Document:

Exhibit
10.4

     

    PLACEMENT
AGENCY AGREEMENT

     

    October
4, 2010

     

    Spencer
Trask Ventures, Inc.

    535
Madison Avenue

    12th
Floor

    New York,
New York 10022

    

    Re:          InVivo Therapeutics
Corporation and Design Source, Inc.

     

    Ladies
and Gentlemen:

     

    This Placement Agency Agreement ("Agreement") sets forth the
terms upon which Spencer Trask Ventures, Inc., a Delaware corporation, and a
registered broker-dealer and member of the Financial Industry Regulatory
Authority ("FINRA") (the
“Placement Agent”),
shall be engaged by InVivo Therapeutics Corporation, a Delaware corporation
(“InVivo”) and Design
Source, Inc., a Nevada corporation (“Pubco”), to act as exclusive
Placement Agent in connection with the private placement (the “Offering”) of units (“Units”) of securities of
Pubco, each Unit consisting of (i) one share of common stock, par value $0.00001
per share (the “Common
Stock”), of Pubco (the “Shares”) and (ii) one warrant
(the “Warrants”), with
each Warrant entitling the holder to purchase one share of Common Stock for a
five-year period at an exercise price of $1.40 per share.  The
Offering will consist of a minimum of 7,000,000 Units ($7,000,000) (the “Minimum
Amount”).  The Bridge Note Conversion Amount, as defined below,
will be taken into account in determining whether the sale of the Minimum Amount
has been achieved.  In the event the Offering is oversubscribed,
InVivo and the Placement Agent may, in their mutual discretion, sell up to
3,000,000 additional Units for an aggregate purchase price of $3,000,000 (the
“Over-allotment”),
provided however, that the Over-Allotment may be increased by up to an
additional 100% ($6,000,000 total) at the mutual discretion of InVivo and the Placement
Agent..  Concurrently with the initial closing of the Offering,
a wholly-owned subsidiary of Pubco will merge with and into InVivo and, with the
proceeds of the Offering, continue the existing operations of InVivo as a wholly
owned subsidiary of Pubco (the “Reverse Merger” or “Merger”). 

    

    As part
of or in conjunction with the Reverse Merger, Pubco will issue shares of its
Common Stock, warrants and options to InVivo’s then-existing securityholders and
to the investors in the Offering as further described in the Memorandum (as
hereinafter defined).  As used in this Agreement, unless the context
otherwise requires, the term “Company” refers to Pubco and
InVivo on a combined basis after giving effect to the Offering and the Reverse
Merger.

    

    The
purchase price for the Units will be $1.00 per Unit (the “Offering Price”), with a
minimum investment of 100,000 Units; provided,
however,
that subscriptions in lesser amounts may be accepted in InVivo’s and Placement
Agent’s joint discretion.  The Placement Agent shall accept subscriptions only from (i)
persons or entities who qualify as “accredited investors,” as such term
is defined in Rule 501 of Regulation D (“Regulation D”) as promulgated
by the United States
Securities and Exchange Commission (the “SEC”) under Section
4(2) of the Securities Act of 1933, as amended (the “Act”) and (ii) persons or
entities who were offered and purchased the Units in an Offshore Transaction (as
such term is defined in Regulation S (“Regulation
S”) as
promulgated by the SEC under the Act) and who are not U.S.
Persons (as such term is defined in Regulation S) and are not acting for
the account or benefit of a person in the United States or a U.S.
Person. The Units will be
offered until the earlier of the time that all Units offered in the Offering are
sold or November 15, 2010 (“Initial Offering Period”), which date may
be extended by the Placement Agent and InVivo in their joint discretion until
December 31, 2010 (this additional period and the Initial Offering Period shall
be referred to as the “Offering
Period”).  The date on which the Offering is terminated shall
be referred to as the “Termination
Date.”

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    With
respect to the Offering, InVivo and Pubco shall provide the Placement Agent, on
terms set forth herein, the right to offer and sell all of the Units being
offered. It is understood that no sale shall be regarded as effective unless and
until accepted by the Company.  The Company may, in its sole
discretion, accept or reject, in whole or in part, any prospective investment in
the Units or allot to any prospective subscriber less than the number of Units
that such subscriber desires to purchase.  Purchases of Units may be
made by the Placement Agent and its officers, directors, employees and
affiliates. All such purchases, together with purchases by officers, directors,
employees and affiliates of InVivo or Pubco, may be used to satisfy the Minimum
Amount if the Minimum Amount has not been subscribed for on or before the end of
the Offering Period.

     

    The
Offering will be made by Pubco solely pursuant to the Memorandum, which at all
times will be in form and substance reasonably acceptable to Pubco, InVivo, the
Placement Agent and their respective counsel and contain such legends and other
information as Pubco, InVivo, the Placement Agent and their respective counsel,
may, from time to time, deem necessary and desirable to be set forth
therein.  “Memorandum” as used in this
Agreement means Pubco’s Confidential Private Placement Memorandum dated on or
about October 4, 2010, inclusive of all annexes, and all amendments, supplements
and appendices thereto.

     

    1.           Appointment of Placement
Agent.  On the basis of the representations and warranties
provided herein, and subject to the terms and conditions set forth herein, the
Placement Agent is appointed as exclusive Placement Agent of InVivo and Pubco
during the Offering Period to assist InVivo and Pubco in finding qualified
subscribers for the Offering.  The Placement Agent may sell Units
through other broker-dealers who are FINRA members and may reallow all or a
portion of the Agent Compensation (as defined in Section 3(b) below) it receives
to such other broker-dealers.  On the basis of such representations
and warranties and subject to such terms and conditions, the Placement Agent
hereby accepts such appointment and agrees to perform its services hereunder
diligently and in good faith and in a professional and businesslike manner and
to use its reasonable efforts to assist InVivo and Pubco in (A) finding
subscribers of Units who either (i) qualify as “accredited investors,” as such
term is defined in Rule 501 of Regulation D, or (ii) were offered and purchased
the Units outside the United States in an Offshore Transaction (as such term is
defined in Regulation S) and who are not U.S. Persons (as such term is defined
in Regulation S) and are not acting for the account or benefit of a person in
the United States or a U.S. Person and (B) completing the Offering.  The Placement
Agent has no obligation to purchase any of the Units.  Unless sooner
terminated in accordance with this Agreement, the engagement of the Placement
Agent hereunder shall continue until the later of the Termination Date or the
Final Closing (as defined below).

     

    2.           Representations, Warranties
and Covenants of InVivo.  The representations and warranties of
InVivo (as used in
this Section 2, “InVivo” refers to InVivo Therapeutics
Corporation  and its subsidiaries) contained in this Section 2
are true and correct as of the date of this Agreement and InVivo covenants as
follows, as applicable.

    
      
         

      

      
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    (a) The Memorandum has been prepared by
InVivo, in conformity with all applicable laws, and is in compliance with
Regulation D, Regulation S and Section 4(2) of the Act and the requirements of
all other rules and regulations (the “Regulations”) of the SEC
relating to offerings of the type contemplated by the Offering, and the
applicable securities laws and the rules and regulations of those jurisdictions
wherein the Placement Agent notifies InVivo that the Units are to be offered and
sold excluding any foreign jurisdictions.  The Units will be offered
and sold pursuant to the registration exemption provided by Regulation D,
Regulation S and Section 4(2) of the Act as a transaction not involving a public
offering and the requirements of any other applicable state securities laws and
the respective rules and regulations thereunder in those United States
jurisdictions in which the Placement Agent notifies InVivo that the Units are
being offered for sale.  None of InVivo, its affiliates, or any person
acting on its or their behalf (other than the Placement Agent, its affiliates or
any person acting on its behalf, in respect of which no representation is made)
has taken nor will it take any action that conflicts with the conditions and
requirements of, or that would make unavailable with respect to the Offering,
the exemption(s) from registration available pursuant to Rule 506 of Regulation
D, Rule 903 of Regulation S or Section 4(2) of the Act, or knows of any reason why any such exemption would be
otherwise unavailable to it (including, without limitation, any Directed Selling
Efforts (as such term is defined in Regulation S)).  None of InVivo,
its predecessors or affiliates has been subject to any order, judgment or decree
of any court of competent jurisdiction temporarily, preliminarily or permanently
enjoining such person for failing to comply with Section 503 of Regulation
D.  InVivo has not, for a period of six months prior to the
commencement of the offering of Units, sold, offered for sale or solicited any
offer to buy any of its securities in a manner that would be integrated with the
offer and sale of the Units pursuant to this Agreement, would cause the
exemption from registration set forth in Rule 506 of Regulation D to become
unavailable with respect to the offer and sale of the Units pursuant to this
Agreement in the United States or to, by or for the benefit or account of, U.S.
Persons, or would cause the exclusion from
registration provided by Rule 903 of Regulation S to become unavailable for
offers and sales of the Units pursuant to this Agreement outside the United
States to non-U.S. Persons.

    

          
         (b) The Memorandum does
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading: provided, however, the
foregoing does not apply to any statements or omissions made solely in reliance
on and in conformity with written information furnished to InVivo by Pubco or
the Placement Agent specifically for use in the preparation
thereof.  To the knowledge of InVivo, none of the statements,
documents, certificates or other items made, prepared or supplied by InVivo with
respect to the transactions contemplated hereby contains an untrue statement of
a material fact or omits to state a material fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which they were made.  There is no fact which InVivo has not disclosed
in the Memorandum and of which InVivo is aware that materially adversely affects
or that could reasonably be expected to have a material adverse effect on the (i) assets,
liabilities, results of operations, condition (financial or otherwise), business
or business prospects of InVivo or (ii) ability of InVivo to perform its
obligations under this Agreement (“InVivo Material
Adverse Effect”).  Notwithstanding
anything to the contrary herein, InVivo makes no representation or warranty with
respect to any estimates, projections and other forecasts and plans (including
the reasonableness of the assumptions underlying such estimates, projections and
other forecasts and plans) that may have been delivered to the Placement Agent
or its representatives or that are contained in the Memorandum, except that such
estimates, projections and other forecasts and plans have been prepared in good
faith on the basis of assumptions stated therein, which assumptions were
believed to be reasonable at the time of such preparation.

    
      
         

      

      
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    (c) InVivo has all requisite corporate
power and authority to conduct its business as presently conducted and as
proposed to be conducted (as described in the Memorandum), to enter into and
perform its obligations under this Agreement, and the other agreements
contemplated hereby (this Agreement and the other agreements contemplated hereby
that InVivo is executing and delivering hereunder are collectively referred to
herein as the “InVivo
Transaction Documents”).  Prior to the First Closing (as
defined below), each of the InVivo Transaction Documents (other than this
Agreement, which has already been authorized) will have been duly
authorized.  This Agreement has been duly authorized, executed and
delivered and constitutes, and each of the other InVivo Transaction Documents,
upon due execution and delivery, will constitute, valid and binding obligations
of InVivo, enforceable against InVivo in accordance with their respective terms
(i) except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect related to laws affecting creditors’ rights generally, including the
effect of statutory and other laws regarding fraudulent conveyances and
preferential transfers, and except that no representation is made herein
regarding the enforceability of InVivo’s obligations to provide indemnification
and contribution remedies under the securities laws and (ii) subject to the
limitations imposed by general equitable principles (regardless of whether such
enforceability is considered in a proceeding at law or in equity).

    

    (d)  None
of the execution and delivery of or performance by InVivo under this Agreement
or any of the other InVivo Transaction Documents or the consummation of the
transactions herein or therein contemplated conflicts with or violates, or will
result in the creation or imposition of, any lien, charge or other encumbrance
upon any of the assets of InVivo under any agreement or other instrument to
which InVivo is a party or by which InVivo or its assets may be bound, or any
term of the certificate of incorporation or by-laws of InVivo, or any license,
permit, judgment, decree, order, statute, rule or regulation applicable to
InVivo or any of its assets, except in the case of a conflict, violation, lien,
charge or other encumbrance (except with respect to InVivo’s Certificate of
Incorporation or By-laws) which would not, or could not
reasonably be expected to, have an InVivo Material Adverse
Effect.

    

         
         (e) InVivo’s
financial statements, together with the related notes, if any, included in the
Memorandum, present fairly, in all material respects, the financial position of
InVivo as of the dates specified and the results of operations for the periods
covered thereby.  Such financial statements and related notes were
prepared substantially in accordance with United States generally
accepted accounting principles applied on a consistent basis throughout the
periods indicated, except that the unaudited financial statements omit full
notes, and except for normal year end adjustments.  Except as set
forth in such financial statements or otherwise disclosed in the Memorandum,
InVivo has no known material liabilities of any kind, whether accrued, absolute
or contingent, or otherwise, and subsequent to the date of the Memorandum and
prior to the date of the First Closing it shall not enter into any material
transactions or commitments without promptly thereafter notifying the Placement
Agent in writing of any such material transaction or commitment.  The
other financial and statistical information with respect to InVivo and any pro
forma information and related notes included in the Memorandum present fairly
the information shown therein on a basis consistent with the financial
statements of InVivo included in the Memorandum. InVivo does not know of
any facts, circumstances or conditions which could materially adversely affect
its operations, earnings or prospects that have not been fully disclosed in
the Memorandum. 

    

           
        (f) The conduct of business by
InVivo as presently and proposed to be conducted is not subject to continuing
oversight, supervision, regulation or examination by any governmental official
or body of the United States, or any other jurisdiction wherein InVivo conducts
or proposes to conduct such business, except as described in the Memorandum and
except as such regulation is applicable generally to enterprises involved in the
business in which InVivo is engaged.  InVivo has obtained all material
licenses, permits and other governmental authorizations necessary to conduct its
business as presently conducted.  InVivo has not received any notice
of any violation of, or noncompliance with, any federal, state, local or foreign
laws, ordinances, regulations and orders (including, without limitation, those
relating to environmental protection, occupational safety and health, securities
laws, equal employment opportunity, consumer protection, credit reporting,
“truth-in-lending”, and warranties and trade practices) applicable to its
business, the violation of, or noncompliance with, would have an InVivo Material
Adverse Effect, and InVivo knows of no facts or set of circumstances which could
give rise to such a notice.

    
      
         

      

      
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                    (g)
No default by InVivo or, to the knowledge of InVivo, any other party, exists in
the due performance under any material agreement to which InVivo is a party or
to which any of its assets is subject (collectively, the “InVivo
Agreements”).  The InVivo Agreements disclosed in the
Memorandum are the only material agreements to which InVivo is bound or by which
its assets are subject, are accurately described in the Memorandum and are in
full force and effect in accordance with their respective terms, subject to any
applicable bankruptcy, insolvency or other laws affecting the rights of
creditors generally and to general equitable principles and the availability of
specific performance.

    

                    (h)
Subsequent to the respective dates as of which information is given in the
Memorandum, InVivo has operated its business in the ordinary course and, except
as may otherwise be set forth in the Memorandum, there has been no: (i) InVivo
Material Adverse Effect; (ii) transaction otherwise than in the ordinary course
of business consistent with past practice; (iii) issuance of any securities
(debt or equity) or any rights to acquire any such securities other than
pursuant to equity incentive plans approved by its Board of Directors; (iv)
damage, loss or destruction, whether or not covered by insurance, with respect
to any asset or property of InVivo; or (v) agreement to permit any of the
foregoing.

    

                    (i)
Except as set forth in the Memorandum, there are no actions, suits, claims,
hearings or proceedings pending before any court or governmental authority or,
to the knowledge of InVivo, threatened, against InVivo, or involving its assets
or any of its officers or directors (in their capacity as such) which, if
determined adversely to InVivo or such officer or director, could reasonably be
expected to have an InVivo Material Adverse Effect or adversely affect the
transactions contemplated by this Agreement or the Merger Agreement (as
hereinafter defined) or the enforceability thereof.

    

                    (j)  InVivo
is not: (i) in violation of its Certificate of Incorporation or By-laws; (ii) in
default of any indenture, mortgage, deed of trust, note or other agreement or
instrument to which InVivo is a party or by which it is or may be bound or to
which any of its assets may be subject, the default of which could reasonably be
expected to have an InVivo Material Adverse Effect; (iii) in violation of any
statute, rule or regulation applicable to InVivo, the violation of which would
have an InVivo Material Adverse Effect; or (iv) in violation of any judgment,
decree or order of any court or governmental body having jurisdiction over
InVivo and specifically naming InVivo, which violation or violations
individually, or in the aggregate, could reasonably be expected to have an
InVivo Material Adverse Effect.

     

                    (k)  Except
as disclosed in the Memorandum, as of the date of this Agreement, no current or
former stockholder, director, officer or employee of InVivo, nor, to the
knowledge of InVivo, any affiliate of any such person is presently, directly or
indirectly through his affiliation with any other person or entity, a party to
any loan from InVivo or any other transaction (other than as an employee) with
InVivo providing for the furnishing of services by, or rental of any personal
property from, or otherwise requiring cash payments to any such
person.

     

                    (l)
InVivo is not obligated to pay, and has not obligated the Placement Agent to
pay, a finder’s or origination fee in connection with the Offering (other than
to the Placement Agent), and hereby agrees to indemnify the Placement Agent from
any such claim made by any other person as more fully set forth in Section 8
hereof.  InVivo has not offered for sale or solicited offers to
purchase the Units except for negotiations with the Placement
Agent.

     

                    (m)  Until
the earlier of (i) the Termination Date and (ii) the Final Closing (as
hereinafter defined), InVivo will not issue any press release, grant any
interview, or otherwise communicate with the media in any manner whatsoever with
respect to the Offering without the Placement Agent’s prior written consent,
which consent will not unreasonably be withheld or delayed.

    
      
         

      

      
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    (n)  For the
benefit of the Placement Agent, InVivo hereby incorporates by reference all of
the representations and warranties contained in Article II, and its covenants
contained in Article IV, of that certain Agreement and Plan of Merger and
Reorganization to be entered into prior to the Closing by and among Pubco,
InVivo and InVivo Therapeutics Acquisition Corp. (the “Merger Agreement”), in each
case with the same force and effect as if specifically set forth herein.

    

    (o) No
representation or warranty contained in Section 2 of this Agreement contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements herein not misleading in the context of such
representations and warranties.

    

             
      2A.      Representations, Warranties
and Covenants of Pubco.  The representations and warranties of
Pubco (as used in
this Section 2A, “Pubco” refers to Design Source, Inc. and its subsidiaries)
contained in this Section 2A are true and correct as of the date of this
Agreement.

     

    (a) The Memorandum has been prepared in
conformity with all applicable laws, and is in compliance with Regulation D, the
Act and the requirements of all other Regulations of the SEC relating to
offerings of the type contemplated by the Offering, and the applicable
securities laws and the rules and regulations of those jurisdictions wherein the
Placement Agent notifies Pubco that the Units are to be offered and sold
excluding any foreign jurisdictions.  The Units will be offered and
sold pursuant to the registration exemptions provided by Regulation D,
Regulation S and Section 4(2) of the Act as a transaction not involving a public
offering and the requirements of any other applicable state securities laws and
the respective rules and regulations thereunder in those United States
jurisdictions in which the Placement Agent notifies Pubco that the Units are
being offered for sale.  None of Pubco, its affiliates, or any person
acting on its or their behalf (other than the Placement Agent, its affiliates or any person acting on its
behalf, in respect of which no representation is made) has taken nor will it
take any action that conflicts with the conditions and requirements of, or that
would make unavailable with respect to the Offering, the exemption(s) from
registration available pursuant to Rule 506 of Regulation D, Rule 903 of
Regulation S or Section 4(2) of the Act, or
knows of any reason why any such exemption
would be otherwise unavailable to it (including, without limitation, any
Directed Selling Efforts (as such term is defined in Regulation
S)).  None of Pubco, its predecessors or affiliates has been subject
to any order, judgment or decree of any court of competent jurisdiction
temporarily, preliminarily or permanently enjoining such person for failing to
comply with Section 503 of Regulation D.  Pubco has not, for a period
of six months prior to the commencement of the offering of Units, sold, offered
for sale or solicited any offer to buy any of its securities in a manner that
would be integrated with the offer and sale of the Units pursuant to this
Agreement, would cause the exemption from registration set forth in Rule 506 of
Regulation D to become unavailable with respect to the offer and sale of the
Units pursuant to this Agreement in the United States or to, by or for the
benefit or account of, U.S. Persons, or would
cause the exclusion from registration provided by Rule 903 of Regulation
S to become unavailable for offers and sales of the Units pursuant to this
Agreement outside the United States to non-U.S. Persons.

    

                    (b)
As to Pubco only, the Memorandum does not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading: provided, however, the
foregoing does not apply to any statements or omissions made solely in reliance
on and in conformity with written information furnished to Pubco by InVivo or
the Placement Agent specifically for use in the preparation
thereof.  To the knowledge of Pubco, none of the statements,
documents, certificates or other items made, prepared or supplied by Pubco with
respect to the transactions contemplated hereby contains an untrue statement of
a material fact or omits to state a material fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which they were made.  There is no fact which Pubco has not disclosed
in the Memorandum and of which Pubco is aware that materially adversely affects
or that could reasonably be expected to have a material adverse effect on the
prospects, condition (financial or otherwise), operations or assets of Pubco (a
“Pubco Material Adverse
Effect”).  Notwithstanding anything to the contrary herein,
Pubco makes no representation or warranty with respect to any estimates,
projections and other forecasts and plans (including the reasonableness of the
assumptions underlying such estimates, projections and other forecasts and
plans) that may have been delivered to the Placement Agent or its
representatives by Pubco, except that such estimates, projections and other
forecasts and plans have been prepared in good faith on the basis of assumptions
stated therein, which assumptions were believed to be reasonable at the time of
such preparation.  

    
      
         

      

      
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                    (c)  Pubco
has all requisite corporate power and authority to conduct its business as
presently conducted and as proposed to be conducted (as described in the
Memorandum), to enter into and perform its obligations under this Agreement, the
Subscription Agreement substantially in the form of Annex A to the Memorandum
(the “Subscription
Agreement”), the Registration Rights Agreement substantially in the form
of Annex B to the Memorandum (the “Registration Rights
Agreement”), and the other agreements contemplated hereby (this
Agreement, the Subscription Agreement, the Registration Rights Agreement and the
other agreements contemplated hereby that Pubco is required to execute and
deliver are collectively referred to herein as the “Pubco Transaction Documents”)
and subject to necessary Board and stockholder approvals, to issue, sell and
deliver the Units, the shares of Common Stock underlying the Units, and the
shares of Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”), the Agent
Warrants (as defined in Section 3(b)) and the Agent Warrant Shares (as defined
in Section 3(b)).  Prior to the First Closing, as defined herein, each
of the Pubco Transaction Documents will have been duly
authorized.  This Agreement has been duly authorized, executed and
delivered and constitutes, and each of the other Pubco Transaction Documents,
upon due execution and delivery, will constitute, valid and binding obligations
of Pubco, enforceable against Pubco in accordance with their respective terms
(i) except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect related to laws affecting creditors’ rights generally, including the
effect of statutory and other laws regarding fraudulent conveyances and
preferential transfers, and except that no representation is made herein
regarding the enforceability of Pubco’s obligations to provide indemnification
and contribution remedies under the securities laws and (ii) subject to the
limitations imposed by general equitable principles (regardless of whether such
enforceability is considered in a proceeding at law or in equity).

    

    (d)  None
of the execution and delivery of, or performance by Pubco under this Agreement
or any of the other Pubco Transaction Documents or the consummation of the
transactions herein or therein contemplated conflicts with or violates, or will
result in the creation or imposition of, any lien, charge or other encumbrance
upon any of the assets of Pubco under any agreement or other instrument to which
Pubco is a party or by which Pubco or its assets may be bound, or any term of
the certificate of incorporation or by-laws of Pubco, or any license, permit,
judgment, decree, order, statute, rule or regulation applicable to Pubco or any
of its assets, except in the case of a conflict, violation, lien, charge or
other encumbrance (except with respect to Pubco’s certificate of incorporation
or by-laws) which would not, or could not
reasonably be expected to, have a Pubco Material Adverse
Effect.

    

                    (e)
As of the date of the First Closing, Pubco will have the authorized and
outstanding capital stock as set forth under the heading “Capitalization” in the
Memorandum.  All outstanding shares of capital stock of Pubco are duly
authorized, validly issued and outstanding, fully paid and
nonassessable.  Except as described in the Memorandum, as of the date
of the First Closing: (i) there will be no outstanding options, stock
subscription agreements, warrants or other rights permitting or requiring Pubco
or others to purchase or acquire any shares of capital stock or other equity
securities of Pubco or to pay any dividend or make any other distribution in
respect thereof; (ii) there will be no securities issued or outstanding which
are convertible into or exchangeable for any of the foregoing and there are no
contracts, commitments or understandings, whether or not in writing, to issue or
grant any such option, warrant, right or convertible or exchangeable security;
(iii) no shares of stock or other securities of Pubco are reserved for issuance
for any purpose; (iv) there will be no voting trusts or other contracts,
commitments, understandings, arrangements or restrictions of any kind with
respect to the ownership, voting or transfer of shares of stock or other
securities of Pubco, including, without limitation, any preemptive rights,
rights of first refusal, proxies or similar rights, and (v) no person holds a
right to require Pubco to register any securities of Pubco under the Act or to
participate in any such registration.  As of the date of the First
Closing, the issued and outstanding shares of capital stock of Pubco will
conform in all material respects to all statements in relation thereto contained
in the Memorandum and the Memorandum describes all material terms and conditions
thereof.  All issuances by Pubco of its securities have been, at the
times of their issuance, exempt from registration under the Act and any
applicable state securities laws.

    
      
         

      

      
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                    (f)
Immediately prior to the First Closing, the shares of Common Stock underlying
the Units, the Warrants, the Warrant Shares, the Agent Warrants and the Agent
Warrant Shares will have been duly authorized and, when issued and delivered
against payment therefor as provided in the Pubco Transaction Documents, will be
validly issued, fully paid and nonassessable.  No holder of any of the
shares of Common Stock underlying the Units, the Warrants, the Warrant Shares,
the Agent Warrants or the Agent Warrant Shares will be subject to personal
liability solely by reason of being such a holder, and except as described in
the Memorandum, none of the shares of Common Stock underlying the Units, the
Warrants, the Warrant Shares, the Agent Warrants or the Agent Warrant
Shares are subject
to preemptive or similar rights of any stockholder or security holder of Pubco
or an adjustment under the antidilution or exercise rights of any holders of any
outstanding shares of capital stock, options, warrants or other rights to
acquire any securities of Pubco.  Immediately prior to the First
Closing, a sufficient number of authorized but unissued shares of Common Stock
will have been reserved for issuance upon the exercise of the Warrants and the
Agent Warrants.

    

                    (g)
No consent, authorization or filing of or with any court or governmental
authority is required in connection with the issuance or the consummation of the
transactions contemplated herein or in the other Pubco Transaction Documents,
except for required filings with the SEC and the applicable state securities
commissions relating specifically to the Offering (all of which filings will be
duly made by, or on behalf of, Pubco), other than those which are required to be
made after the First Closing (all of which will be duly made on a timely
basis).

    

                    (h)
Subsequent to the respective dates as of which information is given in the
Memorandum, Pubco has operated its business in the ordinary course and, except
as may otherwise be set forth in the Memorandum, there has been no: (i) Pubco
Material Adverse Effect; (ii) transaction otherwise than in the ordinary course
of business consistent with past practice; (iii) issuance of any securities
(debt or equity) or any rights to acquire any such securities other than
pursuant to equity incentive plans approved by its Board of Directors; (iv)
damage, loss or destruction, whether or not covered by insurance, with respect
to any asset or property of Pubco; or (v) agreement to permit any of the
foregoing.

    

                    (i)
Except as set forth in the Memorandum, there are no actions, suits, claims,
hearings or proceedings pending before any court or governmental authority or,
to the knowledge of Pubco, threatened, against Pubco, or involving its assets or
any of its officers or directors (in their capacity as such) which, if
determined adversely to Pubco or such officer or director, could not reasonably
be expected to have a Pubco Material Adverse Effect or adversely affect the
transactions contemplated by this Agreement or the Merger Agreement or the
enforceability thereof.

    

                    (j)
Pubco is not obligated to pay, and has not obligated the Placement Agent to pay,
a finder’s or origination fee in connection with the Offering (other than to the
Placement Agent), and hereby agrees to indemnify the Placement Agent from any
such claim made by any other person as more fully set forth in Section 8
hereof.  Pubco has not offered for sale or solicited offers to
purchase the Units except for negotiations with the Placement
Agent.  Except as set forth in the Memorandum, no other person has any
right to participate in any offer, sale or distribution of Pubco’s securities to
which the Placement Agent’s rights, described herein, shall
apply.

    
      
         

      

      
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                    (k)  Neither
the sale of the Units by Pubco nor its use of the proceeds thereof will violate
the Trading with the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating
thereto.  Without limiting the foregoing, Pubco is not (a) a person
whose property or interests in property are blocked pursuant to Section 1 of
Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism
(66 Fed. Reg. 49079 (2001)) or (b) a person who engages in any dealings or
transactions, or be otherwise associated, with any such person.  Pubco
and its subsidiaries, if any, are in compliance, in all material respects, with
the USA Patriot Act of 2001 (signed into law October 26, 2001).

    

                    (l)  Until
the earlier of (i) the Termination Date and (ii) the Final Closing (as
hereinafter defined), Pubco will not issue any press release, grant any
interview, or otherwise communicate with the media in any manner whatsoever with
respect to the Offering without the Placement Agent’s prior written consent,
which consent will not unreasonably be withheld or delayed.

    

                    (m)  For
the benefit of the Placement Agent, Pubco hereby incorporates by reference all
of the representations and warranties contained in Article III, and its
covenants contained in Article IV, of the Merger Agreement, in each case
with the same force and effect as if specifically set forth herein

    

                    (n)  No
representation or warranty contained in Section 2A of this Agreement contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements herein not misleading in the context of such
representations and warranties.

    

    2B.      Representations, Warranties
and Covenants of Placement Agent.  The Placement Agent hereby
represents and warrants to the Company that the following representations
and warranties are true and correct as of the date of this
Agreement:

     

    (a)  The Placement Agent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
enter into this Agreement and to carry out and perform its obligations under the
terms of this Agreement.

    

    (b)  This Agreement has been
duly authorized, executed and delivered by the Placement Agent, and upon due
execution and delivery by the Company, this Agreement will be a valid and
binding agreement of the Placement Agent enforceable against it in accordance
with its terms, except as may be limited by principles of public policy and, as
to enforceability, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditor’s rights from time
to time in effect and subject to general equity principles.

    

    (c)  The
Placement Agent is a member of FINRA and is registered as a broker-dealer under
the Exchange Act (as defined below), and under the securities acts of each state
into which it is making offers or sales of the Units.  None of
the Placement Agent or its affiliates, or any person acting on behalf of the
foregoing (other than Pubco, InVivo, its or their affiliates or any person
acting on its or their behalf, in respect of which no representation is made)
has taken nor will it take any action that conflicts with the conditions and
requirements of, or that would make unavailable with respect to the Offering,
the exemption(s) from registration available pursuant to Rule 506 of Regulation
D, Rule 903 of Regulation S or Section 4(2) of the Act, or knows of any reason why any such exemption would be
otherwise unavailable to it.

    
      
         

      

      
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    3.      
      Placement Agent
Compensation.

    

    (a)  In connection with the
Offering, the Company will pay at each Closing a cash fee (the “Agent Cash Fee”) to the
Placement Agent equal to 10% of the gross proceeds from the sale of the Units
consummated at such Closing, which shall include, without limitation, Units
issued in consideration for the conversion of $500,000 of principal amount of
certain convertible promissory notes of InVivo issued in August/September 2010
(the “Bridge Notes”),
together with accrued interest thereon, into Units as contemplated in the
Memorandum.  The principal amount and accrued interest on the Bridge
Notes at the time of the First Closing is hereinafter referred to as the “Bridge Note Conversion
Amount.” 

    

    (b)  As
additional compensation at each Closing the Company will issue to the Placement
Agent (or its designee(s)) for nominal consideration, warrants (the “Agent Warrants;” the Agent
Cash Fee and Agent Warrants are sometimes referred to herein collectively as
“Agent Compensation”) to
purchase shares of Common Stock (the shares of Common Stock issuable upon
exercise of the Agent Warrants are hereinafter referred to as the “Agent Warrant Shares” and the
Agent Warrants and the Agent Warrant Shares are collectively referred to as the
“Agent
Securities”).  A form of the Agent Warrant is attached hereto
as Exhibit B. The Agent Warrants shall be exercisable for that number of shares
of Common Stock equaling 20% of the number of shares of Common Stock (i)
included in the Units (including, without limitation, Units issued in
consideration of the conversion of the Bridge Notes) at an exercise price of
$1.00 per share and (ii) issuable upon exercise of the Warrants at an exercise
price of $1.40 (the “Agent Warrants”).  The Agent’s Warrants shall be
exercisable until the date that is five (5) years after issuance and shall
contain customary weighted average anti-dilution price protection provisions and
immediate cashless exercise provisions.

     

    (c)  At each Closing, the
Company will pay the Placement Agent a non-accountable expense allowance equal
to 3% of the gross proceeds from the sale of the Units consummated at such
Closing, including, without limitation, Units issued in consideration of the
conversion of the Bridge Notes (the “Agent Expense
Allowance”).  The Agent’s Expense Allowance shall not cover
Blue Sky Expenses (as defined below).  Placement Agent will not bear
any of Pubco’s or InVivo’s respective legal, accounting, printing or other
expenses in connection with any transaction contemplated
hereby.  

    

    (d)  The
Company shall also pay and issue to the Placement Agent the Agent Compensation
calculated according to the percentages set forth in Sections 3(a) and (b) of
this Agreement, if any person or entity contacted by the Placement Agent during
the Offering Period (other than existing shareholders of InVivo) and with whom
the Placement Agent has discussions regarding a potential investment in the
Offering, invests in the Company (other than through open market purchases) and
irrespective of whether such potential investor purchased Units in the
Offering.  (the “Post-Closing Investors”) at
any time prior to the earlier of (i) the date that is eighteen (18) months after
the Termination Date or the Final Closing, whichever is applicable, or (ii) six
(6) months after the effectiveness of the Registration Statement registering the
Shares and shares of Common Stock issuable upon exercise of the
Warrants.  The names of potential Post-Closing Investors shall be
provided in writing by the Placement Agent to the Company at least one business
day prior to the Closing (the “Post Closing Investor List”)
and such delivery shall be a condition to the Company’s obligation to close. The
Company acknowledges and agrees that the Post-Closing Investor List is
proprietary to the Placement Agent, shall be maintained in strict confidence by
the Company and those persons/entities on such list shall not be contacted by
the Company without the Placement Agent’s prior written consent.  If
an event or transaction shall occur that would entitle the Placement Agent to
receive both the Agent Compensation and the Finder’s Fee (as such term is
defined below), then the Placement Agent shall have the right to elect which fee
it shall receive in full satisfaction of the Company’s obligations pursuant to
this Section 3(d) and the Finder’s Agreement, as described in Section 3(e)
below.

    
      
         

      

      
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    (e)  At the First Closing,
the Company and the Placement Agent shall enter into a non-exclusive Finder’s
Fee Agreement (the “Finder’s
Agreement”), which will provide that, during the eighteen (18) month
period following the later of the Termination Date or the First Closing, if the
Company or any of its affiliates shall enter into any of the transactions
enumerated in the Finder’s Agreement with any party introduced to the Company by
the Placement Agent and with whom the Company enters into substantive
discussions,  then the Company shall pay or cause to be paid to the
Placement Agent a cash finder’s fee (the “Finder’s Fee”) payable in cash
at the closing of such transaction, equal to 7% of the first $1 million of
consideration paid by or to the Company, plus 6% of the next $1 million of
consideration paid by or to the Company, plus 5% of the next $5 million of the
consideration paid by or to the Company, plus 4% of the next $1 million paid by
or to the Company, plus 3% of the next $1 million paid by or to the Company,
plus 2.5% of any consideration paid by or to the Company in excess of $9
million; provided, however, that the Placement Agent will not be entitled to a
finder's fee entered into with any party with whom the Company had a
pre-existing relationship prior to the date of the specific introduction and who
was not introduced to the Company by the Placement Agent.  The
Post-Closing Investor List, together with any new introductions that are made
following the Closing (to be mutually agreed to by the Company and the Placement
Agent) shall serve as the list of parties introduced to the Company by the
Placement Agent for purposes of this
section.    

    

    (f)  In
the event the Company elects to redeem the Warrants pursuant to the provisions
thereto, the Placement Agent will be engaged as exclusive warrant solicitation
agent at least 20 calendar days prior to the time notice of redemption is
delivered to holders of Warrants.  The engagement letter will provide
for the payment to the Placement Agent of, inter alia, a cash fee of 5% of the
exercise price for each warrant exercised that has been solicited by the
Placement Agent following a redemption notice.

    

    4.            Subscription and Closing
Procedures.

     

    (a)  InVivo and Pubco shall
cause to be delivered to the Placement Agent copies of the Memorandum and have
each consented, and hereby consent, to the use of such copies for the purposes
permitted by the Act and applicable securities laws and in accordance with the
terms and conditions of this Agreement, and hereby each authorize the Placement
Agent and its agents and employees to use the Memorandum in connection with the
sale of the Units until the earlier of (i) the Termination Date or (ii) the
Final Closing, and no person or entity is or will be authorized to give any
information or make any representations other than those contained in the
Memorandum or to use any offering materials other than those contained in the
Memorandum in connection with the sale of the Units.

     

    (b)  InVivo
and Pubco shall make available to the Placement Agent and its representatives
such information as may be reasonably requested in making a reasonable
investigation of InVivo and Pubco and their respective affairs and shall provide
access to such employees during normal business hours as shall be reasonably
requested by the Placement Agent.

     

    (c)  Each
prospective purchaser will be required to complete and execute an original
omnibus signature page, for each of the Subscription Agreement and the
Registration Rights Agreement  (the “Subscription Documents”), which will be
forwarded or delivered to the Placement Agent at the Placement Agent’s offices
at the address set forth in Section 12 hereof, together with the subscriber’s
check or other good funds in the full amount of the purchase price for the
number of Units desired to be purchased.

    
      
         

      

      
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    (d)  All
funds for subscriptions received from the Offering will be promptly forwarded by
the Placement Agent and deposited into a non-interest bearing escrow account
(the “Escrow Account”)
established for such purpose with Signature Bank (the “Escrow Agent”).  All
such funds for subscriptions will be held in the Escrow Account pursuant to the
terms of an escrow agreement among Pubco, InVivo, the Placement Agent and the
Escrow Agent.  The Company will pay all fees related to the
establishment and maintenance of the Escrow Account. Subject to the receipt of
subscriptions for the Minimum Amount, the Company will either accept or reject,
for any or no reason, the Subscription Documents in a timely fashion and at each
Closing Pubco and InVivo will countersign the Subscription Documents and provide
duplicate copies of such documents to the Placement Agent for distribution to
the subscribers.  The Company, or the Placement Agent on the Company’s
behalf, will promptly return to subscribers incomplete, improperly completed,
improperly executed and rejected subscriptions and give written notice thereof
to the Placement Agent upon such return.

    

    (e)  If
subscriptions for at least the Minimum Amount have been accepted prior to the
Termination Date, the funds therefor have been collected by the Escrow Agent and
all of the conditions set forth elsewhere in this Agreement are fulfilled, a
closing shall be held promptly with respect to Units sold (the “First
Closing”).  Thereafter and assuming
the Placement Agent and the Company so elect, Over-allotment Units will
continue to be offered and sold until the Termination Date and additional
closings (each a “Closing”) may from time to
time be conducted at times mutually agreed to between the Placement Agent and
the Company with respect to Over-allotment Units sold, with the final closing
(“Final Closing”) to
occur within 10 days after the earlier of the Termination Date and the date on
which the Over-allotment has been fully subscribed for.  Delivery of payment for
the accepted subscriptions for Units from funds held in the Escrow Account will
be made at each Closing against delivery of the Shares and Warrants by the
Company.  Executed certificates for the Common Stock, Warrants and the
Placement Agent Warrants will be in such authorized denominations and, with
respect to investors located by the Placement Agent, will be registered in such
names as the Placement Agent may request and will be made available to the
Placement Agent for checking and packaging at the Placement Agent’s office at
each Closing or within five (5) business days following a
Closing.

    

    (f) If
Subscription Documents for the Minimum Amount have not been received and
accepted by the Company on or before the Termination Date for any reason, the
Offering will be terminated, no Units will be sold, and the Escrow Agent will,
at the request of the Placement Agent, cause all monies received from
subscribers for the Units to be promptly returned to such subscribers without
interest, penalty, expense or deduction.

    

    5.     
      Further
Covenants.  InVivo and Pubco hereby covenant and agree
that:

    

    (a)           Except
upon prior written notice to the Placement Agent, neither InVivo nor Pubco
shall, at any time prior to the Final Closing, knowingly take any action which
would cause any of the representations and warranties made by it in this
Agreement not to be complete and correct in all material respects on and as of
each Closing Date with the same force and effect as if such representations and
warranties had been made on and as of each such date (except to the extent any
representation or warranty relates to an earlier date).

    
      
         

      

      
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    (b)           If,
at any time prior to the Final Closing, any event shall occur that causes (i) an
InVivo Material Adverse Effect or (ii) a Pubco Material Adverse Effect, either
of which as a result it becomes necessary to amend or supplement the Memorandum
so that the representations and warranties herein remain true and correct in all
material respects, or in case it shall be necessary to amend or supplement the
Memorandum to comply with Regulation D or any other applicable securities laws
or regulations, either InVivo or Pubco, as applicable, will promptly notify the
Placement Agent and shall, at its sole cost, prepare and furnish to the
Placement Agent copies of appropriate amendments and/or supplements in such
quantities as the Placement Agent may reasonably request.  Neither
InVivo nor Pubco will at any time before the Final Closing prepare or use any
amendment or supplement to the Memorandum of which the Placement Agent will not
previously have been advised and furnished with a copy, or which is not in
compliance in all material respects with the Act and other applicable securities
laws.  As soon as InVivo or Pubco is advised thereof, InVivo or Pubco,
as applicable, will advise the Placement Agent and its counsel, and confirm the
advice in writing, of any order preventing or suspending the use of the
Memorandum, or the suspension of any exemption for such qualification or
registration thereof for offering in any jurisdiction, or of the institution or
threatened institution of any proceedings for any of such purposes, and InVivo
and Pubco, as applicable, will use their best efforts to prevent the issuance of
any such order and, if issued, to obtain as soon as reasonably possible the
lifting thereof.

     

    (c)           InVivo
and Pubco shall comply with the Act, the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), and the rules and regulations thereunder, all applicable state
securities laws and the rules and regulations thereunder in the states in which
Placement Agent's Blue Sky counsel has advised the Placement Agent, InVivo
and/or Pubco that the Units are qualified or registered for sale or exempt from
such qualification or registration, so as to permit the continuance of the sales
of the Units, and will file or cause to be filed with the SEC, and shall
promptly thereafter forward or cause to be forwarded to the Placement Agent, any
and all reports on Form D as are required.

     

    (d)           Pubco
shall use best efforts to qualify the Units for sale under the securities laws
of such jurisdictions in the United States as may be mutually agreed to by
InVivo, Pubco and the Placement Agent, and Pubco will make or cause to be made
such applications and furnish information as may be required for such purposes,
provided that Pubco will not be required to qualify as a foreign corporation in
any jurisdiction or execute a general consent to service of
process.  Pubco will, from time to time, prepare and file such
statements and reports as are or may be required to continue such qualifications
in effect for so long a period as the Placement Agent may reasonably request
with respect to the Offering.

     

    (e)           The
Company shall place a legend on the certificates representing the Shares,
Warrants and the Agent Warrants that the securities evidenced thereby have not
been registered under the Act or applicable state securities laws, setting forth
or referring to the applicable restrictions on transferability and sale of such
securities under the Act and applicable state laws.

     

    (f)           The
Company shall apply the net proceeds from the sale of the Units for the purposes
substantially as described under the “Use of Proceeds” section of the
Memorandum. Except as set forth in the Memorandum, the Company shall not use any
of the net proceeds of the Offering to repay indebtedness to officers (other
than accrued salaries incurred in the ordinary course of business), directors or
stockholders of the Company without the prior written consent of the Placement
Agent.

     

    (g)           During
the Offering Period, InVivo or Pubco, as applicable, shall afford each
prospective purchaser of Units the opportunity to ask questions of and receive
answers from an officer of InVivo or Pubco concerning the terms and conditions
of the Offering and the opportunity to obtain such other additional information
necessary to verify the accuracy of the Memorandum to the extent InVivo or Pubco
possesses such information or can acquire it without unreasonable
expense.

     

    (h)           Except
with the prior written consent of the Placement Agent, InVivo and Pubco shall
not, at any time prior to the earlier of the Final Closing or the Termination
Date, except as contemplated by the Memorandum (i) engage in or commit to engage
in any transaction outside the ordinary course of business as described in the
Memorandum, (ii) issue, agree to issue or set aside for issuance any securities
(debt or equity) or any rights to acquire any such securities, (iii) incur,
outside the ordinary course of business, any material indebtedness, (iv) dispose
of any material assets, (v) make any material acquisition or (vi) change its
business or operations.

    
      
         

      

      
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    (i)           The
Company shall pay all reasonable expenses incurred in connection with the
preparation and printing of all necessary offering documents and instruments
related to the Offering and the issuance of the Shares, the Warrants and the
Agent Warrants and will also pay the Company's own expenses for accounting fees,
legal fees and other costs involved with the
Offering.  Notwithstanding the foregoing, Pubco’s legal fees shall be
limited to a maximum of $145,000.00.  The Company will provide at its
own expense such quantities of the Memorandum and other documents and
instruments relating to the Offering as the Placement Agent may reasonably
request.  In
addition, the Company will pay all reasonable filing fees, costs and legal fees
for Blue Sky services and related filings and reasonable expenses of counsel (up
to $5,000 of legal fees), which $5,000 of legal fees and
an additional amount commensurate with the required filing fees shall be paid on
or before the First Closing with respect to obtaining Blue Sky
exemptions.  Additional amounts, if any, for required filing fees
shall be paid at any subsequent Closing, as applicable.  The Blue Sky
filings shall be prepared by the Placement Agent’s counsel for the Company’s
account.  Further, as promptly as practicable after the
Closing, the Company shall prepare, at its own expense, velobound "closing
binders" relating to the Offering and will distribute such binders to the
individuals designated by counsel to the Placement Agent.

     

     (j)           Until
the earlier of the Termination Date or the Final Closing, neither InVivo nor
Pubco nor any person or entity acting on such persons’ behalf will negotiate
with any other placement agent or underwriter with respect to a private or
public offering of such entity’s debt or equity securities.  Neither
InVivo nor Pubco nor anyone acting on such persons’ behalf will, until the
earlier of the Termination Date or the Final Closing, without the prior written
consent of the Placement Agent, offer for sale to, or solicit offers to
subscribe for Shares from, or otherwise approach or negotiate in respect thereof
with, any other person.

     

    (k)          
Effective upon the sale of the Minimum Amount, the Placement Agent shall have a
eighteen (18) month right of first refusal from such date to act as a lead
placement agent on any future private placement of the Company’s securities in
which the Company seeks to utilize a third party placement agent.  It
is understood that if a third party broker-dealer provides the Company with
written terms with respect to a future securities offering that the Company
wishes to accept during such twelve month period (“Written Offering Terms”), the
Company shall promptly present same to the Placement Agent.  The
Placement Agent shall have ten (10) business days from its receipt of the
Written Offering Terms in which to determine whether or not to accept such offer
and, if the Placement Agent refuses, and provided that such financing is
consummated (a) with another placement agent or underwriter upon substantially
the same terms and conditions as the Written Offering Terms and (b) within two
months after the end of the aforesaid ten (10) business day period, this right
of first refusal shall thereafter be forfeited and terminated; provided, however, if the
financing is not consummated under the conditions of clauses (a) and (b) above,
then the right of first refusal shall once again be reinstated under the same
terms and conditions set forth in this Section 6(i) during the remainder of such
eighteen (18) month period.  

     

     (l)           Effective
with the First Closing, the Company will, at Placement Agent’s option and if so
requested by Placement Agent, recommend and use its best efforts to appoint and
elect one designee of Placement Agent, at the option of Placement Agent, as a
member of its Board of Directors; such designee, if elected or appointed, shall
attend meetings of the Board and receive no more or less compensation than is
paid to other non-management directors of the Company and shall be entitled to
receive reimbursement for all reasonable costs incurred in attending such
meetings including, but not limited to, food, lodging and
transportation.  To the extent permitted by law, the Company will
agree to indemnify Placement Agent’s designee for the actions of such designee
as a director of the Company.  In the event the Company maintains a
liability insurance policy affording coverage for the acts of its officers and
directors, it will agree to include Placement Agent’s designee as an insured
under such policy.  If Placement Agent does not exercise its option to
designate such member of the Company's Board of Directors, Placement Agent shall
nonetheless have the right to send a representative (who need not be the same
individual from meeting to meeting) to observe each meeting of the Board of
Directors.  The Company agrees to give Placement Agent notice of each
such meeting (or copies of any consents in lieu of meetings) and to provide
Placement Agent with an agenda and minutes of the meeting no later than it gives
such notice and provides such items to the directors.  The foregoing
board nominee right shall be in place for a two year period following the Final
Closing.

    
      
         

      

      
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    6.     
       Conditions of Placement
Agent’s Obligations.  The obligations of the Placement Agent
hereunder to effect a Closing are subject to the fulfillment, at or before each
Closing, of the following additional conditions:

     

    (a)           Each
of the representations and warranties made by InVivo and Pubco qualified as to
materiality shall be true and correct at all times prior to and on each Closing
Date, except to the extent any such representation or warranty expressly speaks
as of an earlier date, in which case such representation or warranty shall be
true and correct as of such earlier date, and the representations and warranties
made by InVivo and Pubco not qualified as to materiality shall be true and
correct in all material respects at all times prior to and on each Closing Date,
except to the extent any such representation or warranty expressly speaks as of
an earlier date, in which case such representation or warranty shall be true and
correct in all material respects as of such earlier date.

     

     (b)          InVivo
and Pubco shall have performed and complied in all material respects with all
agreements, covenants and conditions required to be performed and complied with
by it at or before the Closing.

     

    
      (c)           The
Memorandum did not, and as of the date of any amendment or supplement
thereto
will not, include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

    

     

    (d)           No
order suspending the use of the Memorandum or enjoining the Offering or sale of
the Units shall have been issued, and no proceedings for that purpose or a
similar purpose shall have been initiated or pending, or, to the best of
InVivo’s and Pubco’ knowledge, be contemplated or threatened.

     

    (e)           The
Placement Agent shall have received a certificate of the Chief Executive Officer
of each of InVivo and Pubco, dated as of the Closing Date, certifying, as to the
fulfillment of the conditions set forth in subparagraphs (a), (b), (c) and (d)
above.

     

    (f)           InVivo
and Pubco shall have delivered to the Placement Agent: (i) a good standing
certificate dated as of a date within 10 days prior to the Closing Date from the
secretary of state of its jurisdiction of incorporation; and (ii) resolutions of
InVivo's and Pubco's Board of Directors approving this Agreement and the
transactions and agreements contemplated by this Agreement, the Merger Agreement
and the Memorandum, certified by the Chief Executive Officer of InVivo and
Pubco, and (iii) resolutions of InVivo's shareholders and InVivo Acquisition
Corp.’s Board of Directors and shareholders approving the Merger Agreement and
the transactions and agreements contemplated by the Merger
Agreement.

     

    (g)           At
each Closing, the Company shall pay and/or issue to the Placement Agent the
Agent Compensation and Agent Expense Allowance earned in such
Closing.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    (h)           InVivo
shall deliver to the Placement Agent a signed opinion of Meister Selig &
Fein LLP, counsel to InVivo, dated as of the Closing Date, substantially in the
form annexed hereto as Exhibit A-1.  Pubco shall deliver to the
Placement Agent a signed opinion of Gottbetter & Partners, LLP, counsel to
Pubco, dated as of the Closing Date, substantially in the form annexed hereto as
Exhibit A-2.

     

    (i)           All
proceedings taken at or prior to the Closing in connection with the
authorization, issuance and sale of the Shares, the Warrants and the Agent
Warrants will be reasonably satisfactory in form and substance to the Placement
Agent and its counsel, and such counsel shall have been furnished with all such
documents, certificates and opinions as it may reasonably request upon
reasonable prior notice in connection with the transactions contemplated
hereby.

     

    (j)           The
Reverse Merger per the terms of the Merger Agreement shall have been
consummated.

     

    (k)           Lock-up
agreements with all of InVivo’s existing officers and directors and stockholders
who own in the aggregate 5% of the fully-diluted ownership of InVivo prior to
the First Closing, in form and substance reasonably acceptable to the Placement
Agent and consistent with the terms set forth in the Memorandum, shall have been
executed and delivered to the Placement Agent.

     

    (l)           Master
Services Agreement with the Placement Agent in form and substance reasonably
acceptable to the Placement Agent and consistent with the terms set forth in the
Memorandum.

     

    7.           Conditions
of Pubco’s and InVivo’s Obligations.  The
obligations of Pubco and InVivo hereunder to effect a Closing are subject to the
fulfillment, at or before each Closing, of the following additional
conditions:

     

    (a)           Each
of the representations and warranties made by Placement Agent herein being true
and correct as of each Closing Date.

    

    (b)           Lock-up
agreements with each of Adam Stern and related parties of the Placement Agent
and Adam Stern that purchased shares of Pubco Common Stock,  in form
and substance reasonably acceptable to InVivo and consistent with the terms set
forth in the Memorandum, shall have been executed and delivered to the
Company.

    
      
         

      

      
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    8.            Indemnification.

    

    (a)           Pubco
and InVivo severally if the Merger does not occur, and jointly and severally
following the consummation of the Merger,  will: (i) indemnify and
hold harmless the Placement Agent, its agents and their respective officers,
directors, employees, selected dealers and each person, if any, who controls the
Placement Agent within the meaning of the Act and such agents (each an “Indemnitee” or a "Placement Agent Party")
against, and pay or reimburse each Indemnitee for, any and all losses, claims,
damages, liabilities or expenses whatsoever (or actions or proceedings or
investigations in respect thereof), joint or several (which will, for all
purposes of this Agreement, include, but not be limited to, all reasonable costs
of defense and investigation and all reasonable attorneys’ fees, including
appeals), to which any Indemnitee may become subject (x) under the Act or
otherwise, in connection with the offer and sale of the Units and (y) as a result of the breach
of any representation, warranty or covenant made by either InVivo or Pubco
herein, regardless of whether such losses, claims, damages, liabilities or
expenses shall result from any claim by any Indemnitee or by any third party;
and  (ii) reimburse each Indemnitee for any legal or other
expenses reasonably incurred in connection with investigating or defending
against any such loss, claim, action, proceeding or investigation; provided,
however,
that Pubco and InVivo will not be liable in any such case to the extent that any
such claim, damage or liability is finally judicially determined to have
resulted exclusively from (A) an untrue statement or alleged untrue statement of
a material fact made in the Memorandum, or an omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, made solely in reliance upon and in
conformity with written information furnished to Pubco and/or InVivo by the
Placement Agent specifically for use in the Memorandum or (B) any violations by
the Placement Agent of the Act or state securities laws which does not result
from a violation thereof by InVivo, Pubco, or any of their respective
affiliates.  In addition to the foregoing agreement to indemnify and
reimburse, Pubco and InVivo jointly and severally will indemnify and hold
harmless each Indemnitee against any and all losses, claims, damages,
liabilities or expenses whatsoever (or actions or proceedings or investigations
in respect thereof), joint or several (which shall, for all purposes of this
Agreement, include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees, including appeals) to which
any Indemnitee may become subject insofar as such costs, expenses, losses,
claims, damages or liabilities arise out of or are based upon the claim of any
person or entity that he or it is entitled to broker’s or finder’s fees from any
Indemnitee in connection with the Offering, other than fees due to the Placement
Agent.  The foregoing indemnity agreements will be in addition to any
liability Pubco and InVivo may otherwise have.

    

    (b)           The Placement Agent will
indemnify and hold harmless Pubco and InVivo, their respective officers,
directors, and each person, if any, who controls such entity within the meaning
of the Act against, and pay or reimburse any such person for, any and all
losses, claims, damages, liabilities or expenses whatsoever (or actions,
proceedings or investigations in respect thereof) to which Pubco or InVivo or
any such person may become subject under the Act or otherwise, whether such
losses, claims, damages, liabilities or expenses shall result from any claim of
Pubco, InVivo or any such person who controls Pubco or InVivo within the meaning
of the Act or by any third party, but only to the extent that such
losses, claims, damages or liabilities are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Memorandum made
in reliance upon and in conformity with information contained in the Memorandum
relating to the Placement Agent, or an omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in either case, if made or omitted in
reliance upon and in conformity with written information furnished to Pubco or InVivo by
the Placement Agent, specifically for use in the preparation
thereof.  The Placement Agent will reimburse the Company or any such
person for any legal or other expenses reasonably incurred in connection with
investigating or defending against any such loss, claim, damage, liability or
action, proceeding or investigation to which such indemnity obligation
applies.  The foregoing indemnity agreements are in addition to any
liability which the Placement Agent may otherwise have. 

    

                       (c)
Promptly after receipt by an indemnified party under this Section 8 of notice of
the commencement of any action, claim, proceeding or investigation (the “Action”), such indemnified
party, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, will notify the indemnifying party of the
commencement thereof, but the omission to so notify the indemnifying party will
not relieve it from any liability that it may have to any indemnified party
under this Section 8 unless the indemnifying party has been substantially
prejudiced by such omission.  The indemnifying party will be entitled
to participate in and, to the extent that it may wish, jointly with any other
indemnifying party, to assume the defense thereof subject to the provisions
herein stated, with counsel reasonably satisfactory to such indemnified
party.  The indemnified party will have the right to employ separate
counsel in any such Action and to participate in the defense thereof, but the
fees and expenses of such counsel will not be at the expense of the indemnifying
party if the indemnifying party has assumed the defense of the Action with
counsel reasonably satisfactory to the indemnified party, provided, however, that if the
indemnified party shall be requested by the indemnifying party to participate in
the defense thereof or shall have concluded in good faith and specifically
notified the indemnifying party either that there may be specific defenses
available to it that are different from or additional to those available to the
indemnifying party or that such Action involves or could have a material adverse
effect upon it with respect to matters beyond the scope of the indemnity
agreements contained in this Agreement, then the counsel representing it, to the
extent made necessary by such defenses, shall have the right to direct such
defenses of such Action on its behalf and in such case the reasonable fees and
expenses of such counsel in connection with any such participation or defenses
shall be paid by the indemnifying party.  No settlement of any Action
against an indemnified party will be made without the consent of the
indemnifying party and the indemnified party, which consent shall not be
unreasonably withheld or delayed in light of all factors of importance to such
party, and no indemnifying party shall be liable to indemnify any person for any
settlement of any such claim effected without such indemnifying party’s
consent.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    9.      
     Contribution.  To
provide for just and equitable contribution, if: (i) an indemnified party makes
a claim for indemnification pursuant to Section 8 hereof and it is finally
determined, by a judgment, order or decree not subject to further appeal that
such claims for indemnification may not be enforced, even though this Agreement
expressly provides for indemnification in such case; or (ii) any indemnified or
indemnifying party seeks contribution under the Act, the Exchange Act, or
otherwise, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Placement Agent on the other in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses (or actions in respect thereof), as well as any other
relevant equitable considerations.  The relative benefits received by
the Company on the one hand and the Placement Agent on the other shall be deemed
to be in the same proportion as the total net proceeds from the Offering (before
deducting expenses) received by the Company bear to the total Agent Cash Fees
received by the Placement Agent.  The relative fault, in the case of
an untrue statement, alleged untrue statement, omission or alleged omission will
be determined by, among other things, whether such statement, alleged statement,
omission or alleged omission relates to information supplied by the Company or
by the Placement Agent, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement, alleged
statement, omission or alleged omission.  The Company and the
Placement Agent agree that it would be unjust and inequitable if the respective
obligations of the Company and the Placement Agent for contribution were
determined by pro rata allocation of the
aggregate losses, liabilities, claims, damages and expenses or by any other
method or allocation that does not reflect the equitable considerations referred
to in this Section 9.  No person guilty of a fraudulent
misrepresentation (within the meaning of Section 10(f) of the Act) will be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation.  For purposes of this Section 9, each person, if
any, who controls the Placement Agent within the meaning of the Act will have
the same rights to contribution as the Placement Agent, and each person, if any,
who controls the Company within the meaning of the Act will have the same rights
to contribution as the Company, subject in each case to the provisions of this
Section 9.  Anything in this Section 9 to the contrary
notwithstanding, no party will be liable for contribution with respect to the
settlement of any claim or action effected without its written
consent.  This Section 9 is intended to supersede, to the extent
permitted by law, any right to contribution under the Act, the Exchange Act or
otherwise available.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    10.           Termination.

     

    (a) The Offering may be terminated by
the Placement Agent at any time prior to the expiration of the Offering Period
in the event that: (i) any of the representations, warranties or covenants of
the InVivo or Pubco contained herein or in the Memorandum shall prove to have
been false or misleading in any material respect when actually made; (ii) InVivo
or Pubco shall have failed to perform any of its material obligations hereunder
or under any other InVivo Transaction Document, Pubco Transaction Document or
any other transaction document; (iii) there shall occur any event, within the
control of either InVivo or Pubco, that could materially adversely affect the
transactions contemplated hereunder or the ability of InVivo or Pubco to perform
hereunder; or (iv) the Placement Agent determines that it is reasonably likely
that any of the conditions to Closing set forth herein will not, or cannot, be
satisfied.  In the event of any such termination by the Placement
Agent pursuant to clauses (i), (ii) or (iii) of this Section 10(a), the
Placement Agent shall be entitled to receive from the breaching party, within
five (5) business days of the Termination Date, in addition to other rights and
remedies it may have hereunder, at law or otherwise, an amount equal to the sum
of (x) $100,000 and (y) reimbursement of documented out-of-pocket expenses of the
Placement Agent incurred through the date of such termination up to the sum of
$25,000
(collectively, the “Termination Amount”).  In the event of a
termination by the Placement Agent under Section 10(a)(iv), the Placement
Agent shall not be
entitled to any further compensation pursuant to these termination
provisions.

     

    (b)  This Offering may be
terminated by Pubco and InVivo on a joint basis only at any time prior to the
expiration of the Offering Period (i) in the event that the Placement Agent
shall have failed to perform any of its material obligations hereunder or
(ii) on account of the Placement Agent’s fraud, illegal or willful misconduct or
gross negligence.  In the event of any such termination pursuant to
this Section 10(b), the Placement Agent shall not be entitled to any further
compensation pursuant to these termination
provisions.    

    

    (c)  In the event Pubco or
InVivo unilaterally decides for any reason (other than pursuant to Section 10(b)
above or Section 10(d) below) to terminate the Offering at any time prior to the
First Closing (the “Unilateral Termination”), the Placement Agent shall be
entitled to receive from the terminating party the greater of (i) $200,000 or (ii) the Agent Cash Fee and
Agent Expense Allowance calculated based on amounts in escrow at the time of
termination (this (ii) hereinafter the
“Fee/Expense Escrow Amount”) (such
applicable amount the “Unilateral Termination Amount”).  In addition,
if within twelve (12) months after the Unilateral Termination, either Pubco or
InVivo conduct a public or private offering of its securities or enters into a
letter of intent with respect to the foregoing, then upon the closing of any
such transaction, the terminating party shall pay the Placement Agent in
cash, within five (5) business days of the closing of any such
transaction an amount equal to 2% of the gross proceeds from such private
or public offering (the “Additional Unilateral Termination
Amount”).

    

    (d) This
Offering may be terminated upon mutual agreement of Pubco, InVivo and the
Placement Agent at any time prior to the
expiration of the Offering Period.  If the Offering is terminated
pursuant to this Section 10(d), then in cases in which no Closing had been
theretofore consummated, each party shall pay its own respective
expenses.

    

    (e)  Before any termination
by the Placement Agent under Section 10(a) or by Pubco and InVivo under Section
10(b) shall become effective, the terminating party shall give written notice to
the other party of its intention to terminate the Offering (the “Termination
Notice”).  The Termination Notice shall specify the grounds for the
proposed termination. If the specified grounds for termination, or their
resulting adverse effect on the transactions contemplated hereby, are curable,
then the other party shall have ten (10) days from the Termination Notice within
which to remove such grounds or to eliminate all of their material adverse
effects on the transactions contemplated hereby; otherwise, the Offering shall
terminate.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    (f)  In the event that a
majority of the InVivo’s capital stock or assets is sold, or InVivo is merged
with or merges with or into another entity or otherwise combined with or
acquired, or enters into a letter of intent or memorandum of understanding with
respect to any of the foregoing, within one year after the Offering is
terminated, then upon the closing of any such transaction, InVivo or its
successor shall pay the Placement Agent in cash, within five (5) business days
of the closing of any such transaction, an amount equal to three percent (3%) of
the total consideration received or receivable by InVivo or any of its officers,
directors or stockholders in connection with such transaction (the “Transaction
Fee”); provided, however, the
Transaction Fee shall be payable only in the event that the Offering was
terminated as a result of a Unilateral Termination.  Notwithstanding
the foregoing, however, if an event or transaction shall occur that would
entitle the Placement Agent to receive both the the Unilateral Termination
Amount and the Transaction Fee, then the Placement Agent may elect which of the
two such fees, but may elect only one of such fees, it shall collect from
InVivo.  In the event that the Placement Agent has elected to receive
the Unilateral Termination Amount in accordance with this Section 10, and
subsequently an event or transaction occurs that would have entitled the
Placement Agent to receive a Transaction Fee in excess of such Unilateral
Termination Amount, then the Placement Agent may require InVivo to pay it the
difference between the Unilateral Termination Amount already paid and the amount
of the Transaction Fee to which it otherwise would have been entitled to receive
from InVivo.

    

    (g) In addition to all amounts payable
and remedies provided above, in the event of any termination prior to the
consummation of a Closing hereunder, InVivo shall compensate the Placement Agent
in the sum of $65,000 for its finders fee for the Bridge Note
Offering.

    

               (h)  Upon
any termination pursuant to this Section 10, the Placement Agent and Pubco will
instruct Escrow Agent to cause all monies received with respect to the
subscriptions for Units not accepted by the Company to be promptly returned to
such subscribers without interest, penalty or deduction.

    

    11.    
     Survival.

     

                   (a)
The obligations of the parties to pay any costs and expenses hereunder and to
provide indemnification and contribution as provided herein shall survive any
termination hereunder.  In addition, the provisions of Sections 3(d),
and 8 through 16 shall survive the sale of the Units or any termination of the
Offering hereunder.

    

                   (b)
The respective indemnities, covenants, representations, warranties and other
statements of Pubco, InVivo and the Placement Agent set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of, and regardless of any access to
information by, Pubco, InVivo or the Placement Agent, or any of their officers
or directors or any controlling person thereof, and will survive the sale of the
Units or any termination of the Offering hereunder for a period of four years
from the earlier to occur of the Final Closing or the termination of the
Offering.

    .

     

                 12.       
     Notices.  All
communications hereunder will be in writing and, except as otherwise expressly
provided herein or after notice by one party to the other of a change of
address, if sent to the Placement Agent, will be mailed, delivered or telefaxed
and confirmed to Spencer Trask Ventures, Inc., 535 Madison Avenue, 18th Floor,
New York, New York 10022, Attention: John Heidenreich, President, telefax number
(212) 888-9103, with a copy to: Littman Krooks LLP, 655 Third Avenue, 20th Floor,
New York, New York 10017, Attn: Steven D. Uslaner, Esq., telefax number (212)
490-2990, if sent to InVivo or the Company, will be mailed, delivered or
telefaxed and confirmed to InVivo Therapeutics Corporation One Broadway, 14th Floor,
Cambridge, Ma. 02142, Attn: Frank M. Reynolds, President, telefax number
(617) 225-4430, with a copy to Meister Selig & Fein LLP, Two Grand
Central Tower, 140 East 45th  Street,
19th
Floor, New York, NY 10017, Attn: Mitchell L. Lampert, Esq., telefax number
(212) 655-3535 and if
sent to Pubco, will be mailed, delivered or telefaxed and confirmed to Design
Source, Inc., 100 Europa Drive, Suite 455, Chapel Hill, NC 27517, Attn: Peter
Reichard, President, telefax number (919) 933-2730, with a copy to
Gottbetter & Partners, LLP, 488 Madison Ave., 12th Floor,
New York, NY 10022, Attn: Scott E. Rapfogel, Esq., telefax number (212)
400-6901.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    13.  Governing Law,
Jurisdiction.  This Agreement shall be deemed to have been made
and delivered in New York City and shall be governed as to validity,
interpretation, construction, effect and in all other respects by the internal
laws of the State of New York without regard to principles of conflicts of law
thereof.  Any and all disputes, controversies or claims arising out of
or relating to this Agreement, or the breach, termination or invalidity thereof,
shall be finally and exclusively resolved by arbitration in accordance with the
Arbitration Rules of the American Arbitration Association (“AAA”) as at present
in force. The arbitration shall take place in New York City, the State of New
York. The parties hereby submit themselves to the exclusive jurisdiction of the
arbitration tribunal in the City of New York, the State of New York under the
auspices of AAA. To the extent permitted by law, the award of the arbitrators
may include, without limitation, one or more of the following: a monetary award,
a declaration of rights, an order of specific performance, an injunction, and/or
a reformation of the contract. The decision of the arbitrators shall be final
and binding upon the parties hereto, and judgment on the award may be entered in
any court having jurisdiction over the subject matter thereof. The cash expenses
of the arbitration (including without limitation reasonable fees and expenses of
counsel, experts and consultants) shall be borne by the party against whom the
decision of the arbitrators is rendered; provided that if a party
prevails only partially, such party shall be entitled to be reimbursed for such
costs and expenses in the proportion that the dollar amount successfully claimed
by the prevailing party bears to the aggregate dollar amount
claimed.

     

    14.           Miscellaneous.  No
provision of this Agreement may be changed or terminated except by a writing
signed by the party or parties to be charged therewith.  Unless
expressly so provided, no party to this Agreement will be liable for the
performance of any other party’s obligations hereunder.  Either party
hereto may waive compliance by the other with any of the terms, provisions and
conditions set forth herein; provided, however, that any such waiver shall be in
writing specifically setting forth those provisions waived
thereby.  No such waiver shall be deemed to constitute or imply waiver
of any other term, provision or condition of this Agreement. Neither party may
assign its rights or obligations under this Agreement to any other person or
entity without the prior written consent of the other party.

     

    15.           Entire Agreement;
Severability.  This Agreement together with any other agreement
referred to herein supersedes all prior understandings and written or oral
agreements between the parties with respect to the Offering and the subject
matter hereof. If any portion of this Agreement shall be held invalid or
unenforceable, then so far as is reasonable and possible (i) the remainder of
this Agreement shall be considered valid and enforceable and (ii) effect shall
be given to the intent manifested by the portion held invalid or
unenforceable.

     

    16.           Counterparts.  This
Agreement may be executed in multiple counterparts, each of which may be
executed by less than all of the parties and shall be deemed to be an original
instrument which shall be enforceable against the parties actually executing
such counterparts and all of which together shall constitute one and the same
instrument. The exchange of copies of this Agreement and of signature pages by
facsimile transmission shall constitute effective execution and delivery of this
Agreement as to the parties and may be used in lieu of the original Agreement
for all purposes. Signatures of the parties transmitted by facsimile shall be
deemed to be their original signatures for all purposes.

     

    [Signatures
on following page.]

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    If the
foregoing is in accordance with your understanding of the agreement among Pubco,
InVivo and the Placement Agent, kindly sign and return this Agreement, whereupon
it will become a binding agreement among Pubco, InVivo and the Placement Agent
in accordance with its terms.

     

    
      
        	
                INVIVO
      THERAPEUTICS CORPORATION

              
	 
      	 
      
	
                By:

              	
                /s/ Frank Reynolds

              
	 
      	
                Frank
      Reynolds

              
	 
      	
                Chief
      Executive Officer

              
	 
      	 
      
	
                DESIGN
      SOURCE, INC.

              
	 
      	 
      
	
                By:

              	
                /s/ Peter Reichard

              
	 
      	
                Peter
      Reichard

              
	 
      	
                President
      and Chief Executive Officer

              

      

    

    

    
      Accepted
and agreed to this

    

    ____ day
of September, 2010:

    

    
      
        	
                SPENCER
      TRASK VENTURES, INC.

              
	 
      	 
      
	
                By:

              	
                /s/ John Heidenreich

              
	 
      	
                John
      Heidenreich

              
	 
      	
                President

              

      

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    Exhibit
A-1

    

    Form of Opinion-InVivo
Counsel

    

    2.1           InVivo
(the term "Company" when used herein, refers to InVivo) has been duly organized
as a corporation and is validly existing and in good standing under the laws of
the jurisdiction of its incorporation, has full corporate power and authority to
own, lease and operate its properties and conduct its business as described in
the Memorandum and is duly qualified as a foreign corporation for the
transaction of business and is in good standing in each jurisdiction where the
conduct of its business makes such qualification necessary, except where the
failure to so qualify would not have a material adverse effect upon the business
(as currently conducted), financial condition, prospects or results of operation
of the Company (a "Material Adverse Effect").

     

    2.2           The
authorized capital stock of the Company on the date hereof consists of (i)
[_______________] shares of Common Stock, [$0.___] par value per share, and (ii)
[_________________] shares of Preferred Stock, [$0.____] par value per
share.

     

    2.3           The
execution and delivery by InVivo of the Transaction Documents to which it is a
party and the consummation by InVivo of the transactions contemplated thereby
have been duly authorized by all necessary corporate action on the part of
InVivo and duly executed and delivered by InVivo.  Each of the
Transaction Documents to which it is a party constitutes the legal, valid and
binding obligation of InVivo, enforceable against InVivo in accordance with its
terms.

     

    2.4           The
execution and delivery by InVivo of the Transaction Documents1 to which it is a party and
the consummation by InVivo of the transactions contemplated thereby will not (i)
violate the provisions of the Delaware General Corporation Law or any United
States federal or state law, rule or regulation known to us to be currently
applicable to InVivo or (ii) violate the provisions of InVivo's Certificate of
Incorporation or By-Laws; (iii) violate any judgment, decree, order or award
known to us of any court, governmental body or arbitrator having jurisdiction
over InVivo; or (iv) result in the breach or termination of any material term or
provision of an agreement known to us to which InVivo is a party, except in any
such case where the breach or violation would not have a Material Adverse Effect
on InVivo or its ability to perform its obligations under the Transaction
Documents.

     

    2.5           To
our knowledge, there is no action, proceeding or litigation pending or
threatened against InVivo before any court, governmental or administrative
agency or body.

     

    2.6           Either
(i) no consent, approval or authorization of, or other action by, and no notice
to or filing with, any United States federal or state governmental authority on
the part of InVivo is required in connection with the valid execution and
delivery of the Transaction Documents to which it is a party and the
consummation by InVivo of the transactions contemplated thereunder, except for
(A) the filing of a Form D that may be filed with the United States Securities
and Exchange Commission; (B) any filings under the securities laws of the
various jurisdictions in which the Shares, Warrants and Placement Agent Warrants
are being offered and sold in the Offering; and (C) any filings relating to
public disclosure of the transactions contemplated by the Transaction Documents,
or (ii) any required consent, approval, authorization, action or filing has been
obtained, performed or made by InVivo.

    
       

      
        

      

      1  Transaction
Documents should include the Placement Agency Agreement, Escrow Deposit
Agreement, the Merger Agreement,  Warrant, Placement Agent Warrant;
Registration Rights Agreement, Subscription Agreements.

    

    
      
         

      

      
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    Exhibit
A-2

    Form of Opinion-Pubco
Counsel

    

    [

    2.1           InVivo
Therapeutics Holdings Corp. (the term "Company" when used herein, refers to
InVivo Therapeutics Holdings Corp.) has been duly organized as a corporation and
is validly existing and in good standing under the laws of the jurisdiction of
its incorporation, has full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the Company’s
Annual Report on Form 10-K for the year ended March 31, 2010 and is duly
qualified as a foreign corporation for the transaction of business and is in
good standing in each jurisdiction where the conduct of its business makes such
qualification necessary, except where the failure to so qualify would not have a
material adverse effect upon the business (as currently conducted), financial
condition, prospects or results of operation of the Company (a "Material Adverse
Effect").

     

    2.2           The
authorized capital stock of the Company on the date hereof consists of (i)
[_______________] shares of Common Stock, [$0.___] par value per share, and (ii)
[_________________] shares of Preferred Stock, [$0.____] par value per share.
All outstanding shares of capital stock of the Company have been duly authorized
and are validly issued, fully paid and non-assessable.

     

    2.3           The
Shares, the Warrants, the Placement Agent Warrants, and the shares of Common
Stock issuable upon exercise of the Warrants and the Placement Agent Warrants
have been duly authorized for issuance by all necessary corporate action on the
part of the Company. The Shares and the shares of Common Stock issuable upon
exercise of the Warrants and the Placement Agent Warrants when issued, sold and
delivered against payment therefore in accordance with the provisions of the
Memorandum, the Subscription Agreements, the Warrants or the Placement Agent
Warrants, as applicable, will be duly and validly issued, fully paid and
non-assessable. The issuance of the Shares, the Warrants and the Placement Agent
Warrants and the shares of Common Stock issuable upon exercise of the Warrants
and the Placement Agent Warrants are not subject to any statutory or, to our
knowledge, contractual or other preemptive rights. A sufficient number of
authorized but unissued shares of Common Stock have been reserved for issuance
upon exercise of the Warrants and the Placement Agent Warrants.

     

    2.4           The
execution and delivery by the Company of the Transaction Documents to which they
are a party and the consummation by the Company of the transactions contemplated
thereby have been duly authorized by all necessary corporate action on the part
of the Company, and duly executed and delivered by the Company, as applicable.
Each of the Transaction Documents to which it is a party constitutes the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.

     

    2.5           The
execution and delivery by the Company of the Transaction Documents2 to which they are a party
and the consummation by the Company of the transactions contemplated thereby
will not (i) violate the provisions of the Delaware General Corporation Law or
any United States federal or state law, rule or regulation known to us to be
currently applicable to the Company,  (ii) violate the provisions of
the Company's Certificate of Incorporation or By-Laws; (iii) violate any
judgment, decree, order or award known to us of any court, governmental body or
arbitrator having jurisdiction over the Company; or (iv) result in the breach or
termination of any material term or provision of an agreement known to us to
which the Company is a party, except in any such case where the breach or
violation would not have a Material Adverse Effect on the Company or its ability
to perform its obligations under the Transaction Documents.

     

      

      2  Transaction
Documents should include the Placement Agency Agreement, Escrow Deposit
Agreement, the Merger Agreement,  Warrant, Placement Agent Warrant;
Registration Rights Agreement, Subscription Agreements.

    

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    

      2.6           Assuming
that the Shares were sold only to "accredited investors" (as defined in Rule 501
of Regulation D promulgated under the Securities Act of 1933, as amended ("1933
Act")) and the Placement Agent complied in all material respects with Regulation
D and the terms and conditions of the Offering set forth in the Placement Agency
Agreement and the Memorandum, such sales were made in conformity in all material
respects with the requirements of Section 4(2) of the 1933 Act and Regulation D,
and with the requirements of all other United States federal regulations
applicable to the Company currently in effect relating to private offerings of
securities of the type made in the Offering.

       

      2.7           To
our knowledge, there is no action, proceeding or litigation pending or
threatened against the Company before any court, governmental or administrative
agency or body.

       

      2.8           Either
(i) no consent, approval or authorization of, or other action by, and no notice
to or filing with, any United States federal or state governmental authority on
the part of the Company is required in connection with the valid execution and
delivery of the Transaction Documents to which it is a party and the
consummation by the Company of the transactions contemplated thereunder, except
for (A) the filing of a Form D that may be filed with the United States
Securities and Exchange Commission; (B) any filings under the securities laws of
the various jurisdictions in which the Shares, Warrants and Placement Agent
Warrants are being offered and sold in the Offering; and (C) any filings
relating to public disclosure of the transactions contemplated by the
Transaction Documents, or (ii) any required consent, approval, authorization,
action or filing has been obtained, performed or made by the
Company.

       

      We have
not verified, and are not passing upon and do not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Private Placement Memorandum.  We have, however, in the course of the
preparation of the Private Placement Memorandum as counsel to InVivo Therapeutics
Holdings Corp. participated in discussions with your representatives and
those of InVivo
Therapeutics Holdings Corp.  in which the business affairs of
the Company and the contents of the Private Placement Memorandum were
discussed.  On the basis of information that we gained in the course
of the representation of the Company in connection with the preparation of the
Private Placement Memorandum and our participation in the discussions referred
to above, we believe that based on such information and participation, nothing
has come to our attention that causes us to believe that the Private Placement
Memorandum as of its date or as of the date hereof contained or contains any
untrue statement of a material fact or omitted or omits to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that we express
no opinion as to any information concerning InVivo Therapeutics Corporation,
contained in the Memorandum, the financial statements, including the notes and
schedules thereto, or any other financial, statistical or accounting information
included in, or omitted from, the Private Placement Memorandum).

      as to any
information concerning Pubco contained in the Memorandum.

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

      Exhibit
B\

      Form of Placement Agent
Warrant

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

      Warrant
Certificate No. ___

      

      NEITHER
THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES ISSUABLE UPON
THE EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, ASSIGNED OR OTHERWISE
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS
EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN
EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF
COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE
SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES
LAWS.

       

      
        	
                Effective
      Date: [   ], 2010

              	
                 Void After:
      [   ], 2015

              

      

       

      INVIVO
THERAPEUTICS HOLDINGS CORP.

      

      WARRANT
TO PURCHASE COMMON STOCK

      

      InVivo Therapeutics Holdings
Corp., a Nevada corporation (the “Company”), for value received
on
[              ],
2010 (the “Effective
Date”), hereby issues to [          ]
(the “Holder” or
“Warrant Holder”) this
Warrant (the “Warrant”)
to purchase, [        ]
shares (each such share as from time to time adjusted as hereinafter provided
being a “Warrant Share”
and all such shares being the “Warrant Shares”) of the
Company’s Common Stock (as defined below), at the Exercise Price (as defined
below), as adjusted from time to time as provided herein, on or before
[   ], 2015 (the “Expiration Date”), all subject
to the following terms and conditions. This Warrant was issued pursuant to that
certain Placement Agency Agreement dated September __, 2010 among the Company,
InVivo Therapeutics Corporation and Spencer Trask Ventures, Inc.(the “Placement Agency
Agreement”) and in
connection with the Company’s private offering to accredited investors of its
securities in accordance with, and subject to, the terms and conditions
described in that certain Confidential Private Placement Memorandum, dated
September [__], 2010, as the same may be amended and supplemented from time to
time (the “Private Placement
Memorandum”).

       

      As used
in this Warrant, (i) “Business
Day” means any day other than Saturday, Sunday or any other day on which
commercial banks in the City of New York, New York, are authorized or required
by law or executive order to close; (ii) “Common Stock” means the common
stock of the Company, par value $0.00001 per share, including any securities
issued or issuable with respect thereto or into which or for which such shares
may be exchanged for, or converted into, pursuant to any stock dividend, stock
split, stock combination, recapitalization, reclassification, reorganization or
other similar event; (iii) “Exercise Price” means $1.00
per share [PLEASE NOTE THAT THE
OTHER PA WARRANT WILL BE AT $1.40] of Common Stock, subject to adjustment
as provided herein; (iv) “Trading Day” means any day on
which the Common Stock is traded (or available for trading) on its principal
trading market; (v) “Affiliate” means any person
that, directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, a person, as such terms are used
and construed in Rule 144 promulgated under the Securities Act of 1933, as
amended (the “Securities
Act”) and (vi) “Warrantholders” means the
holders of Warrants issued pursuant to the Placement Agency
Agreement.

      
        
           

        

        
          27

          
            

          

        

        
           

        

      

      
        	
                1.

              	
                DURATION
      AND EXERCISE OF WARRANTS

              

      

      

      (a)           Exercise
Period.  The Holder may exercise this Warrant in whole or in
part on any Business Day on or before 5:00 P.M., Eastern Time, on the Expiration
Date, at which time this Warrant shall become void and of no value.

      

      
        	
                 
      

              	
                (b)

              	
                Exercise
      Procedures.

              

      

      

      (i)           While
this Warrant remains outstanding and exercisable in accordance with Section
1(a), in addition to the manner set forth in Section 1(b)(ii) below, the Holder
may exercise this Warrant in whole or in part at any time and from time to time
by:

      

      (A)           delivery
to the Company of a duly executed copy of the Notice of Exercise attached as
Exhibit A;

      

      (B)           surrender
of this Warrant to the Secretary of the Company at its principal offices or at
such other office or agency as the Company may specify in writing to the Holder;
and

      

      (C)           payment
of the then-applicable Exercise Price per share multiplied by the number of
Warrant Shares being purchased upon exercise of the Warrant (such amount, the
“Aggregate Exercise
Price”) made in the form of cash, or by certified check, bank draft or
money order payable in lawful money of the United States of America or in the
form of a Cashless Exercise to the extent permitted in Section 1(b)(ii)
below.

      

      (ii)           In
addition to the provisions of Section 1(b)(i) above, and in lieu of any cash
payment required thereunder, the Holder may, in its sole discretion, exercise
all or any part of the Warrant in a “cashless” or “net-issue” exercise (a “Cashless Exercise”) by
delivering to the Company (1) the Notice of Exercise and (2) the original
Warrant, pursuant to which the Holder shall surrender the right to receive upon
exercise of this Warrant, a number of Warrant Shares having a value (as
determined below) equal to the Aggregate Exercise Price, in which case, the
number of Warrant Shares to be issued to the Holder upon such exercise shall be
calculated using the following formula:

      
        
           

        

        
          28

          
            

          

        

        
           

        

      

      X              =              Y * (A -
B)

      A

       

      
        
          	
                                    with:

                	X
      =	 the
      number of Warrant Shares to be issued to the Holder
	 	 	 
	
                   
      

                	
                  Y
      =

                	
                  the
      number of Warrant Shares with respect to which the Warrant is being
      exercised

                

        

      

      

      
        
          	
                   
      

                	
                  A
      =

                	
                  the
      fair value per share of Common Stock on the date of exercise of this
      Warrant

                
	 	 	 
	 	B
      =	the
      then-current Exercise Price of the
Warrant

        

      

       

      Solely
for the purposes of this paragraph, “fair value” per share of
Common Stock shall mean the average Closing Price (as defined below) per share
of Common Stock for the twenty (20) trading days immediately preceding the date
on which the Notice of Exercise is deemed to have been sent to the
Company.  “Closing
Price” means, for any date, the price determined by the first of the
following clauses that applies:  (a) if the Common Stock is then
listed or quoted on the New York Stock Exchange, the American Stock Exchange,
the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital
Market or any other national securities exchange, the closing price per share of
the Common Stock for such date (or the nearest preceding date) on the primary
eligible market or exchange on which the Common Stock is then listed or quoted;
(b) if prices for the Common Stock are then quoted on the OTC Bulletin Board,
the closing bid price per share of the Common Stock for such date (or the
nearest preceding date) so quoted; or (c) if prices for the Common Stock are
then reported in the “Pink Sheets” published by the National Quotation Bureau
Incorporated (or a similar organization or agency succeeding to its functions of
reporting prices), the most recent closing bid price per share of the Common
Stock so reported.  If the Common Stock is not publicly traded as set
forth above, the “fair value” per share of Common Stock shall be reasonably and
in good faith determined by the Board of Directors of the Company as of the date
which the Notice of Exercise is deemed to have been sent to the
Company.

      

      For purposes of Rule 144 promulgated
under the Securities Act, it is intended, understood and acknowledged that the
Warrant Shares issued in a cashless exercise transaction shall be deemed to have
been acquired by the Holder, and the holding period for such shares shall be
deemed to have commenced, on the date this Warrant was originally
issued.

      
        
           

        

        
          29

          
            

          

        

        
           

        

      

      (iii)           Upon
the exercise of this Warrant in compliance with the provisions of this Section
1(b), and except as limited pursuant to the last paragraph of Section 1(b)(ii),
the Company shall promptly issue and cause to be delivered to the Holder a
certificate for the Warrant Shares purchased by the Holder.  Each
exercise of this Warrant shall be effective immediately prior to the close of
business on the date (the “Date
of Exercise”) that the conditions set forth in Section 1(b) have been
satisfied, as the case may be.  On the first Business Day following
the date on which the Company has received each of the Notice of Exercise and
the Aggregate Exercise Price (or notice of a Cashless Exercise in accordance
with Section 1(b)(ii)) (the “Exercise Delivery Documents”),
the Company shall transmit an acknowledgment of receipt of the Exercise Delivery
Documents to the Company’s transfer agent (the “Transfer Agent”). On or before
the third Business Day following the date on which the Company has received all
of the Exercise Delivery Documents (the “Share Delivery Date”), the
Company shall (X) provided that the Transfer Agent is participating in The
Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with
DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the
Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and dispatch by overnight courier to the address as
specified in the Notice of Exercise, a certificate, registered in the Company’s
share register in the name of the Holder or its designee, for the number of
shares of Common Stock to which the Holder is entitled pursuant to such
exercise.  Upon delivery of the Exercise Delivery Documents, the
Holder shall be deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of the certificates evidencing
such Warrant Shares.

      

      (iv)           If
the Company shall fail for any reason or for no reason to issue to the Holder,
within three (3) Business Days of receipt of the Exercise Delivery Documents, a
certificate for the number of shares of Common Stock to which the Holder is
entitled and register such shares of Common Stock on the Company’s share
register or to credit the Holder’s balance account with DTC for such number of
shares of Common Stock to which the Holder is entitled upon the Holder’s
exercise of this Warrant, and if on or after such Business Day the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of shares of Common Stock
issuable upon such exercise that the Holder anticipated receiving from the
Company (a “Buy-In”),
then the Company shall, within three (3) Business Days after the Holder’s
request and in the Holder’s discretion, either (i) pay cash to the Holder in an
amount equal to the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point
the Company’s obligation to deliver such certificate (and to issue such shares
of Common Stock) shall terminate, or (ii) promptly honor its obligation to
deliver to the Holder a certificate or certificates representing such shares of
Common Stock and pay cash to the Holder in an amount equal to the excess (if
any) of the Buy-In Price over the product of (A) such number of shares of Common
Stock, times (B) the closing bid price on the date of exercise.

      

      (c)           Partial
Exercise.  This Warrant shall be exercisable, either in its
entirety or, from time to time, for part only of the number of Warrant Shares
referenced by this Warrant. If this Warrant is submitted in connection with any
exercise pursuant to Section 1 and the number of Warrant Shares represented by
this Warrant submitted for exercise is greater than the actual number of Warrant
Shares being acquired upon such an exercise, then the
Company shall as soon as practicable and in no event later than five (5)
Business Days after any exercise and at its own expense, issue a new Warrant of
like tenor representing the right to purchase the number of Warrant Shares
purchasable immediately prior to such exercise under this Warrant, less the
number of Warrant Shares with respect to which this Warrant is
exercised.

      
        
           

        

        
          30

          
            

          

        

        
           

        

      

      (d)           Disputes.  In
the case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall promptly issue
to the Holder the number of Warrant Shares that are not disputed and resolve
such dispute in accordance with Section 15.

      

      
        	
                2.

              	
                ISSUANCE
      OF WARRANT SHARES

              

      

      

      (a)           The
Company covenants that all Warrant Shares will, upon issuance in accordance with
the terms of this Warrant, be (i) duly authorized, fully paid and
non-assessable, and (ii) free from all liens, charges and security interests,
with the exception of claims arising through the acts or omissions of any Holder
and except as arising from applicable Federal and state securities
laws.

      

      (b)           The
Company shall register this Warrant upon records to be maintained by the Company
for that purpose in the name of the record holder of such Warrant from time to
time. The Company may deem and treat the registered Holder of this Warrant as
the absolute owner thereof for the purpose of any exercise thereof, any
distribution to the Holder thereof and for all other purposes.

      

      (c)           The
Company will not, by amendment of its certificate of incorporation, by-laws or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all action necessary or appropriate in order to protect the rights of
the Holder to exercise this Warrant, or against impairment of such
rights.

      

      
        	
                3.

              	
                ADJUSTMENTS
      OF EXERCISE PRICE, NUMBER AND TYPE OF WARRANT
  SHARES

              

      

      

      (a)           The
Exercise Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3; provided, that
notwithstanding the provisions of this Section 3, the Company shall not be
required to make any adjustment if and to the extent that such adjustment would
require the Company to issue a number of shares of Common Stock in excess of its
authorized but unissued shares of Common Stock, less all amounts of Common Stock
that have been reserved for issue upon the conversion of all outstanding
securities convertible into shares of Common Stock and the exercise of all
outstanding options, warrants and other rights exercisable for shares of Common
Stock.  If the Company does not have the requisite number of
authorized but unissued shares of Common Stock to make any adjustment, the
Company shall use its commercially best efforts to obtain the necessary
stockholder consent to increase the authorized number of shares of Common Stock
to make such an adjustment pursuant to this Section 3.

      
        
           

        

        
          31

          
            

          

        

        
           

        

      

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

      

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

      

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

      

      (B)           additional
stock or other securities or property (including cash) by way of spin-off,
split-up, reclassification, combination of shares or similar corporate
rearrangement (other than shares of Common Stock issued as a stock split or
adjustments in respect of which shall be covered by the terms of Section 3(a)(i)
above),

      

      then and
in each such case, the Exercise Price and the number of Warrant Shares to be
obtained upon exercise of this Warrant shall be adjusted proportionately, and
the Holder hereof shall, upon the exercise of this Warrant, be entitled to
receive, in addition to the number of shares of Common Stock receivable
thereupon, and without payment of any additional consideration therefor, the
amount of stock and other securities and property (including cash in the cases
referred to above) that such Holder would hold on the date of such exercise had
such Holder been the holder of record of such Common Stock as of the date on
which holders of Common Stock received or became entitled to receive such
shares or all other additional stock and other securities and
property.  The Exercise Price and the Warrant Shares, as so adjusted,
shall be readjusted in the same manner upon the happening of any successive
event or events described in this Section 3(a)(ii).

      
        
           

        

        
          32

          
            

          

        

        
           

        

      

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

      

      (b)           Certificate as to
Adjustments. Upon the occurrence of each adjustment or readjustment
pursuant to this Section 3, the Company at its expense shall promptly compute
such adjustment or readjustment in accordance with the terms hereof and furnish
to each Holder of this Warrant a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall promptly furnish or cause to be
furnished to such Holder a like certificate setting forth: (i) such adjustments
and readjustments; and (ii) the number of shares and the amount, if any, of
other property which at the time would be received upon the exercise of the
Warrant.

      

      (c)           Certain Events. If
any event occurs as to which the other provisions of this Section 3 are not
strictly applicable but the lack of any adjustment would not fairly protect the
purchase rights of the Holder under this Warrant in accordance with the basic
intent and principles of such provisions, or if strictly applicable would not
fairly protect the purchase rights of the Holder under this Warrant in
accordance with the basic intent and principles of such provisions, then the
Company's Board of Directors will, in good faith, make an appropriate adjustment
to protect the rights of the Holder; provided, that no
such adjustment pursuant to this Section 3(c) will increase the Exercise Price
or decrease the number of Warrant Shares as otherwise determined pursuant to
this Section 3.

      
        
           

        

        
          33

          
            

          

        

        
           

        

      

      (d)           Adjustment of Exercise Price
Upon Issuance of Additional Shares of Common Stock.  In the
event the Company shall at any time prior to the Expiration Date issue
Additional Shares of Common Stock, as defined below, without consideration or
for a consideration per share less than the Exercise Price in effect immediately
prior to such issue, then the Exercise Price shall be reduced, concurrently with
such issue, to a price (calculated to the nearest cent) determined by
multiplying such Exercise Price by a fraction, (A) the numerator of which shall
be (1) the number of shares of Common Stock outstanding immediately prior to
such issue plus (2) the number of shares of Common Stock which the aggregate
consideration received or to be received by the Company for the total number of
Additional Shares of Common Stock so issued would purchase at such Exercise
Price; and (B) the denominator of which shall be the number of shares of Common
Stock outstanding immediately prior to such issue plus the number of such
Additional Shares of Common Stock so issued; provided that, (i)
for the purpose of this Section 3(d), all shares of Common Stock issuable upon
conversion or exchange of convertible securities outstanding immediately prior
to such issue shall be deemed to be outstanding, and (ii) the number of shares
of Common Stock deemed issuable upon conversion or exchange of such outstanding
convertible securities shall be determined without giving effect to any
adjustments to the conversion or exchange price or conversion or exchange rate
of such convertible securities resulting from the issuance of Additional Shares
of Common Stock that is the subject of this calculation.  For purposes
of this Warrant, “Additional Shares of Common Stock” shall mean all shares of
Common Stock issued by the Company after the Effective Date (including without
limitation any shares of Common Stock issuable upon conversion or exchange of
any convertible securities or upon exercise of any option or warrant, on an
as-converted basis), other than: (i) shares of Common Stock issued or
issuable upon conversion or exchange of any convertible securities or exercise
of any options or warrants outstanding on the Effective Date; (ii) shares
of Common Stock issued or issuable by reason of a dividend, stock split,
split-up or other distribution on shares of Common Stock that is covered by
Sections 3(a)(i) through 3(a)(iii) above; (iii) shares of Common Stock (or
options with respect thereto) issued or issuable to employees or directors of,
or consultants to, the Company or any of its subsidiaries pursuant to a plan,
agreement or arrangement approved by the Board of Directors of the Company; (iv)
any securities issued or issuable by the Company pursuant to (A) the Company’s
Private Placement  Memorandum thereunder or (B) the reverse triangular
merger of InVivo Therapeutics Corporation with a wholly owned subsidiary of the
Company as contemplated in the Private Placement Memorandum “Merger”); (v)
securities issued pursuant to acquisitions or strategic transactions approved by
a majority of disinterested directors of the Company, provided that any such
issuance shall only be to a person which is, itself or through its subsidiaries,
an operating company in a business synergistic with the business of the Company
and in which the Company receives benefits in addition to the investment of
funds, but shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities and (vi) securities issued to
financial institutions, institutional investors or lessors in connection with
credit arrangements, equipment financings or similar transactions approved by a
majority of disinterested directors of the Company.  The provisions of
this Section 3(d) shall not operate to increase the Exercise
Price.

      
        
           

        

        
          34

          
            

          

        

        
           

        

      

      Upon each
adjustment of the Exercise Price pursuant to the provisions of this Section
3(d), the number of Warrant Shares issuable upon exercise of this Warrant shall
be adjusted by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares issuable
upon exercise of this Warrant immediately prior to such adjustment and dividing
the product so obtained by the adjusted Exercise Price.

      

      4.           INTENTIONALLY
OMITTED.

       

      
        	
                5.

              	
                TRANSFERS
      AND EXCHANGES OF WARRANT AND WARRANT
SHARES

              

      

      

      (a)           Registration of Transfers
and Exchanges. Subject to Section 5(c), upon the Holder’s surrender of
this Warrant, with a duly executed copy of the Form of Assignment attached as
Exhibit B, to the
Secretary of the Company at its principal offices or at such other office or
agency as the Company may specify in writing to the Holder, the Company shall
register the transfer of all or any portion of this Warrant. Upon such
registration of transfer, the Company shall issue a new Warrant, in
substantially the form of this Warrant, evidencing the acquisition rights
transferred to the transferee and a new Warrant, in similar form, evidencing the
remaining acquisition rights not transferred, to the Holder requesting the
transfer.

      

      (b)           Warrant Exchangeable for
Different Denominations. The Holder may exchange this Warrant for a new
Warrant or Warrants, in substantially the form of this Warrant, evidencing in
the aggregate the right to purchase the number of Warrant Shares which may then
be purchased hereunder, each of such new Warrants to be dated the date of such
exchange and to represent the right to purchase such number of Warrant Shares as
shall be designated by the Holder. The Holder shall surrender this Warrant with
duly executed instructions regarding such re-certification of this Warrant to
the Secretary of the Company at its principal offices or at such other
office or agency as the Company may specify in writing to the
Holder.

      

      (c)           Restrictions on
Transfers. This Warrant may not be transferred at any time without (i)
registration under the Securities Act or (ii) an exemption from such
registration and a written opinion of legal counsel addressed to the Company
that the proposed transfer of the Warrant may be effected without registration
under the Securities Act, which opinion will be in form and from counsel
reasonably satisfactory to the Company.

      

      (d)           Permitted Transfers and
Assignments.  Notwithstanding any provision to the contrary in
this Section 5, the Holder may transfer, with or without consideration, this
Warrant or any of the Warrant Shares (or a portion thereof) to the Holder’s
Affiliates (as such term is defined under Rule 144 of the Securities Act)
without obtaining the opinion from counsel that may be required by Section
5(c)(ii), provided, that the
Holder delivers to the Company and its counsel certification, documentation, and
other assurances reasonably required by the Company’s counsel to enable the
Company’s counsel to render an opinion to the Company’s Transfer Agent that such
transfer does not violate applicable securities laws.

      
        
           

        

        
          35

          
            

          

        

        
           

        

      

      (e)           Permitted
Designees.  Notwithstanding anything contained herein, the
Company shall, upon written instructions from the Holder to be delivered to the
Company within ninety (90) calendar days following the date of the issuance of
this Warrant, transfer all or a portion of this Warrant to officers, directors,
employees and other associated persons of the Holder and other registered
dealers, agents and finders (collectively, “Permitted
Designees”).  Such transfer shall be effective upon delivery of this
Warrant and the form of assignment attached hereto as Exhibit B, accompanied by an
investment letter in form and substance satisfactory to the
Company.

      

      
        	
                6.

              	
                MUTILATED
      OR MISSING WARRANT CERTIFICATE

              

      

      

      If this Warrant is mutilated, lost,
stolen or destroyed, upon request by the Holder, the Company will, at its
expense, issue, in exchange for and upon cancellation of the mutilated Warrant,
or in substitution for the lost, stolen or destroyed Warrant, a new Warrant, in
substantially the form of this Warrant, representing the right to acquire the
equivalent number of Warrant Shares; provided, that, as a
prerequisite to the issuance of a substitute Warrant, the Company may require
satisfactory evidence of loss, theft or destruction as well as an indemnity from
the Holder of a lost, stolen or destroyed Warrant.

      

      
        	
                7.

              	
                PAYMENT
      OF TAXES

              

      

      

      The
Company will pay all transfer and stock issuance taxes attributable to the
preparation, issuance and delivery of this Warrant and the Warrant Shares (and
replacement Warrants) including, without limitation, all documentary and stamp
taxes; provided, however, that the
Company shall not be required to pay any tax in respect of the transfer of this
Warrant, or the issuance or delivery of certificates for Warrant Shares or other
securities in respect of the Warrant Shares to any person or entity other than
to the Holder.

      

      8.      
     FRACTIONAL WARRANT SHARES

      

      No
fractional Warrant Shares shall be issued upon exercise of this Warrant. The
Company, in lieu of issuing any fractional Warrant Share, shall round up the
number of Warrant Shares issuable to nearest whole share.

      

      
        	
                9.

              	
                NO
      STOCK RIGHTS AND LEGEND

              

      

      

      No holder
of this Warrant, as such, shall be entitled to vote or be deemed the holder of
any other securities of the Company that may at any time be issuable on the
exercise hereof, nor shall anything contained herein be construed to confer upon
the holder of this Warrant, as such, the rights of a stockholder of the Company
or the right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or give or withhold consent to any
corporate action or to receive notice of meetings or other actions affecting
stockholders (except as provided herein), or to receive dividends or
subscription rights or otherwise (except as provide herein).

      

      Each certificate for Warrant Shares
initially issued upon the exercise of this Warrant, and each certificate for
Warrant Shares issued to any subsequent transferee of any such certificate,
shall be stamped or otherwise imprinted with a legend in substantially the
following form:

      
        
           

        

        
          36

          
            

          

        

        
           

        

      

      “THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH  RESPECT THERETO
IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN
EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF
COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED,
SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR   APPLICABLE
STATE SECURITIES LAWS.”

      

      10.          NOTICES

      

      All notices, consents, waivers, and
other communications under this Warrant must be in writing and will be deemed
given to a party when (a) delivered to the appropriate address by hand or by
nationally recognized overnight courier service (costs prepaid); (b) sent by
facsimile or e-mail with confirmation of transmission by the transmitting
equipment; (c) received or rejected by the addressee, if sent by certified mail,
return receipt requested, if to the registered Holder hereof; or (d) seven days
after the placement of the notice into the mails (first class postage prepaid),
to the Holder, to it at 535 Madison Avenue, 12th Floor,
New York, New York 10022, Attention: John Heidenreich, President, telefax number
(212) 888-9103, with a copy to: Littman Krooks LLP, 655 Third Avenue, 20th Floor,
New York, New York 10017, Attn: Steven D. Uslaner, Esq., telefax number (212)
490-2990,, or if to the Company, to it at One Broadway, 14th Floor, Cambridge,
Ma. 02142, Attention: Frank Reynolds, Chief Executive Officer (or to such other
address, facsimile number, or e-mail address as the Holder or the Company as a
party may designate by notice the other party) with a copy to Meister Seelig
& Fein LLP, 2 Grand Central Tower, 140 East 45th Street,
19th
Floor, New York, NY 10017, Attention:  Mitchell L. Lampert,
Esq.

      

      
        	
                11.

              	
                SEVERABILITY

              

      

      

      If a
court of competent jurisdiction holds any provision of this Warrant invalid or
unenforceable, the other provisions of this Warrant will remain in full force
and effect. Any provision of this Warrant held invalid or unenforceable only in
part or degree will remain in full force and effect to the extent not held
invalid or unenforceable.

      

      
        	
                12.

              	
                BINDING
      EFFECT

              

      

      

      This
Warrant shall be binding upon and inure to the sole and exclusive benefit of the
Company, its successors and assigns, the registered Holder or Holders from time
to time of this Warrant and the Warrant Shares.

      
        
           

        

        
          37

          
            

          

        

        
           

        

      

      
        	
                13.

              	
                SURVIVAL
      OF RIGHTS AND DUTIES

              

      

      

      This
Warrant shall terminate and be of no further force and effect on the earlier of
5:00 P.M., Eastern Time, on the Expiration Date or the date on which this
Warrant has been exercised in full.

      

      
        	
                14.

              	
                GOVERNING
      LAW

              

      

      

      This
Warrant will be governed by and construed under the laws of the State of New
York without regard to conflicts of laws principles that would require the
application of any other law.

      

      
        	
                15.

              	
                DISPUTE
      RESOLUTION

              

      

      

      In the
case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall submit the
disputed determinations or arithmetic calculations via facsimile within two
Business Days of receipt of the Notice of Exercise giving rise to such dispute,
as the case may be, to the Holder. If the Holder and the Company are unable to
agree upon such determination or calculation of the Exercise Price or the
Warrant Shares within three Business Days of such disputed determination or
arithmetic calculation being submitted to the Holder, then the Company shall,
within two Business Days, submit via facsimile (a) the disputed determination of
the Exercise Price to an independent, reputable investment bank selected by the
Company and approved by the Holder or (b) the disputed arithmetic calculation of
the Warrant Shares to the Company’s independent, outside accountant. The
Company shall cause at its expense the investment bank or the accountant, as the
case may be, to perform the determinations or calculations and notify the
Company and the Holder of the results no later than ten (10) Business Days from
the time it receives the disputed determinations or calculations. Such
investment bank’s or accountant’s determination or calculation, as the case may
be, shall be binding upon all parties absent demonstrable error.

      

      
        	
                16.

              	
                NOTICES
      OF RECORD DATE

              

      

      

      Upon (a)
any establishment by the Company of a record date of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution, or right or option to acquire
securities of the Company, or any other right, or (b) any capital
reorganization, reclassification, recapitalization, merger or consolidation of
the Company with or into any other corporation, any transfer of all or
substantially all the assets of the Company, or any voluntary or involuntary
dissolution, liquidation or winding up of the Company, or the sale, in a single
transaction, of a majority of the Company’s voting stock (whether newly issued,
or from treasury, or previously issued and then outstanding, or any combination
thereof), the Company shall mail to the Holder at least ten (10) Business Days,
or such longer period as may be required by law, prior to the record date
specified therein, a notice specifying (i) the date established as the record
date for the purpose of such dividend, distribution, option or right and a
description of such dividend, option or right, (ii) the date on which any such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up, or sale is expected to become effective and (iii) the
date, if any, fixed as to when the holders of record of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, transfer,
consolation, merger, dissolution, liquidation or winding up.

      
        
           

        

        
          38

          
            

          

        

        
           

        

      

      
        	
                17.

              	
                RESERVATION
      OF SHARES

              

      

      

      The
Company shall reserve and keep available out of its authorized but unissued
shares of Common Stock for issuance upon the exercise of this Warrant, free from
pre-emptive rights, such number of shares of Common Stock for which this Warrant
shall from time to time be exercisable.  The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law or
regulation. Without limiting the generality of the foregoing, the Company
covenants that it will use commercially reasonable efforts to take all such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares upon the exercise
of this Warrant and use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents, including but not limited to consents
from the Company’s stockholders or Board of Directors or any public regulatory
body, as may be necessary to enable the Company to perform its obligations under
this Warrant.

      

      
        	
                18.

              	
                NO
      THIRD PARTY RIGHTS

              

      

      

      This
Warrant is not intended, and will not be construed, to create any rights in any
parties other than the Company and the Holder, and no person or entity may
assert any rights as third-party beneficiary hereunder.

      

      [SIGNATURE
PAGE FOLLOWS]

      
        
           

        

        
          39

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of
the date first set forth above.

      

      
        	 
      	
                INVIVO
      THERAPEUTICS HOLDINGS CORP.

              
	 
      	 
      
	 
      	
                By: 

              	 
      
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              

      

      
        
           

        

        
          40

          
            

          

        

        
           

        

      

      EXHIBIT
A

      

      NOTICE OF
EXERCISE

      (To be
executed by the Holder of Warrant if such Holder desires to exercise
Warrant)

      

      To InVivo
Therapeutics Holdings Corp.:

      

      The
undersigned hereby irrevocably elects to exercise this Warrant and to purchase
thereunder, ___________________ full shares of [InVivo Therapeutics Holdings
Corp.] common stock issuable upon exercise of the Warrant and delivery
of:

      

      (1)                 $_________
(in cash as provided for in the foregoing Warrant) and any applicable taxes
payable by the undersigned pursuant to such Warrant; and

      

      (2)                 __________
shares of Common Stock (pursuant to a Cashless Exercise in accordance with
Section 1(b)(ii) of the Warrant) (check here if the undersigned desires to
deliver an unspecified number of shares equal the number sufficient to effect a
Cashless Exercise [___]).

      

      The undersigned requests that
certificates for such shares be issued in the name of:

       

      _________________________________________

      (Please
print name, address and social security or federal employer

      identification
number (if applicable))

      

      _________________________________________

      

      _________________________________________

      

      If the shares issuable upon this
exercise of the Warrant are not all of the Warrant Shares which the Holder is
entitled to acquire upon the exercise of the Warrant, the undersigned requests
that a new Warrant evidencing the rights not so exercised be issued in the name
of and delivered to:

      

      _________________________________________

      (Please
print name, address and social security or federal employer

      identification
number (if applicable))

      

      _________________________________________

      

      _________________________________________

      

      
        	 
      	
                Name
      of Holder (print):

              	 
      

      

      
        	 
      	
                (Signature):

              	 
      
	 
      	
                (By:)

              	 
      
	 
      	
                (Title:)

              	 
      
	 
      	
                Dated:

              	 
      

      

      
        
           

        

        
          41

          
            

          

        

        
           

        

      

      EXHIBIT
B

      

      FORM OF
ASSIGNMENT

      

      FOR VALUE
RECEIVED, ___________________________________ hereby sells, assigns and
transfers to each assignee set forth below all of the rights of the undersigned
under the Warrant (as defined in and evidenced by the attached Warrant) to
acquire the number of Warrant Shares set opposite the name of such assignee
below and in and to the foregoing Warrant with respect to said acquisition
rights and the shares issuable upon exercise of the Warrant:

      

      
        
          
            
              	
                      Name of Assignee

                    	 
      	
                      Address

                    	 
      	
                      Number of Shares

                    
	 
      	 
      	 
      	 
      	 
      

            

          

        

      

      

      If the
total of the Warrant Shares are not all of the Warrant Shares evidenced by the
foregoing Warrant, the undersigned requests that a new Warrant evidencing the
right to acquire the Warrant Shares not so assigned be issued in the name of and
delivered to the undersigned.

      

      
        	 
      	
                Name
      of Holder (print):

              	 
      

      

      
        	 
      	
                (Signature):

              	 
      
	 
      	
                (By:)

              	 
      
	 
      	
                (Title:)

              	 
      
	 
      	
                Dated:Exhibit
10.5

    FINDER’S  AGREEMENT

    

    This
agreement (the “Agreement”) is entered into as of October 26, 2010 between
InVivo Therapeutics Holdings Corp., a Nevada corporation, including each of its
affiliates (the “Company”) and Spencer Trask Ventures, Inc., a Delaware
corporation (“Finder”).

    

    RECITALS

    

    WHEREAS,
Finder may have occasion to introduce the Company to one or more Targets (as
defined in Section 2 below) who may be interested in engaging in a business
combination or financing arrangement with the Company which may include a merger
or purchase of some or all of the stock or assets of the Company by a Target, or
an investment in the securities of or loan to the Company by a Target
(singularly and in combination, a “Transaction”); and

    

    WHEREAS,
the Company desires to engage the services of Finder to provide an introduction
to such Targets in accordance with the terms and conditions set forth in this
Agreement.

    

    AGREEMENT

    

    NOW,
THEREFORE, in consideration of the premises and mutual covenants hereinafter
contained, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:

    

    1.           The
Company engages Finder as one of the Company's non-exclusive finders, to locate
proposed Targets interested in effecting a Transaction.

    

    2.           For
the purposes of this Agreement, “Targets” shall mean individuals, entities or
other persons (and any of their related parties or affiliates) that are set
forth on the Post-Closing Investor List (as defined in the Placement Agency
Agreement dated October 4, 2010 by and between the Company and Finder, as the
same may be amended from time to time (the “PAA”) and which is incorporated
herein by this reference), together with any new introductions made by the
Finder to the Company following the date hereof (to be mutually agreed to by the
Company and Finder).  The Finder agrees not to contact any Targets for
purposes of effecting a Transaction with the Company without the prior written
approval (e-mail will suffice for such purposes) of the Company.

    

    
      3.          
In the
event of a consummated Transaction, the Company shall pay to Finder a cash fee
as follows:

    

    

    
      	
               
      

            	
              (i)

            	
              7%
      of the first $1,000,000 or portion thereof of the Cconsideration paid in
      such transaction (as defined below);
plus

            

    

    
      
        	
              	
                (ii)

              	
                6%
      of the next $1,000,000 or portion thereof of the Consideration paid in
      such transaction; plus

              

      

    

    
      
        	
              	
                (iii)

              	
                5%
      of the next $5,000,000 or portion thereof of the Consideration paid in
      such transaction; plus

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      
        
          	
                	
                  (iv)

                	
                  4%
      of the next $1,000,000 or portion thereof of the Consideration paid in
      such transaction; plus

                

        

      

    

    
      
        
          	
                	
                  (v)

                	
                   3%
      of the next $1,000,000 or portion thereof of the Consideration paid in
      such transaction; plus

                

        

      

    

    
      
        	
              	
                (vi)

              	
                2.5%
      of any Consideration paid in such transaction in excess of
      $9,000,000.

              

      

    

    

    “Consideration paid in such
transaction” for purposes of this Agreement shall mean the value of all
consideration, including proceeds of investments and loans, paid to the
Company  and/or the stockholders of the Company in connection with a
Transaction, including cash, notes, securities or other items of value exchanged
or paid at closing; assumption of debt; installment payments, deferred payments
and contingent payments (whether or not related to future earnings or
operations). Payment of the applicable fee set forth above will be made at the
closing of the related Transaction in immediately available funds.

    

    Securities and any non-cash
Consideration paid in connection with any Transaction shall be included as part
of the Consideration at their fair market value which shall be determined by the
Company’s Board of Directors and Finder, acting in good faith, as of the day
before the closing of the Transaction; provided, however, any publicly traded
securities will be valued based on the average of the closing prices of such
securities on the primary exchange or trading system on which they are traded
for the ten trading days ending one trading day prior to the Transaction
closing.  Amounts paid into escrow and contingent payments, including
interest, will be included as part of the Consideration and paid to Finder, if,
as and when actually paid or otherwise made available to the Company or
affiliated or related entities or individuals) or its
stockholders.  If the aggregate Consideration in connection with any
Transaction may be increased as a result of future events or contingencies, the
portion of the Finder’s fee related to such contingent payments will be
proportionally increased and paid to Finder, if, as and when such contingent
payments are made.

    

    For the avoidance of doubt, Finder will
not be entitled to a fee with respect to a transaction entered into with any
party with whom the Company had a pre-existing relationship prior to the date of
the specific introduction and who was not introduced to the Company by
Finder.

    

    4.           This
Agreement shall remain in full force and effect commencing the date hereof and
continuing until eighteen (18) months after the later of the (i) Termination
Date (as defined in the PAA) or (ii) the date hereof; provided, however, that
Finder shall be entitled to receive the full fee set forth in paragraph 3 hereof
in the event a binding letter of intent or other definitive agreement with a
Target has been executed during the Term with respect to a specific Transaction
and a Transaction is consummated with such Target within six months from the
expiration of this Agreement.

    

    5.           The
Company shall not be liable for any retainers, costs, expenses or other charges
incurred by Finder or third parties at the request of Finder unless the Company
has authorized such costs or expenses in writing.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    6.           (a)
Finder is an independent contractor and financial advisor and is not an employee
or agent of the Company and it shall have no authority to bind the Company in
any manner whatsoever.

    

    (b) The
Company acknowledges that Finder will not be required to conduct any due
diligence with respect to any Target and that Finder makes no representations
whatsoever with respect to any Target (including without limitation its
financial condition or its ability to perform any obligations to which it is or
may become bound), and the Company expressly agrees that Finder shall have no
liability whatsoever in connection with any Transaction it may enter into with a
Target.

    

    7.           This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to its conflict of law
principles.

    

    8.           This
Agreement, together with the PAA, constitutes the entire agreement between the
parties with respect to the subject matter of this Agreement and supersedes any
prior agreements, whether written or oral, between the parties.  No
modification, extension or change in this Agreement shall be effective unless it
is in writing and signed by both Finder and the Company.

    

    9.           The
provisions of this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, their heirs, legal representatives, successors
and assigns.  This Agreement may not be assigned except upon the prior
written consent of the other party to this Agreement.

    

    10.        Any
notice hereunder shall be in writing and delivery thereof shall be complete if
delivered in person, by facsimile or mailed by overnight mail, or registered or
certified mail, postage prepaid to the following addresses (unless changed by
written notice):

    

    
      	
              Finder:

            	
              Spencer
      Trask Ventures, Inc.

            
	 
      	
              535
      Madison Avenue, 12th
      Floor

            
	 
      	
              New
      York, NY 10022

            
	 
      	
              Attention:
      John Heidenreich, President

            
	 
      	 
      
	
              Company:

            	
              InVivo
      Therapeutics Holdings Corp.

            
	 
      	
              One
      Broadway, 14th
      Floor

            
	 
      	
              Cambridge,
      MA. 02142

            
	 
      	
              Attention:  Frank
      M. Reynolds, CEO

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, this Agreement has
been executed by the parties hereto as of the date first above
written.

    

    
      
        	
                INVIVO
      THERAPEUTICS HOLDINGS CORP.

              	 
      	
                SPENCER
      TRASK VENTURES, INC

              
	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Frank M. Reynolds

              	 
      	
                By:

              	
                /s/ John Heidenreich

              
	
                Name:

              	
                Frank
      M. Reynolds

              	 
      	
                Name:

              	
                John
      Heidenreich

              
	
                Title:

              	
                Chief
      Executive Officer

              	 
      	
                Title:

              	
                President

              

      

    

     

    
      
         

      

      
        4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}]]