Exhibit 10.1


 


 


SECURITIES PURCHASE AGREEMENT


 


This SECURITIES
PURCHASE AGREEMENT (this “Agreement”) is dated as of March 3, 2016, by and among LabStyle Innovations
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 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.


 


“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.


 






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“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.


 


“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.


 


“Purchase
Price” means $4.50 per Unit.


 


“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.


 


“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.


 


“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).


 






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“Transaction
Documents” means this Agreement, the Warrants, 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.


 


“Units”
means units sold in the transaction contemplated hereunder, each consisting of

(i) one (1) share (the “Shares”) of Common Stock, par value $0.0001 per share (the “Common Stock”),
and (ii) a Series A warrant to purchase 1.2 shares of Common Stock at an exercise price of $4.5 per share exercisable over a period
of five years (the “Series A Warrant”).


 


“Warrants”
means, the Series A 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, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, an aggregate of $2,500,000 of Units 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 2.2(a). The aggregate number of Units sold hereunder shall be up to 555,555. Prior to Closing, each Purchaser shall deliver
to the Company, via wire transfer of immediately available funds, pursuant to the wire transfer instructions set forth as Exhibit
C, cash equal to its Subscription Amount, and as of the Closing (i) the Company shall deliver to each Purchaser the Units as
determined pursuant to Section 2.2(a), and (ii) the Company and each Purchaser shall deliver the other items set forth in Section
2.2 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 2.2 to be delivered by such other Purchaser. Upon satisfaction of the covenants
and conditions set forth in Sections 2.2 and 2.3, 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           Deliveries.




 


(a)           In
connection with the Closing, the Company shall deliver or cause to be delivered to each Purchaser the following:


 


 (i)           on or prior to the Closing Date, this Agreement duly executed by the Company;




 


(ii)           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 the Closing, be the record holder of such Shares);


 






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(iii)           within
five (5) Business Days of the Closing Date, the Warrants registered in the name of such Purchaser.


 


(b)           In
addition to delivering the Subscription Amount as contemplated by Section 2.1, on or prior to the Closing Date, each Purchaser
shall deliver or cause to be delivered to the Company the following:


 


(i)           this
Agreement duly executed by such Purchaser;


 


(ii)           if
you are an individual, provide a copy of your photo identification (eg., Driver’s License or Passport); and


 


(iii)          any
other subscription documents requested by the Company, duly executed by such Purchaser.


 


 2.3           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 Closing 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(b) of this Agreement.


 


 


(b)           The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being
met:


 


(i)           the
accuracy in all material respects when made and on the Closing 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);


 


(ii)           all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;



 


(iii)           the
Company shall have received all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities; and


 


(iv)           the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement.


 






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ARTICLE III.


REPRESENTATIONS AND WARRANTIES


 


3.1           Representations
and Warranties of the Company. 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 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.


 






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(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)
notices to existing investors in connection with affording such investors any existing pre-emptive or participation rights held
by such existing investors (the “Participation Rights”), and (ii) 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, (collectively, the “Required Approvals”).


 


(f)           Issuance
of the Securities. The Units and Shares are duly authorized 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.


 






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(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,
2,997,201 are issued and outstanding, and 3,540,055 shares are reserved for issuance pursuant to securities (other than the Warrants)
exercisable or exchangeable for, or convertible into, shares of Common Stock and (ii) 5,000,000 shares of preferred stock, of which
35,600 are issued and outstanding and classified as Series A Convertible Preferred Stock. 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. 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. 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.


 






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(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.


 


(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.


 


(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.


 






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(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.


 


(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 (collectively, the “Intellectual
Property Rights”). None of, and neither the Company nor any Subsidiary has received a written notice that any of, the
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. However,
the Company is currently involved in a trademark opposition proceeding in Israel regarding the use the Dario logo in connection
with software. The Company expects that this opposition will be settled shortly 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.


 


(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. Except as set forth in Schedule 3(q) hereto and in the SEC Reports, 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 too 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.


 





 



 


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.




 






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(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)           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.


 


(t)           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.


 


(u)           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.


 






    	 	10	 



     


    

 


(v)           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.


 


(w)           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.


 


(x)           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. 


 


(y)           Tax
Status. 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.


 


(z)           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 (ii) “non-US
persons” as defined in Regulation S as promulgated under the Securities Act.


 


(aa)           Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor 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 any provision of FCPA.


 


(bb)           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.


 






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(cc)           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”).


 


(dd)           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.


 


(ee)           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.


 


(ff)           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.


 


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.


 






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(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.


 


(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)           General
Solicitation. Such Purchaser is not purchasing the Securities (i) 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; or (ii) as a result of any of the Current
Reports on Form 8-K filed by the Company with the Commission on July 23, 2015, August 28, 2015, November 2, 2015, November 19,
2015 and December 22, 2015 or anything contained therein; or (iii) as a result of the Company’s Quarterly Reports on Form


10-Q filed by the Company with the Commission on August 12, 2015 and on November 13, 2015 or anything
contained therein; or (iv) as a result of the Company’s Annual Report on Form 10-K filed by the Company with the Commission
on February 8, 2016 or anything contained therein; or (v) as a result of the Company's Registration Statement on Form S-1 and any
amendments thereto, filed by the Company with the Commission on January 15, 2016, February 17, 2016 and February 25, 2016 or anything
contained therein. 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. 


 






    	 	13	 



     


    

 


(f)           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 Units and the merits and risks of investing in the Units; (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.  


 


(g)           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 B-1.


 


(h)           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). 


 


(i)           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). 


 


ARTICLE IV.


OTHER AGREEMENTS OF THE PARTIES


 


4.1           Transfer
Restrictions.


 


(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.


 






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(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.”


 



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(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.


 


4.3           Furnishing
of Information. For so long as any Purchaser is an “affiliate” (as defined in 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, and the Company shall not terminate its status as
an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would
no longer require or otherwise permit such termination, and the Company shall take all reasonable actions to maintain its eligibility
to register the Common Stock and Warrant Shares for resale by the Purchasers on Form S-3.


 


4.4           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 in a manner that would require
the registration under the Securities Act of the sale of the Securities.


 


4.5           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.


 


4.6           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.


 


4.7           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.


  



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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 4.9.


 


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.


  


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 March 8, 2016, provided, however, that such termination
will not affect the right of any party to sue for any breach by any other party (or parties).


 






    	 	17	 



     


    

 


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 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 and exhibits.


 


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 (2nd) 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 holder of 51% 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.


 






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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           Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.


 


5.12           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.


 


5.13           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.


 


5.14           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.


 


5.15           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.


 






    	 	19	 



     


    

 


5.16           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.


 


5.17           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.


 


  


(Signature Pages Follow)


 


 


 


 




    	 	20	 



     


    

 


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.


 





	LABSTYLE INNOVATIONS CORP.
	 	 
	 	 
	By: 	__________________________________________
	 	Name:
	 	Title:
	 	 
	Address for Notice:
	 
	9 Halamish Street
	Caesarea Industrial Park
	3088900, Israel
	Fax Number: +(972)-(4) 770 4060
	 	 
	With a copy to (which shall not constitute notice):
	 	 
	ZAG/S&W LLP
	1633 Broadway
	New York, NY 10019
	Fax Number: (212) 660-3001
	Attention: Oded Har-Even, Esq.




 


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE PAGE FOR PURCHASER FOLLOWS]


 


 




    	 	21	 



     


    

 


PURCHASER SIGNATURE PAGES


 


(FOR NON-U.S. PERSONS)


 


 


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.


 


 


Subscription Amount: ____________


 


# of Units Purchased (@ $[________] per Unit): ____________


 


 


If Investor is an entity, sign here:



________________________________

(Name of entity)


 

By: ____________________________________




Name:__________________________________




Title: ___________________________________



 







If Investor is an individual, sign here:



Signature: _______________________________



Print Name: ______________________________






 


 


PLEASE COMPLETE FOLLOWING INFORMATION
FOR NOTICES:


 


Email Address: ___________________________________________


 


Facsimile Number: _________________________________________


 


Address for Notice to Investor:


 


  


Offshore Address for Delivery
of Securities to Investor (if not same as address for notice):


 


 






    	 	22	 



     


    




   


EXHIBIT A


 


Form of Series A Warrant


 


NEITHER THIS SECURITY NOR THE SECURITIES
INTO WHICH THIS SECURITY IS EXERCISABLE HAS 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE COMPANY
TO SUCH EFFECT. 


  


 


	Warrant No.                        	March [___], 2016


 


LABSTYLE INNOVATIONS CORP.


Series
A Common Stock Purchase Warrant


 


THIS CERTIFIES THAT,
for value received, [___________________________] (the “Holder”), is entitled to subscribe for
and purchase, at the Exercise Price (as defined below), from LabStyle Innovations Corp., a Delaware corporation (the “Company”),
shares of the Company’s common stock, par value $0.0001 (the “Common Stock”), at any time prior
to 5:00 p.m., New York time, on March [__], 2021 (the “Warrant Exercise Term”).


 


This Warrant is issued
in accordance with, and subject to, the terms and conditions described in the Securities Purchase Agreement, dated March [__],
2016, between the initial Holder and the Company (the “Purchase Agreement”) entered into in connection
with the private placement offering of the Company (the “Offering”) described in the Purchase Agreement.


 


All capitalized terms
used but not defined herein shall have the meanings ascribed to them in the Purchase Agreement.


 


This Warrant is subject to the following
terms and conditions:


 


1.           Shares.
The Holder has, subject to the terms set forth herein, the right to purchase up to an aggregate of [_______] shares of Common Stock
(the “Warrant Shares”) at a per share exercise price of $[______], subject to adjustment
as provided for herein (the “Exercise Price”).


 


2.           Exercise of
Warrant.


 


(a)           Exercise.
This Warrant may be exercised by the Holder at any time prior to the Warrant Exercise Term, in whole or in part, by delivering
the notice of exercise attached as Exhibit A hereto (the “Notice of Exercise”), duly executed
by the Holder to the Company at its principal office, or at such other office as the Company may designate, accompanied by payment,
by wire transfer of immediately available funds to the order of the Company to an account designated by the Company, of the amount
obtained by multiplying the number of Warrant Shares designated in the Notice of Exercise by the Exercise Price (the “Purchase
Price”). For purposes hereof, “Exercise Date” shall mean the date on which all deliveries required
to be made to the Company upon exercise of this Warrant pursuant to this Section 2(a) shall have been made. The
Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. No originals of the Notice
of Exercise shall be required to be delivered, nor shall any medallion guarantee (or any other type of guarantee or notarization)
of any Notice of Exercise shall be required. 


 






    	 	23	 



     


    

 


(b)            Cashless Exercise.
 


 


(i) Notwithstanding
anything contained herein to the contrary, if and only if a registration statement covering the resale of all or any portion of
the Warrant Shares is not available for the resale of such Warrant Shares (such unregistered portion of the Warrant Shares, the
“Unavailable Warrant Shares”), the Holder may, in its sole discretion, exercise this Warrant solely with
respect to the Unavailable Warrant Shares and, in lieu of making the cash payment otherwise contemplated to be made to the Company
upon such exercise in payment of the aggregate Exercise Price for such Unavailable Warrant Shares, elect instead to exercise the
Warrant on a cashless basis as described in paragraph (ii) below.


 


(ii) Upon a “cashless
exercise”, the Holder shall be entitled to receive the number of Warrant Shares equal to the quotient obtained by dividing
(A-B) (X) by (A), where:


 


	 	(A)	= the VWAP on the Trading Day immediately preceding the Exercise Date;


 


	 	(B)	= the Exercise Price of the Warrant, as adjusted as set forth herein; and


 


	 	(X)	= the number of Warrant Shares that would be issuable upon exercise of the Warrant in accordance with the terms of the Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.


 


If the Warrant Shares are issued in such
a cashless exercise, the Company acknowledges and agrees that, in accordance with Section 3(a)(9) of the Securities Act, the Warrant
Shares shall take on the registered characteristics of the Warrants being exercised and the Company agrees not to take any position
contrary thereto.


 


(c)            Issuance of
Certificates. As soon as practicable after the exercise of this Warrant, in whole or in part, in accordance with Section 2(a)
hereof (and in no event later than two (2) Trading Days following the delivery of the Notice of Exercise), the Company, at its
expense, shall cause to be issued in the name of and delivered to the Holder: (i) a certificate or certificates for (or, if applicable,
by delivery through the facilities of the Depository Trust Company in electronic form of) the number of fully paid and non-assessable
Warrant Shares to which the Holder shall be entitled upon such exercise and, if applicable, (ii) a new warrant of like tenor to
purchase all of the Warrant Shares that may be purchased pursuant to the portion, if any, of this Warrant not exercised by the
Holder. The Holder shall for all purposes hereof be deemed to have become the Holder of record of such Warrant Shares on the date
on which the Notice of Exercise and payment of the Purchase Price in accordance with Section 2(a) hereof were delivered and made,
respectively, irrespective of the date of delivery of such certificate or certificates, except that if the date of such delivery,
notice and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become
the holder of record of such Warrant Shares at the close of business on the next succeeding date on which the stock transfer books
are open.


 






    	 	24	 



     


    

 


(d)           Taxes.
The issuance of the Warrant Shares upon the exercise of this Warrant, and the delivery of certificates or other instruments representing
such Warrant Shares, shall be made without charge to the Holder for any tax or other charge of whatever nature in respect of such
issuance and the Company shall bear any such taxes in respect of such issuance.


 


3.           Adjustment
of Exercise Price.


 


(a)           Adjustment
for Reclassification, Consolidation or Merger. If while this Warrant, or any portion hereof, remains outstanding and unexpired
there shall be (i) a reorganization or recapitalization (other than a combination, reclassification, exchange or subdivision of
shares otherwise provided for herein), (ii) a merger or consolidation of the Company with or into another corporation or other
entity in which the Company shall not be the surviving entity, or a reverse merger in which the Company shall be the surviving
entity but the shares of the Company’s capital stock outstanding immediately prior to the merger are converted by virtue
of the merger into other property, whether in the form of securities, cash or otherwise, or (iii) a sale or transfer of the Company’s
properties and assets as, or substantially as, an entirety to any other corporation or other entity in one transaction or a series
of related transactions, then, as a part of such reorganization, recapitalization, merger, consolidation, sale or transfer, unless
otherwise directed by the Holder, all necessary or appropriate lawful provisions shall be made so that the Holder shall thereafter
be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price
then in effect, the greatest number of shares of capital stock or other securities or property that a holder of the Warrant Shares
deliverable upon exercise of this Warrant would have been entitled to receive in such reorganization, recapitalization, merger,
consolidation, sale or transfer if this Warrant had been exercised immediately prior to such reorganization, recapitalization,
merger, consolidation, sale or transfer, all subject to further adjustment as provided in this Section 3. If the per share consideration
payable to the Holder for Warrant Shares in connection with any such transaction is in a form other than cash or marketable securities,
then the value of such consideration shall be determined in good faith by the Company’s Board of Directors. The foregoing
provisions of this paragraph shall similarly apply to successive reorganizations, recapitalizations, mergers, consolidations, sales
and transfers and to the capital stock or securities of any other corporation that are at the time receivable upon the exercise
of this Warrant. In all events, appropriate adjustment shall be made in the application of the provisions of this Warrant with
respect to the rights and interests of the Holder after the transaction, to the end that the provisions of this Warrant shall be
applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable or issuable
after such reorganization, recapitalization, merger, consolidation, sale or transfer upon exercise of this Warrant.


 


(b)           Adjustments
for Split, Subdivision or Combination of Shares. If while this Warrant, or any portion hereof, remains outstanding and unexpired
the Company shall subdivide (by any stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise)
the shares of Common Stock subject to acquisition hereunder, then, upon the effective date of such subdivision, the Exercise Price
in effect immediately prior to such subdivision will be proportionately reduced and the number of shares of Common Stock subject
to acquisition upon exercise of the Warrant will be proportionately increased. If the Company at any time combines (by reverse
stock split, recapitalization, reorganization, reclassification or otherwise) the shares of Common Stock subject to acquisition
hereunder, then, upon the effective date of such combination, the Exercise Price in effect immediately prior to such combination
will be proportionately increased and the number of shares of Common Stock subject to acquisition upon exercise of the Warrant
will be proportionately decreased.


 






    	 	25	 



     


    

 


(c)            Adjustment
Upon Issuance of Common Stock. If and whenever on or after the date hereof and prior to the date that is eight months from
the date hereof (March 8, 2017) (the “Applicable Period”), the Company issues, sells or delivers, or in accordance
with this Section 4 is deemed to have issued, sold or delivered, any Common Stock (including the issuance, sale or delivery of
Common Stock owned or held by or for the account of the Company, but excluding any Excluded Securities (as hereinafter defined)
issued or sold or deemed to have been issued, sold or delivered) for a consideration per share less than a price equal to the Exercise
Price in effect immediately prior to such issuance, sale or delivery or deemed issuance, sale or delivery (such Exercise Price
then in effect is referred to as the “Applicable Price”) (the foregoing a “Dilutive Issuance”),
then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to the New Issuance Price (as
hereinafter defined).


 


For all
purposes of the foregoing (including, without limitation, determining the adjusted Exercise Price and consideration per share under
this Section 3(c)), the following shall be applicable:


 


(i) Issuance of
Options. If the Company grants or sells any Options (as hereinafter defined) (other than Options that qualify as Excluded Securities)
during the Applicable Period and the lowest price per share for which one share is issuable upon the exercise of any such Option
or upon conversion, exercise or exchange of any Convertible Securities (as hereinafter defined) issuable upon exercise of any such
Option is less than the Applicable Price, then such share shall be deemed to be outstanding and to have been issued and sold or
delivered by the Company at the time of the granting or sale of such Option for the New Issuance Price. For purposes of this Section
3(c)(i), the “lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Options
or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option” shall be
equal to (1) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any
one share of Common Stock upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise
or exchange of any Convertible Security issuable upon exercise of such Option minus (2) the sum of all amounts paid or payable
to the holder of such Option (or any other person or entity) upon the granting or sale of such Option, upon exercise of such Option
and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option plus the value of any
other consideration received or receivable by, or benefit conferred on, the holder of such Option (or any other person or entity).
Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such shares
of Common Stock or of such Convertible Securities upon the exercise of such Options.


 


(ii) Issuance of
Convertible Securities. If the Company issues or sells any Convertible Securities (other than Convertible Securities that qualify
as Excluded Securities) during the Applicable Period and the lowest price per share for which one share of Common Stock is issuable
upon the conversion, exercise or exchange thereof is less than the Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold or delivered by the Company at the time of the issuance or sale of such Convertible
Securities for the New Issuance Price. For the purposes of this Section 3(c)(ii), the “lowest price per share for which one
share of Common Stock is issuable upon the conversion, exercise or exchange thereof” shall be equal to (x) the sum of the
lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the
issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security minus (2) the
sum of all amounts paid or payable to the holder of such Convertible Security (or any other person or entity) upon the issuance
or sale of such Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred
on, the holder of such Convertible Security (or any other person or entity). Except as contemplated below, no further adjustment
of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange
of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options
for which adjustment of Warrants has been or is to be made pursuant to other provisions of this Section 3(c), except as contemplated
below, no further adjustment of the Exercise Price shall be made by reason of such issue, sale or delivery.


 






    	 	26	 



     


    

 


(iii) Change in
Option Price. If during the Applicable Period the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for Common Stock increases or decreases at any time, the Exercise
Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been in effect
at such time had such revised terms been in effect. For purposes of this Section 3(c)(iii), if the terms of any Option or Convertible
Security that was outstanding as of the original issuance of the Warrants are increased or decreased in the manner described in
the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment
pursuant to this Section 3(c) shall be made if such adjustment would result in an increase of the Exercise Price then in effect.
[For purposes of clarity, if the Company enters into a Variable Rate Transaction (as hereinafter defined), the Company shall be
deemed to have issued Common Stock, Options or Convertible Securities at the lowest possible conversion or exercise price at which
such securities may be converted or exercised. For purposes herein, no Variable Rate Transaction shall be Excluded Securities.


 


(d)           Other Events.
If any event occurs of the type contemplated by the provisions of Section 3(a) or (b) but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights, Adjustment Rights, phantom stock rights or other rights
with equity features to all holders of Common Stock for no consideration), then the Company's Board of Directors will, at its discretion
and in good faith, make an adjustment in the Exercise Price and the number of Warrant Shares or designate such additional consideration
to be deemed issuable upon exercise of a Warrant, so as to protect the rights of the registered Holder. No adjustment to the Exercise
Price will be made pursuant to more than one sub-section of this Section 3 in connection with a single issuance.


 


(e)           Notice of Adjustments.
Upon any adjustment of the Exercise Price and any increase or decrease in the number of Warrant Shares purchasable upon the exercise
of this Warrant, then, and in each such case, the Company, within 15 days thereafter, shall give written notice thereof to the
Holder at the address of such Holder as shown on the books of the Company, which notice shall state the Exercise Price as adjusted
and, if applicable, the increased or decreased number of Warrant Shares purchasable upon the exercise of this Warrant, setting
forth in reasonable detail the method of calculation of each.


 


4.           Notices.
Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered in accordance
with Section 5.4 of the Purchase Agreement.


 


5.           Legends.
Unless the Warrant Shares are registered for resale with the Commission, each certificate evidencing the Warrant Shares issued
upon exercise of this Warrant shall be stamped or imprinted with a legend required pursuant to the Purchase Agreement.


 


6.           Removal of
Legend. Upon request of a holder of a certificate with the legends required by Section 5 hereof, the Company shall issue to
such holder a new certificate therefor free of any transfer legend, if, with such request, the Company shall have received an opinion
of counsel satisfactory to the Company in form and substance to the effect that any transfer by such holder of the Warrant Shares
evidenced by such certificate will not violate the Securities Act or any applicable state securities laws.


 






    	 	27	 



     


    

 


7.           Fractional
Shares. No fractional Warrant Shares will be issued in connection with any exercise hereunder. Instead, the Company shall round
up, as nearly as practicable to the nearest whole Share, the number of Warrant Shares to be issued.


 


8.           Rights of
Stockholders. Except as expressly provided herein, the Holder, as such, shall not be entitled to vote or be deemed the holder
of the Warrant Shares or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose,
nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification
of stock, change of par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or otherwise
until this Warrant shall have been exercised and the Warrant Shares purchasable upon the exercise hereof shall have been issued,
as provided herein.


 


9.           No Transfer.
This Warrant shall be assignable and transferable, provided that no such assignment and transfer shall be valid unless (a) the
same shall be valid under and undertaken in accordance with applicable law, rule or regulation and (b) the provisions of Sections
4.1 and 5.7 of the Purchase Agreement shall be adhered to as a condition to such transfer or assignment.


 


10.           Definitions.


 


As used herein, the following terms shall
have the following meanings:


 


“Adjustment Right” means any
right granted with respect to any securities issued in connection with, or with respect to, any issuance, sale or delivery (or
deemed issuance, sale or delivery in accordance with Section 3) of Common Stock (other than rights of the type described in Sections
3(a) and 3(b) hereof) that could result in a decrease in the net consideration received by the Company in connection with, or with
respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights)
but excluding anti-dilution and other similar rights (including pursuant to Section 3(c) of this Agreement).


 


“Approved Stock Plan”
means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent to the
date hereof pursuant to which Common Stock and options to purchase Common Stock may be issued to any employee, consultant, officer
or director or other service provider for services provided to the Company in their capacity as such.


 


“Convertible Securities”
means any notes, rights, warrants or other securities (other than Options) that are at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, shares
of Common Stock.


 






    	 	28	 



     


    

 


“Excluded Securities”
means (1) Common Stock or options or other rights to purchase Common Stock or other awards issued to directors, officers, employees,
consultants or other service providers of the Company in their capacity as such pursuant to an Approved Stock Plan, provided that
(A) all such issuances (taking into account the Common Stock issuable upon exercise of such options) after the date hereof pursuant
to this clause (i) do not, in the aggregate, exceed more than 30% of the Common Stock issued and outstanding immediately prior
to the date hereof; provided however, that such issuances to consultants or other service providers do not, in each instance in
the aggregate, exceed more than 5% of the Common Stock issued and outstanding immediately prior to the date hereof, and (B) the
exercise price of any such options is not lowered, none of such options are amended to increase the number of shares issuable thereunder
in each case other than pursuant to the terms hereof (including any anti-dilution provisions contained therein) and none of the
terms or conditions of any such options are otherwise materially changed in any manner that adversely affects any of the holders
of Warrants; (2) Common Stock issued upon the conversion or exercise of Convertible Securities (other than options or other rights
to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) issued prior to the date
hereof, provided that the conversion price of any such Convertible Securities (other than options or other rights to purchase Common
Stock issued pursuant to an Approved Stock Plan that are covered by clause (1) above) is not lowered through the amendment or waiver
of such Convertible Security, none of such Convertible Securities (other than options or other rights to purchase Common Stock
issued pursuant to an Approved Stock Plan that are covered by clause (1) above) are amended to increase the number of shares issuable
thereunder and none of the terms or conditions of any such Convertible Securities (other than options or other rights to purchase
Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (1) above) are otherwise materially changed in
any manner that adversely affects any of the holders of Warrants; (3) Common Stock issuable upon exercise of the Warrants; and
(4) securities issuable in connection with strategic license agreements, other partnering arrangements or acquisitions or mergers
where the purchaser or acquirer of the securities in such issuance solely consists of (A) either (x) the actual participants in
such strategic license, strategic alliance, strategic partnership or other partnering arrangements, (y) the actual owners of such
assets or securities acquired in such acquisition or merger or (z) the stockholders, partners or members of the foregoing persons
or entities and (B) number or amount of securities issued to such person or entity by the Company shall not be disproportionate
(as determined in good faith by the Board of Directors of the Company) to either (x) the fair market value of such person’s
or entity’s actual contribution to such strategic alliance or strategic partnership or (y) the proportional ownership of
such assets or securities to be acquired by the Company, as applicable; provided, that, notwithstanding the foregoing, such purchaser
or acquirer of the securities in such issuance shall not include any person regularly engaged in the business of buying or selling
securities.


 


“New Issuance Price”
means a price (calculated to the nearest cent) determined in accordance with the following formula:


 


EP2 = EP1* (A + B)
÷ (A + C).


 


For purposes of the foregoing formula,
the following definitions shall apply:


 


	 	(a)	“EP2” shall mean the adjusted Exercise Price;


 


	 	(b)	“EP1” shall mean the Exercise Price in effect immediately prior to such issuance of Common Stock;


 


	 	(c)	“A” shall mean the number of shares of Common Stock outstanding immediately prior to such issue of additional Common Stock including the issuance, sale or delivery of Common Stock owned or held by or for the account of the Company, (treating for this purpose as outstanding all shares of Common Stock issuable upon exercise of Options outstanding immediately prior to such issue or upon conversion or exchange of Convertible Securities outstanding (assuming exercise of any outstanding Options therefor) immediately prior to such issue);  


 


	 	(d)	“B” shall mean the number of shares of Common Stock that would have been issued if such additional shares of Common Stock had been issued at an Exercise Price equal to EP1 (determined by dividing the aggregate consideration received by the Company in respect of such issue by EP1); and


 


	 	(e)	“C” shall mean the number of such additional shares of Common Stock issued in such transaction.


 






    	 	29	 



     


    

 


“Options” means any
rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.


 


“Trading Day” means any day
on which the Common Stock is traded on the Trading Market, or, if the Trading Market is not the principal trading market for the
Common Stock, then on the principal securities exchange or securities market in the United States on which the the Common Stock
is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is are scheduled to
trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time
of trading on such exchange or market, then during the hour ending at 4:00 P.M., New York City time).


 


“Trading Market” means NYSE
MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange.


 


“Variable Rate Transaction”
means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable
or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise
price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the Common
Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price
that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence
of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock
or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities
at a future determined price.


 


“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) the volume weighted average price of the Common Stock
for such date (or the nearest preceding date) on the Nasdaq Capital Market, (c) if the Common Stock are not then listed or quoted
for trading on the Nasdaq Capital Market and if prices for the Common Stock are then reported in the OTCQB maintained 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 Common Stock so reported, or (d) in all other cases, the fair market value of the Common Stock as determined by an independent
appraiser selected in good faith by the Company, the fees and expenses of which shall be paid by the Company.


 


11.           Miscellaneous.


 


(a)           This Warrant
and disputes arising hereunder shall be governed by and construed and enforced in accordance with the laws of the State of Delaware
applicable to agreements made and to be performed wholly within such State, without regard to its conflict of law rules. Any action
brought by either party against the other concerning the transaction contemplated by this Warrant shall be brought only in the
state courts of Delaware or in the federal courts located in the state of Delaware. The parties to this Warrant hereby irrevocably
waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens. The Company and Holder waive trial by jury.


 






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(b)           The headings
in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.


 


(c)           The covenants
of the respective parties contained herein shall survive the execution and delivery of this Warrant.


 


(d)           The terms of
this Warrant shall be binding upon and shall inure to the benefit of any successors or permitted assigns of the Company and of
the Holder and of the Warrant Shares issued or issuable upon the exercise hereof.


 


(e)           This Warrant
and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties
with regard to the subject hereof.


 


(f)           The Company
shall not, by amendment of its Certificate of Incorporation or Bylaws, or through any other means, directly or indirectly, avoid
or seek to avoid the observance or performance of any of the terms of this Warrant and shall at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder contained herein against impairment.


 


(g)           Upon receipt
of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case
of any such loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the
Company, or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company, at its expense,
will execute and deliver to the Holder, in lieu thereof, a new Warrant of like date and tenor.


 


(h)           This Warrant
and any provision hereof may be amended, waived or terminated only by an instrument in writing signed by the Company and the Holder.


 


(i)           The remedies
provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction
Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein
shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant.
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened
breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining
any breach, without the necessity of showing economic loss and without any bond or other security being required.


  


 


IN WITNESS WHEREOF,
the Company has caused this Warrant to be signed by its duly authorized officer.


 


 





	 	LABSTYLE INNOVATIONS CORP.	 
	 	 	 	 
	 	 	 	 
	 	By: 	 	 
	 	 	Name: 	 
	 	 	Title:   	 
	 	 	 	 










 




    	 	31	 



     


    

 


Exhibit A


 


NOTICE OF EXERCISE


 


		TO:	LabStyle Innovations Corp., attention: President



 


The undersigned hereby
elects to purchase the below referenced shares (the “Warrant Shares”) of Common Stock of LabStyle Innovations
Corp. (the “Company”) pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase
price of such Warrant Shares in full. Payment of the purchase price is being made by:


 


		____________	 a cash exercise with respect to _________________ Warrant
Shares; or



		____________	 a "cashless exercise" with respect to _______________
Warrant Shares
	 	 	  (if permitted pursuant to Section 2(b) of the Warrant).



 


Please issue a certificate
or certificates representing said shares in the name of the undersigned or in such other name as is specified below:


 


		1.	Name: __________________________________________________



		2.	Address: ________________________________________________



		3.	DWAC Instructions (if applicable): ___________________________________________



 


The undersigned
hereby represents and warrants the following:


 


(a)            It (i) has
such knowledge and experience in financial and business affairs that he/she/it is capable of evaluating the merits and risks involved
in purchasing the Warrant Shares, (ii) is able to bear the economic risks involved in purchasing the Warrant Shares, and (iii)
is a “non-US person” as defined in Regulation S promulgated under the Securities Act of 1933, as amended;


 


(b)           In making the
decision to purchase the Warrant Shares, it has relied solely on independent investigations made by it and has had the opportunity
to ask questions of, and receive answers from, the Company concerning the Warrant Shares, the financial condition, prospective
business and operations of the Company and has otherwise had an opportunity to obtain any additional information, to the extent
that the Company possess such information or could acquire it without unreasonable effort or expense;


 


(c)            Its overall
commitment to investments that are not readily marketable is not disproportionate to its net worth and income, and the purchase
of the Warrant Shares will not cause such overall commitment to become disproportionate; it can afford to bear the loss of the
purchase price of the Warrant Shares;


 


(d)           It has no present
need for liquidity in its investment in the Warrant Shares; and


 


(e)           It acknowledges
that the transaction contemplated in connection with the purchase of the Warrant Shares has not been reviewed or approved 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 any of the securities contemplated hereby.


 


 





	 		 
	 	 (Signature and Date) 	 







 


 









    	 	32	 



     


    

 


EXHIBIT B-1 TO THE

SECURITIES PURCHASE AGREEMENT


 





 






 


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:


 


		1.	At the time of (a) the offer by the Company and (b) the acceptance of the offer by such person
or entity, of the Units, such person or entity was outside the United States.
	 	 	 



		2.	Such person or entity is acquiring the Units for such Purchaser’s own account, for investment
and not for distribution or resale to others and is not purchasing the Units 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.
	 	 	 



		3.	Such person or entity will make all subsequent offers and sales of the Units 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 Units
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.
	 	 	 



		4.	Such person or entity has no present plan or intention to sell the Units in the United States or
to a U.S. person at any predetermined time, has made no predetermined arrangements to sell the Units and is not acting as a distributor
of such securities.
	 	 	 



		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 Units at any time after the Closing Date through the Distribution Compliance
Period except in compliance with the Securities Act.
	 	 	 



		6.	Such person or entity consents to the placement of a legend on any certificate or other document
evidencing the Units substantially in the form set forth in Section 4.1.
	 	 	 



		7.	Such person or entity is not acquiring the Units 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.
	 	 	 



		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.



 






    	 	33	 



     


    




	 	 	 



		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 Units.
	 	 	 



		10.	Such person or entity understands the various risks of an investment in the Units 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 Units.
	 	 	 



		11.	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 Units.
	 	 	 



		12.	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 Units.
	 	 	 



		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.
	 	 	 



		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.
	 	 	 



		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.
	 	 	 



		16.	Such person or entity understands and acknowledges that the Units 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.
	 	 	 





    	 	34	 



     


    

 


Company Wiring Instructions


 


 


Bank Leumi USA - ABA# 026 00 2794


Account Name - Labstyle Innovations Corp


Account No - 22-660127-18


Swift LUMIUS3N


Bank address - 579 Fifth Avenue 5th Floor | New York


 


 


 


 


 


 


 






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