Document:

CNS Response, Inc.

85 Enterprise, Suite 410

Aliso Viejo, CA 92656

 

November __, 2012

 

Sail Capital Partners

3161 Michelson Drive

Suite 750

Irvine, CA 92612

 

		Re:	Governance Agreement

 

Ladies and Gentlemen:

 

This letter agreement confirms the understanding and agreement
between CNS Response, Inc., a Delaware corporation (the “Company”), on the one hand, and Sail Capital Partners
(“Stockholder”), on the other hand. The Company has experienced continuing losses, extreme cash flow shortfalls,
has been unable to satisfy its financial obligations as they have become due and has failed in numerous attempts to raise additional
capital through the sale of equity securities. Various investors led by the Stockholder and including the Stockholder have agreed
to make an investment in convertible promissory notes issued by the Company. As a condition to the investment, the Stockholder
has requested that there be certain changes to the composition of the Board of Directors with the understanding that the Board
be composed of persons who will lead the Company through the challenges facing the Company during the next several years. Accordingly,
the Company has agreed with the Stockholder as follows:

 

		1.	Current Board Composition. As soon as reasonably practicable, the Company agrees to appoint three persons nominated
by Stockholder (the “Board Designees”) to the Board of Directors and agrees to cause to be created vacancies
for such purpose; provided, however, that no such appointments shall be required unless (i) each such Board Designee
shall be qualified and suitable to serve as a member of the Board of Directors under all applicable corporate governance policies
or guidelines of the Company and the Board of Directors and applicable legal, regulatory and stock market requirements, and (ii)
at least two of the aggregate number of such nominees shall meet the independence requirements with respect to the Company of the
Rules of The Nasdaq Stock Market or any successor thereto (including those requirements pertaining to audit committee members).
In addition, the Company shall not increase the number of persons who may comprise the Board of Directors to more than seven persons
without the express written consent of the Stockholder.

 

		2.	Future Stockholder Meetings. At each meeting of stockholders of the Company at which Directors are nominated and elected,
the Company agrees to nominate for election at any such meeting, three Board Designees designated by Stockholder and to take all
necessary action to support the election of each such Board Designee, to oppose any challenges to any such Board Designee. If at
any meeting of Stockholders of the Company, a Board Designee fails to receive sufficient votes to be elected, the Company shall
hold a meeting of stockholders as soon as practicable after the last meeting for the purpose of electing an alternative Board Designee
or alternative Board Designees designated by the Stockholder. Each Board Designee nominated under this Paragraph 2 shall satisfy
each of the conditions (i) and (ii) set forth in Paragraph 1 above.

 

    	 

    	 

    

 

Sail Capital Partners

November __, 2012

Page 2

 

		3.	Qualification. Stockholder will take all necessary action to cause any nominee for Board Designee to make himself or
herself reasonably available for interviews, to consent to such reference and background checks or other investigations and to
provide such information (including information necessary to determine the nominee’s independence status under various requirements
and institutional investor guidelines as well as information necessary to determine any disclosure obligations of the Company)
as the Board of Directors or its Corporate Governance and Nominations Committee may reasonably request. Each Board Designee shall
be subject to the policies and requirements of the Company and its Board of Directors, including the Corporate Governance Guidelines
of the Board of Directors and the Company’s Code of Ethics, in a manner consistent with the application of such policies
and requirements to other members of the Board of Directors. The Company shall indemnify the Board Designees and provide the Board
Designees with director and officer insurance to the same extent it indemnifies and provides insurance for the members of the Board
of Directors pursuant to its organizational documents, applicable law or otherwise.

 

		4.	Other Investor. It is understood that simultaneous with the execution of this Letter Agreement, the Company is entering
into a similar agreement with another stockholder. It is understood and acknowledged that there is no agreement or understanding
between the two designating parties, nor are they acting in concert, with respect to the designation of any persons or the voting
of any shares.

 

		5.	Entire Agreement. This letter agreement contains the entire agreement between and among the parties concerning the subject
matter of this letter agreement and supersedes all prior agreements and understandings with respect to such subject matter.

 

		6.	Governing Law. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of
Delaware.

 

		7.	Assignment. This letter agreement shall be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assignees. This letter agreement may not be assigned by the Company without the consent or other approval
of Stockholder. This letter agreement may not be assigned by Stockholder without the prior written consent of the Company.

 

		8.	Amendment. Except as expressly provided herein, neither this letter agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment,
waiver, discharge or termination is sought.

 

		9.	Termination. This letter agreement shall automatically terminate and be of no further force or effect, without any action
on the part of any of the parties hereto, in the event of (i) the sale of substantially all of the Company’s assets or a
change of control of the Company, which shall be deemed to include, among other things, (A) any transaction or series of related
transactions pursuant to which the stockholders of the Company prior to such transaction or series of transactions hold less than
a majority of the voting power of the Company or any successor in interest thereto or less than a majority in interest of all or
substantially all of the assets of the Company, and (B) any transaction or series of related transactions pursuant to which the
members of the Board prior to such transaction or series of transactions constitute less than a majority of the members of the
Board or the board of directors of any successor in interest thereto; or (ii) any transaction pursuant to which the Company sells
securities to parties not including the Stockholder from which the Company receives gross proceeds of not less than $10,000,000.

 

		10.	Notices. All notices and other communications pursuant to this letter agreement shall be in writing and shall be delivered
personally, sent by facsimile (with receipt confirmed), sent by nationally-recognized overnight courier or mailed by registered
or certified mail (return receipt requested), postage prepaid, to the respective parties at the following address (or at such other
address for a party as shall be specified by like notice):

 

    	- 2 -

    	 

    

 

Sail Capital Partners

November __, 2012

Page 3

 

	If to the Company:
	 
	CNS Response, Inc.
	85 Enterprise, Suite 410
	Aliso Viejo, CA  92656
	 
	Attention:
	 	Corporate Secretary
	Telephone:	(949) 420-4400
	Facsimile:	(866) 294-2611
	 
	If to Sail Capital Partners:
	 
	Sail Capital Partners
	3161 Michelson Drive
	Suite 750
	Irvine, CA  92612
	 
	Attention:
	Telephone:
	Facsimile:

 

Each such notice or other communication shall for
all purposes of this letter agreement be treated as effective or having been given: (i) if delivered personally, when delivered,
(ii) if sent by facsimile, upon confirmation of facsimile transfer, (iii) if sent by nationally-recognized overnight courier, on
the first business day after the business day on which the same has been deposited with such overnight courier, or (iv) if sent
by registered or certified mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly-maintained
receptacle for the deposit of the United States mail, addressed and mailed as aforesaid.

 

		11.	Further Assurances. The parties hereto shall do and perform or cause to be done and performed all such further acts
and things and shall execute and deliver all such other agreements, certificates, instruments or documents as any other party may
reasonably request from time to time in order to carry out the intent and purposes of this letter agreement and the consummation
of the transactions contemplated hereby. Neither the Company nor Stockholder shall voluntarily undertake any course of action inconsistent
with satisfaction of the requirements applicable to them set forth in this letter agreement and each shall promptly do all such
acts and take all such measures as may be appropriate to enable them to perform as early as practicable the obligations herein
and therein required to be performed by them.

 

    	- 3 -

    	 

    

 

Sail Capital Partners

November __, 2012

Page 4

 

		12.	Facsimile; Counterparts. This letter agreement may be executed by facsimile and in two or more counterparts, each of
which may be executed by fewer than all of the parties hereto, each of which shall be fully enforceable against each of the other
parties hereto actually executing such counterparts, and all of which together shall constitute one and the same instrument, enforceable
against all of the parties hereto.

 

		13.	Severability. In the event that any term or provision of this letter agreement shall become, or is declared by a court
of competent jurisdiction to be, illegal, unenforceable or void, this letter agreement shall continue in full force and effect
without said term or provision as close as possible to the intent of the parties hereto.

 

    	- 4 -

    	 

    

 

Sail Capital Partners

November __, 2012

Page 5

 

IN WITNESS WHEREOF, each of the parties hereto has executed
this letter agreement as of the date first written above.

 

	 	CNS RESPONSE, INC.
	 	 
	 	By:	 
	 	Name:  	George Carpenter
	 	Title:	President and Chief Executive Officer
	 	 	 
	 	SAIL CAPITAL PARTNERS
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	- 5 -EMPLOYMENT
COMPENSATION FORFEITURE

AND EXCHANGE
AGREEMENT

 

This EMPLOYMENT COMPENSATION
FORFEITURE AND EXCHANGE AGREEMENT (this “Agreement”) is entered into as of November __, 2012 by and among CNS
Response, Inc., a Delaware corporation (the “Company”) and the undersigned employee of the Company (the “Employee”).

 

WHEREAS, the Company
wishes to issue senior secured convertible promissory notes convertible into common stock of the Company at a price per share of
$0.04718 per share (the “New Notes”) in the aggregate principal amount of $2 million, such amount subject to
increase at the discretion of the Company’s Board of Directors, pursuant to a Note Purchase Agreement (the “Amended
and Restated Purchase Agreement”) to investors who will invest funds after the date hereof and to those investors who
have invested $600,000 between August 17, 2012 and October 19, 2012, of which investors who have invested $400,000 received notes
with substantially the same terms as the terms of the New Notes but containing a mandatory conversion provision (the purchase and
sale of the New Notes pursuant to the Amended and Restated Purchase Agreement and the purchase and sale of the 2013 Notes (as defined
below) is referred to herein as the “New Financing”);

 

WHEREAS, the Company
has experienced continuing losses, extreme cash flow shortfalls, has been unable to satisfy its financial obligations as they have
become due and has failed in numerous attempts to raise additional capital through the sale of equity securities and as a condition
to the Closing of the New Financing, certain investors therein have required that certain members of Management of the Company
agree to waive the right to receive and forfeit 50% of their accrued salary in consideration for the issuance of shares of common
stock, par value $0.001 per share of the Company (the “Common Stock”), in accordance with the terms set forth
herein;

 

NOW, THEREFORE, the
Employee, in consideration for the mutual promises and covenants herein, agrees, effective upon the Company’s receipt of
proceeds in the New Financing of at least $1,350,000 (the “Minimum Amount”) unless otherwise indicated, as follows:

 

1.           Forfeiture
of Accrued Wages.

 

(a)          Forfeiture.
Subject to the terms and conditions of this Agreement, the Employee agrees to waive receipt of and release the Company from the
payment of 50% of $____________ of salary and wages accrued from ____________ to ____________, being $___________, in consideration
for which the Company agrees within five business days from the date hereof to issue to the Employee ___________ shares of Common
Stock. Any remaining accrued salary shall remain outstanding and shall be paid (i) from time to time at the discretion of the Board
of Directors to the extent the Board of Directors determines that such payment will not jeopardize the ability of the Company to
continue as a going concern; or (ii) upon the closing of any single financing transaction (including a single financing transaction
that contemplates multiple closings) in which the Company receives proceeds of $5 million or more. Additionally, where applicable,
Employee agrees to waive receipt of and release the Company from the payment of any previously approved bonus award.

 

(b)          Indemnification
for Federal and State Income taxes. The Company will indemnify the Employee for all Federal and state income tax payable and
actually paid by Employee related directly to the receipt of Common Stock as provided for in Section 1(a) herein. It is expected
that the value of such shares shall be not more than the conversion price of the New Notes (which is $0.04718 per share of Common
Stock.)

 

    	 

    	 

    

 

(c)          Release.
Other than as specifically set forth in Schedule A hereto and as specifically contemplated by this Agreement, including the payment
of any amounts provided for in Section 1 (a) above, each Employee hereby releases and forever discharges the Company and its predecessors,
successors, assigns and each of them, and each past, present, and future director, partner, subsidiary, division or entity or affiliated
corporation, and each past, present or future employee, agent, representative, attorney, accountant, officer, director, stockholder,
subscriber, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all claims,
actions, causes of action, suits, debts, liens, demands, contracts, liabilities, agreements, costs, expenses, or losses of any
type, whether known or unknown, fixed or contingent, which such Employee had, now has, or may hereafter have, arising out of or
resulting from their employment by or services performed for, the Company, prior to the date hereof, including, without limitation,
any such claims and other rights related to or arising from any promise, guaranty or grant (oral or written) by the Company to
be issued or otherwise acquire or receive an equity interest in the Company, including but not limited to: (i) the Employee’s
claim to any equity interest in the Company, and (ii) any and all claims with respect to salary or compensation or applicable law.

 

2.          Waiver.
Each Employee hereby irrevocably waives the right to receive 50% of any wages, salary or compensation for any period of time prior
to the date of September 30, 2012, and waives all rights and remedies related thereto under all applicable laws rules and regulations.

 

3.          Representations
and Warranties of Employee. The Employee hereby represents and warrants to the Company as follows:

 

(a)          Authority.
The Employee has, as appropriate, full power and legal capacity and all right, power, legal capacity and authority to enter into
this Agreement. The execution, delivery and performance of this Agreement has been duly and validly approved and authorized by
each Employee.

 

(b)          Accredited
Investor. The Employee is an “accredited investor” within the meaning of SEC Rule 501 of Regulation D promulgated
under the Securities Act of 1933, as amended (the “Securities Act”).

 

(i)          Investment
for Own Account. The shares of Common Stock to be issued hereunder in accordance herewith are being, and will be, acquired
for his, her or its own account, for investment and not with a view to, or for resale in connection with, any distribution or public
offering thereof within the meaning of the Securities Act. The Employee acknowledges that the shares are “Restricted Securities”
as that term is defined under the Securities Act and may only be resold under certain circumstances, if ever.

 

(ii)         Knowledge
and Experience. The Employee has such knowledge and experience in financial and business matters that (s)he is capable of evaluating
the merits and risks of an investment in the shares of Common Stock and of making an informed investment decision with respect
thereto, has the ability and capacity to protect his/her interests and can bear the economic risk of the acceptance of the shares
of Common Stock, including a total loss of his/her investment. The Employee recognizes and understands that there may not be a
market for the Common Stock and that the Employee may never be able to sell any of such shares or receive any proceeds in the future.

 

    	- 2 -

    	 

    

 

(iii)        Opportunity
to Ask Questions. The Employee has had the opportunity to ask questions and receive answers from the Company or any authorized
person acting on its behalf concerning the Company and its business and to obtain any additional information, to the extent possessed
by the Company (or to the extent it could have been acquired by the Company without unreasonable effort or expense) necessary to
verify the accuracy of the information received by each such Employee. In connection therewith, each Employee acknowledges that
(s)he has had the opportunity to discuss the Company’s business, management and financial affairs with the Company’s
management or any authorized person acting on its behalf.

 

(iv)        Receipt
of Information. The Employee has received and reviewed all the information concerning the Company and the Common Stock, both
written and oral, that the Employee desires. Without limiting the generality of the foregoing, the Employee has been furnished
with or has had the opportunity to acquire, and to review: all information, both written and oral, that the Employee desires with
respect to the Company’s business, management, financial affairs and prospects. In determining whether to make this investment,
the Employee has relied solely on his/her own knowledge and understanding of the Company and its business based upon the Employee’s
own due diligence investigations and the Company’s filings with the U.S. Securities and Exchange Commission.

 

4.           Miscellaneous.

 

(a)          Effectiveness
of Agreement. It is understood and agreed by the Company and the Employee that this Agreement shall only be effective upon
the receipt by the Company of the Minimum Amount in the New Financing.

 

(b)          Governing
Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY,
INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF CALIFORNIA OR ANY OTHER JURISDICTIONS)
THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTIONS OTHER THAN THE STATE OF CALIFORNIA.

 

(c)          Amendment.
This Agreement may only be amended by written agreement of the Company and the Employee.

 

(d)          Assignment.
An Employee may only assign this Agreement with the written consent of the Company. The Company may freely assign this Agreement
without the consent of any other party. Any assignment of this Agreement in violation of this Section is null and void. This Agreement
shall be binding and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

(e)          Waiver
of Rights. No failure on the part of any party hereto to exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy by such party preclude
any other or further exercise thereof or the exercise of any other right, power or remedy. All rights, powers and remedies under
this Agreement are cumulative and are not exclusive of any other rights, powers and remedies provided by law.

 

(f)          No
Other Agreements. This Agreement (including the Exhibits attached hereto) contains a final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter thereof and shall constitute the entire agreement between
the parties hereto with respect to the subject matter thereof, superseding all prior oral or written understandings. There are
no unwritten agreements between the parties hereto.

 

    	- 3 -

    	 

    

 

(g)          Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. This Agreement will be binding upon the Company and the Employee and their respective
successors, assigns, heirs and personal representatives.

 

(h)          Further
Assurances. The Employee shall from time to time and at all times hereafter make, do, execute, or cause or procure to be made,
done and executed such further acts, deeds, conveyances, consents and assurances without further consideration, which may be reasonably
required to effect the transactions contemplated by this Agreement.

 

(i)          Severability.
If any term or other provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by any rule
or law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse
to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely
as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible.

 

[Signature page follows]

 

    	- 4 -

    	 

    

 

IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first written above.

 

	 	CNS RESPONSE, INC.
	 	 
	 	By:	 
	 	Name:  	
	 	Title:	DIRECTOR
	 	 	 
	 	EMPLOYEE
	 	 
	 	 

 

    	- 5 -

    	 

    

 

Schedule A

 

	(1)   Issued and Outstanding Common Stock	 	 	 
	 	 	 	 	 	 	 
	(2)   Issued and Outstanding Warrants	 	 	 
	 	 	 	 	 	 	 
	(3)   Issued and Outstanding Options	 	 	 
	 	 	 	 	 	 	 
	(4)   Note and Warrant Purchase Agreements and Convertible Promissory Notes	 	 	 	 
	Paul Buck	 	$	50,000	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	(5)   Accrued Interest on Promissory Notes through September 30, 2012	 	 	 	 
	Paul Buck	 	 	7,413	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	(6)   Outstanding Expense Reimbursements	 	 	 	 	 	 	 	 
	Michael Darkoch	 	$	3,398	 	 	 	 	 
	Daniel Hoffman	 	 	1,345	 	 	 	 	 
	Paul Buck (due by CNS)	 	 	11,187	 	 	 	 	 
	Paul Buck (due by NTC)	 	 	708	 	 	 	 	 
	 	 	$	16,638	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	(7)   Accrued Vacation Pay	 	 	 	 	 	 	 	 
	George Carpenter	 	$	41,539	 	 	 	 	 
	Paul Buck	 	 	32,000	 	 	 	 	 
	Michael Darkoch	 	 	22,472	 	 	 	 	 
	Daniel Hoffman	 	 	5,831	 	 	 	 	 
	 	 	$	101,842	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	(8)   Accrued HSA Benefits	 	 	 	 	 	 	 	 
	Accrued HSA Benefits CNS	 	$	6,750	 	 	 	 	 
	Accrued HSA Benefits CNS	 	 	9,350	 	 	 	 	 
	 	 	$	16,100	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	(9) Accrued Salary since September 30, 2012 through November 15, 2012*	 	 	 	 
	George Carpenter	 	$	22,500	 	 	 	 	 
	Paul Buck	 	 	17,333	 	 	 	 	 
	Daniel Hoffman	 	 	12,000	 	 	 	 	 
	 	 	$	51,833	 	 	 	 	 
	* Calculated at 2/3 of Standard Salary	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	(10) Employment Agreements	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	(11) Indemnity Agreements	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	(12) Stock issued as part of the Employment Compensation Forfeiture and Exchange Agreement	 
	George Carpenter	 	 	56,250	 	 	 	shares of common stock	 
	Paul Buck	 	 	66,083	 	 	 	shares of common stock	 
	Michael Darkoch	 	 	43,333	 	 	 	shares of common stock	 
	Daniel Hoffman	 	 	38,500	 	 	 	shares of common stock	 
	 	 	 	204,166	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	(13) The 50% of the Deferred Salary not Forfeited under the Employment Compensation Forfeiture and Exchange Agreement	 
	George Carpenter	 	$	56,250	 	 	 	 	 
	Paul Buck	 	 	66,084	 	 	 	 	 
	Michael Darkoch	 	 	43,334	 	 	 	 	 
	Daniel Hoffman	 	 	38,500	 	 	 	 	 
	 	 	$	204,168

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