TOLLING
AND STANDSTILL AGREEMENT


 


This
tolling and standstill agreement (the “Agreement”) is made and entered into as of April 2, 2018 (the “Effective
Date”), among: (a) Schulte Roth & Zabel LLP, on behalf of Empery Asset Master, Ltd., Empery Tax Efficient LP, Empery
Tax Efficient II LP, and Hudson Bay Master Fund, Ltd. (together, the “Investors”); and (b) Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C., on behalf of Microbot Medical Inc. (“Microbot” or the “Company,” and together
with the Investors, the “Parties”).


 


RECITALS


 


WHEREAS,
on or about June 5, 2017, Microbot entered into a Stock Purchase Agreement with the Investors, among others (the “SPA”),
through which the Investors purchased shares of Microbot common stock;


 


WHEREAS,
on June 29, 2017, Sabby Healthcare Master Fund Ltd. and Sabby Volatility Warrant Master Fund Ltd. (the “Sabby Funds”),
each of which are parties to the SPA and purchasers of Microbot common stock, filed a complaint in the Supreme Court of the State
of New York, New York County (the “Complaint”), captioned Sabby Healthcare Master Fund Ltd. et al, v. Microbot
Medical Inc., Index No. 654581/2017 (N.Y. Sup. Ct. N.Y. Cnty. June 29, 2017) (the “Action”);


 


WHEREAS,
the Sabby Funds allege in the Action that Microbot breached material representations and warranties contained in the SPA, including
those set forth in paragraphs 3.1(g) and 3.1(y) and Schedule 3.1(g), by representing that Alpha Capital Anstat (“Alpha Capital”),
the holder of large block of convertible shares, was an “affiliate” of the Company (the “Matter”);


 


WHEREAS,
the Sabby Funds allege in the Action that an affiliate of the Company would be subject to certain trading restrictions under the
Securities Act of 1933, but that Alpha Capital has freely sold a large volume of common stock, leading to a significant decline
in the Company’s stock price;


 


WHEREAS,
the Investors believe that the basis for the claims asserted in the Action apply equally to the Investors (the “Investors’
Claims”);


 


WHEREAS,
the Company affirmatively has denied the allegations asserted in the Action and denies that it has any liability arising out or
related to the Matter;


 


WHEREAS,
the Parties have engaged in settlement discussions which may obviate the need for continued or additional litigation concerning
the Investors’ Claims;


 


WHEREAS,
the Investors agree not to bring any claims against the Company arising out of the Matter;


 


WHEREAS,
the Parties agree that if the Company reaches an agreement to settle the claims asserted by the Sabby Funds in the Action (a “Settlement”),
the Company will provide the same settlement terms on a pro rata basis to the Investors;


 


WHEREAS,
the Parties desire to freeze in time the rights and privileges of each Party as of the Effective Date, until: (i); an agreement
to settle the Action is executed; (ii) a judgment in the Action is obtained; or (iii) the Action is otherwise dismissed with prejudice.


 






    	 	 	 



    	 



    

 


AGREEMENT


 


NOW,
THEREFORE, based on the recitals set forth above which are incorporated herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:


 





	1.	The
    only action, proceeding, claim, cause of action, or lawsuit that may be commenced or asserted based on the statute of limitations
    (“SOL”) having been tolled by this Agreement is an action by the Investors arising out of the Matter.
	 	 
	2.	This
    Agreement shall remain in force and effect from the Effective Date until five business days after any one of the following,
    whichever shall occur first (the “Expiration Date”): (i) a judgment in the Action is obtained; (ii) an agreement
    to settle the Action is reached; or (iii) the Action is otherwise dismissed with prejudice.; provided, that the termination
    of this Agreement shall have no effect upon the Tolling Period.
	 	 
	3.	The
    time period from the Effective Date until the Expiration Date (the “Tolling Period”) shall not be counted in determining
    the time in which the Investors shall be permitted by any SOL to file an action. The Parties hereby expressly waive any defense
    under any SOL, and agree not to assert time-based defenses of any kind, including but not limited to laches, waiver, or estoppel,
    to any action arising out of the Matter due to the Tolling Period.
	 	 
	4.	Except
    as expressly provided herein, nothing in this Agreement shall affect any defense available to any Party as of the Effective
    Date of this Agreement, and this Agreement shall not be deemed to revive any claim that is or was already barred on the Effective
    Date.
	 	 
	5.	Any
    Party may extend the Tolling Period upon the written consent of the other Parties prior to the Expiration Date; in which case,
    the Expiration Date shall be extended until 11:59 PM (New York time) on the date so specified.
	 	 
	6.	The
    Investors waive any right to commence an action arising out of the Matter during the Tolling Period, but nothing in this Agreement
    shall affect or infringe the Investors’ right to commence an action relating to other matters, including, without limitation,
    those relating to this Agreement, subject to paragraph 7 of this Agreement.
	 	 
	7.	The
    Parties agree that if, and whenever on or after the date hereof, the Company enters into a Settlement, then (i) the Company
    shall provide notice thereof to the Investors immediately following the execution of the Settlement, (ii) the terms and conditions
    of the Settlement shall, without any further action by the Investors, automatically be extended to the Investors in an economically
    and legally equivalent manner to the terms of the Settlement, which shall apply pro-rata to each Investor based on the number
    of shares of common stock of the Company purchased by such Investor pursuant to the SPA in relation to the number of shares
    of common stock of the Company purchased by the Sabby Funds pursuant to the SPA (the settlement with the Investors, the “Investor
    Settlement”) and (iii) the Investors will either (x) accept the Investor Settlement within 10 days from the time the
    terms of the Investor Settlement are fully disclosed or (y) be deemed to have waived all of the Investors’ Claims.



 






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	8.	Each
    party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
    all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to
    carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
    Without limiting the generality of the foregoing, no later than five (5) business days after any Settlement, the Company shall
    take all actions necessary to give effect to the Investor Settlement (unless the Investors waive all of the Investors’
    Claims), including by drafting a settlement agreement to be executed by the Company and the Investors reflecting the terms
    and conditions of the Investor Settlement.
	 	 
	9.	The
    Investors waive any right to commence an action arising out of the Matter and waive all of the Investors’ Claims following
    the receipt of an executed settlement agreement from the Company reflecting the terms and conditions of the Investor Settlement.
	 	 
	10.	Nothing
    in this Agreement shall constitute or be construed as an admission by any Party that any claim could or could not properly
    be asserted against it by any other Party, or that any such claim would or would not have any basis in law or in fact. Except
    as expressly provided in paragraphs 1 and 2, with respect to time-based defenses, this Agreement is not intended to and shall
    not have any effect upon any defense that any Party may assert in any action.
	 	 
	11.	This
    Agreement constitutes the entire agreement between the Parties and supersedes any prior negotiations and agreement between
    the Parties, whether written or oral, concerning the subject matter hereof. This Agreement may not be modified except in writing
    duly executed by applicable Parties or their authorized representatives.
	 	 
	12.	This
    Agreement shall be governed in all respects by the laws of the State of New York, as applicable, in effect at the time of
    its execution without reference to its choice of law rules.
	 	 
	13.	This
    Agreement shall be immediately effective and enforceable upon each Party upon the execution of this Agreement by such Party.
	 	 
	14.	This
    Agreement may be executed in counterparts by original signature, facsimile or pdf, each of which counterparts shall be deemed
    an original, fully enforceable counterpart for all purposes, but all of which shall together constitute one and the same agreement.
	 	 
	15.	If
    any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of
    competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended
    to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision
    shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues
    to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
    nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations
    or reciprocal obligations of the Parties or the practical realization of the benefits that would otherwise be conferred upon
    the Parties. The Parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
    with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable
    provision(s).
	 	 
	16.	The
    Parties hereby agree and acknowledge that it has had a full opportunity to consult with any individual or entity and to review
    any materials that it desired to review in connection with the consideration and evaluation of this Agreement. This Agreement,
    therefore, shall not be construed against any Party on the basis that the Party was the drafter.




 


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IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.


 


	 	SCHULTE
    ROTH & ZABEL LLP
	 	 
	 	By:	/s/
    Andrew Gladstein
	 	Title:	Counsel
    to Empery and Hudson Bay
	 	 	 
	 	MINTZ,
    LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
	 	 
	 	By:	/s/
    John F. Sylvia
	 	Title:	Counsel
    to Microbot Medical, Inc.


 






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