Document:

Exhibit 10.1

 

UNSECURED CONVERTIBLE LOAN AGREEMENT

 

 

 

 

 

Dated as of September
18, 2018

 

by and among

 

L. MOLTENI & C. DEI F.LLI ALITTI SOCIETÀ
DI ESERCIZIO S.P.A.,

a company organized and existing under the
laws of Italy

Strada Statale 67, Frazione Granatieri,

Scandicci (Florence), Italy

 

as a Lender

 

 

And

 

TITAN PHARMACEUTICALS, INC.,

a Delaware corporation

 

400 Oyster Point Blvd., Suite 505

South San Francisco, CA 94080

 

as Borrower

 

 

 

Loan Amount: EUR 550,000

 

 

    	 	 	 

     

    

 

UNSECURED CONVERTIBLE LOAN AGREEMENT, dated
as of September 18, 2018, between L. MOLTENI & C. DEI F.LLI ALITTI SOCIETÀ DI ESERCIZIO S.P.A., a company organized
and existing under the laws of Italy, as lender (“Molteni” or “Lender”) and Titan Pharmaceuticals,
Inc., a Delaware corporation, as borrower (“Borrower”).

 

AGREEMENT

 

1. Definitions and Construction.

 

1.1 Definitions. As used in this Agreement, the following capitalized terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms defined):

 

“Affiliate”
means, with respect to any Person, any other Person that owns or controls directly or indirectly ten percent (10%) or more of the
stock of such Person, any other Person that controls or is controlled by or is under common control with such Person and each of
such Person’s officers, directors, managers, or partners. For purposes of this definition, the term “control”
of a Person means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies
of such Person, whether through the ownership of voting Equity Securities, by contract or otherwise and the terms “controlled
by” and “under common control with” shall have correlative meanings.

 

“Agreement”
means this Unsecured Convertible Loan Agreement between Borrower and Lender dated as of the date on the cover page hereto (as it
may from time to time be amended, modified or supplemented in a writing signed by Borrower and Lender).

 

“Anti-Terrorism
Laws” means any laws relating to terrorism or money laundering, including Executive Order No. 13224 (effective September
24, 2001), the USA PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC.

 

“Asset Purchase,
Supply and Support Agreement” means that certain Asset Purchase, Supply and Support Agreement by and among Borrower and
Molteni dated as of March 21, 2018 (as from time to time amended in accordance with its terms).

 

“Attribution
Parties” has the meaning given such term in Section 2.5 of this Agreement.

 

“Borrower”
has the meaning given such term in the preamble to this Agreement.

 

“Business
Day” means any day that is not a Saturday, Sunday, or other day on which banking institutions are authorized or required
to close in New York.

 

“Claim”
has the meaning given such term in Section 9.2 of this Agreement.

 

“Consolidated”
means the consolidation of accounts in accordance with GAAP.

 

“Conversion
Shares” has the meaning given such term in Section 2.5 of this Agreement.

 

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“Default”
means any Event of Default or any event which with the passing of time or the giving of notice or both would become an Event of
Default hereunder.

 

“Default Rate”
means the per annum rate of interest equal to five percent (5%) over the Loan Rate, but such rate shall in no event be more than
the highest rate permitted by applicable law to be charged on commercial loans in a default situation.

 

“Disclosure
Schedule” means Exhibit A attached hereto.

 

“Effective
Date” means the date on which all conditions precedent set forth in Section 3 have been satisfied (or waived in accordance
with the terms hereof).

 

“Environmental
Laws” means all foreign, federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and
codes, together with all administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements
with, any Governmental Authorities, in each case relating to environmental, health, safety and land use matters, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Clean Air Act, the Federal Water Pollution Control
Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery Act, the Toxic Substances Control Act
and the Emergency Planning and Community Right-to-Know Act.

 

“Equity Securities”
of any Person means (a) all common stock, preferred stock, participations, shares, partnership interests, membership interests
or other equity interests in and of such Person (regardless of how designated and whether or not voting or non-voting) and (b)
all warrants, options and other rights to acquire any of the foregoing.

 

“ERISA”
has the meaning given such term in Section 6.10 of this Agreement.

 

“Event of
Default” has the meaning given such term in Section 7 of this Agreement.

 

“Excluded
Property” has the meaning set forth in the Secured Loan Agreement.

 

“FATCA”
means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version
that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official
interpretations thereof, any agreements entered into pursuant to Section 1471(b) of the Internal Revenue Code and any intergovernmental
agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Internal Revenue Code.

 

“GAAP”
means generally accepted accounting principles as in effect in the United States of America from time to time, consistently applied.

 

“Governmental
Authority” means (a) any federal, state, county, municipal or foreign government, or political subdivision thereof,
(b) any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality or public
body, (c) any court or administrative tribunal, or (d) with respect to any Person, any arbitration tribunal or other
non-governmental authority to whose jurisdiction that Person has consented.

 

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“Hazardous
Materials” means all those substances which are regulated by, or which may form the basis of liability under, any Environmental
Law, including all substances identified under any Environmental Law as a pollutant, contaminant, hazardous waste, hazardous constituent,
special waste, hazardous substance, hazardous material, or toxic substance, or petroleum or petroleum derived substance or waste.

 

“Indebtedness”
means, with respect to any Person, the aggregate amount of, without duplication, (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations
of such Person to pay the deferred purchase price of property or services (excluding trade payables aged less than one hundred
eighty (180) days), (d) all capital lease obligations of such Person, (e) all obligations or liabilities of others secured by a
Lien on any asset of such Person, whether or not such obligation or liability is assumed, (f) all obligations or liabilities of
others guaranteed by such Person, and (g) any other obligations or liabilities which are required by GAAP to be shown as debt on
the balance sheet of such Person.

 

“Indemnified
Person” has the meaning given such term in Section 9.2 of this Agreement.

 

“Intellectual
Property” means, with respect to any Person, all of such Person’s right, title and interest in and to patents,
patent rights (and applications and registrations therefor and divisions, continuations, renewals, reissues, extensions and continuations-in-part
of the same), trademarks and service marks (and applications and registrations therefor and the goodwill associated therewith),
whether registered or not, inventions, copyrights (including applications and registrations therefor and like protections in each
work or authorship and derivative work thereof), whether published or unpublished, mask works (and applications and registrations
therefor), trade names, trade styles, software and computer programs, source code, object code, trade secrets, licenses, methods,
processes, know how, drawings, specifications, descriptions, and all memoranda, notes, and records with respect to any research
and development, all whether now owned or subsequently acquired or developed by such Person and whether in tangible or intangible
form or contained on magnetic media readable by machine together with all such magnetic media (but not including embedded computer
programs and supporting information included within the definition of “goods” under the Uniform Commercial Code as
in effect in the State of New York).

 

“Internal
Revenue Code” has the meaning given such term in Section 4.17 of this Agreement.

 

“Investment”
means the purchase or acquisition of any capital stock, equity interest, or any obligations or other securities of, or any similar
interest in, any Person, or the extension of any advance, loan, extension of credit or capital contribution to, or any other investment
in, or deposit with, any Person.

 

“Lender”
has the meaning given such term in the preamble to this Agreement.

 

“Lender’s
Expenses” means all reasonable costs or expenses (including reasonable attorneys’ fees and expenses) incurred by
Lender solely in connection with enforcing or defending the Loan Documents (including reasonable fees and expenses of appeal or
review), including the exercise of any rights or remedies afforded hereunder or under applicable law, whether or not suit is brought,
whether before or after bankruptcy or insolvency, including all reasonable fees and costs incurred by Lender in connection with
Lender’s enforcement of its rights in a bankruptcy or insolvency proceeding filed by or against Borrower, any Subsidiary
or their respective Property.

 

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“Lien”
means any voluntary or involuntary security interest, pledge, bailment, lease, mortgage, hypothecation, conditional sales and title
retention agreement, encumbrance or other lien with respect to any Property in favor of any Person.

 

“Loan”
means the advance of credit in the amount of EUR 550,000 on the Effective Date by Lender to Borrower under this Agreement.

 

“Loan Documents”
means, collectively, this Agreement, the Note and all other documents, instruments and agreements entered into in connection with
this Agreement, as each may be amended, restated or otherwise modified from time to time.

 

“Loan Rate”
means the per annum rate of interest equal to 9.50% plus the amount by which the one month LIBOR Rate (rounded to the nearest
one hundredth percent), as reported in the Wall Street Journal exceeds 1.10%. Notwithstanding the foregoing, in no event
shall the Loan Rate be less than 9.50%.

 

“Material
Adverse Effect” means a material adverse effect on (a) the condition (financial or otherwise), business, or operations
of Borrower or (b) the ability of Borrower to perform its Obligations under the Loan Documents.

 

“Maturity
Date” means December 31, 2019, or if earlier, the date of acceleration of such Loan following an Event of Default, whichever
is applicable.

 

“Molteni”
has the meaning given such term in the preamble to this Agreement.

 

“Note”
means the promissory note executed in connection with the Loan in substantially the form of Exhibit C attached hereto.

 

“Obligations”
means all debt, principal, interest, fees, charges, expenses and reasonable attorneys’ fees and costs and other amounts,
obligations, covenants, and duties owing by Borrower to Lender of any kind and description pursuant to or evidenced by the Loan
Documents, whether due or to become due, now existing or hereafter arising, including all Lender’s Expenses.

 

“OFAC”
means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

“Permitted
Indebtedness” means and includes:

 

(a) (i) Indebtedness of Borrower to Lender under this Agreement and (ii) Indebtedness of Borrower under the Secured Loan Agreement;

 

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(b) Indebtedness arising from the endorsement of instruments in the ordinary course of business;

 

(c) Indebtedness of Borrower existing on the date hereof and set forth on the Disclosure Schedule;

 

(d) intercompany Indebtedness owed by any Subsidiary to Borrower or any wholly-owned Subsidiary, as applicable; provided
that, if applicable, such Indebtedness is also permitted as a Permitted Investment and, in the case of such Indebtedness owed to
Borrower, such Indebtedness shall be evidenced by one or more promissory notes;

 

(e) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness under subsection
(d) above; provided that the principal amount thereof is not increased or the terms thereof are not modified to impose materially
more burdensome terms upon Borrower.

 

(f) unsecured Indebtedness to trade creditors incurred in the ordinary course of business;

 

(g) Indebtedness of Borrower secured by Liens permitted under clause (g) of the definition of Permitted Liens, up to an aggregate
principal amount of Five Hundred Thousand Dollars ($500,000) at any one time;

 

(h) to the extent constituting or that may constitute Indebtedness, any Equity Securities of Borrower outstanding as of the
date hereof, including any preferred stock, warrants, options and other rights to acquire Borrower’s Equity Securities and
any payments that may arise thereunder; and

 

(i) Indebtedness for deferred compensation to Borrower’s employees, including accrued vacation, in an aggregate amount
not to exceed Four Hundred Thousand Dollars ($400,000).

 

“Permitted
Investments” means and includes any of the following Investments:

 

(a) Deposits and deposit accounts with commercial banks organized under the laws of the United States or a state thereof to
the extent: (i) the deposit accounts of each such institution are insured by the Federal Deposit Insurance Corporation up to the
legal limit; and (ii) each such institution has an aggregate capital and surplus of not less than One Hundred Million Dollars ($100,000,000);

 

(b) Investments in marketable obligations issued or fully guaranteed by the United States, any state thereof or any agency thereof
and maturing not more than one (1) year from the date of issuance;

 

(c) Investments in open market commercial paper rated at least “A1” or “P1” or higher by a national
credit rating agency and maturing not more than one (1) year from the creation thereof;

 

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(d) Investments pursuant to or arising under currency agreements or interest rate agreements entered into in the ordinary course
of business;

 

(e) Investments by Borrower and Subsidiaries in their Subsidiaries outstanding on the date hereof;

 

(f) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers
and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course
of business;

 

(g) Investments in joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the
licensing of technology, intellectual property and/or product, the development of such technology, intellectual property and/or
product or the providing of technical support, provided that any cash Investments by Borrower do not exceed $100,000 in the aggregate
in any fiscal year; and

 

(h) other Investments aggregating not in excess of One Hundred Thousand Dollars ($100,000) at any time.

 

“Permitted
Licenses” means and includes (i) non-exclusive licenses of Intellectual Property entered into in the ordinary course
of business, (ii) exclusive licenses of Intellectual Property entered into in the ordinary course of business and applicable solely
outside the United States, provided that such exclusive licenses could not result in a legal transfer of title of the licensed
Intellectual Property and (iii) exclusive licenses of Intellectual Property entered into in the ordinary course of business that
are exclusive as to the United States, to the extent consented to by Lender, which consent shall not be unreasonably withheld,
conditioned or delayed.

 

“Permitted
Liens” means and includes:

 

(a) the Liens created by the Secured Loan Agreement;

 

(b) Liens for fees, taxes, levies, imposts, duties or other governmental charges of any kind which are not yet delinquent or
which are being contested in good faith by appropriate proceedings which suspend the collection thereof;

 

(c) Liens identified on the Disclosure Schedule;

 

(d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar Liens arising
in the ordinary course of business and which are not delinquent or remain payable without penalty or which are being contested
in good faith and by appropriate proceedings;

 

(e) leases or subleases of real property granted in the ordinary course of Borrower’s business, and leases, subleases,
non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course of
Borrower’s business;

 

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(f) leases or subleases granted in the ordinary course of Borrower’s business, including in connection with Borrower’s
leased premises or leased property;

 

(g) Liens upon any equipment or other personal property acquired by Borrower after the date hereof to secure (i) the purchase
price of such equipment or other personal property, or (ii) capital lease obligations or indebtedness incurred solely for the purpose
of financing the acquisition of such equipment or other personal property; provided that (A) such Liens are confined solely
to the equipment or other personal property so acquired and the amount secured does not exceed the acquisition price thereof, and
(B) no such Lien shall be created, incurred, assumed or suffered to exist in favor of Borrower’s officers, directors or shareholders
holding five percent (5%) or more of Borrower’s Equity Securities; and

 

(h) Liens in favor of financial institutions arising solely in connection with Borrower’s deposit or securities accounts
held at such institutions.

 

“Person”
means and includes any individual, any partnership, any corporation, any business trust, any joint stock company, any limited liability
company, any unincorporated association or any other entity and any domestic or foreign national, state or local government, any
political subdivision thereof, and any department, agency, authority or bureau of any of the foregoing.

 

“Property”
means any interest in any kind of property or asset, whether real, personal or mixed, whether tangible or intangible.

 

“Sanctions”
means any economic or financial sanction administered or enforced by the United States Government (including, without limitation,
OFAC and the United States Department of State), the United Nations Security Council, the European Union, Her Majesty’s Treasury
of the United Kingdom or other relevant sanctions authority.

 

“Scheduled
Payment” has the meaning given such term in Section 2.2(a)(i) of this Agreement.

 

“Secured Loan
Agreement” means that certain Amended and Restated Venture Loan and Security Agreement, dated as of March 21, 2018, among
Molteni, Borrower, and the other lenders from time to time party thereto, as the same may be amended or modified from time to time
in accordance with its terms.

 

“Subsidiary”
means any corporation or other entity of which a majority of the outstanding Equity Securities entitled to vote for the election
of directors or other governing body (otherwise than as the result of a default) is owned by Borrower directly or indirectly through
Subsidiaries.

 

“Transfer”
has the meaning given such term in Section 7.4 of this Agreement.

 

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1.2 Construction. References in this Agreement to “Articles,” “Sections,” “Exhibits,”
 “Schedules” and “Annexes” are to recitals, articles, sections, exhibits, schedules and annexes herein and
hereto unless otherwise indicated. References in this Agreement and each of the other Loan Documents to any document, instrument
or agreement shall include (a) all exhibits, schedules, annexes and other attachments thereto, (b) all documents, instruments
or agreements issued or executed in replacement thereof, and (c) such document, instrument or agreement, or replacement or
predecessor thereto, as amended, modified and supplemented from time to time and in effect at any given time (subject, in the case
of clauses (b) and (c), to any restrictions on such replacement, amendment, modification or supplement set forth in the Loan Documents).
The words “hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement or any other Loan Document shall refer to this Agreement or such other Loan Document, as the case may be, as a whole
and not to any particular provision of this Agreement or such other Loan Document, as the case may be. The words “include”
and “including” and words of similar import when used in this Agreement or any other Loan Document shall not be construed
to be limiting or exclusive. Unless the context requires otherwise, any reference in this Agreement or any other Loan Document
to any Person shall be construed to include such Person’s successors and assigns. Unless otherwise indicated in this Agreement
or any other Loan Document, all accounting terms used in this Agreement or any other Loan Document shall be construed, and all
accounting and financial computations hereunder or thereunder shall be computed, in accordance with GAAP. The terms and information
set forth on the cover page of this Agreement are incorporated into this Agreement.

 

2. Loan; Repayment.

 

2.1 Loan.

 

(a) The Loan Amounts. Subject to the terms and conditions of this Agreement and relying upon the representations and
warranties herein set forth as and when made or deemed to be made, Lender agrees to lend to Borrower the Loan on the Effective
Date.

 

(b) The Loan and the Notes. The obligation of Borrower to repay the unpaid principal amount of and interest on the Loan
shall be evidenced by the Note issued to Lender.

 

(c) Use of Proceeds. The proceeds of the Loan shall be used solely for working capital or general corporate purposes
of Borrower.

 

2.2 Payments.

 

(a) Scheduled Payment.

 

(i) Unless earlier converted into Conversion Shares in accordance with the terms of Section 2.5 hereof, the outstanding principal
amount of the Loan together with all accrued interest thereon shall be due and payable in full on the Maturity Date (the “Scheduled
Payment”).

 

(b) Payment of Interest. Interest shall accrue on the Loan at a per annum rate of interest equal to the Loan Rate. The
Loan Rate shall be calculated using the LIBOR Rate then applicable to the Secured Loan Agreement. Interest (including interest
at the Default Rate, if applicable) shall be computed on the basis of a 360-day year for the actual number of days elapsed. Notwithstanding
any other provision hereof, the amount of interest payable hereunder shall not in any event exceed the maximum amount permitted
by the law applicable to interest charged on commercial loans.

 

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(c) Application of Payments. All payments received by Lender prior to an Event of Default shall be applied as follows:
(i) first, to Lender’s Expenses then due and owing; (ii) second, ratably, to the Scheduled Payment then due and owing (provided,
however, if such payments are not sufficient to pay the whole amount then due, such payments shall be applied first to unpaid interest
at the Loan Rate, then to the remaining amounts then due).

 

(d) Late Payment Fee. Unless the Scheduled Payment is earlier converted into Conversion Shares in accordance with the
terms of Section 2.5 hereof, Borrower shall pay to Lender a late payment fee equal to six percent (6%) of that portion, if any,
of the Scheduled Payment which is not paid in full to Lender within two (2) Business Days of the Maturity Date.

 

(e) Default Rate. If an Event of Default has occurred and the Obligations have been accelerated (whether automatically
or at the election of Lender), interest shall accrue on the aggregate outstanding accelerated balance hereunder from the date of
the Event of Default until all Events of Default are cured, at a per annum rate equal to the Default Rate.

 

2.3 Other Payment Terms.

 

(a) Place and Manner. Borrower shall make all payments due to Lender in lawful money of the United States. Unless earlier
converted into Conversion Shares in accordance with the terms of Section 2.5 hereof, the Scheduled Payment payable by Borrower
hereunder shall be made, in immediately available funds, not later than 3:00 p.m. New York time, on the Maturity Date via
wire transfer or ACH as instructed by Lender from time to time.

 

(b) Date. Whenever any payment is due hereunder on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall be included in the computation of interest or fees, as the case
may be.

 

(c) Taxes.

 

(i) Unless otherwise required under applicable law, any and all payments made hereunder or under the Notes shall be made free
and clear of and without deduction for any taxes; provided that if Borrower shall be required to deduct any taxes from such payments,
then (A) except with respect to any taxes excluded from indemnified taxes pursuant to the proviso in Section 2.4(c)(ii) below,
the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.4(c)) Lender receives an amount equal to the sum it would have received had no such
deductions been made, (B) Borrower shall make such deductions and (C) Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

 

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(ii) Borrower shall indemnify Lender, within 10 days after written demand therefor, for the full amount of any taxes imposed
or asserted directly on Lender by any Governmental Authority on or attributable to amounts payable under this Agreement solely
as a result of Lender entering into this Agreement to the extent such taxes are paid by Lender, and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not such taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority; provided, however, that such indemnified taxes shall not include (1) income, branch profits
or franchise taxes imposed on (or measured by) Lender’s net income by the jurisdiction, or any political subdivision thereof
or taxing authority therein, under the laws of which such recipient is organized or in which its principal office is located or
in which its applicable lending office is located or in which it has a present or former connection, (2) any U.S. federal withholding
taxes imposed on amounts payable to or for the account of Lender with respect to any applicable interest in the Loan pursuant to
a law in effect on the date on which Lender acquires such interest in the Loan or such Lender changes its lending office, except
in each case to the extent that, pursuant to this Section 2.4(c), amounts with respect to such taxes were payable either to Lender’s
assignor immediately before such Lender became a party hereto or to Lender immediately before it changed its lending office, (3)
any taxes attributable to Lender’s failure to comply with section 2.4(c)(iv), and (4) any withholding taxes imposed under
FATCA. A certificate as to the amount of such payment or liability delivered to Borrower by any Lender shall be conclusive absent
manifest error.

 

(iii) As soon as practicable after any payment of taxes by Borrower hereunder to a Governmental Authority, Borrower shall deliver
to Lender the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably satisfactory to Lender.

 

(iv) If Lender is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement, such Lender shall
deliver to Borrower, as reasonably requested by Borrower, such properly completed and executed documentation prescribed by applicable
law as will permit such payments to be made without withholding or at a reduced rate.

 

(v) If Lender receives a refund in respect of taxes paid by Borrower pursuant to this Section 2.4(c), which in the reasonable
discretion of such Lender exercised in good faith is allocable to such payment, it shall promptly pay such refund, together with
any other amounts paid by Borrower in connection with such refunded taxes, to Borrower, net of all out-of-pocket expenses (including
any taxes to which such Lender has become subject as a result of its receipt of such refund) of such Lender incurred in obtaining
such refund and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund);
provided that Borrower, upon the request of such Lender, shall repay to such Lender amounts paid over pursuant to the preceding
clause (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such Lender
is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (v),
in no event will Lender be required to pay any amount to Borrower pursuant to this paragraph (v) the payment of which would place
such Lender in a less favorable net after-tax position than such Lender would have been in if the indemnification payments or additional
amounts giving rise to such refund had never been paid. This paragraph shall not be construed to require Lender to make available
its tax returns (or any other information relating to its taxes that it deems confidential) to Borrower or any other Person.

 

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2.4 Conversion.

 

(a) In the event that prior to the Maturity Date the European Medicines Agency issues marketing approval for Probuphine®
(the date of such approval, the “Conversion Date”), then the outstanding principal amount of the Note together
with all accrued but unpaid interest thereon shall automatically convert into fully paid and non-assessable shares (the “Conversion
Shares”) of Borrower’s common stock, $.001 par value (the “Common Stock”) at a price per share
equal to the lower of (i) the closing price of the Common Stock as reported by the Nasdaq Stock Market (the “Closing Price”)
on the date hereof and (ii) the Closing Price on the Conversion Date (such price, the “Conversion Price”). Lender
acknowledges, agrees and understands that as of the Conversion Date the Note shall be deemed converted and of no further force
or effect.

 

(b) As soon as practicable after the Conversion Date, Borrower shall issue and deliver to Lender confirmation of the number
of Conversion Shares that have been issued to Lender upon conversion of the Note. No fractional shares shall be issued upon conversion
of the Note. If upon any conversion of the Note a fractional share of Borrower’s capital stock would otherwise result, then
in lieu of such fraction Borrower shall pay the cash value of that fractional share calculated on the basis of the applicable Conversion
Price.

 

(c) f at any time the number of Conversion Shares issuable upon conversion of the Note shall not be sufficient to effect the
conversion of this Note, Borrower shall take such action as may, in the opinion of its counsel, be necessary to increase its authorized
but unissued capital stock or other securities issuable upon conversion of the Note as shall be sufficient for such purpose.

 

3. Conditions Precedent to Effectiveness of this Agreement. At the time of the execution and delivery of this Agreement,
Lender shall have received, in form and substance reasonably satisfactory to Lender, all of the following (unless Lender has agreed
to waive such condition or document):

 

(a) Loan Agreement. This Agreement duly executed by Borrower and Lender.

 

(b) Secretary’s Certificate. A certificate of the secretary or assistant secretary of Borrower, dated as of the
date hereof, with copies of the following documents attached: (i) the certificate of incorporation and bylaws (or equivalent
documents) of Borrower certified by Borrower as being complete and in full force and effect on the date thereof, (ii) incumbency
and representative signatures, and (iii) resolutions authorizing the execution and delivery of this Agreement and each of
the other Loan Documents.

 

(c) Good Standing Certificates. A good standing certificate from Borrower’s state of organization and the state
in which Borrower’s principal place of business is located, each dated as of a date no earlier than thirty (30) days prior
to the date hereof.

 

(d) No Default. No Default or Event of Default has occurred under this Agreement or the other Loan Documents and is continuing
or will exist immediately after giving effect to this Agreement.

 

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(e) Note. Borrower shall have duly executed and delivered the Note to Lender in the amount of the Loan.

 

(f) Closing Certificate. Borrower shall have duly executed and delivered to Lender the Closing Certificate.

 

4. Representations and Warranties. Except as set forth in the Disclosure Schedule, Borrower represents and warrants
as follows:

 

4.1 Organization and Qualification. Each of Borrower and its Subsidiaries is a corporation duly organized and validly
existing under the laws of its state of incorporation and qualified and licensed to do business in, and is in good standing in,
any jurisdiction in which the conduct of its business or its ownership of Property requires that it be so qualified and licensed,
except for such states as to which any failure to so qualify would not have a Material Adverse Effect.

 

4.2 Authority. Borrower has all necessary power and authority to execute, deliver, and perform its obligations in accordance
with the terms thereof, the Loan Documents to which it is a party. Borrower and Subsidiaries have all requisite power and authority
to own and operate their Property and to carry on their businesses as now conducted. Borrower and Subsidiaries have obtained all
licenses, permits, approvals and other authorizations necessary for the operation of their business.

 

4.3 Conflict with Other Instruments, etc. Neither the execution and delivery of any Loan Document to which Borrower is
a party nor the consummation of the transactions therein contemplated nor compliance with the terms, conditions and provisions
thereof will conflict with or result in a breach of any of the terms, conditions or provisions of the certificate of incorporation,
the by-laws, or any other organizational documents of Borrower or any law or any regulation, order, writ, injunction or decree
of any court or Governmental Authority by which Borrower or any Subsidiary or any of their respective property or assets may be
bound or affected or any material agreement or instrument to which Borrower is a party or by which it or any of its Property is
bound or to which it or any of its Property is subject, or constitute a default thereunder or result in the creation or imposition
of any Lien, other than Permitted Liens.

 

4.4 Authorization; Enforceability. The execution and delivery of this Agreement, the incurrence of the Loan, the execution
and delivery of the other Loan Documents to which Borrower is a party and the consummation of the transactions herein and therein
contemplated have each been duly authorized by all necessary action on the part of Borrower. No authorization, consent, approval,
license or exemption of, and no registration, qualification, designation, declaration or filing with, or notice to, any Person
is, was or will be necessary to (a) the valid execution and delivery of any Loan Document to which Borrower is a party or (b) the
performance of Borrower’s obligations under any Loan Document. The Loan Documents have been duly executed and delivered and
constitute legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws of general application relating
to or affecting the enforcement of creditors’ rights or by general principles of equity.

 

    	 	12	 

     

    

 

4.5 Name; Location of Chief Executive Office, Principal Place of Business. Borrower has not done business under any name
other than that specified on the signature page hereof. Borrower’s jurisdiction of incorporation, chief executive office,
principal place of business are presently located in the state and at the address set forth on the cover page of this Agreement.

 

4.6 Litigation. There are no actions or proceedings pending by or against Borrower or any Subsidiary before any court,
arbitral tribunal, regulatory organization, administrative agency or similar body in which an adverse decision could have a Material
Adverse Effect. Borrower does not have knowledge of any such pending or threatened actions or proceedings.

 

4.7 Financial Statements. All financial statements relating to Borrower, any Subsidiary or any Affiliate that have been
delivered by Borrower to Lender present fairly in all material respects Borrower’s Consolidated financial condition as of
the date thereof and Borrower’s Consolidated results of operations for the period then ended.

 

4.8 Full Disclosure. No representation, warranty or other statement made by Borrower in any Loan Document (including
the Disclosure Schedule), certificate or written statement furnished to Lender (other than projections, forward-looking statements
and other information of a general economic or industry nature, which projections, forward-looking statements and other information
of a general economic or industry nature have been prepared by Borrower in good faith based upon assumptions believed by Borrower
to be reasonable at the time) contains any untrue statement of a material fact or omits to state a material fact necessary in order
to make the statements contained in such certificates or statements not misleading. There is no fact known to Borrower which materially
adversely affects, or which could in the future be reasonably expected to materially adversely affect, its ability to perform its
obligations under this Agreement.

 

4.9 [Reserved].

 

4.10 Subsidiaries. Borrower has no Subsidiaries.

 

4.11 Capitalization. All issued and outstanding Equity Securities of Borrower are duly authorized and validly issued,
fully paid and non-assessable, and such securities were issued in compliance with all applicable state and federal laws concerning
the issuance of securities, except for such compliance with such laws that would not reasonably be expected to result in a Material
Adverse Effect.

 

4.12 Catastrophic Events; Labor Disputes. None of Borrower, any Subsidiary or any of their respective Property
is or has been affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or other casualty that could reasonably be expected to have a Material Adverse Effect. There are no disputes
presently subject to grievance procedure, arbitration or litigation under any of the collective bargaining agreements, employment
contracts or employee welfare or incentive plans to which Borrower or any Subsidiary is a party, and there are no strikes, lockouts,
work stoppages or slowdowns, or, to the knowledge of Borrower, jurisdictional disputes or organizing activity occurring or threatened
which could reasonably be expected to have a Material Adverse Effect.

 

    	 	13	 

     

    

 

4.13 Certain Agreements of Officers, Employees and Consultants.

 

(a) No Violation. To the knowledge of Borrower, no officer, employee or consultant of Borrower is, or is now expected
to be, in violation of any term of any employment contract, proprietary information agreement, nondisclosure agreement, noncompetition
agreement or any other material contract or agreement or any restrictive covenant relating to the right of any such officer, employee
or consultant to be employed by Borrower because of the nature of the business conducted or to be conducted by Borrower or relating
to the use of trade secrets or proprietary information of others, and to Borrower’s knowledge, the continued employment of
Borrower’s officers, employees and consultants does not subject Borrower to any material liability for any claim or claims
arising out of or in connection with any such contract, agreement, or covenant.

(b) No Present Intention to Terminate. To the knowledge of Borrower, no officer of Borrower, and no employee or consultant
of Borrower whose termination, either individually or in the aggregate, could reasonably be expected to have a Material Adverse
Effect, has any present intention of terminating his or her employment or consulting relationship with Borrower.

 

4.14 No Plan Assets. Neither Borrower nor any Subsidiary is an “employee benefit plan,” as defined in Section 3(3)
of ERISA, subject to Title I of ERISA, and none of the assets of Borrower or any Subsidiary constitutes or will constitute
 “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) neither
Borrower nor any Subsidiary is a “governmental plan” within the meaning of Section 3(32) of ERISA and (b) transactions
by or with Borrower or any Subsidiary are not subject to state statutes regulating investment of, and fiduciary obligations with
respect to, governmental plans similar to the provisions of Section 406 of ERISA or Section 4975 of the Internal Revenue
Code currently in effect, which prohibit or otherwise restrict the transactions contemplated by this Loan Agreement.

 

4.15 Sanctions, Etc. None of Borrower, any of its Subsidiaries or, to the knowledge of Borrower after due inquiry, any
director, officer, employee, agent or Affiliate of Borrower or any of its Subsidiaries, is a Person that is, or is owned or controlled
by Persons that are, (b) the subject or target of any Sanctions or (b) located, organized or resident in a country or territory
that is, or whose government is, the subject of Sanctions. To the best of Borrower’s knowledge, as of the date hereof and
at all times throughout the term of this Agreement, including after giving effect to any transfers of interests permitted pursuant
to the Loan Documents, none of the funds of Borrower, any Subsidiary or of their Affiliates have been (or will be) derived from
any unlawful activity with the result that the investment in the respective party (whether directly or indirectly), is prohibited
by applicable law or the Loan is in violation of applicable law.

 

    	 	14	 

     

    

 

4.16 Regulatory Compliance. Borrower is not a “bank holding company” or a direct or indirect subsidiary of
a “bank holding company” as defined in the Bank Holding Company Act of 1956, as amended, and Regulation Y thereunder
of the Board of Governors of the Federal Reserve System. Neither Borrower nor any Subsidiary is an “investment company”
or a company controlled by an “investment company” under the Investment Company Act of 1940. Borrower is not engaged
in the business of extending credit for the purpose of purchasing or carrying margin stock (as defined in Regulation U of the Board
of Governors of the Federal Reserve System) and no proceeds of the Loan will be used to purchase or carry margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin stock.

 

4.17 Payment of Taxes. All federal and other material tax returns, reports and statements (including any attachments thereto
or amendments thereof) of Borrower and its Subsidiaries filed or required to be filed by any of them have been timely filed (or
extensions have been obtained and such extensions have not expired) and all taxes shown on such tax returns or otherwise due and
payable and all assessments, fees and other governmental charges upon Borrower, its Subsidiaries and their respective properties,
assets, income, businesses and franchises which are due and payable have been paid when due and payable, except for the payment
of any such taxes, assessments, fees and other governmental charges which are being diligently contested by Borrower in good faith
by appropriate proceedings and for which adequate reserves have been made under GAAP. To the knowledge of Borrower, no tax return
of Borrower or any Subsidiary is currently under an audit or examination, and Borrower has not received written notice of any proposed
audit or examination, in each case, where a material amount of tax is at issue. Borrower is not an “S corporation”
within the meaning of Section 1361(a)(1) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”).

 

4.18 Anti-Terrorism Laws. Borrower will not, directly or indirectly, use the proceeds of the Loan, or lend, contribute
or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, (i) to fund any activities
or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is,
the subject of Sanctions, or (ii) in any other manner that would result in a violation of Sanctions by any Person (including any
Person participating in the Loan, whether as lender, underwriter, advisor, investor or otherwise). Lender hereby notifies Borrower
that pursuant to the requirements of Anti-Terrorism Laws, and Lender’s policies and practices, Lender is required to obtain,
verify and record certain information and documentation that identifies Borrower and its principals, which information includes
the name and address of Borrower and its principals and such other information that will allow Lender to identify such party in
accordance with Anti-Terrorism Laws.

 

5. Affirmative Covenants. Borrower, until the full and complete payment of the Obligations, covenants and agrees that:

 

5.1 Good Standing. Borrower shall maintain, and cause each of its Subsidiaries to maintain, its corporate existence and
its good standing in its jurisdiction of incorporation and maintain qualification in each jurisdiction in which the failure to
so qualify could reasonably be expected to have a Material Adverse Effect. Borrower shall maintain, and cause each of its Subsidiaries
to maintain, in force all licenses, approvals and agreements, the loss of which could reasonably be expected to have a Material
Adverse Effect.

 

    	 	15	 

     

    

 

5.2 Government Compliance. Borrower shall comply, and cause each of its Subsidiaries to comply, with all statutes, laws,
ordinances and government rules and regulations to which it is subject, noncompliance with which could reasonably be expected to
have a Material Adverse Effect.

 

5.3 Financial Statements, Reports, Certificates. Without duplication of any such deliverables provided to Lender under
the Secured Loan Agreement, Borrower shall deliver to Lender: (a) at the time of filing of Borrower’s Form 10-K
with the U.S. Securities and Exchange Commission after the end of each fiscal year of Borrower, the financial statements of Borrower
filed with such Form 10-K; and (ii) at the time of filing of Borrower’s Form 10-Q with the U.S. Securities
and Exchange Commission after the end of each of the first three fiscal quarters of Borrower, the Consolidated financial statements
of Borrower filed with such Form 10-Q; and (c) as soon as available, but in any event within forty-five (45) days after
the earlier of (i) the end of Borrower’s fiscal year or (ii) the date of Borrower’s board of directors’ adoption,
Borrower’s operating budget and plan for the next fiscal year; and (d) such other financial information as Lender may reasonably
request from time to time. In addition, without duplication of any such deliverables provided to Lender under the Secured Loan
Agreement, Borrower shall deliver to Lender (A) promptly upon becoming available, copies of all statements, reports and notices
sent or made available generally by Borrower to its security holders and (B) immediately upon receipt of notice thereof, a
report of any material legal actions pending or threatened against Borrower or any Subsidiary or the commencement of any action,
proceeding or governmental investigation involving Borrower or any Subsidiary is commenced that is reasonably expected to result
in damages or costs to Borrower of One Hundred Thousand Dollars ($100,000) or more.

 

5.4 Notice of Defaults. As soon as possible, and in any event within five (5) days after the discovery of a Default or
an Event of Default, Borrower shall provide Lender with an Officer’s Certificate setting forth the facts relating to or giving
rise to such Default or Event of Default and the action which Borrower proposes to take with respect thereto.

 

5.5 Taxes. Borrower shall make, and cause each Subsidiary to make, due and timely payment or deposit of all federal,
state, and local taxes, assessments, or contributions required of it by law or imposed upon any Property belonging to it, and will
execute and deliver to Lender, on demand, appropriate certificates attesting to the payment or deposit thereof; and Borrower will
make, and cause each Subsidiary to make, timely payment or deposit of all tax payments and withholding taxes required of it by
applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes,
and will, upon request, furnish Lender with proof satisfactory to Lender indicating that Borrower and each Subsidiary has made
such payments or deposits; provided that Borrower need not make any payment if the amount or validity of such payment is
contested in good faith by appropriate proceedings which suspend the collection thereof. In addition, Borrower shall not change,
and shall not permit any Subsidiary to change, its respective jurisdiction of residence for taxation purposes.

 

5.6 Insurance. Borrower shall keep its business insured for risks and in amounts standard for companies in Borrower’s
industry and location. Insurance policies shall be in a form, with companies, and in amounts that are reasonably satisfactory to
Lender. At Lender’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments.

 

    	 	16	 

     

    

 

5.7 Further Assurances. At any time and from time to time Borrower shall execute and deliver such further instruments
and take such further action as may reasonably be requested by Lender to make effective the purposes of this Agreement.

 

5.8 Subsidiaries. Borrower, upon Lender’s request, shall cause any Subsidiary to provide Lender with a guaranty
of the Obligations.

 

5.9 Keeping of Books. Borrower shall keep proper books of record and account, in which full and correct entries shall
be made of all financial transactions and the assets and business of Borrower and its Subsidiaries in accordance with GAAP.

 

6. Negative Covenants. Borrower, until the full and complete payment of the Obligations, covenants and agrees that Borrower
shall not (and shall not allow any Subsidiary to):

 

6.1 Chief Executive Office. Change its name, jurisdiction of incorporation, chief executive office, principal place of
business or any of the items set forth in Section 1 of the Disclosure Schedule without thirty (30) days prior written notice to
Lender.

 

6.2 Liens. Create, incur, allow or suffer, or permit any Subsidiary to create, incur, allow or suffer, any Lien on any
of its property, or assign or convey any right to receive income, including the sale of any accounts except for Permitted Liens.

 

6.3 Distributions. (a) Pay any dividends or make any distributions, or permit any Subsidiary to pay any dividends or
make any distributions, on their respective Equity Securities; (b) purchase, redeem, retire, defease or otherwise acquire, or permit
any Subsidiary to purchase, redeem, retire, defease or otherwise acquire, for value any of their respective Equity Securities (other
than repurchases pursuant to the terms of employee stock purchase plans, employee restricted stock agreements or similar arrangements
in an aggregate amount not to exceed One Hundred Thousand Dollars ($100,000) in any fiscal year); (c) return, or permit any Subsidiary
to return, any capital to any holder of its Equity Securities as such; (d) make, or permit any Subsidiary to make, any distribution
of assets, Equity Securities, obligations or securities to any holder of its Equity Securities as such; or (e) set apart any sum
for any such purpose; provided, however, Borrower may pay dividends payable solely in Borrower’s common stock.

 

6.4 Mergers or Acquisitions. Merge or consolidate, or permit any Subsidiary to merge or consolidate, with or into any
other Person or acquire, or permit any Subsidiary to acquire, all or substantially all of the capital stock or assets of another
Person; provided that (a) any Subsidiary may merge into another Subsidiary and (b) any Subsidiary may merge into Borrower
so long as Borrower is the surviving entity.

 

6.5 Change in Business or Ownership. (a) Engage, or permit any Subsidiary to engage, in any business other than the businesses
currently engaged in by Borrower or such Subsidiary, as applicable, or reasonably related thereto or (b) issue in a private placement
Equity Securities to venture capital investors that results in one or more of such investors holding twenty-five percent (25%)
or more of Borrower’s ownership following such issuance unless Borrower identifies to Lender the venture capital investors
prior to the execution of a definitive agreement and any such venture capital investors have cleared Lender’s “know
your customer” checks.

 

    	 	17	 

     

    

 

6.6 Transactions With Affiliates; Creation of Subsidiaries. (a) Enter, or permit any Subsidiary to enter, into any contractual
obligation with any Affiliate or engage in any other transaction with any Affiliate except upon terms at least as favorable to
Borrower or such Subsidiary, as applicable, as an arms-length transaction with Persons who are not Affiliates of Borrower or (b)
create a Subsidiary without providing at least 10 Business Days advance notice thereof to Lender and, if requested by Lender, such
Subsidiary guarantees the Obligations on terms reasonably satisfactory to Lender.

 

6.7 Indebtedness Payments. (a) Prepay, redeem, purchase, defease or otherwise satisfy in any manner prior to the scheduled
repayment thereof any Indebtedness for borrowed money (other than amounts due or permitted to be prepaid under this Agreement)
or lease obligations, (b) amend, modify or otherwise change the terms of any Indebtedness for borrowed money or lease obligations
so as to accelerate the scheduled repayment thereof or (c) repay any notes to officers, directors or shareholders.

 

6.8 Indebtedness. Create, incur, assume or permit, or permit any Subsidiary to create, incur or permit, to exist any
Indebtedness except Permitted Indebtedness.

 

6.9 Investments. Make, or permit any Subsidiary to make, any Investment except for Permitted Investments.

 

6.10 Compliance. (a) Become, or permit any Subsidiary to become, an “investment company” or a company controlled
by an “investment company” under the Investment Company Act of 1940, or undertake as one of its important activities,
extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve
System), or use the proceeds of the Loan for that purpose; (b) become, or permit any Subsidiary to become, subject to any other
federal or state law or regulation which purports to restrict or regulate its ability to borrow money; or (c) (i) fail, or permit
any Subsidiary to fail, to meet the minimum funding requirements of the Employment Retirement Income Security Act of 1974, and
its regulations, as amended from time to time (“ERISA”), permit, or (ii) permit, or permit any Subsidiary to permit,
a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; (d) fail, or permit any Subsidiary to fail, to comply
with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected
to have Material Adverse Effect.

 

6.11 Negative Pledge Regarding Intellectual Property. Create, incur, assume or suffer to exist, or permit any Subsidiary
to create, incur, assume or suffer to exist, any Lien of any kind upon any Intellectual Property or Transfer any Intellectual Property,
whether now owned or hereafter acquired, other than non-exclusive licenses of Intellectual Property entered into in the ordinary
course of business.

 

    	 	18	 

     

    

 

7. Events of Default. Any one or more of the following events shall constitute an “Event of Default”
by Borrower under this Agreement:

 

7.1 Failure to Pay. If Borrower fails to pay when due and payable or when declared due and payable in accordance with
the Loan Documents: (a) unless earlier converted into Conversion Shares in accordance with the terms of Section 2.5 hereof, the
Scheduled Payment on the Maturity Date; or (b) any other portion of the Obligations within five (5) days after receipt of written
notice from Lender that such payment is due.

 

7.2 Certain Covenant Defaults. If Borrower fails to perform any obligation arising under Sections 5.4 or 5.6, or violates
any of the covenants contained in Section 6 of this Agreement.

 

7.3 Other Covenant Defaults. If Borrower fails or neglects to perform, keep, or observe any other term, provision, condition,
covenant, or agreement contained in this Agreement (other than as set forth in Sections 7.1, 7.2 or 7.4 through 7.13), in any of
the other Loan Documents and Borrower has failed to cure such default within thirty (30) days of the occurrence of such default.
During this thirty (30) day period, the failure to cure the default is not an Event of Default.

 

7.4 Material Adverse Change. If there occurs a material adverse change in Borrower’s business, or if there is a
material impairment of the prospect of repayment of any portion of the Obligations owing to Lender.

 

7.5 Intentionally Omitted.

 

7.6 Seizure of Assets, Etc. (a) If any material portion of Borrower’s or any Subsidiary’s assets (i) is attached,
seized, subjected to a writ or distress warrant, or is levied upon or (ii) comes into the possession of any trustee, receiver or
Person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged
or rescinded within ten (10) days, (b) if Borrower or any Subsidiary is enjoined, restrained or in any way prevented by court order
from continuing to conduct all or any material part of its business affairs, (c) if a judgment or other claim becomes a lien or
encumbrance upon any material portion of Borrower’s or any Subsidiary’s assets or (d) if a notice of lien, levy, or
assessment is filed of record with respect to any of Borrower’s or any Subsidiary’s assets by the United States Government,
or any department agency or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is
not paid within ten (10) days after Borrower receives notice thereof; provided that none of the foregoing shall constitute
an Event of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest by Borrower.

 

7.7 Service of Process. (a) The service of process upon Lender seeking to attach by a trustee or other process any funds
of Borrower on deposit or otherwise held by Lender in excess of One Hundred Thousand Dollars ($100,000), (b) the delivery upon
Lender of a notice of foreclosure by any Person seeking to attach or foreclose on any funds of Borrower on deposit or otherwise
held by Lender in excess of One Hundred Thousand Dollars ($100,000) or (c) the delivery of a notice of foreclosure or exclusive
control to any entity holding or maintaining Borrower’s deposit accounts or accounts holding securities by any Person (other
than Lender) seeking to foreclose or attach any such accounts or securities.

 

    	 	19	 

     

    

 

7.8 Default on Indebtedness. One or more defaults shall exist under any agreement with any third party or parties which
consists of the failure to pay any Indebtedness of Borrower or any Subsidiary at maturity or which results in a right by such third
party or parties, whether or not exercised, to accelerate the maturity of Indebtedness in an aggregate amount in excess of One
Hundred Thousand Dollars ($100,000) or a default shall exist under any financing agreement with Lender or any of its Affiliates.

 

7.9 Judgments. If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of
at least One Hundred Thousand Dollars ($100,000) shall be rendered against Borrower or any Subsidiary and shall remain unsatisfied
and unstayed for a period of ten (10) days or more except for those that are fully covered by a reputable and financially sound
insurer.

 

7.10 Misrepresentations. If any material misrepresentation or material misstatement exists now or hereafter in any warranty,
representation, statement, certification, or report made to Lender by Borrower or any officer, employee, agent, or director of
Borrower.

 

7.11 Unenforceable Loan Document. If any Loan Document shall in any material respect cease to be, or Borrower shall assert
that any Loan Document is not, a legal, valid and binding obligation of Borrower enforceable in accordance with its terms.

 

7.12 Involuntary Insolvency Proceeding. (a) If a proceeding shall have been instituted in a court having jurisdiction
in the premises (i) seeking a decree or order for relief in respect of Borrower or any Subsidiary in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) for the appointment of a receiver,
liquidator, administrator, assignee, custodian, trustee (or similar official) of Borrower or any Subsidiary or for any substantial
part of its Property or (iii) for the winding-up or liquidation of its affairs, and such proceeding shall remain undismissed or
unstayed and in effect for a period of thirty (30) consecutive days or (b) such court shall enter a decree or order granting the
relief sought in any such proceeding.

 

7.13 Voluntary Insolvency Proceeding. If Borrower or any Subsidiary shall (a) commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (b) consent to the entry of an order for relief in an involuntary
case under any such law, (c) consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian
(or other similar official) of Borrower or any Subsidiary or for any substantial part of its Property, (d) shall make a general
assignment for the benefit of creditors, (e) shall fail generally to pay its debts for borrowed money as they become due or (f)
take any corporate action in furtherance of any of the foregoing.

 

8. Lender’s Rights and Remedies.

 

8.1 Rights and Remedies. Upon the occurrence and during the continuance of any Default or Event of Default, Lender may,
by written notice and demand to Borrower, declare all Obligations, including (i) any accrued and unpaid interest, (ii) the unpaid
principal balance of the Loan and (iii) all other sums, if any, that shall have become due and payable hereunder, immediately due
and payable (provided that upon the occurrence of an Event of Default described in Section 7.12 or 7.13 all Obligations
shall become immediately due and payable without any action by Lender).

 

    	 	20	 

     

    

 

8.2 Set Off Right. Lender may set off and apply to the Obligations any and all Indebtedness at any time owing to or for
the credit or the account of Borrower or any other assets of Borrower in its possession or control.

 

8.3 Lender’s Expenses. If Borrower fails to pay any amounts or furnish any required proof of payment due to third
persons or entities, as required under the terms of this Agreement, then Lender may, without duplication of any such action taken
under the Secured Loan Agreement, do any or all of the following: (a) make payment of the same or any part thereof; or (b) obtain
and maintain insurance policies of the type discussed in Section 5.6 of this Agreement, and take any action with respect to
such policies as Lender may deem prudent. Any amounts paid or deposited by Lender shall constitute Lender’s Expenses, shall
be immediately due and payable and shall bear interest at the Default Rate. Any payments made by Lender shall not constitute an
agreement by Lender to make similar payments in the future or a waiver by Lender of any Event of Default under this Agreement.
Borrower shall pay all reasonable fees and expenses, including Lender’s Expenses, incurred by Lender in the enforcement or
attempt to enforce any of the Obligations hereunder not performed when due.

 

8.4 Remedies Cumulative; Independent Nature of Lender’s Rights. Lender’s rights and remedies under this Agreement,
the Loan Documents, and all other agreements shall be cumulative. Lender shall have all other rights and remedies not inconsistent
herewith as provided by law, or in equity. No failure on the part of Lender to exercise, and no delay in exercising, any right
or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right or remedy preclude
any other or further exercise thereof or the exercise of any other right. The Obligations of Borrower to Lender shall be enforced
by Lender in accordance with the terms of this Agreement and the other Loan Documents.

 

9. Waivers; Indemnification.

 

9.1 Demand; Protest. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment
and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts,
documents, instruments, chattel paper, and guarantees at any time held by Lender on which Borrower may in any way be liable.

 

9.2 Indemnification and Waiver. Whether or not the transactions contemplated hereby shall be consummated:

 

    	 	21	 

     

    

 

(a) General Indemnity. Borrower agrees upon demand to pay or reimburse Lender for all liabilities, obligations and out-of-pocket
expenses, including Lender’s Expenses and reasonable fees and expenses of counsel for Lender from time to time arising in
connection with the enforcement or collection of sums due under the Loan Documents, and in connection with any “work-out”
in connection with the Loan Documents. Borrower shall indemnify, reimburse and hold Lender and its successors, assigns, agents,
attorneys, officers, directors, equity holders, servants, agents and employees (each an “Indemnified Person”)
harmless from and against all liabilities, losses, damages, actions, suits, demands, claims of any kind and nature (including claims
relating to environmental discharge, cleanup or compliance), all costs and expenses whatsoever to the extent they may be incurred
or suffered by such Indemnified Person in connection therewith (including reasonable attorneys’ fees and expenses), fines,
penalties (and other charges of any applicable Governmental Authority), damage to or loss of use of property (including consequential
or special damages to third parties or damages to Borrower’s property), or bodily injury to or death of any person (including
any agent or employee of Borrower) (each, a “Claim”), directly or indirectly relating to or arising out of the
use of the proceeds of the Loan or otherwise, the falsity of any representation or warranty of Borrower or Borrower’s failure
to comply with the terms of this Agreement or any other Loan Document. The foregoing indemnity shall cover, without limitation,
(i) any Claim for infringement of any patent, copyright, trademark or other intellectual property right, (ii) any Claim resulting
from the presence on or under or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials
on the premises owned, occupied or leased by Borrower, including any Claims asserted or arising under any Environmental Law or
(iv) any Claim for negligence or strict or absolute liability in tort; provided, however, Borrower shall not indemnify any
Indemnified Person for any liability incurred by such Indemnified Person as a direct and sole result of such Indemnified Person’s
gross negligence or willful misconduct. Such indemnities shall continue in full force and effect, notwithstanding the expiration
or termination of this Agreement. Upon Lender’s written demand, Borrower shall assume and diligently conduct, at its sole
cost and expense, the entire defense of Lender, each of its members, partners, and each of their respective, agents, employees,
directors, officers, equity holders, successors and assigns against any indemnified Claim described in this Section 9.2(a).
Borrower shall not settle or compromise any Claim against or involving Lender without first obtaining Lender’s written consent
thereto, which consent shall not be unreasonably withheld. For the avoidance of doubt, tax claims are governed by Section 2.4(c)
and this Section 9.2(a) shall not apply with respect to taxes other than any taxes that represent losses, claims or damages arising
from any non-tax claim.

 

(b) Waiver. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR ANYWHERE ELSE, BORROWER AGREES THAT
IT SHALL NOT SEEK FROM LENDER UNDER ANY THEORY OF LIABILITY (INCLUDING ANY THEORY IN TORTS), ANY SPECIAL, INDIRECT, CONSEQUENTIAL
OR PUNITIVE DAMAGES.

 

(c) Survival; Defense. The obligations in this Section 9.2 shall survive payment of all other Obligations
pursuant to Section 11.8. At the election of any Indemnified Person, Borrower shall defend such Indemnified Person
using legal counsel satisfactory to such Indemnified Person in such Person’s reasonable discretion, at the sole cost and
expense of Borrower. All amounts owing under this Section 9.2 shall be paid within thirty (30) days after written demand.

 

    	 	22	 

     

    

 

10. Notices. Unless otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement
or any other agreement entered into in connection herewith shall be in writing and (except for financial statements and other informational
documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by certified mail, postage
prepaid, return receipt requested, by prepaid nationally recognized overnight courier, or by prepaid facsimile to Borrower or to
Lender, as the case may be, at their respective addresses set forth below:

 

	 	If to Borrower:	
        Titan Pharmaceuticals, Inc.

        400 Oyster Point Blvd., Suite 505

        South San Francisco, CA 94080

        Attention: Chief Executive Officer

        Fax: (650) 244-4956

        Ph: (650) 244-4990

         

	 	If to Molteni:	
        L. Molteni & C. dei F.lli Alitti Società
        di Esercizio S.p.A.

        Strada Statale 67

        Frazione Granatieri

        Scandicci (Florence), Italy

        Attention: Giuseppe Seghi Recli

        Fax No.: +39 055 720057

         

	 	 	
        with a copy to (which shall not constitute
        notice):

         

        Willkie Farr & Gallagher LLP

        787 Seventh Avenue

        New York, NY 10019-6099

        Fax No.: 212 728 9968

        Attn: Mark A. Cognetti, Esq. and David Tarr

        

        

        Studio Legale Delfino e Associati

        Willkie Farr & Gallagher LLP

        Via Michele Barozzi, 2

        20122 Milan

        Attn: Maurizio Delfino 

 

The parties hereto may change the address
at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other.

 

11. General Provisions.

 

11.1 Successors and Assigns. This Agreement and the Loan Documents shall bind and inure to the benefit of the respective
successors and permitted assigns of each of the parties; provided, however, neither this Agreement nor any rights hereunder
may be assigned by Borrower without Lender’s prior written consent, which consent may be granted or withheld, as applicable,
in Lender’s sole discretion. Lender shall have the right without the consent of or notice to Borrower to sell, assign, transfer,
assign, negotiate, or grant participations in all or any part of, or any interest in such Lender’s rights and benefits hereunder.
Lender may disclose the Loan Documents and any other financial or other information relating to Borrower to any potential participant
or assignee of the Loan; provided that such participant or assignee agrees for the benefit of Borrower to protect the confidentiality
of such documents and information using the same measures that it uses to protect its own confidential information.

 

    	 	23	 

     

    

 

11.2 Time of Essence. Time is of the essence for the performance of all obligations set forth in this Agreement.

 

11.3 Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this
Agreement for the purpose of determining the legal enforceability of any specific provision.

 

11.4 Entire Agreement; Construction; Amendments and Waivers.

 

(a) Entire Agreement. This Agreement and each of the other Loan Documents, taken together, constitute and contain the
entire agreement between Borrower and Lender and supersede any and all prior agreements, negotiations, correspondence, understandings
and communications between the parties, whether written or oral, respecting the subject matter hereof. Borrower acknowledges that
it is not relying on any representation or agreement made by Lender or any employee, attorney or agent thereof, other than the
specific agreements set forth in this Agreement and the Loan Documents.

 

(b) Construction. This Agreement is the result of negotiations between and has been reviewed by each of Borrower and
Lender as of the date hereof and their respective counsel; accordingly, this Agreement shall be deemed to be the product of the
parties hereto, and no ambiguity shall be construed in favor of or against Borrower or Lender. Borrower and Lender agree that they
intend the literal words of this Agreement and the other Loan Documents and that no parol evidence shall be necessary or appropriate
to establish Borrower’s or Lender’s actual intentions.

 

(c) Amendments and Waivers. Any and all discharges or waivers of, or consents to any departures from any provision of
this Agreement or of any of the other Loan Documents and any and all amendments and modifications of this Agreement or of any of
the other Loan Documents, in each case, shall not be effective without the written consent of Lender and Borrower; provided
that no such discharge, waiver, consent, amendment or modification under this Agreement or any other Loan Document shall: (i) reduce
the principal of, or rate of interest specified herein on, the Loan, without the written consent of Lender directly and adversely
affected thereby, (ii) postpone any date scheduled for any payment of principal of, or interest (including for the avoidance of
doubt, the Maturity Date) on, the Loan, or reduce the amount of, waive or excuse any such payment, without the written consent
of Lender directly and adversely affected thereby. Any waiver or consent with respect to any provision of the Loan Documents shall
be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on Borrower
in any case shall entitle Borrower to any other or further notice or demand in similar or other circumstances. Any amendment, modification,
waiver or consent affected in accordance with this Section 11.4 shall be binding upon Lender and on Borrower.

 

    	 	24	 

     

    

 

11.5 Reliance by Lender. All covenants, agreements, representations and warranties made herein by Borrower shall be deemed
to be material to and to have been relied upon by Lender, notwithstanding any investigation by Lender.

 

11.6 No Set-Offs by Borrower. All sums payable by Borrower pursuant to this Agreement or any of the other Loan Documents
shall be payable without notice or demand and shall be payable in United States Dollars without set-off or reduction of any manner
whatsoever.

 

11.7 Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts
(including signatures delivered by facsimile or other electronic means), each of which, when executed and delivered, shall be deemed
to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.

 

11.8 Survival. All covenants, representations and warranties made in this Agreement shall continue in full force and effect
so long as any Obligations remain outstanding. The obligations of Borrower to indemnify Lender with respect to the expenses, damages,
losses, costs and liabilities described in Section 9.2 shall survive until all applicable statute of limitations periods with
respect to actions that may be brought against Lender have run.

 

12. Relationship of Parties. Borrower and Lender acknowledge, understand and agree that the relationship between Borrower,
on the one hand, and Lender, on the other, is, and at all times shall remain solely that of a borrower and lender. Lender shall
not, under any circumstances, be construed to be a partner or a joint venturer of Borrower or any of its Affiliates; nor shall
Lender, under any circumstances, be deemed to be in a relationship of confidence or trust or a fiduciary relationship with Borrower
or any of its Affiliates, or to owe any fiduciary duty or any other duty to Borrower or any of its Affiliates. Lender undertakes
or assumes no responsibility or duty to Borrower or any of its Affiliates to select, review, inspect, supervise, pass judgment
upon or otherwise inform Borrower or any of its Affiliates of any matter in connection with its or their Property or the operations
of Borrower or any of its Affiliates. Borrower and each of its Affiliates shall rely entirely on their own judgment with respect
to such matters, and any review, inspection, supervision, exercise of judgment or supply of information undertaken or assumed by
Lender in connection with such matters is solely for the protection of Lender and neither Borrower nor any Affiliate is entitled
to rely thereon.

 

    	 	25	 

     

    

 

13. Confidentiality. All information (other than periodic reports filed by Borrower with the U.S. Securities and Exchange
Commission and information otherwise publicly disclosed by Borrower) disclosed by Borrower or its representatives to Lender or
its representatives, whether furnished before or after the date hereof and regardless of the manner in which such information is
furnished (including disclosures through inspection pursuant to this Agreement and the other Loan Documents) shall be considered
confidential if it is marked confidential or designated, in writing, as confidential, or if either Lender knows that such information
is material non-public information, including, without limitation, financial information and information regarding Borrower’s
existing and prospective relationships and transactions with third parties (such information, collectively, the “Confidential
Information”). Lender agree to use the same degree of care to safeguard and prevent disclosure of such Confidential Information
as Lender use with their own confidential information, but in any event no less than a reasonable degree of care. No Lender shall
disclose such Confidential Information to any third party (other than (a) to Lender’s members, partners, attorneys, governmental
regulators (including any self-regulatory authority) or auditors, (b) to Lender’s subsidiaries and affiliates, (c) on a confidential
basis, to any rating agency, (d) to prospective transferees and purchasers of the Loan or any actual or prospective party (or its
Affiliates) to any swap, derivative or other transaction under which payments are to be made by reference to the Obligations, Borrower,
any Loan Document or any payment thereunder, all subject to the same confidentiality obligation set forth herein or (e) as required
by law, regulation, subpoena or other order to be disclosed) and shall use such information only for purposes of evaluation of
its investment in Borrower and the exercise of Lender’s rights and the enforcement of its remedies under this Agreement and
the other Loan Documents. The obligations of confidentiality shall not apply to any information that (i) was known to the public
prior to disclosure by Borrower or its representatives under this Agreement, (ii) becomes known to the public through no fault
of Lender, (iii) is disclosed to Lender on a non-confidential basis by a third party or (iv) is independently developed by Lender.
Notwithstanding the foregoing, Lender’s agreement of confidentiality shall not apply in connection with any enforcement or
Lender’s rights and remedies under this Agreement following an Event of Default.

 

14. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK. EACH OF BORROWER AND LENDER HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE
AND FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK. BORROWER, LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.

 

15. Nature of Obligations.

 

Notwithstanding anything to the contrary contained
herein or in the Secured Loan Agreement, Lender acknowledges agrees that the Obligations hereunder are unsecured obligations and
are not secured by the lien granted to the Lenders under and as defined in the Secured Loan Agreement.

  

 

[Remainder of page intentionally left blank.]

 

    	 	26	 

     

    

 

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

  

	 	BORROWER: 
	 	 	 
	 	TITAN PHARMACEUTICALS, INC.
	 	 
	 	By:	/s/ Sunil Bhonsle
	 	Name:	Sunil Bhonsle
	 	Title:	Chief Executive Officer

   

 

[SIGNATURE PAGE TO UNSECURED CONVERTIBLE
LOAN AGREEMENT]

 

    	 	 	 

     

    

 

	 	LENDER:
	 	 	 
	 	L. MOLTENI & C. DEI F.LLI ALITTI SOCIETÀ DI ESERCIZIO S.P.A. 
	 	 	 
	 	By:	/s/ Guiseppe Seghi RECLI
	 	Name:	/s/ Guiseppe Seghi RECLI
	 	Title:	Managing Director

   

 

[SIGNATURE PAGE TO UNSECURED CONVERTIBLE
LOAN AGREEMENT]

 

    	 	 	 

     

    

 

LIST OF EXHIBITS
AND SCHEDULES

 

	Exhibit A	Disclosure Schedule
	Exhibit B	Closing Certificate
	Exhibit C	Form of Note

  

    	 	 	 

     

    

 

EXHIBIT A

DISCLOSURE SCHEDULE

 

(Provided separately and will be inserted
upon completion.) 

 

    	 	 	 

     

    

 

EXHIBIT B

 

CLOSING CERTIFICATE

 

The undersigned, being the duly elected
and acting Sunil Bhonsle, Chief Executive Officer of TITAN PHARMACEUTICALS, INC., a Delaware corporation (“Borrower”),
does hereby certify to L. MOLTENI & C. DEI F.LLI ALITTI SOCIETÀ DI ESERCIZIO S.P.A. (“Molteni or “Lender”)
in connection with that certain Unsecured Convertible Loan Agreement dated as of the date hereof by and among Borrower and Lender
(the “Loan Agreement”; with other capitalized terms used below having the meanings ascribed thereto in the Loan Agreement)
that:

 

1. The representations and warranties made by Borrower in Section 4 of the Loan Agreement and in the other Loan Documents
are true and correct as of the date hereof.

 

2. No Default or Event of Default has occurred under the Loan Agreement or the other Loan Documents and is continuing or will
exist immediately after giving effect to Loan Agreement.

 

3. Borrower is in compliance with the covenants and requirements contained in Sections 5 and 6 of the Loan Agreement.

 

4. All conditions referred to in Section 3 of the Loan Agreement to the making of the Loan to be made on or about the
date hereof have been satisfied.

 

5. No material adverse change in the general affairs, management, results of operations, condition (financial or otherwise)
or prospects of the Borrower, whether or not arising from transactions in the ordinary course of business, has occurred since September
12, 2018.

 

Dated: September 18, 2018

 

	 	BORROWER:
	 	 	 
	 	TITAN PHARMACEUTICALS, INC.
	 	 	 
	 	By:	/s/ Sunil Bhonsle
	 	Name:	Sunil Bhonsle
	 	Title:  	Chief Executive Officer

  

 

(Signature page to Closing Certificate)

 

    	 	 	 

     

    

 

EXHIBIT C

 

UNSECURED PROMISSORY NOTE

 

	EUR 550,000	Dated as of: September 18, 2018

  

 

FOR VALUE RECEIVED,
the undersigned, TITAN PHARMACEUTICALS, INC., a Delaware corporation (“Borrower”), HEREBY PROMISES TO PAY to
L. MOLTENI & C. DEI F.LLI ALITTI SOCIETÀ DI ESERCIZIO S.P.A., a company organized and existing under the laws of Italy
(“Lender”) the principal amount of Five Hundred Fifty Thousand and 00/100 Euros EUR 550,000) or such lesser
amount as shall equal the outstanding principal balance of the Loan (the “Loan”) made to Borrower by Lender
pursuant to the Loan Agreement (as defined below), and to pay all other amounts due with respect to the Loan on the dates and in
the amounts set forth in the Loan Agreement. Capitalized terms used but not defined herein shall have the meaning ascribed thereto
in the Loan Agreement.

 

Interest on the principal
amount of this Note from the date of this Note shall accrue at the Loan Rate or, if applicable, the Default Rate, each as established
in accordance with the Loan Agreement (as defined below). Interest shall be computed on the basis of a 360-day year for the actual
number of days elapsed. If not sooner paid or converted into Conversion Shares in accordance with Section 2.5 of the Loan Agreement,
all outstanding amounts hereunder and under the Loan Agreement shall become due and payable on the Maturity Date.

 

Principal, interest
and all other amounts due with respect to the Loan, are payable in lawful money of the United States of America to Lender as set
forth in the Loan Agreement. The principal amount of this Note and the interest rate applicable thereto, and all payments made
with respect thereto, shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which
is part of this Note.

 

This Note is referred
to in, and is entitled to the benefits of, the Unsecured Convertible Loan Agreement dated as of the date hereof (the “Loan
Agreement”), between Borrower and Lender. The Loan Agreement, among other things, (a) provides for the making of an unsecured
Loan to Borrower, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events.

 

This Note may not be
prepaid.

 

This Note and the obligations
of Borrower to repay the unpaid principal amount of the Loan and all other amounts due Lender under the Loan Agreement is unsecured.

 

Presentment for payment,
demand, notice of protest and all other demands and notices of any kind in connection with the execution, delivery, performance
and enforcement of this Note are hereby waived.

 

    	 	 	 

     

    

 

Borrower shall pay
all fees and expenses, including attorneys’ fees and costs, incurred by Lender in the enforcement or attempt to enforce any
of Borrower’s obligations hereunder not performed when due.

 

On the Conversion Date
(as defined in Section 2.5 of the Loan Agreement), the outstanding principal amount and all accrued and unpaid interest under this
Note shall be automatically converted into Conversion Shares in accordance with the terms of and as defined in Section 2.5 of the
Loan Agreement and such conversion shall be deemed to be a payment made under this Note.

 

Any reference herein
to Lender shall be deemed to include and apply to every subsequent holder of this Note. Reference is made to the Loan Agreement
for provisions concerning acceleration and other material terms affecting this Note.

 

This Note shall
be governed by and construed under the laws of the State of New York. Borrower agrees that any action or proceeding brought to
enforce or arising out of this Note may be commenced in the state or federal courts located within the State of New York.

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF,
Borrower has caused this Note to be duly executed by one of its officers thereunto duly authorized on the date hereof.

 

	 	BORROWER:
	 	 	 
	 	TITAN PHARMACEUTICALS, INC.
	 	 	 
	 	By:	/s/ Sunil Bhonsle
	 	Name:	Sunil Bhonsle
	 	Title:  	Chief Executive Officer

 

 

(Signature page to Promissory
Note)Exhibit 4.1

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 04:38 PM 09/17/2018

FILED 04:38 PM 09/17/2018

SR
20186691798 - File Number 6160806

 

CERTIFICATE OF DESIGNATION, PREFERENCES

AND OTHER RIGHTS OF THE OF

CLASS A PREFERRED SUPER MAJORITY VOTING
STOCK OF

BLOCKCHAIN HOLDINGS CAPITAL VENTURES,
INC. 

 

Pursuant
to Section 151 of the General Corporation Law of the State of Delaware, Blockchain Holdings Capital Ventures, Inc., a Delaware
corporation (the "Company"), does hereby certify:

 

The
Certificate of Amendment to the Certificate of Incorporation of the Company confers upon the Board of Directors of the Company
(the "Board of Directors") the authority to provide for the issuance of shares of preferred stock in classes and to
establish the number of shares to be included in each such class and to fix the powers, designations, preferences and rights of
the shares of each such class.

 

On
September 14, 2018, the Board of Directors duly adopted the following resolution creating a class of preferred stock designated
as the Class A Preferred Super Majority Voting Stock, and such resolution has not been modified and is in full force and effect
on the date hereof:

 

RESOLVED,
that the Company shall authorize a new class of preferred stock which shall be designated as Class A Preferred Super Majority
Voting Stock and that the number of shares thereof and the powers, preferences and rights of the shares of such series, and the
qualifications, limitations and restrictions thereof are as [follows:]

 

1.      General.

 

A.   
Designation and Number. Ten million (10,000,000) shares of the preferred stock, par value $.001 of the Company are
hereby designated as "Class A Preferred Super Majority Voting Stock" ("Preferred Stock").

 

B.     Ranking.
The Preferred Stock shall, with respect to payment of dividends, redemption payments and rights upon liquidation, dissolution
or winding-up of the affairs of the Company, rank:

 

i.            
Senior and prior to the common stock, par value $0.0001 of the Company ("Common Stock") and any additional series
of preferred stock which may in the future be issued by the Company and are designated in the amendment to the Certificate of
Incorporation or the certificate of designation establishing such additional preferred stock as ranking junior to the Preferred
Shares. Any shares of the Company's capital stock which are junior to the Preferred Shares with respect to the payment of dividends
are hereinafter referred to as “Junior Dividend Shares” and any shares which are junior to the Preferred Shares
with respect to redemption, payment and rights upon liquidation, dissolution or winding-up of the affairs of the Company are hereinafter
referred to as “Junior Liquidation Shares”.

 

 

 

 

 

 

    	 	1	 

     

    

 

ii.          
Pari passu with any additional series of preferred stock which may in the future be issued by the Company and are designated
in the amendment to the Certificate of Incorporation or the certificate of designation establishing such additional preferred
stock as ranking equal to the Preferred Shares or which do not state they are Junior Dividend Shares or Senior Dividend Shares
(as defined below). Any shares of the Company's capital stock which are equal to the Preferred Shares with respect to the payment
of dividends are hereinafter referred to as “Parity Dividend Shares” and any shares which are equal to the
Preferred Shares with respect to redemption, payment and rights upon liquidation, dissolution or winding-up of the affairs of
the Company are hereinafter referred to as “Parity Liquidation Shares”.

 

iii.       Junior
to any additional series of preferred stock which may in the future be issued by the Company and are designated in the amendment
to the Certificate of Incorporation or the certificate of designation establishing such additional preferred stock as ranking
senior to the Preferred Shares. Any shares of the Company's capital stock which are senior to the Preferred Shares with respect
to the payment of dividends are hereinafter referred to as "Senior Dividend Shares" and any shares which are
senior to the Preferred Shares with respect to redemption, payment and rights upon liquidation, dissolution or winding-up of the
affairs of the Company are hereinafter referred to as “Senior Liquidation Shares”.

 

2.           
Dividends. The Preferred Stock shall bear no dividends.

 

3.           
Rights on Liquidation, Dissolution or Winding Up.

 

A.     
In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of Preferred
Stock then outstanding shall be entitled, on a pro rata basis, to be paid out of the assets of the Company available for distribution
to its shareholders, whether from capital, surplus or earnings, $.01 per share of Preferred Stock plus an amount equal to the
sum of all accumulated and unpaid dividends through the date fixed for the payment of the distribution on the shares of Preferred
Stock, after any payment being made to the holders of shares of Senior Liquidation Shares and prior to any payment being made
to the holders of shares of Junior Liquidation Shares.

 

B.     
If, upon any liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to its
shareholders shall be insufficient to pay the holders of shares of Preferred Stock the full amounts to which they respectively
shall be entitled, the holders of shares of Preferred Stock shall share ratably in any distribution of assets in proportion to
their respective ownership of Preferred Stock.

 

C.    
In the event of any liquidation, dissolution or winding up of the Company, after payment shall have been made to the holders of
shares of Preferred Stock of the full amount to which they shall be entitled as aforesaid, the holders of shares of Junior Liquidation
Shares, to the exclusion of the holders of shares of Preferred Stock, shall be entitled to share on a pro rata basis, according
to their respective rights and preferences, in all remaining assets of the Company available for distribution to its shareholders.

 

D.    
The consolidation or merger of the Company with one or more other entity, or the sale or transfer by the Company of all or substantially
all of its assets shall not be deemed to be a liquidation, dissolution or winding up of the Company.

 

 

 

 

    	 	2	 

     

    

 

4.       Voting.

 

A.     
The holders of shares of Preferred Stock shall have the right to vote upon matters submitted to the holders of Common Stock of
the Company and to receive notice of any meeting of the holders of Common Stock of the Company. The Preferred Stock shall have
a vote equal to the number of shares of Common Stock of the Company which would give the holders of the Preferred Stock
a vote equal to sixty percent (60%) of the Common Stock. This vote shall be exercised pro-rata by the holders of the Preferred
Shares.

 

B.    
No corporate actions may preclude the Preferred Stock from exercising its right to vote as set forth herein with respect any matter
requiring the approval or consent by a majority of the holders of Common Stock. For purposes of determining a quorum for any meeting
of the holders of Common Stock, the holders of the Preferred Stock shall be included and each holder of the Preferred Stock shall
represent its pro-rata share of the sixty percent (60%) voting power.

 

C.    
The Company shall not, without the affirmative vote or consent of the holders of shares of Preferred Stock representing a majority
of the shares of Preferred Stock then outstanding, acting as a separate class:

 

i.       
in any manner authorize or create any Parity Dividend Shares, Parity Liquidation Shares, Senior Dividend Shares or Senior Liquidation
Shares;

 

ii.      
in any manner alter or change the designations, powers, preferences or rights or the qualifications, limitations or restrictions
of the Preferred Stock;

 

iii.      authorize the issuance of any other preferred stock with terms which are more advantageous than those set forth herein;

 

iv.      agree to any provision in any agreement which would otherwise impose any restriction upon the Company's ability to honor the exercise
of any rights of the holders of the Preferred Stock; or

 

v.      
agree or otherwise commit to take any of the actions set forth above; provided however, that except as otherwise provided by law,
any such vote or consent as set forth in this Paragraph "C" of this Article "4" of this Certificate of Designation
shall be sufficient authorization, by the holders of the Preferred Stock, for any such action, and when such action is effected
upon such vote or consent, holders of shares of Preferred Stock dissenting from such action shall not have any rights other than
the same rights as all holders of the Preferred Stock, including, but not limited to, the right to payment for their shares by
reason of this provision.

 

5.       Redemption.
The Company shall have the right to redeem, in its sole and absolute discretion, at any time after 1 year after the date of
issuance of the Preferred Stock, all or any portion of the shares of Preferred Stock at a price of $0.01 per share.

 

 

 

 

 

    	 	3	 

     

    

 

IN WITNESS WHEREOF,
Blockchain Holdings Capital Ventures, Inc. has caused this Certificate of Designation to be duly executed in its corporate name
on this 17th day of September, 2018.

 

	 	Blockchain Holdings Capital Ventures, Inc.
	 	 
	 	By: /s/ Delray Wannemacher                    
	 	Delray Wannemacher, CEO
	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	4

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