Document:

ex10-1.htm

Exhibit 10.1

 

THIS CONVERTIBLE SECURED PROMISSORY NOTE AND THE SECURITIES THAT MAY BE ISSUED UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR "BLUE SKY" LAWS (COLLECTIVELY, THE "ACTS"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF LESS IN COMPLIANCE WITH  RULE  144 UNDER THE SECURITIES ACT OR A EFFECTIVE  REGISTRATION  STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE LENDER SATISFACTORY TO PAYOR THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACTS OR RECEIPT OF A NO-ACTION LETTER FROM THE U.S. SECURITIES AND EXCHANGE COMMISSION.

PROMISSORY NOTE 

	
$500,000.00

	Date: May 12, 2015  	Denver, Colorado

THIS PROMISSORY NOTE ("Note") is entered into as of May 12, 2015 (the "Effective Date") by and between Clean Coal Technologies Inc., a Nevada corporation  ("Payor"), and CCTC Acquisition Partners LLC, a Colorado limited liability company ("Lender"). Payor and Lender are hereafter sometimes referred to individually as "Party" or collectively as "Parties."

 

Both Parties agree that there are significant advantages to the Parties entering into this Note and providing the Advances (as defined below) in order to commence the construction of Payor's demonstration plant in Oklahoma ("Demonstration  Plant") as soon as possible and funds advanced under this Note will be used for this purpose as provided herein.  The amounts borrowed under this Note are contemplated to be part of an interim step in connection with completing a financing transaction between Payor and Lender (the "Additional Financing"). The Additional Financing is subject to Payor, on the one hand, and Lender and its affiliate, Black Diamond Financial  Group LLC, on the other, completing definitive documentation that will provide for  the Additional Financing.  The Parties agree in good faith to negotiate final documents for this transaction to conclusion as soon as possible, but no later than June 15, 2015 (the "Additional Financing Transaction Date").

 

AGREEMENT

 

FOR VALUE RECEIVED and subject to receipt of the Initial Advance (defined below), Payor hereby promises to pay to the order of Lender the total dollar amount of FIVE HUNDRED THOUSAND and NO/l00 ($500,000.00) (the "Principal Amount"), together with interest on the then outstanding Principal Amount calculated from the date hereof in accordance with the provisions of this Note. The Principal Amount shall be funded by Lender in accordance with Section 2 hereof.

 

1.     Use of Proceeds.  Payor will use the Principal Amount primarily for the development of the Development Plan and for working capital needs.

 

2.     Advances.  Up to three separate  advances may be made by Lender to Payor in such amounts and on such dates as set forth below (collectively, the "Advances"), with the Initial Advance (as defined below) being made as of the Effective Date and the subsequent Advances being made at the discretion of Lender:

 

  

  

  

 

(i)     the Principal Amount shall be advanced on the Effective Date (the "Initial Advance");

 

(ii)    Up to FIVE HUNDRED THOUSAND DOLLARS ($500 ,000.00) shall be advanced on or before May 22, 2015 ("Second Advance"); and

 

(iii)   Up to FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) shall be advanced on or before June 5, 2015 (the "Final Advance").

 

The Second Advance and the Final Advance shall be on terms substantially  the same as the Initial Advance and evidenced by separate promissory notes.

 

3.      Interest. Interest on the then outstanding unpaid Principal Amount shall accrue at a monthly rate of 1.2% beginning on the Effective Date for the Initial Advance ("Interest"). Upon an Event of Default and as long as such Event of Default continues, the Interest on this Note for the then outstanding unpaid Principal Amount shall bear interest until paid at the lesser of (i) a monthly rate of 1.7% or (ii) the highest interest rate for which Payor may legally contract under applicable law.

 

4.      Payments. All payments of Interest and the Principal Amount will be in lawful money of the United States  of  America.  The then outstanding Principal Amount made by Lender to Payor and the accrued Interest thereon shall be payable in a single installment at the Maturity Date or shall be deemed paid in full and this Note shall be cancelled upon the required conversion of this Note as set forth in Section 6(a). Upon any such payment on the Maturity Date (as defined below) or conversion of the Note, the obligations of Payor under this Note shall be fully satisfied and the Note cancelled as contemplated by Section 13 hereof.  This Note may be prepaid at any time at the option of Payor.

 

5.      Security. As of the closing of the First Advance, Payor shall grant to Lender a first priority security interest in and to all of the right, title and interest of Payor in its equipment and the Demonstration Plant, which security interest shall be evidenced by a UCC filing reasonably acceptable to Lender. As of the closing of the Final Advance, Payor also shall grant to Lender a first priority security interest in and to all of the right, title and interest of Payor in its intellectual property (the "IP  Security, Interest"), which security interest shall be evidenced by a UCC filing reasonably acceptable to Lender.  In the event that the Additional Financing transaction is not consummated for any reason, then the IP Security Interest granted to Lender by Payor shall be cancelled and Lender agrees to take all necessary action to terminate and release such IP Security Interest as promptly as possible, but  in no event later than two business days following the Additional Financial Transaction Date. For the avoidance of doubt all security interests granted to Lender hereunder shall be cancelled immediately upon the conversion of all debt under this Note into equity securities of Payor or upon repayment of this Note.

 

  

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6.      Conversion and Maturity Date.

 

(a)    Conversion. Upon consummation of the Additional Financing, the outstanding Principal Amount, plus the accrued interest thereon , shall automatically convert into a three year 12% convertible notes issued at 91% or par value or $910 per $1,000.00 note. The face amount of such note will be convertible during its term into units of Payor, with each unit consisting of one common share of Payor and one three-year share purchase warrant for a common share at a strike price of $.10 per share. Such conversion shall be calculated as though the aggregate dollar amount of the outstanding Principal Amount made and any accrued Interest thereon were a cash investment in the Payor 's securities to be sold in the Additional Financing.

 

(b)    Maturity Date. Except as provided in Section 7 hereof and unless earlier converted pursuant to Section 6(a), the outstanding Principal Amount made to Payor, plus the accrued Interest thereon, shall be due and payable by Payor to Lender on the six month anniversary of the date of this Note (the "Maturity Date"). If the Maturity Date shall fall on a holiday or weekend or other date in which  financial  institutions  are not open for business in New York, New York, then the Maturity Date shall be the next business day when such institutions are open for business.

 

7.      Failure to Close. Should the Parties fail to consummate the Additional Financing by the Additional Financing Transaction Date due to Payor consummating a financing transaction with an unaffiliated third party ("Termination Event"), then upon written notice of Lender (the "Acceleration  Notice") all of the then outstanding Principal Amount, plus accrued Interest thereon shall become immediately due and payable by Payor to Lender (the "Acceleration Payment").

 

8.      Break-up Fee. Upon the occurrence of a Termination Event, Payor agrees to pay Lender a break­ up fee of $ 100,000.00 and 1,000,000 fully paid shares of Payor common stock (the "Break -Up Fee"). The receipt of the Break-Up Fee is intended to be liquidated damages for Lender and, assuming payment of the Note as contemplated by Section 7 hereof , shall be the sole remedy available to Lender. The ability of Lender to receive the Break -Up Fee shall be contingent upon Lender satisfying each of the following ( 1) Lender satisfying its obligations under this Note, including making the Initial Advance contemplated  herein, and (2) Lender continuing to negotiate in good faith with Payor toward completing the Additional Financing. In the event that the Break-Up Fee is payable by Payor to Lender. then Lender shall have the right in the Acceleration Notice to require Payor deliver the $100,000 break-up fee in the form of a convertible note under the same terms as Section 6(a) above.

 

  

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9.      Events of Default.

 

(a)    Definition.  For the purpose of this  Note, an "Event of Default" will be deemed to have occurred if:

 

(i)     Payor fails to pay within five (5) days after the Maturity Date or as contemplated by Section 7 hereof.

 

(ii)    Payor fails in any respect to perform or observe any other material provision contained in this Note and such failure continues for a period of fifteen (15) days after written notice by Lender of such failure:

 

(iii)   (A) Payor (1) makes an assignment for the benefit of creditors: or (2) files a petition or makes an application to any tribunal for the appointment of a custodian, trustee, receiver or liquidator, or commences any proceeding relating to Payor under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction: or (B) an involuntary petition or application is filed, or any such proceeding is commenced, against Payor and either (x) Payor by any act indicates Payor 's approval thereof, consents thereto or acquiesces therein or (y) such petition, application or proceeding is not dismissed within sixty (60) days.

 

(b)    Consequences of Events of Default.

 

(i)     If an Event of Default (other than the type described in Section 7(a)(iii) hereof) occurs, Lender may declare, by written notice of an Event of Default given to Payor, the entire outstanding Principal Amount of this Note, together with all accrued, unpaid Interest thereon and any other amounts due hereunder , immediately due and payable, and Lender may otherwise exercise any and all rights as set forth in this Note.

 

(ii)    If an Event of Default of the type described in Section 7(a)(iii) hereof occurs, then all of the outstanding Principal Amount of this Note, together with all accrued , unpaid interest thereon and any other amounts due hereunder, shall automatically be immediately due and payable without any further action on the part of Lender, and Lender otherwise may exercise any and all rights as set forth in this Note.

 

10.    Representations and Warranties of Payor.  Payor hereby represents and warrants to Lender on the Effective Date and on the date of each Advance that:

 

(a)    Payor is a validly existing corporation under the laws of the State of Nevada and has the power and authority to execute and deliver this Note.

 

(b)    All action on the part of Payor necessary for the authorization of Payor to execute and deliver this Note has been taken. No consent, approval, authorization, order, filing, registration or qualification of or with any court, governmental authority or third person is required to be obtained by Payor in connection with the execution and delivery of this Note by Payor.

 

(c)    This Note has been duly executed by Payor and constitutes the legal, valid and binding obligation of Payor, enforceable against Payor in accordance with its terms, subject, as to enforcement of remedies, to the discretion of courts in awarding equitable relief and to applicable bankruptcy, reorganization, insolvency, moratorium and similar laws affecting the rights of creditors generally.

 

  

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(d)    Payor is not currently in negotiation  with any third parties, nor will Payor enter into any negotiations with any third parties, for funding the construction of the Demonstration Plant, unless and until the first to occur of either (i) one or more of the Advances are not made as contemplated by Section 2 hereof, (ii) the Parties cease good faith negotiations of definitive documentation for the Additional Financing or (iii) the failure to consummate the Additional Financing by the Additional Financing Transaction Date.

 

11.    Representations and Warranties of Lender.  By acceptance of this Note, Lender hereby represents and warrants to Payor on the Effective Date and on the date of each Advance that:

 

(a)    Lender is a validly existing limited liability company under the laws of the State of [Colorado] and has the power and authority to execute and deliver this Note.

 

(b)    All action on the part of Lender necessary for the authorization of Lender execute and deliver this Note has been taken.  No consent, approval, authorization, order, filing, registration or qualification of or with any court, governmental authority or third person is required to be obtained by Lender in connection with the execution and delivery of this Note by Lender.

 

(c)    This Note has been duly executed by Lender and constitutes the legal, valid and binding obligation of Lender, enforceable against Lender in accordance with its terms, subject, as to enforcement of remedies, to the discretion of courts in awarding equitable relief and to applicable bankruptcy, reorganization, insolvency, moratorium and similar laws affecting the rights of creditors generally.

 

(d)    Other than the conversion contemplated by Section 6(a) hereof, it is the present intention of Lender to acquire the Note for Lender 's own account and that the Note is being or will be acquired by Lender for the purpose of making the loan and not with a view to distribution.

 

(e)    Lender understands that the information provided by Lender and its members in connection with this Note are being relied upon by Payor for an exemption under federal and state securities laws. All information Lender has provided to Payor is correct and complete as of the date set forth on the signature page hereof and if there should be any adverse change in such information, Lender shall immediately provide Payor with such updated information.

 

(f)     Lender and each of its members is an  "accredited  investor" as defined in the regulations of the U.S. Securities and Exchange Commission pursuant to the Securities Act.  No "Bad Actor" disqualifying event described in Rule 506(d)( l )(i) to (viii) of the Securities Act is applicable to Lender, its members or any of their respective affiliates.

 

(g)    Lender acknowledges that it has received and reviewed the business and financial information that it deemed necessary to make this loan to Payor.

 

(h)    Lender has sought such accounting, legal and tax advice as Lender has considered necessary to make an informed decision with respect to the making of the loan, and Lender has taken all the steps it deems necessary to evaluate the merits and risks of making the loan to Payor.

 

  

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(i)     Lender is not making the loan to Payor as a result of any advertisement, article, notice or other communication regarding Payor published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general advertisement or general solicitation.

 

(j)     Lender acknowledges that no representations or warranties have been made to Lender by Payor, or any officer, employee , agent, affiliate or subsidiary of Payor other than the representations contained in this Note, and in making the loan to Payor hereunder, Lender is not relying upon any representations.

 

(k)    Lender and each of its members have the financial ability to bear the economic risk of Lender 's loan, including but not limited to a total loss of the principal loaned to Payor and limited transferability of the Note, and Lender has adequate means for providing for Lender 's current needs and personal contingencies and Lender has no need for liquidity with respect to the loan made to Payor.

 

(l)     Lender acknowledges that Payor 's business is speculative and has not commenced commercial operations and repayment of this Note will be based on Payor 's ability to establish the commercial viability of its technology among other matters . Lender further understands that (i) its loan to Payor involves a high degree of risk , (ii) no representation is being made as to the business or prospects of Payor. (iii) no representation is being made as to any projections or estimates delivered to or made available to Lender (or any of Lender 's affiliates or representatives) of Payor future assets, liabilities, stockholders' equity, regulatory capital ratios, net interest income, net income or any component of any of the foregoing or any ratios derived therefrom and (iv)   there is no assurance that Payor 's technology will test and work as contemplated or that it will be commercially viable.

 

(m)   Lender and its manager have carefully considered and have, to the extent Lender believes such discussion necessary, discussed with Lender 's professional legal, tax and financial advisers the suitability of making a loan to Payor and believes that making the loan is suitable for Lender 's and its members particular financial situation.

 

(n)    Lender understands that a sale or transfer of this Note is restricted by applicable federal and state securities laws and the provisions of this Note.

 

(o)    Lender acknowledges it, its members, affiliates and representatives are aware, and that the United States securities laws prohibit any person who has received from Payor material, non-public information concerning the matters which are the subject of an investment in the Note from purchasing or selling securities of Payor or from communicating such information to any other person or entity under circumstances in which it is reasonably foreseeable that such person or entity is likely to purchase or sell such securities. Lender, its members, affiliates and  its representatives shall comply with such laws as they relate Payor confidential information and its securities.  Neither Lender nor its manager is aware of any violations of United States securities laws relating purchases and sales of Payor securities by Lender or any of its members or their respective affiliates.

 

(p)    The foregoing representations and warranties shall survive the execution and delivery of this Note.

 

12.    Amendment and Waiver.  Except as otherwise expressly provided herein, the provisions of this Note may be amended only by a written instrument signed by both Lender and Payor.  Payor may take any action herein prohibited or omit to perform any act herein required to be performed by Payor, only if Payor has obtained the written consent of Lender.

 

  

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13.    Cancellation. After all obligations for the payment of money arising under this Note have been paid in full or conversion of this Note has occurred (whichever occurs first), this Note will be promptly surrendered to Payor for cancellation.

 

14.    Costs of Enforcement. Subject to Section 16 below, Payor agrees to pay, and to indemnify and hold harmless Lender from, against  and for any and all liabilities, obligations, claims, damages, actions, penalties, causes of action, losses, judgments, suits, costs, expenses and disbursements,  including without limitation, reasonable attorneys' fees,  incurred or arising in connection with (i)  a breach of representations and warranties in Section 10 hereof or (ii) the enforcement by Lender of its rights under this Note. Lender and its manager agrees to pay, and to indemnify and hold harmless Payor from, against and for any and all liabilities, obligations, claims, damages, actions, penalties , causes of action, losses, judgments, suits, costs, expenses and disbursements, including without limitation, reasonable attorneys' fees, incurred or arising in connection with a breach of representations and warranties in Section 11 hereof.

 

15.    Waiver of Presentment, Demand and Dishonor.

 

(a)    Payor hereby waives presentment for payment, protest, demand, notice of protest, notice of nonpayment and diligence with respect to this Note.

 

(b)    No failure on the part of Lender to exercise any right or remedy hereunder with respect to Payor, whether before or after the happening of an Event of Default, shall constitute waiver of any such Event of Default or of any other Event of Default by Lender. No failure to accelerate the debt of Payor evidenced hereby by reason of an Event of Default or indulgence granted from time to time shall be construed to be a waiver of the right to insist upon prompt payment thereafter; or shall be deemed to be a novation of this Note or a reinstatement of such debt evidenced hereby or a waiver of such right of acceleration or any other right, or be construed so as to preclude the exercise of any right Lender may have, whether by the laws of the state governing this Note, by agreement or otherwise; and Payor hereby expressly waives the benefit of any statute or rule of law or equity that would produce a result contrary to or in conflict with the foregoing.

 

(c)    Payor does not waive or renounce any rights to the benefits of any statute of l imitations or any moratorium, appraisement, exemption, or homestead now provided or that hereafter may be provided by any federal or applicable state statute, including but not limited to exemptions provided by or allowed under the Bankruptcy Code of 1978, as amended, both as to Payor and as to all of Payer's property, whether real or personal, against the enforcement and collection of the obligations evidenced by this Note and any and all extensions, renewals, and modifications hereof.

 

  

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16.    Usury. Payor and Lender intend that the obligations evidenced by this Note  conform strictly  to the applicable usury laws from time  to  time  in  force. All agreements between Payor  and  Lender,  whether now existing or hereafter arising and whether oral or written, hereby are expressly limited so that in  no contingency or event whatsoever, whether  by acceleration of  maturity  hereof  or  otherwise, shall  the amount paid or agreed to be paid to Lender, or collected by Lender, by or on behalf of Payor for the use, forbearance or detention of the money to be loaned to Payor hereunder or otherwise, or for the payment or performance of any covenant or obligation contained herein of Payor to Lender, or in any other document evidencing, securing or pertaining to such indebtedness evidenced hereby, exceed the maximum amount permissible under applicable usury law.  If under any circumstances whatsoever, fulfillment of any provision thereof or any other document. at the time performance of such provisions shall be due, shall involve transcending the limit of validity prescribed by law, then ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity and if under any circumstances Lender ever shall receive from or  on behalf of Payor an amount deemed interest, by applicable law, which would exceed the highest lawful rate such amount that would be excessive interest under applicable usury laws shall be applied to the reduction of Payor 's principal amount owing hereunder and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal and such other indebtedness, the excess shall be deemed to have been a payment made by mistake and shall be refunded to Payor or to any other person making such payment on Payor's behalf.

 

17.    Governing Law. The validity, construction and interpretation of this Note will be governed by and construed in accordance with the internal laws of the State of Colorado.

 

18.    Conflict of Terms.  If and to the extent that there are any discrepancies between the provisions of this Note and any other document securing or pertaining to the indebtedness evidenced by this Note, the provisions of this Note shall control. The Parties acknowledge that the confidentiality agreement dated February 19, 2015 shall continue to be in full force and effect and be applicable to the Parties hereto.

 

19.    Notice.  For the purpose of this Note, notices and all other communications provided for in this Note shall be in writing and shall be given to:

 

If Payor:             Clean Coal Technologies, Inc.

295 Madison Avenue, 12th Floor

New York, New York 10017

Attention: Robin Eves, President and Chief Executive Officer

Facsimile:

 

  

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with a copy to: Squire Patton Boggs (US) LLP

2550 M Street,  NW 

Washington DC, 20037

Facsimile: (202) 457-6315 

Attention: Jonathan Pavony

 

If to Lender:     CCTC Acquisition Partners LLC

c/o Black Diamond Financial Group LLC 

1610 Wynkoop Street, Suite 400

Denver CO 80202 

Attn:   Patrick Imeson

 

with a copy to: Carver Schwarz McNab Kam per & Forbes, LLC

1600 Stout Street 

Hudsons Bay Centre 

Suite 1700

Denver, Colorado 80202 

Telephone (303) 893-1825 

Fax number (303) 893-1829

Attention: Chris Kamper, Esq.

 

Either Party may change its address by providing notice to the other Party in accordance herewith. Each such notice or other communication shall be effective (i) if given by prepaid overnight courier, upon receipt, or (ii) if given by United States mail, postage prepaid, return receipt requested, the later of actual receipt or three (3) business days after deposit with the United States postal service: provided that notice of change of address shall be effective only upon actual receipt.

 

20.    Assignment.  Absent the prior written consent of the other party hereto, this Note shall not be assignable by Payor or Lender.

 

 

[Signature Page Follows]

 

 

  

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IN WITNESS WHEREOF, Payor has executed and delivered this Promissory Note on the date first above written.

 

CLEAN COAL TECHNOLOGIES INC.

 

 

/s/ Robin Eves                                              

By: Robin Eves

Title: Chief Executive Officer

 

 

 

 

Lender has agreed to the terms of this Note on this 12th day of May 2015.

 

 

CCTC ACQUISITION PARTNERS LLC

 

/s/ Patrick Imeson                                          

By: Patrick Imeson

Title: ManagerExhibit 10.2

 

  CONSULTING AGREEMENT 

 

THIS
CONSULTING AGREEMENT (the “Agreement”) is made as of the 6th day of March, 2015 (the “Effective
Date”), by and between VIRTUALSCOPICS, INC, a Delaware company ("VS”), and Michael
E. Woehler, with a current mailing address of 317 Cedar Street, Chatham,
MA 02633 ("Consultant”). 

 

RECITALS:

 

WHEREAS, Consultant
is an expert in the area of clinical trial imaging industry,

 

WHEREAS, VS desires
to retain Consultant to provide the services set forth in this Agreement;

 

PROVISIONS:

 

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

 

1.     
Duties and Responsibilities. 

 

(a)   
Services. During the term of this Agreement Consultant shall
perform the services (the “Services”) as follows:

 

(i)                
Services include, but are not limited to face to face meetings in Rochester and/or where necessary, telephone calls, third
party meetings and other consulting services with the CEO, Members of the Executive Leadership Team and other key employees. The
purpose of the Services is to assist with general industry discussions and understanding, improve operational efficiencies and
design a strategic plan for the Company

 

(ii)              
Consultant shall commit up to 1 to 11⁄2 days per week for consulting.

 

(iii)            
Consultant agrees to personally perform the Services.

 

2.     
Term and Termination. 

 

(a)   
Unless earlier terminated as provided in this Section, the term
of this Agreement shall commence on the Effective Date and shall continue for six months unless terminated as outlined in section
2.

 

(b)  
Either party may terminate this Agreement in the event the other party materially breaches this Agreement, and fails to cure such
breach within fifteen (15) days after receiving written notice of such breach.

 

    	 

    	 

    

 

(c)   
VS may terminate this Agreement immediately upon notice to Consultant in the event of any breach by Consultant of Section 4 hereof.

 

(d)  
If Consultant consistently fails to make himself/herself available as generally required or is not performing the Services routinely
throughout the term of this Agreement, then Consultant shall be deemed in material breach of this Agreement. 

 

(e)   
This Agreement may be cancelled for any reason upon 30 days written notice to Consultant. Upon termination, Consultant will use
best efforts to close out any remaining activities and not incur additional expenditures other than those required to close out
the Agreement.

 

(f)   
Upon termination of this Agreement the provisions of Sections 4, 5, 6, 7, 8(b)(c), 9, and 10(c)(d)(f)(g) hereof, and any other
provision that by its nature survives termination of this Agreement, shall survive termination of this Agreement. 

 

3.     
Compensation and Expenses. 

 

(a)   
In consideration of Consultant’s performance of the Services during the term of this Agreement, VS shall compensate Consultant
at a rate of $7,500 per month. Invoices must be submitted by the 6th of each month in arrears. The first invoice is
due on April 6, 2015 and the last invoice on September 6, 2015. Payment shall be due within 30 days upon receipt of invoice from
Consultant. All amounts shall be paid in U.S. Dollars. 

 

(b)  
Consultant’s traveling and related expenses may be subject to reimbursement by VS so long as such expenses are pre-approved
by VS prior to Consultant incurring the expense. Travel time to and from VirtualScopics is not a reimbursable charge. 

 

(c)   
Consultant shall be solely responsible for all costs and expenses, including any income taxes, sales taxes, benefit costs and the
like, if any, attributable to the Services being performed by Consultant hereunder, and shall indemnify and hold VS harmless from
any and all claims in respect thereof.

 

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4.     
Confidential Information.

 

(a)   
Definition of Confidential Information. “Confidential
Information” means any and all trade secrets, confidential knowledge, or any other proprietary information existing as of
the date of this Agreement, or thereafter developed, pertaining to VS or the Sponsor, its affiliates and subsidiaries, or any of
their respective existing or prospective clients, customers, or consultants. By way of illustration but not limitation, “Confidential
Information” includes (i) inventions, ideas, concepts, improvements, discoveries, trade secrets, processes, data, programs,
knowledge, know-how, designs, techniques, formulas, test data, computer software (including object and source code), other works
of authorship and designs whether or not patentable, copyrightable, or otherwise protected by law (hereinafter collectively referred
to as “Inventions”) (ii) information regarding new developments, new products and services, marketing plans and strategies,
merchandising and selling, business plans and processes, data models, strategies, forecasts, projections, profits, investments,
operations, financings, records, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers;
(iii) identity, requirements, preferences, practices and methods of doing business of specific parties with whom a party transacts
business, and information regarding the skills and compensation of employees of such party and independent contractors performing
services for such party; and (iv) the terms of this Agreement. 

 

(b)  
Confidentiality Obligations. Consultant acknowledges that
irreparable injury and damage will result from disclosure of the Confidential Information to third parties or its use for purposes
other than those connected with the Services. Consultant agrees, during the term of this Agreement and indefinitely after termination
of this Agreement: 

 

(i)                
To hold the Confidential Information in strictest confidence.

 

(ii)              
Not to disclose Confidential Information to any third party except as specifically authorized herein or as specifically authorized
by VS in writing, and to use all precautions reasonably necessary to prevent the unauthorized disclosure of the Confidential Information,
including without limitation, protection of documents from theft, unauthorized duplication and discovery of contents, and restrictions
on access by other persons to the Confidential Information.

 

(iii)            
Not to make or use any copies, synopses or summaries of oral or written material made available by VS to Consultant, except as
are necessary to carry out Consultant’s duties and/or obligations as a Consultant as set forth in this Agreement.

 

(iv)             
In the event of disclosure in accordance with Section 4(b)(ii) hereof, to limit disclosure to persons with a bona
fide need to know the Confidential Information, Consultant agrees to communicate to all persons to whom such Confidential
Information is made available the strictly confidential nature of such Confidential Information and to obtain from all such persons
an agreement in writing to be bound by the restrictions imposed by this Agreement.

 

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(v)               
In the event Consultant is required by law to disclose such Confidential Information, to provide VS with prompt written notice
of such requirement so that VS may seek a protective order or other appropriate remedy and/or waive compliance with the provisions
of this Agreement; in the event that such protective order or other remedy is not obtained, or that VS waives compliance with the
provisions of this Agreement in writing, to furnish only that portion of Confidential Information that is legally required and
to use Consultant’s best efforts to obtain reliable assurance that confidential treatment will be accorded to that portion
of the Confidential Information to be disclosed.

 

(c)   
Return of Confidential Information. Upon VS request and upon the termination of this Agreement, Consultant will promptly
return to VS all written material and other documentation which includes any of the Confidential Information, and will, at VS request,
provide VS with a written certification that Consultant has done so.

 

(d)  
Unauthorized Disclosure of Confidential Information. If it appears that Consultant has disclosed, or has threatened to disclose,
any Confidential Information in violation of this Section, VS shall be entitled to an injunction to restrain Consultant from disclosing,
in whole or in part, such information as a result of Consultant’s violation of this Section. VS shall not be prohibited by
this provision from pursuing all other legal and equitable remedies available, including a claim for losses and damages.

 

(e)   
Permitted Disclosures. In order to permit Consultant to communicate with customer contacts regarding VS’ business
and capabilities without breaching this Section, Consultant will confer with VS from time to time so that the parties can determine
appropriate guidelines for such customer discussions.

 

5.     
Advisory Nature of Services; Inventions. 

 

(a)   
It is understood and agreed that Consultant’s role hereunder
is that of an advisor, educator, and facilitator rather than a developer of new or modified Inventions. However, the parties recognize
that circumstances may arise where, intentionally or unintentionally, Consultant may conceive, reduce to practice, produce, create,
author, or develop one or more Inventions in connection with the performance of the Services, whether alone or jointly with others,
in which case, Consultant shall immediately notify VS in writing of any such Invention, at which time the parties shall determine
the parties’ respective rights and interests in such Invention. 

 

    	Page 4 of 9

    	 

    

 

(b)  
In the event the parties determine that VS is the sole owner of
any Invention described in clause (a) above, then Consultant shall agree in writing, to the extent applicable, that such Invention,
is a “work made for hire,” as that term is defined in the United States Copyright Act (17 U.S.C., Section 101). In
the event that any rights to the Invention are deemed not to be works made for hire, or in the event Consultant should, by operation
of law, be deemed to retain any rights in such Invention, Consultant hereby irrevocably assigns without any further consideration
all of Consultant’s rights, title and interest, if any, in and to such Invention to VS. Consultant agrees that VS, as the
owner of all rights to the Invention, shall have the full and complete right to prepare and create derivative works based upon
the Invention, and to use, make, reproduce, publish, print, copy, market, advertise, distribute, transfer, sell, offer to sell,
import, publicly perform and publicly display, integrate, modify, and otherwise exploit by all means now known or later developed,
such Invention and derivative works anywhere throughout the world. Consultant further irrevocably and unconditionally transfers
and assigns to VS, without any further consideration, any and all Moral Rights (as hereinafter defined) Consultant may have in
or with respect to the Invention. To the extent that Consultant cannot assign such rights, Consultant shall waive and agree never
to assign such rights to a competitor of VS, VS’ successors-in-interest, or any of their licensees. “Moral Rights”
shall mean any right to (i) divulge the Invention to the public; (ii) retract such Invention from the public; (iii) claim authorship
of such Inventions; (iv) object to any distortion, mutilation, or other modification of such Invention; and (v) any and all similar
rights, existing under judicial or statutory law of any country or jurisdiction in the world, or under any treaty regardless of
whether or not such right is called or generally referred to as a “moral right.”

 

(c)   
In the event (i) the parties determine that Consultant is the owner
of any Invention described in clause (a) above, or (ii) the issue of ownership cannot be resolved by the parties, and the question
of ownership is determined by a judge or other judicial or similar body, and such party determines that Consultant is the owner
of the Invention in question, then, notwithstanding any ownership rights of Consultant in the Invention, Consultant hereby grants
VS a non-exclusive, perpetual, irrevocable, royalty-free license, with a right of sublicense, to use, make, reproduce, publish,
print, copy, market, advertise, distribute, transfer, sell, offer to sell, import, publicly perform and publically display, integrate,
modify, prepare and create derivative works of, and otherwise exploit for internal, commercial, or any other purpose the Invention
for the term of this Agreement and indefinitely after termination of this Agreement. Further, Consultant agrees that, notwithstanding
any ownership rights of VS in the Invention pursuant to Section 5(c) of this Agreement, Consultant shall be permitted to use, modify,
and exploit the Invention as agreed to by the parties in writing. Consultant agrees that any sublicense or transfer of the Invention
by Consultant to a third party shall be subject to the foregoing limitations. 

 

(d)  
In the event it is determined that a third party has ownership
interests in any Invention described in clause (a) above, then Consultant shall use Consultant’s best efforts to obtain from
the third party a license grant for VS’ benefit with the rights and benefits described in clause (c) above, and to cause
the third party to agree to the limitations on use of the Invention described in clause (c).

 

    	Page 5 of 9

    	 

    

 

6.     
License of Tools and/or Data. It is understood that
as of the Effective Date Consultant may own certain Inventions or other general concepts and techniques currently employed or currently
developed by Consultant, any of which Consultant may be required to employ in performing the Services hereunder. To the extent,
if any, Consultant is required to employ any such Invention Consultant shall first notify VS in writing, and, if VS agrees to the
use of such Invention by Consultant, the parties shall set forth the Invention as an exhibit to this Agreement (any such Invention
set forth in an exhibit is hereinafter referred to as a “Tool”). , At the time a Tool is identified in an exhibit hereto,
Consultant hereby grants to VS a non-exclusive, perpetual, irrevocable, royalty-free license, with a right of sublicense, to use,
make, reproduce, publish, print, copy, market, advertise, distribute, transfer, sell, offer to sell, import, publicly perform and
publically display, integrate, modify, prepare and create derivative works of, and otherwise exploit the Tool for internal, commercial,
or any other purpose during the term of this Agreement and indefinitely after termination of this Agreement. 

 

7.     
Damages. 

 

(a)   
Because of the difficulty of measuring economic losses to VS as
a result of the breach or threatened breach of the covenants set forth in Sections 4, 5, or 6 hereof, and because of the immediate
and irreparable damage that would be caused to VS for which it would have no other adequate remedy, Consultant agrees that, in
the event Consultant breaches any of the covenants set forth in Sections 4, 5, or 6 hereof, such covenants may be enforced by VS
by, without limitation, injunctions and restraining orders. Nothing herein shall be construed as prohibiting VS from pursuing any
other available remedy for such breach or threatened breach, including the recovery of damages. Each of the rights and remedies
enumerated in this Section shall be independent of the other, and shall be severally enforceable, and such rights and remedies
shall be in addition to, and not in lieu of, any other rights and remedies available to VS under law or equity.

 

(b)  
If any provision of Sections 4, 5, or 6 hereof is held to be unenforceable
because of the scope, duration or area of its applicability, the entity making such determination shall have the power to modify
such scope, duration or area, or all of them, and such provision or provisions shall then be applicable in such modified form.

 

8.     
Representations and Warranties; Indemnification. 

 

(a)   
Consultant hereby represents and warrants to VS as follows:

 

(i)                
Consultant is authorized to enter into this Agreement and perform as contemplated herein;

 

(ii)              
in performing hereunder, Consultant will comply materially with U.S. and applicable international laws, rules, and regulations,
and, if advised by VS of Consultant’s failure to comply materially with applicable U.S. and International laws, such that
VS has a good faith reason to believe that VS, its business, or the continuation of this Agreement will be impaired, Consultant
will take reasonable steps (taking into account Consultant’s available resources) to comply materially with such law;

 

    	Page 6 of 9

    	 

    

 

(iii)            
the Services will be performed in a diligent and professional manner, using reasonable care;

 

(iv)             
to the best of Consultant’s knowledge, the Services will not violate any trademark, trade secret, copyright, patent or other
intellectual property right of any third party;

 

(v)               
Consultant’s performance under this Agreement will not violate any contract, agreement, or other document to which Consultant
is subject or violate any rules of independence as it relates to the Project or the Project Sponsor;

 

(b)  
Consultant will defend, indemnify and hold harmless VS from and
against any and all claims, actions, demands, liabilities, losses, damages, judgments, settlements, costs and expenses (including
reasonable attorneys' fees) (any or all of the foregoing hereinafter referred to as "Losses") insofar as such Losses
(or actions in respect thereof) arise out of or are based on (i) the grossly negligent or intentional acts or omissions of Consultant,
(ii) a material breach of any representation, warranty or covenant made by Consultant hereunder, or (iii) a claim that any Work,
Invention, or Tool infringes the patent, trademark, trade secret, copyright, or other intellectual property right of any third
party, except to the extent that VS’ use or modification of the foregoing has contributed to any such infringement claim.

 

(c)   
VS will defend, indemnify and hold harmless Consultant from and
against any and all claims, actions, demands, liabilities, losses, damages, judgments, settlements, costs and expenses (any or
all of the foregoing hereinafter referred to as "Losses") insofar as such Losses (or actions in respect thereof) arise
out of or are based on (i) the grossly negligent or intentional acts or omissions of VS, (ii) a material breach of any representation,
warranty or covenant made by VS hereunder, or (iii) a claim that any Work, Invention, or Tool infringes the patent, trademark,
trade secret, copyright, or other intellectual property right of any third party, except to the extent that Consultant’s
use or modification of the foregoing has contributed to any such infringement claim. 

 

9.     
Publicity. VS shall have the right to refer
to Consultant verbally and in writing in connection with VS’s business. If applicable, such references may include descriptions
of Consultant’s research findings and publications as they relate to VS’ services, with particular emphasis on the
value being added to VS’s services by way of this Agreement insofar as it does not violate any existing Confidentiality agreements.

 

    	Page 7 of 9

    	 

    

 

10. 
General.

 

(a)   
Notices. Except as otherwise provided in this Agreement,
notices required to be given pursuant to this Agreement shall be effective when received, and shall be sufficient if given in writing,
hand delivered, sent by facsimile with confirmation of receipt, sent by First Class Mail, return receipt requested (for all types
of correspondence), postage prepaid, or sent by overnight courier service and delivered to the addresses appearing on the first
page of this Agreement. Any notice to VS sent pursuant to this Section shall be addressed to Finance .

 

(b)  
Independent Contractor. Consultant is, and at all times will be, an independent contractor. Nothing in this Agreement
shall be deemed to create an employer/employee, principal/agent, or joint venture relationship. Unless expressly agreed to in writing,
neither party has the authority to enter into any contracts on behalf of the other party or otherwise act on behalf of the other
party.

 

(c)   
Governing Law and Jurisdiction; No Trial by Jury. This Agreement
shall be governed by New York law, without regard to conflicts of law principles. The federal and state courts located in Monroe
County, New York shall have exclusive jurisdiction over any such claim brought under this Agreement, and the parties hereby consent
to the personal jurisdiction of such courts. 

 

(d)  
Entire Agreement. Subject to the Indemnification Agreement entered into between Consultant and VS dated March 2, 2015, which
remains in full force and effect, this Agreement is the entire agreement between the parties and supersedes and replaces all other
agreements oral and written with respect to its subject matter. This Agreement may not be modified, amended or terminated except
by a writing signed by all parties to it.

 

(e)   
Assignment. Consultant may not assign any of Consultant’s rights or obligations under this Agreement to any other
person or entity (including any subcontractor), without the prior written consent of VS. All of the terms and conditions of this
Agreement shall be binding upon, shall inure to the benefit of, and shall be enforceable by the respective successors and assigns
of the parties. Any attempted assignment in conflict with the terms herein shall be deemed null and void. 

 

(f)   
Remedies. The parties acknowledge that the financial hardship to a non-defaulting party as a result of breach of this Agreement
may be difficult or impossible to measure in dollars and that no remedy at law will be adequate to compensation the non-breaching
party for such violation; therefore, in any action to enforce this Agreement, a party shall be entitled to preliminary, temporary
or permanent injunctive relief and the other party waives the defense of adequate remedy at law, acknowledging that no such remedy
exists. In the event of litigation to enforce the terms and conditions of this Agreement, the losing party agrees to pay the substantially
prevailing party's costs and expenses incurred including, without limitation, reasonable attorneys' fees. Each and all of the rights
and remedies provided for in the Agreement shall be cumulative. No one right or remedy shall be exclusive of the others or any
right or remedy allowed in law or in equity. 

 

    	Page 8 of 9

    	 

    

 

(g)  
Waiver. No waiver by VS of any failure by Consultant to keep or perform any promise of condition of this Agreement shall
be a waiver of any proceeding or succeeding breach of the same or any other promise or condition. No waiver of VS of any right
shall be construed as a waiver of any other right.

 

IN WITNESS WHEREOF,
each of the parties hereto has executed this Agreement as of the Effective Date.

 

	 	VIRTUALSCOPICS, INC
	 	 	 
	 	By:    	/s/ James Groff
	 	 	James Groff
	 	 	 
	 	CONSULTANT
	 	 	 
	 	By:  	/s/
Michael E. Woehler
	 	 	Michael E. Woehler

 

    	Page 9 of 9

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