Document:

Exhibit 10.07

 

COLLATERAL
AGENCY AGREEMENT

 

THIS COLLATERAL AGENCY
AGREEMENT (this “Agreement”) is made and dated as of December ___, 2012 and among the persons named as “Secured
Party” on the signature pages hereto (each, a “Secured Party” and together, the “Secured
Parties”), WPCS International Incorporated, a Delaware corporation (the “Company”), and Worldwide
Stock Transfer LLC, a New Jersey limited liability company, as collateral agent for the Secured Parties with respect to the Collateral
(as hereinafter defined) (in such capacity, the “Collateral Agent”). The Collateral Agent is sometimes referred
to herein as the “Agent”.

 

PRELIMINARY
STATEMENTS

 

A.Each of the Secured
Parties has entered into a Securities Purchase Agreement, dated December 4, 2012 (the “Purchase Agreement” the
form of which is attached hereto as Exhibit B), with the Company, pursuant to which, among other things, each Secured
Party, under substantially identical terms and conditions, has purchased from the Company a note, in each case, evidenced by a
Senior Convertible Note (each a “Note”, and collectively, the “Notes”) secured by, inter
alia, a Security Agreement, dated as of the date hereof, among the Company, the Collateral Agent and each of the Grantors (as
defined therein) that may be a party thereto from time to time (the “Security Agreement” together with the Notes
and each of the other Company Security Documents (as defined in the Purchase Agreement; defined terms used herein, but not defined
herein shall have the meaning assigned to such terms in the Purchase Agreement), as the same may be amended, supplemented or modified
from time to time, the “Security Documents”).

 

B.To
secure the payment and performance of the obligations under and pursuant to the Purchase Agreement, the Notes, the Security Documents
and the other Transaction Documents (including, without limitation, the Obligations (as defined in the Security Agreement) and
other obligations of the Company to each of the Secured Parties (all such secured obligations, the “Secured Obligations”)),
the Company has granted to the Collateral Agent for itself and for the benefit of each of the Secured Parties a first priority
security interest in the same common collateral as described in the Security Agreement and the other Security Documents (hereinafter
all of such collateral shall be referred to collectively as the “Collateral”).

 

C.The Company and
the Secured Parties desire to enter into this Agreement with Worldwide Stock Transfer LLC to appoint Worldwide Stock Transfer LLC
as the Collateral Agent for the Secured Parties with respect to the Collateral and Worldwide Stock Transfer LLC desires to accept
such appointment.

    	 

    	 

    
 

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

 

AGREEMENT

 

1.Definitions.
All capitalized terms used herein without definition shall have the meanings assigned to such terms in the Security Documents.
The following terms used in this Agreement shall have the following meanings:

 

“Affiliate”
means, at any time, and with respect to any Person: (i) any other Person (other than a Subsidiary) that at such time directly or
indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person;
and (ii) any Person beneficially owning or holding, directly or indirectly, ten percent (10%) or more of any class of voting or
equity interests of the Company or any Subsidiary or any corporation of which the Company and its Subsidiaries beneficially own
or hold, in the aggregate, directly or indirectly, ten percent (10%) or more of any class of voting or equity interests.

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or otherwise. Unless the context otherwise clearly requires,
any reference to an “Affiliate” is a reference to an Affiliate of the Company.

 

“Event of
Default” has the meaning assigned to such term in each Note.

 

“GAAP”
means generally accepted accounting principals, consistently applied.

 

“Person”
means an individual, partnership, corporation, limited liability company, limited partnership, association, trust, unincorporated
organization, or a government or agency or political subdivision thereof.

 

“Proceeds”
means all amounts paid or payable for the benefit of the Secured Parties or the Collateral Agent pursuant to, or upon the exercise
of remedies under, the Security Documents.

 

“Required
Holders” means, as of any given date, the holders of a majority of the Registrable Securities (as defined in the Purchase
Agreement) (excluding any Registrable Securities held by the Company or any of its Subsidiaries) then issuable pursuant to the
terms of the Notes then outstanding.

 

“Subsidiary”
means any limited liability company, partnership or corporation which the Company consolidates, or may consolidate from time to
time after the date hereof, on its financial statements on a GAAP basis.

 

2.Appointment
and Duties of Collateral Agent.

 

(a)Appointment
of Collateral Agent. Each Secured Party, by its execution of this Agreement or its acceptance of the benefits of this Agreement
and the Security Documents, subject to Sections 3 and 5(i) hereof, hereby grants Worldwide Stock Transfer LLC the authority as
its agent and attorney-in-fact to do the following:

 

(i)to act
as agent for each Secured Party under the Security Documents;

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(ii)to
timely prepare and provide to each Secured Party and, as applicable, the Company, the notices, certificates and other documents
called for in this Agreement;

 

(iii)to
take all action expressly required under this Agreement and the Security Agreement (including, without limitation Section 5(i)
thereof);

 

(iv)to
hold each item of Collateral which is evidenced by a certificate or an instrument in its possession in the State of New Jersey
pursuant to the terms hereof on behalf and for the benefit of the Secured Parties;

 

(v)subject
to the terms of Section 3 hereof and the terms of the Security Documents, to sell the Collateral, to collect Proceeds therefrom,
and to apply such Proceeds in accordance with the terms of this Agreement; to
receive and/or release Collateral in accordance with the terms of this Agreement;

 

(vi)to
verify with the applicable bank or financial institution, upon Collateral Agent’s receipt of each Cash and Receivables Report,
the cash balance in the Controlled Accounts as reported by Company as item #1 on each such Cash and Receivables Report as of the
date thereof; and

 

(vii)to
promptly (and in any event within one (1) Business Day) notify each Secured Party upon the occurrence of an Event of Default as
evidenced by a Cash and Receivables Report and to take such other actions as the Collateral Agent shall be directed to take, either
by the terms hereof, by the terms of the Security Agreements or as the Required Holders may reasonably direct in writing and to
perform the duties and obligations set forth herein and therein and to effect the purposes of this Agreement.

 

Notwithstanding the foregoing, in connection
with the release of any Collateral in connection with a Cash and Receivables Report, as permitted pursuant to the terms and conditions
of the Notes and the Security Agreement, the Collateral Agent shall not transfer any Collateral to any Person or Account (as defined
in the Security Agreement) other than a Controlled Account (as defined in the Security Agreement).

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(b)Acceptance
by Collateral Agent. The Collateral Agent hereby agrees to act as agent for the Secured Parties pursuant to the terms and conditions
of, and to fully and timely perform its duties under, this Agreement until the satisfaction in full in cash and discharge of the
Secured Obligations. By its execution and delivery of this Agreement, the Collateral Agent accepts its appointment as Collateral
Agent and agrees to, among other things and in all cases subject to Section 3 and 5(i) hereof: (i) take the actions and otherwise
exercise the rights and perform the duties described in Section 2(a) above; (ii) notify each Secured Party of the occurrence
of an Event of Default of which it has actual knowledge and any material adverse change or development in the perfection of the
security interest of the Collateral Agent, for the benefit of the Secured Parties, in the Collateral of which it has actual knowledge;
(iii) release Collateral in accordance with the written instructions of the Required Holders; (iv) upon the occurrence of an Event
of Default of which it has knowledge, solicit and rely upon direction from the Required Holders as to any disposition or other
action with respect to the Collateral; (v) effectuate any reasonable actions called for by the Required Holders; and (vi) sell,
liquidate or cause to be sold or liquidated the Collateral in a commercially reasonable manner in accordance with the written instructions
of the Required Holders. Notwithstanding anything herein or elsewhere to the contrary, it is expressly understood and agreed among
the parties hereto that the Collateral Agent shall have no duty or responsibility for preparing, maintaining or filing any financing
statements (including, without limitation, any continuation statements or financing statement amendments) and the Collateral Agent
hereby authorizes any of the Secured Parties to file financing statements naming the Collateral Agent as the secured party, as
the collateral agent for the Secured Parties, with respect to the Collateral and the Secured Obligations. The Secured Parties shall
have the sole responsibility for any such filings.

 

(c)Collateral
to be held in State of New Jersey. The Collateral Agent shall at all times hold and maintain possession of the Collateral which
is evidenced by a certificate or instrument in the State of New Jersey.

 

(d)Material Non-Public
Information. Upon the delivery of any notices, documents, information or materials to Collateral Agent by Company and/or any
of its subsidiaries or any of its or their respective officers, directors, employees and/or agents in accordance with or pursuant
to this Agreement or any other Transaction Document, the Company shall certify or cause to be certified in writing to Collateral
Agent whether such notices, documents, information or materials contain any material non-public information. If Collateral Agent  receives
any such notices, documents, information or materials with such certification that such notices, documents, information
or materials contain material non-public information and the Collateral Agent reasonably determines, in its sole
discretion, the Secured Parties should receive such notices, documents, information or materials, (x) Collateral Agent
shall deliver a written notice to the Company that Collateral Agent intends to promptly deliver such notice, documents or other
information or materials to the Secured Parties, (y) the Company shall within one (1) Business Day after any receipt of such written
notice from Collateral Agent  (A)  publicly disclose such material, non-public information on a Current Report on
Form 8-K or otherwise and (B) deliver written notice to Collateral Agent certifying that such notice, documents,
information or materials no longer contain any material, non-public information (a “Non-Public Certification”)
and (z)  promptly following the receipt of such Non-Public Certification, Collateral Agent shall delivery such notice,
documents, information or materials to each Secured Party. Any delivery by Collateral Agent of any notice, documents or other information
or materials to any Secured Party shall be deemed to be a delivery by the Company to such Secured Party for all purposes hereunder
and pursuant to any other Transaction Documents. To the extent Collateral Agent receives any notices, documents, information or
materials from Company and/or any of its subsidiaries or any of its or their respective officers, directors, employees and agents
without concurrent certification by Company that such notices, documents, information or materials do not contain any non-public
information or the Company fails to deliver a Non-Public Certification as required hereunder, Collateral Agent shall retain
such items or information and shall not deliver any such items or information to any Secured Party, but shall deliver written notice
to each Secured Party that it has received items or information that may or may not contain material non-public information without
a certification by Company as to the contents thereof (but without otherwise describing in any detail such items or information).
Upon receipt of such notice, each Secured Party may  provide further instruction to Collateral Agent with respect to distribution
of such notices, documents, information or materials to such Secured Party (and not to any other Secured Party) and Collateral
Agent shall have no further duty with respect thereto until receipt of such instruction from any such Secured Party. Notwithstanding
anything herein or in any Transaction Document to the contrary, the Collateral Agent shall not deliver to any Secured Party any
documents or other information or materials  without prior certification by Company that such notices, documents, information
or materials do not contain material non-public information, without the prior written consent of such Secured Party
(other than notices of the occurrence of an Event of Default).

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3.Instructions
to Collateral Agent. Except as set forth herein, the Collateral Agent hereby agrees to act with respect to the Collateral
and otherwise under this Agreement only upon the written instructions of, or with the consent of, the Required Holders; provided
that without the written instructions of, or consent from, the Required Holders, the Collateral Agent may not release Collateral
other than in accordance with this Agreement.

 

4.Secured
Party Actions. No Secured Party may take, or require the Collateral Agent to take or refrain from taking, any action hereunder
or under the Security Documents or with respect to any of the Collateral except as and to the extent expressly
set forth in this Agreement or the Security Documents. Each Secured Party agrees that written instructions given to the Collateral
Agent by the Required Holders (regardless of whether such Secured Party agrees, disagrees or abstains with respect to such instructions)
shall be binding upon such Secured Party and its transferees and assigns for all purposes and that none of the Secured Parties
shall have any liability to any other Secured Party for any such instructions given to the Collateral Agent.

 

5.The Agent.

 

(a)Duties and
Responsibilities. The Agent shall have only such powers, and only such duties on behalf of the Secured Parties, as are expressly
set forth herein. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Notes, the Purchase Agreement
or the Security Documents, the Agent shall not have any duties or responsibilities except those expressly set forth herein, and
no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or the
Security Documents or otherwise exist against the Agent. The duties of Agent shall be mechanical and administrative in nature and
Agent shall not have, or be deemed to have, by reason of this Agreement, the Notes, the Purchase Agreement or any Security Document
or otherwise a fiduciary or trustee relationship in respect of any Secured Party.

 

(b)Delegation
of Duties, Etc. The Agent may exercise any of its powers and perform any of its duties hereunder by or through agents or attorneys
and shall be entitled to consult with legal counsel, accountants and other experts selected by it. Any action taken or omitted
to be taken or suffered in good faith by the Agent in accordance with the reasonable opinion of such counsel, accountants or other
experts shall be full justification and protection to it. The Agent shall not be responsible for any misconduct or negligence,
other than gross negligence or willful misconduct on the part of any agent or attorney appointed with due care by it hereunder.

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For the purposes of this
Section 5(b), “Confidential Information” means written information that is marked “confidential”
and is delivered to the Collateral Agent by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated
by or otherwise pursuant to this Agreement, provided that such term does not include information that: (i) was publicly
known or otherwise known to the Collateral Agent prior to the time of such disclosure; (ii) subsequently becomes publicly known
through no act or omission by the Collateral Agent or any person acting on its behalf; (iii) otherwise becomes known to the Collateral
Agent other than through disclosure by the Company or any Subsidiary; or (iv) constitutes financial information delivered to the
Secured Parties pursuant to the Purchase Agreement or other Transaction Documents that are otherwise publically available. The
Collateral Agent will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by it
in good faith to protect confidential information of third parties delivered to it, provided that the Collateral Agent may
deliver or disclose Confidential Information to: (i) its directors, officers, employees, agents, attorneys and affiliates (to the
extent such disclosure reasonably relates to its duties hereunder); (ii) its financial advisors and other professional advisors
who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 5(b);
(iii) any Secured Party; (iv) any Person from which a Secured Party offers to purchase any security of the Company to the extent
such Buyer agrees to be bound by provisions substantially similar to the provisions in this paragraph; (v) any federal or state
regulatory authority having jurisdiction over the Collateral Agent; (vi) the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating
agency that requires access to information about a Secured Party’s investment portfolio; or (vii) any other Person to which
such delivery or disclosure may be necessary or appropriate (A) to effect compliance with any law, rule, regulation or order applicable
to the Collateral Agent, (B) in response to any subpoena or other legal process, (C) in connection with any litigation to which
a the Collateral Agent is a party, or (D) if an Event of Default has occurred and is continuing, to the extent the Collateral Agent
may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of
the rights and remedies under the Security Documents.

 

(c)Indemnification.
The Company hereby agrees to indemnify the Agent in its individual capacity and as the Collateral Agent, and the Agent’s
directors, officers, stockholders, employees, agents, successors and assigns (each and “Indemnitee”) from and
hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable
fees, charges and disbursements of one counsel for the Collateral Agent) incurred by any Indemnitee or asserted against any Indemnitee
by any third party or by the Company or any other party to the Notes arising out of, in connection with, or as a result of: (i)
the execution or delivery of this Agreement, any other Security Documents of any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the
transactions contemplated hereby or thereby or the acceptance and administration of this Agreement or any of the Security Documents
by the Collateral Agent; (ii) any Note or the use or proposed use of the proceeds therefrom; or (iii) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory,
whether brought by a third party or by the Company or any other party to the Notes, and regardless of whether the Collateral Agent
is a party thereto; provided that such indemnity shall not be available to the extent that such losses, claims, damages, liabilities
or related expenses result from the gross negligence or willful misconduct of the Indemnitee as finally determined by a court of
competent jurisdiction. The provisions of this Section 5(c) shall survive the termination of this Agreement and each other
Security Document and the resignation or removal of the Collateral Agent.

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(d)Exculpatory
Provisions. No Indemnitee shall be liable to any Secured Party or the Company for any action taken or omitted to be taken or
suffered by it or them hereunder or in connection herewith, except for its or their own gross negligence or willful misconduct
as finally determined by a court of competent jurisdiction. The Agent shall not be liable for the effectiveness, enforceability,
value, sufficiency, or validity of this Agreement, the Purchase Agreement, the Notes, the Security Documents or the Collateral.
Without limiting the generality of the foregoing, the Agent shall not be responsible for any statements, warranties or representations
made by the Company in or in connection with the Security Documents or any other document relating to the Collateral. The Agent
shall be entitled to conclusively rely on any communication, instrument, paper or other document, including without limitation
any certificates provided by the Company (absent manifest error), believed by the Agent to be genuine and correct and to have been
signed or sent by the proper parties. The Agent shall be fully justified in failing or refusing to take any action under this Agreement
unless it shall first have received written direction from the Required Holders. The Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement
or the Security Documents in accordance with the written consent or written instructions of the Required Holders and such consent
or instructions and any action taken or failure to act pursuant thereto shall be binding upon all applicable Secured Parties. The
Agent shall be under no duty or responsibility to any Secured Party to ascertain or to inquire into the performance or observance
by the Company or any other party of any of the provisions of the Purchase Agreement, the Notes, the Security Documents or any
other document. Under no circumstance shall the Agent be liable for special, punitive, indirect or consequential damages.

 

(e)Standard of
Care. Except for the exercise of reasonable care in the custody of any Collateral in its possession and the accounting for
moneys actually received by it in accordance with the Security Documents, the Collateral Agent shall have no duty as to any Collateral.
The Collateral Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the liens in any of the Collateral, whether impaired by operation of law or by reason
of any action or omission to act on its part hereunder, except to the extent such action or omission constitutes gross negligence
or willful misconduct on the part of the Collateral Agent, for the validity or sufficiency of the Collateral or any agreement or
assignment contained therein, for the validity of the title of the Company to the Collateral, for insuring the Collateral or for
the payment of taxes, charges, assessment or liens upon the Collateral or otherwise as to the maintenance of the Collateral.

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(f)Independent
Credit Investigation. Each Secured Party expressly acknowledges that the Agent has not made any representations or warranties
to it and that no act taken by the Agent shall be deemed to constitute any representation or warranty by the Agent to any such
party. Each Secured Party acknowledges that it has taken and will continue to take such actions and to make such investigations
as it deems necessary to inform itself of the affairs of the Company, and each Secured Party acknowledges that it has made and
will continue to make its own independent investigation of the creditworthiness and the business and operations of the Company,
and that, in entering into this Agreement and the Purchase Agreement, it has not relied and will not rely upon any information
or representations furnished or given by the Agent or any Secured Party.

 

(g)Knowledge of
Default, etc. The Agent shall be entitled to assume that no Event of Default or material adverse change or development in the
perfection of the security interest of the Agent in the Collateral exists, unless the officers of the Agent responsible for matters
concerning this Agreement shall have obtained actual knowledge of such Event of Default based upon its review of the Cash and Receivables
Report and/or shall have been notified in writing by the Company or any Secured Party that it considers that an Event of Default
or such material adverse change or development exists and specifying the general nature thereof.

 

(h)No
Duty to Provide Additional Credit Information; No Responsibility for Perfection or Priority of Liens, etc. The Agent shall
not have any duty or responsibility to provide the Secured Parties with any credit information concerning the affairs, financial
condition or business of the Company which may at any time come into the possession of the Agent (other than any such credit information
specifically provided to the Agent in connection with the Security Documents or requested by any Secured Party) or any responsibility
for the perfection or priority of any lien.

 

(i)Resignation
or Removal of the Collateral Agent. The Collateral Agent may resign hereunder at any time by giving thirty (30) days’
prior written notice thereof to each Secured Party and may be removed at any time with or without cause by an instrument in writing
delivered to the Company and the Collateral Agent and signed by the Required Holders; provided no such removal shall be effective
until a successor Collateral Agent shall have accepted appointment as set forth below. Upon any such notice of resignation or removal,
the Required Holders shall appoint a successor Collateral Agent. If an instrument of acceptance by a successor Collateral Agent
shall not have been delivered to a removed Collateral Agent within thirty (30) days after notice of removal has been given as set
forth above, such removed Collateral Agent may petition any court of competent jurisdiction, at the sole cost and expense of the
Company, for the appointment of a successor Collateral Agent. Upon the acceptance of any appointment as successor Collateral Agent,
that successor shall thereupon establish such accounts as are provided for in the Security Documents, shall take all actions as
may be necessary or appropriate to perfect the security interest created under the Security Documents, and shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the retiring or removed Collateral Agent, and the retiring
or removed Collateral Agent shall, upon the payment of its charges hereunder, promptly: (i) transfer to such successor agent all
items of Collateral held by the retiring or removed Collateral Agent, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor Collateral Agent under this Agreement; and (ii) execute
and deliver to such successor Collateral Agent such amendments to financing statements delivered to the resigning or removed Collateral
Agent, and take all such other actions at the expense and direction of the Company as may be reasonably necessary or appropriate
in connection with the assignment to such successor Collateral Agent of the security interests created under the Security Documents,
whereupon the retiring or removed Collateral Agent shall be discharged from its duties and obligations under this Agreement. After
any retiring or removed Collateral Agent’s resignation or removal hereunder as Collateral Agent, the provisions of this Agreement
shall survive and shall continue and inure to its benefit as to any actions taken or omitted to be taken by it under this Agreement
while it was the Collateral Agent hereunder, including but not limited to Section 5(c).

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(j)Waiver.
Any waiver, forbearance, failure or delay by the Agent in exercising, or the exercise or beginning of exercise by the Agent of,
any right, power or remedy, simultaneous or later, shall not preclude the further, simultaneous or later exercise thereof, and
every right, power or remedy of the Agent shall continue in full force and effect until such right, power or remedy is specifically
waived in a written instrument executed by the Agent.

 

(k)Notice of Transfer.
Upon receipt of a written notice by an officer of the Agent responsible for matters relating to this Agreement from the Company
or applicable Secured Party of a transfer of a Note, the transferee shall be entitled to all benefits of this Agreement, and the
Agent shall treat such transferee as a Secured Party for all purposes hereof so long as the Agent has no reason to believe that
the facts stated in such notice are not true and correct. Prior to such notice, the Agent shall be justified in treating the prior
Secured Party as the owner thereof and as a Secured Party for all purposes hereof and shall not be responsible for ascertaining
whether a transfer has occurred.

 

(l)Fees; Expenses.
The Company shall pay to the Agent within five (5) Business Days of its demand the amount of any and all reasonable costs and expenses,
including the reasonable fees and expenses of its counsel, that the Agent may incur in connection with: (i) the acceptance and
administration of this Agreement and its duties as Agent hereunder or under any of the Security Documents; (ii) the custody or
preservation of or the sale of, collection from or other realization upon, any of the Collateral; or (iii) the exercises and enforcements
of any rights of the Agent hereunder or under any of the Security Documents. The provisions of this Section 5(m) shall survive
the termination of this Agreement and the resignation or removal of the Agent.

 

(m)Application
of Proceeds. At the written direction of the Required Holders, the Collateral Agent shall apply the proceeds of any collection,
sale, foreclosure or other realization upon any Collateral (the “Order of Application”):

 

FIRST, to the
payment of all amounts payable under this Agreement on account of the Collateral Agent’s fees or any out-of-pocket legal
fees, costs and expenses or other liabilities of any kind incurred by the Collateral Agent or any co agent in connection with any
Security Document (including without limitation any fees and expenses described in Section 5(l) above);

 

SECOND, to
each Secured Party on a pro-rata basis, based on the pro rata percentage that each Secured Party’s outstanding Notes bears
to all outstanding Notes until all obligations due and owing under such Notes and other Transaction Documents have been paid in
full in cash;

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THIRD, any
surplus remaining after the payment in full in cash of all of the Secured Obligations shall be paid to the Company or to whomsoever
as the Company may by notice direct as lawfully entitled to receive the same, or as a court of competent jurisdiction may direct.

 

For this purpose, “proceeds”
of Collateral means any and all cash, securities and other property realized from collection, foreclosure or enforcement of the
Collateral Agent’s liens upon the Collateral (including distributions of Collateral in satisfaction of any Secured Obligations).
Upon written request by a Secured Party or the Collateral Agent to the Company, the Company shall furnish each Secured Party and
the Collateral Agent with such information as the Secured Party or the Collateral Agent may reasonably require to calculate and
determine each Secured Party’s pro rata percentage of outstanding Notes for purposes of this Agreement. The Collateral Agent
shall be entitled to conclusively rely upon such information provided by the Company.

 

6.Termination
of this Agreement. Except as otherwise specifically provided herein, this Agreement shall terminate immediately upon the
satisfaction in full in cash of all Secured Obligations. Without limiting the foregoing, the bankruptcy; insolvency,
dissolution or other similar event or condition of any Person, including the Company, shall not operate to terminate this Agreement.

 

7.Miscellaneous.

 

(a)Assignment.
This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective permitted successors and
assigns, but does not otherwise create, and shall not be construed as creating, any rights enforceable by any Person other than
the Agent and the Secured Parties, in their respective capacities as such and the Company and any permitted assignor. Any corporation
or other fund into which the Collateral Agent may be merged or converted or with which it may be consolidated, or any corporation
or other fund resulting from any merger, conversion or consolidation to which the Collateral Agent shall be a party, or any corporation
or other fund succeeding to all or substantially all of the corporate trust business of the Collateral Agent, shall be the successor
of the Collateral Agent hereunder without the execution or filing of any paper or any further action on the part of any of the
parties hereto. At the time of any assignment of all or any portion of the Secured Obligations by a Secured Party, such assigning
Secured Party shall cause its assignee to execute the Counterpart Collateral Agency Agreement attached hereto as Exhibit A
and become a party to this Agreement. Upon execution of the Counterpart Collateral Agency Agreement attached hereto as Exhibit A,
the assignee shall be entitled to all benefits of this Agreement, and the Agent shall treat such assignee as a Secured Party for
all purposes hereof so long as the Agent has no reason to believe that the facts stated in such notice are not true and correct.

 

(b)Amendments.
No amendment or waiver of any provision of this Agreement or the Security Documents shall in any event be effective unless the
same shall be in writing and shall have been approved by the Required Holders and, as to Section 5, the Agent; provided
that any amendment of Section 3 hereof, this Section 7(b), or the definition of “Required Holders” used herein
shall require the approval of the Agent and all Secured Parties.

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(c)Governing Law;
Submission to Jurisdiction; Waiver of Jury Trial. The validity, interpretation, enforceability, and performance of this Agreement
shall be governed by the law of the State of New York, without regard to conflicts of laws principles thereof. The parties hereby
consent to the jurisdiction of a state or federal court situated in The City of New York, Borough of Manhattan, in connection with
any dispute arising hereunder. The parties hereby waive their right to trial by .jury in any proceeding involving, directly or
indirectly, any matter in any way arising our of, relating to, or connected with, this Agreement. To the extent that in any jurisdiction
any party may now or hereafter be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (before
or after judgment) or other legal process, each party irrevocably agrees not to claim, and it hereby waives, such immunity in connection
with this Agreement. The Company and each Secured Party each waives personal service of process and consents to service of process
by certified or registered mail, return receipt requested, directed to it at the address last specified for notices hereunder,
and such service shall be deemed completed ten (10) calendar days after the same is so mailed. Nothing herein shall affect the
right of any party to serve legal process in any manner permitted by law or affect its right to bring any action in any other court.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(d)Limitation
on Liability of Secured Parties to Each Other. None of the Secured Parties or any of their respective directors, officers,
agents or employees, shall have any liability for any action taken or omitted to be taken by it or them or by the Agent in connection
with the Purchase Agreement, the Notes, the Security Documents or this Agreement (or any other documents executed pursuant thereto)
unless resulting from its gross negligence or willful misconduct.

 

(e)Severability.
If any provision of this Agreement, or the application thereof to any Person, place, or circumstance, shall be held by a court
of competent jurisdiction to be invalid, unenforceable, or void, the remainder of this Agreement and such provisions as applied
to other Persons, places and circumstances shall remain in full force and effect.

 

(f)Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered to the other parties hereto. In the event that
any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf
such signature page is executed) with the same force and effect as if such signature page were an original thereof.

    	11

    	 

    
 

(g)Headings; Gender.
The headings of this Agreement are for convenience of reference and shall not form a part of, or affect the interpretation of,
this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine,
neuter, singular and plural forms thereof. The terms “including”, “includes”, “include” and
words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein”,
“hereunder”, “hereof” and words of like import refer to this entire Agreement instead of just the provision
in which they are found.

 

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

 

(i)Joinder.
At any time after the initial execution and delivery of this Agreement, one or more additional Persons may become parties hereto
as a Secured Party by executing and delivering the Counterpart Collateral Agency Agreement attached hereto as Exhibit A,
at which time such Person shall be entitled to all benefits of this Agreement as a Secured Party.

 

(j)Inconsistency
with Purchase Agreement. In the event of any inconsistency between the terms and conditions of the Purchase Agreement, any
other Security Document and this Agreement (i) with respect to the rights, duties or obligations of the Collateral Agent, the terms
and conditions of this Agreement shall govern and (ii) with respect to the rights, duties or obligations of the Company or the
Secured Parties, the terms and conditions of the Purchase Agreement, or such other Security Document, as applicable, shall control.

 

(k)Force Majeure.
The Collateral Agent shall not be responsible or liable for any failure or delay in the performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances beyond its control, including without limitation,
acts of God, earthquakes, fires, floods, wars, civil or military disturbances, terrorism, sabotage, epidemics, riots, loss or malfunctions
of utilities, acts of civil or military authority, or governmental, judicial or regulatory actions.

 

(l)Notices.
Any notice, election, instruction, direction, request, demand, report or statement which by any provision of this Agreement is
required or permitted to be given or served hereunder shall be in writing and shall be given or served by: (i) hand delivery against
receipt; (ii) next day delivery by any nationally recognized overnight courier service providing evidence of the date of delivery;
(iii) certified mail return receipt requested, postage prepaid; or (iv) facsimile with receipt confirmation and a confirmation
copy sent in the manner provided in clauses (1), (ii) or (iii). Any notice shall be addressed to the addresses set forth below
or to such other address as shall be designated by such party in a written notice to the other parties.

 

	 	If to a Secured Party:	The respective address as indicated on the Schedule of Buyers attached to the Securities Purchase Agreement.
	 	 	 
	 	If to Collateral Agent:	Worldwide Stock Transfer LLC
 433 Hackensack ave
 Level L

 

    	12

    	 

    
 

	 	 	
        Hackensack, NJ 07601

        Attn:Jonathan Gellis

        Ref:WPCS International Incorporated

        Tel.:(201) 820-2008

        Fax:(201) 820-2010

	 	 	 
	 	If to Company:	
        WPCS International Incorporated

        One East Uwchlan Avenue

        Suite 301

        Exton, PA 19341

        Attn: Chief Executive Officer

        Telephone: (610) 903-0400

        Facsimile: (610) 903-0401

        E-mail address: andy.hidalgo@wpcs.com

        Attention: Chief Executive Officer

	 	 	 
	 	With a copy, which shall not constitute notice to:	
        Sichenzia Ross Friedman Ference LLP

        61 Broadway, 32nd Floor

        New York, New York 10006

        Telephone: (212) 930-9700

        Facsimile: (212) 930-9725

        E-mail address: trose@srff.com

        Attention: Thomas A. Rose, Esq.

  

 

All notices, elections,
requests, instructions, directions, reports, statements and demands under this Agreement shall be effective upon actual receipt.

 

(m)Instructions
to Collateral Agent. The undersigned Secured Parties hereby certify that they constitute all of the Secured Parties as of the
date hereof and, the undersigned Secured Parties, by executing their counterpart signature pages of this Agreement, hereby instruct
the Collateral Agent to execute and deliver this Agreement. In order to induce the Collateral Agent to so execute and deliver this
Agreement, the undersigned Secured Parties hereby certify that (i) they have reviewed and approved of this Agreement, and (ii)
this instruction and such action by the Collateral Agent pursuant to this instruction are not contrary to any obligation of the
Collateral Agent under, and are consistent with, permitted by and in compliance with the Purchase Agreement and the Security Documents.
In order to induce the Agent to take the foregoing requested action, the undersigned Secured Parties (on a several, but not joint
basis) hereby agree to indemnify each Indemnitee for, and agree to hold each Indemnitee harmless against, those liabilities, losses
or expenses (including, without limitation, reasonable legal and other professional fees and expenses) incurred by an Indemnitee
in connection with or arising out of the taking by Worldwide Stock Transfer LLC, as Collateral Agent, except to the extent resulting
from or arising out of the gross negligence or willful misconduct of any Indemnitee as finally determined by a court of competent
jurisdiction, of the foregoing requested action.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

    	13

    	 

    
 

IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day
and year first above written

 

	 	WPCS INTERNATIONAL INCORPORATED
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	By:	
	 	 	Name:
	 	 	Title:
	 	 	 
	 	WORLDWIDE STOCK TRANSFER
	 	     LLC, as Collateral Agent 
	 	 	 
	 	 	 
	 	 	 
	 	By:	
	 	 	Name:
	 	 	Title:

 

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written

 

 

	 	HUDSON BAY MASTER FUND LTD.,
	 	     as a Secured Party 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written

 

 

	 	IROQUOIS MASTER FUND LTD.,
	 	     as a Secured Party 
	 	 
	 	 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written

 

	 	AMERICAN CAPITAL MANAGEMENT LLC,
	 	     as a Secured Party 
	 	 
	 	 
	 	 
	 	By:	
	 	 	Name:
	 	 	Title:

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written

 

	 	BAY CAPITAL A.G.,
	 	     as a Secured Party 
	 	 
	 	 
	 	 
	 	By:	
	 	 	Name:
	 	 	Title:

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written

 

	 	GRQ CONSULTANTS, INC. 401K,
	 	     as a Secured Party 
	 	 
	 	 
	 	 
	 	By:	
	 	 	Name:
	 	 	Title:

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written

 

 

	 	 	____________________________
	 	 	RICHARD MOLINSKY, as a Secured Party

 

    	 

    	 

    

Exhibit A

 

Counterpart
Collateral Agency Agreement (Secured Party)

 

IN WITNESS WHEREOF,
the undersigned has caused this Counterpart Collateral Agency Agreement, dated as of ___________________ (this “Counterpart”),
to be duly executed and delivered by its duly authorized officer. Upon execution and delivery of this Counterpart to Collateral
Agency Agreement, the undersigned shall be a “Secured Party” under the Collateral Agency Agreement and shall be as
fully a party to the Collateral Agency Agreement dated as of _________________, by and among WPCS International Incorporated, a
Delaware corporation, the Collateral Agent and the Secured Parties listed on the signature pages thereof; as if such Secured Party
were an original signatory to the Collateral Agency Agreement on and after the date hereof.

 

 

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	By:	
	 	 	Name:
	 	 	Title:

 

 

	 	
        Address for Notice:

 

_____________________________________

_____________________________________

_____________________________________

Attn: _________________________________

Telephone: _____________________________

Facsimile: ______________________________

Email: _________________________________

         

	 	
        With a copy, which shall not constitute

        notice to:

        Attn: _________________________________

        Telephone: _____________________________

        Facsimile: ______________________________

        Email: _________________________________

 

    	Exhibit A

    	 

    

Exhibit B

 

 

Securities Purchase Agreement

 

See attached.

    	Exhibit BExhibit 10.1

 

 

 

 

License
Agreement

 

 

By
And Between

 

  

Novartis
institutes for biomedical research, inc. 

 

And

 

Marina
Biotech, Inc.

 

 

 

 

 

 

    	 

    	 

    

	1.	DEFINITIONS AND INTERPRETATION	1
	 	 	 
	2.	LICENSES	5
	 	 	 
	3.	DISCLOSURE AND TRANSFER OF MARINA KNOW-HOW AND COOPERATION	7
	 	 	 
	4.	FINANCIAL PROVISIONS	7
	 	 	 
	5.	PAYMENT TERMS	7
	 	 	 
	6.	CONFIDENTIALITY	8
	 	 	 
	7.	EVENT OF DEFAULT	10
	 	 	 
	8.	TERM; RIGHTS IN BANKRUPTCY	10
	 	 	 
	9.	REPRESENTATIONS, WARRANTIES AND COVENANTS	11
	 	 	 
	10.	INDEMNIFICATION; LIABILITY	15
	 	 	 
	11.	PUBLICATIONS AND PUBLICITY	18
	 	 	 
	12.	GENERAL PROVISIONS	20

 

 

 

EXHIBIT A – Marina
PATENTS

 

EXHIBIT B – PRESS RELEASE

 

 

    	 

    	 

    

LICENSE AGREEMENT

 

This LICENSE AGREEMENT
(“Agreement”) is made as of this ___ day of August, 2012 (“Effective Date”), by and between
Novartis Institutes for BioMedical Research, Inc., a Delaware corporation (“Novartis”) and Marina Biotech, Inc.,
a Delaware corporation (“Marina”). Novartis and Marina are each
referred to individually as a “Party” and together as the “Parties.”

 

RECITALS

 

WHEREAS, Marina
has developed a proprietary platform for creating novel oligonucleotide therapeutics and owns or Controls (as defined below) certain
intellectual property relating thereto;

 

WHEREAS, Novartis wishes
to obtain, and Marina wishes to grant, a license to such intellectual property on
the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration
of the mutual covenants and agreements herein contained, the Parties agree as follows.

 

		1.	DEFINITIONS AND INTERPRETATION

 

		1.1	Definitions. Unless the context otherwise requires, the terms in this Agreement with initial letters
capitalized, shall have the meanings set forth below, or the meaning as designated in the indicated places throughout this Agreement.

 

“Affiliate”
means, with respect to a Party, any Person that controls, is controlled by, or is under common control with that Party. For the
purpose of this definition, “control” shall mean, direct or indirect, ownership of fifty percent (50%) or more of the
shares of stock entitled to vote for the election of directors, in the case of a corporation, or fifty percent (50%) or more of
the equity interest in the case of any other type of legal entity, status as a general partner in any partnership, or any other
arrangement whereby the entity or person controls or has the right to control the board of directors or equivalent governing body
of a corporation or other entity, or the ability to cause the direction of the management or policies of a corporation or other
entity. In the case of entities organized under the laws of certain countries, the maximum percentage ownership permitted by law
for a foreign investor may be less than fifty percent (50%), and in such case such lower percentage shall be substituted in the
preceding sentence, provided, that such foreign investor has the power to direct the management and policies of such entity.
In the case of Novartis, “Affiliates” shall also be deemed to include the Novartis Institute for Functional Genomics,
Inc. (also known as the Genomics Institute of the Novartis Research Foundation), the Friedrich Miescher Institute for BioMedical
Research, and their respective Affiliates.

 

“Agreement” shall
have the meaning set forth in the preamble.

 

“Novartis Indemnitees”
shall have the meaning set forth in Section 10.1.

 

    	1

    	 

    
 

 

“Business Day” means any day that is not a Saturday, a Sunday,
or other day which is a recognized Federal holiday in the United States of America.

 

“Claims” means
all Third Party demands, claims, actions, proceedings and liabilities (whether criminal or civil, in contract, tort or otherwise)
for losses, damages, reasonable legal costs and other reasonable expenses of any nature whatsoever.

 

“Code” shall
have the meaning set forth in Section 8.2(a).

 

“Confidential Information”
means all Know-How and other proprietary information and data of a financial, commercial or technical nature which the disclosing
Party or any of its Affiliates has supplied or otherwise made available to the other Party or its Affiliates, whether made available
orally, in writing or in electronic form, including information comprising or relating to concepts, discoveries, inventions, data,
designs or formulae in relation to this Agreement. For purposes hereof, this Agreement and the terms hereof shall be deemed to
be the Confidential Information of both Parties, subject to the rights of disclosure set forth in Section 11.2(b) and (c)..

 

“Control”
or “Controlled” means, with respect to any Know How, Patents, other intellectual property rights, or any
proprietary or trade secret information, the legal authority or right (whether by ownership, license or otherwise) of a Party
to grant a license or a sublicense of or under such Know How, Patents, or intellectual property rights to another Person, or to
otherwise disclose such proprietary or trade secret information to another Person, without breaching the terms of any agreement
with a Third Party, or misappropriating the proprietary or trade secret information of a Third Party.

 

“CRN” means
a nucleotide analog with a linker connecting C2’ and C4’ carbons of the ribose ring.

 

“CRN Data”
means all data and information Controlled by Marina relating to the structure, activity
and/or other characteristics of the CRN Platform Technology.

 

“CRN Platform Technology”
generally means compounds containing one or more CRN, and including any Technology Improvements, as in existence as of the Effective
Date.

 

“Effective Date”
shall have the meaning set forth in the first paragraph of this Agreement.

 

“Encumbrance”
means any claim, charge, equitable interest, hypothecation, lien, mortgage, pledge, option, license, assignment, power of sale,
retention of title, right of pre-emption, right of first refusal or security interest of any kind.

 

“Event of Default”
shall have the meaning set forth in Section 7.1.

 

“Field” shall
mean all uses and purposes for the development of human therapeutics.

 

    	2

    	 

    
 

 

“Force Majeure Event”
shall have the meaning set forth in Section 12.5.

 

“Indemnification Claim
Notice” shall have the meaning set forth in Section 10.3(b).

 

“Indemnified Party”
shall have the meaning set forth in Section 10.3(b).

 

“Indemnifying Party”
shall have the meaning set forth in Section 10.3(b).

 

“Know-How”
means all technical information, know-how and data, including inventions (whether patentable or not), discoveries, trade secrets,
specifications, instructions, processes, formulae, materials, expertise and other technology applicable to compounds, biologics,
formulations, compositions, products or to their manufacture, development, registration, use or commercialization or methods of
assaying or testing them or processes for their manufacture, formulations containing them, compositions incorporating or comprising
them and including all biological, chemical, pharmacological, biochemical, toxicological, pharmaceutical, physical and analytical,
safety, quality control, manufacturing, preclinical and clinical data, instructions, processes, formulae, expertise and information,
regulatory filings and copies thereof, relevant to the development, manufacture, use or commercialization of and/or which may be
useful in studying, testing, development, production or formulation of products, or intermediates for the synthesis thereof.

 

“MAA”
means an application for the authorization to market a Product in any country or group of countries outside the United States,
as defined in the applicable laws and regulations and filed with the Regulatory Authority of a given country or group of countries.

 

“Marina
Know-How” means the Know-How owned or Controlled by Marina or its Affiliates
as of the Effective Date relating to the CRN® Platform Technology. The Marina
Know-How shall also include the CRN Data.

 

“Marina
Patents” means the Patents identified in Exhibit A and any other Patents owned or Controlled by Marina
or its Affiliates as of the Effective Date that have claims covering the CRN Platform Technology.

 

“Marina
Technology” means Marina Patents and Marina
Know-How.

 

“Marina
Indemnitees” shall have the meaning set forth in Section 10.2.

 

“Party” shall
have the meaning set forth in the preamble.

 

“Patents”
means all patents and patent applications, author certificates, inventor certificates, utility certificates, improvement patents
and models and certificates of addition and all foreign counterparts of them and including all divisionals, continuations, substitutions,
continuations-in-part, re-examinations, reissues, additions, renewals, extensions, registrations, and supplemental protection certificates
and the like of any of the foregoing.

 

    	3

    	 

    
 

 

“Person” means
any individual, partnership, limited liability company, firm, corporation, association, trust, unincorporated organization or other
entity.

 

“Product” means
any product or process covered by a claim in a Marina Patent or utilizing or incorporating Marina
Know-How.

 

“Regulatory Authority”
means any governmental agency or authority responsible for granting regulatory approvals for Products, including the United
States Food and Drug Administration, the European Medicines Agency, or any successor entities thereto and any corresponding national
or regional regulatory authorities.

 

“Regulatory Filings”
means any submission to a Regulatory Authority of any appropriate regulatory application, and shall include, without limitation,
any submission to a regulatory advisory board, MAA, and any supplement or amendment thereto. For the avoidance of doubt, Regulatory
Filings shall include any Investigational New Drug (IND), New Drug Application (NDA) or the corresponding application in any other
country or group of countries.

 

“Term” means
the term of this Agreement as set forth in Section 8.1.

 

“Territory” means
all countries of the world.

 

“Third Party”
means any Person other than a Party or an Affiliate of a Party.

 

“United States”
or “US” means the United States of America, its territories and possessions.

 

“USD” or “US$”
means the lawful currency of the United States.

 

		1.2	Interpretation. In this agreement unless otherwise specified:

 

		(a)	“includes” and “including” shall mean respectively includes and including
without limitation;

 

		(b)	a Party includes its permitted assignees and/or their respective permitted successors in title
to substantially the whole of its undertaking;

 

		(c)	a statute or statutory instrument or any of their provisions is to be construed as a reference
to that statute or statutory instrument or such provision as the same may have been or may from time to time hereafter be amended
or re-enacted;

 

		(d)	words denoting the singular shall include the plural and vice versa and words denoting any gender
shall include all genders;

 

		(e)	the Exhibits and other attachments form part of the operative provision of this Agreement and references
to this Agreement shall, unless the context otherwise requires, include references to the Exhibits and attachments;

 

    	4

    	 

    
 

 

		(f)	the headings in this Agreement are for information only and shall not be considered in the interpretation
of this Agreement;

 

		(g)	general words shall not be given a restrictive interpretation by reason of their being preceded
or followed by words indicating a particular class of acts, matters or things; and

 

		(h)	the Parties agree that the terms and conditions of this Agreement are the result of negotiations
between the Parties and that this Agreement shall not be construed in favor of or against any Party by reason of the extent to
which any Party participated in the preparation of this Agreement.

 

		2.	LICENSES

 

		2.1	License Grant. Subject to the terms and conditions of this Agreement, Marina
hereby grants to Novartis and its Affiliates a non-exclusive, irrevocable, perpetual, royalty-free, fully paid-up license, with
the right to grant sublicenses as permitted in Section 2.2 of this Agreement, under the Marina
Technology to research, develop, make, have made, use, import, offer for sale, sell, have sold, commercialize and otherwise exploit
any Product in the Field in the Territory.

 

		2.2	Sublicense Rights. Novartis may sublicense to a Third Party the rights granted to it by Marina
under Section 2.1 of this Agreement at any time at its sole discretion, but only in connection with the research, manufacturing,
development and or commercialization of a Novartis Product by Novartis or its Affiliates, by such Third Party or its Affiliates
or by any of such Persons as part of a collaboration. A “Novartis Product” means any Product with respect to
which Novartis or any of its Affiliates has conducted research, manufacturing, development and /or commercialization activities
that are material to such Product.

 

		3.	DISCLOSURE AND TRANSFER OF MARINA KNOW-HOW AND COOPERATION

 

		3.1	Disclosure and Transfer of Marina Know-How. As soon
as reasonably possible after the Effective Date (and in any event within ten (10) days after the Effective Date), Marina,
without additional consideration, shall use good faith, diligent efforts to disclose to Novartis or its designated Affiliate all
Marina Know-How in existence as of the Effective Date and shall provide such copies
of any existing tangible embodiment thereof in written or electronic form as may be reasonably requested by Novartis, including
delivery of an electronic copy of the CRN Data in a commonly usable format (to the extent in existence on the date hereof). Such
disclosures shall include all Marina Know-How and any other data, information and
documents known to and Controlled by Marina as of the Effective Date which may be
necessary or useful to Novartis to practice the licenses granted hereunder efficiently.

 

		3.2	Cooperation. Upon request by Novartis within a reasonable period after disclosure by Marina
of the Marina Know-How and other data, information and documents pursuant to Section
3.1 of this Agreement, Marina will provide reasonable assistance to Novartis or its
designated Affiliate in connection with understanding and using the Marina Know-How
for purposes consistent with licenses and rights granted to Novartis hereunder; provided, that Novartis shall promptly pay
or reimburse Marina for any travel or other out-of-pocket expenses incurred by Marina
in connection with providing such assistance requested by Novartis.

 

    	5

    	 

    
 

 

		4.	FINANCIAL PROVISIONS

 

		4.1	Upfront Payment. In consideration of the licenses and rights granted to Novartis hereunder, Novartis
shall pay to Marina a one-time upfront payment of One Million Dollars (US$1,000,000).
Such upfront payment shall be paid within five (5) Business Days after receipt by Novartis of an invoice to be issued no earlier
than the Effective Date.

 

		5.	PAYMENT TERMS

 

		5.1	Payment Terms. All payments from Novartis to Marina
shall be made by wire transfer to the credit of such bank account as may be designated by Marina
in this Agreement or in writing to Novartis. Any payment which falls due on a date which is not a Business Day may be made on the
next succeeding Business Day.

 

		5.2	Currency. All payments under this Agreement shall be payable in US dollars.

 

		5.3	Taxes. Marina will pay any and all taxes levied on
account of any payments made to it under this Agreement.

 

		6.	CONFIDENTIALITY

 

		6.1	Duty of Confidence. Subject to the other provisions of this Section 6, all Confidential Information
disclosed by a Party or its Affiliates under this Agreement will be maintained in confidence and otherwise safeguarded by the recipient
Party. The recipient Party may only use the Confidential Information for the purposes of this Agreement and pursuant to the rights
granted to the recipient Party under this Agreement. Subject to the other provisions of this Section 6, each Party shall hold as
confidential such Confidential Information of the other Party or its Affiliates in the same manner and with the same protection
as such recipient Party maintains its own confidential information. Subject to the other provisions of this Section 6, a recipient
Party may only disclose Confidential Information of the other Party to employees, agents, contractors, consultants and advisers
of the Party and its Affiliates and sublicensees and to Third Parties to the extent reasonably necessary for the purposes of, and
for those matters undertaken pursuant to, this Agreement; provided, that such Persons are bound to maintain the confidentiality
of the Confidential Information in a manner consistent with the confidentiality provisions of this Agreement.

 

    	6

    	 

    
 

 

		6.2	Exceptions. The obligations under this Section 6 shall not apply to any information to the extent
the recipient Party can demonstrate by competent evidence that such information:

 

		(a)	is (at the time of disclosure) or becomes (after the time of disclosure) generally known to the
public or part of the public domain through no breach of this Agreement by the recipient Party or its Affiliates;

 

		(b)	was known to, or was otherwise in the possession of, the recipient Party or its Affiliates prior
to the time of disclosure by the disclosing Party or any of its Affiliates;

 

		(c)	is disclosed to the recipient Party or an Affiliate on a non-confidential basis by a Third Party
who is entitled to disclose it without breaching any confidentiality obligation to the disclosing Party or any of its Affiliates;
or

 

		(d)	is independently developed by or on behalf of the recipient Party or its Affiliates, as evidenced
by its written records, without reference to the Confidential Information disclosed by the disclosing Party or its Affiliates under
this Agreement.

 

Specific aspects or details of
Confidential Information shall not be deemed to be within the public domain or in the possession of the recipient Party merely
because the Confidential Information is embraced by more general information in the public domain or in the possession of the recipient
Party. Further, any combination of Confidential Information shall not be considered in the public domain or in the possession of
the recipient Party merely because individual elements of such Confidential Information are in the public domain or in the possession
of the recipient Party unless the combination and its principles are in the public domain or in the possession of the recipient
Party.

 

		6.3	Authorized Disclosures.

 

		(a)	In addition to disclosures allowed under Section 6.2, Novartis may disclose Confidential Information
belonging to Marina or its Affiliates to the extent such disclosure is necessary
in the following instances: (i) filing or prosecuting Patents as permitted by this Agreement; and (ii) in connection with Regulatory
Filings for Products. In addition, Novartis may disclose Confidential Information belonging to Marina
or its Affiliates to the extent such disclosure is necessary in connection with prosecuting or defending litigation as permitted
by this Agreement; provided, that Novartis (A) informs Marina as soon as reasonably
practicable of the proposed disclosure; and (B) shall use commercially reasonable efforts (but in no event less than the efforts
used by Novartis with respect to confidential information derived from its other drug development and commercialization efforts)
to limit the disclosure for the required purpose and to obtain protections to maintain the confidentiality of such Marina
Confidential Information.

 

    	7

    	 

    
 

 

		(b)	In addition, Novartis may disclose Confidential Information of Marina
to Novartis Affiliates and sublicensees permitted under Section 2.2; provided, that such Novartis Affiliates and
sublicensees are bound in writing to maintain the confidentiality of such Confidential Information in a manner consistent with
the confidentiality provisions of this Agreement.

 

		(c)	In addition, Novartis and its Affiliates and sublicensees may disclose Confidential Information
of Marina to Third Parties as may be necessary or useful in connection with the development,
manufacture or commercialization of Products; provided, that such Third Parties are bound in writing to maintain the confidentiality
of such Confidential Information in a manner consistent with the confidentiality provisions of this Agreement.

 

		(d)	In the event the recipient Party is required to disclose Confidential Information of the disclosing
Party by law or in connection with bona fide legal process, such disclosure shall not be a breach of this Agreement; provided,
that the recipient Party (i) informs the disclosing Party as soon as reasonably practicable of the required disclosure; (ii) limits
the disclosure to the required purpose; and (iii) at the disclosing Party’s request and expense, assists in the disclosing
Party’s attempt to object to or limit the required disclosure.

 

		(e)	Notwithstanding anything to the contrary contained in this Article 6 or Article 11 of this Agreement,
Marina shall be permitted to disclose a copy of this Agreement to (a) Marina’s
current or prospective banks, financial institutions, investors or other Third Parties for the purpose of raising capital or borrowing
money or maintaining compliance with agreements, arrangements and understandings relating thereto, and (b) to any Person who proposes
to be an assignee or to purchase or otherwise succeed (by merger, operation of law or otherwise) to all of Marina’s
right, title and interest in, to and under this Agreement, if (1) such Person agrees to maintain the confidentiality of this Agreement
pursuant to a written agreement at least as protective as the terms set forth in this Article 6 (with the exception of the term
of the obligation of confidentiality, which may be for a specified term of years) and (2) any such assignment, purchase or succession
would be permitted under Section 12.1 hereof.

 

 

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		7.	EVENT OF DEFAULT

 

		7.1	Event of Default. The rejection of this Agreement under section 365 of the Code by Marina
shall constitute an event of default (an “Event of Default”) by Marina
under this Agreement.

 

		7.2	Breach by Novartis. Upon material breach of any representation, warranty or covenant by Novartis
under this Agreement, Marina may notify Novartis of such breach and require that
Novartis cure such breach, which cure period shall be not shorter than ninety (90) days following Marina’s
notice for any such breach. In the event Novartis shall not have cured such breach by the end of the applicable cure period, Marina
may terminate this Agreement immediately upon written notice to Novartis. Notwithstanding the foregoing cure period, non-payment
of the upfront license fee within the time period set forth in Section 4.1, shall automatically and immediately terminate this
Agreement.

 

		7.3	Termination for Other Marina Breach. Upon material
breach of any representation, warranty or covenant by Marina under this Agreement,
Novartis may notify Marina in writing of such Default and require that Marina
cure such Default within ninety (90) days of Novartis’s notice. In the event Marina
shall not have cured the Default by the end of the cure period, Novartis may terminate this Agreement immediately upon written
notice to Marina.

 

 

 

		8.	TERM; RIGHTS IN BANKRUPTCY 

 

		8.1	Term. Subject to Section 8.2, the term of this Agreement (the “Term”) is perpetual
and shall continue indefinitely following the Effective Date.

 

		8.2	Termination for Event of Default. Novartis may terminate this Agreement immediately upon written
notice to Marina upon the occurrence of an Event of Default.

 

		8.3	Rights in Bankruptcy.

 

		(a)	The Parties agree that this Agreement constitutes an executory contract under Section 365 of the
US Bankruptcy Code (the “Code”) for the license of “intellectual property” as defined under Section
101 of the Code and constitutes a license of “intellectual property” for purposes of any similar laws in any other
country in the Territory. The Parties further agree that Novartis, as licensee of such rights under this Agreement, may retain
and may fully exercise all of its protections, rights, and elections under the Code, including, but not limited to, Section 365(n)
of the Code, and any similar laws in any other country in the Territory. The Parties further agree that, in the event of the commencement
of a bankruptcy case by or against any Marina under the Code, and in the event that
MARINA rejects this Agreement and Novartis elects to retain its rights under Section 365(n)(1)(B) of the Code. Novartis will be
entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments
of such intellectual property then existing, and the same, if not already in its possession, will be promptly delivered to following
the rejection of this Agreement by or on behalf of Marina.

 

    	9

    	 

    
 

 

		(b)	All rights, powers and remedies of Novartis provided for in this Section 8.3 are in addition to
and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including,
without limitation, under the Code and any similar laws in any other country in the Territory). In the event of the commencement
of a bankruptcy case by or against Marina under the Code, Novartis, in addition to
the rights, power and remedies expressly provided herein, shall be entitled to exercise all other such rights and powers and resort
to all other such remedies as may now or hereafter exist at law or in equity (including, without limitation, under the Code), subject
to any requirements of the Code relating to relief from the automatic stay with respect to Novartis’s exercise of such rights
or remedies). The Parties agree that they intend the following Novartis rights to extend to the maximum extent permitted by law,
including, without limitation, for purposes of and consistent with the provisions of the Code: (i) the right of access to any such
intellectual property (including all embodiments thereof) of Marina licensed or sublicensed
to Novartis pursuant to this Agreement, or any Third Party with whom Marina contracts
to perform an obligation of Marina under Section 3.1 of this Agreement which is necessary
for the development, registration, manufacture and/or commercialization of Products in the Territory; (ii) the right to contract
directly with any Third Party described in (i) to complete the contracted work, and (iii) the right to cure any breach of or default
under any such agreement with a Third Party and set off the costs thereof against amounts payable to Marina
under this Agreement.

 

		9.	REPRESENTATIONS, WARRANTIES AND COVENANTS

 

		9.1	Representations and Warranties by Each Party. Each Party represents and warrants to the other as
of the Effective Date that:

 

		(a)	it is a corporation duly organized, validly existing, and in good standing under the laws of its
jurisdiction of formation;

 

		(b)	it has full corporate power and authority to execute, deliver, and perform this Agreement, and
has taken all corporate action required by law and its organizational documents to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated by this Agreement;

 

		(c)	this Agreement constitutes a valid and binding agreement enforceable against it in accordance with
its terms;

 

		(d)	all consents, approvals and authorizations from all governmental authorities or other Third Parties
required to be obtained by such Party in connection with the execution, delivery and performance of this Agreement have been obtained;
and

 

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		(e)	the execution and delivery of this Agreement and all other instruments and documents required to
be executed pursuant to this Agreement, and the consummation of the transactions contemplated hereby do not (i) conflict with or
result in a breach of any provision of its organizational documents, (ii) result in a breach of any agreement to which it is a
party; or (iii) violate any law.

 

		9.2	Representations and Warranties by Marina. Marina
represents and warrants to Novartis as of the Effective Date that:

 

		(a)	Exhibit A sets forth a complete and accurate list of all Marina
Patents;

 

		(b)	Marina has obtained from all individuals who participated
in any respect in the invention or authorship of any Marina Technology effective
assignments of all ownership rights of such individuals in such Marina Technology,
either pursuant to written agreement or by operation of law;

 

		(c)	All of Marina’s employees, officers, and consultants
have executed agreements or have existing obligations under applicable laws requiring assignment to Marina
of all inventions made during the course of and as the result of their association with Marina
and obligating the individual to maintain as confidential Marina’s Confidential
Information as well as confidential information of other parties (including Novartis and its Affiliates, although they may not
be specifically referenced by name) which such individual may receive, to the extent required to support Marina’s
obligations under this Agreement;

 

		(d)	Marina has all necessary legal rights and authority
to grant the licenses and rights granted under this Agreement and has not assigned, transferred, conveyed or licensed its right,
title and interest in the Licensed Technology in any manner inconsistent with such license grant or the other terms of this Agreement.;

 

		(e)	Marina has all necessary legal rights and authority
to use and disclose and to enable Novartis to use and disclose (in each case under appropriate conditions of confidentiality) the
Marina Know-How;

 

		(f)	To Marina’s knowledge, the issued patents in
the Marina Patents are valid and enforceable without any claims, challenges, oppositions,
interference or other proceedings pending or, to Marina’s knowledge, threatened
and Marina has filed and prosecuted patent applications within the Marina
Patents in good faith and, to Marina’s knowledge, complied with all duties
of disclosure with respect thereto;

 

		(g)	To Marina’s knowledge, Marina
has not committed any act, or omitted to commit any act, that may cause the Marina
Patents to expire prematurely or be declared invalid or unenforceable;

 

		(h)	All application, registration, maintenance and renewal fees in respect of the Marina
Patents as of the Effective Date have been paid and all necessary documents and certificates have been filed with the relevant
agencies for the purpose of maintaining the Marina Patents;

 

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		(i)	To Marina’s knowledge, the practice of the
Marina Technology does not infringe Patents or misappropriate Know-How of any Third
Party, nor has Marina received any written notice alleging such infringement or misappropriation;

 

		(j)	Marina has not initiated or been involved in any
proceedings or claims in which it alleges that any Third Party is or was infringing the Marina
Patents or misappropriating any Marina Know-How, nor have any such proceedings
been threatened by Marina, nor does Marina
know of any valid basis for any such proceedings;

 

		(k)	Marina has taken all reasonable precautions to preserve
the confidentiality of the Marina Know-How;

 

		(l)	Marina has not entered into a government funding
relationship that would result in rights to any Products residing in the US Government, National Institutes of Health, National
Institute for Drug Abuse or other agency, and the licenses granted hereunder are not subject to overriding obligations to the US
Government as set forth in Public Law 96-517 (35 U.S.C. 200-204), as amended, or any similar obligations under the laws of any
other country;

 

		(m)	Subject to Section 9.2, Marina has not granted any
Third Party rights that would otherwise interfere or be inconsistent with Novartis’s rights hereunder, and there are no agreements
or arrangements to which Marina or any of its Affiliates is a party relating to the
Products, Marina Patents, Marina Know-How
or that would limit the rights granted to Novartis under this Agreement or that restrict or will result in a restriction on Novartis’
ability to develop, manufacture, register, use or commercialize the Products in the Territory; and

 

		(n)	Marina has not failed to disclose to Novartis any
fact or circumstance known to Marina and relating to any of the Marina
Technology that would be reasonably material to Novartis in determining to enter into this Agreement or the transactions contemplated
herein.

 

		9.3	Novartis acknowledges that MARINA has granted rights to practice certain Marina
Patents (a) to Mirna Therapeutics, Inc. (“Mirna”) solely in connection with the development and commercialization of
a limited number of specified proprietary compounds belonging to Mirna and (b) to ProNai Therapeutics, Inc. (“ProNai”)
in connection with DNAi human therapeutic use. DNAi does not include RNAi, antisense and microRNA oligonucleotides that base pair
with mRNAs, microRNAs or pre-mRNAs to affect expression of a gene, directly or indirectly). The Parties agree that the foregoing
grants do not interfere with, are not otherwise inconsistent with, and do not limit the rights granted to Novartis in Section 2.1.

 

 

    	12

    	 

    

 

		9.4	Covenants of Marina. Marina
covenants and agrees that:

 

		(a)	it will not grant any interest in the Marina Technology
which is inconsistent with the terms and conditions of this Agreement;

 

		(b)	if, at any time after execution of this Agreement, it becomes aware that it or any employee, agent
or subcontractor of Marina who participated, or is participating, in the performance
of any activities hereunder is on, or is being added to the FDA Debarment List or any of the three (3) FDA Clinical Investigator
Restriction Lists referenced in Section 14.1(f), it will provide written notice of this to Novartis within two (2) Business Days
of its becoming aware of this fact;

 

		(c)	it shall maintain insurance with respect to its indemnification obligations under this Agreement
in such amounts as are commercially reasonable in the industry for companies conducting similar business and shall require any
of its Affiliates undertaking activities under this Agreement to do the same.

 

		9.5	No Other Warranties. EXCEPT AS EXPRESSLY STATED IN THIS SECTION 9, (A) NO REPRESENTATION, CONDITION
OR WARRANTY WHATSOEVER IS MADE OR GIVEN BY OR ON BEHALF OF ASTRNovartisENECA OR MARINA;
AND (B) ALL OTHER CONDITIONS AND WARRANTIES WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE ARE HEREBY EXPRESSLY EXCLUDED, INCLUDING
ANY CONDITIONS AND WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.

 

		10.	INDEMNIFICATION; LIABILITY

 

		10.1	Indemnification by Marina. Marina
shall defend, indemnify, and hold Novartis, its Affiliates, and their respective officers, directors, employees and agents, and
all successors and assigns of any of the foregoing (“Novartis Indemnitees”) harmless from and against any Claims against
them to the extent arising or resulting from:

 

		(a)	the gross negligence or willful misconduct of Marina
or any of its Affiliates; or

 

		(b)	the breach of any of the covenants, representations or warranties made by Marina
to Novartis under this Agreement;

 

provided, however,
that Marina shall not be obliged to so indemnify, defend and hold harmless the Novartis
Indemnitees for any Claims to the extent that Novartis has an obligation to indemnify Marina
Indemnitees pursuant to Section 10.2 or to the extent that such Claims arise from the breach, gross negligence or willful misconduct
of Novartis or a Novartis Indemnitee.

 

		10.2	Indemnification by Novartis. Novartis
shall defend, indemnify, and hold Marina, its Affiliates, and their respective
officers, directors, employees and agents, and all successors and assigns of any of the foregoing (“Marina
Indemnitees”) harmless from and against any Claims against them to the extent arising or resulting from:

 

		(a)	the gross negligence or willful misconduct of Novartis or any of its Affiliates or sublicensees;

 

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		(b)	the breach of any of the covenants, representations or warranties made by Novartis
to Marina under this Agreement; or

 

(c) the exercise or practice
by Novartis, its Affiliates or Sublicensees of the license granted to Novartis under Sections 2.1 (excluding any such Claim that
alleges that the exercise or practice of the MARINA Technology infringes a patent or misappropriates other intellectual property
of a Third Party); or

 

(d) the development, manufacture
or commercialization of any Product by or for Novartis, its Affiliates or Sublicensees;..

 

provided, however,
that Novartis shall not be obliged to so indemnify, defend and hold harmless the Marina
Indemnitees for any Claims to the extent that Marina has an obligation to indemnify
Novartis Indemnitees pursuant to Section 10.1 or to the extent that such Claims arise from the breach, gross negligence or willful
misconduct of Marina or the Marina
Indemnitee.

 

		10.3	Indemnification Procedure.

 

		(a)	For the avoidance of doubt, all indemnification claims in respect of a Novartis Indemnitee or Marina
Indemnitee shall be made solely by Novartis or Marina, respectively, on behalf of the Novartis Indemnitee or Marina
Indemnitee, as the case may be.

 

		(b)	A Party seeking indemnification hereunder (“Indemnified Party”) shall notify
the other Party (“Indemnifying Party”) in writing reasonably promptly after the assertion against the Indemnified
Party of any Claim or fact in respect of which the Indemnified Party intends to base a claim for indemnification hereunder (“Indemnification
Claim Notice”), but the failure or delay to so notify the Indemnifying Party shall not relieve the Indemnifying Party
of any obligation or liability that it may have to the Indemnified Party, except to the extent that the Indemnifying Party demonstrates
that its ability to defend or resolve such Claim is adversely affected thereby. The Indemnification Claim Notice shall contain
a description of the claim and the nature and amount of the Claim (to the extent that the nature and amount of such Claim is known
at such time). Upon the request of the Indemnifying Party, the Indemnified Party shall furnish promptly to the Indemnifying Party
copies of all correspondence, communications and official documents (including court documents) received or sent in respect of
such Claim.

 

		(c)	Subject to the provisions of sub-Section (d) below, the Indemnifying Party shall, within thirty
(30) days after receipt of the Indemnification Claim Notice, advise the Indemnified Party whether it is assuming the defense and
handling of such Claim, at the Indemnifying Party’s sole expense. The assumption of the defense of a Claim by the Indemnifying
Party shall not be construed as acknowledgement that the Indemnifying Party is liable to indemnify any indemnitee in respect of
the Claim, nor shall it constitute a waiver by the Indemnifying Party of any defenses it may assert against any Indemnified Party’s
claim for indemnification. In the event that it is ultimately decided that the Indemnifying Party is not obligated to indemnify
or hold an indemnitee harmless from and against the Claim, the Indemnified Party shall reimburse the Indemnifying Party for any
and all reasonable costs and expenses (including attorneys’ fees and costs of suit) incurred by the Indemnifying Party in
its defense of the Claim.

 

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		(d)	Upon assumption of the defense of a Claim by the Indemnifying Party: (i) the Indemnifying Party
shall have the right to and shall assume sole control and responsibility for dealing with the Claim; (ii) the Indemnifying Party
may, at its own cost, appoint as counsel in connection with conducting the defense and handling of such Claim any law firm or counsel
reasonably selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party (such consent not to be unreasonably
withheld or delayed); (iii) the Indemnifying Party shall keep the Indemnified Party informed of the status of such Claim; and (iv)
the Indemnifying Party shall have the right to settle the Claim on any terms the Indemnifying Party chooses; provided, however,
that it shall not, without the prior written consent of the Indemnified Party, agree to a settlement of any Claim which could lead
to liability for or create any financial or other obligation or restriction on the Indemnified Party for which the Indemnified
Party is not entitled to indemnification hereunder or which admits any wrongdoing or responsibility for the Claim on behalf of
the Indemnified Party. The Indemnified Party shall cooperate with the Indemnifying Party at the Indemnifying Party’s expense.
In particular, the Indemnified Party shall furnish such records, information and testimony, provide witnesses and attend such conferences,
discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith; subject to the right
of the Indemnified Party to obtain confidentiality protection in connection therewith consistent with the confidentiality provisions
of this Agreement. Such cooperation shall include access during normal business hours by the Indemnifying Party to, and reasonable
retention by the Indemnified Party of, records and information that are reasonably relevant to such Claim, and making the Indemnified
Party, the Novartis Indemnitees or Marina Indemnitees, as the case may be, and its and their employees and agents available on
a mutually convenient basis to provide additional information and explanation of any records or information provided. The Indemnified
Party shall be entitled to participate in, but not control, the defense of such Claim with its own counsel and at its own expense;
provided, however, that if the litigants in any such action include both the Indemnified Party and the Indemnifying Party
and legal counsel for the Indemnified Party shall have reasonably concluded in a written legal opinion delivered to the Indemnifying
Party that, by reason of certain bona fide defenses available to the Indemnified Party which are different from or additional to
those available to the Indemnifying Party, the interests of the Indemnified Party materially conflict with the interests of the
Indemnifying Party such that it would be unethical under applicable rules relating to attorney conflicts of interest for the Indemnifying
Party and such Indemnified Party to be represented by the same counsel with respect to such defense, the Indemnified Party shall
have the right to select one separate counsel and to assert such legal defenses, with the reasonable expenses and fees of such
separate counsel to be reimbursed by the Indemnifying Party as and when incurred.

 

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		(e)	If the Indemnifying Party fails to assume or conduct the defense and handling of any Claim in good
faith as provided in Section 10.3(c) and (d) above, the Indemnified Party may, at the Indemnifying Party’s expense, select
counsel reasonably acceptable to the Indemnifying Party (such consent not to be unreasonably withheld or delayed) in connection
with conducting the defense and handling of such Claim and defend or handle such Claim in such manner as it may deem appropriate;
provided, that the foregoing shall not be construed as a limitation on the Indemnified Party’s right to claim that
the Indemnifying Party has breached its obligations pursuant to this Section 10. In such event, the Indemnified Party shall keep
the Indemnifying Party timely apprised of the status of such Claim and the Indemnified Party shall have the right to settle the
Claim on any terms the Indemnified Party chooses; provided, however, that the Indemnified Party shall not, without
the prior written consent of the Indemnifying Party, agree to a settlement of any Claim which could lead to liability or create
any financial or other obligation on the part of the Indemnifying Party, other than its liability for indemnification of the Indemnified
Party as provided in this Article 10, or which admits any wrongdoing or responsibility for the claim on behalf of the Indemnifying
Party.

 

		10.4	Mitigation of Loss. Each Indemnified Party will take
and will procure that its Affiliates take all such reasonable steps and action as are necessary or as the Indemnifying Party may
reasonably require in order to mitigate any Claims (or potential losses or damages) under this Section 10. Nothing in this Agreement
shall or shall be deemed to relieve any Party of any common law or other duty to mitigate any losses incurred by it.

 

		10.5	Special, Indirect and Other Losses. NEITHER PARTY NOR
ANY OF ITS AFFILIATES SHALL BE LIABLE IN CONTRACT, TORT, NEGLIGENCE BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY SPECIAL, INDIRECT,
INCIDENTAL OR PUNITIVE DAMAGES OR FOR ANY ECONOMIC LOSS OR LOSS OF PROFITS SUFFERED BY THE OTHER PARTY, EXCEPT TO THE EXTENT ANY
SUCH DAMAGES ARE REQUIRED TO BE PAID TO A THIRD PARTY AS PART OF A CLAIM FOR WHICH A PARTY PROVIDES INDEMNIFICATION UNDER THIS
SECTION 10.

 

		10.6	No Exclusion. Neither Party excludes any liability for death or personal bodily injury caused by
its or its Affiliate’s (or, in the case of Novartis, its sublicensee’s) negligence or that of their respective employees,
agents or sub-contractors.

 

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		11.	PUBLICATIONS AND PUBLICITY

 

		11.1	Publications

 

		(f)	For the avoidance of doubt, Novartis or any of its Affiliates may, without any required consents
from Marina but subject to its confidentiality obligations under Article 6 of this
Agreement with respect to the Confidential Information of Marina, (i) issue press
releases and other public statements as it deems appropriate in connection with the development and commercialization of the Products
under this Agreement; and (ii) publish or have published information about clinical trials related to the Products, including the
results of such clinical trials

 

		11.2	Publicity

 

		(a)	Neither Party shall use the name, symbol, trademark, trade name or logo of the other Party or its
Affiliates in any press release, publication or other form of public disclosure without the prior written consent of the other
Party in each instance (such consent not to be unreasonably withheld or delayed), except for those disclosures for which consent
has already been obtained. Notwithstanding the foregoing, Novartis shall be entitled, upon reasonable prior notice to Marina,
to use the name of Marina to identify its licensor to the extent necessary or useful
in connection with the development or commercialization of the Products, including in connection with sublicensing and subcontracting
transactions.

 

		(b)	Subject to paragraph (c) of this Section 11.2, each Party agrees not to issue any press release
or other public statement, whether oral or written, disclosing the existence of this Agreement, the terms hereof or any information
relating to this Agreement without the prior written consent of the other Party, which approval shall not be unreasonably withheld,
conditioned or delayed; provided, however, that Novartis may issue press releases and other public statements as
it deems appropriate in connection with the development and commercialization of Products under this Agreement and provided
further, that the Parties approve the text of the press release annexed as Exhibit B to this Agreement.

 

		(c)	Notwithstanding the foregoing, each Party may, without the prior approval of the other Party, make
any disclosures required of it to comply with any duty of disclosure it may have pursuant to law or governmental regulation or
pursuant to the rules of any recognized stock exchange. , The Parties shall nevertheless use good faith efforts to coordinate with
each other with respect to the timing, form and content of such required disclosure. If so requested by the other Party, the Party
subject to such obligation shall use commercially reasonable efforts to obtain an order, agreement or other governmental or Third
Party action protecting to the maximum extent possible the confidentiality of such provisions of this Agreement as reasonably requested
by the other Party. Unless the Parties otherwise agree, such disclosure shall be limited to the minimum required as determined
by the disclosing Party in consultation with its legal counsel. Without limiting the foregoing, each Party shall consult with the
other Party on the provisions of this Agreement, together with exhibits or other attachments attached hereto, to be redacted in
any filings made by Marina or Novartis with the Securities and Exchange Commission
(or other regulatory body) or as otherwise required by law. Marina also may file
or submit such redacted version of this Agreement with NASDAQ in connection with maintaining its NASDAQ listing.

 

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		12.	GENERAL PROVISIONS

 

		12.1	Assignment. Neither Party may assign its rights and obligations under this Agreement without the
other Party’s prior written consent, except that (a) a Party may assign its rights and obligations under this Agreement or
any part hereof to one or more of its Affiliates without the consent of the other Party; and (b) either Party may assign this Agreement
in its entirety to a successor to all or substantially all of its business or assets to which this Agreement relates. The assigning
Party shall provide the other Party with prompt written notice of any such assignment pursuant to clause (b) above. Any permitted
assignee shall assume all obligations of its assignor under this Agreement (or related to the assigned portion in case of a partial
assignment to an Affiliate), and no permitted assignment shall relieve the assignor of liability hereunder. Any attempted assignment
in contravention of the foregoing shall be void. Subject to the terms of this Agreement, this Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors and permitted assigns.

 

		12.2	Extension to Affiliates; Subcontractors. Novartis shall have the right to extend the rights, immunities
and obligations granted in this Agreement to one or more of its Affiliates. All applicable terms and provisions of this Agreement
shall apply to any such Affiliate to which this Agreement has been extended to the same extent as such terms and provisions apply
to Novartis. Novartis shall remain primarily liable for any acts or omissions of its Affiliates. In addition, Novartis may subcontract
to Third Parties the performance of any tasks and obligations relating to its exercise of the license and other rights under this
Agreement as Novartis deems appropriate, subject to its confidentiality obligations pursuant to Article 6 of this Agreement.

 

		12.3	Severability. Should one or more of the provisions of this Agreement become void or unenforceable
as a matter of law, then this Agreement shall be construed as if such provision were not contained herein and the remainder of
this Agreement shall be in full force and effect, and the Parties will use their commercially reasonable efforts to substitute
for the invalid or unenforceable provision a valid and enforceable provision which conforms as nearly as possible with the original
intent of the Parties.

 

		12.4	Governing Law and Jurisdiction. This Agreement shall be governed by and construed under the laws
of New York, without giving effect to the conflicts of laws provision thereof. Any disputes between the Parties relating to this
Agreement shall be subject to the exclusive jurisdiction and venue of the federal courts located in the Southern District of New
York (without restricting any right of appeal), and the Parties hereby waive any objection which they may have now or hereafter
to the laying of venue of any proceedings in such courts and to any claim that such proceedings have been brought in an inconvenient
forum, and further agree that a judgment or order in any such proceedings shall be binding upon each of them and may be enforced
in the courts of any other jurisdiction.

 

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		12.5	Force Majeure. Neither Party shall be responsible to the other for any failure or delay in performing
any of its obligations under this Agreement or for other nonperformance hereunder if such delay or nonperformance is caused by
strike, stoppage of labor, lockout or other labor trouble, fire, flood, accident, war, act of terrorism, act of God or of the government
of any country or of any local government, or by other cause unavoidable or beyond the reasonable control of any Party hereto (a
“Force Majeure Event”).

 

		12.6	Waivers and Amendments. The failure of any Party to assert a right hereunder or to insist upon
compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent
failure to perform any such term or condition by the other Party. No waiver shall be effective unless it has been given in writing
and signed by the Party giving such waiver. No provision of this Agreement may be amended or modified other than by a written document
signed by authorized representatives of each Party.

 

		12.7	Relationship of the Parties. Nothing contained in this Agreement shall be deemed to constitute
a partnership, joint venture, or legal entity of any type between Marina and Novartis,
or to constitute one as the agent of the other. Moreover, each Party agrees not to construe this Agreement, or any of the transactions
contemplated hereby, as a partnership for any tax purposes. Each Party shall act solely as an independent contractor, and nothing
in this Agreement shall be construed to give any Party the power or authority to act for, bind, or commit the other.

 

		12.8	Notices. All notices, consents, waivers, and other communications under this Agreement must be
in writing and will be deemed to have been duly given when: (a) delivered by hand (with written confirmation of receipt); (b) sent
by fax (with written confirmation of receipt), provided, that a copy is immediately sent by an internationally recognized
overnight delivery service (receipt requested); or (c) when received by the addressee, if sent by an internationally recognized
overnight delivery service (receipt requested), in each case to the appropriate addresses and fax numbers set forth below (or to
such other addresses and fax numbers as a Party may designate by notice):

 

If to Marina:

Marina, Inc.

3830 Monte Villa Parkway

Bothell, WA 98021

USA

Attn.: Mr. J. Michael French, President
and CEO

Fax: (425) 908-3101

Email: JMFrench@marinabio.com

 

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If to Novartis:

Novartis Institutes for BioMedical
Research, Inc.

250 Massachusetts Avenue

Cambridge, MA 02139

USA

Attn.: Dr. Charles Wilson

Vice President, Global Head of Strategic
Alliances

Phone: +1 617-871-3320

Email : charles.wilson@novartis.com

 

		12.9	Further Assurances. Novartis and Marina hereby covenant
and agree without the necessity of any further consideration, to execute, acknowledge and deliver any and all such other documents
and take any such other action as may be reasonably necessary to carry out the intent and purposes of this Agreement.

 

		12.10	Compliance with Law. Each Party shall perform its obligations under this Agreement in accordance
with all applicable laws. No Party shall, or shall be required to, undertake any activity under or in connection with this Agreement
which violates, or which it believes, in good faith, may violate, any applicable law.

 

		12.11	No Third Party Beneficiary Rights. The provisions of this Agreement are for the sole benefit of
the Parties and their successors and permitted assigns, and they shall not be construed as conferring any rights to any Third Party
(including any third party beneficiary rights).

 

		12.12	English Language. This Agreement is written and executed in the English language. Any translation
into any other language shall not be an official version of this Agreement and in the event of any conflict in interpretation between
the English version and such translation, the English version shall prevail.

 

		12.13	Expenses. Except as otherwise expressly provided in this Agreement, each Party shall pay the fees
and expenses of its respective lawyers and other experts and all other expenses and costs incurred by such Party incidental to
the negotiation, preparation, execution and delivery of this Agreement.

 

		12.14	Entire Agreement. This Agreement, together with its Exhibits, sets forth the entire agreement and
understanding of the Parties as to the subject matter hereof and supersedes all proposals, oral or written, and all other prior
communications between the Parties, with respect to such subject matter. In the event of any conflict between a substantive provision
of this Agreement and any Exhibit hereto, the substantive provisions of this Agreement shall prevail.

 

		12.15	Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.

 

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		12.16	Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive, but each
shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

 

 

 

 

 

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IN WITNESS WHEREOF, the
Parties intending to be bound have caused this Agreement to be executed by their duly authorized representatives.

 

	
        NOVARTIS INSTITUTES FOR 

        BIOMEDICAL RESEARCH, INC. 
	MARINA BIOTECH, INC. 

	 	 
	
        By:  /s/ Christian Klee

         
	By:  /s/ J. Michael French
	
        Name: Christian Klee

         
	Name: J. Michael French

	Title: Vice President & Chief Financial Officer	Title: President & CEO

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