Exhibit
10.1


 


SECURITIES
PURCHASE AGREEMENT


 


This Securities Purchase
Agreement (this “Agreement”) is dated as of November 23, 2016, between Rosetta Genomics Ltd., an Israeli 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 (i) an effective registration statement under the Securities Act
of 1933, as amended (the “Securities Act”), and (ii) an exemption from the registration requirements of Section
5 of the Securities Act contained in Section 4(a)(2) thereof and/or Regulation D 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: (a) capitalized terms that are not otherwise
defined herein have the meanings given to such terms in the Debentures (as defined herein), and (b) the following terms have the
meanings set forth in this Section 1.1:


 


“Acquiring Person”
shall have the meaning ascribed to such term in Section 4.5.


 


“Action”
shall have the meaning ascribed to such term in Section 3.1(j).


 


“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 or in the State of Israel are authorized or required by law or other
governmental action to close.


 


“Closing(s)”
means each of the First Closing and the Second Closing.


 


“Closing
Date(s)” means each of the First Closing Date and Second Closing Date.


 


“Commission”
means the United States Securities and Exchange Commission.


 



     


     


    

 


“Common
Stock” means the Ordinary Shares.


 


“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.


 


“Company
Israel Counsel” means Amar Reiter Jeanne Shochatovitch, Lawyers, with offices located at 14 Abba Hillel Silver Rd., Ramat
Gan 5250607, Israel.


 


“Company
U.S. Counsel” means Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, with offices located at One Financial Center, Boston,
MA 02111.


 


“Co-Placement
Agents” means Aegis Capital Corp. and Maxim Group LLC.


 


“Debentures”
means collectively, the Registered Debentures and Private Placement Debentures.


 


“Disclosure
Schedules” means the disclosure schedules of the Company delivered concurrently herewith and on or immediately prior
to the Second Closing Date, if any.


 


“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers, advisors or consultants
to the Company or any Subsidiary or directors of the Company pursuant to any stock or option plan duly adopted for such purpose,
by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee
directors established for such purpose for services rendered to the Company (provided that, under this clause (a), issuances to
advisors or consultants shall not exceed an aggregate of 100,000 shares (subject to adjustment for reverse and forward stock splits
and the like after the date hereof) of Common Stock or options in any 6 month period), (b) for purposes of Section 4.10 and 4.11
hereunder, securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities
exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement,
provided that such securities have not been amended since the date of this Agreement to increase the number of such securities
or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits
or combinations) or to extend the term of such securities, (c) securities issued pursuant to acquisitions or strategic or business
transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be
to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner
of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in
addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for
the purpose of raising capital or to an entity whose primary business is investing in securities, and (d) securities issued pursuant
to a stock split, stock dividend or any similar recapitalization.


 



     


     


    

 


“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.


 


“FDA”
shall have the meaning ascribed to such term in Section 3.1(hh).


 


“FDCA”
shall have the meaning ascribed to such term in Section 3.1(hh).


 


“First
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 initial Subscription
Amount and (ii) the Company’s obligations to deliver the Securities purchased at such First Closing, in each case, have been
satisfied or waived, but in no event later than the third Trading Day following the date hereof.


 


“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).


 


“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).


 


“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).


 


“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).


 


“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.


 


“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).


 


“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).


 


“NTIA”
means the Israeli National Technological Innovation Authority (formerly – the Office of the Chief Scientist of the Israeli
Ministry of Economy).


 


“Ordinary
Share(s)” means the ordinary shares of the Company, par value NIS 0.6 per share, and any other class of securities into
which such securities may hereafter be reclassified or changed.


 


“Per
Share Purchase Price” equals $0.50, 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 and prior to the First
Closing.


 



     


     


    

 


“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.


 


“Pharmaceutical
Product” shall have the meaning ascribed to such term in Section 3.1(hh).


 


“Private
Placement Conversion Shares” shall mean the shares of Common Stock underlying the Private Placement Debentures.


 


“Private
Placement Debentures” means the Convertible Debentures due, subject to the terms therein, 30 years from their date of
issuance, issued by the Company to the Purchasers hereunder, in the form of Exhibit A-2 attached hereto.


 


“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.


 


“Prospectus”
means the final prospectus filed for the Registration Statement.


 


“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with
the Commission and delivered by the Company to each Purchaser at the First Closing.


 


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.


 


“Registered
Debentures” means the Convertible Debentures due, subject to the terms therein, 30 years from the date of issuance, issued
by the Company to the Purchasers hereunder, in the form of Exhibit A-1 attached hereto.


 


“Registration
Rights Agreement” means the Registration Rights Agreement, dated the date hereof, among the Company and the Purchasers,
in the form of Exhibit C attached hereto.


 


“Registration
Statement” means the effective registration statement with Commission file No. 333-210366 which registers the sale of
the Registered Debentures, the shares of Common Stock underlying the Registered Debentures, and the Shares to the Purchasers.


 


“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).


 


“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of all Warrants
or conversion in full of all Debentures, ignoring any conversion or exercise limits set forth therein, and assuming that the Conversion
Price is at all times on and after the date of determination $0.25 (subject to adjustment for reverse and forward stock splits
and the like after the date hereof).


 



     


     


    

 


“Resale
Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights
Agreement and covering the resale of the Registrable Securities (as defined in the Registration Rights Agreement) by each Purchaser
as provided for in the Registration Rights Agreement.


 


“Restricted
Securities” shall mean the Private Placement Debentures, the Private Placement Conversion Shares, the Warrants and the
Warrant Shares.


 


“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.


 


“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.


 


“Second Closing” shall have
the meaning ascribed to such term in Section 2.1(b).


 


“Second Closing Date” means
the date of the Second Closing.


 


“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).


 


“Securities”
means the Shares, the Warrants, the Debentures and the Underlying Shares.


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


“Shares”
means the Ordinary Shares issued or issuable to each Purchaser pursuant to this Agreement.


 


“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include the location and/or reservation of borrowable shares of Common Stock). 


 


“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Securities 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 any subsidiary of the Company as set forth on Exhibit 8.1 to the Company’s Annual Report on Form 20-F for the year
ended December 31, 2015, and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired
after the date thereof.


 



     


     


    

 


“Subsidiary
Guarantee” means the Subsidiary Guarantee, dated the date hereof, by each Subsidiary in favor of the Purchasers, in the
form of Exhibit D attached hereto.


 


“Trading
Day” means a day on which the principal Trading Market is open for trading and if the Common Stock is not then listed
or quoted for trading on a Trading Market, “Trading Day” means a day on which the New York Stock Exchange (or any successor
exchange) is open for business.


 


“Trading
Hour Period” means the time period that the New York Stock Exchange trading floor is open.


 


“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, or the
New York Stock Exchange (or any successors to any of the foregoing).


 


“Transaction
Documents” means this Agreement, the Warrants, the Debentures, the Registration Rights Agreement, the Subsidiary Guarantee
and any other documents or agreements executed in connection with the transactions contemplated hereunder.


 


“Transfer
Agent” means American Stock Transfer & Trust Company, LLC, the current transfer agent of the Company, with a mailing
address of 6201 15th Avenue, Brooklyn, NY 11219 and a facsimile number of (718) 921-8334, and any successor transfer
agent of the Company.


 


“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion or redemption of the Debentures and upon
exercise of the Warrants.


 


“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.12(b).


 


“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the First Closing in accordance with Section
2.2(a) hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to five (5) years, in the form
of Exhibit E attached hereto.


 


“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.


 


“ZAGSW”
means Zysman, Aharoni, Gayer and Sullivan & Worcester LLP, with offices at 1633 Broadway, New York, NY 10019.


 



     


     


    

 


ARTICLE II.

PURCHASE AND SALE


 


2.1           Closing.


 


(a)          First
Closing. On the First Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell,
and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of $3,707,500 of Shares, Debentures and Warrants.
Each Purchaser’s First Closing Subscription Amount as set forth on the signature page hereto executed by such Purchaser,
which as to the Shares shall be made available for “Delivery Versus Payment” settlement with the Company. The Company
shall deliver to each Purchaser its respective Shares, Debentures and a Warrant as determined pursuant to Section 2.2(a), and the
Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the First Closing. Upon satisfaction
of the covenants and conditions set forth in Sections 2.2 and 2.3, the First Closing shall occur at the offices of ZAGSW or such
other location as the parties shall mutually agree. Unless otherwise directed by the Co-Placement Agents, settlement of the Shares
shall occur via “Delivery Versus Payment” (“DVP”) (i.e., on the First Closing Date, the Company
shall issue the Shares registered in the Purchasers’ names and addresses and released by the Transfer Agent directly to the
account(s) at the applicable Co-Placement Agent identified by each Purchaser; upon receipt of such Shares, the applicable Co-Placement
Agent shall promptly electronically deliver such Shares to the applicable Purchaser, and payment therefor shall be made by such
Co-Placement Agent (or its clearing firm) by wire transfer to the Company).


 


(b)          Second
Closing. On the Second Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell,
and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of $1,292,500 of Private Placement Debentures
as determined pursuant to Section 2.2(a), which closing shall occur on, or as soon as reasonably practicable following, and in
any event within 3 Trading Days of the satisfaction of the conditions to the Second Closing (the “Second Closing”).
Each Purchaser shall deliver to the Company, via wire transfer, immediately available funds equal to its remaining Subscription
Amount, and the Company shall deliver to each Purchaser its respective Private Placement Debentures as determined pursuant to Section
2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Second Closing.
Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Second Closing shall occur at the offices
of ZAGSW or such other location as the parties shall mutually agree.


 


2.2           Deliveries.


 


(a)          On
or prior to each Closing Date (except as noted), the Company shall deliver or cause to be delivered to each Purchaser the following:


 


(i)          as
to the First Closing, this Agreement duly executed by the Company;


 



     


     


    

 


(ii)         a
legal opinion of each of Company U.S. Counsel and Company Israel Counsel, in form and substance reasonably satisfactory to the
Co-Placement Agents and each of the Purchasers;


 


(iii)        as
to the First Closing, subject to the last sentence of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent
instructing the Transfer Agent to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian
system (“DWAC”) Shares equal to 10.95% of such Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, registered in the name of such Purchaser;


 


(iv)        as
to the First Closing, a Registered Debenture with a principal amount equal to 63.20% of such Purchaser’s Subscription Amount,
registered in the name of such Purchaser;


 


(v)         as
to the First Closing, the Registration Rights Agreement, duly executed by the Company;


 


(vi)        as
to the Second Closing, a Private Placement Debenture with a principal amount equal to 25.85% of such Purchaser’s Subscription
Amount, registered in the name of such Purchaser;


 


(vii)       as
to the First Closing, a Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal
to 100% of such Purchaser’s Subscription Amount divided by $0.50, with an exercise price equal to $0.85, subject to adjustment
therein (such original Warrant certificate may be delivered within three Trading Days of the First Closing Date);


 


(viii)      as
to the First Closing, the Subsidiary Guarantee, duly executed by each Subsidiary;


 


(ix)         the
Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the
Chief Executive Officer or Chief Financial Officer; and


 


(x)          as
to the First Closing, the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities
Act).


 


(b)          On
or prior to each Closing Date (except as noted), each Purchaser shall deliver or cause to be delivered to the Company via the clearing
firm pursuant to the last sentence of Section 2.1, as applicable, the following:


 


(i)          as
to the First Closing, this Agreement duly executed by such Purchaser;


 


(ii)         as
to the First Closing, the Registration Rights Agreement duly executed by such Purchaser; and


 



     


     


    

 


(iii)        such
Purchaser’s Subscription Amount as to the applicable Closing, which as to the Shares issuable at the First Closing, shall
be made available for “Delivery Versus Payment” settlement with the Company.


 


2.3           Closing
Conditions.


 


(a)          The
obligations of the Company hereunder in connection with each Closing are subject to the following conditions being met:


 


(i)          the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) on the applicable 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 applicable 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; and


 


(iv)        in
the event that, upon the issuance of the Shares to a Purchaser at the First Closing, such Purchaser will hold (in accordance with
the definition of the term “holding” in the Israeli Securities Law, 1968) 5% or more of the Company’s issued
share capital or of the voting rights in the Company, the delivery by such Purchaser to the Company of the Undertaking (as defined
in Exhibit B attached hereto) towards the NTIA substantially in the form attached hereto as Exhibit B duly executed
by such Purchaser (the “NTIA Undertaking”).


 


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


 


(i)          the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on each Closing Date of the representations and warranties of the Company 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 the Company required to be performed at or prior to the applicable Closing Date shall
have been performed;


 


(iii)        the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement and updated Disclosure Schedules prior to the
Second Closing;


 



     


     


    

 


(iv)        as
to the Second Closing, a Resale Registration Statement registering all of the Registrable Securities (as defined in the Registration
Rights Agreement) shall have been declared effective by the Commission and shall have thereafter remained effective;


 


(v)         as
to the Second Closing, such Second Closing shall have occurred on or before 120 days following the First Closing; and


 


(vi)        there
shall have been no Material Adverse Effect with respect to the Company since the date hereof; and


 


(vii)       from
the date hereof to the applicable Closing Date, trading in the Common Stock shall not have been suspended by the Commission or
the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported
by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose
trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market
which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities
at the applicable Closing.


 


ARTICLE III.

REPRESENTATIONS AND WARRANTIES


 


3.1           Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part
hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding
section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:


 


(a)          Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Exhibit 8.1 to the Company’s Annual Report on
Form 20-F for the year ended December 31, 2015. 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, prospects
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.
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, assuming due authorization, execution and delivery by the applicable Purchaser thereof, will constitute
the valid and binding obligation of the Company enforceable against the Company in respect of such Purchaser in accordance with
its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.


 


(d)          No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby
and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter documents, or (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 each of clauses (ii)
and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.


 



     


     


    

 


(e)          Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement,
(iii) application(s) to each applicable Trading Market for the listing of the Shares and Underlying Shares for trading thereon
in the time and manner required thereby (iv) the filing of the Form D with the Commission and such filings as are required to be
made under applicable state securities laws and (v) the filings required by the NTIA, if applicable, and filings to the Israeli
Registrar of Companies in accordance with the Israeli Companies Law, 1999 (collectively, the “Required Approvals”).


 


(f)          Issuance
of the Securities; Registration. The Securities 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 with respect to the Warrants, Warrant Shares, Private Placement Debentures and Underlying
Shares issuable upon conversion thereof provided for in this Agreement and such Transaction Documents Warrants. The Warrant Shares,
when issued and paid for 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 this Agreement and the Warrants.
The Company has reserved from its duly authorized capital stock a number of shares of Common Stock issuable pursuant to the Transaction
Documents equal to at least the Required Minimum. The Company has prepared and filed the Registration Statement in conformity with
the requirements of the Securities Act, which became effective on March 30, 2016 (the “Effective Date”),
including the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement.
The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of
the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings
for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission. The Company, if required
by the rules and regulations of the Commission, shall file the Prospectus with the Commission pursuant to Rule 424(b). At the time
the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at the applicable Closing
Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements
of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendments
or supplements thereto, at time the Prospectus or any amendment or supplement thereto was issued and at the applicable Closing
Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain
an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.


 



     


     


    

 


(g)          Capitalization.
The capitalization of the Company is as set forth in the Disclosure Schedules. The Company has not issued any capital stock since
its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under
the Company’s stock option plans, the issuance of shares of Common Stock to directors and employees pursuant to the Company’s
employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the
date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except
as a result of the purchase and sale of the Securities and as set forth in the Disclosure Schedules, 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 the capital stock of any Subsidiary, 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 or
capital stock of any Subsidiary. The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue
shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. There are no outstanding
securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no
contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem
a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock”
plans or agreements or any similar plan or agreement. 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, together with
the Prospectus and the Prospectus Supplement, 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 the Disclosure Schedules, (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 plans. The Company does not
have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Securities
contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is
reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects,
properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities
laws at the time this representation is made or deemed made that has not been publicly disclosed.


 



     


     


    

 


(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. Neither
the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim
of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. 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 to the knowledge of the Company any current or former director or officer of the Company. The Commission has not issued any
stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under
the Exchange Act or the Securities Act.


 


(k)          Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of
the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or
any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant
in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance
with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.


 


(l)          Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any
court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation
of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.


 



     


     


    

 


(m)          Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with
all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient
air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand
letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated
or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required
of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms
and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could
be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.


 


(n)          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 notice of proceedings relating to the revocation
or modification of any Material Permit.


 


(o)          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.


 



     


     


    

 


(p)          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 or required for use in connection with their respective businesses as described in the SEC Reports
and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) 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. 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, except as could not have or reasonably be expected to not have
a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and 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, except
where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Notwithstanding
the above, the Company participates in a consortium which is supported by the NTIA. The consent of the NTIA will be required for
the transfer of know how developed in the framework of the consortium or rights to manufacture based on and/or incorporating such
know how to third parties who are not members of the consortium. The Company also participates in a mini-consortium which is supported
by the NTIA. The consent of the NTIA will be required for the transfer of know how developed in the framework of the mini-consortium
or rights to manufacture based on and/or incorporating such know how to third parties who are not members of the mini-consortium.


 


(q)          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, including,
but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the
Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without
a significant increase in cost.


 


(r)          Transactions
With Affiliates and Employees. Except as set forth in the Disclosure Schedules, none of the officers or directors of the Company
or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party
to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case
in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan
of the Company.


 



     


     


    

 


(s)          Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in 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 each 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 December 31,
2015 (such date, the “Evaluation Date”). The Company presented in its Annual Report on Form 20-F for the year
ended December 31, 2015 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.


 


(t)          Certain
Fees. Except as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions are or will be payable
by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank
or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in
this Section that may be due in connection with the transactions contemplated by the Transaction Documents.


 


(u)          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.


 



     


     


    

 


(v)         Registration
Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act
of any securities of the Company or any Subsidiary.


 


(w)          Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating
such registration. Except as disclosed in Schedule 3.1(w) of the Disclosure Schedules, the Company has not, in the 12 months
preceding the date hereof, received 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. Other than
as set forth in Schedule 3.1(w) of the Disclosure Schedules, the Company is, and has no reason to believe that it will not
in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is
currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and
the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation)
in connection with such electronic transfer.


 


(x)          Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and
the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation
as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities (subject to
the compliance of the Purchasers with its respective representation and warranty under the second paragraph of Section 3.2(c)).


 


(y)          Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information which is not otherwise disclosed
in the Prospectus Supplement. The Company understands and confirms that the Purchasers will rely on the foregoing representation
in effecting transactions in securities of the Company. 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, including the
Disclosure Schedules to this Agreement, is true and correct 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. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement
taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when
made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties
with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.


 



     


     


    

 


(z)          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 other components of this Offering or prior offerings by the Company for purposes of the
Securities Act which would require the registration of the Warrants, the Warrant Shares, the Private Placement Debentures, the
shares underlying the Private Placement Debentures or any applicable shareholder approval provisions of any Trading Market on which
any of the securities of the Company are listed or designated.


 


(aa)         Solvency.
Based on the consolidated financial condition of the Company as of each Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities on such Closing Date, (i) the fair saleable value of the Company’s
assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the applicable Closing Date. The Disclosure
Schedules set forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary,
or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course
of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.


 



     


     


    

 


(bb)         Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local
income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due
on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of
all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or
of any Subsidiary know of no basis for any such claim.


 


(cc)         Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent
or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person
acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any
provision of FCPA.


 


(dd)         Accountants.
The Company’s accounting firm is set forth in the SEC

Reports. To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required
by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s
Annual Report for the fiscal year ending December 31, 2016.        


 


(ee)         
Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the
Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby
and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents
and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company
further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents
has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.


 



     


     


    

 


(ff)         Acknowledgement
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere
herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.13 hereof), it is understood and acknowledged by the
Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from
purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Securities for any specified term; (ii) past or future open market or other transactions
by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or
after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such
Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and (iv)
each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities
at various times during the period that the Securities are outstanding, including, without limitation, during the periods that
the value of the Warrant Shares and Conversion Shares deliverable with respect to Securities are being determined, and (z) such
hedging activities (if any) could reduce the value of the existing stockholders' equity interests in the Company at and after
the time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned hedging activities
do not constitute a breach of any of the Transaction Documents.


 


(gg)         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 in connection with the placement of the Securities.


 



     


     


    

 


(hh)         FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal
Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged,
labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed
by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge,
threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint,
or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received
any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket
clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing
of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall,
suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any
Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries,
(iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent
decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have
a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material
respects in accordance with all applicable laws, rules and regulations of the FDA.  The Company has not been informed by the
FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed,
produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product
being developed or proposed to be developed by the Company. 


 


(ii)         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”).


 


(jj)         U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.


 


(kk)         Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act
of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly
or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or
more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.


 


(ll)         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 or Proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of
the Company or any Subsidiary, threatened.


 



     


     


    

 


(mm)         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 Warrants or the Warrant Shares issuable upon exercise thereof
by the Company to the Purchasers as contemplated hereby.


 


(nn)         No
General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Warrant
or Warrant Shares by any form of general solicitation or general advertising. The Company has offered the Warrant and Warrant Shares
for sale only to the Purchasers.


 


(oo)         No
Disqualification Events.  With respect to the Warrant and Warrant Shares to be offered and sold hereunder in reliance
on Rule 506 under the Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive
officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s
outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule
405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered
Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”),
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine
whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with
its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided thereunder.


 


(pp)         Other
Covered Persons. Other than the Co-Placement Agents, the Company is not aware of any person (other than any Issuer Covered
Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the
sale of any Securities.


 


(qq)         Notice
of Disqualification Events. The Company will notify the Purchasers and the Co-Placement Agents in writing, prior to each Closing
Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of
time, reasonably be expected to become a Disqualification Event relating to any Issuer Covered Person, in each case of which it
is aware.


 


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 First Closing Date to the Company as follows (unless as of a specific date therein, in which case
they shall be accurate as of such date):


 



     


     


    

 


(a)          Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability
company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and
performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary
corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with
the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.


 


(b)          Understandings
or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect
arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation
and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the 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. Such Purchaser understands that the Warrants and the Warrant Shares are “restricted securities”
and have not been registered under the Securities Act or any applicable state securities law and is acquiring such 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 such Securities
pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws).


 


(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 Closing
Date and on each date on which it exercises any Warrants or converts a Debenture, it will be: an “accredited investor”
as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act; and will not (x) be in Israel or an Israeli
citizen, corporation or resident, or controlled by an Israeli citizen, corporation or resident, (y) be related to any officer or
director of the Company, and (z) hold (in accordance with the term “holding” in the Israeli Securities Law, 1968)
5% or more of the Company's issued share capital or of the voting rights in the Company. In the event that, upon
the issuance of the Shares and/or Underlying Shares to a Purchaser, such Purchaser holds 5% or more of the Company's issued share
capital or of the voting rights in the Company, then, upon such issuance and as a condition thereto, such Purchaser shall deliver
to the Company an executed copy of the NTIA Undertaking.


 



     


     


    

 


Without derogating
from the above, following the issuance of the Shares and/or Underlying Shares, the Purchaser will not hold (in accordance with
the term “holding” in the Israeli Securities Law, 1968), either alone or in cooperation with other(s), either directly
or indirectly, through a trustee or in any other way, 25% or more of the Company’s issued share capital or voting rights.


 


(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.


 


(e)          Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it
has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company
and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate
its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. 
Such Purchaser acknowledges and agrees that neither the Co-Placement Agents nor any Affiliate of the Co-Placement Agents has provided
such Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired. 
Neither the Co-Placement Agents nor any Affiliate has made or makes any representation as to the Company or the quality of the
Securities and the Co-Placement Agents and any Affiliate may have acquired non-public information with respect to the Company which
such Purchaser agrees need not be provided to it.  In connection with the issuance of the Securities to such Purchaser, neither
the Co-Placement Agents nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.


 


(f)          Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not,
nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly 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 pricing 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 to such Purchaser’s
representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents
and Affiliates, 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). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability
of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.


 



     


     


    

 


(g)          General
Solicitation. Such Purchaser is not, to such Purchaser’s knowledge, purchasing the Warrants, the Private Placement Debentures,
the shares of Common Stock issuable upon conversion of the Private Placement Debentures or the Warrant Shares as a result of any
advertisement, article, notice or other communication regarding such 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.


 


The Company acknowledges
and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right
to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this
Agreement or the consummation of the transactions contemplated hereby.


 


ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES


 


4.1           Removal
of Legends.


 


(a)          The
Restricted Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer
of the Restricted 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 security 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 the Registration Rights Agreement and shall have the and obligations of a Purchaser
under this Agreement and the Registration Rights Agreement.


 



     


     


    

 


(b)          
The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Restricted Securities
in the following form:


 


[NEITHER] THIS SECURITY [NOR THE
SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY [AND
THE SECURITIES ISSUABLE UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED
IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


The Company acknowledges
and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Restricted Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser
may transfer pledged or secured the Restricted Securities to the pledgees or secured parties. Such a pledge or transfer would not
be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required
in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the
Company will execute and deliver such reasonable documentation as a pledgee or secured party of the Restricted Securities.


 



     


     


    

 


(c)          Certificates
evidencing the Warrant Shares and Private Placement Conversion Shares shall not contain any legend (including the legend set forth
in Section 4.1(b) hereof): (i) while a registration statement covering the resale of such security is effective under the Securities
Act, or (ii) following any sale of such Warrant Shares or Private Placement Conversion Shares pursuant to Rule 144, or (iii) if
such Warrant Shares or Private Placement Conversion Shares are eligible for sale under Rule 144, 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). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly if required
by the Transfer Agent to effect the removal of the legend hereunder. If all or any portion of a Warrant is exercised or a Private
Placement Debenture converted at a time when there is an effective registration statement to cover the resale of the Warrant Shares
or Private Placement Conversion Shares, as applicable, or if such Warrant Shares or Private Placement Conversion Shares may be
sold under Rule 144 or if such legend is not otherwise required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the staff of the Commission) then such Warrant Shares and Private Placement
Conversion Shares shall be issued free of all legends. The Company agrees that following such time as such legend is no longer
required under this Section 4.1(c), the Company will, no later than the earlier of (i) three Trading Days and (ii) the number of
Trading Days comprising the Standard Settlement Period (as defined below) following the delivery by a Purchaser to the Company
or the Transfer Agent of a certificate representing Private Placement Conversion Shares or Warrant Shares, as applicable, issued
with a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered
to such Purchaser a certificate representing such shares that is free from all restrictive and other legends, provided that, upon
written request by Company and delivery by the Company to the Purchaser of such certificate in customary form, the Purchaser delivers
a certificate as to the factual basis for removing the legend within two Trading Days following such request. The Company may not
make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth
in this Section 4. Certificates for Private Placement Conversion Shares and Warrant Shares subject to legend removal hereunder
shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with
the Depository Trust Company System as directed by such Purchaser. As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with
respect to the Common Stock as in effect on the date of delivery of a certificate representing Private Placement Conversion Shares
or Warrant Shares issued with a restrictive legend.


 


(d)          In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as partial liquidated
damages and not as a penalty, for each $1,000 of Warrant Shares or Private Placement Conversion Shares, as applicable (based on
the VWAP of the Common Stock on the date such Securities are submitted to the Transfer Agent) delivered for removal of the restrictive
legend and subject to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages
have begun to accrue) for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend and
(ii) if the Company fails to (a) issue and deliver (or cause to be delivered) to a Purchaser by the Legend Removal Date a certificate
representing the Securities so delivered to the Company by such Purchaser that is free from all restrictive and other legends and
(b) if after the Legend Removal Date such Purchaser purchases (in an open market transaction or otherwise) shares of Common Stock
to deliver in satisfaction of a sale by such Purchaser of all or any portion of the number of shares of Common Stock, or a sale
of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, that such Purchaser
anticipated receiving from the Company without any restrictive legend, then an amount equal to the excess of such Purchaser’s
total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock
so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In
Price”) over the product of (A) such number of Warrant Shares or Private Placement Conversion Shares, as applicable
that the Company was required to deliver to such Purchaser by the Legend Removal Date multiplied by (B) the lowest closing sale
price of the Common Stock on any Trading Day during the period commencing on the date of the delivery by such Purchaser to the
Company of the applicable Warrant Shares or Private Placement Conversion Shares (as the case may be) and ending on the date of
such delivery and payment under this Section 4.1(d).


 



     


     


    

 


(e)          The
Shares, Registered Debentures and shares of Common Stock underlying the Registered Debentures shall be issued free of legends.


 


(f)          Each
Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will only sell or otherwise
transfer any Warrant Shares or Private Placement Conversion Shares pursuant to either the registration requirements of the Securities
Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Warrant Shares or Private
Placement Conversion Shares are sold pursuant to a Resale 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 any
Warrant Shares or Private Placement Conversion Shares as set forth in this Section 4.1 is predicated upon the Company’s reliance
upon this understanding


 


4.2           Furnishing
of Information.


 


(a)          Until
the earliest of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired, the Company covenants to timely
file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements
of the Exchange Act.


 


(b)          At
any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of
the Warrant Shares and Private Placement Conversion Shares may be sold without the requirement for the Company to be in compliance
with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any
reason to satisfy the current public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule
144 (i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2)
(a “Public Information Failure”) then, in addition to such Purchaser’s other available remedies, the Company
shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction
of its ability to sell any Restricted Securities an amount in cash equal to two percent (2.0%) of the aggregate Subscription Amount
of such Purchaser’s outstanding Securities on the day of a Public Information Failure and on every thirtieth (30th)
day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information
Failure is cured and (b) such time that such public information is no longer required  for the Purchasers to transfer the
applicable Underlying Shares pursuant to Rule 144.  The payments to which a Purchaser shall be entitled pursuant to this Section
4.2(b) are referred to herein as “Public Information Failure Payments.”  Public Information Failure
Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure
Payments are incurred and (ii) the third (3rd) Business Day after the event or failure giving rise to the Public
Information Failure Payments is cured.  In the event the Company fails to make Public Information Failure Payments
in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated
for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the
Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief.


 



     


     


    

 


4.3           Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require
the registration under the Securities Act of the sale of the Restricted Securities or that would be integrated with the offer and
sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval
prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.


 


4.4           Securities
Laws Disclosure; Publicity. The Company shall (a) by 9:00 a.m. (New York City time) on the Trading Day immediately following
on the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a
report on Form 6-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the
Exchange Act. From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly
disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or
any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction
Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all
confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries
or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any
of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing
any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall
issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect
to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the
Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case
the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing
with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a)
as required by federal securities law in connection with the filing of final Transaction Documents with the Commission and (b)
to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers
with prior notice of such disclosure permitted under this clause (b).


 



     


     


    

 


4.5           Shareholder
Rights Plan. Subject to the Purchasers’ compliance with its respective representation and warranty under the second paragraph
of Section 3.2(c), no claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that
any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities
under the Transaction Documents or under any other agreement between the Company and the Purchasers.


 


4.6           Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting
on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably
believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt
of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that
each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent
that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company
hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries,
or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries
or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public
information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant
to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Report on Form 6-K. The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.


 


4.7           Use
of Proceeds. Except as set forth in the Prospectus Supplement, the Company shall use the net proceeds from the sale of the
Securities hereunder for working capital purposes and shall not use such proceeds: (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.


 



     


     


    

 


4.8           Indemnification
of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not
an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence,
willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may
be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall
have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any
Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time
to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not
be liable to any Purchaser Party under this Agreement (x) for any punitive or special damages; (y) for any settlement by a Purchaser
Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to
the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach
of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other
Transaction Documents. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained
herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any
liabilities the Company may be subject to pursuant to law.


 


4.9           Reservation
and Listing of Securities.


 


(a)          The
Company shall maintain a reserve of the Required Minimum from its duly authorized shares of Common Stock for issuance pursuant
to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.


 


(b)          If,
on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate
of incorporation or equivalent document to increase the number of authorized but unissued shares of Common Stock to at least the
Required Minimum at such time, as soon as possible and in any event not later than the 75th day after such date.


 



     


     


    

 


(c)          The
Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading
Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum
on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing
or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing or
quotation and (iv) use commercially reasonable best efforts to maintain the listing or quotation of such Common Stock on any date
at least equal to the Required Minimum on such date on such Trading Market or another Trading Market. The Company agrees to maintain
the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing
corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established
clearing corporation in connection with such electronic transfer.


 


4.10         Participation
in Future Financing.


 


(a)          From
the date hereof until the date that is the later of (i) the two year anniversary of the First Closing Date and (ii) the two year
anniversary of the Second Closing Date, upon any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock
Equivalents for cash consideration, convertible Indebtedness or a combination of units thereof (a “Subsequent Financing”),
each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal to 25% of the Subsequent
Financing (the “Participation Maximum”) on the same terms, conditions and price provided for in the Subsequent
Financing.


 


(b)          During
or prior to the Trading Hour Period on the Trading Day immediately prior to the Trading Day of the expected announcement of the
Subsequent Financing (provided, however, the Company may deliver a Pre-Notice during such time other than during
the Trading Hour Period on the Trading Day immediately prior to the Trading Day of the expected announcement, provided that such
Pre-Notice shall be deemed to have been delivered at 9:30 a.m. on the next Trading Day), the Company shall deliver to each Purchaser
a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask
such Purchaser if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”).
Upon the request of a Purchaser received within two hours of the delivery of such Pre-Notice that is delivered on or before 6:00
p.m. New York Time (otherwise by 8:30 a.m. New York time (the “Pre-Notice Termination Time”), and only upon
a request by such Purchaser, for a Subsequent Financing Notice, the Company shall promptly deliver a Subsequent Financing Notice
to such Purchaser. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing,
the amount of proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing
is proposed to be effected and shall include a term sheet or similar document relating thereto as an attachment. If the Company receives no such notice from a Purchaser as of such Pre-Notice Termination Time, such Purchaser shall be deemed
to have notified the Company that it does not elect to participate.


 



     


     


    

 


(c)          Any
Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by no later than 12 hours
after receipt of the applicable Subsequent Financing Notice (the “Notice Termination Time”) that such Purchaser
is willing to participate in the Subsequent Financing, the amount of such Purchaser’s participation, and representing and
warranting that such Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent
Financing Notice. If the Company receives no such notice from a Purchaser as of such Notice Termination Time, such Purchaser shall
be deemed to have notified the Company that it does not elect to participate.


 


(d)          If
by the Notice Termination Time, notifications by the Purchasers of their willingness to participate in the Subsequent Financing
(or to cause their designees to participate) is, in the aggregate, less than the total amount of the Participation Maximum, then
the Company may effect the remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent
Financing Notice.


 


(e)          If
by the Notice Termination Time, the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase
more than the aggregate amount of the Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata
Portion (as defined below) of the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription
Amount of Securities purchased on the Closing Date by a Purchaser participating under this Section 4.10 and (y) the sum of the
aggregate Subscription Amounts of Securities purchased on the Closing Date by all Purchasers participating under this Section 4.10.


 


(f)          The
Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of
participation set forth above in this Section 4.10, if the Subsequent Financing subject to the initial Subsequent Financing Notice
is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within three Trading Days after the
date of the initial Subsequent Financing Notice.


 


(g)          The
Company and each Purchaser agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision whereby such Purchaser shall be required to agree to
any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to any amendment to or termination
of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior written consent of
such Purchaser.


 


(h)          Notwithstanding
anything to the contrary in this Section 4.10 and unless otherwise agreed to by such Purchaser, the Company shall either confirm
in writing to such Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly
disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Purchaser
will not be in possession of any material, non-public information, by the 3rd Business Day following delivery of the
Subsequent Financing Notice. If by such 3rd Business Day, no public disclosure regarding a transaction with respect
to the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction has been received by such
Purchaser, such transaction shall be deemed to have been abandoned and such Purchaser shall not be deemed to be in possession of
any material, non-public information with respect to the Company or any of its Subsidiaries.


 



     


     


    

 


(i)          Notwithstanding
the foregoing, this Section 4.10 shall not apply in respect of an Exempt Issuance.


 


4.11         Subsequent
Equity Sales.


 


(a)          From
the date hereof until the later of (i) 90 days after the Second Closing Date (which period shall be tolled on a daily basis for
any days during such period when the Resale Registration Statement is not effective or current), or (ii) 121 days following the
First Closing Date (such later date, the “Market Standstill Expiration Date”), neither the Company nor any Subsidiary
shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common
Stock Equivalents.


 


(b)          From
the date hereof until the two (2) year anniversary of the First Closing Date, the Company shall be prohibited from effecting or
entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents
(or a combination of units thereof) involving a Variable Rate Transaction. “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 shares of 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, or effects a transaction under, any agreement, including, but not limited to, an equity line
of credit, whereby the Company may issue securities at a future determined price; provided, that commencing after the Market Standstill
Expiration Date, the Company may engage in at-the-market offerings through a broker-dealer pursuant to Rule 415 (subject to a floor
price of $0.25 per share (subject to adjustment for reverse and forward stock splits and the like after the date hereof)); provided
further, that any transaction with a maximum number of shares issuable that is fixed at the time of closing shall not be a Variable
Rate Transaction; and provided further, no registered public offering shall be a Variable Rate Transaction. The Company shall provide
the Purchasers with prompt written notice, and in no event later than 1 Trading Day after entering into an at-the-market offering,
of such at-the-market offering and any resets to such Purchasers’ Exercise Price or Conversion Price. Any Purchaser shall
be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to
any right to collect damages.


 



     


     


    

 


(c)          Notwithstanding
the foregoing, this Section 4.11 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall
be an Exempt Issuance.


 


4.12         Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration
is also offered to all of the parties to this Agreement. For clarification purposes, this provision constitutes a separate right
granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat
the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect
to the purchase, disposition or voting of Securities or otherwise.


 


4.13         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 pursuant to the initial press release
as described in Section 4.4.  Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such
time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release
as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and
the information included in the Disclosure Schedules.  Notwithstanding the foregoing and notwithstanding anything contained
in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation,
warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that
the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described
in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company
in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any
duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance
of the initial press release as described in Section 4.4.  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 covenant 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.


 



     


     


    

 


4.14         Exercise
and Conversion Procedures. Subject to compliance of the exercising Purchaser with the last sentence of Section 3.2(c) hereto,
the form of Notice of Exercise included in the Warrants and the form of Notice of Conversion included in the Debentures set forth
the totality of the procedures required of the Purchasers in order to exercise the Warrants or to convert the Debentures. No additional
legal opinion, other information or instructions shall be required of the Purchasers to exercise their Warrants or convert their
Debentures. Without limiting the preceding sentences, no ink-original Notice of Exercise or Notice of Conversion shall be required,
nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required in order
to exercise the Warrants or any Notice of Conversion form be required in order to convert the Debentures. The Company shall honor
exercises of the Warrants and conversions of the Debentures and shall deliver Warrant Shares and Conversion Shares (as defined
in the Debentures) in accordance with and subject to the terms, conditions and time periods set forth in the Transaction Documents.


 


4.15         Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Restricted Securities as required under
Regulation D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Restricted Securities for, sale
to the Purchasers at the Closings under applicable securities or “Blue Sky” laws of the states of the United States,
and shall provide evidence of such actions promptly upon request of any Purchaser.


 


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 First
Closing has not been consummated on or before December 2, 2016; provided, however, that no such termination will affect the right
of any party to sue for any breach by any other party (or parties).


 


5.2           Fees
and Expenses. At the First Closing, the Company has agreed to reimburse Purchaser the non-accountable sum of $50,000 for its
legal fees and expenses, $25,000 of which has been paid prior to the date hereof. Except as expressly set forth in the Transaction
Documents to the contrary, 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 exercise notice delivered by a Purchaser), stamp taxes and
other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.


 


5.3           Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus Supplement,
contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements
and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents,
exhibits and schedules.


 



     


     


    

 


5.4           Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile or email attachment at the facsimile number or email address as set forth on the signature pages attached hereto
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 or email attachment at the facsimile number or email address 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. To the extent that any notice provided pursuant
to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.


 


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 Purchasers which purchased at least 75% in interest of the Securities based on
the initial Subscription Amounts hereunder or, in the case of a waiver, by the party against whom enforcement of any such waived
provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser
(or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required.
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.
Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser
relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely
affected Purchaser, Any amendment effected in accordance with accordance with this Section 5.5 shall be binding upon each Purchaser
and holder of Securities and the Company.


 


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. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of
each Purchaser (other than by merger). 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 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. The Co-Placement Agents shall be the third party beneficiaries of the representations and warranties
of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. 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, except as otherwise set forth in Section 4.8 and this Section 5.8.


 



     


     


    

 


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 New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action
or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding
is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action
or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under
Section 4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action
or Proceeding.


 


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


 


5.11         Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.


 


5.12         Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.


 



     


     


    

 


5.13         Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser
may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission
of an exercise of a Warrant or conversion of a Debenture, the applicable Purchaser shall be required to return any shares of Common
Stock subject to any such rescinded exercise or conversion notice concurrently with the return to such Purchaser of the aggregate
exercise price paid to the Company for such shares (all subject to the limitations under the Israeli Companies Law, 1999 on the
repurchase of shares by the issuing company) and the restoration of such Purchaser’s right to acquire such shares pursuant
to such Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).


 


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 and in case of loss, theft or destruction, of indemnity reasonably satisfactory
to it. 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         Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the
Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation
the defense that a remedy at law would be adequate.


 


5.16         Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.


 



     


     


    

 


5.17         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. For reasons of administrative convenience only, each
Purchaser and its respective counsel have chosen to communicate with the Company through ZAGSW. ZAGSW does not represent any of
the Purchasers and only represents the Co-Placement Agents. The Company has elected to provide all Purchasers with the same terms
and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the
Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction
Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between
and among the Purchasers.


 


5.18         Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other
amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages
or other amounts are due and payable shall have been canceled.


 


5.19         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.


 


5.20         Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.


 


5.21         WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 


 


(Signature Pages Follow)


 




     


     


    

 


IN WITNESS WHEREOF,
the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.


 


	ROSETTA GENOMICS LTD.	 	Address for Notice:
	 	 	 	 
	By:	 	 	Rosetta Genomics Ltd.
	 	Name: Kenneth A. Berlin	 	3 Independence Way, STE 209,
	 	Title: Chief Executive Officer	 	Princeton, N.J. 08540, USA
	 	 	 	Attn: Ana Ward, General Counsel
	 	 	 	Fax: 609-419-9009


 


	With a copy to (which shall not constitute notice):	Mintz, Levin, Cohn, Ferris
	 	Glovsky and Popeo, P.C.
	 	One Financial Center
	 	Boston, MA 02111
	 	Attn: Brian P. Keane
	 	Fax: 617-542-2241
	 	 
	and to:	AYR - Amar Reiter Jeanne
	 	Shochatovitch & Co. Lawyers
	 	14 Aba Hillel Silver Rd.
	 	Ramat Gan 5250607, Israel
	 	Attn: Nir Oren
	 	Fax: (+)972-3-6019602




 


[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK


 


SIGNATURE PAGE FOR PURCHASER FOLLOWS]


 




     


     


    

 


[PURCHASER SIGNATURE PAGES TO ROSG SECURITIES
PURCHASE AGREEMENT]


 


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.


 


Name of Purchaser: ________________________________________________________


 


Signature of Authorized Signatory
of Purchaser: _________________________________


 


Name of Authorized Signatory: _______________________________________________


 


Title of Authorized Signatory: ________________________________________________


 


Email Address of Authorized Signatory:_________________________________________


 


Facsimile Number of Authorized Signatory: __________________________________________


 


Address for Notice to Purchaser:


 


 


 


 


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


 


 


 


 


Subscription Amount $____ (___% payable at the First Closing
(the “First Closing Subscription Amount”) and ____% payable at the Second Closing)


 


Shares (____% of First Closing Subscription Amount divided
by $____): ___________


 


Principal Amount of Registered Debentures (___% of First
Closing Subscription Amount): $____________


 


Principal Amount of Private Placement Debentures (___% of
Subscription Amount): $________________


 


Warrant Shares: __________________


 


EIN Number: _______________________


 


[SIGNATURE PAGES CONTINUE]


 




     


     


    

 


Rosetta Genomics Ltd. Disclosure
Schedule


 


This Disclosure Schedule, including
the annexes, attachments and exhibits hereto, has been prepared and is being delivered in accordance with, and is incorporated
into as part and parcel of, that certain Securities Purchase Agreement (the “Agreement”) entered into as of November
23, 2016, by and among Rosetta Genomics Ltd, and the Purchasers. Capitalized terms which are used but not otherwise defined herein
have the respective meanings assigned to them in the Agreement. This Disclosure Schedule is subject to the following terms and
conditions:


 


		1.	All references to Articles and Section numbers are to
Articles and Sections of the Agreement, unless otherwise stated or the context otherwise requires. The words “herein,”
“hereby,” “hereunder” and words of similar import refer to the Disclosure Schedule as a whole and not
to any particular section of the Disclosure Schedule (unless expressly so limited).



 


		2.	The headings and descriptions of representations, warranties
and covenants herein are for descriptive purposes and convenience of reference only and should not be deemed to affect such representations,
warranties or covenants or to limit the exceptions made hereby or the provisions hereof.



 


		3.	The fact that any item of information is disclosed in
any section(s) of the Disclosure Schedule shall not be construed: (i) to mean that such disclosure is required by the Agreement,
including without limitation in order to render any representation or warranty true or correct or (ii) to constitute a representation
or warranty as to the materiality of any item so disclosed. The fact that certain information is contained herein is not an admission
of liability under any applicable Law or otherwise. Additionally, matters reflected in the Disclosure Schedule shall not be used
as a basis for interpreting the terms “material,” “materially,” “materiality” or any other
similar qualification in the Agreement.



 


		4.	The annexes, attachments and exhibits to the Disclosure
Schedule form an integral part of the Disclosure Schedule and are incorporated by reference for all purposes as if set forth fully
herein.



 




     


     


    

 


Section 3.1(a)


 


Subsidiaries 


 


		1.	Rosetta Genomics Inc., a Delaware corporation



		2.	Minuet Diagnostics, Inc., a Delaware Corporation



		3.	CynoGen, Inc., a Delaware Corporation



 



     


     


    

 


1.


 


Section 3.1(g)


 


Capitalization 


 


		1.	As of November 23, 2016, 60,000,000 Ordinary Shares, par
value NIS 0.6 per share, were authorized, of which 20,867,255 Ordinary Shares are issued and outstanding.



		2.	As of November 23, 2016, the Company had outstanding options
to purchase 1,918,488 Ordinary Shares, at a weighted average exercise price of $3.31.



		3.	As of November 23, 2016, the Company had 83,625 RSUs outstanding.



		4.	As of November 23, 2016, the Company had 385,979 Ordinary
Shares available for issuance under its stock plans.



		5.	As of November 23, 2016, the Company had the following
warrants outstanding:



 





	Date Issued	 	Warrants

 Outstanding	 	 	Exercise Price	 	 	Expiration
	1/26/2012	 	 	712	 	 	$	1.5570	 	 	1/26/2017
	4/12/2012	 	 	2,727	 	 	$	3.1875	 	 	4/12/2017
	5/22/2012	 	 	2,800	 	 	$	4.375	 	 	5/16/2017
	5/31/2012	 	 	14,269	 	 	$	14.375	 	 	5/24/2017
	8/8/2012	 	 	148,937	 	 	$	6.250	 	 	8/2/2017
	10/16/2013	 	 	15,000	 	 	$	3.180	 	 	10/16/2023
	10/16/2015	 	 	1,766,666	 	 	$	1.646	 	 	10/16/2020
	TOTAL	 	 	1,951,111	 	 	 	 	 	 	 





 



     


     


    

 


2.


 


Section 3.1(i)


 


Material Changes; Undisclosed Events,
Liabilities or Developments 


 


See Sections 3.1(n) and 3.1(w) below.


 




     


     


    

 


Section 3.1(n)


 


Regulatory Permits 


 


As disclosed in the Report on Form 6-K filed by the Company
with the SEC on August 22, 2016, the Company received notice of rescission of conditional approval from the New York State Department
of Health (NYSDOH) for four of the Company’s allele-specific PCR (CAST PCR)-based assays to test for BRAF, EGFR, KRAS and
NRAS mutations in various cancers, which are processed at its Lake Forest, California facility.


 




     


     


    

 


Section 3.1(p)


 


Intellectual Property 


 


There is a question regarding enforceability
of Composition of Matter patents in the U.S.A., following the SCOTUS rulings in re. Myriad and Prometheus cases. For more details,
see “D. Risk Factors – Risks Related to Our Intellectual Property” in the Company's Annual Report on Form 20-F
for the year ended December 31, 2015 as filed with the SEC on March 23, 2016.


 




     


     


    

 


Section 3.1(r)


 


Transactions With Affiliates and Employees



 


Not applicable.


 




     


     


    

 


Section 3.1(t)


 


Certain Fees 


 


The Company may pay Barrington Research Associates, Inc.
a financial advisory fee of up to $100,000.


 




     


     


    

 


Section 3.1(w)


 


Listing and Maintenance Requirements



 


As disclosed in the Report on Form 6-K filed by the Company
with the SEC on October 13, 2016, on October 13, 2016, the “Company received a staff deficiency letter from The Nasdaq Stock
Market (“Nasdaq”) notifying the Company that for the past 30 consecutive business days, the closing bid price per share
of its ordinary shares was below the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market, as
required by Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”). As a result, the Company was notified by Nasdaq
that it is not in compliance with the Bid Price Rule. Nasdaq has provided the Company with 180 calendar days, or until April 11,
2017, to regain compliance with the Bid Price Rule.


 


To regain compliance with the Bid Price Rule, the closing
bid price of the Company’s ordinary shares must meet or exceed $1.00 per share for a minimum of ten consecutive business
days during the 180 day grace period. If the Company’s ordinary shares do not regain compliance with the Bid Price Rule
during this grace period, it may be eligible for an additional grace period of 180 calendar days provided that the Company satisfies
certain of Nasdaq’s continued and initial listing standards for listing on The Nasdaq Capital Market, other than the minimum
bid price requirement, and provides written notice to Nasdaq of its intention to cure the delinquency during the second grace period.
If the Company does not regain compliance during the initial grace period and is not eligible for an additional grace period, Nasdaq
will provide written notice that the Company’s ordinary shares are subject to delisting from The Nasdaq Capital Market. In
that event, the Company may appeal such determination to a hearings panel, but there could be no assurance that the Company would
prevail at any such hearing.


 




     


     


    

 


Section 3.1(aa)


 


Solvency 


 


The Company entered into a three-year capital
lease agreement in which it purchased lab equipment for its operations. This lease includes a bargain purchase option at the end
of the original lease term and has been classified as a capital lease. The capital lease lab equipment is included in property
and equipment.


 


The following table is a schedule, by years, of the
future minimum lease payments required as of June 30, 2016:




 


	2016	 	$	23	 
	2017	 	 	55	 
	2018	 	 	55	 
	2019	 	 	14	 
	 	 	 	 	 
	Total lease payments	 	$	147	 



 




     


     


    

 


Section 3.1(pp)


 


Certain Fees 


 


The Company may pay Barrington Research Associates, Inc.
a financial advisory fee of up to $100,000.


 




     


     


    

 


Section 4.10


 


Listing of Common Stock 


 


See Section 3.1(w) above.