THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
(WHICH MAY BE COMPANY COUNSEL) REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT, OR
ANY APPLICABLE STATE SECURITIES LAWS.


  


WARRANT AGREEMENT


 


To Purchase Shares of the Common Stock of


 


InspireMD, Inc.


 


Dated as of October 23, 2013 (the “Effective
Date”)


 


WHEREAS, InspireMD, Inc., a Delaware corporation
(the “Company”) and Inspire M.D Ltd have entered into a Loan and Security Agreement of even date herewith (as
amended and in effect from time to time, the “Loan Agreement”) with Hercules Technology
Growth Capital, Inc., a Maryland corporation (the “Warrantholder”);


 


WHEREAS, pursuant to the Loan Agreement
and as additional consideration to the Warrantholder for, among other things, its agreements in the Loan Agreement, the Company
has agreed to issue to the Warrantholder this Warrant Agreement, evidencing the right to purchase shares of the Company’s
Common Stock (this “Warrant” or this “Agreement”);


 


NOW, THEREFORE, in consideration of the
Warrantholder having executed and delivered the Loan Agreement and provided the financial accommodations contemplated therein,
and in consideration of the mutual covenants and agreements contained herein, the Company and Warrantholder agree as follows:


 


SECTION 1. GRANT
OF THE RIGHT TO PURCHASE COMMON STOCK. 


 


(a) For value received, the Company hereby
grants to the Warrantholder, and the Warrantholder is entitled, upon the terms and subject to the conditions hereinafter set forth,
to subscribe for and purchase, from the Company, up to 168,351 shares of Common Stock (as defined below), at a purchase price per
share of $2.97 (the “Exercise Price”). The number and Exercise Price of such shares are subject to adjustment
as provided in Section 8. As used herein, the following terms shall have the following meanings:


 


“Act” means
the Securities Act of 1933, as amended.


 


“Charter” means
the Company’s Certificate of Incorporation or other constitutional document, as may be amended and in effect from time to
time.


 


“Common Stock”
means the Company’s common stock, $0.0001 par value per share, as presently constituted under the Charter, and any class
and/or series of Company capital stock for or into which such common stock may be converted or exchanged in a reorganization, recapitalization
or similar transaction.


 






    	 



    	 



    

 


“Liquid Sale”
means the closing of a Merger Event in which the consideration received by the Company and/or its stockholders, as applicable,
consists solely of cash and/or Marketable Securities.


 


“Marketable Securities”
in connection with a Merger Event means securities meeting all of the following requirements: (i) the issuer thereof is then subject
to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and is then current in its filing of all required reports and other information under the Act and the Exchange
Act; (ii) the class and series of shares or other security of the issuer that would be received by the Warrantholder in connection
with the Merger Event were the Warrantholder to exercise this Warrant on or prior to the closing thereof is then traded on a national
securities exchange or over-the-counter market, and (iii) following the closing of such Merger Event, Warrantholder would not be
restricted from publicly re-selling all of the issuer’s shares and/or other securities that would be received by Warrantholder
in such Merger Event were Warrantholder to exercise this Warrant in full on or prior to the closing of such Merger Event, except
to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y)
does not extend beyond six (6) months from the closing of such Merger Event.


 


“Merger Event”
means any of the following: (i) a sale, lease or other transfer of all or substantially all assets of the Company, (ii) any merger
or consolidation involving the Company in which the Company is not the surviving entity or in which the outstanding shares of the
Company’s capital stock are otherwise converted into or exchanged for shares of capital stock or other securities or property
of another entity, or (iii) any sale by holders of the outstanding voting equity securities of the Company in a single transaction
or series of related transactions of shares constituting a majority of the outstanding combined voting power of the Company.


 


"Purchase Price"
means, with respect to any exercise of this Warrant, an amount equal to the then-effective Exercise Price multiplied by the number
of shares of Common Stock as to which this Warrant is then exercised.


 


SECTION 2. TERM
OF THE AGREEMENT. 


 


The term of this Agreement and the right
to purchase Common Stock as granted herein shall commence on the Effective Date and, subject to Section 8(a) below, shall be exercisable
for a period ending upon the fifth (5th) anniversary of the Effective Date.


 


SECTION 3. EXERCISE
OF THE PURCHASE RIGHTS. 


 


(a) Exercise. The purchase rights
set forth in this Agreement are exercisable by the Warrantholder, in whole or in part, at any time, or from time to time, prior
to the expiration of the term set forth in Section 2, by tendering to the Company at its principal office a notice of exercise
in the form attached hereto as Exhibit I (the “Notice of Exercise”), duly completed and executed. Promptly
upon receipt of the Notice of Exercise and the payment of the Purchase Price in accordance with the terms set forth below, and
in no event later than three (3) days thereafter, the Company shall issue to the Warrantholder a certificate for the number of
shares of Common Stock purchased and shall execute the acknowledgment of exercise in the form attached hereto as Exhibit II
(the “Acknowledgment of Exercise”) indicating the number of shares which remain subject to future purchases
under this Warrant, if any.


 






    	2



    	 



    

 


The Purchase Price may be paid at the Warrantholder’s
election either (i) by cash or check, or (ii) by surrender of all or a portion of the Warrant for shares of Common Stock to be
exercised under this Agreement and, if applicable, an amended Agreement setting forth the remaining number of shares purchasable
hereunder, as determined below (“Net Issuance”). If the Warrantholder elects the Net Issuance method, the Company
will issue shares of Common Stock in accordance with the following formula:


 








	 	X =   	Y(A-B)	 
	 	 	A	 




 








	Where:  	X =   	the number of shares of Common Stock to be issued to the Warrantholder.
	 	Y = 	the number of shares of Common Stock requested to be exercised under this Agreement.
	 	A = 	the then-current fair market value of one (1) share of Common Stock at the time of exercise.
	 	B =	the then-effective Exercise Price.







 


For purposes of the above calculation, the
current fair market value of shares of Common Stock shall mean with respect to each share of Common Stock:


 


(i) at all times when the Common Stock shall
be traded on a national securities exchange, inter-dealer quotation system or over-the-counter bulletin board service, the average
of the closing prices over a five (5) day period ending three days before the day the current fair market value of the securities
is being determined;


 


(ii) if the exercise is in connection with
a Merger Event, the fair market value of a share of Common Stock shall be deemed to be the per share value received by the holders
of the outstanding shares of Common Stock pursuant to such Merger Event as determined in accordance with the definitive transaction
documents executed among the parties in connection therewith; or


 


(iii) in cases other than as described in
the foregoing clauses (i) and (ii), the current fair market value of a share of Common Stock shall be determined in good faith
by the Company’s Board of Directors.


 


Upon partial exercise by either cash or,
upon request by the Warrantholder and surrender of all or a portion of this Warrant, Net Issuance, prior to the expiration or earlier
termination hereof, the Company shall promptly issue an amended Agreement representing the remaining number of shares purchasable
hereunder. All other terms and conditions of such amended Agreement shall be identical to those contained herein, including, but
not limited to the Effective Date hereof.


 


(b) Exercise Prior to Expiration.
To the extent this Warrant is not previously exercised as to all shares subject hereto, and if the then-current fair market value
of one share of Common Stock is greater than the Exercise Price then in effect, or, in the case of a Liquid Sale, where the value
per share of Common Stock (as determined as of the closing of such Liquid Sale in accordance with the definitive agreements executed
by the parties in connection with such Merger Event) to be paid to the holders thereof is greater than the Exercise Price then
in effect, this Agreement shall be deemed automatically exercised on a Net Issuance basis pursuant to Section 3(a) (even if not
surrendered) as of immediately before its expiration determined in accordance with Section 2. For purposes of such automatic exercise,
the fair market value of one share of Common Stock upon such expiration shall be determined pursuant to Section 3(a). To the extent
this Warrant or any portion hereof is deemed automatically exercised pursuant to this Section 3(b), the Company agrees to promptly
notify the Warrantholder of the number of shares of Common Stock if any, the Warrantholder is to receive by reason of such automatic
exercise, and to issue a certificate to Warrantholder evidencing such shares.


 






    	3



    	 



    

 


SECTION 4. RESERVATION
OF SHARES. 


 


During the term of this Agreement, the Company
will at all times have authorized and reserved a sufficient number of shares of its Common Stock to provide for the exercise of
the rights to purchase Common Stock as provided for herein.


 


SECTION 5. NO
FRACTIONAL SHARES OR SCRIP. 


 


No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Agreement, but in lieu of such fractional shares the Company shall
make a cash payment therefor upon the basis of the Exercise Price then in effect.


 


SECTION 6. NO
RIGHTS AS SHAREHOLDER/STOCKHOLDER.


 


Without limitation of any provision hereof,
Warrantholder agrees that this Agreement does not entitle the Warrantholder to any voting rights or other rights as a shareholder/stockholder
of the Company prior to the exercise of any of the purchase rights set forth in this Agreement.


 


SECTION 7. WARRANTHOLDER
REGISTRY. 


 


The Company shall maintain a registry showing
the name and address of the registered holder of this Agreement. Warrantholder's initial address, for purposes of such registry,
is set forth in Section 12(g) below. Warrantholder may change such address by giving written notice of such changed address to
the Company.


 


SECTION 8. ADJUSTMENT
RIGHTS. 


 


The Exercise Price and the number of shares
of Common Stock purchasable hereunder are subject to adjustment from time to time, as follows:


 


(a) Merger Event. In connection with
a Merger Event that is a Liquid Sale, this Warrant shall terminate upon the closing of such Liquid Sale to the extent not previously
exercised. In connection with a Merger Event that is not a Liquid Sale, the Company shall cause the successor or surviving entity
to assume this Warrant and the obligations of the Company hereunder on the closing thereof, and thereafter this Warrant shall be
exercisable for the same number and type of securities or other property as the Warrantholder would have received in consideration
for the shares of the Class issuable hereunder had it exercised this Warrant in full as of immediately prior to such closing, at
an aggregate Exercise Price no greater than the aggregate Exercise Price in effect as of immediately prior to such closing, and
subject to further adjustment from time to time in accordance with the provisions of this Warrant. Notwithstanding the first sentence
of this Section 8(a), in connection with any Liquid Sale and upon Warrantholder’s written election to the Company, the Company
shall cause this Warrant to be exchanged, on and as of the closing thereof, without a requirement of formal exercise, for the consideration
that Warrantholder would have received (less the Purchase Price) had Warrantholder elected to exercise this Warrant in full as
of immediately prior to the closing of such Liquid Sale. The provisions of this Section 8(a) shall similarly apply to successive
Merger Events.


 






    	4



    	 



    

 


(b) Reclassification of Shares. Except
for Merger Events subject to Section 8(a), if the Company at any time shall, by combination, reclassification, exchange or subdivision
of securities or otherwise, change any of the securities as to which purchase rights under this Agreement exist into the same or
a different number of securities of any other class or classes of securities, this Agreement shall thereafter represent the right
to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities
which were subject to the purchase rights under this Agreement immediately prior to such combination, reclassification, exchange,
subdivision or other change. The provisions of this Section 8(b) shall similarly apply to successive combination, reclassification,
exchange, subdivision or other change.


 


(c) Subdivision or Combination of Shares.
If the Company at any time shall combine or subdivide its Common Stock, (i) in the case of a subdivision, the Exercise Price shall
be proportionately decreased and the number of shares for which this Warrant is exercisable shall be proportionately increased,
or (ii) in the case of a combination, the Exercise Price shall be proportionately increased and the number of shares for which
this Warrant is exercisable shall be proportionately decreased.


 


(d) Stock Dividends. If the Company
at any time while this Agreement is outstanding and unexpired shall:


 


(i) pay a dividend with respect to the outstanding
shares of Common Stock payable in additional shares of Common Stock, then the Exercise Price shall be adjusted, to that price determined
by multiplying the Exercise Price in effect immediately prior to such date of determination by a fraction (A) the numerator of
which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (B)
the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution,
and the number of shares of Common Stock for which this Warrant is exercisable shall be proportionately increased; or


 


(ii) make any other dividend or distribution
on or with respect to Common Stock, except any dividend or distribution (A) in cash, or (B) specifically provided for in any other
clause of this Section 8, then, in each such case, provision shall be made by the Company such that the Warrantholder shall
receive upon exercise or conversion of this Warrant a proportionate share of any such distribution as though it were the holder
of the Common Stock (or other stock for which the Common Stock is convertible) as of the record date fixed for the determination
of the shareholders of the Company entitled to receive such distribution.


 


(e) Notice of Certain Events. If: (i)
the Company shall declare any dividend or distribution upon its outstanding Common Stock, payable in stock, cash, property or other
securities (provided that Warrantholder in its capacity as lender under the Loan Agreement consents to such dividend); (ii) the
Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or
other rights; (iii) there shall be any Merger Event; or (iv) there shall be any voluntary dissolution, liquidation or winding up
of the Company; then, in connection with each such event, the Company shall give the Warrantholder notice thereof at the same time
and in the same manner as it gives notice thereof to the holders of outstanding Common Stock.


 






    	5



    	 



    

 


SECTION 9. REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE COMPANY.


 


(a) Reservation of Common Stock.
The Company covenants and agrees that all shares of Common Stock, if any, that may be issued upon the exercise of the rights represented
by this Warrant will, upon issuance, be validly issued and outstanding, fully paid and non-assessable. The Company further covenants
and agrees that the Company will, at all times during the term hereof, have authorized and reserved, free from preemptive rights,
a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant. If at any
time during the term hereof the number of authorized but unissued shares of Common Stock shall not be sufficient to permit exercise
of this Warrant in full, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.


 


(b) Due Authority. The execution
and delivery by the Company of this Agreement and the performance of all obligations of the Company hereunder, including the issuance
to Warrantholder of the right to acquire the shares of Common Stock, have been duly authorized by all necessary corporate action
on the part of the Company. This Agreement: (1) does not violate the Company's Charter or current bylaws; (2) does not contravene
any law or governmental rule, regulation or order applicable to it; and (3) except as could not reasonably be expected to have
a Material Adverse Effect (as defined in the Loan Agreement), does not and will not contravene any provision of, or constitute
a default under, any indenture, mortgage, contract or other instrument to which it is a party or by which it is bound. This Agreement
constitutes a legal, valid and binding agreement of the Company, enforceable in accordance with its terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally
(including, without limitation, fraudulent conveyance laws) and by general principles of equity, regardless of whether considered
in a proceeding in equity or at law.


 


(c) Consents and Approvals. No consent
or approval of, giving of notice to, registration with, or taking of any other action in respect of any state, federal or other
governmental authority or agency is required with respect to the execution, delivery and performance by the Company of its obligations
under this Agreement, except for the filing of notices pursuant to Regulation D under the Act and any filing required by applicable
state securities law, which filings will be effective by the time required thereby.


 


(d) [Intentionally
Omitted].


 


(e) [Intentionally Omitted].


 


(f) Exempt Transaction. Subject to
the accuracy of the Warrantholder's representations in Section 10, the issuance of the Common Stock upon exercise of this Agreement
will constitute a transaction exempt from (i) the registration requirements of Section 5 of the Act, in reliance upon Section 4(2)
thereof, and (ii) the qualification requirements of the applicable state securities laws.


 


(g) Registration Rights. The Company
covenants and agrees with Warrantholder that if the Company, at any time and from time to time on or after the Effective Date and
on or before the expiration or earlier termination of this Warrant, proposes to register under the Act any shares of Common Stock
held by one or more stockholders of the Company for resale by such stockholders, whether on a Form S-3 registration statement or
otherwise, the Company shall give written notice thereof to Warrantholder and permit Warrantholder to include any or all of the
shares of Common Stock issuable upon exercise of this Warrant (and any or all shares previously issued to Warrantholder upon any
prior exercise(s) hereof) in such registration on a pari passu basis with such other stockholder(s) and on the same terms
and conditions applicable to such other stockholder(s).


 






    	6



    	 



    

 


(h) Information Rights. At all times
(if any) prior to the earlier to occur of (x) the date on which all shares of Common Stock issued on exercise of this Warrant have
been sold, or (y) the expiration or earlier termination of this Warrant, when the Company shall not be required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act or shall not have timely filed all such required reports, Warrantholder shall
be entitled to the information rights contained in Section 7.1(b) – (f) of the Loan Agreement, and in any such event Section
7.1(b) – (f) of the Loan Agreement is hereby incorporated into this Agreement by this reference as though fully set forth
herein, provided, however, that the Company shall not be required to deliver a Compliance Certificate once all Indebtedness (as
defined in the Loan Agreement) owed by the Company to Warrantholder has been repaid.


 


(i) Rule 144 Compliance. The Company
shall, at all times prior to the earlier to occur of (x) the date of sale or other disposition by Warrantholder of this Warrant
or all shares of Common Stock issued on exercise of this Warrant, (y) the registration pursuant to subsection (g) above of the
shares issued on exercise of this Warrant, or (z) the expiration or earlier termination of this Warrant if the Warrant has not
been exercised in full or in part on such date, use all commercially reasonable efforts to timely file all reports required under
the 1934 Act and otherwise timely take all actions necessary to permit the Warrantholder to sell or otherwise dispose of this Warrant
and the shares of Common Stock issued on exercise hereof pursuant to Rule 144 promulgated under the Act as amended and in effect
from time to time, provided that the foregoing shall not apply in the event of a Merger Event following which the successor or
surviving entity is not subject to the reporting requirements of the 1934 Act. If the Warrantholder proposes to sell Common Stock
issuable upon the exercise of this Agreement in compliance with Rule 144, then, upon Warrantholder’s written request to the
Company, the Company shall furnish to the Warrantholder, within five (5) business days after receipt of such request, a written
statement confirming the Company’s compliance with the filing and other requirements of such Rule.


 


SECTION 10. REPRESENTATIONS
AND COVENANTS OF THE WARRANTHOLDER. 


 


This Agreement has been entered into by
the Company in reliance upon the following representations and covenants of the Warrantholder:


 


(a) Investment Purpose. This Warrant
and the shares issued on exercise hereof will be acquired for investment and not with a view to the sale or distribution of any
part thereof in violation of applicable federal and state securities laws, and the Warrantholder has no present intention of selling
or engaging in any public distribution of the same except pursuant to a registration or exemption.


 


(b) Private Issue. The Warrantholder
understands (i) that the Common Stock issuable upon exercise of this Agreement is not, as of the Effective Date, registered under
the Act or qualified under applicable state securities laws, and (ii) that the Company's reliance on exemption from such registration
is predicated on the representations set forth in this Section 10.


 


(c) Financial Risk. The Warrantholder
has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its
investment, and has the ability to bear the economic risks of its investment.


 


(d) Accredited Investor. Warrantholder
is an "accredited investor" within the meaning of Rule 501 of Regulation D promulgated under the Act, as presently in
effect.


 






    	7



    	 



    

 


(e) No Short Sales. Warrantholder
has not at any time on or prior to the Effective Date engaged in any short sales or equivalent transactions in the Common Stock.
Warrantholder agrees that at all times from and after the Effective Date and on or before the expiration or earlier termination
of this Warrant, it shall not engage in any short sales or equivalent transactions in the Common Stock.


 


SECTION 11. TRANSFERS.


 


Subject to compliance with applicable federal
and state securities laws, this Agreement and all rights hereunder are transferable, in whole or in part, without charge to the
holder hereof (except for transfer taxes) upon surrender of this Agreement properly endorsed. Each taker and holder of this Agreement,
by taking or holding the same, consents and agrees that this Agreement, when endorsed in blank, shall be deemed negotiable, and
that the holder hereof, when this Agreement shall have been so endorsed and its transfer recorded on the Company’s books,
shall be treated by the Company and all other persons dealing with this Agreement as the absolute owner hereof for any purpose
and as the person entitled to exercise the rights represented by this Agreement. The transfer of this Agreement shall be recorded
on the books of the Company upon receipt by the Company of a notice of transfer in the form attached hereto as Exhibit III (the
"Transfer Notice"), at its principal offices and the payment to the Company of all transfer taxes and other governmental
charges imposed on such transfer. Until the Company receives such Transfer Notice, the Company may treat the registered owner hereof
as the owner for all purposes.


 


SECTION 12. MISCELLANEOUS.



 


(a) Effective Date. The provisions
of this Agreement shall be construed and shall be given effect in all respects as if it had been executed and delivered by the
Company on the date hereof. This Agreement shall be binding upon any successors or assigns of the Company.


 


(b) Remedies. In the event of any
default hereunder, the non-defaulting party may proceed to protect and enforce its rights either by suit in equity and/or by action
at law, including but not limited to an action for damages as a result of any such default, and/or an action for specific performance
for any default where Warrantholder will not have an adequate remedy at law and where damages will not be readily ascertainable.


 


(c) No Impairment of Rights. The
Company will not, by amendment of its Charter or through any other means, avoid or seek to avoid the observance or performance
of any of the terms of this Agreement, but will at all times in good faith assist in the carrying out of all such terms and in
the taking of all such actions as may be necessary or appropriate in order to protect the rights of the Warrantholder against impairment.


 


(d) [Intentionally Omitted]


 


(e) Attorneys’ Fees. In any
litigation, arbitration or court proceeding between the Company and the Warrantholder relating hereto, the prevailing party shall
be entitled to attorneys’ fees and expenses and all costs of proceedings incurred in enforcing this Agreement. For the purposes
of this Section 12(e), attorneys’ fees shall include without limitation fees incurred in connection with the following: (i)
contempt proceedings; (ii) discovery; (iii) any motion, proceeding or other activity of any kind in connection with an insolvency
proceeding; (iv) garnishment, levy, and debtor and third party examinations; and (v) post-judgment motions and proceedings of any
kind, including without limitation any activity taken to collect or enforce any judgment.


 


(f) Severability. In the event any
one or more of the provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable, the remaining provisions
of this Agreement shall be unimpaired, and the invalid, illegal or unenforceable provision shall be replaced by a mutually acceptable
valid, legal and enforceable provision, which comes closest to the intention of the parties underlying the invalid, illegal or
unenforceable provision.


 






    	8



    	 



    

 


(g) Notices. Except as otherwise
provided herein, any notice, demand, request, consent, approval, declaration, service of process or other communication that is
required, contemplated, or permitted under this Agreement or with respect to the subject matter hereof shall be in writing, and
shall be deemed to have been validly served, given, delivered, and received upon the earlier of: (a) personal delivery to
the party to be notified, (b) when sent by confirmed telex, electronic transmission or facsimile if sent during normal business
hours of the recipient, if not, then on the next business day, (c) five days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt, and shall be addressed to the party to be notified as follows:


 


If to Warrantholder:


 


Hercules Technology
GROWTH CAPITAL, INC.


Legal Department


Attention: Chief Legal Officer and Manuel Henriquez


400 Hamilton Avenue, Suite 310


Palo Alto, CA 94301


Facsimile: 650-473-9194


Telephone: 650-289-3060


  


If to the Company:


 


INSPIREMD, INC.


Attention: Chief Financial Officer


800 Boylston Street


Suite 16041


Boston, MA 02199


Facsimile:


Telephone: 716-849-6810


 


 


or to such other address as each party may
designate for itself by like notice.


 


(h) Entire Agreement; Amendments.
This Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof,
and supersedes and replaces in their entirety any prior proposals, term sheets, letters, negotiations or other documents or agreements,
whether written or oral, with respect to the subject matter hereof. None of the terms of this Agreement may be amended except by
an instrument executed by each of the parties hereto.


 


(i) Headings. The various headings
in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any
provisions hereof.


 


(j) Advice of Counsel. Each of the
parties represents to each other party hereto that it has discussed (or had an opportunity to discuss) with its counsel this Agreement
and, specifically, the provisions of Sections 12(n), 12(o), 12(p), 12(q) and 12(r).


 






    	9



    	 



    

 


(k) No Strict Construction. The parties
hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.


 


(l) No Waiver. No omission or delay
by Warrantholder at any time to enforce any right or remedy reserved to it, or to require performance of any of the terms, covenants
or provisions hereof by Warrantholder at any time designated, shall be a waiver of any such right or remedy to which Warrantholder
is entitled, nor shall it in any way affect the right of Warrantholder to enforce such provisions thereafter during the term of
this Agreement.


 


(m) Survival. All agreements, representations
and warranties contained in this Agreement or in any document delivered pursuant hereto shall be for the benefit of Warrantholder
and shall survive the execution and delivery of this Agreement and the expiration or other termination of this Agreement.


 


(n) Governing Law. This Agreement
has been negotiated and delivered to Warrantholder in the State of California, and shall be deemed to have been accepted by Warrantholder
in the State of California. Delivery of Common Stock to Warrantholder by the Company under this Agreement is due in the State of
California. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California,
excluding conflict of laws principles that would cause the application of laws of any other jurisdiction.


 


(o) Consent to Jurisdiction and Venue.
All judicial proceedings arising in or under or related to this Agreement may be brought in any state or federal court of competent
jurisdiction located in the State of California. By execution and delivery of this Agreement, each party hereto generally and unconditionally:
(a) consents to personal jurisdiction in Santa Clara County, State of California; (b) waives any objection as to jurisdiction or
venue in Santa Clara County, State of California; (c) agrees not to assert any defense based on lack of jurisdiction or venue in
the aforesaid courts; and (d) irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement.
Service of process on any party hereto in any action arising out of or relating to this Agreement shall be effective if given in
accordance with the requirements for notice set forth in Section 12(g), and shall be deemed effective and received as set forth
in Section 12(g). Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the
right of either party to bring proceedings in the courts of any other jurisdiction.


 


(p) Mutual Waiver of Jury Trial.
Because disputes arising in connection with complex financial transactions are most quickly and economically resolved by an experienced
and expert person and the parties wish applicable state and federal laws to apply (rather than arbitration rules), the parties
desire that their disputes arising under or in connection with this Warrant be resolved by a judge applying such applicable laws.
EACH OF THE COMPANY AND WARRANTHOLDER SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM,
CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM (COLLECTIVELY, "CLAIMS") ASSERTED BY THE COMPANY AGAINST
WARRANTHOLDER OR ITS ASSIGNEE OR BY WARRANTHOLDER OR ITS ASSIGNEE AGAINST THE COMPANY RELATING TO THIS WARRANT. This waiver extends
to all such Claims, including Claims that involve persons or entities other the Company and Warrantholder; Claims that arise out
of or are in any way connected to the relationship between the Company and Warrantholder; and any Claims for damages, breach of
contract, specific performance, or any equitable or legal relief of any kind, arising out of this Agreement.


 






    	10



    	 



    

 


(q) Arbitration. If the Mutual Waiver
of Jury Trial set forth in Section 12(p) is ineffective or unenforceable, the parties agree that all Claims shall be submitted
to binding arbitration in accordance with the commercial arbitration rules of JAMS (the “Rules”), such arbitration
to occur before one arbitrator, which arbitrator shall be a retired California state judge or a retired Federal court judge. Such
proceeding shall be conducted in Santa Clara County, State of California, with California rules of evidence and discovery applicable
to such arbitration. The decision of the arbitrator shall be binding on the parties, and shall be final and nonappealable to the
maximum extent permitted by law. Any judgment rendered by the arbitrator may be entered in a court of competent jurisdiction and
enforced by the prevailing party as a final judgment of such court.


 


(r) Pre-arbitration Relief. In the
event Claims are to be resolved by arbitration, either party may seek from a court of competent jurisdiction identified in Section
12(o), any prejudgment order, writ or other relief and have such prejudgment order, writ or other relief enforced to the fullest
extent permitted by law notwithstanding that all Claims are otherwise subject to resolution by binding arbitration.


 


(s) Counterparts. This Agreement
and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts, and by different parties
hereto in separate counterparts, each of which when so delivered shall be deemed an original, but all of which counterparts shall
constitute but one and the same instrument.


 


(t) Specific Performance. The parties
hereto hereby declare that it is impossible to measure in money the damages which will accrue to Warrantholder by reason of the
Company’s failure to perform any of the obligations under this Agreement and agree that the terms of this Agreement shall
be specifically enforceable by Warrantholder. If Warrantholder institutes any action or proceeding to specifically enforce the
provisions hereof, any person against whom such action or proceeding is brought hereby waives the claim or defense therein that
Warrantholder has an adequate remedy at law, and such person shall not offer in any such action or proceeding the claim or defense
that such remedy at law exists.


 


(u) Lost, Stolen, Mutilated or Destroyed
Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise
as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute an
original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall
be at any time enforceable by anyone.


 


(v) Legends. To the extent required
by applicable laws, this Warrant and the shares of Common Stock issuable hereunder (and the securities issuable, directly or indirectly,
upon conversion of such shares of Common Stock, if any) may be imprinted with a restricted securities legend in substantially the
following form:


 


THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO RULE
144 OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.


 






    	11



    	 



    

 


IN WITNESS WHEREOF, the parties hereto have
caused this Warrant Agreement to be executed by its officers thereunto duly authorized as of the Effective Date.


 


 





	COMPANY:	INSPIREMD, INC.
	 	 	 
	 	 	 
	 	By:	/s/ Craig Shore
	 	Name:  	Craig Shore 
	 	Title:	Chief Financial Officer







 


 


 





	WARRANTHOLDER:  	HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
	 	 	 
	 	By:	/s/ K. Nicholas Martitsch
	 	Name:  	K. Nicholas Martitsch
	 	Title:	Associate General Counsel







 






    	12



    	 



    







 


EXHIBIT I


 


NOTICE OF EXERCISE


 


 


		To:	[____________________________]



 


		(1)	The undersigned Warrantholder hereby elects to purchase
[_______] shares of the Common Stock of [_________________], pursuant to the terms of the Agreement dated the [___] day of [______,
_____] (the "Agreement") between [_________________] and the Warrantholder, and tenders herewith payment of the Purchase
Price in full, together with all applicable transfer taxes, if any. [NET ISSUANCE: elects pursuant
to Section 3(a) of the Agreement to effect a Net Issuance.]



 


		(2)	Please issue a certificate or certificates representing
said shares of Common Stock in the name of the undersigned or in such other name as is specified below.



 


 





	 	 
	 	(Name)
	 	 
	 	 
	 	(Address)







 





	WARRANTHOLDER:	HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
	 	 	 
	 	By:  	                  
	 	Name: Ben Bang
	 	Title: Senior Counsel







 






    	13



    	 



    







 


EXHIBIT II


 


1. ACKNOWLEDGMENT OF EXERCISE


 


 


 


 


The undersigned [____________________________________], hereby
acknowledge receipt of the "Notice of Exercise" from Hercules Technology Growth Capital, Inc., to purchase [____] shares
of the Common Stock of [_________________], pursuant to the terms of the Agreement, and further acknowledges that [______] shares
remain subject to purchase under the terms of the Agreement.


 


 





	COMPANY:	[_________________]
	 	 	 
	 	 	 
	 	By:	                              
	 	 	 
	 	Title:  	 
	 	 	 
	 	Date:	 










 






    	14



    	 



    

 


EXHIBIT III


 


TRANSFER NOTICE


  


(To transfer or assign the foregoing Agreement execute this
form and supply required information. Do not use this form to purchase shares.)


 


FOR VALUE RECEIVED, the foregoing Agreement and all rights evidenced
thereby are hereby transferred and assigned to


 





	 	 
	(Please Print)	 










 





	whose address is	 	 
	 	 	 
	 	 







  


 


Dated: _______________________________________


 


 


Holder's Signature: ______________________________


 


 


Holder's Address: _______________________________


 


 


_____________________________________________


 


 


Signature Guaranteed: ________________________________________________


 


 


NOTE: The signature to this Transfer Notice
must correspond with the name as it appears on the face of the Agreement, without alteration or enlargement or any change whatever.
Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority
to assign the foregoing Agreement.


 


1610967.1


 








    	15