Document:

Untitled Document

  

Exhibit 4.1

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

2016 8% CONVERTIBLE PROMISSORY NOTE

SYMBID CORP.

DUE _______, 2019

	
Original Issue Date: _______, 2016
	
US$_______

 

This Convertible Promissory Note (the “Note”) is one of a series of duly authorized and issued convertible promissory notes (the “Notes”) of Symbid Corp., a Nevada corporation (the “Company” or “Pubco”), designated its 2016 8% Convertible Promissory Notes.

Principal and Interest. (a) FOR VALUE RECEIVED, Symbid Corp. a Nevada corporation (the “Company”), hereby promises to pay to the order of  or its registered assigns (“Holder”),
in lawful money of the United States of America and in immediately available funds the principal sum of Dollars (US$_________) on _______, 2019 (the “Maturity Date”).

(a) The Company further promises to pay interest in cash on the unpaid principal amount of this Note at a rate per annum equal to eight percent (8%), commencing to accrue on the date hereof and payable on the first, second and third anniversaries
of the Original Issue Date or earlier prepayment as provided herein. Interest will be computed on the basis of a 360-day year of twelve 30-day months for the actual number of days elapsed.

(c)           Upon mutual agreement of the Company and Holder, the Company may prepay all or any portion of the principal amount of this Note together with accrued and unpaid interest thereon on terms to be negotiated by the Company and Holder.

 

Optional Conversion. (a)  At any time after the Company’s completion of its Next Qualified Equity Offering (as herein defined), the Holder shall be entitled to convert all or any portion of the outstanding and unpaid principal amount of this Note, together with accrued and unpaid interest
thereon to the date of conversion, into validly issued, fully paid and non-assessable shares of common stock of the Company (“Common Stock”) in the manner provided below, at a conversion price equal to 50% at the price of which Common Stock is sold in the Company’s Next Qualified Equity Offering (the “Optional Conversion Price”).  The Company shall not issue any fraction of a share
of Common Stock upon any such conversion.  If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share.  The Company shall pay any and all transfer, stamp, issuance and similar taxes that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any conversion amount. The Next Qualified Equity Offering shall mean the first equity offering closed
by the Company following the Original Issue Date of this Note resulting in gross proceeds to the Company of not less than $1, 500,000.

 

 

 

(b) The number of shares issuable upon an optional conversion of this Note shall be determined by the quotient obtained by dividing (i) the outstanding principal amount of this Note being converted plus accrued but unpaid interest
thereon on the Conversion Date by (ii) the Optional Conversion Price. The calculation by the Company of the number of conversion shares to be received by the Holder upon conversion hereof, shall be conclusive absent manifest error.

(c) To convert any portion of the unpaid principal of this Note into shares of Common Stock on any date (a “Conversion Date”), the Holder shall (i) transmit by facsimile (or otherwise deliver), for receipt on or prior
to 12:00 noon., New York time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion Notice”) to the Company and (ii) surrender this Note to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction). On or before the fifth (5th) trading day for the Common
Stock following the date of receipt of a Conversion Notice (the “Share Delivery Date”), the Company shall cause the Company’s transfer agent to issue and deliver to the Holder at the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder, for the number of shares of Common Stock to which the Holder shall be entitled. If the outstanding principal amount of this Note is greater than the principal portion of being converted, then the Company shall as
soon as practicable after receipt of this Note, at its own expense, issue and deliver to the Holder a new Note representing the outstanding principal amount not converted. Such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the principal amount remaining outstanding, (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Original Issue Date of this Note, (iv) shall have the same rights and conditions
as this Note, and (v) shall represent accrued and unpaid interest on the unpaid principal amount of this Note from the Original Issue Date.

(d) The person or persons entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock from the Conversion
Date.

Absolute Obligation/Ranking. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and liquidated damages (if any) on, this Note at the time, place, and rate, and in the coin or
currency, herein prescribed. This Note is a direct debt obligation of the Company.

Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for such registration of transfer or exchange.

Reliance on Note Register. Prior to due presentment to the Company for permitted transfer or conversion of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered as the owner hereof for the purpose of receiving payment as herein provided and
for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

 

 

 

Events of Default. Each of the following events shall constitute a default under this Note (each an “Event of Default”):

failure by the Company to pay any principal amount or interest due hereunder within five (5) days of the date such payment is due;

the Company or any Subsidiary shall: (i) make a general assignment for the benefit of its creditors; (ii) apply for or consent to the appointment of a receiver, trustee, assignee, custodian, sequestrator, liquidator or similar official for itself or any of its assets and properties; (iii) commence a voluntary case for relief as a debtor under the United States Bankruptcy Code; (iv) file with or otherwise submit to any governmental authority any petition, answer or other document seeking:
(A) reorganization, (B) an arrangement with creditors or (C) to take advantage of any other present or future applicable law respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief of debtors, dissolution or liquidation; (v) file or otherwise submit any answer or other document admitting or failing to contest the material allegations of a petition or other document filed or otherwise submitted against it in any proceeding under any such applicable law, or (vi) be
adjudicated a bankrupt or insolvent by a court of competent jurisdiction;

any case, proceeding or other action shall be commenced against the Company or any Subsidiary for the purpose of effecting, or an order, judgment or decree shall be entered by any court of competent jurisdiction approving (in whole or in part) anything specified in 0 hereof, or any receiver, trustee, assignee, custodian, sequestrator, liquidator or other official shall be appointed with respect to the Company, or shall be appointed to take or shall otherwise
acquire possession or control of all or a substantial part of the assets and properties of the Company, and any of the foregoing shall continue unstayed and in effect for any period of sixty (60) days;

any material breach by the Company of any of its representations or warranties contained in this Note; or

any default, whether in whole or in part, shall occur in the due observance or performance of any obligations or other covenants, terms or provisions to be performed by the Company under this Note which is not cured within five (5) business days after receipt of written notice thereof.

The liquidation of the Company’s 50.1% subsidiary, Symbid Italia SPA, as described in the Company’s Current Report on Form 8-K dated April 29, 2016 shall not be considered an Event of Default under this Section 2.01.

If any Event of Default specified in 0 or 0 occurs, then the full principal amount of this Note, together with any other amounts owing in respect thereof, to the date of the Event of Default, shall become immediately due and payable without any action on the part of the Holder, and if any other Event of Default occurs, the
full principal amount of this Note, together with any other amounts owing in respect thereof, to the date of acceleration shall become, at the Holder’s election, immediately due and payable in cash. All Notes for which the full amount hereunder shall have been paid in accordance herewith shall promptly be surrendered to or as directed by the Company. The Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and
without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by the Holder at any time prior to payment hereunder and the Holder shall have all rights as a Note holder until such time, if any, as the full payment under this Section shall have been received by it. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent
thereon.

 

 

 

If any Event of Default occurs, in addition to the remedies provided in the preceding Section and any other rights or remedies available to the Holder under applicable law, no later than five (5) business days after the date of such Event of Default, or such later date as the Borrower may in writing agree, the Holder may request that the Borrower
make available to the Holder such security as the Holder shall in its absolute discretion determine, and pending provision of such security and thereafter the Borrower shall not create or agree to create any mortgage or charge on any part of its assets.

Covenants. So long as this Note shall remain in effect and until any outstanding principal and interest and all fees and all other expenses or amounts payable under this Note have been paid in full, unless the Holders of a majority of the principal amount of the Notes shall otherwise consent in writing
(such consent not to be unreasonably withheld), the Company shall:

Senior Indebtedness. Not incur, create, assume, guaranty or permit to exist any indebtedness that ranks senior in priority to the obligations under the Notes, except for (i) indebtedness existing on the date hereof, (ii) indebtedness secured by a purchase money lien described in an aggregate amount
outstanding not to exceed $250,000; and (iii) indebtedness created as a result of a subsequent financing if the net proceeds to the Company of such financing are equal to or greater than the outstanding principal amount of and accrued interest on this Note and the other Notes and all of the Notes are repaid in full upon the closing of such financing. This Note shall rank pari passu with the outstanding notes of the Company issued in 2015.

Notice of Default. Promptly advise the Holder in writing of the occurrence of any Event of Default of which the Company is aware.

Entry into Certain Transactions. Not, directly or in directly, (i) voluntarily liquidate, dissolve or wind up the Company; (ii) merge or consolidate the Company (other than where the shareholders of the Company own a majority by voting power of the outstanding equity of the surviving or acquiring entity);
(iii) sell, lease, transfer or otherwise dispose of all or substantially all of the assets of the Company; or (iv) amend, alter or repeal any provision of the Company’s Articles of Incorporation or Bylaws.

Representations of the Company. The Company hereby represents and warrants to the Holder that:

The Company has the requisite corporate power and authority to enter into and perform its obligations under this Note, (ii) the execution and delivery of this Note by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by the Company’s Board of Directors, and no further consent or authorization
is required by the Company, its Board of Directors or its stockholders, (iii) this Note has been duly executed and delivered by the Company, (iv) this Note constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies.

 

 

 

The execution, delivery and performance of this Noteby the Company, and the consummation by the Company of the transactions contemplated hereby, will not (i) result in a violation of the Articles of Incorporation or by-laws (or equivalent constitutive document) of the Company or (ii) violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including U.S. federal and state securities laws and regulations) applicable to the Company or by which any property or asset of the Company is bound or affected,
except for those which could not reasonably be expected to have a material adverse effect on the assets, business, condition (financial or otherwise), results of operations or future prospects of the Company.

There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or affecting the Company or any subsidiary, wherein an unfavorable decision, ruling or finding would adversely affect the validity or enforceability of, or the authority or ability of the Company
to perform its obligations under, this Note.

Representations of the Holder. The Holder hereby represents and warrants to the Company that:

(a) Investment Purpose. The Holder is acquiring this Note, and, upon conversion of this Note, the Holder will acquire
the shares of Common Stock into which this Note may be converted (the “Conversion Shares” and, together with this Note, the “Securities”), for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act of
1933, as amended (the “Securities Act”); provided, however, that by making the representations herein, such Holder reserves the right to dispose of the Securities at any time in accordance with or pursuant to an effective registration statement covering such Securities, or an available exemption under the Securities Act. The Holder agrees not to sell, hypothecate or otherwise transfer the Securities
unless such Securities are registered under the federal and applicable state securities laws or unless, in the opinion of counsel satisfactory to the Company, an exemption from such law is available.

(b) Accredited Investor Status. The Holder meets the requirements of at least one of the suitability standards for an
“Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation D under the Securities Act.

(c) Investor Qualifications. The Holder (i) if a natural person, represents that the Holder has reached the age of 21
and has full power and authority to execute and deliver this Note and all other related agreements or certificates and to carry out the provisions hereof and thereof; (ii) if a corporation, partnership, or limited liability company or partnership, or association, joint stock company, trust, unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring this Note, such entity is duly organized, validly existing and in good standing under the laws of
the state of its organization, the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its charter or other organizational documents, such entity has full power and authority to execute and deliverthis Note and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold this Note, the execution and delivery of this Note has been duly authorized by all necessary action, this Note has
been duly executed and delivered on behalf of such entity and is a legal, valid and binding obligation of such entity; or (iii) if executing this Note in a representative or fiduciary capacity, represents that it has full power and authority to execute and deliver this Note in such capacity and on behalf of the subscribing individual, ward, partnership, trust, estate, corporation, or limited liability company or partnership, or other entity for whom the Holder is executing this Note, and such individual, partnership,
ward, trust, estate, corporation, or limited liability company or partnership, or other entity has full right and power to perform pursuant to this Note and make an investment in the Company, and represents that this Note constitutes a legal, valid and binding obligation of such entity. The execution and delivery of this Note will not violate or be in conflict with any order, judgment, injunction, agreement or controlling document to which the Holder is a party or by which it is bound.

 

 

 

(d) Solicitation. The Holder is unaware of, is in no way relying on, and did not become aware of the offering of this
Note through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, in connection with the offering and sale of this Note and is not subscribing for this Note and did not become aware of the offering of this Note through or as a result of any seminar or meeting to which the Holder was invited by, or any solicitation
of a subscription by, a person not previously known to the Holder in connection with investments in securities generally.

(e) Brokerage Fees. The Holder has taken no action that would give rise to any claim by any person for brokerage commissions,
finders’ fees or the like relating to this Note or the transaction contemplated hereby (other than commissions to be paid by the Company to the Brokers).

(f) Knowledge and Experience. The Holder has such knowledge and experience in financial, tax, and business matters, and,
in particular, investments in securities, so as to enable it to utilize the information made available to it in connection with this Note to evaluate the merits and risks of an investment in this Note and the Company and to make an informed investment decision with respect thereto.

(g) Liquidity. The Holder has adequate means of providing for such Holder’s current financial needs and foreseeable
contingencies and has no need for liquidity of its investment in this Note for an indefinite period of time, and after purchasing this Note the Holder will be able to provide for any foreseeable current needs and possible personal contingencies. The Holder must bear and acknowledges the substantial economic risks of the investment in this Note including the risk of illiquidity and the risk of a complete loss of this investment.

(h) High Risk Investment. The Holder is aware that an investment in this Note, and upon conversion of this Note, the Conversion Shares, involves a number of very significant risks
and has carefully researched and reviewed and understands the risks of, and other considerations relating to, the purchase of this Note, and upon conversion of this Note, the Conversion Shares. 

(i) Reliance on Exemptions. The Holder understands that this Note is being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Holder set forth herein in order to determine the availability of such exemptions and the eligibility of such Holder to acquire such securities.

(j) Information. The Holder has been furnished with all documents and materials relating to the business, finances and
operations of the Company and its subsidiaries and information that Holder requested and deemed material to making an informed investment decision regarding its purchase of this Note. The Holder has been afforded the opportunity to review such documents and materials and the information contained therein. The Holder has been afforded the opportunity to ask questions of the Company and its management. The Holder understands that such discussions, as well as any written information provided by the Company, were
intended to describe the aspects of the Company’s and its subsidiaries’ business and prospects which the Company believes to be material, but were not necessarily a thorough or exhaustive description, and except as expressly set forth in this Note, the Company makes no representation or warranty with respect to the completeness of such information and makes no representation or warranty of any kind with respect to any information provided by any entity other than the Company. Some of such information
may include projections as to the future performance of the Company and its subsidiaries, which projections may not be realized, may be based on assumptions which may not be correct and may be subject to numerous factors beyond the Company’s and its subsidiaries’ control. Additionally, Holder understands and represents that it is purchasing this Note notwithstanding the fact that the Company and its subsidiaries, if any, may disclose in the future certain material
information Holder has not received, including the financial results of the Company and its subsidiaries for their current fiscal quarters. Neither such inquiries nor any other due diligence investigations conducted by such Holder shall modify, amend or affect such Holder’s right to rely on the Company’s representations and warranties contained herein. The Holder has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to
its investment in this Note.

 

 

 

(k) No Other Representations or Information. In evaluating the suitability of an investment in this Note, the Holder has
not relied upon any representation or information (oral or written) with respect to the Company or its subsidiaries, or otherwise, other than as stated in this Note. No oral or written representations have been made, or oral or written information furnished, to the Holder in connection with the offering of this Note.

(l) No Governmental Review. The Holder understands that no United States federal or
state agency or any other government or governmental agency has passed on or will pass on, or has made or will make, any recommendation or endorsement of this Note (or the Conversion Shares), or the fairness or suitability of the investment in this Note (or the Conversion Shares), nor have such authorities passed upon or endorsed the merits of the offering of this Note (or the Conversion Shares).

(m) Transfer or Resale. The Holder understands that: (i) this Note has not been and are not being registered under the
Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, or (B) such Holder shall have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration requirements; (ii) any sale of such securities made in reliance on Rule 144 under the Securities
Act (or a successor rule thereto) (“Rule 144”) may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of such securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder; and (iii) neither
the Company nor any other person is under any obligation to register such securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. There can be no assurance that there will be any market or resale for this Note (or the Conversion Shares), nor can there be any assurance that this Note (or the Conversion Shares) will be freely transferable at any time in the foreseeable future.

(n) Legends. The Holder understands that the certificates representing the Conversion Shares shall bear a restrictive
legend in substantially the following form (and a stop transfer order may be placed against transfer of such stock certificates):

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY.
HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

 

 

 

(o) Confidentiality. The Holder acknowledges and agrees that all of the information received by it in connection with
the transactions contemplated by this Note is of a confidential nature and may be regarded as material non-public information under Regulation FD promulgated by the SEC and that such information has been furnished to the Holder for the sole purpose of enabling the Holder to consider and evaluate an investment in this Note. The Holder agrees that it will treat such information in a confidential manner, will not use such information for any purpose other than evaluating an investment in this Note, will not, directly
or indirectly, trade or permit the Holder’s agents, representatives or affiliates to trade in any securities of the Company while in possession of such information and will not, directly or indirectly, disclose or permit the Holder’s agents, representatives or affiliates to disclose any of such information without the Company’s prior written consent. The Holder shall make its agents, affiliates and representatives aware of the confidential nature of the information
contained herein and the terms of this section including the Holder’s agreement to not disclose such information, to not trade in the Company’s securities while in the possession of such information and to be responsible for any disclosure or other improper use of such information by such agents, affiliates or representatives. Likewise, without the Company’s prior written consent, the Holder will not, directly or indirectly, make any statements, public announcements or other release or provision
of information in any form to any trade publication, to the press or to any other person or entity whose primary business is or includes the publication or dissemination of information related to the transactions contemplated by this Note.

(p) No Legal Advice from the Company. The Holder acknowledges that it has had the opportunity to review this Note and
the transactions contemplated by this Note with its own legal counsel and investment and tax advisors. The Holder is relying solely on such advisors and not on any statements or representations of the Company or any of its employees, representatives or agents for legal, tax, economic and related considerations or investment advice with respect to this investment, the transactions contemplated by this Note or the securities laws of any jurisdiction.

(q) No Group Participation. The Holder and its affiliates is not a member of any group, nor is any Holder acting in concert
with any other person, including any other Holder, with respect to its acquisition of this Note (and the Conversion Shares).

Piggyback Registration Rights. For a period of five years from the Original Issue Date, piggyback registration rights shall apply to the shares of Common Stock issuable upon conversion of this Note with respect to any registration statement filed by the Company that would permit the inclusion of such
shares, subject to customary pro rata cut backs in the case of underwritten offerings.

 

 

Conversion Price Adjustments.

(a)           General. The conversion prices and the number of shares issuable upon the conversion of this Note shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 6.01.

(i)           Subdivision or Combination of Stock. In case the Company shall at any time subdivide (whether by way of stock dividend, stock split or otherwise) its outstanding shares of Common Stock into a greater number of shares, the conversion
price in effect immediately prior to such subdivision shall be proportionately reduced and the number of conversion shares shall be proportionately increased, and conversely, in case the outstanding shares of Common Stock of the Company shall be combined (whether by way of stock combination, reverse stock split or otherwise) into a smaller number of shares, the conversion price in effect immediately prior to such combination shall be proportionately increased and the number of conversion shares shall be proportionately
decreased. The conversion price and the conversion shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 6.01(a)(i).

(ii)           Dividends in Stock, Property, Reclassification. If at any time, or from time to time, the holders of Common Stock (or any shares of stock or other securities at the time receivable upon the conversion of this Note) shall have received
or become entitled to receive, without payment therefor:

(A)           any shares of stock or other securities that are at any time directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution, or

(B)           additional stock or other securities or property (including cash) by way of spin-off, split-up, reclassification, combination of shares or similar corporate rearrangement (other than shares of Common Stock issued as a stock split or adjustments in respect of which shall be covered
by the terms of Section 6.01(a)(i) above),

then and in each such case, the conversion price and the number of conversion shares to be issued upon conversion of this Note shall be adjusted proportionately, and the Holder hereof shall, upon the conversion of this Note, be entitled to receive, in addition to the number of shares of Common Stock receivable thereupon, and without payment of any
additional consideration therefor, the amount of stock and other securities and property (including cash in the cases referred to above) that such Holder would hold on the date of such exercise had such Holder been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such shares or all other additional stock and other securities and property. The conversion price and the conversion shares, as so adjusted, shall be readjusted in the same
manner upon the happening of any successive event or events described in this Section 6.01(a)(ii).

 

 

 

(iii)           Reorganization, Reclassification, Consolidation, Merger or Sale. If any recapitalization, reclassification or reorganization of the capital stock of the Company, or any consolidation or merger of the Company with another corporation, or the sale of all
or substantially all of its assets or other transaction shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities or other assets or property (an “Organic Change”), then lawful and adequate provisions shall be made by the Company whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the shares of the Common Stock of the Company immediately theretofore purchasable
and receivable upon the conversion of this Note) such shares of stock, securities or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such stock immediately theretofore purchasable and receivable assuming the full conversion of this Note. In the event of any Organic Change, appropriate provision shall be made by the Company with respect to the rights and interests of the Holder of this Note
to the end that the provisions hereof (including, without limitation, provisions for adjustments of the conversion price and of the number of shares purchasable and receivable upon the exercise of this Note) shall thereafter be applicable, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. To the extent necessary to effect the foregoing provisions, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation
purchasing such assets shall assume by written instrument reasonably satisfactory in form and substance to the Holder executed and mailed or delivered to the registered Holder hereof at the last address of such Holder appearing on the books of the Company, the obligation to deliver to such Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such Holder may be entitled to purchase. If there is an Organic Change, then the Company shall cause to be mailed to the Holder
at its last address as it shall appear on the books and records of the Company, at least 10 calendar days before the effective date of the Organic Change, a notice stating the date on which such Organic Change is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares for securities, cash, or other property delivered upon such Organic Change; provided, that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to convert this Note during the 10-day period commencing on the date of such notice to the effective date of the event triggering such notice. In any event, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall be deemed to assume such obligation to deliver to such Holder
such shares of stock, securities or assets even in the absence of a written instrument assuming such obligation to the extent such assumption occurs by operation of law.

Section 7.01  Notice. Notices regarding this Note shall be sent to the parties at the following addresses, unless a party notifies the other parties, in writing, of a change of address:

	
If to the Company:
	
Symbid Corp.

Marconistraat 16

3029 AK Rotterdam

The Netherlands

	
 
	
 

	
If to the Holder:
	
 ____________________________

 ____________________________

 ____________________________

 ____________________________

Facsimile: [______________]

 

 

 

 

Section1.02 Governing Law; Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Note (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan
(the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Note), 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, or such New
York Courts are improper or inconvenient venue for such proceeding. 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 via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address ineffect for notices to it under this Note 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 hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

Section1.2. Severability. The invalidity of any of the provisions of this Note shall not invalidate or otherwise affect any of the other provisions of this Note, which shall remain in full force and effect.

Entire Agreement and Amendments. This Note represents the entire agreement between the parties hereto with respect to the subject matter hereof and there are no representations, warranties or commitments, except as set forth herein. This Note may be amended only by an instrument in
writing executed by the parties hereto.

[Remainder of Page Intentionally Left Blank]

 

 

 

IN WITNESS WHEREOF, with the intent to be legally bound hereby, the Company as executed this Note as of the date first written above.

 

	
  
	SYMBID CORP.	
  

	
  
	
  
	
  
	
  

	
 
	
By:   
	
/s/  
	
  

	
  
	Name:	Korstiaan Zandvliet	
  

	
  
	Title:	Chief Executive Officer	
  

 

 

 

EXHIBIT I

 

NOTICE OF CONVERSION

(To be executed by the Holder in order to convert the Note)

	
TO:  Symbid Corp.

	
 

 

The undersigned hereby irrevocably elects to convert the unpaid principal amount and interest amount indicated below of the 2016 8% Convertible Promissory Note due _______, 2019 (the “Note”) into shares of Common Stock of Symbid Corp., according to the conditions stated therein, as of the Conversion
Date written below.

	
Conversion Date:

	
 

	
Applicable Conversion Price (per share):

	
$

	
Principal amount to be converted:

	
$

	
Principal amount of Note unconverted:

	
$

	
Interest amount to be converted

	
$

	
Number of shares of Common Stock to be issued:

	
 

	
Issue the shares of Common Stock in the following name and to the following address:

	
 

	
Issue to the following account of the Holder:

	
 

	
Authorized Signature:

	
 

	
Name:

	
 

	
Title:

	
 

	
Phone Number:Exhibit 10.1

	 

        {***} 

        Fill/Finish of Ampligen®
        Bulk Drug

         

         

         

        Proposal Prepared for

        Hemispherx Biopharma, Inc.

         

         

         

        June 20, 2016August 12, 2016
	

 

 

 

Avrio Biopharmaceuticals | 4 Chrysler,
Irvine California 92618

Phone 866.982.8746 | Fax 949.462.0821 |

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

    	 		Confidential

 

    

    

 

Table of Contents

	1.0	Contact Information	2
	2.0	Scope of Work Summary	3
	3.0	Fee and Schedule Summary Estimate	3
	4.0	Payment Schedule	5
	5.0	Analytical Activities	6
	6.0	Drug Product Manufacturing	7
	7.0	Supporting Services	8
	8.0	Storage and Shipping	10
	9.0	Key Assumptions	10
	10.0	Change in Scope Management	10
	11.0	Authorizations	11
	12.0	Terms and Conditions	12

 

		1.0	Contact Information

 

	Hemispherx Biopharma, Inc.
	Contact:	Wayne Springate	Carol Smith, Ph.D.
	Title:	VP of Operations	VP of Manufacturing Quality and Process Development
	Address:	One Penn Center, 1617 JFK Blvd, Philadelphia, PA 19103	One Penn Center, 1617 JFK Blvd, Philadelphia, PA 19103
	Phone No.:	(215) 988-0080	(215) 988-0080
	Email:	Wayne.Springate@hemispherx.net	carol.smith@Hemispherx.net
	 	 
	Avrio Biopharmaceuticals, LLC
	Contact:	Jack Wright	Laman Alani
	Title:	VP, Business Development and Marketing	COO
	Address:	10 Vanderbilt, Irvine, CA 92618	4 Chrysler, Irvine, CA 92618
	Phone No.:	(949) 547-7333	(949) 462-0814 x334
	Email:	jack.wright@irvinepharma.com	laman.alani@avriobiopharma.com

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

    	 	{***}	Confidential

                                         Page 2
                                         of 17

 

    

    

		2.0	Scope of Work Summary

 

Avrio Biopharmaceuticals LLC (“Avrio”)
is pleased to present this proposal to Hemispherx Biopharma, Inc. (“Client”) for product fill and finish of a liquid
presentation. Avrio will manufacture Phase 3 clinical trial material supply of Ampligen drug product.

 

Included in the scope of work is analytical
method transfer and validation to support drug product testing, raw material release testing, manufacturing compatibility studies,
filter validation, engineering run, media fill, clinical batch production, and finished product release.

 

This proposal is based on the technical
information as provided by Client. The proposed work will be conducted by Avrio located in Irvine, California.

 

		3.0	Fee and Schedule Summary Estimate

 

	 	Task	 	Deliverables	 	Time Estimate	 	Cost Estimate*
	 	Analytical Activities
	1a 	Release Testing of Excipients (ID only)	 
	{***} 	 	
         

        Certificate of Analysis

         

         
	 	
        

         

        {***}
	 	{***}
	{***} 	 	 	 	{***}
	{***} 	 	 	 	{***}
	{***} 	 	 	 	{***}
	1b	Release Testing of Polymers (ID only)
	{***}	 	Certificate of Analysis	 	{***}	 	{***}
	{***}	 	 	 	 	 	{***}
	2a	{***}	 	Validation Report	 	{***}	 	{***}
	2b	{***}	 	Validation Report	 	{***}	 	{***}
	2c	{***}	 	Validation Report	 	{***}	 	{***}
	2d	{***}	 	Validation Report	 	{***}	 	{***}
	 	 	 	 	 	Subtotal	 	{***}
	Tech Transfer and Qualifications
	3a	{***}	 	Protocol and Report	 	{***}	 	{***}
	3b	{***}	 	Protocol and Report	 	{***}	 	{***}
	4a	{***}	 	Protocol and Report	 	{***}	 	{***}
	4b	{***}	 	Protocol and Report	 	{***}	 	{***}
	5	{***}	 	Report	 	{***}	 	{***}
	6	{***}	 	Final Report	 	{***}	 	{***}
	7	{***}	 	Final Report	 	{***}	 	{***}

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

    	 	{***}	Confidential

                                         Page 3
                                         of 17

 

    

    

 

	 	Task	 	Deliverables	 	Time Estimate	 	Cost Estimate*
	8	{***}	 	Final Report	 	{***}	 	{***}
	 	 	 	 	 	Subtotal	 	{***}
	 	 	 	Drug Product Manufacturing	 	 	 	 
	9	{***}	 	Protocol and Report	 	{***}	 	{***}
	10	{***}	 	Protocol and Report	 	{***}	 	{***}
	11	{***}	 	Final Report	 	{***}	 	{***}
	12	{***}	 	Batch Record, Material Specifications (Raw Material, Components, In Process & Final Product)	 	{***}	 	{***}
	13	{***}	 	Executed Batch Records	 	{***}	 	{***}
	14	{***}	 	Executed Batch Records	 	{***}	 	{***}
	15	{***}	 	Executed Batch Records	 	{***}	 	{***}
	16	{***}	 	
        Media Qualification

        Protocol and Report
	 	{***}	 	{***}
	 	GMP Batch Production for Registration Batches
	17	{***}	 	Executed Batch Records	 	{***}	 	{***}
	18a	{***}	 	Executed Batch Records, Units	 	{***}	 	{***}
	18b	{***}	 	Executed Batch Records, Units	 	{***}	 	{***}
	19	{***}	 	Certificate of Analysis	 	
        {***}

        (after date of fill)
	 	{***}
	 	Subtotal (liquid formulation manufacturing)	 	{***}
	 	 	 	Additional Support and Fees	 	 	 	 
	 	Project Management 	 	{***}	 	6 months	 	{***}
	 	Materials and Components*	 	Project specific materials and components purchased by Avrio will be billed to Client at cost {***}	 	 	 	{***}
	 	Shipping Preparation of Finished Batch	 	Preparation of product, verification of shipment, documentation preparation	 	 	 	{***}
	 	Shipping of Finished Batch	 	 	 	 	 	{***}

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

    	 	{***}	Confidential

                                         Page 4
                                         of 17

 

    

    

	 	Task	 	Deliverables	 	Time
    Estimate	 	Cost
    Estimate*
	 	Storage Chamber for 2-80C storage of Finished Product1	 	 	 	 	 	{***}
	 	Monthly Storage for Finished Batch (after 60 days following release)	 	{***}/month {***})	 	 	 	{***}
	 	Subtotal	 	{***}
	 	Estimated Grand Total	 	{***}

  

*An
estimated ${***} has been accounted for
pass through costs and will only be billed for project specific materials which are purchased by Avrio. Pass through costs are
subject to a 10% handling fee. Client will supply {***}.

 

For formulations and processes developed
by Avrio, and for which an engineering run was performed by Avrio, Avrio shall be responsible for the successful manufacture of
the cGMP Batch. For formulations and/or processes developed by another party and transferred to Avrio, Avrio will manufacture
the batches as outlined in the Batch Record as approved by Client. Avrio shall be responsible for the manufacture of the batch
in accordance with the approved procedures.

 

		4.0	Payment Schedule

 

Payments for the above listed scope will
be made in accordance with the following milestones:

 

Prepayment:

		·	{***}%
                                         of the grand total is due upon signature

		·	{***}
                                         months of PM fees included in prepayment. The remaining will be billed monthly

		·	Excludes
                                         shipping and storage. No activities will begin until upfront payment is received.

 

Analytical Method Feasibility:

		·	{***}%
                                         upon submittal of data summary (per method)

 

Analytical Method Validation/Verification

		·	{***}%
                                         upon submittal of draft protocol (per method)

		·	{***}%
                                         upon submittal of draft report (per method)

 

Micro Validation:

		·	{***}%
                                         upon submittal of validation reports (per method)

 

Tanks IQ/OQ and CIP/SIP Validations:

		·	{***}%
                                         upon completion of validation reports

 

 

 

{***}

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

    	 	{***}	Confidential

                                         Page 5
                                         of 17

 

    

    

Release of Raw Materials:

		·	{***}%
                                         upon completion

 

Manufacturing Activities:

		·	{***}%
                                         upon completion of manufacturing

		·	{***}%
                                         upon release of batch

 

Additional Supporting Services:

		·	Billed
                                         on a month by month basis

 

Payment terms are NET 30 days from date
of invoice except for the first payment which is due when received.

 

		5.0	Analytical Activities

 

Task 1: Release Testing of Drug
Product and Components

 

Avrio’s affiliate, Irvine Pharmaceutical
Services, Inc. (“Irvine”), shall perform testing for the release of {***}  in accordance with approved specifications
provided by Client.

		·	{***}

 

Avrio shall release {***}  based
on Certificate of Analysis (CofA) as client supplied components.

 

Irvine will perform identity testing by
USP on the following excipients for {***}  formulation:

		I.	{***}

		II.	{***}

		III.	{***}

		IV.	{***}

 

Upon completion, a Certificate of Analysis
approved by Quality Assurance (QA) will be generated for Client for each of the above materials in accordance with cGMP requirements.

 

Task 2: Microbiological Methods
Validation 

 

Avrio will perform the {***} to
support routine testing:

 

		a)	{***}

		b)	{***}

		c)	{***}

		d)	{***}

 

Upon completion of each microbial method
validation, Avrio will generate a validation report for Client review.

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

    	 	{***}	Confidential

                                         Page 6
                                         of 17

 

    

    

		6.0	Tech Transfer Activities

 

Task 3: Method Feasibility

 

Avrio will perform the method feasibility for the following
methods:

 

		(a)	{***}

		(b)	{***}

 

Avrio will generate a feasibility report upon completion of
the feasibility work.

 

Task 4: Method Validation of Ampligen ID

 

Avrio will perform the method validation for the following
methods:

 

		(a)	{***}

		(b)	{***}

 

Avrio will conduct method validation {***}. Upon completion
of method validation, Avrio will issue a summary report for Client review.

 

If the existing methods as provided or directed by Client
are not suitable for cGMP support (as mutually agreed in good faith by Avrio and Client), additional development of the method(s)
may be required at additional cost.

 

Task 5:Tank IQ/OQ

 

Avrio will perform IQ/OQ of three compounding tanks provided
by Hemispherx. {***}

 

Task 6:CIP Validation 

 

Avrio will perform one CIP process confirmation run and three
CIP validation runs per tank based on process parameters provided by Hemispherx. Cleaning validation protocol will be based on
{***}.

 

Task 7:SIP Validation 

 

Avrio will perform one SIP process confirmation run and three
SIP validation runs per {***}.

 

Task 8:Mixing Studies 

 

Avrio will perform mixing studies during engineering run based
{***}.

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

    	 	{***}	Confidential

                                         Page 7
                                         of 17

 

    

    

		7.0	Drug Product Manufacturing

  

Task 9: Machine Modification and
Validation for {***}

 

{***}. Upon completion of the validation,
Avrio will generate a validation report for Client review.

 

Task 10: Manufacturing Compatibility
Studies

 

A compatibility study of the formulation
with manufacturing components shall be designed and performed as required to ensure that the contact surfaces of the process (lines,
filters, bags or vessels) do not adsorb the active compound or other ingredients of the formulation or produce higher than allowed
levels of degradants or leachables.

 

Task 11: Filter Validations

 

Avrio assumes the filters used in the
filter assembly provided by client can be used in a new assembly customized to work with Avrio equipment. Filter validation studies
are assumed to be previously completed by client and are not included in this proposal.

 

Task 12: Manufacturing Preparation

 

Client will provide {***} and container
closure components required for manufacturing. All Avrio purchased materials and components will be charged to Client as pass-through
costs. Materials and components supplied by client will be received and released per Task 1. All other materials and components
will be received and released per Avrio Standard Operating Procedures and charged to Client as pass-through costs.

 

The manufacturing batch record will be
prepared by Avrio and approved by both parties. Avrio will include the product specification limits (provided by the Client) in
the protocol.

 

Task 13: Engineering Formulation

 

Formulation tanks will be cleaned and
sterilized {***}. Bulk Ampligen will be formulated for engineering run based on {***}.

 

Task 14: Engineering Batch –
Liquid Formulation

 

Avrio will manufacture an Engineering
Batch of {***} vials of the final formulation of Ampligen drug product (liquid).

 

Fill volume shall consist of {***}.

 

Avrio will conduct the following tests
of the bulk compounded product:

		•	{***}

		•	{***}

		•	{***}

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

    	 	{***}	Confidential

                                         Page 8
                                         of 17

 

    

    

Upon completion of fill and finish, Avrio
will provide a copy of batch records for Client’s review. All documentation is reviewed by manufacturing.

 

Task 15: Media Formulation

 

Formulation tanks will be cleaned and
sterilized {***}. Bulk media will be formulated for media fill based on client procedures.

 

Task 16: Media Fills

 

{***}

 

Task 17: Fill/Finish Formulation

 

Formulation tanks will be cleaned and
sterilized {***}. Bulk Ampligen will be formulated for cGMP batch based on {***}.

 

Task 18: Fill/Finish Batch

 

Avrio will manufacture {***} of
the final formulation of Ampligen in support of clinical studies.

 

{***}

 

Upon completion of fill and finish, Avrio
will provide a copy of batch records for Client’s review. All documentation is reviewed by QA and manufacturing teams.

 

Task 19: GMP Batch Release

 

Avrio will perform release of the one
(1) GMP batch of Ampligen for Injection according to final specification sheet approved by Client.

 

The release tests to be performed on the
product shall be:

		·	{***}

		·	{***}

 

Upon completion of testing for each lot
Avrio will furnish a QA approved CofA, in support of releasing the product to the Client.

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

    	 	{***}	Confidential

                                         Page 9
                                         of 17

 

    

    

		8.0	Supporting Services

  

Project Management 

 

Upon the client's approval of a proposal,
a Project Manager (PM) will be assigned. Based on the timeline outlined in the proposal, the dedicated PM would identify tasks,
timelines, and resources required.

 

The designated PM will then coordinate
a formal kick-off meeting with the client and appropriate laboratory personnel to review and discuss the project scope, resources,
and timelines. A technical writer would draft a technology (method) protocol for each required task and provide this to the client
for their review and approval.

 

Analysts are selected based on their education,
background, and work experience to support specific projects and tasks. The designated PM would then, from start to finish, oversee
the project, managing deadlines, mitigating program risks, and providing proactive communications to the client via emails/conference
calls/Gantt charts/etc.

 

During development work, typically weekly
teleconferences are held to discuss next steps, and progress, with an agenda provided. For manufacturing and during a batch release,
email updates will be provided, as available.

 

Materials, Components, and Equipment

 

The services described in this agreement
will comprise the following additional costs:

		·	{***}

		·	{***}

		·	{***}

 

		9.0	Storage and Shipping

 

Avrio will be responsible for storage of finished product packaged
vials for up to 60 days from Date of Manufacture. Finished vials will be bulk packaged and shipped at ambient temperature or as
requested by Client.

 

Note: The Client will be responsible for providing Avrio
all information of where final product will be shipped. The cost of shipping is the responsibility of Client and not included
in this proposal.

 

		10.0	Key Assumptions

 

This proposal is based upon the key assumptions listed below.
Changes to any of the following key assumptions may result in a change in scope:

 

		§	{***}

 

		§	Client
                                         will provide all applicable and required test and manufacturing material(s) and any available
                                         documents to Avrio in order to meet the requirements of the project timeline including
                                         but not limited to formulation and process information. Client will provide GMP {***}.

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

    	 	{***}	Confidential

                                         Page 10
                                         of 17

 

    

    

		§	Client
                                         will provide a minimum of two (2) weeks advance notice for sample and documentation shipment(s).
                                         A completed Chain of Custody form must accompany all samples submitted to Irvine; otherwise
                                         samples will not be processed.

 

		§	The
                                         protocol(s), report(s), and batch records will be generated in Avrio format and one revision
                                         of the protocol(s) and report(s) is included in the pricing.

 

		§	Project
                                         specific materials/equipment purchased by Avrio {***} will be billed to Client
                                         {***}.

 

		§	All
                                         analytical, microbiology testing will be performed at Avrio’s affiliate, Irvine
                                         Pharmaceutical Services.

 

		§	Avrio
                                         will discard of material following 30 days of batch release unless otherwise specified
                                         by Client. Disposal fees will be charged as a pass through cost.

 

		§	Charges
                                         for Out of Specification (OOS) investigations which are determined non-laboratory related
                                         shall be billed back to Client at {***}. A Change in Scope document will be prepared
                                         for Client’s approval to capture the associated costs of the investigation.

 

		11.0	Change in Scope Management

 

Any modifications or amendments to the Project Scope will require
an executed Change Order. All Change Orders must be signed by authorized representatives of Avrio and Client prior to the initiation
of change.

 

Change Orders may be required for changes to the following
project elements:

		•	Change in one or more of the Key Assumptions listed in
                                         this quotation

		•	Project Scope

		•	Change in equipment or process (Client specified)

  

		12.0	Authorizations

 

The costing and project schedule provided within this proposal
is valid for one hundred and eighty (180) days after approval and issuance by Avrio. This quote is submitted under the Terms and
Conditions attached to this proposal.

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

    	 	{***}	Confidential

                                         Page 11
                                         of 17

 

    

    

	Client Acceptance of Proposal	 	Avrio Approval
	Signature:  s/	 	Signature: s/

         

	Name:        Wayne Springate	 	Name:   Laman Alani
	Title:          VP of Operations	 	Title:    COO
	Date:          7/21/16	 	Date:       7/21/16 
	Purchase Order Number:

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

    	 	{***}	Confidential

                                         Page 12
                                         of 17

 

    

    

		13.0	Terms and Conditions

 

		1.0	Scope

1.1           Any services and / or sales of
goods (“Services”) provided by Irvine Pharmaceutical Services, Inc. (“Irvine”) and Avrio Biopharmaceutical
LLC. (“Avrio”; Irvine and Avrio are jointly referred to as “Provider”) to a customer (“Client”),
and the entering into and execution of any contract or agreement of Services with a Client (“Order”), shall be subject
to the terms and conditions contained herein (“Conditions”). These Conditions shall be deemed part of the Order.

 

1.2           Any terms by the Client, which
are inconsistent with this document, and are not agreed to by Provider in writing, shall not apply. This shall apply even when
the Client expressly orders the Services only subject to Client’s terms and conditions. No variation of Conditions will
be binding upon Provider unless agreed to by Provider in writing and signed by its authorized representative. The terms “in
writing” or “written” as used in these Conditions will also be satisfied by facsimile or other electronic transmission.

 

		2.0	Order

2.1           Any Order of Services must be in writing and signed
by an authorized representative of both the Client and Provider. The same shall apply to any amendments or changes to an Order.

 

2.2           In the case that any terms of these
Conditions deviate from or are contradictory to terms of the Order, the terms and conditions of the duly signed Order shall govern.

 

		3.0	Prices

All prices for Services are exclusive
of any applicable shipping costs, shipping insurance, sales tax, and custom duties.

 

		4.0	Payment

Terms of
payment are net 30 days from the date of Provider’s invoice. Invoices shall be issued by Provider only after substantial
completion of each respective group of tasks set forth in the Order including, without limitation, the delivery to Client of any
deliverables associated with each group of tasks. In the event any payment for Services is not made when due, Provider shall be
entitled to interest on any such payment at the rate of one and one quarter percent (1.25%) per month during the default period.
In this case Provider is also entitled, among its other rights, to cease work and stop deliveries
or any other activities with respect to the Order, until such payment, including any accrued interest, has been paid in full.

 

		5.0	Limited Warranty 

5.1           Provider warrants that (a) all
Services performed hereunder will conform to the requirements of the Order, and (b) Provider will perform all Services according
to good laboratory and manufacturing practices and in conformity with any and all federal, state and local regulations and requirements.

5.2           EXCEPT FOR THE FOREGOING WARRANTY,
THERE IS NO OTHER WARRANTY OF PROVIDER OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

		6.0	Limitation of Liability

6.1           IN THE EVENT PROVIDER FAILS TO
PERFORM THE SERVICES HEREUNDER ON A TIMELY BASIS OR IN THE EVENT CLIENT REASONABLY REJECTS A DELIVERABLE BECAUSE IT DOES NOT COMPLY
WITH THE ORDER OR THESE CONDITIONS, PROVIDER SHALL REPERFORM THE SERVICES. IF PROVIDER IS UNABLE TO CURE THE FAILURE, PROVIDER
SHALL PAY THE CLIENT THE GREATER OF (A) ANY PAYMENTS PREVIOUSLY MADE BY CLIENT IN RESPECT OF SUCH SERVICES OR (B) THE COST OF
A THIRD PARTY VENDOR TO PERFORM SUCH SERVICES BUT NOT TO EXCEED 125% OF THE AMOUNT OF PAYMENTS PROVIDED FOR IN (A) HEREOF.

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

    	 	{***}	Confidential

                                         Page 13
                                         of 17

 

    

    

6.2           PROVIDER, ITS AFFILIATES OR SUBSIDIARIES,
OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, SHALL NOT BE LIABLE TO CLIENT FOR INDIRECT, INCIDENTAL,
CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES, INCLUDING LOST PROFITS, TO THE CLIENT AND/OR ANY THIRD PARTY, WHETHER ARISING
FROM DEFECTIVE WORKMANSHIP OR MATERIALS OR DESIGN, BREACH OF WARRANTY, FAILURE OR DELAY IN DELIVERY OR OTHER BREACH OF CONTRACT,
OR FROM ANY CAUSE WHATSOEVER, INCLUDING NEGLICENCE, EVEN IF THE CLIENT, OR THE THIRD PARTY, WAS ADVISED OF THE POSSIBILITY OF
ANY SUCH DAMAGES AND EVEN IF ANY OTHER REMEDY FAILS OF ITS ESSENTIAL PURPOSE. IN NO EVENT SHALL THE LIABILITY OF PROVIDER TO CLIENT
FOR ANY DAMAGES ARISING OUT OF THIS AGREEMENT, REGARDLESS OF THE LEGAL THEORY ON WHICH SUCH DAMAGES MAY BE BASED, EXCEED THE AMOUNT
OF TWO TIMES THE AGREED UPON PRICE FOR SUCH SERVICES UNDER THE ORDER.

6.3           THE DISCLAIMERS AND LIMITATIONS
OF LIABILITY SET FORTH IN THE FOREGOING SECTIONS 6.1 AND 6.2 SHALL NOT APPLY IN CASE OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
ON THE PART OF PROVIDER, AND SHALL NOT LIMIT OBLIGATIONS BY WAY OF INDEMNIFICATION UNDER SECTION 7.

  

		7.0	Indemnification

Client will indemnify and hold harmless
Provider and its affiliates and subsidiaries and their respective officers, directors, employees and agents from and against any
and all third party claims, losses, damages, or liabilities (including but not limited to reasonable attorney’s fees), relating
to or arising from or in connection with any third party allegations that the manufacture, use or sale of material by Provider
for fulfilling its obligations under the Order infringes intellectual property or other rights of a third party, or the Client’s
breach of any of Client’s representations, warranties, or covenants under the Order, in each case, except to the extent
any such claim is based upon Provider’s gross negligence or intentional misconduct under the Order. Provider will indemnify
and hold harmless Client and its affiliates and subsidiaries and their respective officers, directors, employees and agents from
and against any and all third party claims, losses, damages or liabilities (including but not limited to reasonable attorney’s
fees), relating to or arising from or in connection with the Provider’s breach of any of Provider’s representations,
warranties or covenants under the Order, in each case, except to the extent any such claim is based upon Client’s gross
negligence or intentional misconduct under the Order. The indemnified party shall promptly notify the indemnifying party of any
third party claim giving rise to indemnification hereunder, and allow the indemnifying party to assume and control the defense
of such claims through legal counsel reasonably acceptable to the indemnified party.

 

		8.0	Assignment

The Order and these Conditions shall inure
to the benefit of and are binding upon the parties hereto and their respective successors and assigns. Neither party shall assign
its rights nor obligations under the Order without the written consent of the other party, which consent shall not be reasonably
withheld; provided, however, that either party may assign its interests herein without the written consent of the other:

 

(A) to an entity which
shall succeed to its rights and obligations by merger, consolidation or other reorganization or transfer by operation of law or
by purchase of the business of or substantially all of the assets of the assignor; or 

(B) to an entity controlling,
under the control of or under common control with the assignor, where common control means more than fifty percent ownership of
the equity interest of an entity.

Provider shall not subcontract any of
the Services to a third party without the prior written consent of Client.

 

		9.0	Force Majeure

Neither party shall be liable under an
Order for any delay or failure in performance of the Services or its other obligations if such delay or failure is due to an act
or other occurrence beyond its the reasonable control, including but not limited to, acts of nature, fire, flood, strikes, lockouts,
labor troubles, inability to procure raw materials, failure or curtailment of power or any other utility service, restrictive
governmental law or regulations, riots, insurrection, war or other reason of like nature (“Force Majeure”). Any party
relying upon any event of Force Majeure to excuse its performance under this Agreement shall be required, as a condition of such
reliance, to promptly notify the other party of such event and exercise its commercially reasonable efforts to remedy the circumstances
creating such event.

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

    	 	{***}	Confidential

                                         Page 14
                                         of 17

 

    

    

		10.0	Termination

10.1           Provider may terminate an Order
at any time by written notice to Client, (i) if information provided by Client to Provider for the performance of the Services
cannot be reduced to practice, or shall require any Services exceeding commercially reasonable efforts, or (ii) if Client is adjudicated
insolvent, makes an assignment for the benefit of creditors, files a petition for bankruptcy, becomes the subject of a petition
in bankruptcy, becomes the subject of any receivership proceeding or admits in writing its inability to pay its debts generally
as they become due, or (iii) if Client breaches a material provision herein and Client fails to cure such breach within thirty
(30) days after written notice thereof from Provider to Client. Client may terminate an Order in its discretion by giving ten
(10) days written notice to Provider. Client may also terminate an Order at any time by written notice to Provider if Provider
breaches a material provision herein and Provider fails to cure such breach within thirty (30) days after written notice thereof
from Client to Provider.

 

10.2           If the Order is terminated by
Client (other than a termination by Client by reason of the breach of an Order by Provider) or Provider according to one of the
termination clauses in the foregoing Section 10.1, the Client agrees to reimburse Provider for the following under the terminated
Order, subject to the right of Client to receive the results achieved by Provider under the Order up to the date of its termination,
if so requested by Client:

- one hundred percent (100%) of authorized
material costs and costs for outsourced work already incurred or irrevocably committed to;

- the portion of Services already provided,
on a pro rata basis; and

- reasonable and unavoidable closing,
documentation and clean-up fees. The foregoing provisions of this Section 10.2 shall not apply in case of a termination according
to Section 10.1 (i) or if the termination occurred due to a material breach of Provider in the performance of its Services.

 

		11.0	Severability

If any provision hereof or set out in
the Order document shall be determined to be invalid or unenforceable, such determination shall not affect the validity of the
remaining provisions, and the parties shall use all reasonable efforts to agree upon a substitute provision to achieve the same
economic effect as the provision determined to be invalid or unenforceable.

 

		12.0	Governing Law; Venue

The Order and these Conditions shall be
governed by and construed in accordance with the laws of the State California, laws of the State of Pennsylvania if not laws of
the State of Delaware, without regard for those laws relating to conflicts of law.

 

		13.0	Compliance with Laws 

Provider will conduct all Services in
conformance with any and all applicable federal, state and local laws, regulations, and requirements. Such compliance includes,
but is not limited to, the Food and Drug Administration regulations and United States’ regulations pertaining to good clinical
and manufacturing practice requirements as may be established by applicable regulatory authorities in the United States from time
to time; and such other federal, state and local laws and regulations in the United States and applicable to the conduct of the
Services. Provider represents and warrants it has never been and, to the best of its knowledge after due inquiry, none of its
employees, affiliates or agents has ever been threatened to be debarred or indicted for a crime or otherwise engaged in conduct
for which a person can be debarred under Sections 306(a) or (b) of Federal Food, Drug and Cosmetic Act, and Provider will promptly
notify Client upon learning of any such debarment, conviction, threat or indictment. Provider warrants that it will not employ
the services of person which would result in a violation of the foregoing representation and warranty.

 

		14.0	Retention of Documentation and Materials 

Raw data, documentation, protocols, case
report forms, source documents, interim reports and final reports (collectively Documentation) shall be retained by Provider for
the period of time required or recommended by applicable United States’ regulatory requirements. During the above described
retention periods, Documentation shall be available for inspection by the Client, the Client's authorized agents, and authorized
government agencies.

 

		15.0	Propriety Information 

Client will own all data and written reports
arising out of the Order or prepared for Client in this project upon payment for Services. Client acknowledges that Provider is
required to maintain certain regulatory and scientific documents as required by regulatory authorities.

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

    	 	{***}	Confidential

                                         Page 15
                                         of 17

 

    

    

		16.0	Nondisclosure 

Provider agrees, during the term of performance
of Services and for a period of five (5) years from the date of termination of this Order, that, except to the extent required
by law, regulation, judicial requirement, or regulatory agency, it will not itself use, or provide or disclose to any third party,
any information, data or documentation that were specifically developed or generated by Provider for Client.

 

		17.0	Inspection 

Both parties recognize that governmental
agencies may request that Provider produce records, data, or materials related to Client products during the course of, or as
subject of, an inspection. In such instances, Provider shall notify Client within one business day of any request for production
or property inspections by any governmental agency specifically involving either the Services or the facility at which the Services
are being performed, including, without limitation, any such planned inspections and have the opportunity to comment upon any
related interactions with the governmental agency. Client may be present at inspections related to Provider’s Services hereunder.
For all other inspections, Provider shall keep Client duly notified and informed of such inspection and any related activities
associated with such inspection. Not more frequently than once per year and at other times upon reasonable request, Client may
inspect Provider’s facilities and the performance of the Services.

 

		18.0	Insurance 

Provider shall maintain commercial product
liability insurance (which insurance shall include professional errors and omissions insurance) at limits of not less than $5
million per occurrence and $5 million aggregate. Provider shall maintain commercial general liability insurance at limits of not
less than $1 million per occurrence and $2 million aggregate and $4 million in excess umbrella liability (per occurrence and aggregate)
insurance. If Provider terminates insurance coverage required hereunder, Provider shall obtain and maintain the maximum available
extended discovery period insurance during the term of the Agreement. At the request of Client, Provider shall provide certificates
evidencing such insurance.

 

		19.0	Survival 

The terms and provisions of Sections 4,
5, 6, 7, 8, 10, 11, 14, 15, 16, 17 and 19 of these Conditions shall survive the expiration, cancellation or termination of the
Order.

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

    	 	{***}	Confidential

                                         Page 16
                                         of 17

 

    

    

 PAYMENT
FOR CANCELLATION OR POSTPONEMENT OF GMP MANUFACTURING

 

In the event of termination of this Agreement
prior to GMP manufacturing, CLIENT shall reimburse Avrio for (a) all components ordered prior to termination and not cancelable
at no cost to Avrio, (b) all work-in-process commenced by Avrio (“the Charges”). Charges would not include release
costs or other costs which would not have occurred. In the event of cancellation or postponement by CLIENT of the GMP manufacturing
phase described in this agreement or in the event of termination of this agreement, except for termination in the event of a default
by Avrio, CLIENT shall pay a cancellation fee as shown in Schedule I. CLIENT shall make payment for all the Charges within thirty
(30) days of the invoice date. If cancellation/postponement comes from Avrio, then CLIENT will be given the right to cancel/postpone
with the same notice as given by Avrio. Avrio would use reasonable efforts to use the manufacturing window left vacant by CLIENT.
In the case Avrio is able to use the window, no cancellation fees would be charged to CLIENT.

 

Schedule I. Cancellation/Postponement
Fee Schedule

 

	Postponement/Cancellation	 	Situation	 	Fee
	 	 	{***}	 	{***}
	 	 	{***}	 	{***}
	Cancellation	 	{***}	 	{***}
	 	 	{***}	 	{***}
	 	 	{***}	 	{***}
	 

        Postponement
	 	{***}	 	{***}
	 	{***}	 	{***}
	 	{***}	 	{***}

 

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

    	 	{***}	Confidential

                                         Page 17
                                         of 17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00261-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00261-of-00352.parquet"}]]