OTHER MATTERS
As of the date of this proxy statement, our
management knows of no matter not specifically described above as to any action which is expected to be taken at the Meeting.
The persons named in the enclosed proxy, or their substitutes, will vote the proxies, insofar as the same are not limited to the
contrary, in their best judgment, with regard to such other matters and the transaction of such other business as may properly
be brought at the Meeting.
IF YOU HAVE NOT VOTED BY INTERNET, PLEASE
DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST CONVENIENCE IN THE ENCLOSED RETURN ENVELOPE. A PROMPT RETURN OF YOUR
PROXY CARD WILL BE APPRECIATED AS IT WILL SAVE THE EXPENSE OF FURTHER MAILINGS.
|
By order of the Board of Directors
,
|
|
|
|
/s/ Erez Raphael
|
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Erez Raphael
|
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Chief Executive Officer and Chairman of the Board
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Caesarea, Israel
February 3, 2017
Exhibit A
SECURITIES PURCHASE AGREEMENT
This
SECURITIES
PURCHASE AGREEMENT
(this “
Agreement
”) is dated as of January __, 2017, by and among DarioHealth Corp.,
a Delaware corporation (the “
Company
”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “
Purchaser
” and collectively, the
“
Purchasers
”).
WHEREAS
, subject
to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended
(the “
Securities Act
”) and Rule 506(b) of Regulation D and Rule 903 of Regulation S promulgated thereunder,
the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from
the Company, securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of
which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
1.1
Definitions
.
In addition to the terms defined elsewhere in this Agreement, the following capitalized terms have the meanings set forth in this
Section 1.1:
“
Affiliate
”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“
Board
of Directors
” means the board of directors of the Company.
“
Business
Day
” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.
“
Closing
”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“
Closing
Date
” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the
applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription
Amount and (ii) the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived
including but not limited to obtaining Stockholder Approval, but in no event later than the third Trading Day following
the date thereof.
“
Commission
”
means the United States Securities and Exchange Commission.
“
Common
Stock
” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
“
Common
Stock Equivalents
” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.
“
Exchange
Act
” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“
FCPA
”
means the Foreign Corrupt Practices Act of 1977, as amended.
“
Liens
”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“
Per
Share Purchase Price
” equals $2.80, subject to adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
“
Person
”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“
Proceeding
”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
“
Registration
Rights Agreement
” means the Registration Rights Agreement, dated the date hereof, among the Company and the Purchasers,
in the form of
Exhibit D
attached hereto.
“
Registration
Statement
” means a registration statement covering the resale of the Shares and the Warrant Shares by each Purchaser.
“
Rule
144
” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.
“
Securities
”
means the Shares, the Warrants and the Warrant Shares.
“
Securities
Act
” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“
Shares
”
means the Common Stock issued or issuable to each Purchaser pursuant to this Agreement.
“
Short
Sales
” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.
“
Stockholder
Approval
” means the approval of the stockholders of the Company to approve the issuance of the Securities pursuant to
NASDAQ Marketplace Rule 5635.
“
Subscription
Amount
” shall mean, as to each Purchaser, the aggregate amount to be paid for the Shares and Warrants purchased hereunder
as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription
Amount,” in United States dollars and in immediately available funds.
“
Subsidiary
”
means (i) LabStyle Innovation Ltd., an Israeli company and (ii) LabStyle Innovations US LLC, a Delaware limited liability company,
and “
Subsidiaries
” means each Subsidiary collectively.
“
Trading
Day
” means a day on which the principal Trading Market is open for trading.
“
Trading
Market
” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange or the OTC Bulletin Board or OTCQB Marketplace operated by OTC Markets Group, Inc. (or any successors to any
of the foregoing).
“
Transaction
Documents
” means this Agreement, the Warrants, the Registration Rights Agreement, all exhibits and schedules thereto
and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“
Transfer
Agent
” means VStock Transfer, LLC, the current transfer agent of the Company, and any successor transfer agent of the
Company.
“
Warrants
” means, the Warrant in the form of Exhibit A attached hereto.
“
Warrant
Shares
” means the shares of Common Stock issuable upon exercise of the Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1
Closing
.
On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchasers,
severally and not jointly, agree to purchase, an aggregate of $3,000,000 of Shares and Warrants, with an aggregate value for each
Purchaser equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser,
and Warrants as determined pursuant to Section 2.4(a). As of the Closing (i) the Company shall deliver to each Purchaser the Shares
and Warrants as determined pursuant to Section 2.4, and (ii) the Company and each Purchaser shall deliver the other items set forth
in Section 2.4 deliverable at the Closing, provided that it shall not be a condition for the Closing as to any Purchaser that any
other Purchaser shall have delivered the items set forth in Section 2.5 to be delivered by such other Purchaser. Upon satisfaction
of the covenants and conditions set forth in Sections 2.4 and 2.5, the Closing shall occur at the offices of legal counsel to the
Company or such other location as the parties shall mutually agree (and such Closing may be undertaken remotely by electronic exchange
of documentation).
2.2
Signing
.
On or before 2:00 p.m., New York City time, on January __, 2017 (such date, the “
Signing Date
”), each Purchaser
shall deliver to the Company (i) an executed copy of this Agreement; (ii) an executed copy of the Registration Rights Agreement;
(iii) if such Purchaser is an Accredited Investor (as defined herein) an executed copy of the Accredited Investor Questionnaire
set forth on
Exhibit C-1
; and (iv) any other subscription documents requested by the Company, duly executed by such Purchaser.
The Company shall indicate its acceptance of such subscription by providing each Purchaser with a countersigned copy of this Agreement
on or before 5:00 p.m. New York City time on the day following the Signing Date.
2.3
Funding
.
On or prior to 4:00 p.m. New York City time on the Signing Date, each Purchaser shall make payment for its Subscription Amount
to the Company by wire transfer pursuant to the wire instructions contained in
Exhibit B
annexed hereto of immediately available
funds. Upon receipt by the Company, the aggregate Subscription Amount will be placed in a non-interest bearing account. Upon the
Company’s obtaining Stockholder Approval, the Purchasers consent and agree that the Subscription Amount shall be immediately
released to the Company for purposes of Closing.
2.4
Deliveries
.
In connection with the Closing, the Company shall deliver or cause to be delivered to each Purchaser the following:
(a) within
five (5) Business Days of the Closing Date, a stock certificate evidencing a number of Shares equal to such Purchaser’s Subscription
Amount divided by the Purchase Price, registered in the name of such Purchaser (it being agreed, however, that each Purchaser shall,
upon consummation of each Closing, be the record holder of such Shares); and
(b) within
five (5) Business Days of the Closing Date, a Warrant registered in the name of such Purchaser to purchase up to a number of shares
of Common Stock equal to 100% of such Purchaser’s Shares, with an exercise price equal to $3.50, subject to adjustment therein.
2.5
Closing
Conditions
.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects on the Signing Date of the representations and warranties of the Purchasers contained herein
(unless as of a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been
performed; and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2 of this Agreement;
(iv)
the
Company shall have obtained Stockholder Approval; and
(v) such
Purchaser shall have paid the Subscription Amount to the Company Escrow Agent in the amount set forth on the signature page hereto
pursuant to the requirements of this Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being
met:
(ii)
the
accuracy in all material respects when made and on the Signing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein, which shall be true and correct as of such specified date);
(iii)
all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iv)
the
Company shall have received all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities, including the Stockholder Approval;
(v)
the
Company shall have obtained Stockholder Approval; and
(vi)
the
delivery by the Company of the items set forth in Section 2.5(a) of this Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1
Representations
and Warranties of the Company
. Except as set forth in the SEC Reports or Disclosure Schedules, which Disclosure Schedules shall
be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained
in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties
to each Purchaser:
(a)
Subsidiaries
.
The Subsidiaries are the only direct or indirect subsidiaries of the Company. The Company owns, directly or indirectly, all of
the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities.
(b)
Organization
and Qualification
. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on
the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document
(any of (i), (ii) or (iii), a “
Material Adverse Effect
”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(c)
Authorization;
Enforcement
. The Company has the requisite corporate power and authority to enter into and, after giving effect to the Stockholder
Approval, to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder and to issue the Securities in accordance with the term hereof and thereof.
The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by
it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company
and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith
or therewith, other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which
it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.
(d)
No
Conflicts
. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby
and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any
of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which
any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court
or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of clause (ii), such
as could not have or reasonably be expected to result in a Material Adverse Effect.
(e)
Filings,
Consents and Approvals
. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to Section 4.7 of this Agreement, (ii) the filing with the Commission pursuant to the Registration
Rights Agreement, (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities
and the listing of the Shares and Warrant Shares for trading thereon in the time and manner required thereby; (iv) the Stockholder
Approval and the filing of the Proxy Statement; and (v) the filing of Form D with the Commission and such filings as are required
to be made under applicable state securities laws, (collectively, the “
Required Approvals
”).
(f)
Issuance
of the Securities; Registration
. The Securities are duly authorized and, after giving effect to the Stockholder Consent and
when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction
Documents and (ii) the Warrant Shares, when paid for and issued in accordance with the terms of the Warrants, will be validly issued,
fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for
in the Transaction Documents and (iii) the Company has reserved from its duly authorized capital stock a number of shares of Common
Stock for issuance of the Warrant Shares.
(g)
Capitalization
.
As of the date hereof the authorized capital stock of the Company consists of (i) 160,000,000 shares of Common Stock, of which,
5,713,383 are issued and outstanding, and 5,044,331 shares are reserved for issuance pursuant to securities exercisable or exchangeable
for, or convertible into, shares of Common Stock and (ii) 5,000,000 shares of preferred stock, of which none are issued and outstanding.
No shares of Common Stock are held in treasury. All of such outstanding shares are duly authorized and have been, or upon issuance
will be, validly issued and are fully paid and nonassessable. Except as set forth in the SEC Reports or as a result of the purchase
and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or
giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common
Stock Equivalents, except that the exercise price of the warrants issued by the Company on March 3, 2016 will be adjusted downward
to equal the Purchase Price. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued,
fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval
or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities.
There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.
(h)
SEC
Reports; Financial Statements
. Since December 29, 2016, the Company has filed all reports, schedules, forms, statements and
other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law
or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference
therein, being collectively referred to herein as the “
SEC Reports
”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act.
The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial
statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent
basis during the periods involved (“
GAAP
”), except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates
thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements,
to normal, immaterial, year-end audit adjustments.
(i)
Material
Changes; Undisclosed Events, Liabilities or Developments
. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i) there has
been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property
to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v)
the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock
option or incentive plans.
(j)
Litigation
.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “
Action
”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. There
has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving
the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act
or the Securities Act.
(k)
Labor
Relations
. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of
the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or
any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant
in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance
with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect
(l)
Compliance
.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any
court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation
of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.
(m)
Regulatory
Permits
. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“
Material
Permits
”), and neither the Company nor any Subsidiary has received any written notice of proceedings relating to the
revocation or modification of any Material Permit.
(n)
Title
to Assets
. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens
for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP
and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by
the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance in all material respects.
(o)
Intellectual
Property
. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary for use or currently used in connection with their respective businesses and which the failure to
do so could have a Material Adverse Effect (collectively, the “
Intellectual Property Rights
”). None of, and
neither the Company nor any Subsidiary has received a written notice that any of, the material Intellectual Property Rights has
expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date
of this Agreement.
1
Neither the Company nor any Subsidiary has received, since the date of the latest audited financial
statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property
Rights violate or infringe upon the rights of any Person. To the knowledge of the Company, all such Intellectual Property Rights
are enforceable. With the possible exception of one third-party company that is selling a product that may infringe the Company's
patent rights, to the knowledge of the Company, there is no existing infringement by another Person of any of the Intellectual
Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties. The Company, and to the Company’s knowledge its patent counsel, have complied
with the duty of candor and good faith in dealing with the U.S. Patent and Trademark Office and any similar duties in dealing with
similar foreign intellectual property office. There are no material defects in the preparation and filing of any of the Company’s
patents and patent applications. The Company is not obligated to pay a royalty, grant a license, or provide other consideration
to any third party in connection with the Intellectual Property Rights. The Company has not infringed (or would infringe) or otherwise
violated (or would violate) any intellectual property rights of any third party by conducting its business in the manner in which
it is contemplated as set forth in the SEC Reports.
1
This statement is made
with the knowledge that within two (2) years: (i) certain of the Company’s U.S. trademark applications have deadlines to
file Statements of Use, and this statement assumes that the Company will begin use of the marks in these applications before those
deadlines; and (ii) certain of the Company’s U.S. patent applications have statutory deadlines, and this statement assumes
that the Company will file the necessary responses, or continuation applications prior to expiration of the statutory deadline.
(p)
Insurance
.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged.
(q)
Transactions
With Affiliates and Employees
. None of the officers or directors of the Company or any Subsidiary and, to the knowledge of
the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or
any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for
the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee
or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for: (i) payment
of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii)
other employee benefits, including stock option agreements under any stock option plan of the Company.
(r)
Sarbanes-Oxley;
Internal Accounting Controls
. The Company and the Subsidiaries are in material compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of
the period covered by the most recently filed periodic report under the Exchange Act (such date, the “
Evaluation Date
”).
The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange
Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal
control over financial reporting of the Company and its Subsidiaries.
(s)
Investment
Company.
The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will
not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as
amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject
to registration under the Investment Company Act of 1940, as amended.
(t)
Registration
Rights
. Except as disclosed in the SEC Reports, no Person has any right to cause the Company to effect the registration under
the Securities Act of any securities of the Company or any Subsidiary.
(u)
Listing
and Maintenance Requirements
. The Company has not, in the 12 months preceding the date hereof, received written notice from
any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market.
(v)
Disclosure
.
All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby is true and correct in all material respects and does not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
(w)
No
Integrated Offering
. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act which would require the
registration of any such securities under the Securities Act.
(x)
Tax
Status
. Except for matters that would not, individually, or in the aggregate, have or reasonable be expected to result in a
Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local
income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due
on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of
all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or
of any Subsidiary know of no basis for any such claim.
(y)
No
General Solicitation
. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers
and certain other (i) “accredited investors” within the meaning of Rule 501 under the Securities Act, and (an “
Accredited
Investor
”) and (ii) “non-US persons” as defined in Regulation S as promulgated under the Securities Act.
(z)
Foreign
Corrupt Practices.
Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any director,
officer, employee, agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used
any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political
activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic
political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any
Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated
in any material respect any provision of FCPA.
(aa)
Regulation
M Compliance
. The Company has not, and to its knowledge no one acting on its behalf has: (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of,
any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other
securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement
agent or finders in connection with the placement of the Securities.
(bb)
Office
of Foreign Assets Control
. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“
OFAC
”).
(cc)
Money
Laundering
. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “
Money
Laundering Laws
”), and no action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company and any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge
of the Company or any Subsidiary, threatened.
(dd)
Application
of Takeover Protections; Rights Agreement.
The Company and its board of directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of
Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its formation which is or could become
applicable to any Purchaser as a result of the transactions contemplated by this Agreement, including, without limitation, the
Company's issuance of the Securities and any Purchaser's ownership of the Securities. The Company and its Board of Directors have
taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or similar arrangement relating
to accumulations of beneficial ownership of shares of Common Stock or a change in control of the Company or any of its Subsidiaries.
(ee)
Off
Balance Sheet Arrangements
. There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries
and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its Exchange Act filings
and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.
(ff)
Private
Placement
. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated
hereby.
3.2
Representations
and Warranties of the Purchasers
. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as
of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein):
(a)
Organization;
Authority
. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and (where such
concept is applicable) in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate,
partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated
by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of
the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have
been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the
part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered
by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(b)
Own
Account
. Such Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account
and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act
or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to
distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities
law (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to a Registration
Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business.
(c)
Purchaser
Status
. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on
which it exercises any Warrants for cash, it will be a “non-US person” as defined in Regulation S (“
Regulation
S
”) as promulgated under the Securities Act and/or an “accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.
(d)
Experience
of Such Purchaser
. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. Such Purchaser
acknowledges that as of the date hereof, the Company has very limited financial resources, and thus an investment in the Securities
is subject to significant risk.
(e)
Access
to Information
. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering
of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its
financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate
its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.
Such Purchaser acknowledges and agrees that neither the Company nor any Affiliate of the Company has provided such Purchaser with
any information or advice with respect to the Securities nor is such information or advice necessary or desired.
Such Purchaser
is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities
published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any
other general solicitation or general advertisement. In purchasing the Securities hereunder, such Purchaser is relying only on
the representations and warranties contained herein and the other Transaction Documents provided by the Company.
(f)
Certain
Transactions and Confidentiality
. Other than consummating the transactions contemplated hereunder, such Purchaser has not directly
or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any purchases
or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser
first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material
terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing,
in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions
of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect
to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered
by this Agreement. Other than to other Persons party to this Agreement or its legal counsel or other advisors, such Purchaser has
maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms
of this transaction).
(g)
Other
Company Holdings
. As of the Closing Date, and prior to the consummation of the transactions contemplated by this Agreement,
such Purchaser is not, collectively with its Affiliates or any Person with whom such Purchaser is acting in concert, a holder of
Common Stock or Common Stock Equivalents in an amount equal to more than 9.99% of the outstanding shares of Common Stock (assuming
full exercise or conversion of any such Common Stock Equivalents).
(h)
Additional
Representations and Warranties of Accredited Investors
. Each Purchaser indicating that such Purchaser is an Accredited Investor
on its signature page to this Agreement, severally and not jointly, shall complete the Accredited Investor Questionnaire set forth
on
Exhibit C-1
.
(i)
Additional
Representations and Warranties of Non-U.S. Persons
. Each Purchaser indicating that it is not a U.S. person on its signature
page to this Agreement, severally and not jointly, further makes the representations and warranties to the Company set forth on
Exhibit C-2.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1
Removal
of Legends
.
(a) The
Securities may only be disposed of in compliance with U.S. state and U.S. federal securities laws. In connection with any transfer
of Securities other than pursuant to an effective Registration Statement or Rule 144, to the Company or to an Affiliate of a Purchaser
or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of
which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of
such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to
be bound by the terms of this Agreement and shall have the rights and obligations of a Purchaser under this Agreement and the Registration
Rights Agreement.
(b) Each
certificate representing the Shares, the Warrants and Warrant Shares and if appropriate, securities issued upon conversion or exercise
thereof, shall be stamped or otherwise imprinted with a legend substantially in the following form (in addition to any legend required
by applicable state securities or “blue sky” laws):
“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE (THE “
SECURITIES
”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “
SECURITIES ACT
”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN
OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
LAWS IS NOT REQUIRED.”
Each certificate representing the
Shares, the Warrants and Warrant Shares and if appropriate, securities issued upon conversion or exercise thereof, if such securities
are being offered to Purchasers in reliance upon Regulation S, shall be stamped or otherwise imprinted with a legend substantially
in the following form (in addition to any legend required by applicable state securities or “blue sky” laws):
“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “
SECURITIES ACT
”),
OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT, AND BASED ON AN
OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT THE PROVISIONS OF REGULATION S HAVE
BEEN SATISFIED, (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS
OR (3) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION
ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED
IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE SECURITIES ACT.”
The Company acknowledges
and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Warrants or Warrant Shares to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement
and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Warrants or Warrant Shares
to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion
of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be
required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation
as a pledgee or secured party of Warrants and Warrant Shares may reasonably request in connection with a pledge or transfer of
the Warrants or Warrant Shares.
(c) Certificates
evidencing the Warrant Shares shall not be required to contain any legend (including the legend set forth in Section 4.1(b) hereof):
(i) while a Registration Statement is effective under the Securities Act, (ii) following any sale of such Warrant Shares pursuant
to Rule 144, (iii) if such Warrant Shares are eligible for sale under Rule 144, without the requirement for the Company to be in
compliance with the current public information required under Rule 144 as to such Warrant Shares and without volume or manner-of-sale
restrictions or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the Commission).
(d) Each
Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Securities
pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold in compliance
with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.
4.2
Furnishing
of Information
. Until the time that no Purchaser is an “affiliate” (as defined under Rule 144) of the Company,
the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then
subject to the reporting requirements of the Exchange Act.
4.3
Integration
.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities for purposes of the rules
and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction
unless shareholder approval is obtained before the closing of such subsequent transaction.
4.4
Exercise
Procedures
. The form of Notice of Exercise included in the Warrants set forth the totality of the procedures required of the
Purchasers in order to exercise the Warrants.
4.5
Use
of Proceeds
. The Company shall use the net proceeds from the sale of the Securities hereunder for working capital and general
corporate purposes and shall not use such proceed: (a) for the satisfaction of any portion of the Company’s debt (other than
payment of trade payables in the ordinary course of the Company’s business and prior practices), (b) for the redemption of
any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA
or OFAC regulations.
4.6
Certain
Transactions and Confidentiality
. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither
it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including
Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending
at such time that the transactions contemplated by this Agreement are first publicly announced. Each Purchaser, severally
and not jointly with the other Purchasers, and the Company covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company, it will maintain the confidentiality of the existence and terms of this transaction
and the information included in the Transaction Documents.
4.7
Securities
Laws Disclosure; Publicity
. The Company shall file a Current Report on Form 8-K, including the Transaction Documents as exhibits
thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such Current Report on
Form 8-K, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered
to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or
agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the filing of
such Current Report on Form 8-K, the Company acknowledges and agrees that any and all confidentiality or similar obligations under
any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors,
agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall
terminate. The Company and each Purchaser shall consult with each other in issuing any press releases with respect to the transactions
contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public
statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent
of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed,
except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior
notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market,
without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with the filing
of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations,
in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).
4.8
Listing
.
The Company shall promptly secure the listing of all of the Shares and the Warrant Shares upon each national securities exchange
and automated quotation system, if any, upon which the Common Stock is then listed (subject to official notice of issuance) and
shall maintain such listing of all Shares and Warrant Shares from time to time issuable under the terms of the Transaction Documents.
The Company shall maintain the authorization for quotation of the Common Stock on the Trading Market. Neither the Company nor any
of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the Common
Stock on the Trading Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this
Section 4.8.
4.9
Indemnification
by Purchasers
. Each Purchaser, severally and not jointly, indemnifies and holds harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted
by applicable law, from and against all losses, as incurred, to the extent arising out of or based solely upon: (x) such Purchaser’s
failure to comply with any applicable prospectus delivery requirements of the Securities Act through no fault of the Company or
(y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any prospectus, preliminary
prospectus, free writing prospectus, or in any amendment or supplement thereto, or arising out of or relating to any omission or
alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any
prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but
only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Purchaser
to the Company expressly for inclusion in such Registration Statement or such prospectus or (ii) to the extent, but only to the
extent, that such information relates to such Purchaser’s proposed method of distribution of the Securities and was reviewed
and expressly approved in writing by such Purchaser expressly for use in a Registration Statement (it being understood that the
Purchaser has approved the contents of the “Selling Stockholder Questionnaire” for this purpose), such prospectus,
preliminary prospectus, free writing prospectus, or in any amendment or supplement thereto or (iii) to the extent, but only to
the extent, related to the use by such Purchaser of an outdated, defective or otherwise unavailable prospectus after the Company
has notified such Purchaser in writing that the prospectus is outdated, defective or otherwise unavailable for use by such Purchaser.
4.10
Reservation
of Common Stock
. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available
at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company
to issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.
4.11
Form
D; Blue Sky Filings
. The Company agrees to timely file a Form D, if required by applicable law, with respect to the Warrant
and Warrant Shares as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser. The Company
shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify
the Warrant and Warrant Shares for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky”
laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.
4.12
Proxy
Statement; Stockholder Meeting; Voting Agreement
. (A) The Company agrees (i) to promptly prepare a proxy statement (the “
Proxy
Statement
”) to be sent to the Company’s stockholders in connection with a special meeting of holders of the Company’s
Common Stock (the “
Special Meeting
”), to be held for the purpose of seeking the Stockholder Approval described
herein and for such other purposes within the sole discretion of the Company, (ii) to call and hold the Special Meeting no later
than the date that is 90 days after the Signing Date, in compliance with applicable law, the Certificate of Incorporation, the
Company’s by-laws and the NASDAQ Marketplace Rules, provided that if the Company receives notification from the U.S. Securities
and Exchange Commission that it will review the Proxy Statement, such date shall be automatically extended by an additional 45
days without the requirement of any action by the Company or the Purchasers, and provided further that any additional extension
of this period under this Section 4.12 shall require the approval of the Purchasers purchasing a majority of the Securities and
(iii) to use its reasonable best efforts to obtain the Stockholder Approval at the Special Meeting. (B) Each Purchaser hereby severally
agrees with the Company that it shall, and shall cause its Affiliates (including by proxy, if applicable), to vote all shares of
Common Stock held by it or its Affiliates and eligible to be voted in accordance with applicable law and the NASDAQ Marketplace
Rules in favor of the proposals contemplated by the Stockholder Approval at the Special Meeting.
4.13
Purchaser
Information
. Each Purchaser shall promptly provide the Company such information as the Company may reasonably request in connection
with the preparation, filing and distribution of the Proxy Statement. Until the completion of the Special Meeting, each Purchaser
shall promptly correct any information supplied by it for inclusion, or incorporation by reference, in the Proxy Statement if,
and to the extent, any such previously provided information shall, at that time, include any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading.
ARTICLE V.
MISCELLANEOUS
5.1
Termination
.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without
any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other
parties, if the Closing has not been consummated on or before 5:00 p.m., New York time, on June 30, 2017,
provided
,
however
,
that such termination will not affect the right of any party to sue for any breach by any other party (or parties).
5.2
Fees
and Expenses
. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this
Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing
of any instruction letter delivered by the Company and any conversion or exercise notice delivered by a Purchaser), stamp taxes
and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.
5.3
Entire
Agreement
. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of
the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or
written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4
Notices
.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto (or, with respect
to an assignee or transferee of Securities as contemplated by Section 5.7, at the contact information of such Person provided to
the Company in connection with such assignment or transfer) at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b)
the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile
number or email attachment as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than
5:30 p.m. (New York City time) on any Trading Day, (c) the second (2
nd
) Trading Day following the date of mailing, if
sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required
to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.
5.5
Amendments;
Waivers
. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the holders of 50.1% of the Shares and Warrants purchased from the Company hereunder
or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future
or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay
or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
5.6
Headings
.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.7
Successors
and Assigns
. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns. Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or
transfers any Securities, provided that such transferee agrees in writing as a pre-condition to such assignment or transfer to
be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8
No
Third-Party Beneficiaries
. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
5.9
Governing
Law
. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the
principles of conflicts of law thereof.
5.10
Arbitration
of Claims
. Any dispute, controversy or claim arising in relation to this this Agreement or any Transaction Document, including
with regard to their validity, invalidity, breach, enforcement or termination, will be referred to a single arbitrator, who shall
be appointed by the Head of the Israel Bar Association. The arbitrator will not be bound by rules of evidence or procedure and
will give the reasons for his or her judgment in writing. Any such arbitration shall be conducted in Tel Aviv, Israel. The arbitrator's
decision shall be final and enforceable in any court. This Section 5.10 shall constitute an arbitration agreement between the parties.
5.11
Execution
.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.
5.12
Severability
.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
5.13
Replacement
of Securities
. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or
in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.14
Independent
Nature of Purchasers’ Obligations and Rights
. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers
are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser
to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction Documents.
5.14
Saturdays,
Sundays, Holidays, etc.
If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.
5.16
Construction
.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.
5.17
WAIVER
OF JURY TRIAL
.
IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature Pages Follow)
IN WITNESS WHEREOF, the
parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as
of the date first indicated above.
DARIO HEALTH CORP.
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By:
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Name:
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Title:
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Address for Notice
:
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9 Halamish Street
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Caesarea Industrial Park
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3088900, Israel
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Fax Number: +(972)-(4) 770 4060
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With a copy to (which shall not constitute notice):
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ZAG/S&W LLP
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1633 Broadway
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New York, NY 10019
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Fax Number: (212) 660-3001
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Attention: Oded Har-Even, Esq.
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
PURCHASER SIGNATURE PAGES
IN WITNESS WHEREOF, the
undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
# of shares of Common Stock Purchased (@ $2.80 per Share):
|
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# of Warrant Shares (100% Warrant Coverage):
|
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If Purchaser is an entity, sign here:
EIN/Social
Security Number:
|
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If Purchaser is an individual, sign here:
If Purchaser is providing the representations
contained in Exhibit C-2, please check here:
¨
PLEASE COMPLETE FOLLOWING INFORMATION FOR
NOTICES:
Address for Notice to
Investor
:
Address for Delivery of Securities
to
Investor
(if not same as address for notice):
EXHIBIT A
Form of Warrant
See attached.
EXHIBIT B
Wiring Instructions
Exhibit C-1
ACCREDITED INVESTOR QUESTIONNAIRE
DarioHealth Corp.
9 Halamish Street
Caesarea Industrial Park, Israel 3088900
In connection with my purchase
of a certain securities (“Securities”) of DarioHealth Corp., a Delaware corporation (the “Company”), I,
the undersigned subscriber (“I” or “Investor”) understand that the offer and sale of the Securities to
me is contingent upon my status as an “Accredited Investor” as defined pursuant to the terms of the Securities Act
of 1933, as amended (the “Act”). In connection with the purchase, I have reviewed and completed the Accredited Investor
Questionnaire set forth below:
As of the date hereof, the Investor
is (
check all appropriate categories
):
____ A natural person whose individual
net worth, or joint net worth with that person’s spouse, at the time of his or her purchase exceeds $1,000,000. When determining
net worth for purposes of Rules 215 and 501(a)(5) of the Act, the value of an individual’s primary residence should be excluded.
The value of the primary residence is determined by subtracting from the estimated fair market value of the property, the amount
of debt secured by the property up to the estimated fair market value;
____ A natural person who had individual
income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year. Individual
income is defined as adjusted gross income (as reported for federal income tax purposes), less any income earned by a spouse or
from property owned by a spouse, increased by the following amounts (not attributable to a spouse): (i) the amount of any tax exempt
interest income received, (ii) the amount of losses claimed a limited partner in a limited partnership, and (iii) any deductions
claimed for depletion.
____ A director or an executive
officer of the Company.
____ A bank as defined in Section
3(a)(2) of the Securities Act, or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities
Act whether acting in its individual or fiduciary capacity;
____ A broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934;
____ An insurance company as defined
in Section 2(13) of the Securities Act;
____ An investment company registered
under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act;
____ A Small Business Investment
Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of
1958;
____ A plan established and maintained
by a state, its political subdivisions, any agency or instrumentality of a state or its political subdivisions, for the benefit
of its employees, if such plan has total assets in excess of $5,000,000;
____ An employee benefit plan within
the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered
investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000, or, if a self-directed plan, with
investment decisions made solely by persons that are accredited investors;
____ A private business development
company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;
____ An organization described in
Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the Notes, with total assets in excess of $5,000,000;
____ A trust with total assets in
excess of $5,000,000, not formed for the specific purpose of acquiring the Notes, whose purchase is directed by a sophisticated
person as described in Rule 506(b)(2)(ii) under the Securities Act.
____ An entity in which all equity
owners are accredited investors.
In addition, as of this
date, I hereby represent and warrant to the Company and agree as follows:
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1.
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I acknowledge that the Securities, and any other securities
issuable upon exercise of any conversion or other rights that are a part of the Securities, have not been and will not be registered
under the Act, and are being offered and sold under one or more of the exemptions from registration provided for in Sections 4(2)
and 3(b) of the Act, as well as Regulation D promulgated under the Act. I further acknowledge that the Securities have not been
qualified under any state securities laws in reliance on an exemption from qualification. I also acknowledge that the Company
is relying on the truth and accuracy of my representations, warranties, and acknowledgments made in this Questionnaire in offering
the Securities for sale without registering them under the Act or qualifying them under applicable state securities laws.
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2.
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If a natural person, I am a citizen of the United States,
and at least 18 years of age. I am a bona fide resident and domiciliary (not a temporary or transient resident) of the state indicated
on the signature page hereto, and have no present intention of becoming a resident of any other state or jurisdiction.
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3.
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I understand that (i) an investment in the Securities is
suitable only for an investor who is able to bear the economic consequences of losing his or her entire investment; (ii) an investment
in the Securities is speculative and involves a high degree of risk of loss; and (iii) there are substantial restrictions on the
transferability of the Securities, and accordingly, it may not be possible to liquidate my investment in the Securities in the
case of an emergency.
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4.
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I have the financial ability (i) to bear the economic risk
of my investment in the Securities; (ii) to hold the Securities for an indefinite period of time; and (iii) currently to afford
a complete loss of my investment in the Securities without experiencing any undue financial difficulties, and my commitments to
all speculative investments (including my investment in the Securities) are reasonable in relation to my net worth and annual
income.
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5.
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I acknowledge that this transaction has not been reviewed
or scrutinized by the Securities and Exchange Commission or by any administrative agency charged with the administration of the
securities laws of any state, and that no such agency has passed on or made any recommendation or endorsement of the Securities.
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6.
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I am acquiring the Securities in good faith solely for
my personal account (or a trust account if I am a trustee), for investment purposes only, and not with a view to any sale, distribution,
subdivision, or fractionalization of the Securities, in whole or in part.
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7.
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I acknowledge that the Securities, and any other securities
issuable upon exercise of any conversion or other rights that are a part of the Securities, are and will be “restricted
securities” within the meaning of Rule 144 promulgated under the Act; that the Securities are not and will not be registered
under the Act and must be held indefinitely unless they are subsequently registered under the Act and qualified under any applicable
state and foreign securities laws, or unless an exemption from registration or qualification is available. I understand the resale
limitations imposed by the Act and am familiar with Rule 144, as presently in effect, and the conditions that must be met in order
for that Rule to be available for the resale of “restricted securities”.
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8.
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I agree not to sell, convey, transfer, pledge, hypothecate,
or otherwise dispose of (“Transfer”) any of the Securities unless (i) the Securities to be Transferred have been registered
under the Act and qualified under any applicable state and foreign securities laws, or (ii) I have notified the Company of the
proposed Transfer, and I have presented the Company with a written opinion of counsel satisfactory to the Company or a “no-action”
or interpretive letter from the Securities and Exchange Commission stating that registration is not required under the circumstances
of the proposed Transfer, and counsel to the Company shall have concurred with the opinion of my counsel or the applicability
of the no-action or interpretive letter; provided that no Transfer of any of the Securities shall be permitted except in compliance
with the terms and conditions of any agreement between me and the Company imposing restrictions on the Transfer of the Securities.
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9.
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I agree to indemnify and hold harmless the Company, its
officers and directors, and any of its affiliates, associates, agents, or employees from and against any and all loss, damage,
or liability (including costs and attorneys’ fees) due to or arising out of a breach of any representation, warranty, or
acknowledgment made by me in this Questionnaire.
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10.
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The representations, warranties, acknowledgments, and agreements
set forth in this Questionnaire and the Securities Purchase Agreement shall survive both (i) my purchase and the Company’s
issuance and delivery of the Securities, and (ii) my death or disability, and will be binding upon my heirs, executors, administrators,
successors, and assigns.
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[Signature Page Follows]
Investor is an entity, sign here:
If Investor is an individual, sign here:
EXHIBIT C-2
NON U.S. PERSON REPRESENTATIONS
Each Purchaser indicating that it is not a
U.S. person, severally and not jointly, further represents and warrants to the Company as follows:
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1.
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At the time of (a) the offer by the Company and (b) the
acceptance of the offer by such person or entity, of the Securities, such person or entity was outside the United States.
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2.
|
Such person or entity is acquiring the Securities for such
Purchaser’s own account, for investment and not for distribution or resale to others and is not purchasing the Securities
for the account or benefit of any U.S. person, or with a view towards distribution to any U.S. person, in violation of the registration
requirements of the Securities Act.
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3.
|
Such person or entity will make all subsequent offers and
sales of the Securities either (x) outside of the United States in compliance with Regulation S; (y) pursuant to a registration
under the Securities Act; or (z) pursuant to an available exemption from registration under the Securities Act. Specifically,
such person or entity will not resell the Securities to any U.S. person or within the United States prior to the expiration of
a period commencing on the Closing Date and ending on the date that is one year thereafter (the “
Distribution Compliance
Period
”), except pursuant to registration under the Securities Act or an exemption from registration under the Securities
Act.
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4.
|
Such person or entity has no present plan or intention
to sell the Securities in the United States or to a U.S. person at any predetermined time, has made no predetermined arrangements
to sell the Securities and is not acting as a distributor of such securities.
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5.
|
Neither such person or entity, its affiliates nor any person
acting on behalf of such person or entity, has entered into, has the intention of entering into, or will enter into any put option,
short position or other similar instrument or position in the U.S. with respect to the Securities at any time after the Closing
Date through the Distribution Compliance Period except in compliance with the Securities Act.
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6.
|
Such person or entity consents to the placement of a legend
on any certificate or other document evidencing the Securities substantially in the form set forth in Section 4.1.
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7.
|
Such person or entity is not acquiring the Securities in
a transaction (or an element of a series of transactions) that is part of any plan or scheme to evade the registration provisions
of the Securities Act.
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8.
|
Such person or entity has sufficient knowledge and experience
in finance, securities, investments and other business matters to be able to protect such person’s or entity’s interests
in connection with the transactions contemplated by this Agreement.
|
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9.
|
Such person or entity has consulted, to the extent that
it has deemed necessary, with its tax, legal, accounting and financial advisors concerning its investment in the Securities.
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10.
|
Such person or entity understands the various risks of
an investment in the Securities and can afford to bear such risks for an indefinite period of time, including, without limitation,
the risk of losing its entire investment in the Securities.
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11.
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Such person or entity has had access to the Company’s
publicly filed reports with the Commission and has been furnished during the course of the transactions contemplated by this Agreement
with all other public information regarding the Company that such person or entity has requested and all such public information
is sufficient for such person or entity to evaluate the risks of investing in the Securities.
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12.
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Such person or entity has been afforded the opportunity
to ask questions of and receive answers concerning the Company and the terms and conditions of the issuance of the Securities.
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13.
|
Such person or entity is not relying on any representations
and warranties concerning the Company made by the Company or any officer, employee or agent of the Company, other than those contained
in this Agreement.
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14.
|
Such person or entity will not sell or otherwise transfer
the Securities unless either (A) the transfer of such securities is registered under the Securities Act or (B) an exemption
from registration of such securities is available.
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15.
|
Such person or entity represents that the address furnished
on its signature page to this Agreement is the principal residence if he is an individual or its principal business address if
it is a corporation or other entity.
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16.
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Such person or entity understands and acknowledges that
the Securities have not been recommended by any federal or state securities commission or regulatory authority, that the foregoing
authorities have not confirmed the accuracy or determined the adequacy of any information concerning the Company that has been
supplied to such person or entity and that any representation to the contrary is a criminal offense.
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EXHIBIT D
Registration Rights Agreement
See attached.
Exhibit B
REGISTRATION RIGHTS AGREEMENT
This Registration Rights
Agreement (this “
Agreement
”) is made and entered into as of January __, 2017, between DarioHealth Corp., a Delaware
corporation (the “
Company
”), and each of the several purchasers signatory hereto (each such purchaser, a “
Purchaser
”
and, collectively, the “
Purchasers
”).
This Agreement is made
pursuant to the Securities Purchase Agreement, dated as of the date hereof, between the Company and each Purchaser (the “
Purchase
Agreement
”).
The Company and each Purchaser
hereby agrees as follows:
Capitalized terms used
and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement.
As used in this Agreement, the following terms shall have the following meanings:
“
Advice
”
shall have the meaning set forth in Section 6(d).
“
Effectiveness
Date
” means, with respect to the Initial Registration Statement required to be filed hereunder, the 120
th
calendar day following the Closing Date (or, in the event of a “full review” by the Commission, the 150
th
calendar day following the Closing Date) and with respect to any additional Registration Statements which may be required pursuant
to Section 2(c) or Section 3(c), the 120
th
calendar day following the date on which an additional Registration Statement
is required to be filed hereunder (or, in the event of a “full review” by the Commission, the 150
th
calendar
day following the date such additional Registration Statement is required to be filed hereunder);
provided
,
however
,
that in the event the Company is notified by the Commission that one or more of the above Registration Statements will not be reviewed
or is no longer subject to further review and comments, the Effectiveness Date as to such Registration Statement shall be the fifth
Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above, provided,
further, if such Effectiveness Date falls on a day that is not a Trading Day, then the Effectiveness Date shall be the next succeeding
Trading Day.
“
Effectiveness
Period
” shall have the meaning set forth in Section 2(a).
“
Event
”
shall have the meaning set forth in Section 2(d).
“
Event
Date
” shall have the meaning set forth in Section 2(d).
“
Filing
Date
” means, with respect to the Initial Registration Statement required hereunder, the 60
th
calendar day
following the Closing Date and, with respect to any additional Registration Statements which may be required pursuant to Section
2(c) or Section 3(c), the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration
Statement related to the Registrable Securities.
“
Holder
”
or “
Holders
” means the holder or holders, as the case may be, from time to time of Registrable Securities.
“
Indemnified
Party
” shall have the meaning set forth in Section 5(c).
“
Indemnifying
Party
” shall have the meaning set forth in Section 5(c).
“
Initial
Registration Statement
” means the initial Registration Statement filed pursuant to this Agreement.
“
Losses
”
shall have the meaning set forth in Section 5(a).
“
Plan
of Distribution
” shall have the meaning set forth in Section 2(a).
“
Prospectus
”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to
be incorporated by reference in such Prospectus.
“
Registrable
Securities
” means, as of any date of determination, (a) all Shares, (b) all Warrant Shares issuable upon exercise of
the Warrants (assuming on such date the Warrants are exercised in full without regard to any exercise limitations therein) and
(c) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event
with respect to the foregoing;
provided,
however
, that any such Registrable Securities shall cease to be Registrable
Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement
hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Registrable Securities
is declared effective by the Commission under the Securities Act and such Registrable Securities have been disposed of by the Holder
in accordance with such effective Registration Statement, (b) such Registrable Securities have been previously sold in accordance
with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current
public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable
to the Transfer Agent and the affected Holders (assuming that such securities and any securities issuable upon exercise, conversion
or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any Affiliate
of the Company, and all Warrants are exercised by “cashless exercise” as provided in Section 2(c) of each of the Warrants),
as reasonably determined by the Company, upon the advice of counsel to the Company.
“
Registration
Statement
” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional
registration statements contemplated by Section 2(c) or Section 3(c), including (in each case) the Prospectus, amendments and supplements
to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in any such registration statement.
“
Rule
415
” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.
“
Rule
424
” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.
“
Selling
Stockholder Questionnaire
” shall have the meaning set forth in Section 3(a).
“
SEC
Guidance
” means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements
or requests of the Commission staff and (ii) the Securities Act.
(a) On
or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale
of all or such maximum portion of the Registrable Securities as permitted by SEC Guidance (provided that, the Company shall use
diligent efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with the
SEC Guidance, including without limitation, the Manual of Publicly Available Telephone Interpretations D.29) that are not then
registered on an effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415. Each Registration
Statement filed hereunder shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith, subject to
the provisions of Section 2(e)) and shall contain (unless otherwise directed by at least 85% in interest of the Holders) substantially
the “
Plan of Distribution
” attached hereto as
Annex A
and substantially the “
Selling Stockholder
”
section attached hereto as
Annex B
. Subject to the terms of this Agreement, the Company shall use its best efforts to cause
a Registration Statement filed under this Agreement (including, without limitation, under Section 3(c)) to be declared effective
under the Securities Act as promptly as possible after the filing thereof, but in any event no later than the applicable Effectiveness
Date, and shall use its best efforts to keep such Registration Statement continuously effective under the Securities Act until
the date that all Registrable Securities covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule
144, or (ii) (A) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and (B) (I) may be sold without
the requirement for the Company to be in compliance with the current public information requirement under Rule 144 or (II) the
Company is in compliance with the current public information requirement under Rule 144, as determined by the counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the affected Holders (the
“
Effectiveness Period
”). The Company shall telephonically request effectiveness of a Registration Statement
as of 5:00 p.m. Eastern Time on a Trading Day. The Company shall promptly notify the Holders via facsimile or by e-mail of the
effectiveness of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the
Commission, which shall be the date requested for effectiveness of such Registration Statement. The Company shall, by 5:00 p.m.
Eastern Time on the second Trading Day after the effective date of such Registration Statement, file a final Prospectus with the
Commission as required by Rule 424. Failure to so notify the Holder within one (1) Trading Day of such notification of effectiveness
or failure to file a final Prospectus as foresaid shall be deemed an Event under Section 2(d).
(b)
Notwithstanding the registration obligations set forth in Section 2(a), if the Commission informs the Company that all of the Registrable
Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration
statement, the Company agrees to promptly inform each of the Holders thereof and use its commercially reasonable efforts to file
amendments to the Initial Registration Statement as required by the Commission, covering the maximum number of Registrable Securities
permitted to be registered by the Commission, on Form S-3 or such other form available to register for resale the Registrable Securities
as a secondary offering, subject to the provisions of Section 2(e); with respect to filing on Form S-3 or other appropriate form;
provided
,
however
, that prior to filing such amendment, the Company shall be obligated to use diligent efforts to
advocate with the Commission for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including
without limitation, Compliance and Disclosure Interpretation 612.09.
(c) Notwithstanding
any other provision of this Agreement, if the Commission or any SEC Guidance sets forth a limitation on the number of Registrable
Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that
the Company used diligent efforts to advocate with the Commission for the registration of all or a greater portion of Registrable
Securities), unless otherwise directed in writing by a Holder as to its Registrable Securities, the number of Registrable Securities
to be registered on such Registration Statement will be reduced as follows:
a. First,
the Company shall reduce or eliminate any securities to be included other than Registrable Securities, but excluding the shares
listed on Schedule 6(b);
b. Second,
the Company shall reduce, on a pro rata basis, Registrable Securities represented by Warrant Shares and the shares underlying the
warrants as listed on Schedule 6(b) (applied, in the case that some Warrant Shares may be registered, to the Holders on a pro rata
basis based on the total number of unregistered Warrant Shares held by such Holders); and
c. Third,
the Company shall reduce, on a pro rata basis, the Registrable Securities represented by Shares and the shares of common stock
listed on Schedule 6(b) (applied, in the case that some Shares may be registered, to the Holders on a pro rata basis based on the
total number of unregistered Shares held by such Holders).
In the event of a cutback hereunder,
the Company shall give the Holder at least five (5) Trading Days prior written notice along with the calculations as to such Holder’s
allotment. In the event the Company amends the Initial Registration Statement in accordance with the foregoing, the Company will
use its best efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance provided to the Company
or to registrants of securities in general, one or more registration statements on Form S-3 or such other form available to register
for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended.
(d) [RESERVED]
(e) If
Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register
the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities
on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement
then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective
by the Commission.
|
3.
|
Registration Procedures
.
|
In connection with the
Company’s registration obligations hereunder, the Company shall:
(a) Not
less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior
to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated
or deemed to be incorporated therein by reference), the Company shall (i) furnish to each Holder copies of all such documents proposed
to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review
of such Holders, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to
such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation
within the meaning of the Securities Act. The Company shall not file a Registration Statement or any such Prospectus or any amendments
or supplements thereto to which the Holders of a majority of the Registrable Securities shall reasonably object in good faith,
provided that, the Company is notified of such objection in writing no later than five (5) Trading Days after the Holders have
been so furnished copies of a Registration Statement or one (1) Trading Day after the Holders have been so furnished copies of
any related Prospectus or amendments or supplements thereto. Each Holder agrees to furnish to the Company a completed questionnaire
in the form attached to this Agreement as
Annex B
(a “
Selling Stockholder Questionnaire
”) on a date that
is not less than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4
th
) Trading Day following
the date on which such Holder receives draft materials in accordance with this Section.
(b) (i)
Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements
in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to
be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented
or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the
Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to
the Holders true and complete copies of all correspondence from and to the Commission relating to a Registration Statement (provided
that, the Company may excise any information contained therein which would constitute material non-public information as to any
Holder which has not executed a confidentiality agreement with respect thereto with the Company or its Subsidiaries), and (iv)
comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the disposition
of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms
of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such Registration Statement as
so amended or in such Prospectus as so supplemented.
(c) If
during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common
Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case
prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the
number of such Registrable Securities.
(d) Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied
by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible
(and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement
or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the Company whether
there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration
Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration
Statement or Prospectus or for additional information, (iii) of the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities
or the initiation of any Proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction,
or the initiation or threatening of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time that
makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a
Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case
of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (vi) of the occurrence or existence of any pending corporate development with respect
to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best
interest of the Company to allow continued availability of a Registration Statement or Prospectus, provided that, any and all of
such information shall remain confidential to each Holder until such information otherwise becomes public, unless disclosure by
a Holder is required by law; provided, further, that notwithstanding each Holder’s agreement to keep such information confidential,
each such Holder makes no acknowledgement that any such information constitutes material, non-public information.
(e) Use
its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.
(f) Furnish
to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent
requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission; provided, that any such item which is available
on the EDGAR system (or successor thereto) need not be furnished in physical form.
(g) Subject
to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus
and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).
(h)
Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate
with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification)
of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition
in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that, the Company shall not
be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such
jurisdiction.
(i) If
requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free,
to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be
in such denominations and registered in such names as any such Holder may request.
(j) Upon
the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the circumstances taking into
account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature
disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file
any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain
an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders
in accordance with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the requisite changes
to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its best efforts
to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise
its right under this Section 3(j) to suspend the availability of a Registration Statement and Prospectus, for a period not to exceed
60 calendar days (which need not be consecutive days) in any 12-month period.
(k) Otherwise
use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the Securities
Act and the Exchange Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including
any supplement or amendment thereof, with the Commission pursuant to Rule 424 under the Securities Act, promptly inform the Holders
in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and,
as a result thereof, the Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities
and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.
(l) The
Company shall use its best efforts to maintain eligibility for use of Form S-3 (or any successor form thereto) for the registration
of the resale of Registrable Securities.
(m) The
Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive
control over the shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration
of the Registrable Securities solely because any Holder fails to furnish such information within three Trading Days of the Company’s
request, any damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise occur
solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.
4.
Registration
Expenses
. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred
to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made
with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then
listed for trading, and (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company
in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications
or exemptions of the Registrable Securities), (ii) printing expenses (including, without limitation, expenses of printing certificates
for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company,
(v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the
Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing
of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for
any broker or similar commissions of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees
or other costs of the Holders.
(a)
Indemnification
by the Company
. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder,
the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal
as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and
any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or
any other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and
any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or
any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively,
“
Losses
”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material
fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light
of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance
of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions
are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein,
or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such
Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this
purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder
of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus
is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated
in Section 6(d). The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising
from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive
the transfer of any Registrable Securities by any of the Holders in accordance with Section 6(h).
(b)
Indemnification
by Holders
. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted
by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: (x) such Holder’s
failure to comply with the prospectus delivery requirements of the Securities Act or (y) any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by such Holder to the Company expressly for inclusion in such Registration
Statement or such Prospectus, (ii) to the extent, but only to the extent, that such information relates to such Holder’s
information provided in the Selling Stockholder Questionnaire or the proposed method of distribution of Registrable Securities
and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement (it being understood
that the Holder has approved Annex A hereto for this purpose), such Prospectus or in any amendment or supplement thereto, or (iii)
in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated,
defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated,
defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated in
Section 6(d). In no event shall the liability of a selling Holder be greater in amount than the dollar amount of the proceeds (net
of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the amount of any damages such
Holder has otherwise been required to pay by reason of such untrue statement or omission) received by such Holder upon the sale
of the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.
(c)
Conduct
of Indemnification Proceedings
. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an “
Indemnified Party
”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “
Indemnifying Party
”) in writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses
incurred in connection with defense thereof; provided, that, the failure of any Indemnified Party to give such notice shall not
relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that
it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have materially and adversely prejudiced the Indemnifying Party.
An Indemnified
Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party
has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense
of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3) the named
parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate
counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any
such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect
of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
Subject to the
terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying
Party; provided, that, the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and
expenses applicable to such actions for which such Indemnified Party is determined by a court of competent jurisdiction not to
be entitled to indemnification hereunder.
(d)
Contribution
.
If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified
Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified
Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party,
and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement
or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations
set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in connection with
any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for
in this Section was available to such party in accordance with its terms.
The parties hereto
agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation
or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately
preceding paragraph. In no event shall the contribution obligation of a Holder of Registrable Securities be greater in amount than
the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section
5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.
The indemnity
and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to
the Indemnified Parties.
(a)
Remedies
.
In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company
and each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach
by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance
in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.
(b)
No
Piggyback on Registrations; Prohibition on Filing Other Registration Statements
. Except as set forth on
Schedule 6(b)
attached hereto, neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto)
may include securities of the Company in any Registration Statements other than the Registrable Securities. The Company shall not
file any other registration statements until all Registrable Securities are registered pursuant to a Registration Statement that
is declared effective by the Commission, provided that this Section 6(b) shall not prohibit the Company from filing amendments
to registration statements filed prior to the date of this Agreement.
(c)
Compliance
.
Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable
to it in connection with sales of Registrable Securities pursuant to a Registration Statement.
(d)
Discontinued
Disposition
. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “
Advice
”)
by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company
will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company agrees
and acknowledges that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities
hereunder shall be subject to the provisions of Section 2(d).
(e)
Piggy-Back
Registrations
. If, at any time during the Effectiveness Period, there is not an effective Registration Statement covering all
of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection
with the Company’s stock option or other employee benefit plans, then the Company shall deliver to each Holder a written
notice of such determination and, if within fifteen days after the date of the delivery of such notice, any such Holder shall so
request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such
Holder requests to be registered;
provided
,
however
, that the Company shall not be required to register any Registrable
Securities pursuant to this Section 6(e) that are eligible for resale pursuant to Rule 144 promulgated by the Commission pursuant
to the Securities Act or that are the subject of a then effective Registration Statement that is available for resales or other
dispositions by such Holder.
(f)
Amendments
and Waivers
. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed
by the Company and the Holders of 51% or more of the then outstanding Registrable Securities (for purposes of clarification, this
includes any Registrable Securities issuable upon exercise or conversion of any Security), provided that, if any amendment, modification
or waiver disproportionately and adversely impacts a Holder (or group of Holders), the consent of such disproportionately impacted
Holder (or group of Holders) shall be required. If a Registration Statement does not register all of the Registrable Securities
pursuant to a waiver or amendment done in compliance with the previous sentence, then the number of Registrable Securities to be
registered for each Holder shall be reduced pro rata among all Holders and each Holder shall have the right to designate which
of its Registrable Securities shall be omitted from such Registration Statement. Notwithstanding the foregoing, a waiver or consent
to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of a Holder or some Holders
and that does not directly or indirectly affect the rights of other Holders may be given only by such Holder or Holders of all
of the Registrable Securities to which such waiver or consent relates;
provided
,
however
, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the first sentence of this
Section 6(f). No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision
of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.
(g)
Notices
.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as
set forth in the Purchase Agreement.
(h)
Successors
and Assigns
. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or obligations
hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities. Each Holder may
assign their respective rights hereunder in the manner and to the Persons as permitted under Section 5.8 of the Purchase Agreement.
(i)
No
Inconsistent Agreements
. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the
Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities,
that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions
hereof. Except as set forth on
Schedule 6(i)
, neither the Company nor any of its Subsidiaries has previously entered into
any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied
in full.
(j)
Execution
and Counterparts
. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.
(k)
Governing
Law
. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.
(l)
Cumulative
Remedies
. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.
(m)
Severability
.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(n)
Headings
.
The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit
or affect any of the provisions hereof.
(o)
Independent
Nature of Holders’ Obligations and Rights
. The obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations
of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no
action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association,
a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert
or as a group or entity with respect to such obligations or the transactions contemplated by this Agreement or any other matters,
and the Company acknowledges that the Holders are not acting in concert or as a group, and the Company shall not assert any such
claim, with respect to such obligations or transactions. Each Holder shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as
an additional party in any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company
contained was solely in the control of the Company, not the action or decision of any Holder, and was done solely for the convenience
of the Company and not because it was required or requested to do so by any Holder. It is expressly understood and agreed that
each provision contained in this Agreement is between the Company and a Holder, solely, and not between the Company and the Holders
collectively and not between and among Holders.
********************
(Signature Pages Follow)
IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.
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dariohealth corp.
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By:
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Name:
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Title:
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[SIGNATURE PAGE OF HOLDERS FOLLOWS]
[SIGNATURE
PAGE OF HOLDERS TO DRIO RRA]
Name of Holder: __________________________
Signature of Authorized Signatory of Holder
:
__________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________
[SIGNATURE PAGES CONTINUE]
Annex A
Plan of Distribution
Each Selling Stockholder
(the “
Selling Stockholders
”) of the securities and any of their pledgees, assignees and successors-in-interest
may, from time to time, sell any or all of their securities covered hereby on the [principal Trading Market or any other stock
exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed
or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling securities:
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·
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ordinary brokerage transactions and transactions
in which the broker-dealer solicits purchasers;
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·
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block trades in which the broker-dealer will
attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
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·
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purchases by a broker-dealer as principal
and resale by the broker-dealer for its account;
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an exchange distribution in accordance with
the rules of the applicable exchange;
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·
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privately negotiated transactions;
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·
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settlement of short sales;
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·
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in transactions through broker-dealers that
agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;
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·
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through the writing or settlement of options
or other hedging transactions, whether through an options exchange or otherwise;
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·
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a combination of any such methods of sale;
or
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·
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any other method permitted pursuant to applicable
law.
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The Selling Stockholders
may also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended (the
“
Securities Act
”), if available, rather than under this prospectus.
Broker-dealers engaged
by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction
not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction
a markup or markdown in compliance with FINRA IM-2440.
In connection with the
sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions
they assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions,
or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter
into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which
securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended
to reflect such transaction).
The Selling Stockholders
and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within
the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement
or understanding, directly or indirectly, with any person to distribute the securities.
The Company is required
to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed
to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.
We agreed to keep this
prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without
registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for
the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of
similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or
any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if
required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be
sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Under applicable rules
and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation
M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and
sales of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to
the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior
to the time of the sale (including by compliance with Rule 172 under the Securities Act).
SELLING SHAREHOLDERS
The common stock being
offered by the selling shareholders are those previously issued to the selling shareholders, and those issuable to the selling
shareholders, upon exercise of the warrants. For additional information regarding the issuances of those shares of common stock
and warrants, see "Private Placement of Common Shares and Warrants" above. We are registering the shares of common stock
in order to permit the selling shareholders to offer the shares for resale from time to time. Except for the ownership of the shares
of common stock and the warrants, the selling shareholders have not had any material relationship with us within the past three
years.
The table below lists the
selling shareholders and other information regarding the beneficial ownership of the shares of common stock by each of the selling
shareholders. The second column lists the number of shares of common stock beneficially owned by each selling shareholder, based
on its ownership of the shares of common stock and warrants, as of ________, 2016, assuming exercise of the warrants held by the
selling shareholders on that date, without regard to any limitations on exercises.
The third column lists
the shares of common stock being offered by this prospectus by the selling shareholders.
In accordance with the
terms of a registration rights agreement with the selling shareholders, this prospectus generally covers the resale of the sum
of (i) the number of shares of common stock issued to the selling shareholders in the __________________ and (ii) the maximum number
of shares of common stock issuable upon exercise of the related warrants, determined as if the outstanding warrants were exercised
in full as of the trading day immediately preceding the date this registration statement was initially filed with the SEC, each
as of the trading day immediately preceding the applicable date of determination and all subject to adjustment as provided in the
registration right agreement, without regard to any limitations on the exercise of the warrants.
The fourth column assumes
the sale of all of the shares offered by the selling shareholders pursuant to this prospectus.
Under the terms of the
warrants, a selling shareholder may not exercise the warrants to the extent such exercise would cause such selling shareholder,
together with its affiliates and attribution parties, to beneficially own a number of shares of common stock which would exceed
[4.99]% of our then outstanding common stock following such exercise, excluding for purposes of such determination shares of common
stock issuable upon exercise of the warrants which have not been exercised. The number of shares in the second column does not
reflect this limitation. The selling shareholders may sell all, some or none of their shares in this offering. See "Plan of
Distribution."
Name
of Selling Shareholder
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Number
of shares of
Common Stock Owned
Prior to Offering
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Maximum
Number of
shares of Common Stock
to be Sold Pursuant to this
Prospectus
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Number
of shares of
Common Stock Owned
After Offering
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Annex C
[___________________
Selling Stockholder Notice and Questionnaire
The undersigned beneficial
owner of common stock (the “
Registrable Securities
”) of [_______, a [________ corporation (the “
Company
”),
understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “
Commission
”)
a registration statement (the “
Registration Statement
”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the “
Securities Act
”), of the Registrable Securities, in accordance with
the terms of the Registration Rights Agreement (the “
Registration Rights Agreement
”) to which this document
is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below.
All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.
Certain legal consequences
arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.
NOTICE
The undersigned beneficial
owner (the “
Selling Stockholder
”) of Registrable Securities hereby elects to include the Registrable Securities
owned by it in the Registration Statement.
The undersigned hereby provides the following
information to the Company and represents and warrants that such information is accurate:
QUESTIONNAIRE
1.
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Name.
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(a)
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Full Legal Name of Selling Stockholder
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(b)
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Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held:
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(c)
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Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire):
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2. Address for Notices
to Selling Stockholder:
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Telephone: _______________________________________________________________________________________
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Fax:
_____________________________________________________________________________________________
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Contact
Person: ___________________________________________________________________________________
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3. Broker-Dealer
Status:
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(a)
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Are you a broker-dealer?
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Yes
¨
No
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(b)
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If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?
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Yes
¨
No
¨
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Note:
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If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
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(c)
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Are you an affiliate of a broker-dealer?
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Yes
¨
No
¨
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(d)
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If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?
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Yes
¨
No
¨
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Note:
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If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
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4. Beneficial Ownership
of Securities of the Company Owned by the Selling Stockholder.
Except as set forth below in this
Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable
pursuant to the Purchase Agreement.
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(a)
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Type and Amount of other securities beneficially owned by the Selling Stockholder:
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5. Relationships
with the Company:
Except as set forth below, neither
the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or
its predecessors or affiliates) during the past three years.
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State any exceptions here:
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The undersigned agrees
to promptly notify the Company of any material inaccuracies or changes in the information provided herein that may occur subsequent
to the date hereof at any time while the Registration Statement remains effective; provided, that the undersigned shall not be
required to notify the Company of any changes to the number of securities held or owned by the undersigned or its affiliates.
By
signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through
5 and the inclusion of such information in the Registration Statement and the related prospectus
and any amendments or supplements
thereto
. The undersigned understands that such information will be relied upon by the Company in
connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements
thereto.
IN WITNESS WHEREOF the
undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.
Date:
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Beneficial Owner: _____________________
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By:
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Name:
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Title:
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PLEASE FAX A COPY (OR EMAIL A .PDF COPY)
OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO:
Exhibit C
NEITHER THIS SECURITY NOR THE SECURITIES FOR
WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
DARIOHEALTH
CORP.
Warrant Shares: _______
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Initial Exercise Date: July __, 2017
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THIS COMMON STOCK PURCHASE
WARRANT (the “
Warrant
”) certifies that, for value received, _____________ or its assigns (the “
Holder
”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on
or after July __, 2017 (the “
Initial Exercise Date
”) and on or prior to the close of business on January __,
2022 (the “
Termination Date
”) but not thereafter, to subscribe for and purchase from DarioHealth Corp., a Delaware
corporation (the “
Company
”), up to ______ shares (as subject to adjustment hereunder, the “
Warrant
Shares
”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise
Price, as defined in Section 2(b).
Section 1
.
Definitions
.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase
Agreement (the “
Purchase Agreement
”), dated January ___, 2017, among the Company and the purchasers signatory
thereto.
Section 2
.
Exercise
.
a)
Exercise
of Warrant
. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company or the Transfer Agent (or
such other office or agency that the Company may designate by notice in writing to the registered Holder at the address of the
Holder appearing on the books of the Company), as applicable, of a duly executed facsimile copy or PDF copy submitted by electronic
(or e-mail attachment) of the Notice of Exercise in the form annexed hereto. Within the earlier of (i) three (3) Trading Days and
(ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the
date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable
Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure
specified in Section 2(c) below is specified in the applicable Notice of Exercise.
No ink-original Notice of Exercise shall
be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required.
Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company
until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which
case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final
Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total
number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records
showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice
of Exercise within one (1) Business Day of receipt of such notice.
The Holder and any assignee, by acceptance of this Warrant,
acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares
hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on
the face hereof.
b)
Exercise
Price
. The exercise price per share of the Common Stock under this Warrant shall be
$
3.50, subject to adjustment hereunder
(the “
Exercise Price
”).
c)
Cashless
Exercise
. If at any time after the six-month anniversary of the Closing Date, there is no effective Registration Statement
registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may also
be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled
to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = the last
VWAP immediately preceding the time of delivery of the Notice of Exercise giving rise to the applicable “cashless exercise”,
as set forth in the applicable Notice of Exercise (to clarify, the “last VWAP” will be the last VWAP as calculated
over an entire Trading Day such that, in the event that this Warrant is exercised at a time that the Trading Market is open, the
prior Trading Day’s VWAP shall be used in this calculation);
(B) = the Exercise
Price of this Warrant, as adjusted hereunder; and
(X) = the
number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise.
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9)
of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period
of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to
take any position contrary to this Section 2(c).
“
VWAP
”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).
d)
Mechanics of Exercise
.
i.
Delivery
of Warrant Shares Upon Exercise
. Warrant Shares purchased hereunder shall be transmitted by the Transfer Agent to the Holder
by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through
its Deposit or Withdrawal at Custodian system (“
DWAC
”) if the Company is then a participant in such system and
either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations
pursuant to Rule 144, and otherwise by physical delivery of a certificate, registered in the Company’s share register in
the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise
to the address specified by the Holder in the Notice of Exercise by the date that is the earlier of (i) one (1) Trading Day and
(ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise
(such date, the “
Warrant Share Delivery Date
”). Upon delivery of the Notice of Exercise, the Holder shall be
deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant
has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise
Price (other than in the case of a cashless exercise) is received within the earlier of (i) three Trading Days and (ii) the number
of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise.
ii.
Delivery
of New Warrants Upon Exercise
. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.
iii.
Rescission
Rights
. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv.
No
Fractional Shares or Scrip
. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.
v.
Charges,
Taxes and Expenses
. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the
Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder;
provided
,
however
, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental
thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees
to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day
electronic delivery of the Warrant Shares.
vi.
Closing
of Books
. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
e)
Holder’s
Exercise Limitations
. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after
exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “
Attribution
Parties
”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes
of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution
Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining,
nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii)
exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation,
any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing
to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible
for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e)
applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together
with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion
of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this
Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties)
and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder
may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual
report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent
written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon
the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder
or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported.
The “
Beneficial Ownership Limitation
” shall be 4.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon
notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions
of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the
61
st
day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof)
which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall
apply to a successor holder of this Warrant.
Section 3
.
Certain
Adjustments
.
a)
Stock
Dividends and Splits
. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b) [RESERVED]
c)
Subsequent
Rights Offerings
. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues
or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “
Purchase Rights
”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to
any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such
extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase
Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in
the Holder exceeding the Beneficial Ownership Limitation).
d)
Pro
Rata Distributions
. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of
a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “
Distribution
”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation,
the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in
such Distribution (
provided
,
however
, to the extent that the Holder's right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution
to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if
ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
e)
Fundamental
Transaction
. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets
in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group
acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “
Fundamental Transaction
”), then, upon any subsequent
exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon
such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard
to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “
Alternate Consideration
”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant
is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to
apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder
shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental
Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor
(the “
Successor Entity
”) to assume in writing all of the obligations of the Company under this Warrant and the
other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance
reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction
and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced
by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number
of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock
(but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value
of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting
the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity
shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this
Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant
and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
f)
Calculations
.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
g)
Notice
to Holder
.
i.
Adjustment
to Exercise Price
. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
Notice
to Allow Exercise by Holder
. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email
to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least
20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which
a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or
share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice
or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the
date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section 4
.
Transfer
of Warrant
.
a)
Transferability
.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions
of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration
rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder
or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue
to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.
Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company
unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within
three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant full. The Warrant,
if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having
a new Warrant issued.
b)
New
Warrants
. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the original
Issue date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c)
Warrant
Register
. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “
Warrant
Register
”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.
d)
Transfer
Restrictions
. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer
of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and
under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or
current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer,
that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.
e)
Representation
by the Holder
. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any
exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for
distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.
Section 5
.
Miscellaneous
.
a)
No Rights
as Stockholder Until Exercise
. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as
a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section
3.
b)
Loss,
Theft, Destruction or Mutilation of Warrant
. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of
the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.
c)
Saturdays,
Sundays, Holidays, etc
. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding
Business Day.
d)
Authorized
Shares
.
The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged
with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be
listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by
the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such
issue).
Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the
generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor
upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant
and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any
action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise
Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any
public regulatory body or bodies having jurisdiction thereof.
e)
Jurisdiction
.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.
f)
Restrictions
.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does
not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g)
Nonwaiver
and Expenses
. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that all
rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of
this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be
sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of
appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its
rights, powers or remedies hereunder.
h)
Notices
.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Purchase Agreement.
i)
Limitation
of Liability
. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder
for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
j)
Remedies
.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be adequate.
k)
Successors
and Assigns
. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.
l)
Amendment
.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
m)
Severability
.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions
of this Warrant.
n)
Headings
.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of
this Warrant.
********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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DARIOHEALTH CORP.
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By:
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Name:
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Title:
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NOTICE OF EXERCISE
To: dario
health corp.
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes,
if any.
(2) Payment
shall take the form of (check applicable box):
¨
in lawful money of the United States; or
¨
[if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c).
(3) Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The Warrant Shares shall be delivered to the
following DWAC Account Number:
(4)
Accredited
Investor
. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities
Act of 1933, as amended.
[SIGNATURE
OF HOLDER]
Name of Investing Entity: ___________________________________________________________________________
Signature of Authorized Signatory of Investing
Entity
: _____________________________________________________
Name of Authorized Signatory: _______________________________________________________________________
Title of Authorized Signatory: ________________________________________________________________________
Date: ___________________________________________________________________________________________
EXHIBIT B
ASSIGNMENT
FORM
(To assign the foregoing Warrant, execute
this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and
all rights evidenced thereby are hereby assigned to
Name:
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(Please Print)
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Address:
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(Please Print)
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Phone Number:
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Email Address:
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Dated: _______________ __, ______
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Holder’s Signature:
________________________
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Holder’s Address:
________________________
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Exhibit D
FIRST AMENDMENT TO
AMENDED AND RESTATED
2012 EQUITY INCENTIVE PLAN
WHEREAS
, DarioHealth
Corp. (the “Company”) maintains the DarioHealth Corp.’s Amended and Restated 2012 Equity Incentive Plan (the
“Incentive Plan”);
WHEREAS
, the Board
of Directors (the “Board”) and the Compensation Committee of the Board has determined that it is in the best interests
of the Company to amend the Incentive Plan to increase the maximum number of shares of the Company’s common stock authorized
to be issued under the Incentive Plan by 500,000, from 1,873,000 to 2,373,000; and
WHEREAS
,
pursuant
to Section 13 of the Incentive Plan, an amendment that materially increases the aggregate number of shares that may be issued under
the Incentive Plan generally must be approved by a majority of votes cast by the stockholders of the Company in accordance with
applicable stock exchange rules.
NOW, THEREFORE
,
effective as of the date of approval by a majority of votes cast by the stockholders of the Company in accordance with applicable
stock exchange rules, the Incentive Plan is hereby amended in the following particulars:
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1.
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Section 4(a) of the Incentive Plan is deleted in its entirety
and replaced with the following:
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Share Reserve
. Subject to the
provisions of Section 11 relating to adjustments upon changes in Common Stock, the Common Stock that may be issued pursuant to
Awards shall not exceed in the aggregate of 2,373,000 shares of Common Stock. During the terms of the Awards, the Company shall
keep available at all times the number of shares of Common Stock required to satisfy such Awards.
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2.
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In all other respects the Incentive Plan shall remain unchanged
and in full force and effect.
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