The Executive shall comply with all Company policies, standards, rules and regulations (the “Company Policies”)
and all applicable government laws, rules and regulations that are now or hereafter in effect. The Executive acknowledges receipt
of copies of all written Company Policies that are in effect as of the date of this Agreement.

 

3.            Term.
Unless earlier terminated as provided herein, the initial term of this Agreement shall commence on the Effective Date and shall
continue for three years from the Minimum Financial Milestone Event (as defined below) (the “Term”). Thereafter,
this Agreement shall automatically renew on a year-to-year basis on the same terms and conditions as set forth herein unless: (a)
earlier terminated or amended as provided herein or (b) either party gives written notice of non-renewal at least 60 days prior
to the end of the Term or any renewal term thereafter. The initial term and all renewals thereof are referred to as the “Term.”

 

    	 	 	 

     

    

 

4.            Compensation.
During the Term, as compensation for the services rendered by the Executive under this Agreement, the Executive shall be entitled
to receive the following (all payments are subject to applicable withholdings):

 

(a)          Base
Salary. Upon the occurrence of the Minimum Financial Milestone Event (as defined below), the Executive shall be paid an annual
salary in the amount of $240,000, which shall be payable in accordance with the then-current payroll schedule of the Company (the
“Base Salary”), less all applicable taxes and withholdings; provided, however, that the Executive shall
be paid minimum wage in accordance with applicable state law until such time as the Minimum Financial Milestone Event has occurred.
From and after the date of the Minimum Financial Milestone Event, the Executive shall be entitled to payment of the Base Salary
in accordance with the then-current payroll schedule of the Company. Upon the occurrence of the Second Financial Milestone Event
(as defined below), the Executive's Base Salary shall be increased to $300,000, which shall be paid in accordance with the then-current
payroll schedule of the Company commencing on the first regularly scheduled payroll date of the Company after the Second Minimum
Financial Milestone Event has occurred. The Executive's salary may be increased from time to time by the Board. Notwithstanding
anything to the contrary, the Base Salary may be reduced if the Board approves and implements an equal percentage reduction in
the base salaries of all of the Company’s executive officers, but in no event will such reduction be greater than 15% of
the Base Salary. A reduction in the Executive’s Base Salary in accordance with the immediately preceding sentence shall not
constitute a substantial reduction in salary as described at paragraph 5(b)(i)(A) of this Agreement.

 

For the purposes of this
Agreement, the “Minimum Financial Milestone Event” shall mean the sale by the Company of its Equity Securities
in a bona fide equity financing following the Effective Date in which the Company receives gross proceeds of not less than $5,000,000,
including proceeds received in connection with any transaction in which the Company’s securities (or the securities of any
successor to the Company) become publicly tradeable. “Equity Securities” means the Company’s common stock
or preferred stock issued to one or more third parties for bona fide equity financing purposes. The “Second Financial
Milestone Event” shall mean the sale or sales by the Company of its Equity Securities in a bona fide equity financing
(or series of bona fide equity financings, including the Minimum Financial Milestone Event) following the Effective Date of this
Agreement in which the Company receives aggregate gross proceeds of at least $30,000,000, including proceeds received in connection
with any transaction in which the Company’s securities (or the securities of any successor to the Company) become publicly
tradeable. For purposes of clarity, the amount of the Minimum Financial Milestone Event shall be included in calculating the Second
Milestone Event.

 

(b)           Bonuses.

 

(i)          Upon
the occurrence of the Minimum Financial Milestone Event (as defined above) provided that the conditions set forth below have been
satisfied, the Executive shall be paid a one-time lump sum cash bonus in the amount of $60,000, less applicable withholdings, which
shall be paid within 30 days of the occurrence of the Minimum Financial Milestone Event.

 

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(ii)         Upon
the occurrence of the Second Minimum Financial Milestone Event, provided that the conditions set forth below have been satisfied,
the Executive shall be paid a one-time lump sum cash bonus in the amount of $175,000, less all applicable withholdings, which shall
be paid to the Executive within 30 days of the occurrence of the Second Minimum Financial Milestone Event. In the event a Second
Minimum Financial Event is the initial fundraising, the Executive shall be entitled to payment of both bonuses specified under
subparts (i) above this subpart (ii), and both bonuses shall be paid to the Executive, less applicable withholdings, within 30
days of the occurrence of the Second Minimum Financial Milestone Event.

 

For the purposes of subparts
(i) and (ii) above, the Executive shall only be paid the bonuses specified therein if: (A) the Executive is employed by the Company
on the effective date of the occurrence of the Minimum Financial Milestone Event and/or Second Minimum Financial Milestone Event,
as appropriate, or has been terminated without Cause prior to such date. For purposes of clarity, if the Executive is not employed
by the Company upon the applicable milestone or has been terminated for Cause (as defined herein) prior to the occurrence of the
applicable milestone event, the Executive shall have no right to the payment of the bonus specified under subpart (i) or subpart
(ii) hereof.

 

(iii)         The
Executive shall be eligible to participate in all bonus or similar incentive plans adopted by the Board. The amount awarded, if
any, to the Executive under any bonus or incentive plan shall be in the discretion of the Board or any committee administering
such plan, based on its assessment of the Executive’s and the Company’s performance during the relevant period. If
a Bonus is awarded, unless otherwise specifically provided by the Board or committee administering such plan, it shall be paid
within 30 days of December 31st in the year following the year in which the Bonus was awarded.

 

(c)          Equity.
Following the completion of the Minimum Financial Milestone Event, the Executive shall be eligible for an annual grant of restricted
stock (the “Equity Grant”) for each year of service during the Term, which grant shall be made at the then-current
fair market value of such restricted stock on the date of grant, subject to (i) the Executive’s achievement of the agreed-upon
milestones set forth on Exhibit A in the applicable calendar year, which milestones may be modified on an annual basis commencing
in the year 2016; (ii) the approval of the grant by the Board; and (iii) the Executive’s continued employment by the Company
until such time as the Equity Grant is made. If an Equity Grant is made by the Board, it shall be made within 45 days of December
31st of the applicable calendar year. The terms and conditions of the Equity Grant shall be governed by a Restricted
Stock Purchase Agreement in a form mutually acceptable to the Executive and the Company and shall be governed by the Company’s
2015 Stock Incentive Plan, which shall be approved and adopted by the Company before the Equity Grant is made. It is understood
that each Equity Grant shall be subject to a Right of Repurchase in favor of the Company, which Right of Repurchase shall be subject
to the Company’s standard vesting schedule unless otherwise agreed whereby the Company’s Right of Repurchase shall
lapse with respect to 25% of the restricted stock on the one year anniversary of the date of grant and with respect to an additional
1/48 each month on the corresponding day of the month thereafter, until all of the restricted stock has been released from restrictions
on the fourth anniversary of the date of grant, subject to Executive continuing perform services through each such date. Each Equity
Grant shall provide that the Company’s Right of Repurchase shall lapse 100% upon a Change in Control, as such term is defined
in the Restricted Stock Purchase Agreement.

 

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(d)         Benefits.
The Executive shall be entitled to receive those benefits provided from time to time to other executive employees of the Company,
in accordance with the terms and conditions of the applicable plan documents; provided that the Executive meets the eligibility
requirements thereof. All such benefits are subject to amendment or termination from time to time by the Company without the consent
of the Executive or any other employee of the Company.

 

(e)         Paid
Time Off. The Executive shall be entitled to four weeks of paid time off (“PTO”) (prorated for partial calendar
years) to be taken at such times as may be approved by the Board. PTO earned in one calendar year may not be used in any subsequent
calendar year. Upon the termination of the Executive’s employment with the Company, the Executive shall be paid for any accrued
and used PTO (less standard employment related withholdings and dedcutions).

 

(f)          Business
Expenses. The Company shall pay, or reimburse the Executive for, all reasonable expenses incurred by the Executive directly
related to conduct of the business of the Company; provided that, the Executive complies with the Company’s policies for
the reimbursement or advancement of business expenses that are now or hereafter in effect.

 

5.            Termination.
This Agreement and the Executive’s employment by the Company shall or may be terminated, as the case may be, as follows:

 

(a)          Termination
upon Expiration of the Term. This Agreement and the Executive’s employment by the Company shall terminate upon the expiration
of the Term in the event notice of non-renewal is provided according to the terms of Section 3.

 

(b)          Termination
by the Executive. The Executive may terminate this Agreement and his employment by the Company:

 

(i)          for
“Good Reason” (as defined herein). For purposes of this Agreement, “Good Reason” shall mean, the
existence, without the consent of the Executive, of any of the following events: (A) the Executive’s duties and responsibilities
or salary are substantially reduced or diminished; (B) the Company materially breaches its obligations under this Agreement, including
the failure of the Company to pay the Executive any Base Salary that becomes due and payable within 30 days after the Employee
has given the Company written notice thereof; or (C) the Executive’s place of employment is relocated by more than 50 miles
of Philadelphia, Pennsylvania, without the consent of the Executive. In addition to any requirements set forth above, in order
for any of the above events to constitute “Good Reason”, the Executive must (X) inform the Company of the existence
of the event within 90 days of the initial existence of the event, after which date the Company shall have no less than 30 days
to cure the event which otherwise would constitute “Good Reason” hereunder and (Y) the Executive must terminate employment
with the Company for such “Good Reason” no later than two years after the initial existence of the event which prompted
the Executive’s termination.

 

(ii)         Other
than for Good Reason 30 days after notice to the Company.

 

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(c)          Termination
by the Company. The Company may terminate this Agreement and the Executive’s employment by the Company upon notice to
the Executive (or personal representative):

 

(i)          at
any time and for any reason;

 

(ii)         upon
the death of the Executive, in which case this Agreement shall terminate immediately; provided that, such termination shall not
prejudice any benefits payable to the Executive’s spouse or beneficiaries which are fully vested as of the date of death;

 

(iii)        if
the Executive is “permanently disabled” (as defined herein), in which case this Agreement shall terminate immediately;
provided that, such termination shall not prejudice any benefits payable to the Executive, the Executive’s spouse or beneficiaries
which are fully vested as of the date of the termination of this Agreement. For purposes of this Agreement, the Executive shall
be considered “permanently disabled” when a qualified medical doctor mutually acceptable to the Company and
the Executive or the Executive’s personal representative shall have certified in writing that: (A) the Executive is unable,
because of a medically determinable physical or mental disability, to perform substantially all of the Executive’s duties,
with or without a reasonable accommodation, for more than 180 calendar days measured from the last full day of work; or (B) by
reason of mental or physical disability, it is unlikely that the Executive will be able, within 180 calendar days, to resume substantially
all business duties and responsibilities in which the Executive was previously engaged and otherwise discharge the Executive’s
duties under this Agreement;

 

(iv)        upon
the liquidation, dissolution or discontinuance of business by the Company in any manner or the filing of any petition by or against
the Company under any federal or state bankruptcy or insolvency laws, which petition shall not be dismissed within 60 days after
filing; provided that, such termination shall not prejudice the Executive’s rights as a stockholder or a creditor of the
Company; or

 

(v)         "for
cause" (as defined herein). “For cause” shall be determined by the Board by a majority vote without the
participation of the Executive in such vote and shall mean:

 

(A)         Any
material breach of the terms of this Agreement by the Executive, or the failure of the Executive to diligently and properly perform
the Executive’s duties for the Company or the Executive’s failure to achieve the objectives specified by the Board;

 

(B)         The
Executive’s misappropriation or unauthorized use of the Company’s tangible or intangible property, or breach of the
Proprietary Information Agreement (as defined herein) or any other similar agreement regarding confidentiality, intellectual property
rights, non-competition or non-solicitation;

 

(C)         Any
material failure to comply with the Company Policies or any other policies and/or directives of the Board;

 

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(D)         The
Executive’s use of illegal drugs or any illegal substance, or the Executive’s use of alcohol in any manner that materially
interferes with the performance of the Executive’s duties under this Agreement;

 

(E)         Any
dishonest or illegal action (including, without limitation, embezzlement) or any other action whether or not dishonest or illegal
by the Executive which is materially detrimental to the interest and well-being of the Company, including, without limitation,
harm to its reputation;

 

(F)         The
Executive’s failure to fully disclose any material conflict of interest that the Executive may have with the Company in a
transaction between the Company and any third party which is materially detrimental to the interest and well-being of the Company;
or

 

(G)         Any
adverse action or omission by the Executive which would be required to be disclosed pursuant to public securities laws or which
would limit the ability of the Company or any entity affiliated with the Company to sell securities under any Federal or state
law or which would disqualify the Company or any affiliated entity from any exemption otherwise available to it.

 

(d)          Obligations
of the Company Upon Termination.

 

(i)           Upon
the termination of this Agreement: (A) by the Executive pursuant to paragraph 5(b)(ii); or (B) by the Company pursuant to paragraph
5(c)(ii), (iii), (iv), or (v), the Company shall have no further obligations hereunder other than the payment of all compensation
and other benefits payable to the Executive through the date of such termination which shall be paid on or before the Company’s
next regularly scheduled payday unless such amount is not then-calculable, in which case payment shall be made on the first regularly
scheduled payday after the amount is calculable.

 

(ii)          Upon
termination of this Agreement: (A) upon the expiration of the Term, if the Company does not renew the Term for a reason unrelated
to Cause; (B) by the Executive pursuant to paragraph 5(b)(i); or (C) by the Company pursuant to paragraph 5(c)(i) and provided
that the Executive first executes and does not revoke a release and settlement agreement in the form acceptable to the Company
within the time period then-specified by the Company but in any event no later than sixty (60) days after the date of termination
(the “Release”): (1) the Company shall pay the Executive an amount equal to 12 months of Executive’s then-current
Base Salary (less all applicable deductions) payable in installments in accordance with the then-current generally applicable payroll
schedule of the Company commencing on the first regularly scheduled pay date of the Company processed after Executive has executed,
delivered to the Company and not revoked the Release; (2) provided that the Company still offers a health insurance plan, either
allow the Executive to continue to participate in the Company’s health insurance plan at the level in effect immediately
prior to termination (if permitted under the provisions of such plan), or provided that the Executive properly elects and
maintains continued health insurance coverage under COBRA or its state law equivalent and provided further that such benefits continue
to be offered under the Company sponsored plan, the Company shall reimburse the Executive in an amount equal to the cost of the
premium for such continued health insurance coverage at the same average level and on the same terms and conditions which applied
immediately prior to the date of the Executive’s termination for the shorter of (a) 12 months from the date of termination
or (b) until the Executive obtains reasonably comparable coverage.

 

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(e)          Resignation
as Officer and Director. Upon termination of this Agreement and the Executive’s employment hereunder for any reason by
either party, the Executive shall be deemed to have resigned from all offices and positions the Executive may hold with the Company
at such time including without limitation Board membership and/or positions as an officer of the Company.

 

(f)          Payment
in Lieu of Notice Period. Upon the termination of this Agreement: (A) pursuant to the expiration of the Term based on a non-renewal
notice, if applicable, or (B) by the Executive pursuant to paragraph 5(b)(i) or 5(b)(ii), the Company may, at its sole election,
pay the Executive an amount equal to Executive’s then-current Base Salary for all or any portion of the applicable notice
period required by paragraph 3(b) or paragraph 5(b)(i) or 5(b)(ii) in lieu of all or any portion of such notice period; provided,
however, any such election by the Company shall not be deemed to be a termination by the Company that invokes the obligations set
forth in Section 5(d)(ii) of this Agreement. Notwithstanding the above, if the Executive requests that Executive’s final
day of employment occur prior to the expiration of any applicable notice period and the Company consents, pay in lieu of notice
shall not be required.

 

6.          
Proprietary Information Agreement. The terms of the Proprietary Information, Inventions, Non-Competition and Non-Solicitation
Agreement by and between the Company and the Executive, entered into simultaneously herewith (the “Proprietary Information
Agreement”) and any other similar agreement regarding confidentiality, intellectual property rights, non-competition
or non-solicitation between the Company and the Executive, are hereby incorporated by reference and are a material part of this
Agreement.

 

7.           Representations
and Warranties.

 

(a)          The
Executive represents and warrants to the Company that the Executive’s performance of this Agreement and as an employee of
the Company does not and will not breach any noncompetition agreement or any agreement to keep in confidence proprietary information
acquired by the Executive in confidence or in trust prior to the Executive's employment by the Company. The Executive represents
and warrants to the Company that the Executive has not entered into, and agrees not to enter into, any agreement that conflicts
with or violates this Agreement.

 

(b)          The
Executive represents and warrants to the Company that the Executive has not brought and shall not bring with the Executive to the
Company, or use in the performance of the Executive's responsibilities for the Company, any materials or documents of a former
employer which are not generally available to the public or which did not belong to the Executive prior to the Executive’s
employment with the Company, unless the Executive has obtained written authorization from the former employer or other owner for
their possession and use and provided the Company with a copy thereof.

 

    	 	7	 

     

    

 

8.            Indemnification.

 

(a)          By
the Employee. The Executive shall indemnify and hold harmless the Company, its directors, officers, stockholders, agents, and
employees against all claims, costs, expenses, liabilities, and lost profits, including amounts paid in settlement, incurred by
any of them as a result of the breach by the Executive of any provision of Section 2, 6 and/or 7 of this Agreement.

 

(b)          By
the Company. The Company will indemnify and hold harmless the Executive from any labilities and expenses arriving from his
actions as an officer, director or employee of the Company to the fullest extent permitted by law, excepting any unauthorized acts,
intentional or illegal conduct with breaches the terms of this or any other agreement or Company policy, including but not limited
to the Proprietary Information Agreement.

 

9.            Notices.
All notices, requests, consents, approvals, and other communications to, upon, and between the parties shall be in writing and
shall be deemed to have been given, delivered, made, and received when: (a) personally delivered; (b) deposited for next day delivery
by Federal Express, or other similar overnight courier services; (c) transmitted via telefacsimile or other similar device to the
attention of the Company President with receipt acknowledged; or (d) three days after being sent or mailed by certified mail, postage
prepaid and return receipt requested, addressed to the Company at 8601 Six Forks Road, Suite 400, Raleigh, NC 27615, and to the
Executive at the address set forth by the signature page below.

 

10.          Effect.
This Agreement shall be binding on and inure to the respective benefit of the Company and its successors and assigns and the Executive
and his personal representatives.

 

11.          Entire
Agreement. This Agreement and the Proprietary Information Agreement and any other similar agreement regarding confidentiality,
intellectual property rights, non-competition or non-solicitation constitute the entire agreement between the parties with respect
to the matters set forth herein and supersede all prior agreements and understandings between the parties with respect to the same.

 

12.          Severability.
The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other
provision.

 

13.          Amendment
and Waiver. No provision of this Agreement, including the provisions of this Section, may be amended, modified, deleted, or
waived in any manner except by a written agreement executed by the parties.

 

14.          Section
409A Matters. This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986,
as amended and the Treasury Regulations and other applicable guidance thereunder (“Section 409A”). To the extent
that there is any ambiguity as to whether this Agreement (or any of its provisions) contravenes one or more requirements of Section
409A, such provision shall be interpreted and applied in a matter that does not result in a Section 409A violation. Without limiting
the generality of the above:

 

    	 	8	 

     

    

 

(a)           For
clarity, the severance benefits specified in this Agreement (the “Severance Benefits”) are only payable upon
a “separation from service” as defined in Section 409A. The Severance Benefits shall be deemed to be series of separate
payments, with each installment being treated as a separate payment. The time and form of payment of any compensation may not be
deferred or accelerated to the extent it would result in an impermissible acceleration or deferral under Section 409A.

 

(b)          To
the extent this Agreement contains payments which are subject to Section 409A (as opposed to exempt from Section 409A), the Executive’s
rights to such payments are not subject to anticipation, alienation, sale, transfer, pledge, encumbrance, attachment or garnishment
and, where applicable, may only be transferred by will or the laws of descent and distribution.

 

(c)          To
the extent the Severance Benefits are intended to be exempt from Section 409A as a result of an “involuntary separation from
service” under Section 409A, if all conditions necessary to establish the Executive’s entitlement to such Severance
Benefits have been satisfied, all Severance Benefits shall be paid or provided in full no later than December 31st of
the second calendar year following the calendar year in which the Executive’s employment terminated unless another time period
is applicable.

 

(d)          If
the Employee is a “specified employee” (as defined in Section 409A) on the termination date and a delayed payment is
required by Section 409A to avoid a prohibited distribution under Section 409A, then no Severance Benefits that constitute “non-qualified
deferred compensation” under Section 409A shall be paid until the earlier of (i) the first day of the 7th month
following the date of Employee’s “separation from service” as defined in Section 409A, or (ii) the date of Employee’s
death. Upon the expiration of the applicable deferral period, all payments deferred under this clause shall be paid in a lump sum
and any remaining severance benefits shall be paid per the schedule specified in this Agreement.

 

(e)          The
Company makes no representation that this Agreement will be exempt from or compliant with Section 409A and makes no affirmative
undertaking to preclude Section 409A from applying, but does reserve the right to unilaterally amend this Agreement as may be necessary
or advisable to permit the Agreement to be in documentary and operational compliance with Section 409A which determination will
be made in the sole discretion of the Company.

 

15.          Governing
Law. This Agreement will be governed by and construed according to the laws of the State of North Carolina without regard to
conflict of law principles.

 

    	 	9	 

     

    

 

16.          Consent
to Jurisdiction and Venue. Each of the parties agrees that any suit, action, or proceeding arising out of this Agreement may
be instituted against it in the state or federal courts located in Wake County, North Carolina. Each of the parties hereby waives
any objection that it may have to the venue of any such suit, action, or proceeding, and each of the parties hereby irrevocably
consents to the personal jurisdiction of any such court in any such suit, action, or proceeding.

 

17.          Counterparts.
This Agreement may be executed in more than one counterpart, each of which shall be deemed an original, and all of which shall
be deemed a single agreement.

 

18.          Headings.
The headings herein are for convenience only and shall not affect the interpretation of this Agreement.

 

[The remainder of this page is intentionally
left blank.]

 

    	 	10	 

     

    

 

IN WITNESS WHEREOF,
the parties have executed this Agreement as of the day and year first above written.

 

	 	COMPANY:
	 	 
	 	Innovate Biopharmaceuticals, InC.
	 	 	 
	 	By:	/s/ Jay P. Madan
	 	 	Jay P. Madan, President
	 	 	 
	 	EXECUTIVE:
	 	 	 
	 	/s/ Christopher P. Prior, Ph.D.
	 	Christopher P. Prior, Ph.D.
	 	 
	 	Address:

 

    	 	11	 

     

    

 

EXHIBIT A

 

2016 Milestones for Equity Grant

 

The following pertains
to the Equity Grant set forth in Section 4(a) of the Executive Employment Agreement:

 

    	 	12	 

     

    

 

FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT
AGREEMENT

 

THIS FIRST AMENDMENT
TO EXECUTIVE EMPLOYMENT AGREEMENT (the “Amendment”) is entered into as of March 15, 2016 (the “Effective
Date”) by and between Innovate Biopharmaceuticals, Inc., a Delaware corporation (the “Company”), and
Christopher P. Prior (the “Executive;” and, together with the Company, the “Parties”), who
agree to be bound by all of the terms and conditions hereof.

 

WITNESSETH:

 

WHEREAS, the Executive
and the Company entered into an Executive Employment Agreement on or about October 28, 2015 (the “Employment Agreement”),
setting forth the terms and conditions of Executive’s employment as the Chief Executive Officer of the Company;

 

WHEREAS, the Executive
and the Company desire to amend the Employment Agreement at this time as set forth in this Amendment.

 

NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Executive and the Company hereby
amend the Employment Agreement as follows, effective as of the date hereof:

 

1.           
Section 4(a) of the Employment Agreement is hereby amended and restated in its entirety as follows:

 

“(a)          Base
Salary. Upon the occurrence of the Minimum Financial Milestone Event (as defined below), the Executive shall be paid an annual
salary in the amount of $240,000, which shall be payable in accordance with the then-current payroll schedule of the Company (the
“Base Salary”), less all applicable taxes and withholdings; provided, however, that the Executive shall
be paid minimum wage in accordance with applicable state law until such time as the Minimum Financial Milestone Event has occurred.
From and after the date of the Minimum Financial Milestone Event, the Executive shall be entitled to payment of the Base Salary
in accordance with the then-current payroll schedule of the Company. Upon the occurrence of the Second Financial Milestone Event
(as defined below), the Executive's Base Salary shall be increased to $260,000 which shall be paid in accordance with the then-current
payroll schedule of the Company commencing on the first regularly scheduled payroll date of the Company after the Second Minimum
Financial Milestone Event has occurred. Upon the occurrence of the Third Financial Milestone Event (as defined below), the Executive's
Base Salary shall be increased to $300,000, which shall be paid in accordance with the then-current payroll schedule of the Company
commencing on the first regularly scheduled payroll date of the Company after the Second Minimum Financial Milestone Event has
occurred. The Executive's salary may be increased from time to time by the Board. Notwithstanding anything to the contrary, the
Base Salary may be reduced if the Board approves and implements an equal percentage reduction in the base salaries of all of the
Company’s executive officers, but in no event will such reduction be greater than 15% of the Base Salary. A reduction in
the Executive’s Base Salary in accordance with the immediately preceding sentence shall not constitute a substantial reduction
in salary as described at paragraph 5(b)(i)(A) of this Agreement.

 

    	 	 	 

     

    

 

For the purposes
of this Agreement, the “Minimum Financial Milestone Event” shall mean the sale by the Company of its Equity
Securities in a bona fide equity financing following the Effective Date in which the Company receives gross proceeds of not less
than $5,000,000, including proceeds received in connection with any transaction in which the Company’s securities (or the
securities of any successor to the Company) become publicly tradeable. “Equity Securities” means the Company’s
common stock or preferred stock issued to one or more third parties for bona fide equity financing purposes. The “Second
Financial Milestone Event” shall mean the sale or sales by the Company of its Equity Securities following the Effective
Date in a bona fide equity financing (or series of bona fide equity financings, including the Minimum Financial Milestone Event)
in which the Company receives aggregate gross proceeds of at least $10,000,000, including proceeds received in connection with
any transaction in which the Company’s securities (or the securities of any successor to the Company) become publicly tradeable.
The “Third Financial Milestone Event” shall mean the sale or sales by the Company of its Equity Securities following
the Effective Date in a bona fide equity financing (or series of bona fide equity financings, including the Minimum Financial Milestone
Event and the Second Financial Milestone Event) in which the Company receives aggregate gross proceeds of at least $30,000,000,
including proceeds received in connection with any transaction in which the Company’s securities (or the securities of any
successor to the Company) become publicly tradeable. For purposes of clarity, the amount of the Minimum Financial Milestone Event
shall be included in calculating the Second Milestone Event and the amount of the Minimum Financial Milestone Event and the Second
Financial Milestone Event shall be included in calculating the Third Financial Milestone Event.”

 

2.            Section
4(b) of the Employment Agreement is hereby amended and restated in its entirety as follows:

 

“(b)         Bonuses.

 

(i)          Upon
the occurrence of the Minimum Financial Milestone Event (as defined above) provided that the conditions set forth below have been
satisfied, the Executive shall be paid a one-time lump sum cash bonus in the amount of $60,000, less applicable withholdings, which
shall be paid within 30 days of the occurrence of the Minimum Financial Milestone Event.

 

(ii)         Upon
the occurrence of the Second Financial Milestone Event, provided that the conditions set forth below have been satisfied, the Executive
shall be paid a one-time lump sum cash bonus in the amount of $90,000, less all applicable withholdings, which shall be paid to
the Executive within 30 days of the occurrence of the Second Financial Milestone Event. In the event a Second Financial Event is
the initial fundraising, the Executive shall be entitled to payment of both bonuses specified under subpart (i) above, and both
bonuses shall be paid to the Executive, less applicable withholdings, within 30 days of the occurrence of the Second Financial
Milestone Event.

 

    	 	 	 

     

    

 

(iii)        Upon
the occurrence of the Third Financial Milestone Event, provided that the conditions set forth below have been satisfied, the Executive
shall be paid a one-time lump sum cash bonus in the amount of $175,000, less all applicable withholdings, which shall be paid to
the Executive within 30 days of the occurrence of the Third Financial Milestone Event. In the event the Third Financial Milestone
Event is the initial fundraising, the Executive shall be entitled to a payment of each bonus specified under subpart (i) and (ii)
above this subpart (iii), and all such bonuses shall be paid to the Executive, less applicable withholdings, within 30 days of
the occurrence of the Third Financial Milestone Event.

 

For the purposes of subparts (i),
(ii) and (iii) above, the Executive shall only be paid the bonuses specified therein if: (A) the Executive is employed by the Company
on the effective date of the occurrence of the Minimum Financial Milestone Event the Second Financial Milestone Event, and/or the
Third Financial Milestone Event, as appropriate, or has been terminated without Cause prior to such date. For purposes of clarity,
if the Executive is not employed by the Company upon the applicable milestone or has been terminated for Cause (as defined herein)
prior to the occurrence of the applicable milestone event, the Executive shall have no right to the payment of the bonus specified
under subparts (i), (ii) or (iii) hereof.”

 

3.           This
Amendment is hereby incorporated into and forms a part of the Employment Agreement.

 

4.           Except
as modified herein, all other terms and conditions of the Employment Agreement shall continue in full force and effect.

 

5.           This
Amendment shall be binding upon the Parties hereto and upon their respective heirs, legal representatives, successors and permitted
assigns and shall be governed by and construed in accordance with the laws of the State of North Carolina.

 

[The remainder of this page is intentionally
left blank.]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties have executed this Agreement as of the day and year first above written.

 

	 	COMPANY:
	 	 
	 	Innovate Biopharmaceuticals, InC.
	 	 	 
	 	By:	/s/ Jay P. Madan, President
	 	 	Jay P. Madan, President
	 	 	 
	 	EXECUTIVE:
	 	 	 
	 	By:	/s/ Christopher P. Prior
	 	 	Christopher P. Prior
	 	 	 
	 	Address:

 

    	 	 	 

     

    

 

SECOND AMENDMENT TO EXECUTIVE EMPLOYMENT
AGREEMENT

 

THIS SECOND AMENDMENT
TO EXECUTIVE EMPLOYMENT AGREEMENT (the “Second Amendment”) is entered into as of March 1, 2017, with an effective
date of July 1, 2016 (the “Effective Date”) by and between Innovate Biopharmaceuticals, Inc., a Delaware corporation
(the “Company”), and Christopher P. Prior (the “Executive;” and, together with the Company,
the “Parties”), who agree to be bound by all of the terms and conditions hereof.

 

WITNESSETH:

 

WHEREAS, the Executive
and the Company entered into an Executive Employment Agreement on or about October 28, 2015 (the “Employment Agreement”),
setting forth the terms and conditions of Executive’s employment as the Chief Executive Officer of the Company;

 

WHEREAS, the Executive
and the Company entered into a First Amendment to Executive Employment Agreement on or about March 15, 2016 (the “First
Amendment”); and

 

WHEREAS, the Executive
and the Company desire to amend the Employment Agreement, as amended by the First Amendment, as set forth in this Second Amendment.

 

NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Executive and the Company hereby
amend the Employment Agreement as follows, effective as of the Effective Date set forth above:

 

1.            Section
4(a) of the Employment Agreement entitled “Base Salary” is hereby amended to add the following paragraphs at the end
of Section 4(a) relative to Executive’s Base Salary:

 

“Commencing
on July 1, 2016, Executive’s Base Salary shall be increased so that Executive is paid $36,000 per year ($3,000 per
month) (to clarify which will be $ 18,000 for period of July 1, 2016 to Dec 31, 2016) (the “Salary Increase”),
less all applicable taxes and withholdings. Payment of the Salary Increase shall continue until such time as the Minimum Financial
Milestone Event has occurred.

 

Additionally,
in the months of July, August and September 2016, the Executive shall be paid a discretionary monthly bonus in addition to the
Salary Increase in the amount of $700 per month (to clarify, that the total 2016 Discretionary Bonus would be $ 2,100) (the “2016
Discretionary Bonus”). The 2016 Discretionary Bonus shall be paid to the Executive on a monthly basis in each of the
months of July, August and September 2016 in accordance with the Company’s standard payroll procedure and shall be less all
applicable taxes and withholdings. There shall be no further payment of the 2016 Discretionary Bonus from and after September 30,
2016.”

 

2.            This
Second Amendment is hereby incorporated into and forms a part of the Employment Agreement.

 

    	 	 	 

     

    

 

3.            Except
as modified herein, all other terms and conditions of the Employment Agreement as amended by the First Amendment, shall continue
in full force and effect.

 

4.            This
Second Amendment shall be binding upon the Parties hereto and upon their respective heirs, legal representatives, successors and
permitted assigns and shall be governed by and construed in accordance with the laws of the State of North Carolina.

 

[The remainder of this page is intentionally
left blank.]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties have executed this Second Amendment as of the day and year first above written.

 

	 	COMPANY:
	 	 
	 	Innovate Biopharmaceuticals, InC.
	 	 	 
	 	By:	/s/ Jay P. Madan
	 	 	Jay P. Madan, President
	 	 	 
	 	EXECUTIVE:
	 	 	 
	 	By:	/s/ Christopher P. Prior, Ph.D.
	 	 	Christopher P. Prior, Ph.D.
	 	 	 
	 	Address:

 

    	 	 	 

     

    

 

THIRD AMENDMENT TO EXECUTIVE EMPLOYMENT
AGREEMENT

 

THIS THIRD AMENDMENT
TO EXECUTIVE EMPLOYMENT AGREEMENT (the “Third Amendment”) is entered into as of March 1, 2017 (the “Effective
Date”) by and between Innovate Biopharmaceuticals, Inc., a Delaware corporation (the “Company”), and
Christopher P. Prior (the “Executive;” and, together with the Company, the “Parties”), who
agree to be bound by all of the terms and conditions hereof.

 

WITNESSETH:

 

WHEREAS, the Executive
and the Company entered into an Executive Employment Agreement on or about October 28, 2015 (the “Employment Agreement”),
setting forth the terms and conditions of Executive’s employment as the Chief Executive Officer of the Company;

 

WHEREAS, the Executive
and the Company entered into a First Amendment to Executive Employment Agreement on or about March 15, 2016 (the “First
Amendment”);

 

WHEREAS, the Executive
and the Company entered into a Second Amendment to Executive Employment Agreement simultaneously herewith with an effective date
of July 1, 2016 (the “Second Amendment”); and

 

WHEREAS, the Executive
and the Company desire to amend the Employment Agreement, as amended by the First Amendment and Second Amendment, as set forth
in this Third Amendment.

 

NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Executive and the Company hereby
amend the Employment Agreement as follows, effective as of the Effective Date set forth above:

 

1.            Section 4(a) of the Employment Agreement is hereby amended and restated in its entirety as follows:

 

“(a)          Base
Salary. Upon the occurrence of the Minimum Financial Milestone Event (as defined below), the Executive shall be paid an annual
salary in the amount of $240,000, which shall be payable in accordance with the then-current payroll schedule of the Company (the
“Base Salary”), less all applicable taxes and withholdings; provided, however, that the Executive shall
be paid minimum wage in accordance with applicable state law until such time as the Minimum Financial Milestone Event has occurred.
From and after the date of the Minimum Financial Milestone Event, the Executive shall be entitled to payment of the Base Salary
in accordance with the then-current payroll schedule of the Company. Upon the occurrence of the Second Financial Milestone Event
(as defined below), the Executive's Base Salary shall be increased to $260,000 which shall be paid in accordance with the then-current
payroll schedule of the Company commencing on the first regularly scheduled payroll date of the Company after the Second Minimum
Financial Milestone Event has occurred. Upon the occurrence of the Third Financial Milestone Event (as defined below), the Executive's
Base Salary shall be increased to $300,000, which shall be paid in accordance with the then-current payroll schedule of the Company
commencing on the first regularly scheduled payroll date of the Company after the Third Minimum Financial Milestone Event has occurred.
Upon the occurrence of the Fourth Financial Milestone Event (as defined below), the Executive's Base Salary shall be increased
to $425,000, which shall be paid in accordance with the then-current payroll schedule of the Company commencing on the first regularly
scheduled payroll date of the Company after the Fourth Minimum Financial Milestone Event has occurred. The Executive's
salary may be increased from time to time by the Board. Notwithstanding anything to the contrary, the Base Salary may be reduced
if the Board approves and implements an equal percentage reduction in the base salaries of all of the Company’s executive
officers, but in no event will such reduction be greater than 15% of the Base Salary. A reduction in the Executive’s Base
Salary in accordance with the immediately preceding sentence shall not constitute a substantial reduction in salary as described
at paragraph 5(b)(i)(A) of this Agreement.

 

    	 	 	 

     

    

 

For the purposes
of this Agreement, the “Minimum Financial Milestone Event” shall mean the sale by the Company of its Equity
Securities in a bona fide equity financing following the Effective Date in which the Company receives gross proceeds of not less
than $5,000,000, including proceeds received in connection with any transaction in which the Company’s securities (or the
securities of any successor to the Company) become publicly tradeable. “Equity Securities” means the Company’s
common stock or preferred stock issued to one or more third parties for bona fide equity financing purposes. The “Second
Financial Milestone Event” shall mean the sale or sales by the Company of its Equity Securities following the Effective
Date in a bona fide equity financing (or series of bona fide equity financings, including the Minimum Financial Milestone Event)
in which the Company receives aggregate gross proceeds of at least $10,000,000, including proceeds received in connection with
any transaction in which the Company’s securities (or the securities of any successor to the Company) become publicly tradeable.
The “Third Financial Milestone Event” shall mean the sale or sales by the Company of its Equity Securities following
the Effective Date in a bona fide equity financing (or series of bona fide equity financings, including the Minimum Financial Milestone
Event and the Second Financial Milestone Event) in which the Company receives aggregate gross proceeds of at least $30,000,000,
including proceeds received in connection with any transaction in which the Company’s securities (or the securities of any
successor to the Company) become publicly tradeable. The “Fourth Financial Milestone Event” shall mean
the sale or sales by the Company of its Equity Securities following the Effective Date in a bona fide equity financing (or series
of bona fide equity financings, including the Minimum Financial Milestone Event, the Second Financial Milestone Event and the Third
Financial Milestone Event, as applicable) in which the Company receives aggregate gross proceeds of at least $45,000,000, including
proceeds received in connection with any transaction in which the Company’s securities (or the securities of any successor
to the Company) become publicly tradeable. For purposes of clarity, the amount of the Minimum Financial Milestone Event
shall be included in calculating the Second Milestone Event; the amount of the Minimum Financial Milestone Event and the Second
Financial Milestone Event shall be included in calculating the Third Financial Milestone Event; and the amount of the Minimum
Financial Milestone Event, the Second Financial Milestone Event and the Third Financial Milestone shall be included in calculating
the Fourth Financial Milestone Event."

 

    	 	 	 

     

    

 

2.            Section
4(b) of the Employment Agreement is hereby amended and restated in its entirety as follows:

 

“(b)         Bonuses.

 

(i)          Upon
the occurrence of the Minimum Financial Milestone Event (as defined above) provided that the conditions set forth below have been
satisfied, the Executive shall be paid a one-time lump sum cash bonus in the amount of $60,000, less applicable withholdings, which
shall be paid within 30 days of the occurrence of the Minimum Financial Milestone Event.

 

(ii)         Upon
the occurrence of the Second Financial Milestone Event, provided that the conditions set forth below have been satisfied, the Executive
shall be paid a one-time lump sum cash bonus in the amount of $125,000, less all applicable withholdings, which shall be paid to
the Executive within 30 days of the occurrence of the Second Financial Milestone Event. In the event a Second Financial Event is
the initial fundraising, the Executive shall be entitled to payment of both bonuses specified under subpart (i) above, and both
bonuses shall be paid to the Executive, less applicable withholdings, within 30 days of the occurrence of the Second Financial
Milestone Event.

 

(iii)        Upon
the occurrence of the Third Financial Milestone Event, provided that the conditions set forth below have been satisfied, the Executive
shall be paid a one-time lump sum cash bonus in the amount of $175,000, less all applicable withholdings, which shall be paid to
the Executive within 30 days of the occurrence of the Third Financial Milestone Event. In the event the Third Financial Milestone
Event is the initial fundraising, the Executive shall be entitled to a payment of each bonus specified under subpart (i) and (ii)
above this subpart (iii), and all such bonuses shall be paid to the Executive, less applicable withholdings, within 30 days of
the occurrence of the Third Financial Milestone Event.

 

(iv)        Upon
the occurrence of the Fourth Financial Milestone Event, provided that the conditions set forth below have been satisfied, the Executive
shall be paid a one-time lump sum cash bonus in the amount of $175,000, less all applicable withholdings, which shall be paid to
the Executive within 30 days of the occurrence of the Forth Financial Milestone Event. In the event the Fourth Financial Milestone
Event is the initial fundraising, the Executive shall be entitled to a payment of each bonus specified under subparts (i), (ii)
and (iii) above, and all such bonuses shall be paid to the Executive, less applicable withholdings, within 30 days of the occurrence
of the Fourth Financial Milestone Event.

 

    	 	 	 

     

    

 

For the purposes
of the bonuses specified under subparts (i) – (iv) above, the Executive shall only be entitled to the bonuses specified therein
if the Executive is employed by the Company on the effective date of the occurrence of the Minimum Financial Milestone Event the
Second Financial Milestone Event, the Third Financial Milestone Event and/or the Fourth Financial Milestone Event, as appropriate.
For purposes of clarity, unless the Executive is employed by the Company on the date of such milestone event, the Executive shall
have no right to the payment of the bonus specified under subparts (i), (ii), (iii) or (iv) hereof.”

 

3.           This
Third Amendment is hereby incorporated into and forms a part of the Employment Agreement.

 

4.           Except
as modified herein, all other terms and conditions of the Employment Agreement shall continue in full force and effect.

 

5.           This
Third Amendment shall be binding upon the Parties hereto and upon their respective heirs, legal representatives, successors and
permitted assigns and shall be governed by and construed in accordance with the laws of the State of North Carolina.

 

[The remainder of this page is intentionally
left blank]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties have executed this Third Amendment as of the day and year first above written.

 

	 	COMPANY:
	 	 
	 	Innovate Biopharmaceuticals, InC.
	 	 	 
	 	By:	/s/ Jay P. Madan
	 	 	Jay P. Madan, President
	 	 	 
	 	EXECUTIVE:
	 	 	 
	 	By:	/s/ Christopher P. Prior, Ph.D.
	 	 	Christopher P. Prior, Ph.D.
	 	 	 
	 	Address:

 

    	 	 	 

     

    

 

FOURTH AMENDMENT TO EXECUTIVE EMPLOYMENT
AGREEMENT

 

THIS FOURTH AMENDMENT
TO EXECUTIVE EMPLOYMENT AGREEMENT (the “Fourth Amendment”) is entered into as of August 31, 2017, with an effective
date of July 1, 2016 (the “Effective Date”) by and between Innovate Biopharmaceuticals, Inc., a Delaware corporation
(the “Company”), and Christopher P. Prior (the “Executive;” and, together with the Company,
the “Parties”), who agree to be bound by all of the terms and conditions hereof.

 

WITNESSETH:

 

WHEREAS, the Executive
and the Company entered into an Executive Employment Agreement on or about October 28, 2015 (the “Employment Agreement”),
setting forth the terms and conditions of Executive’s employment as the Chief Executive Officer of the Company;

 

WHEREAS, the Executive
and the Company entered into a First Amendment to Executive Employment Agreement on or about March 15, 2016 (the “First
Amendment”);

 

WHEREAS, the Executive
and the Company entered into a Second Amendment to Executive Employment Agreement on or about March 1, 2017 (the “Second
Amendment”);

 

WHEREAS, the Executive
and the Company entered into a Third Amendment to Executive Employment Agreement on or about March 1, 2017 (the “Third
Amendment”); and

 

WHEREAS, the Executive
and the Company desire to amend the Employment Agreement, as amended, as set forth in this Fourth Amendment.

 

NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Executive and the Company hereby
amend the Employment Agreement as follows, effective as of the Effective Date set forth above:

 

1.            The
second paragraph of Section 4(a)(i) of the Employment Agreement is hereby amended and restated in its entirety as follows:

 

    	 	 	 

     

    

 

“For
the purposes of this Agreement, the “Minimum Financial Milestone Event” shall mean the sale by the Company of
its Equity Securities in a bona fide equity financing following the Effective Date in which the Company receives gross proceeds
of not less than $5,000,000, including proceeds received in connection with any transaction in which the Company’s securities
(or the securities of any successor to the Company) become publicly tradeable. “Equity Securities” means the
Company’s common stock or preferred stock, or any other securities convertible into the Company’s common stock or preferred
stock (e.g., convertible promissory notes), issued to one or more third parties for bona fide equity financing purposes. The “Second
Financial Milestone Event” shall mean the sale or sales by the Company of its Equity Securities following the Effective
Date in a bona fide equity financing (or series of bona fide equity financings, including the Minimum Financial Milestone Event)
in which the Company receives aggregate gross proceeds of at least $10,000,000, including proceeds received in connection with
any transaction in which the Company’s securities (or the securities of any successor to the Company) become publicly tradeable.
The Second Financial Milestone Event will also include any proceeds received from sale of assets, out-licensing and/or partnering
agreements. The “Third Financial Milestone Event” shall mean the sale or sales by the Company of its Equity
Securities following the Effective Date in a bona fide equity financing (or series of bona fide equity financings, including the
Minimum Financial Milestone Event and the Second Financial Milestone Event) in which the Company receives aggregate gross proceeds
of at least $25,000,000, including proceeds received in connection with any transaction in which the Company’s securities
(or the securities of any successor to the Company) become publicly tradeable. The Third Financial Milestone Event will also include
any proceeds received from sale of assets, out-licensing and/or partnering agreements. The “Fourth Financial Milestone
Event” shall mean the sale or sales by the Company of its Equity Securities following the Effective Date in a bona fide
equity financing (or series of bona fide equity financings, including the Minimum Financial Milestone Event, the Second Financial
Milestone Event and the Third Financial Milestone Event, as applicable) in which the Company receives aggregate gross proceeds
of at least $45,000,000, including proceeds received in connection with any transaction in which the Company’s securities
(or the securities of any successor to the Company) become publicly tradeable. The Fourth Financial Milestone Event will also include
any proceeds received from sale of assets, out-licensing and/or partnering agreements. For purposes of clarity, the amount of the
Minimum Financial Milestone Event shall be included in calculating the Second Financial Milestone Event; the amount of the Minimum
Financial Milestone Event and the Second Financial Milestone Event shall be included in calculating the Third Financial Milestone
Event; and the amount of the Minimum Financial Milestone Event, the Second Financial Milestone Event and the Third Financial Milestone
shall be included in calculating the Fourth Financial Milestone Event."

 

2.            This
Fourth Amendment is hereby incorporated into and forms a part of the Employment Agreement.

 

3.            Except
as modified herein, all other terms and conditions of the Employment Agreement, as amended, shall continue in full force and effect.

 

4.            This
Fourth Amendment shall be binding upon the Parties hereto and upon their respective heirs, legal representatives, successors and
permitted assigns and shall be governed by and construed in accordance with the laws of the State of North Carolina.

 

[The remainder of this page is intentionally
left blank.]

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
the parties have executed this Fourth Amendment as of the day and year first above written.

 

	 	COMPANY:
	 	 
	 	Innovate Biopharmaceuticals, InC.
	 	 	 
	 	By:	/s/ Jay P. Madan
	 	 	Jay P. Madan, President
	 	 	 
	 	EXECUTIVE:
	 	 	 
	 	By:	/s/ Christopher P. Prior, Ph.D.
	 	 	Christopher P. Prior, Ph.D.
	 	 	 
	 	Address:

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