Exhibit 10.10

 

SUBSCRIPTION AGREEMENT

 

DarioHealth Corp.

8 HaTokhen Street

Caesarea Industrial Park

Israel 3088900

 

Ladies and Gentlemen:

 

1.             Subscription. The undersigned (the “Purchaser”), intending to be
legally bound, hereby irrevocably agrees to purchase from DarioHealth Corp., a
Delaware corporation (the “Company”), the number of shares of Series A Preferred
Stock, par value $0.0001 (“Series A Preferred”), or such number of shares of
Series A-1 Preferred Stock, par value $0.0001 (the “Series A-1 Preferred” and
collectively with the Series A Preferred, the “Shares”) set forth on the
signature page hereof at a purchase price of $1,000 per Share (“Share Price”),
with a minimum investment amount of $100,000 which minimum investment may be
waived at the discretion of the Company and the Placement Agent which minimum
investment may be waived at the discretion of the Company and the Placement
Agent. The Shares are being sold in the Offering (as defined below), as more
fully described in the Memorandum (as defined below). This Subscription
Agreement (this “Subscription Agreement”) is one in a series of similar
subscription agreements (collectively, the “Subscription Agreements”) entered
into pursuant to the Offering.

 

2.             The Offering. This subscription is submitted to you in accordance
with and subject to the terms and conditions described in this Subscription
Agreement and the Confidential Private Placement Memorandum of the Company dated
October __, 2019, as amended or supplemented from time to time, including all
attachments, schedules and exhibits thereto (the “Memorandum”), relating to the
offering (the “Offering”) by the Company of a minimum of 8,000 Shares
($8,000,000) (the “Minimum Offering Amount”), and up to a maximum of 15,000
Shares ($15,000,000) (the “Maximum Offering Amount”), with an over-allotment
amount of up to 5,000 Shares ($5,000,000) (the “Over-Allotment Amount”).
SternAegis Ventures, through Aegis Capital Corp., (“SternAegis”), has been
engaged as exclusive placement agent in connection with the Offering (sometimes
referred to as the “Placement Agent”). The terms of the Offering are more
completely described in the Memorandum and such terms are incorporated herein in
their entirety.

 

3.             Deliveries and Payment; Escrow of Funds. Simultaneously with the
execution hereof, the Purchaser shall: (a) deliver to SternAegis in accordance
with the Subscription Instructions attached hereto, (i) one (1) completed and
executed Omnibus Signature Page to this Subscription Agreement and the
Registration Rights Agreement (page 14), (ii) a completed Accredited Investor
Certification (pages 15-16), (iii) a completed Investor Profile (page 17) and
(iv) one (1) completed and executed Tax Certification for U.S. Persons or
Non-U.S. Persons, as applicable (beginning on page 19); and (b) make a wire
transfer payment to, “Signature Bank, Escrow Agent for DarioHealth Corp.” in an
amount equal to the product of (i) the number of Shares being subscribed for by
the Purchaser in the Offering as set forth on the signature page hereof,
multiplied by (ii) the Share Price. Wire transfer instructions are set forth on
page 12 hereof under the heading “To subscribe for Shares in the private
offering of DarioHealth Corp.” Such funds will be held for the Purchaser's
benefit in a non-interest-bearing escrow account (the “Escrow Account”) until
the earliest to occur of (a) a closing of the sale of the Minimum Offering
Amount or more (the “First Closing”), (b) the rejection of such subscription, or
(c) the termination of the Offering by the Company or the Placement Agent. The
Company and the Placement Agent may continue to offer and sell the Shares and
conduct additional closings for the sale of additional Shares after the First
Closing and until the termination of the Offering.

 

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4.             Acceptance of Subscription. The Purchaser understands and agrees
that the Company, in its sole discretion, reserves the right to accept or reject
this or any other subscription for Shares, in whole or in part, notwithstanding
prior receipt by the Purchaser of notice of acceptance of this subscription. In
furtherance of the foregoing, the Company shall have the right to require
potential subscribers to supply additional information and execute additional
documents in a satisfactory manner, which determination shall be at the sole
discretion of the Company, prior to the acceptance of this Subscription
Agreement. The Company shall have no obligation hereunder until the Company
shall execute and deliver to the Purchaser an executed copy of this Subscription
Agreement. If this subscription is rejected in whole, the Offering of Shares is
terminated or the Minimum Offering Amount is not raised, all funds received from
the Purchaser will be returned without interest or offset, and this Subscription
Agreement shall thereafter be of no further force or effect. If this
subscription is rejected in part, the funds for the rejected portion of this
subscription will be returned without interest or offset, and this Subscription
Agreement will continue in full force and effect to the extent this subscription
was accepted.

 

5.             Representations and Warranties.

 

The Purchaser hereby acknowledges, represents, warrants, and agrees as follows:

 

(a)            None of the Shares or the shares of common stock of the Company
issuable upon conversion of the Shares (the “Conversion Securities”) offered
pursuant to the Memorandum are registered under the Securities Act of 1933, as
amended (the “Securities Act”), or any state securities laws. The Purchaser
understands that the offering and sale of the Shares is intended to be exempt
from registration under the Securities Act, by virtue of Section 4(a)(2) thereof
and the provisions of Regulation D (“Regulation D”) as promulgated by the United
States Securities and Exchange Commission (the “SEC”) thereunder, based, in
part, upon the representations, warranties and agreements of the Purchaser
contained in this Subscription Agreement.

 

(b)           Prior to the execution of this Subscription Agreement, the
Purchaser and the Purchaser’s attorney, accountant, purchaser representative
and/or tax adviser, if any (collectively, the “Advisers”), have received the
Memorandum and all other documents requested by the Purchaser, have carefully
reviewed them and understand the information contained therein.

 

(c)           Neither the SEC nor any state securities commission or other
regulatory authority has approved the Shares or the Conversion Securities or
passed upon or endorsed the merits of the Offering or confirmed the accuracy or
determined the adequacy of the Memorandum. The Memorandum has not been reviewed
by any federal, state or other regulatory authority.

 

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(d)           All documents, records, and books pertaining to the investment in
the Shares (including, without limitation, the Memorandum) have been made
available for inspection by such Purchaser and its Advisers, if any.

 

(e)           The Purchaser and its Advisers, if any, have had a reasonable
opportunity to ask questions of and receive answers from a person or persons
acting on behalf of the Company concerning the offering of the Shares and the
business, financial condition and results of operations of the Company and
LabStyle Innovation Ltd. (the “Subsidiary”) and all such questions have been
answered to the full satisfaction of the Purchaser and its Advisers, if any.

 

(f)            In evaluating the suitability of an investment in the Company and
the Shares, the Purchaser has not relied upon any representation or information
(oral or written) other than as stated in the Memorandum and the Purchaser and
its Advisors have had access, through the Memorandum and/or the EDGAR system, to
true and complete copies of the Company’s most recent Annual Report on Form 10-K
for the fiscal year ended December 31, 2018 (the “10-K”) and all other reports
filed by the Company pursuant to the Securities Exchange Act of 1934, as
amended, since the filing of the 10-K and prior to the date hereof and have
reviewed such filings (the “SEC Reports”).

 

(g)           The Purchaser is unaware of, is in no way relying on, and did not
become aware of the Offering through or as a result of, any form of general
solicitation or general advertising including, without limitation, any article,
notice, advertisement or other communication published in any newspaper,
magazine or similar media or broadcast over television, radio or the Internet
(including, without limitation, internet “blogs,” bulletin boards, discussion
groups and social networking sites) in connection with the Offering and is not
subscribing for the Shares and did not become aware of the Offering through or
as a result of any seminar or meeting to which the Purchaser was invited by, or
any solicitation of a subscription by, a person not previously known to the
Purchaser in connection with investments in securities generally.

 

(h)           The Purchaser has taken no action that would give rise to any
claim by any person for brokerage commissions, finders’ fees or the like
relating to this Subscription Agreement or the transactions contemplated hereby
(other than commissions to be paid by the Company to the Placement Agent or as
otherwise described in the Memorandum).

 

(i)            The Purchaser, together with its Advisers, if any, has such
knowledge and experience in financial, tax, and business matters, and, in
particular, investments in securities, so as to enable it to utilize the
information made available to it in connection with the Offering to evaluate the
merits and risks of an investment in the Shares and the Company and to make an
informed investment decision with respect thereto.

 

(j)            The Purchaser is not relying on the Company, the Placement Agent
or any of their respective employees or agents with respect to the legal, tax,
economic and related considerations of an investment in the Company and the
Shares, and the Purchaser has relied on the advice of, or has consulted with,
only its own Advisers.

 

(k)           The Purchaser is acquiring the Shares solely for such Purchaser’s
own account for investment purposes only and not with a view to or intent of
resale or distribution thereof, in whole or in part. The Purchaser has no
agreement or arrangement, formal or informal, with any person to sell or
transfer all or any part of the Shares constituting the Shares or the Conversion
Securities, and the Purchaser has no plans to enter into any such agreement or
arrangement.

 

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(l)            The Purchaser must bear the substantial economic risks of the
investment in the Shares indefinitely because none of the Shares or Conversion
Securities may be sold, hypothecated or otherwise disposed of unless
subsequently registered under the Securities Act and applicable state securities
laws or an exemption from such registration is available. Legends shall be
placed on the securities included in the Shares to the effect that they have not
been registered under the Securities Act or applicable state securities laws and
appropriate notations thereof will be made in the Company’s stock books. Stop
transfer instructions will be placed with the transfer agent of the Shares, if
any. The Company has agreed that purchasers of the Shares will have, with
respect to the Conversion Securities, the registration rights described in the
Memorandum. Notwithstanding such registration rights, there can be no assurance
that there will be any market for resale of the Shares or the Conversion
Securities, nor can there be any assurance that such securities will be freely
transferable at any time in the foreseeable future.

 

(m)          The Purchaser has adequate means of providing for such Purchaser’s
current financial needs and foreseeable contingencies and has no need for
liquidity from its investment in the Shares for an indefinite period of time.

 

(n)           The Purchaser is aware that an investment in the Shares is high
risk, involving a number of very significant risks and has carefully read and
considered the matters set forth under the caption “Risk Factors” in the
Memorandum and in the SEC Reports, and, in particular, acknowledges that the
Company with its Subsidiary is a development stage company which has only
recently entered the commercialization stage of its technology, has had
significant operating losses since inception, limited revenues from operations
to date, and are engaged in highly competitive businesses.

 

(o)           The Purchaser meets the requirements of at least one of the
suitability standards for an “accredited investor” as that term is defined in
Regulation D and as set forth on the Accredited Investor Certification contained
herein.

 

(p)           The Purchaser (i) if a natural person, represents that the
Purchaser has reached the age of 21 and has full power and authority to execute
and deliver this Subscription Agreement and all other related agreements or
certificates and to carry out the provisions hereof and thereof; (ii) if a
corporation, partnership, or limited liability company or partnership, or
association, joint stock company, trust, unincorporated organization or other
entity, represents that such entity was not formed for the specific purpose of
acquiring the Shares, such entity is duly organized, validly existing and in
good standing under the laws of the state of its organization, the consummation
of the transactions contemplated hereby is authorized by, and will not result in
a violation of state law or its charter or other organizational documents, such
entity has full power and authority to execute and deliver this Subscription
Agreement and all other related agreements or certificates and to carry out the
provisions hereof and thereof and to purchase and hold the securities
constituting the Shares, the execution and delivery of this Subscription
Agreement has been duly authorized by all necessary action, this Subscription
Agreement has been duly executed and delivered on behalf of such entity and is a
legal, valid and binding obligation of such entity; or (iii) if executing this
Subscription Agreement in a representative or fiduciary capacity, represents
that it has full power and authority to execute and deliver this Subscription
Agreement in such capacity and on behalf of the subscribing individual, ward,
partnership, trust, estate, corporation, or limited liability company or
partnership, or other entity for whom the Purchaser is executing this
Subscription Agreement, and such individual, partnership, ward, trust, estate,
corporation, or limited liability company or partnership, or other entity has
full right and power to perform pursuant to this Subscription Agreement and make
an investment in the Company, and represents that this Subscription Agreement
constitutes a legal, valid and binding obligation of such entity. The execution
and delivery of this Subscription Agreement will not violate or be in conflict
with any order, judgment, injunction, agreement or controlling document to which
the Purchaser is a party or by which it is bound.

 

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(q)           The Purchaser and the Advisers, if any, have had the opportunity
to obtain any additional information, to the extent the Company has such
information in their possession or could acquire it without unreasonable effort
or expense, necessary to verify the accuracy of the information contained in the
Memorandum and all documents received or reviewed in connection with the
purchase of the Shares and have had the opportunity to have representatives of
the Company provide them with such additional information regarding the terms
and conditions of this particular investment and the financial condition,
results of operations, and business of the Company and the Subsidiary deemed
relevant by the Purchaser or the Advisers, if any, and all such requested
information, to the extent the Company has such information in their possession
or could acquire it without unreasonable effort or expense, has been provided to
the full satisfaction of the Purchaser and the Advisers, if any.

 

(r)            Any information which the Purchaser has heretofore furnished or
is furnishing herewith to the Company or the Placement Agent is complete and
accurate and may be relied upon by the Company and the Placement Agent in
determining the availability of an exemption from registration under federal and
state securities laws in connection with the offering of securities as described
in the Memorandum. The Purchaser further represents and warrants that it will
notify and supply corrective information to the Company and the Placement Agent
immediately upon the occurrence of any change therein occurring prior to the
Company's issuance of the securities contained in the Shares.

 

(s)           The Purchaser has significant prior investment experience,
including investment in non-listed and non-registered securities. The Purchaser
is knowledgeable about investment considerations in development-stage companies
with limited operating histories. The Purchaser has a sufficient net worth to
sustain a loss of its entire investment in the Company and the Shares in the
event such a loss should occur. The Purchaser's overall commitment to
investments which are not readily marketable is not excessive in view of the
Purchaser’s net worth and financial circumstances and the purchase of the Shares
will not cause such commitment to become excessive. Investment in the Company
and the Shares as contemplated by this Subscription Agreement is suitable for
the Purchaser.

 

(t)            The Purchaser is satisfied that the Purchaser has received
adequate information with respect to all matters which it or the Advisers, if
any, consider material to its decision to make an investment in the Company and
the Shares as contemplated by this Subscription Agreement.

 

(u)           The Purchaser acknowledges that any estimates or forward-looking
statements or projections included in the Memorandum were prepared by the
Company in good faith but that the attainment of any such projections, estimates
or forward-looking statements cannot be guaranteed by the Company or the
Subsidiary and should not be relied upon.

 

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(v)           No oral or written representations have been made, or oral or
written information furnished, to the Purchaser or the Advisers, if any, in
connection with the Offering which are in any way inconsistent with the
information contained in the Memorandum.

 

(w)          Within five (5) days after receipt of a request from the Company or
the Placement Agent, the Purchaser will provide such information and deliver
such documents as may reasonably be necessary to comply with any and all laws
and ordinances to which the Company or the Placement Agent is subject.

 

(x)           The Purchaser's substantive relationship with either the Company,
the Placement Agent or subagent through which the Purchaser is subscribing for
Shares predates such Placement Agent's or such subagent's contact with the
Purchaser regarding an investment in the Shares.

 

(y)           THE SHARES OFFERED HEREBY (INCLUDING THE SHARES COMPRISING THE
CONVERSION SECURITIES UNDERLYING SUCH SHARES) HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING
OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
SAID ACT AND SUCH LAWS. SUCH SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. SUCH SECURITIES HAVE NOT BEEN RECOMMENDED, APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY
OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED
UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE
MEMORANDUM OR THIS SUBSCRIPTION AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.

 

(z)            In making an investment decision, investors must rely on their
own examination of the Company, the Subsidiary and the terms of the Offering,
including the merits and risks involved. The Purchaser should be aware that it
will be required to bear the financial risks of investment in the Company and
the Shares for an indefinite period of time.

 

(aa)          (For ERISA plans only) The fiduciary of the ERISA plan (the
“Plan”) represents that such fiduciary has been informed of and understands the
Company’s investment objectives, policies and strategies, and that the decision
to invest “plan assets” (as such term is defined in ERISA) in the Company is
consistent with the provisions of ERISA that require diversification of plan
assets and impose other fiduciary responsibilities. The Purchaser fiduciary or
Plan (a) is responsible for the decision to invest in the Company; (b) is
independent of the Company or any of its affiliates; (c) is qualified to make
such investment decision; and (d) in making such decision, the Purchaser
fiduciary or Plan has not relied primarily on any advice or recommendation of
the Company or any of its affiliates.

 

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(bb)         The Purchaser should check the Office of Foreign Assets Control
(“OFAC”) website at <http://www.treas.gov/ofac> before making the following
representations. The Purchaser represents that the amounts invested by it in the
Company in the Offering were not and are not directly or indirectly derived from
activities that contravene federal, state or international laws and regulations,
including anti-money laundering laws and regulations. Federal regulations and
Executive Orders administered by OFAC prohibit, among other things, the
engagement in transactions with, and the provision of services to, certain
foreign countries, territories, entities and individuals. The lists of OFAC
prohibited countries, territories, persons and entities can be found on the OFAC
website at <http://www.treas.gov/ofac>. In addition, the programs administered
by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or entities in
certain countries regardless of whether such individuals or entities appear on
the OFAC lists.

 

(cc)         To the best of the Purchaser’s knowledge, none of: (1) the
Purchaser; (2) any person controlling or controlled by the Purchaser; (3) if the
Purchaser is a privately-held entity, any person having a beneficial interest in
the Purchaser; or (4) any person for whom the Purchaser is acting as agent or
nominee in connection with this investment is a country, territory, individual
or entity named on an OFAC list, or a person or entity prohibited under the OFAC
Programs. Please be advised that the Company may not accept any amounts from a
prospective investor if such prospective investor cannot make the representation
set forth in the preceding paragraph. The Purchaser agrees to promptly notify
the Company and the Placement Agent should the Purchaser become aware of any
change in the information set forth in these representations. The Purchaser
understands and acknowledges that, by law, the Company may be obligated to
“freeze the account” of the Purchaser, either by prohibiting additional
subscriptions from the Purchaser, declining any redemption requests and/or
segregating the assets in the account in compliance with governmental
regulations, and the Placement Agent may also be required to report such action
and to disclose the Purchaser’s identity to OFAC. The Purchaser further
acknowledges that the Company may, by written notice to the Purchaser, suspend
the redemption rights, if any, of the Purchaser if the Company reasonably deems
it necessary to do so to comply with anti-money laundering regulations
applicable to the Company and the Placement Agent or any of the Company’s other
service providers. These individuals include specially designated nationals,
specially designated narcotics traffickers and other parties subject to OFAC
sanctions and embargo programs.

 

(dd)         To the best of the Purchaser’s knowledge, none of: (1) the
Purchaser; (2) any person controlling or controlled by the Purchaser; (3) if the
Purchaser is a privately-held entity, any person having a beneficial interest in
the Purchaser; or (4) any person for whom the Purchaser is acting as agent or
nominee in connection with this investment is a senior foreign political
figure,2 or any immediate family3 member or close associate4 of a senior foreign
political figure, as such terms are defined in the footnotes below.

 

 

1 These individuals include specially designated nationals, specially designated
narcotics traffickers and other parties subject to OFAC sanctions and embargo
programs.

 

2 A “senior foreign political figure” is defined as a senior official in the
executive, legislative, administrative, military or judicial branches of a
foreign government (whether elected or not), a senior official of a major
foreign political party, or a senior executive of a foreign government-owned
corporation. In addition, a “senior foreign political figure” includes any
corporation, business or other entity that has been formed by, or for the
benefit of, a senior foreign political figure.

 

3 “Immediate family” of a senior foreign political figure typically includes the
figure’s parents, siblings, spouse, children and in-laws.

 

4 A “close associate” of a senior foreign political figure is a person who is
widely and publicly known to maintain an unusually close relationship with the
senior foreign political figure, and includes a person who is in a position to
conduct substantial domestic and international financial transactions on behalf
of the senior foreign political figure.

 

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(ee)         If the Purchaser is affiliated with a non-U.S. banking institution
(a “Foreign Bank”), or if the Purchaser receives deposits from, makes payments
on behalf of, or handles other financial transactions related to a Foreign Bank,
the Purchaser represents and warrants to the Company that: (1) the Foreign Bank
has a fixed address, other than solely an electronic address, in a country in
which the Foreign Bank is authorized to conduct banking activities; (2) the
Foreign Bank maintains operating records related to its banking activities; (3)
the Foreign Bank is subject to inspection by the banking authority that licensed
the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does
not provide banking services to any other Foreign Bank that does not have a
physical presence in any country and that is not a regulated affiliate.

 

6.             Indemnification. The Purchaser agrees to indemnify and hold
harmless the Company the Subsidiary, the Placement Agent (including its selected
dealers, if any), and their respective officers, directors, employees, agents,
control persons and affiliates from and against all losses, liabilities, claims,
damages, costs, fees and expenses whatsoever (including, but not limited to, any
and all expenses incurred in investigating, preparing or defending against any
litigation commenced or threatened) based upon or arising out of any actual or
alleged false acknowledgment, representation or warranty, or misrepresentation
or omission to state a material fact, or breach by the Purchaser of any covenant
or agreement made by the Purchaser herein or in any other document delivered in
connection with this Subscription Agreement.

 

7.             Irrevocability; Binding Effect. The Purchaser hereby acknowledges
and agrees that the subscription hereunder is irrevocable by the Purchaser,
except as required by applicable law, and that this Subscription Agreement shall
survive the death or disability of the Purchaser and shall be binding upon and
inure to the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives, and permitted assigns. If the Purchaser is
more than one person, the obligations of the Purchaser hereunder shall be joint
and several and the agreements, representations, warranties, and acknowledgments
herein shall be deemed to be made by and be binding upon each such person and
such person's heirs, executors, administrators, successors, legal
representatives, and permitted assigns.

 

8.             Modification. This Subscription Agreement shall not be modified
or waived except by an instrument in writing signed by the party against whom
any such modification or waiver is sought.

 

9.             Immaterial Modifications to the Registration Rights Agreement.
The Company may, at any time prior to the First Closing, modify the
Registration Rights Agreement if necessary to clarify any provision therein,
without first providing notice or obtaining prior consent of the Purchaser, if,
and only if, such modification is not material in any respect.

 

10.           Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be deemed effectively given:
(a) upon personal delivery to the party notified, (b) when sent by confirmed
email or facsimile if sent during normal business hours of the recipient, if not
confirmed, then on the next business day, (c) five days after having been sent
by registered or certified mail, return receipt requested, postage prepaid, or
(d) one day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. The Company
and the Purchaser hereby consent to the delivery of communications and notices
to such parties at their respective address, email or facsimile number set forth
on the signature page hereto, or to such other address as such party shall have
furnished in writing in accordance with the provisions of this Section 10.

 

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11.           Assignability. This Subscription Agreement and the rights,
interests and obligations hereunder are not transferable or assignable by the
Purchaser and the transfer or assignment of the Shares or the Conversion
Securities shall be made only in accordance with all applicable laws.

 

12.           Applicable Law. This Subscription Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts to be wholly-performed within said State.

 

13.           Arbitration. The parties agree to submit all controversies to
arbitration in accordance with the provisions set forth below and understand
that:

 

(a)           Arbitration is final and binding on the parties.

 

(b)           The parties are waiving their right to seek remedies in court,
including the right to a jury trial.

 

(c)           Pre-arbitration discovery is generally more limited and different
from court proceedings.

 

(d)           The arbitrator’s award is not required to include factual findings
or legal reasoning and any party’s right to appeal or to seek modification of
rulings by arbitrators is strictly limited.

 

(e)           The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry.

 

(f)            All controversies which may arise between the parties concerning
this Subscription Agreement shall be determined by arbitration pursuant to the
rules then pertaining to the Financial Industry Regulatory Authority, Inc.
(“FINRA”) in New York City, New York. Judgment on any award of any such
arbitration may be entered in the Supreme Court of the State of New York or in
any other court having jurisdiction of the person or persons against whom such
award is rendered. Any notice of such arbitration or for the confirmation of any
award in any arbitration shall be sufficient if given in accordance with the
provisions of this Agreement. The parties agree that the determination of the
arbitrators shall be binding and conclusive upon them.

 

14.           Blue Sky Qualification. The purchase of Shares under this
Subscription Agreement is expressly conditioned upon the exemption from
qualification of the offer and sale of the Shares from applicable federal and
state securities laws. The Company shall not be required to qualify this
transaction under the securities laws of any jurisdiction and, should
qualification be necessary, the Company shall be released from any and all
obligations to maintain its offer, and may rescind any sale contracted, in the
jurisdiction.

 

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15.           Use of Pronouns. All pronouns and any variations thereof used
herein shall be deemed to refer to the masculine, feminine, neuter, singular or
plural as the identity of the person or persons referred to may require.

 

16.           Confidentiality. The Purchaser acknowledges and agrees that any
information or data the Purchaser has acquired from or about the Company or the
Subsidiary, not otherwise properly in the public domain, was received in
confidence. The Purchaser agrees not to divulge, communicate or disclose, except
as may be required by law or for the performance of this Agreement, or use to
the detriment of the Company or the Subsidiary or for the benefit of any other
person or persons, or misuse in any way, any confidential information of the
Company or the Subsidiary, including any scientific, technical, trade or
business secrets of the Company or the Subsidiary and any scientific, technical,
trade or business materials that are treated by the Company or the Subsidiary as
confidential or proprietary, including, but not limited to, ideas, discoveries,
inventions, developments and improvements belonging to the Company or the
Subsidiary and confidential information obtained by or given to the Company or
the Subsidiary about or belonging to third parties.

 

17.           Miscellaneous.

 

(a)           This Subscription Agreement, together with the Registration Rights
Agreement, constitute the entire agreement between the Purchaser and the Company
with respect to the subject matter hereof and supersede all prior oral or
written agreements and understandings, if any, relating to the subject matter
hereof. The terms and provisions of this Subscription Agreement may be waived,
or consent for the departure therefrom granted, only by a written document
executed by the party entitled to the benefits of such terms or provisions.

 

(b)           The representations and warranties of the Purchaser made in this
Subscription Agreement shall survive the execution and delivery hereof and
delivery of the Shares constituting the Shares.

 

(c)           Each of the parties hereto shall pay its own fees and expenses
(including the fees of any attorneys, accountants, appraisers or others engaged
by such party) in connection with this Subscription Agreement and the
transactions contemplated hereby whether or not the transactions contemplated
hereby are consummated.

 

(d)           This Subscription Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.

 

(e)           Each provision of this Subscription Agreement shall be considered
separable and, if for any reason any provision or provisions hereof are
determined to be invalid or contrary to applicable law, such invalidity or
illegality shall not impair the operation of or affect the remaining portions of
this Subscription Agreement.

 

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(f)            Paragraph titles are for descriptive purposes only and shall not
control or alter the meaning of this Subscription Agreement as set forth in the
text.

 

(g)           The Purchaser understands and acknowledges that there may be
multiple closings for this Offering.

 

18.           Omnibus Signature Page. This Subscription Agreement is intended to
be read and construed in conjunction with the Registration Rights Agreement
pertaining to the issuance by the Company of the Shares to subscribers pursuant
to the Memorandum. Accordingly, pursuant to the terms and conditions of this
Subscription Agreement and such related agreements it is hereby agreed that the
execution by the Purchaser of this Subscription Agreement, in the place set
forth herein, shall constitute agreement to be bound by the terms and conditions
hereof and the terms and conditions of the Registration Rights Agreement, with
the same effect as if each of such separate but related agreement were
separately signed.

 

19.           Book Entry Registration of the Shares. The Company will issue the
Shares and the shares of Common Stock underlying the Series A Preferred and/or
the Series A-1 Preferred by registering them in book entry form with the
Company's transfer agent in Investor’s name and the applicable restrictions will
be noted in the records of the Company's transfer agent and in the book entry
system, except for investments made via custodian accounts such as Pensions and
IRA's in which case physical certificates evidencing the shares and warrants
will be issued if so requested.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

11

 

 

PRIVATE PLACEMENT OFFERING OF

DarioHealth Corp.

 

SUBSCRIPTION INSTRUCTIONS

 

To subscribe for Shares in the private offering of DarioHealth Corp.:

 

1.Date and Fill in the number of Shares being purchased and Complete and Sign
the Omnibus Signature Page to the Subscription Agreement (page 14).

 

2.Initial the Accredited Investor Certification page attached to the
Subscription Agreement (pages 15-16).

 

3.Complete and return the Investor Profile (page 17).

 

4.Complete and Sign the Tax Certification for U.S. Persons or Non-U.S. Persons,
as applicable (beginning on page 19).

 

5.Fax or e-mail all forms to Tierney S. Picardal at 347-772-3121/
inbox@sternaegis.com.

 

6.Please wire funds directly to the escrow account pursuant to the following
instructions (unless other arrangements have been made); checks cannot be
accepted:

 

Bank Name: Signature Bank   Bank Address: 950 Third Avenue, NY, NY 10022 (IF
wiring banker requests this info)   ABA Number: 026013576   SWIFT CODE: SIGNUS33
  A/C Name: Signature Bank, as Agent for DarioHealth Corp.   DarioHealth Corp.
Address (if requested): 8 HaTokhen Street, Caesarea Industrial Park   Israel
3088900   A/C Number: 1503781596   REF. outgoing wire with the following
information   FBO: Investor Name         SSN/TIN       Address  

 

12

 

 

ANTI MONEY LAUNDERING REQUIREMENTS

 

 

The USA PATRIOT Act

 

What is money laundering? How big is the problem and why is it important?

 

The USA PATRIOT Act is designed to detect, deter, and punish terrorists in the
United States and abroad. The Act imposes new anti-money laundering requirements
on brokerage firms and financial institutions. Since April 24, 2002 all
brokerage firms have been required to have new, comprehensive anti-money
laundering programs.

 

To help you understand these efforts, we want to provide you with some
information about money laundering and the Placement Agent’s efforts to
implement the USA PATRIOT Act.

 

Money laundering is the process of disguising illegally obtained money so that
the funds appear to come from legitimate sources or activities. Money laundering
occurs in connection with a wide variety of crimes, including illegal arms
sales, drug trafficking, robbery, fraud, racketeering, and terrorism.

 

The use of the U.S. financial system by criminals to facilitate terrorism or
other crimes could well taint our financial markets. According to the U.S. State
Department, one recent estimate puts the amount of worldwide money laundering
activity at $1 trillion a year.

 

What the Placement Agent is required to do to help eliminate money laundering?

 

Under new rules required by the USA PATRIOT Act, the Placement Agent’s
anti-money laundering program must designate a special compliance officer, set
up employee training, conduct independent audits, and establish policies and
procedures to detect and report suspicious transaction and ensure compliance
with the new laws.

 

As part of the Placement Agent’s required program, it may ask you to provide
various identification documents or other information. Until you provide the
information or documents that the Placement Agent needs, it may not be able to
effect any transactions for you.

 

13

 

 

DarioHealth Corp.

OMNIBUS SIGNATURE PAGE TO THE

SUBSCRIPTION AGREEMENT AND Registration Rights AGREEMENT

 

Subscriber hereby elects to subscribe under the Subscription Agreement for a
total of $__________ of Series A Preferred / Series A-1 Preferred (circle one)
Shares at a price of $1,000.00 per Share (NOTE: to be completed by subscriber)
and, by execution and delivery hereof, Subscriber hereby executes the
Subscription Agreement and agrees to be bound by the terms and conditions of the
Subscription Agreement and the Registration Rights Agreement.

 

If the Purchaser is an INDIVIDUAL, and if purchased as JOINT TENANTS, as TENANTS
IN COMMON, or as COMMUNITY PROPERTY:

 

      Print Name(s)   Social Security Number(s)             Signature(s) of
Subscriber(s)   Signature             Date   Address

 

If the Purchaser is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY or
TRUST:

 

      Name of Entity   Federal Taxpayer     Identification Number       By:    
    Name:   State of Organization   Title:                 Date   Address      
      Fax Number   Email Address       DarioHealth Corp.   AEGIS CAPTIAL CORP.  
          By:   By:   Authorized Officer     Authorized Officer

 

14

 

 

DarioHealth Corp.

ACCREDITED INVESTOR CERTIFICATION

 

For Individual Investors Only

(all Individual Investors must INITIAL where appropriate):

 

Initial _______          I have an individual net worth, or joint net worth with
my spouse, as of the date hereof in excess of $1 million. For purposes of
calculating net worth under this category, (i) the undersigned’s primary
residence shall not be included as an asset, (ii) indebtedness that is secured
by the undersigned’s primary residence, up to the estimated fair market value of
the primary residence at the time of the sale of securities, shall not be
included as a liability, (iii) to the extent that the indebtedness that is
secured by the primary residence is in excess of the fair market value of the
primary residence, the excess amount shall be included as a liability, and (iv)
if the amount of outstanding indebtedness that is secured by the primary
residence exceeds the amount outstanding 60 days prior to the execution of this
Subscription Agreement, other than as a result of the acquisition of the primary
residence, the amount of such excess shall be included as a liability.

 

Initial _______          I have had an annual gross income for the past two
years of at least $200,000 (or $300,000 jointly with my spouse) and expect my
income (or joint income, as appropriate) to reach the same level in the current
year.

 

Initial _______          I am a director or executive officer of DarioHealth
Corp.

 

For Non-Individual Investors

(all Non-Individual Investors must INITIAL where appropriate):

 

Initial _______          The investor certifies that it is a partnership,
corporation, limited liability company or business trust that is 100% owned by
persons who meet at least one of the criteria for Individual Investors set forth
above.

 

Initial _______          The investor certifies that it is a partnership,
corporation, limited liability company or any organization described in
Section 501(c)(3) of the Internal Revenue Code, Massachusetts or similar
business trust that has total assets of at least $5,000,000f and was not formed
for the purpose of investing the Company.

 

Initial _______          The investor certifies that it is an employee benefit
plan within the meaning of the Employee Retirement Income Security Act of 1974,
whose investment decision is made by a plan fiduciary (as defined in ERISA
§3(21)) that is a bank, savings and loan association, insurance company or
registered investment adviser.

 

Initial _______           The investor certifies that it is an employee benefit
plan whose total assets exceed $5,000,000 as of the date of this Agreement.

 

15

 

 

Initial _______          The undersigned certifies that it is a self-directed
employee benefit plan whose investment decisions are made solely by persons who
meet either of the criteria for Individual Investors.

 

Initial _______          The investor certifies that it is a U.S. bank, U.S.
savings and loan association or other similar U.S. institution acting in its
individual or fiduciary capacity.

 

Initial _______          The undersigned certifies that it is a broker-dealer
registered pursuant to §15 of the Securities Exchange Act of 1934.

 

Initial _______          The investor certifies that it is an organization
described in §501(c)(3) of the Internal Revenue Code with total assets exceeding
$5,000,000 and not formed for the specific purpose of investing in the Company.

 

Initial _______          The investor certifies that it is a trust with total
assets of at least $5,000,000, not formed for the specific purpose of investing
in the Company, and whose purchase is directed by a person with such knowledge
and experience in financial and business matters that he is capable of
evaluating the merits and risks of the prospective investment.

 

Initial _______         The investor certifies that it is a plan established and
maintained by a state or its political subdivisions, or any agency or
instrumentality thereof, for the benefit of its employees, and which has total
assets in excess of $5,000,000.

 

Initial _______          The investor certifies that it is an insurance company
as defined in §2(13) of the Securities Act, or a registered investment company.

 

Initial _______          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.

 

Initial _______          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.

 

Initial _______           A private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940.

 

16

 

 

DarioHealth Corp.

Investor Profile (Must be completed by Investor)

 

Section A - Personal Investor Information

For All Purchasers

Certificate Title:
______________________________________________________________________________

Individual(s) executing this subscription:
__________________________________________________________

Social Security Number(s) for all signatories: ________________________________

Entity Federal I.D. Number: _____________________________________________

Date(s) of Birth: ______________

Marital Status: _______________

Years Investment Experience: ______________

Aegis Capital Acct Executive or Outside Broker/Dealer: ______ /Aegis Rep 3-Digit
I.D._____/Aegis Acct #_______

Check if you are a FINRA member or affiliate of a FINRA member firm: ____

Check Investment Objective(s) (See definitions on following page):
____Preservation of Capital ____Income

____Capital Appreciation ____Trading Profits ____Speculation

____Other (please specify)

The source of funds for this investment is my personal or my entity's assets 
_____Yes   _____No

 

For Purchasers as Individual or as Joint Tenants, Tenants in Common, and
Community Property

Annual Income(s): ___________________

Liquid Net Worth(s):__________________

Net Worth(s) (excluding value of primary residence): ________________

Select Tax Bracket(s): ____ 15% or below ____ 25% - 27.5% ____ Over 27.5%

 

For All Purchasers, by the Primary Contact

Home Street Address:
______________________________________________________________________

Home City, State & Zip Code:
_______________________________________________________________

Home Phone: ___________________ Home Fax: _________________Home Email:
____________________

Employer: ___________________________________

Type of Business: _____________________________

Employer Street Address:
___________________________________________________________________

Employer City, State & Zip Code:
____________________________________________________________

Bus. Phone: _____________________Bus. Fax: ___________________Bus. Email:
____________________

 

For All Purchasers

If you are a United States citizen, please list the number and jurisdiction of
issuance of any other government-issued document evidencing residence and
bearing a photograph or similar safeguard (such as a driver’s license or
passport), and provide a photocopy of each of the documents you have listed.

If you are NOT a United States citizen, for each jurisdiction of which you are a
citizen or in which you work or reside, please list (i) your passport number and
country of issuance or (ii) alien identification card number AND (iii) number
and country of issuance of any other government-issued document evidencing
nationality or residence and bearing a photograph or similar safeguard, and
provide a photocopy of each of these documents you have listed. These
photocopies must be certified by a lawyer as to authenticity.

Government-Issued Identification Document Number(s) and
Jurisdiction(s):_______________________

In addition, please provide a legible photocopy of your Identification
Document(s) with your subscription

 

Section B – Securities Delivery Instructions

____ Please deliver securities to the Employer Address listed in Section A.

____ Please deliver securities to the Home Address listed in Section A.

____ Please deliver securities to the following address:
_____________________________________________

 

Section C –Wire Transfer Instructions

____ I will wire funds from my outside account according to the “Subscription
Instructions” Page.

____ I will wire funds from my Aegis Capital Account.

____The funds for this investment are rolled over, tax deferred from __________
within the allowed 60 day window.

 

        Investor Signature   Date                   Investor Signature   Date  

 

17

 

 

Investment Objectives: The typical investment listed with each objective are
only some examples of the kinds of investments that have historically been
consistent with the listed objectives. However, neither the Company nor the
Placement Agent can assure that any investment will achieve your intended
objective. You must make your own investment decisions and determine for
yourself if the investments you select are appropriate and consistent with your
investment objectives.

 

Neither the Company nor the Placement Agent assumes responsibility to you for
determining if the investments you selected are suitable for you.

 

Preservation of Capital: An investment objective of Preservation of Capital
indicates you seek to maintain the principal value of your investments and are
interested in investments that have historically demonstrated a very low degree
of risk of loss of principal value. Some examples of typical investments might
include money market funds and high quality, short-term fixed income products.

 

Income: An investment objective of Income indicates you seek to generate income
from investments and are interested in investments that have historically
demonstrated a low degree of risk of loss of principal value. Some examples of
typical investments might include high quality, short and medium-term fixed
income products, short-term bond funds and covered call options.

 

Capital Appreciation: An investment objective of Capital Appreciation indicates
you seek to grow the principal value of your investments over time and are
willing to invest in securities that have historically demonstrated a moderate
to above average degree of risk of loss of principal value to pursue this
objective. Some examples of typical investments might include common stocks,
lower quality, medium-term fixed income products, equity mutual funds and index
funds.

 

Trading Profits: An investment objective of Trading Profits indicates you seek
to take advantage of short-term trading opportunities, which may involve
establishing and liquidating positions quickly. Some examples of typical
investments might include short-term purchases and sales of volatile or low
priced common stocks, put or call options, spreads, straddles and/or
combinations on equities or indexes. This is a high-risk strategy.

 

Speculation: An investment objective of Speculation indicates you seek a
significant increase in the principal value of your investments and are willing
to accept a corresponding greater degree of risk by investing in securities that
have historically demonstrated a high degree of risk of loss of principal value
to pursue this objective. Some examples of typical investments might include
lower quality, long-term fixed income products, initial public offerings,
volatile or low priced common stocks, the purchase or sale of put or call
options, spreads, straddles and/or combinations on equities or indexes, and the
use of short-term or day trading strategies.

 

Other: Please specify.

 

18