6%
CONVERTIBLE PROMISSORY NOTE

     

    THIS
PROMISSORY NOTE AND THE SECURITIES THAT MAY BE OBTAINABLE UPON CONVERSION HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“THE
ACT”), OR THE SECURITIES LAWS OF ANY STATE.  THE SECURITIES MAY NOT BE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF
WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

     

    
      6%
CONVERTIBLE PROMISSORY NOTE

    

     

    
      
        	
                No.
      ICPN-[   ]

              	
                ______
      __, 2010

              
	
                U.S.
      $ _____________

              	 
      


      

    

    


    FOR VALUE
RECEIVED, the undersigned, InVivo Therapeutics Corporation, a Delaware
corporation (the “Company”), hereby unconditionally promises to pay
____________________ (the “Holder”), on the Maturity Date (as defined in Section 1 hereof) to
the order of the Holder, in lawful money of the United States of America and in
immediately available funds, the principal amount of _____________________
($________) Dollars (the “Principal Amount”).  Interest shall accrue
the rate of 6% per annum (“Interest”) based on a 360 day year and shall be
payable for the actual number of days the Note is outstanding on the Maturity
Date unless earlier converted pursuant to Section 2 hereof.

     

    This Note
shall be binding upon the Company and its successors and permitted assigns and
shall inure to the benefit of the Holder and its successors and
assigns.  The Company may not assign or delegate any of its duties or
obligations under this Note without the written consent of the
Holder.

     

    This Note
is one of a series of 6% convertible promissory notes of like tenor and ranking
made by the Company in favor of certain investors and issued, from time to time
(collectively, the “Notes”) pursuant to that certain Securities Purchase
Agreement by and between the Company and certain investors, including the
Holder, of even date herewith (the “Securities Purchase
Agreement”).  Each of the Notes shall rank equally without preference
or priority of any kind over one another, and all payments on account of
principal and interest with respect to any of the Notes shall be applied ratably
and proportionately on the outstanding Notes on the basis of the principal
amount of the outstanding indebtedness represented thereby.

     

    As
described in the Securities Purchase Agreement, each $50,000 principal amount of
this Note entitled the Holder to 3,631 common stock purchase warrants (“Bridge
Warrants”).


    
      
         


      

      
        1

        
          

        

      

      
         


      

    


    1.           Maturity.  Unless
otherwise converted into Next Round Equity Securities, as such term is defined
in Section 2 hereof, in accordance with the provisions of said Section 2, this
Note shall mature on December 31, 2010 (such date, the “Maturity
Date”).  On the Maturity Date, unless, and to the extent, converted
into Next Round Equity Securities in accordance with the provisions of Section 2
hereof, any and all outstanding principal and Interest due and owing under the
Note shall be immediately paid by the Company.

     

    2.           Conversion.

     

    (a)           General. The
outstanding Principal Amount, plus accrued but unpaid Interest on this Note
shall automatically convert into the Company’s equity securities or equity
securities of Pubco (as defined below), which may include common stock,
convertible preferred stock, convertible debt instruments, and/or warrants
exercisable for any of the foregoing, singularly or in the form of units
comprised of two or more of such kinds of equity securities (the “Next Round
Equity Securities”) upon the closing of the earlier of either (i) the Company’s
next financing resulting in gross proceeds to the Company from the sale of Next
Round Equity Securities of at least $3,000,000 or (ii) a financing of at least
$7,000,000 of gross proceeds that is conducted concurrent with a reverse merger
transaction between the Company and a publicly held company (“Pubco”) that
results in the Company (or the surviving corporation in connection with such
transaction) being (or remaining) subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended.  A financing referred to
in either (i) or (ii) above is referred to herein as a “Qualified Next Round
Financing.” For purposes of calculating the aggregate amount of such proceeds,
the aggregate amount of the Notes, all of which are convertible into Next Round
Equity Securities in connection with the Qualified Next Round Financing, shall
be included.  The
quantity of Next Round Equity Securities to be issued upon such conversion shall
equal (i) the entire outstanding principal amount of this Note plus accrued but
unpaid Interest through the date of closing on a Qualified Next Round Financing
divided by (ii) 100% of the price (a) per security or (b) per unit of securities
at which the Next Round Equity Securities are sold in the Qualified Next Round
Financing (hereinafter referred to as the “Conversion Price”).  The
Next Round Equity Securities issued to Holder shall have rights, preferences,
privileges and restrictions (including, without limitation, registration rights,
preemptive rights and any other contractual rights) identical to those granted
to or received by the other investors in the Qualified Next Round Financing. The
Company covenants to cause such securities, when issued pursuant to this Section
2(a), to be fully paid and nonassessable, and free from all taxes, liens and
charges with respect to the issuance thereof, other than any taxes, liens or
charges not caused by the Company.

     

    (b)           Mechanics of
Conversion.  No later than five (5) business days prior to the
first closing of the Qualified Next Round Financing, the Company shall notify
Holder of such closing and the conversion terms of this Note, including
providing any offering documents that are utilized in connection with the
Qualified Next Round Financing. The date of such closing is herein referred to
as the “Conversion Date.”  The Next Round Equity Securities issuable
on the Conversion Date are herein referred to as the “Conversion
Securities.”  No fractions of Conversion Securities will be issued
upon the conversion of this Note.  Any fractional amount will be
rounded up.  Subject to Section 2(c) below, on the Conversion Date,
the repayment rights and other rights of Holder under this Note shall cease, and
the person in whose name the Conversion Securities shall be issuable upon such
conversion shall become the holder of record of the Conversion
Securities.


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    (c)           Rights as a
Stockholder.   Holder shall not be entitled to vote or
receive distributions or be deemed the holder of Conversion Securities or any
other securities of the Company which may at any time be issuable upon the
conversion of this Note for any purpose, nor shall anything contained herein be
construed to confer upon Holder, as such, any of the rights of a stockholder of
the Company or any right to vote as a stockholder of the Company or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance of
equity securities of the Company, reclassification of equity securities of the
Company, consolidation, merger, transfer of assets or otherwise) or to receive
notice of meetings, or to receive distributions or subscription rights or
otherwise unless and until this Note is converted in accordance with the terms
hereof.

     

    (d)           Optional Conversion in
Certain Events.  In the event a Qualified Next Round Financing
is not consummated on or before the Maturity Date, the entire Principal Amount
of this Note, along with all accrued Interest thereon, shall, at the option of
the Holder, be convertible into the Company’s common stock at a conversion price
equal to $13.7706 per share.  To exercise such optional conversion,
Holder must complete the attached Optional Conversion Notice Addendum (the
“Addendum”),
and deliver the original of this Note (or an affidavit of loss reasonably
acceptable to the Company) and the executed Addendum to the Company on or before
that date that is within 10 business days following the Maturity
Date.  Subject to the terms below, the conversion will be effective
two (2) business days following the Company’s receipt of the original of this
Note and the Addendum.

     

    (e)           Reservation of Common
Stock.  As set forth in the Securities Purchase Agreement, the
Company shall reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of conversion of this Note and
the exercise of the Bridge Warrants and other warrants issued to broker-dealers
retained in connection with the transactions contemplated by the Securities
Purchase Agreement (the “BD Warrants”), that number of shares of Common Stock
equal to the sum of (i) the number of shares of Common Stock into which the Note
is convertible based upon the Conversion Price, plus (ii) the number of shares
of Common Stock for which the Bridge Warrants are exercisable from time to time
based upon the exercise price, plus (iii) the number of shares of Common Stock
for which the BD Warrants are exercisable from time to time based upon the
exercise price.

     

    3.           Adjustments.  The
Conversion Price shall be subject to adjustment from time to time upon the
occurrence of certain events described in this Section 3.

     

    (a)           Stock Dividends and
Splits. If the Company, at any time while this Note is outstanding: (A)
pays a stock dividend or otherwise make a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock, (B) subdivides outstanding shares of Common
Stock into a larger number of shares, (C) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares,
or (D) issues by reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding immediately before
such event and of which the denominator shall be the number of shares of Common
Stock outstanding immediately after such event and the number of shares issuable
upon conversion of this Note shall be proportionately adjusted.  Any
adjustment made pursuant to this Section 3(a) shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    (b)           Mergers, Consolidations,
Etc. Subject to Section 2 above, in the event of any consolidation or
merger of Company with or into another corporation or the conveyance of all or
substantially all of the assets of Company to another corporation or entity,
this Note shall thereafter be convertible into the number of shares of capital
stock or other securities or property to which a holder of the number of Common
Stock deliverable upon conversion hereof would have been entitled upon such
consolidation, merger or conveyance; and, in any such case, appropriate
adjustment shall be made in the application of the provisions herein set forth
with respect to the rights and interest of Holder thereafter, to the end that
the provisions set forth herein (including provisions with respect to
adjustments in the Conversion Price) shall thereafter be applicable, as nearly
as may be practicable, in relation to any shares of stock or other property
thereafter deliverable upon the conversion hereof.

     

    4.           Events of
Default.  The term “Event of Default” shall mean any of the
events set forth in this Section 4:

     

    (a)          the
Company shall default in the performance of, or violate any of the covenants and
agreements contained in this Note or in the Securities Purchase Agreement,
including without limitation, the failure to pay amounts due under this Note on
its Maturity Date, or any of the other Notes on their Maturity
Date;

     

    (b)          any
representation, warranty or certification made by or on behalf of the Company in
this Note or in the Securities Purchase Agreement shall have been incorrect in
any material respect when made;

     

    (c)          there
shall be a dissolution, termination of existence, suspension or discontinuance
of the Company’s business for a continuous period of 20 days or it ceases to
operate as going concern;

     

    (d)          if
the Company shall:

     

    (i)           admit
in writing its inability to pay its debts generally as they become
due;

    (ii)          file
a petition in bankruptcy or a petition to take advantage of any insolvency
act;

    (iii)         convey
any material portion of the assets of the Company to a trustee, mortgage or
liquidating agent or make an assignment for the benefit of
creditors;


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    (iv)         consent
to the appointment of a receiver, trustee, custodian or similar official, for
the Company or any material portion of the property or assets of the
Company;

    


    (v)          on
a petition in bankruptcy filed against it, be adjudicated a bankrupt;
or

    


    (vi)         file
a petition or answer seeking reorganization or arrangement under the federal
bankruptcy laws or any other applicable law or statute of the United States of
America or any State, district or territory thereof;

    


    (e)          if
a court of competent jurisdiction shall enter an order, judgment, or decree
appointing, without the consent of the Company, a receiver of the whole or any
substantial part of the Company’s assets, and such order, judgment or decree
shall not be vacated or set aside or stayed within 60 days from the date of
entry thereof;

     

    (f)           if,
under the provisions of any other law for the relief or aid of debtors, any
court of competent jurisdiction shall assume custody or control of the whole or
any substantial part of the Company’s assets and such custody or control shall
not be terminated or stayed within 60 days from the date of assumption of such
custody or control; or

     

    (g)          the
Company shall default in any of its obligations under any other promissory note,
indenture or any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be
issued, or by which there may be secured or evidenced any indebtedness for
borrowed money or money due under any long term leasing or factoring arrangement
of the Company in an amount exceeding $100,000, whether such indebtedness now
exists or shall hereafter be created and such default shall result in such
indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise become due and payable.

     

    If any
Event of Default described in clause (d) of Section 4 shall occur, the Principal
Amount of this Note, together with all accrued and unpaid Interest shall
automatically be and become immediately due and payable, without notice or
demand.

    


    If any
Event of Default (other than any Event of Default described in clause (d) of
Section 4) shall occur for any reason, whether voluntary or involuntary, and be
continuing, for ten (10) days after notice, the Holder may, upon notice to the
Company, declare all or any portion of the outstanding Principal Amount,
together with all accrued and unpaid Interest, to be due and payable, whereupon
the full unpaid Principal Amount hereof, together with all accrued and unpaid
Interest shall be so declared due and payable shall be and become immediately
due and payable, without further notice, demand, or presentment.

    


    5.           Remedies.  In
case any one or more of the Events of Default specified in Section 4 hereof
shall have occurred and be continuing, the Holder may proceed to protect and
enforce the Holder’s rights either by suit in equity and/or by action at law,
whether for the specific performance of any covenant or agreement contained in
this Note or in aid of the exercise of any power granted in this Note, or the
Holder may proceed to enforce the payment of all sums due upon this Note or to
enforce any other legal or equitable right of the Holder.


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    6.           Amendments and
Waivers.  The terms of this Note may be amended and the
observance of any term of this Note may be waived (either generally or in a
particular instance and either retroactively or prospectively) with the Holder’s
consent.

     

    7.           Notices.

     

    (a)           Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Securities Purchase Agreement.

     

    (b)           Any
party may give any notice, request, consent or other communication under this
Note using any other means (including personal delivery, messenger service,
telecopy, first class mail or electronic mail), but no such notice, request,
consent or other communication shall be deemed to have been duly given unless
and until it is actually received by the party for whom it is
intended.  Any party may change the address to which notices,
requests, consents or other communications hereunder are to be delivered by
giving the other parties notice in the manner set forth in this Section
7.

     

    8.           Severability.  The
unenforceability or invalidity of any provision or provisions of this Note as to
any persons or circumstances shall not render that provision or those provisions
unenforceable or invalid as to any other provisions or circumstances, and all
provisions hereof, in all other respects, shall remain valid and
enforceable.

     

    9.           Governing
Law.  This Note shall be governed by and construed under the
laws of the State of New York applicable to agreements made and to be performed
entirely within such jurisdiction.

     

    10.         Waivers.  The
nonexercise by either party of any of its rights hereunder in any particular
instance shall not constitute a waiver thereof in that or any subsequent
instance.

     

    11.         Attorneys’ Fees;
Costs.  If this Note is not paid when due or if any Event of
Default occurs, the Company promises to pay all costs of enforcement and
collection, including but not limited to, Holder’s  attorneys’ fees,
whether or not any action or proceeding is brought to enforce the provisions
hereof.

    


    [Signature
Page Follows]


    
      
         


      

      
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    IN
WITNESS WHEREOF, the Company has caused its duly authorized officers to execute
this Note as of the date first written above.


    


    
      
        
          
            
              
                	
                        COMPANY:

                      	 
	 
      	 
	
                        INVIVO THERAPEUTICS
      CORPORATION

                      
	 
      	 
      	 
      	 
	
                        By:

                      	 
      	 
	 
      	
                        Name:

                      	
                        Frank
      Reynolds

                      	 
	 
      	
                        Title:

                      	
                        Chief
      Executive Officer

                      	 


              

            

          

        

      

    


    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    Optional Conversion
Notice

    


    ______________________, the registered
holder of this 6% Convertible Promissory Note, issued ________, 2010, hereby
gives notice of the conversion of all outstanding principal and accrued interest
into Common Stock of Invivo Therapeutics Corporation at a conversion price equal
to $13.7706 per share.

    


    
      
        
          
            	
                    Signature
      of Holder:

                  	 
      
	 
      	 
      
	 
      	 
      
	
                    (must
      be in exact name as listed on the first page of this Note)

                  	 
      


          

        

      

    


    
      
         


      

      
        8