WAIVER AND CONSENT AGREEMENT

 

THIS WAIVER AND CONSENT AGREEMENT (the “Agreement”), is dated as of May 19, 2017
(the “Effective Date”), by and between QUANTUM MATERIALS, INC., a Nevada
corporation (the “Company”), and LINCOLN PARK CAPITAL FUND, LLC, an Illinois
limited liability company (the “Investor”).

 

WHEREAS, the Investor and Company entered into a Purchase Agreement, dated as of
November 8, 2016 (the “LPC Purchase Agreement”) and a Registration Rights
Agreement, dated as of November 8, 2016 (the “LPC Registration Rights Agreement”
and, together with the LPC Purchase Agreement, the “LPC Agreements”)
(Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the LPC Purchase Agreement); and

 

WHEREAS, the Company subsequently entered into certain transactions referred to
herein as the “Subject Transaction:” (i) an Equity Purchase Agreement, dated as
of March 29, 2017 (the “Equity Purchase Agreement”), by and between the Company
and L2 Capital, LLC, a Kansas limited liability company (“L2”), and SBI
Investments LLC, 2014-1, a statutory series of Delaware limited liability
company (“SBI”), (ii) promissory notes dated March 29, 2017 issued to L2 and SBI
in connection with the transactions contemplated by the Equity Purchase
Agreement (collectively, the “EPA Notes”), (iii) each of those certain
Securities Purchase Agreements, dated as of March 29, 2017 (collectively, the
“Securities Purchase Agreements”), by and between the Company and each of L2 and
SBI, and (iv) each of the promissory notes dated March 29, 2017 issued to L2 and
SBI in connection with the transactions contemplated by the Securities Purchase
Agreements (collectively, the “SPA Notes”);

 

WHEREAS, the Company desires to obtain the Investor’s waiver and consent with
respect to the Subject Transaction and the Investor desires to grant such waiver
and consent; and

 

WHEREAS, the Company and the Investor desire to mutually terminate the LPC
Agreements.

 

NOW THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Investor agree as
follows:

 

1. CONSENT TO EQUITY PURCHASE AGREEMENT; TERMINATION OF THE LPC AGREEMENTS

 

(a) The Investor agrees to waive the application of Section 5(l) of the LPC
Purchase Agreement solely with respect to the Subject Transaction and hereby
consents to the consummation of the Subject Transaction by the Company;
provided, however, that such waiver and consent shall apply only to the Subject
Transaction, and the Company and LPC hereby acknowledge and agree that such
waiver and consent shall not be deemed to waive the application of Section 5(l)
of the LPC Purchase Agreement or to consent to any other issuance of Common
Stock or Common Stock Equivalents or any other securities by the Company to the
investors in the Subject Transaction or to any other Person in any other
transaction or series of transactions.

 

(b) The Company and the Investor hereby mutually agree to terminate the LPC
Purchase Agreement pursuant to Section 11(b) of the LPC Purchase Agreement and
to terminate the LPC Registration Rights Agreement; provided, however, that the
Company and the Investor acknowledge and agree that, pursuant to Section 11 of
the LPC Purchase Agreement, the representations and warranties and covenants of
the Company contained in Sections 4(excluding section 4(bb) as the Company was a
former shell) and 6 of the LPC Purchase Agreement, and the indemnification and
contribution provisions set forth in Section 9 of the LPC Purchase Agreement and
in Sections 6 and 7 of the LPC Registration Rights Agreement each shall survive
such termination of the LPC Agreements and shall remain in full force and
effect. Each of the Company and the Investor hereby waive notice of such
termination required under Section 11 of the LPC Purchase Agreement.

 

   

 

 

2. MISCELLANEOUS.

 

(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of Illinois, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of Illinois or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of Illinois. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the State of Illinois, County of Cook, for the adjudication of
any dispute hereunder or in connection herewith, or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature or signature
delivered by e-mail in a “.pdf” format data file shall be considered due
execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original signature.

 

(c) Headings. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.

 

(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

 

(e) Notices. Any notices, consents or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will be
deemed to have been delivered: (i) upon receipt when delivered personally; (ii)
upon receipt when sent by facsimile or email (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one (1) Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses for such communications shall be:

 

   

 

 

If to the Company:to the address of the Company and phone number on file with
theSEC

 

Facsimile:

E-mail: SSquires@aol.com

Attention: Stephen Squires

 

If to the Investor:

 

Lincoln Park Capital Fund, LLC

440 North Wells, Suite 410

Chicago, IL 60654

Telephone: 312-822-9300

Facsimile: 312-822-9301

E-mail: jscheinfeld@lpcfunds.com/jcope@lpcfunds.com

Attention: Josh Scheinfeld/Jonathan Cope

 

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

 

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

666 Third Avenue

New York, NY 10017

  Telephone: (212) 692-6267   Facsimile: (212) 983-3115   E-mail:
ajmarsico@mintz.com   Attention: Anthony J. Marsico, Esq.

 

or at such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party three (3) Business Days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine or email account containing the
time, date, and recipient facsimile number or email address, as applicable, and
an image of the first page of such transmission or (C) provided by a nationally
recognized overnight delivery service, shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.

 

(f) Disclosure. The Company confirms that neither it nor any other Person acting
on its behalf has provided the Investor or its agents or counsel with any
information that it believes constitutes or might constitute material,
non-public information which is not otherwise publicly disclosed in a report or
statement filed with the SEC prior to the date hereof. The Company understands
and confirms that the Investor will rely on the foregoing representation and
confirmation. The Company represents and confirms that neither it nor any other
Person acting on its behalf will provide the Investor with any material,
non-public information regarding the Company or any of its Subsidiaries from and
after the date hereof without the express prior written consent of the Investor
(which may be granted or withheld in the Investor’s sole discretion). To the
extent that the Company or any Person acting on its behalf delivers any
material, non-public information to the Investor (as determined in the
reasonable good faith judgment of the Investor) without the Investor’s consent,
(i) the Company hereby covenants and agrees that the Investor shall not have any
duty of confidentiality with respect to, or a duty not to trade on the basis of,
such material, non-public information, and (ii) in addition to any other remedy
provided herein, the Investor shall have the right to make a public disclosure,
in the form of a press release, public advertisement or otherwise, of such
material, non-public information without the prior approval by the Company;
provided the Investor shall have first provided notice to the Company that it
believes it has received information that constitutes material, non-public
information, the Company shall have at least 24 hours to publicly disclose such
material, non-public information prior to any such disclosure by the Investor,
and the Company shall have failed to publicly disclose such material, non-public
information within such time period.

 

   

 

 

(h) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns. The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investor, including by merger or
consolidation. The Investor may not assign its rights or obligations under this
Agreement.

 

(i) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person.

 

(j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement.

 

(k) No Strict Construction. The language used in this Agreement is the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.

 

(l) Changes to the Terms of this Agreement. This Agreement and any provision
hereof may only be amended by an instrument in writing signed by the Company and
the Investor. The term “Agreement” and all reference thereto, as used throughout
this instrument, shall mean this instrument as originally executed, or if later
amended or supplemented, then as so amended or supplemented.

 

(m) Failure or Indulgence Not Waiver. No failure or delay in the exercise of any
power, right or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege.

 

** SIGNATURE PAGE FOLLOWS **

 

   

 

 

IN WITNESS WHEREOF, the Investor and the Company have caused this Waiver and
Consent Agreement to be duly executed as of the date first written above.

 

  COMPANY:         QUANTUM MATERIALS CORP.         By:     Name:     Title:    
      INVESTOR:         LINCOLN PARK CAPITAL FUND, LLC   BY: LINCOLN PARK
CAPITAL PARTNERS, LLC   BY: ROCKLEDGE CAPITAL CORPORATION         By:     Name:
Josh Scheinfeld   Title: President