Document:

EXHIBIT
10.2

    

    MANAGEMENT
ADVISORY AGREEMENT

    

         THIS
MANAGEMENT ADVISORY AGREEMENT (this “Agreement”), dated as of
September 20, 2010 (the “Effective Date”), is by and
among CHESSCOM TECHNOLOGIES, INC., a Nevada corporation (the “Company”) and CHESSCOM
MANAGEMENT ADVISORS, INC., a Delaware corporation (the “Advisor”) and wholly-owned
subsidiary of LEXICON UNITED INCORPORATED, a Delaware corporation.

    

    RECITALS

    

                    WHEREAS, the Company desires
to avail itself of the experience, sources of information, advice, assistance
and certain facilities available to the Advisor (as defined below) and to have
the Advisor undertake the duties and responsibilities hereinafter set forth, on
behalf of, and subject to the supervision of, the Board of Directors, all as
provided herein; and

         

    WHEREAS, the Advisor is
willing to undertake to render such services, subject to the supervision of the
Board of Directors, on the terms and conditions hereinafter set
forth.

         

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

    

    1. Definitions. As used
in this Agreement, the following terms have the definitions hereinafter
indicated:

    

    Advisor.
Chesscom Management Advisors, Inc., a Delaware corporation, any successor
advisor to the Company or any successor advisor subcontractors with respect to
substantially all of its functions.

    

    Affiliate or
Affiliated. An Affiliate of another Person includes only the following:
(i) any Person directly or indirectly owning, controlling, or holding with
the power to vote ten percent (10.0%) or more of the outstanding voting
securities of such other Person; (ii) any Person ten percent (10.0%) or
more of whose outstanding voting securities are directly or indirectly owned,
controlled, or held, with power to vote, by such other Person; (iii) any
Person directly or indirectly controlling, controlled by, or under common
control with such other Person; (iv) any executive officer, director,
trustee, or general partner of such other Person; and (v) any legal entity
for which such Person acts as an executive officer, director, trustee, or
general partner.

              

    Articles of
Incorporation. The Articles of Incorporation of the Company filed
pursuant to the Nevada Revised Statutes, as amended from time to
time.

         

    Management
Fee. The Management Fee payable to the Advisor as defined in Section 8.

              

    Board of
Directors or Board. The persons holding such office, as of any particular
time, under the Articles of Incorporation of the Company, whether they be the
Directors named therein or additional or successor Directors.

              

    Bylaws.
The bylaws of the Company, as the same are in effect from time to
time.

              

    Company.
Chesscom Technologies, Inc., a corporation organized under the laws of the State
of Nevada.

              

    Director.
A member of the Board of Directors of the Company.

              

    Person. An
individual, corporation, partnership, estate, trust, a portion of a trust
permanently set aside for or to be used exclusively for the purposes described
in Section 642(c) of the Code, association, private foundation within the
meaning of Section 509(a) of the Code, joint stock company or other entity, or
any government or any agency or political subdivision thereof, and also includes
a group as that term is used for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

                   

    2. Appointment. The
Company appoints the Advisor to serve as its advisor as of the Effective Date,
on the terms and conditions set forth in this Agreement, and the Advisor hereby
accepts such appointment as of the Effective Date.

    

    3. Duties and Authority of the
Advisor. The Advisor undertakes to use its commercially reasonable
efforts to manage, administer, promote, maintain, and improve the assets and
operations of the Company in a professional and diligent manner. The services of
the Advisor are to be of scope and quality not less than those generally
performed by professional executives and managers of other similar companies.
The Advisor shall make available the full benefit of the judgment, experience
and advice of the members of the Advisor’s organization and staff with respect
to the duties it will perform under this Agreement. To facilitate the Advisor’s
performance of these undertakings, but subject to the restrictions included in
Sections 4
and 7 and the
provisions of Section 11 and
to the continuing and exclusive authority of the Board, the Company hereby
delegates to the Advisor the authority to, and the Advisor hereby agrees to,
either directly or by engaging a duly qualified and licensed Affiliate of the
Advisor or other duly qualified and licensed Person:

    

    (a) serve as the
Company’s sole and exclusive operations and financial advisor and, as requested
by the Board, provide such information and data as may be requested from time to
time with respect to the Company’s operations and financial
results;

    

    (b) provide the daily
management of the Company and perform and supervise the various administrative
functions reasonably necessary for the management of the
Company;  

    

    (c) maintain and preserve
the books and records of the Company, including maintaining the accounting and
other record-keeping functions with respect to the Company;

        

    (d) investigate, select,
and, on behalf of the Company, engage and conduct business with such Persons as
the Advisor deems necessary to the proper performance of its obligations
hereunder, including but not limited to consultants, accountants,
correspondents, lenders, technical advisors, attorneys, corporate fiduciaries,
depositaries, custodians, agents for collection, insurers, insurance agents,
banks, construction contractors, developers, property owners, property
management companies, real estate operating companies, securities investment
advisors, mortgagors, and any and all agents for any of the foregoing, including
Affiliates of the Advisor, and Persons acting in any other capacity deemed by
the Advisor necessary or desirable for the performance of any of the foregoing
services, including but not limited to entering into contracts in the name of
the Company with any of the foregoing;

         

    (e) make capital
investments in and dispositions within the discretionary limits and authority as
granted by the Board and in accordance with the Articles of
Incorporation;

         

    (f) consult with the
Board and assist the Board in the formulation and implementation of the
Company’s financial policies, and, as necessary, furnish the Board with advice
and recommendations with respect to the financial and operational objectives and
policies of the Company and in connection with any borrowings proposed to be
undertaken by the Company;

    

    (g) select joint venture
partners, structure corresponding agreements and oversee and monitor these
relationships;

    

    (h) recommend to the
Board of Directors appropriate transactions which would provide liquidity to the
Company;

    

    (i) oversee the
performance by a third party or Affiliates, including collection of payments due
from third parties the payment of expenses related to the Company’s business and
operations;

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (j)  review, analyze and
comment upon the operating budgets, capital budgets and the like and aggregate
these budgets into the Company’s overall budget;

    

    (k) review and analyze
on-going financial information pertaining to the Company’s
operations;

    

    (l) if an action or
transaction requires approval by the Board of Directors, deliver to the Board of
Directors all documents requested by them in their evaluation of the proposed
action or transaction;

    

    (m) formulate and oversee
the implementation of strategies for the administration, promotion, management,
operation, maintenance, financing and marketing of the Company;

    

    (n) (i) locate, analyze
and select potential business opportunities; (ii) structure and negotiate the
terms and conditions of transactions for new business opportunities;
(iii) make investments on behalf of the Company in compliance with the
investment objectives and policies of the Company; (iv) on a best efforts
basis, arrange for financing and otherwise deal with the Company’s assets and
investments; (v) enter into supply agreements, leases and acquire property
interests related to the Company’s operations; (vi) enter into service
contracts; (vii) oversee the performance of all third-party contractors;
and (viii) to the extent necessary, perform all other operational functions
for the operation and maintenance of the Company and its assets;

    

    (o) obtain the prior
approval of the Board, any particular Directors specified by the Board or any
committee of the Board, as the case may be, for any and all investments outside
of the ordinary course of the Company’s business;

    

    (p) negotiate on behalf
of the Company with banks or lenders for loans to be made to the Company;
provided, further, that any fees and costs payable to third parties incurred by
the Advisor in connection with the foregoing shall be the responsibility of the
Company;

    

    (q) on behalf of the
Company, maintain, customary insurance, including but not limited to customary
fire, casualty and public liability insurance;

    

    (r)  from time to time,
or at any time reasonably requested by the Board, provide information or make
reports to the Board related to its performance of services to the Company under
this Agreement;

    

    (s)  provide the Company
with all necessary cash management services;

    

    (t) notify the Board of
all proposed material transactions before they are completed;

    

    (u) supervise the
preparation and filing and distribution of returns and reports to governmental
agencies;

    

    (v)  establish and
maintain bank accounts on behalf of the Company pursuant to Section 5 of
this Agreement;

    

    (w) at the expense of the
Company, provide
office space, equipment and personnel as required for the performance of the
foregoing services as the Advisor; and

    

    (x) do all things it
reasonably deems necessary to assure its ability to render the services
described in this Agreement.

         

    4. Modification or Revocation of
Authority of Advisor. The Board may, at any time upon the giving of
notice to the Advisor, modify or revoke the authority or approvals set forth in
Section 3;
provided, however, that
such modification or revocation shall be effective upon receipt by the Advisor
and shall not be applicable to actions or transactions to which the Advisor has
committed the Company prior to the date of receipt by the Advisor of such
notification.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

         

    5. Bank Accounts. At the
direction of the Board of Directors, the Advisor may establish and maintain one
or more bank accounts in its own name for the account of the Company or in the
name of the Company and may collect and deposit into any such account or
accounts, and disburse from any such account or accounts, any money on behalf of
the Company, under such terms and conditions as the Board may approve, provided
that no funds shall be commingled with the funds of the Advisor; and the Advisor
shall from time to time render appropriate accountings of such collections and
payments to the Board and to the auditors of the Company.

         

    6. Records; Access. The
Advisor shall maintain appropriate records of all its activities hereunder and
make such records available for inspection by the Board and by counsel, auditors
and authorized agents of the Company, at any time or from time to time during
normal business hours. The Advisor shall at all reasonable times have access to
the books and records of the Company.

         

    7. Limitations on
Activities. Anything else in this Agreement to the contrary
notwithstanding, the Advisor shall refrain from taking any action which, in its
sole judgment made in good faith, would violate any law, rule, regulation or
statement of policy of any governmental body or agency having jurisdiction over
the Company or otherwise not be permitted by the Articles of Incorporation or
Bylaws of the Company, except if such action shall be ordered by the Board, in
which case the Advisor shall notify promptly the Board of the Advisor’s judgment
of the potential impact of such action and shall refrain from taking such action
until it receives further clarification or instructions from the Board. In such
event the Advisor shall have no liability for acting in accordance with the
specific instructions of the Board so given. Notwithstanding the foregoing, the
Advisor, its directors, officers, employees and stockholders, and stockholders,
directors and officers of the Advisor’s Affiliates shall not be liable to the
Company, the Board or to the Stockholders for any act or omission by the
Advisor, its directors, officers, employees or stockholders, or stockholders,
directors or officers of the Advisor’s Affiliates taken or omitted to be taken
in the performance of their duties under this Agreement except as provided in
Sections 19 and
20 of this
Agreement.

         

    8. Management Fee. The
Advisor or its Affiliates shall receive as compensation for services rendered in
connection with this Agreement the following:  Advisor or its
Affiliates shall receive as compensation for services rendered in connection
with this Agfreement the following:  $52,000 per annum as Base
Pay.  The base Pay shall be paid to Advisor or its Affiliates on a
bi-weekly basis on the same schedule as all other employees of the
Company.

    

    9. Expenses.

         

    (a) Reimbursable
Expenses. In addition to the compensation paid to the Advisor pursuant to
Section 8
hereof, the Company shall pay directly or reimburse the Advisor for all of the
expenses paid or incurred by the Advisor (to the extent not reimbursable by
another party) in connection with the services it provides to the Company
pursuant to this Agreement, including, but not limited to:

             

    (i) the actual cost of goods
and services used by the Company;

    

    (ii) interest and other costs
for borrowed money, including discounts, points and other similar
fees;

    

    (iii) taxes and assessments on
income of the Company or any of the Properties;

    

    (iv) costs associated with
insurance required in connection with the business of the Company or by the
Board;

    

    (v) expenses of managing and
operating the business and assets of the Company, whether payable to an
Affiliate of the Company or a non-Affiliated Person;

    

    (vi) all compensation and
expenses payable to the Directors in connection with their services to the
Company and the Stockholders and their attendance at meetings of the
Directors;

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    (vii) expenses of organizing,
redomesticating, merging, liquidating or dissolving the Company or of amending
the Articles of Incorporation or the Bylaws;

    

    (viii) administrative service
expenses (including (a) personnel costs and (b) the Company’s
allocable share of other overhead of the Advisor such as rent and
utilities);

    

    (ix) audit, accounting, legal
and other professional fees; and

    

    (x) all other administrative
service expenses, including all costs and expenses incurred by Advisor in
fulfilling its duties hereunder. Such costs and expenses may include reasonable
wages and salaries and other employee-related expenses of all employees of the
Advisor or its Affiliates who are engaged in the management, administration,
operations, or marketing of the Company, including taxes, insurance and benefits
relating to such employees, and legal, travel and other out-of-pocket expenses
which are directly related to their services provided hereunder.

         

    (b) Other
Services. Should the Board request that the Advisor, any Affiliate of the
Advisor or any director, officer or employee thereof render services for the
Company other than set forth in Section 3, such
additional services, if the Advisor elects to perform them, shall be separately
compensated at such rates and in such amounts as are agreed by the Advisor and
the Board, subject to the limitations contained in the Articles of
Incorporation, shall not exceed an amount that would be paid to non-Affiliated
third parties for similar services, and shall not be deemed to be services
pursuant to the terms of this Agreement.

         

    (c) Timing of and
Limitations on Reimbursements.

              

    (i) Expenses incurred by the
Advisor on behalf of the Company and payable pursuant to this Section 9 shall
be reimbursed at least monthly to the Advisor. The Advisor shall prepare a
statement documenting the expenses of the Company during each month, and shall
deliver such statement to the Company within fifteen (15) days after the
end of each calendar month.

    

    (ii) The foregoing
reimbursements of expenses, as limited by this Agreement, will be made
regardless of whether any cash distributions are made to the
Stockholders.

    

                    10. Statements. The
Advisor shall furnish to the Company not later than the thirtieth (30th) day
following the end of each calendar year, a statement showing a computation of
the fees or other compensation payable to the Advisor or an Affiliate of the
Advisor with respect to such calendar year under Sections 8 and
9 hereof. The
final settlement of compensation payable under Sections 8 and
9 hereof for
each calendar year shall be subject to adjustments in accordance with, and upon
completion of, the annual audit of the Company’s financial
statements.

         

    11. Other Activities of the
Advisor. Nothing herein contained shall prevent the Advisor from engaging
in other activities, including, without limitation, the rendering of advice to
other Persons nor shall this Agreement limit or restrict the right of any
director, officer, employee, or stockholder of the Advisor or its Affiliates to
engage in any other business or to render services of any kind to any other
partnership, corporation, firm, individual, trust or association. The Advisor
may, with respect to any transaction in which the Company is a participant, also
render advice and service to each and every other participant therein. The
Advisor shall report to the Board the existence of any condition or
circumstance, existing or anticipated, of which it has knowledge, which creates
or could create a conflict of interest between the Advisor’s obligations to the
Company and its obligations to or its interest in any other partnership,
corporation, firm, individual, trust or association.

         

    12. Non-Solicitation. The
Company agrees not to solicit any current and/or future employees of the Advisor
or its Affiliates for employment or in any consulting or similar capacity for
two (2) years following the termination of this Agreement.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

         

    13. Information Furnished to the
Advisor. The Board of Directors will keep the Advisor informed concerning
the operational and financing policies of the Company. The Board of Directors
shall notify the Advisor promptly of its intention to make any changes to such
policies. Upon request of the Advisor, the Company shall furnish the Advisor
with a certified copy of any Company financial statements, a signed copy of each
report prepared by independent certified public accountants, and such other
information with regard to its affairs as the Advisor may reasonably
request.  The Company will make available, without limitation, all
intellectual property owned by the Company and all passwords, codes and
information required to access all Company information systems and intellectual
propertyaccess requirements.

         

    14. Relationship of Advisor and
Company. The Company and the Advisor are not partners or joint venturers
with each other, and nothing in this Agreement shall be construed to make them
such partners or joint venturers or impose any liability as such on either of
them.

         

    15. Term. This Agreement
shall continue in force until the first anniversary of the Effective Date,
subject to an unlimited number of successive one-year renewals upon mutual
consent of the parties. The Board will evaluate the performance of the Advisor
annually before renewing the Agreement.

         

    16. Termination.

        

    (a) This Agreement may be
terminated upon sixty (60) days written notice without cause or penalty, by
either party (if by the Company, only upon approval of a majority of the members
of the Board of Directors).

         

    (b) Survival.
The provisions of Sections 6, 7, 12, 14,
and 17 through 30, and the
provisions of Section 8, shall
survive expiration or termination of this Agreement.

         

    17. Assignment. This
Agreement shall not be assigned by the Advisor to a non-Affiliate. This
Agreement may be assigned by the Advisor to an Affiliate with the approval of
the Board. Notwithstanding the foregoing, the Advisor may assign any rights to
receive fees or other payments under this Agreement without obtaining the
approval of the Board. This Agreement shall not be assigned by the Company
without the consent of the Advisor, except in the case of an assignment by the
Company to a corporation or other organization which is a successor to all of
the assets, rights and obligations of the Company, as the case may be, in which
case such successor organization shall be bound hereunder and by the terms of
said assignment in the same manner as the Company is bound by this
Agreement.

         

    18. Payments to and Duties of
Advisor Upon Termination.    

     

    (a) After the expiration
or termination of this Agreement, the Advisor shall not be entitled to
compensation for further services hereunder except that it shall be entitled to
receive from the Company within thirty (30) days after the effective date
of such termination all unpaid reimbursements of expenses and all earned but
unpaid fees payable to the Advisor prior to termination of this Agreement;
and

         

    (b) The Advisor shall
promptly upon termination:

             

    (i) pay over to the Company
all money collected and held for the account of the Company pursuant to this
Agreement, after deducting any accrued compensation and reimbursement for its
expenses to which it is then entitled;

    

    (ii) deliver to the Board a
full accounting, including a statement showing all payments collected by it and
a statement of all money held by it, covering the period following the date of
the last accounting furnished to the Board;

    

    (iii) deliver to the Board all
assets and documents of the Company then in the custody of the Advisor;
and

    

    (iv) cooperate with the
Company to provide an orderly management transition.     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    19. Indemnification by the
Company.  The Company shall indemnify and hold harmless the
Advisor and its Affiliates, including their respective officers, directors,
partners and employees, from all liability, claims, damages or losses arising in
the performance of their duties hereunder, and related expenses, including
reasonable attorneys’ fees, to the extent such liability, claims, damages or
losses and related expenses are not fully reimbursed by insurance, provided that
the Company shall not indemnify and hold harmless the Advisor or its Affiliates
unless:

     

    (a) the Advisor or its
Affiliates have determined, in good faith, that the course of conduct which
caused the loss or liability was in the best interests of the
Company;

              

    (b) the Advisor or its
Affiliates were acting on behalf of or performing services for the
Company;

              

    (c) such liability or loss was
not the result of negligence or misconduct by the Advisor or its Affiliates;
and

              

    (d) such indemnification or
agreement to hold harmless is recoverable only out of Company’s net assets and
not from its stockholders.  The obligation of the Company to indemnify
or hold harmless the Advisor and its Affiliates shall also be subject to any
limitations imposed by Nevada law.

         

    20. Indemnification by
Advisor. The Advisor shall indemnify and hold harmless the Company from
contract or other liability, claims, damages, taxes or losses and related
expenses, including attorneys’ fees, to the extent that such liability, claims,
damages, taxes or losses and related expenses are not fully reimbursed by
insurance and are incurred by reason of the Advisor’s bad faith, fraud, willful
misfeasance, misconduct, or reckless disregard of its duties, but the Advisor
shall not be held responsible for any action of the Board in following or
declining to follow advice or recommendation given by the Advisor.

    

                    21. Fidelity Bond. The
Advisor shall not be required to obtain or maintain a fidelity bond in
connection with the performance of its services hereunder.

    

                    22. Notices. Any notice,
report or other communication required or permitted to be given hereunder shall
be in writing unless some other method of giving such notice, report or other
communication is required by the Articles of Incorporation, the Bylaws, or
accepted by the party to whom it is given, and shall be given by being delivered
by hand or by overnight mail or other overnight delivery service to the
addresses set forth herein:

    
      
        
          	 
      	 
      	 
      
	
                  To
      the Board and to the Company:

                	 
      	
                   

                  Chesscom
      Technologies, Inc .

                
	 
      	 
      	
                  500
      N. Rainbow Blvd., Suite 300 

                  Las
      Vegas, Nevada 89107

                
	 
      	 
      	
                  Attention:
      President

                
	 
      	 
      	 
      
	
                  To
      the Advisor:

                	 
      	
                  Chesscom
      Management Advisors, Inc.

                
	 
      	 
      	
                  4500
      Steiner Ranch Blvd, Suite 1708

                
	 
      	 
      	
                  Austin,
      TX 78732

                
	 
      	 
      	
                  Attention:
      President

                

        

      

    

         

    Either
party may at any time give notice in writing to the other party of a change in
its address for the purposes of this Section 22.

         

    23. Amendments. This
Agreement shall not be changed, modified, terminated, or discharged, in whole or
in part, except by an instrument in writing signed by each of the parties
hereto, or their respective successors or assignees.

         

    24. Severability. The
provisions of this Agreement are independent of and severable from each other,
and no provision shall be affected or rendered invalid or unenforceable by
virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

        

    25. Construction. The
provisions of this Agreement shall be construed and interpreted in accordance
with the laws of the State of Texas.

         

    26. Entire Agreement.
This Agreement contains the entire agreement and understanding among the parties
hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express
or implied, oral or written, of any nature whatsoever with respect to the
subject matter hereof. The express terms hereof control and supersede any course
of performance and/or usage of the trade inconsistent with any of the terms
hereof. This Agreement may not be modified or amended other than by an agreement
in writing.

         

    27. Indulgences, Not
Waiver. Neither the failure nor any delay on the part of a party to
exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.

         

    28. Gender. Words used
herein regardless of the number and gender specifically used, shall be deemed
and construed to include any other number, singular or plural, and any other
gender, masculine, feminine or neuter, as the context requires.

         

    29. Titles Not to Affect
Interpretation. The titles of sections and subsections contained in this
Agreement are for convenience only, and they neither form a part of this
Agreement nor are they to be used in the construction or interpretation
hereof.

         

    30. Execution in
Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
the counterparts hereof, taken together, bear the signatures of all of the
parties reflected hereon as the signatories.

         

    [Signatures
Appear on Next Page]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties hereto have executed this Management Advisory Agreement as of the day
and year first above written.

     

    
      
        	
                CHESSCOM
      TECHNOLOGIES, INC.

              
	 
      	 
      
	
                By:                

              	
                /s/ Thomas C. Cook

              	 
      
	 
      	 
      
	
                Name:
      Thomas C. Cook

              
	
                Title:
      President

              
	 
      
	
                CHESSCOM
      MANAGEMENT ADVISORS, INC.

              
	 
      	 
      
	
                By:

              	
                /s/ Jeffrey Nunez

              	 
      
	 
      	 
      
	
                Name:
      Jeffrey Nunez

              
	
                Title:
      PresidentWarrant
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 CORPORATION

      

      WARRANT
TO PURCHASE COMMON STOCK

      

      InVivo
Therapeutics Corporation, a Delaware corporation (the “Company”), for value received
on [  ], 2010 (the “Effective Date”), hereby
issues to [          ]
(the “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. Unless otherwise defined in this Warrant,
terms appearing in initial capitalized form shall have the meaning ascribed to
them in that certain Securities Purchase Agreement between the Company and the
purchaser signatory thereto pursuant to which this Warrant was issued (the
“Securities Purchase
Agreement”).

      

      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 $0.001 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
$13.7706 per share of Common Stock, subject to adjustment as provided
herein; (iv) “Trading
Day” means any day on which the Common Stock is traded on the primary
national or regional stock exchange on which the Common Stock is listed, or if
not so listed, the OTC Bulletin Board, if quoted thereon, is open for the transaction of business;
and (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”).

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      
        	
                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)          At
any time when a registration statement covering the resale of the Warrant Shares
by the Holder is not available after the first anniversary of the Effective
Date, 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:

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      

      
        
          
            
              	
                      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 (A) the average of the closing sales prices, as quoted on the primary
national or regional stock exchange on which the Common Stock is listed, or, if
not listed, the OTC Bulletin Board if quoted thereon, on the twenty (20) trading
days immediately preceding the date on which the Notice of Exercise is deemed to
have been sent to the Company, or (B) if the Common Stock is not publicly traded
as set forth above, as 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.

      

      Notwithstanding
the foregoing provisions of this Section 1(b)(ii), the Holder may not make a
Cashless Exercise if and to the extent that such exercise 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 permit the Holder to make a
Cashless Exercise, the Company shall use commercially reasonable efforts to
obtain the necessary stockholder consent to increase the authorized number of
shares of Common Stock to permit such Holder to make a Cashless Exercise
pursuant to this Section 1(b)(ii).

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      (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. If this Warrant is submitted in connection with any
exercise pursuant to Section 1(a) 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 three (3)
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.

      

      (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 exercised in part, the Company
shall issue, at its expense, a new Warrant, in substantially the form of this
Warrant, referencing such reduced number of Warrant Shares that remain subject
to this Warrant.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      (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 formation, 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(a); 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(a).

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      (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).

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      (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.

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      (d)           Adjustment of Exercise Price
Upon Issuance of Additional Shares of Common Stock.  If the
Company issues Additional Shares of Common Stock, as defined below, without
consideration or for a consideration per share less than a price (the “Applicable Price”)
equal to the Exercise Price in effect immediately prior to such issuance, then
immediately after such issuance the Exercise Price then in effect shall be
reduced to an amount equal to such consideration per share, provided that in no
event shall the Exercise Price be reduced below $0.001.  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 Securities
Purchase Agreement, (B) the reverse triangular merger of the Company into a
publicly-held company (“Merger”), or (C) any private placement offering that
closes (including subsequent closings) as part of the Merger; and (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.  The provisions of this Section 3(d) shall
not operate to increase the Exercise Price.

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      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.

              	
                TRANSFERS
      AND EXCHANGES OF WARRANT AND WARRANT
SHARES

              

      

      

      (a)           Registration of Transfers
and Exchanges. Subject to Section 4(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 4, 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
4(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.

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      
        	
                5.

              	
                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.

      

      
        	
                6.

              	
                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.

      

      7.           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.

      

      
        	
                8.

              	
                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:

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      “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.”

      

      
        	
                9.

              	
                REGISTRATION
      UNDER THE SECURITIES ACT OF 1933

              

      

      

      In connection with any Organic Change
in which the Company is not the surviving corporation, the Company shall cause
the surviving corporation to provide registration rights with respect to the
resale of the Warrant Shares (or the warrant shares issuable upon the exercise
of the warrant that is exchanged for this Warrant at the time of the closing of
such Organic Change) under the Securities Act which are equal to any
registration rights that are afforded to any purchasers of securities that are
sold at the time of the Organic Change.

      

      
        	
                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 at the address, facsimile number, or e-mail address
furnished by the registered Holder to the Company in accordance with the
Securities Purchase Agreement by and between the Company and the Holder, 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.

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      
        	
                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.

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      
        	
                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]

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

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

      

      
        
          
            
              
                
                  	
                          INVIVO
      THERAPEUTICS CORPORATION

                        
	 
      	 
      	 
	
                          By:

                        	 
      	 
	Name:     
       Frank
      Reynolds	 
	Title:        
      Chief
      Executive Officer	 

                

              

            

          

        

      

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      EXHIBIT
A

      

      NOTICE OF
EXERCISE

      

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

      

      To InVivo
Therapeutics Corporation:

      

      The
undersigned hereby irrevocably elects to exercise this Warrant and to purchase
thereunder, ___________________ full shares of InVivo Therapeutics Corporation
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:  

                      	 
      	 

              

            

          

        

      

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      

      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:

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