SECURITIES
PURCHASE AGREEMENT


 


This
Securities Purchase Agreement (this “Agreement”) is dated as of November 28 2017, between InspireMD, Inc.,
a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).


 


WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933,
as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell
to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company
as more fully described in this Agreement.


 


NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration
the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:


 


ARTICLE
I.


DEFINITIONS


 


1.1
Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise
defined herein have the meanings given to such terms in the Certificate of Designation (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 4.7.


 


“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.


 


“Amendment
to Series C Certificate of Designation” means the Amendment to the Series C Certificate of Designation to be filed prior
to the Closing by the Company with the Secretary of State of Delaware, which shall include the amendments set forth in Section
4.17 below and in the form of Exhibit C-2 attached hereto.


 


“Board
of Directors” means the board of directors of the Company.


 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.


 


“Certificate
of Designation” means the Certificate of Designation to be filed prior to the Closing by the Company with the Secretary
of State of Delaware, in the form of Exhibit A attached hereto.


 




    	 



    	 



    

 


“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.


 


“Closing
Date” means the earlier of (i) December 11, 2017 and (ii) the date immediately following the date that the closing bid
price of the Common Stock on the Trading Market is $0.33 or less.


 


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


 


“Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.


 


“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.


 


“Company
Counsel” means Haynes and Boone, LLP, with offices located at 30 Rockefeller Plaza, 26th Floor, New York,
NY 10112.


 


“Conversion
Price” shall have the meaning ascribed to such term in the Certificate of Designation.


 


“Conversion
Shares” shall have the meaning ascribed to such term in the Certificate of Designation.


 


“Disclosure
Schedules” shall have the meaning ascribed to such term in Section 3.1.


 


“EGS”
means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105-0302.


 


“Effective
Date” means the earliest of the date that (a) the initial Registration Statement has been declared effective by the
Commission, (b) all of the Conversion Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without without
volume or manner-of-sale restrictions; provided, that the Company shall be in compliance with the current public information required
under Rule 144, or (c) all of the Conversion Shares may be sold pursuant to an exemption from registration under Section 4(1)
of the Securities Act without volume or manner-of-sale restrictions and Company Counsel has delivered to such holders a standing
written unqualified opinion that resales may then be made by such holders of the Conversion Shares pursuant to such exemption
which opinion shall be in form and substance reasonably acceptable to such holders.


 




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“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 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, (b) 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, and (c) securities issued pursuant to acquisitions
or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities
are issued as “restricted securities” (as defined in Rule 144) or otherwise subject to a customary lock-up agreement
for a period of at least one hundred eighty (180) days, and, 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 engaged
in an operating business 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 (it being understood that any portfolio company of a private equity sponsor
shall not be deemed to have a primary business of investing in securities).


 


“FCPA”
means the Foreign Corrupt Practices Act of 1990, as amended.


 


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


 


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


 


“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(bb).


 


“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).


 




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“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).


 


“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.17.


 


“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(ll).


 


“Preferred
Stock” means the up to 750 shares of the Company’s Series D Convertible Preferred Stock issued hereunder having
the rights, preferences and privileges set forth in the Certificate of Designation, in the form of Exhibit A 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.


 


“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).


 


“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).


 


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.10.


 


“Qualified
Offering” means a Qualified Offering of Common Stock or Common Stock Equivalents, with gross cash proceeds to the Company
of at least $8,000,000 and in which the Purchasers exchange all of their Preferred Stock, Series B Preferred Stock and Series
C Preferred Stock into such offering.


“Registration
Statement” means a registration statement covering the resale of the Conversion Shares by each Purchaser.


 


“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 Conversion Shares issuable upon conversion in full of all shares
of Preferred Stock, ignoring any conversion limits set forth therein.


 




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“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.


 


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


 


“Securities”
means the Preferred Stock and the Conversion Shares.


 


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


 


“Series
B Preferred Stock” means the Company’s Series B Convertible Preferred Stock.


 


“Series
B Certificate of Designation” means the Certificate of Designation to the Series B Preferred Stock previously filed
by the Company with the Secretary of State of Delaware.


 


“Series
C Preferred Stock” means the Company’s Series C Convertible Preferred Stock.


 


“Series
C Certificate of Designation” means the Certificate of Designation to the Series C Preferred Stock previously filed
by the Company with the Secretary of State of Delaware.


 


“Shareholder
Approval” means such approval as may be required by the applicable rules and regulations of the NYSE MKT (or any successor
entity) from the shareholders of the Company (i) with respect to the MFN Adjustment and (ii) with respect to the transactions
contemplated by the Transaction Documents, including the issuance of all of the Underlying Shares in excess of 19.99% of the issued
and outstanding Common Stock on the Closing Date.


 


“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 locating and/or borrowing shares of Common Stock).


 


“Stated
Value” means $1,000 per share of Preferred Stock.


 




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“Subscription
Amount” shall mean, as to each Purchaser, the aggregate amount to be paid for the Preferred Stock 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.


 


“Subsequent
Financing” any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents for cash
consideration, Indebtedness or a combination of units thereof.


 


“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the date hereof.


 


“Trading
Day” means a day on which the principal Trading Market is open for trading.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange (or any successors to any of the foregoing) or any other trading marketing maintained by the OTC Markets
Group, Inc.


 


“Transaction
Documents” means this Agreement, the Certificate of Designation, all exhibits and schedules thereto and hereto and any
other documents or agreements executed in connection with the transactions contemplated hereunder.


 


“Transfer
Agent” means Action Stock Transfer Corporation, the current transfer agent of the Company, with a mailing address of
2469 E. Fort Union Blvd., Suite 214 and a facsimile number of (801) 274-1099, and any successor transfer agent of the Company.


 


“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13(b).


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common
Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d)
in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.


 




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ARTICLE
II.


PURCHASE
AND SALE


 


2.1
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with
the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally
and not jointly, agree to purchase, up to an aggregate of $750,000 of shares of Preferred Stock with an aggregate Stated Value
for each Purchaser equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such
Purchaser. The aggregate number of shares of Preferred Stock sold hereunder shall be up to 750. Each Purchaser shall deliver to
the Company, via wire transfer or a certified check, immediately available funds equal to its Subscription Amount and the Company
shall deliver to each Purchaser its respective shares of Preferred Stock 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 Closing. Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of EGS or such other location
as the parties shall mutually agree.


 


2.2
Deliveries.


 


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


 


(i)
this Agreement duly executed by the Company;


 


(ii)
a legal opinion of Company Counsel in a form reasonably acceptable to the Purchasers;


 


(iii)
a certificate evidencing a number of shares of Preferred Stock equal to such Purchaser’s Subscription Amount divided by
the Stated Value, registered in the name of such Purchaser and evidence of the filing and acceptance of the Certificate of Designation
from the Secretary of State of Delaware;


 


(iv)
as of the date hereof until the date that is 90 days following the Qualified Offering, all directors and officers of the Company
shall have provided lock-up agreements in form and substance satisfactory to the Purchasers; and


 


(v)
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.


 




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


 


(i)
this Agreement duly executed by such Purchaser;


 


(ii)
a lock-up agreement prohibiting the sale of shares of Common Stock (x) for a price less than $0.10 until the earlier of 150 days
following the date hereof and the date that the pricing of the Qualified Offering is publicly announced and (y) at any price below
$0.17 during one 30 consecutive day marketing period (or such lesser period if the Qualified Offering is publicly announced prior
to the expiration of such period) in connection with the Qualified Offering, provided such period shall not commence until after
the 90th day following the date hereof and shall not extend beyond the 150th day following the date hereof,
which form shall be in form and substance satisfactory to the parties; and


 


(iii)
such Purchaser’s Subscription Amount by wire transfer to the account specified in writing by the Company.


 


2.3
Closing Conditions.


 


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


 


(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein
(unless as of a specific date therein in which case they shall be accurate as of such date);


 


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


 


(iii)
the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.


 


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


 


(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein 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 Closing Date shall have been
performed;


 




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(iii)
evidence of the filing and acceptance of the Amendment to the Series B Certificate of Designation from the Secretary of State
of Delaware;


 


(iv)
evidence of the filing and acceptance of the Amendment to the Series C Certificate of Designation from the Secretary of State
of Delaware;


 


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


 


(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 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
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 Schedule 3.1(a). 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. If the Company has no subsidiaries, all other
references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.


 


(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.


 




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(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, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.


 


(d)
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents
to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby
and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon
any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which
any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court
or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii)
and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.


 




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(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 4.6 of this Agreement, (ii) the notice and/or application(s) to each applicable
Trading Market for the issuance and sale of the Securities and the listing of the Conversion Shares for trading thereon in the
time and manner required thereby, and (iii) the filing of Form D with the Commission and such filings as are required to be made
under applicable state securities laws (collectively, the “Required Approvals”).


 


(f)
Issuance of the Securities. 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 provided for in the Transaction Documents. The Conversion Shares, when issued in accordance
with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved
from its duly authorized capital stock a number of shares of Common Stock for issuance of the Conversion Shares at least equal
to the Required Minimum on the date hereof.


 


(g)
Capitalization. The capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule 3.1(g)
shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of
the date hereof. The Company has not issued any capital stock since its most recently filed periodic report under the Exchange
Act, other than pursuant to conversion of the Series B Preferred Stock and Series C Preferred Stock, the exercise of employee
stock options under the Company’s stock option plans, the issuance of shares of Common Stock to 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 set forth on Schedule 3.1(g), 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. Except as set
forth on Schedule 3.1(g), 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.


 




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(h)
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation
to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as
applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect
at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified
in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case
of unaudited statements, to normal, immaterial, year-end audit adjustments.


 


(i)
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements
included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i)
there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company
has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock
and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company
stock option 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 or as set forth on Schedule 3.1(i), 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, 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 at least 1 Trading Day prior to the date that this representation is made.


 


(j)
Litigation. Except as set forth on Schedule 3.1(j), 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 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.


 




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(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.


 




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(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 as described in the SEC Reports as necessary or required for use in connection with their respective
businesses 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.


 




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(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 SEC Reports, none of the officers or directors of
the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is
presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental
of real or personal property to or from, providing for the borrowing of money from or lending of money 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 the Closing Date. The
Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that:
(i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and
procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.
The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company
and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such
date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial
reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or
is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.


 




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(t)
Certain Fees. Except as set forth on Schedule 3.1(t), 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)
Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers
as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the
Trading Market.


 


(v)
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.


 


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


 


(x)
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. 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. 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.


 




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(y)
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.


 


(z)
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.
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.


 


(aa)
No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section
3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this
offering of the Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would
require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated.


 




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(bb)
Indebtedness. Schedule 3.1(bb) sets 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.


 


(cc)
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.


 


(dd)
No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of
the Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only
to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.


 


(ee)
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.


 


(ff)
Accountants. The Company’s accounting firm is set forth on Schedule 3.1(ff) of the Disclosure Schedules. 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, 2017.


 




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(gg)
Seniority. As of the Closing Date, no Indebtedness or other claim against the Company is senior to the Preferred Stock
in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness
secured by purchase money security interests (which is senior only as to underlying assets covered thereby) and capital lease
obligations (which is senior only as to the property covered thereby).


 


(hh)
No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the
Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s
ability to perform any of its obligations under any of the Transaction Documents.


 


(ii)
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.


 


(jj)
Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary
notwithstanding (except for Sections 3.2(f) and 4.15 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, may presently 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
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.


 




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(kk)
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.


 


(ll)
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.


 




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(mm)
Form S-3 Eligibility. The Company is eligible to register the resale of the Conversion Shares for resale by the Purchaser
on Form S-3 promulgated under the Securities Act.


 


(nn)
Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i)
in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair
market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock
option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there
is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate
the grant of stock options with, the release or other public announcement of material information regarding the Company or its
Subsidiaries or their financial results or prospects.


 


(oo)
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”).


 


(pp)
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.


 


(qq)
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.


 


(rr)
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 and any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge
of the Company or any Subsidiary, threatened.


 




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(ss)
No Disqualification Events. With respect to the Securities 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.


 


(tt)
Other Covered Persons. 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.


 


(uu)
Notice of Disqualification Events. The Company will notify the Purchasers in writing, prior to the Closing Date of (i)
any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become
a Disqualification Event relating to any Issuer Covered Person.


 


(vv)
Adjustment to Series B Preferred Stock Conversion Price; No Adjustment to Series C Preferred Stock. Effective immediately,
the conversion price of the Series B Preferred Stock shall, by its own terms, adjust to $0.50 on the date hereof until the Closing
Date at which time the conversion prices thereof shall be reduced, and only reduced, to equal to the Conversion Price then in
effect, but to not less than $0.20, subject to adjustment for reverse and forward stock splits and the like. By virtue of the
amendment provided for in Section 4.23, no similar adjustment shall be made on the Series C Preferred Stock as a result of the
transactions contemplated hereunder (but any future issuances may result in an adjustment).


 


3.2
Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents
and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein,
in which case they shall be accurate as of such date):


 




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(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)
Own Account. Such Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account
and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act
or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons
to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities
law (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to 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.


 


(c)
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on
each date on which it converts any shares of Preferred Stock, 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.


 


(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.


 




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(e)
General Solicitation. Such Purchaser is not, to such Purchaser’s knowledge, purchasing the Securities as a result
of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar or, to the knowledge of such Purchaser, any other
general solicitation or general advertisement.


 


(f)
Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser
has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that
such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting
forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement. Other than to other Persons party to this Agreement or 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 locating or borrowing shares in order
to effect Short Sales or similar transactions in the future.


 


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. Notwithstanding the foregoing, for the avoidance
of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating
or borrowing shares in order to effect Short Sales or similar transactions in the future.


 


ARTICLE
IV.


OTHER
AGREEMENTS OF THE PARTIES


 


4.1
Transfer Restrictions.


 


(a)
The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of
Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser
or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance
of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration
of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing
to be bound by the terms of this Agreement and shall have the rights and obligations of a Purchaser under this Agreement.


 




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


 


[NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS 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 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 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 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 Securities may reasonably request
in connection with a pledge or transfer of the Securities.


 






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(c)
Certificates evidencing the Conversion Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof):
(i) while a registration statement (including the Registration Statement) covering the resale of such security is effective under
the Securities Act, (ii) following any sale of such Conversion Shares pursuant to Rule 144, (iii) if such 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 or the Purchaser if required by the Transfer Agent to effect the removal of the legend hereunder,
or if requested by a Purchaser, respectively. If all or any shares of Preferred Stock are converted at a time when there is an
effective registration statement to cover the resale of the Conversion Shares, or if such Conversion Shares may be sold under
Rule 144 and the Company is then in compliance with the current public information required under Rule 144, or if the Conversion
Shares may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public information
required under Rule 144 as to such Conversion Shares and without volume or manner-of-sale restrictions 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 Conversion Shares shall be issued free of all legends. The Company agrees that
following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later
than the earlier of (i) three (3) 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 Conversion
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, however, in the event the restrictive legend on such certificate is being removed pursuant
to Rule 144 or such Conversion Shares as first being issued without legend in reliance on Rule 144, such Purchaser shall, at the
time of delivery of such certificates to the Company or Transfer Agent, represent to the Company and Company Counsel that (i)
it intends to sell such Conversion Shares prior to the filing date of the Company’s next periodic report and (ii) if such
Conversion Shares are not sold by such filing date and such Conversion Shares are no longer eligible for resale under Rule 144
such Purchaser will deliver such shares to the Transfer Agent or Company to have the restrictive legend placed back on such certificates
representing such Conversion Shares. 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 Conversion 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 Conversion
Shares, as applicable, issued with a restrictive legend.


 




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(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 Conversion Shares (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 (x) such number of Conversion Shares that the Company was required to deliver to such Purchaser by the Legend
Removal Date multiplied by (y) 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 Conversion Shares (as the case may be) and ending
on the date of such delivery and payment under this clause (ii).


 


(e)
Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any
Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold
in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from
certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this
understanding.


 


4.2
Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the
outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges
that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Conversion Shares
pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay
or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless
of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.


 


4.3
Furnishing of Information; Public Information.


 


(a)
Until the time that no Purchaser owns Securities, the Company covenants to maintain the registration of the Common Stock under
Section 12(b) or 12(g) of the Exchange Act and 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.


 




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(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 Securities 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 the Securities, an
amount in cash equal to two percent (2.0%) of the aggregate Subscription Amount of such Purchaser’s Securities held 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 Conversion Shares pursuant to Rule 144. The payments to which
a Purchaser shall be entitled pursuant to this Section 4.3(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.


 


4.4
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in
a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated
with the offer or 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.


 


4.5
Conversion Procedures. Each form of Notice of Conversion included in the Certificate of Designation set forth the totality
of the procedures required of the Purchasers in order to convert the Preferred Stock. Without limiting the preceding sentences,
no ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Conversion form be required in order to convert the Preferred Stock. No additional legal opinion, other information
or instructions shall be required of the Purchasers to convert their Preferred Stock. The Company shall honor conversions of the
Preferred Stock and shall deliver Conversion Shares in accordance with the terms, conditions and time periods set forth in the
Transaction Documents.


 




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4.6
Securities Laws Disclosure; Publicity. The Company shall by 9:30 a.m. (New York City time) on the Trading Day immediately
following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and file
a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission. 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 (i) any registration statement and (ii) 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).


 


4.7
Shareholder Rights Plan. 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.


 






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4.8
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 4.6, 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 Company, any of its
Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, and 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 Current Report
on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting
transactions in securities of the Company.


 


4.9
Use of Proceeds. Except as set forth on Schedule 4.9 attached hereto, 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) except as set forth on Schedule
4.9 attached hereto, for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.


 






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4.10
Indemnification of Purchasers. Subject to the provisions of this Section 4.10, 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 (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 4.10 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.


 










4.11
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 100% of
(i) the Required Minimum on such date, minus (ii) the number of shares of Common Stock previously issued pursuant to the Transaction
Documents, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate or articles
of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at
such time (minus the number of shares of Common Stock previously issued pursuant to the Transaction Documents), as soon as possible
and in any event not later than the 90th day after such date, provided that the Company will not be required at any
time to authorize a number of shares of Common Stock greater than the maximum remaining number of shares of Common Stock that
could possibly be issued after such time pursuant to the Transaction Documents.


 




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(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 use commercially reasonable best efforts 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. In addition, the Company
shall hold a special meeting of shareholders (which may also be at the annual meeting of shareholders) at the earliest practical
date after this Agreement, but in no event later than 90 days following the Closing Date, for the purpose of obtaining Shareholder
Approval, with the recommendation of the Company’s Board of Directors that such proposal be approved, and the Company shall
solicit proxies from its shareholders in connection therewith in the same manner as all other management proposals in such proxy
statement and all management-appointed proxyholders shall vote their proxies in favor of such proposal. The Company shall use
its commercially reasonable efforts to obtain such Shareholder Approval. If the Company does not obtain Shareholder Approval at
the first meeting, the Company shall call a meeting every four months thereafter to seek Shareholder Approval until the earlier
of the date Shareholder Approval is obtained or the Preferred Stock is no longer outstanding


 


4.12
[RESERVED]


 


4.13
Subsequent Equity Sales.


 


(a)
From the date hereof until 90 days following the Closing Date. Notwithstanding the foregoing, the Company may commence offers
and sales in connection with the Qualified Offering at any time after February 26, 2018.


 


(b)
From the date hereof until the six month anniversary of the 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, however, following the
later of (i) 90 days following the Closing date, (ii) the date Shareholder Approval has been obtained and deemed effective and
(ii) the pricing of the Qualified Offering, the Company shall be permitted to make sales pursuant to the Company’s existing
at-the-market agreement provided such sales shall not be for a price less than 110% of the public offering price of the Qualified
Offering. 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; provided, further, however, nothing contained in herein shall prohibit
the company from issuing any Common Stock Equivalents that contain a “weight average” or “full ratchet”
anti-dilution in connection with the Qualified Offering.


 




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(c)
Notwithstanding the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance, except that no Variable Rate
Transaction shall be an Exempt Issuance (except, for the avoidance of doubt, the Company may issue Common Stock Equivalents that
contain a “weight average” or “full ratchet” anti-dilution in connection with the Qualified Offering).


 


4.14
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 the Transaction Documents unless the
same consideration is also offered to all of the parties to such Transaction Documents. 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.


 


4.15
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 4.6. 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 4.6, such Purchaser will maintain the confidentiality of the existence and terms
of this transaction and the information included in the Transaction Documents and 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 4.6, (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 4.6 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 4.6. 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.


 




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4.16
Series D Most Favored Nation Provision. From the date hereof until such time as the Company consummates a Qualified Offering,
in the event the Company undertakes, or enters into any agreement to undertake, the issuance and sale of Common Stock and/or Common
Stock Equivalents to third party investors for cash, a Subsequent Financing, each Purchaser may elect, in its sole discretion,
to exchange all or some of the Preferred Stock then held by such Purchaser for any securities or units (including Common Stock
purchase warrants, if any) issued in such Subsequent Financing on a $1.00 per Stated Value for $1.00 new subscription amount basis
(the “MFN Adjustment”). The surrender of Preferred Stock shall be in lieu of any cash subscription amount required
for the participation in such Subsequent Financing. By way of example, if a Purchaser’s Subscription Amount is $100,000,
then the Purchaser shall have the right to surrender the $100,000 in Stated Value of Preferred Stock in lieu of cash consideration
in the subsequent offering of $100,000.


 


4.17
Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the 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 Securities for, sale to the Purchasers
at the Closing 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.


 


4.18
Capital Changes. Until the one year anniversary of the Effective Date, the Company shall not undertake a reverse or forward
stock split or reclassification of the Common Stock without the prior written consent of the Purchasers holding a majority in
interest of the shares of Preferred Stock.


 


4.19
[RESERVED]


 


4.20
Redemption Obligation. At the closing of any Subsequent Financing, the Company shall be required to use at least 12.5%
of the gross proceeds from such Subsequent Financings to offer the Purchasers (and only the Purchasers) holding any outstanding
shares of Series B Preferred Stock a redemption right (payable directly out of the closing thereof) of such Subsequent Financing
until such time that the Company has redeemed, in the aggregate, at least $1 million of Series B Preferred Stock; provided,
however, the maximum redemption amount shall be $1.5 million, in the aggregate, of Series B Preferred Stock following the
date that less than 50% of the shares of Series B Preferred Stock held by such Purchaser on the date hereof remain outstanding.


 




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4.21
Series B Mandatory Exchange. Upon a Qualified Offering, each Purchaser agrees to exchange all remaining Series B Preferred
Stock then held by such Purchaser (after the application of the redemption pursuant to Section 4.20) for any securities or units
(including Common Stock purchase warrants, if any) issued in such Qualified Offering on a $1.00 per Stated Value for $1.375 new
subscription amount basis; provided, however, following the date that a Purchaser holds less than 50% of the shares
of Series B Preferred Stock held on the date hereof by such Purchaser, and provided that such Purchaser has received at least
$1.5 million of redemptions pursuant to Section 4.20, the ratio shall be on a $1.00 of Stated Value for $1.00 of new subscription
amount basis. The surrender of Series B Preferred Stock shall be in lieu of any cash subscription amount required for the participation
in such Qualified Offering. By way of example, if a Purchaser’s Subscription Amount is $100,000, then the Purchaser surrender
the $100,000 in Stated Value of Preferred Stock in lieu of cash consideration in the Qualified Offering of $137,500. Notwithstanding
anything herein to the contrary, in the event that such participation would otherwise cause such Purchaser to exceed the Beneficial
Ownership Limitation (as defined in the Preferred Stock), then the Company shall ensure that, as a condition to any such Qualified
Offering and the obligation to exchange hereunder, a like security is available to issue to the Purchaser to ensure that the Purchaser
does not exceed the Beneficial Ownership Limitation as result of the exchange hereunder (the form and substance of such security
which shall be reasonably acceptable to such Purchaser).


 


4.22
Series C Mandatory Exchange. Upon a Qualified Offering, each Purchaser agrees to exchange all remaining Series C Preferred
Stock then held by such Purchaser (but only after the redemption of Series B pursuant to Section 4.20 is met in full) for any
securities or units (including Common Stock purchase warrants, if any) issued in such Qualified Offering on a $1.00 per Stated
Value for $1.00 new subscription amount basis. The surrender of Series C Preferred Stock shall be in lieu of any cash subscription
amount required for the participation in such Qualified Offering. By way of example, if a Purchaser’s Subscription Amount
is $100,000, then the Purchaser shall surrender the $100,000 in Stated Value of Preferred Stock in lieu of cash consideration
in the Qualified Offering of $100,000. Notwithstanding anything herein to the contrary, in the event that such exchange would
otherwise cause such Purchaser to exceed the Beneficial Ownership Limitation (as defined in the Preferred Stock), then the Company
shall ensure that, as a condition to any such Qualified Offering and the obligation to exchange hereunder, a like security is
available to issue to the Purchaser to ensure that the Purchaser does not exceed the Beneficial Ownership Limitation as result
of the exchange hereunder (the form and substance of such security which shall be reasonably acceptable to such Purchaser).


 


4.23
Series C Amendment. The Certificate of Designation Preferences, Rights and Limitations of the Series C Preferred Stock
shall be amended to include the transactions contemplated hereunder as an “Exempt Issuance” thereunder. As such, the
definition of Exempt Issuance in Section 1 thereof is hereby amended and restated in its entirety to read as follows:


 




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““Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of
the Corporation pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors
of the Corporation or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities
exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the Issuance Date, provided
that such securities have not been amended since the Issuance Date to increase the number of such securities or to decrease the
exercise price, exchange price or conversion price of any such securities or to extend the term of such securities, (c) securities
issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Corporation,
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 Corporation and
shall provide to the Corporation additional benefits in addition to the investment of funds, but shall not include a transaction
in which the Corporation is issuing securities primarily for the purpose of raising capital or to an entity whose primary business
is investing in securities and (d) the Series D Convertible Preferred Stock and the transactions contemplated thereunder and in
connection with such issuance under the Securities Purchase Agreement entered into on November 28, 2017, pursuant to which such
preferred stock is issued.”


 


ARTICLE
V.


MISCELLANEOUS


 


5.1
Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only
and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other
parties, if the Closing has not been consummated on or before December 4, 2017; provided, however, that such termination
will not affect the right of any party to sue for any breach by any other party (or parties).


 


5.2
Fees and Expenses. At the Closing, the Company has agreed to reimburse Sabby Capital Management, LLC (“Sabby”)
the non-accountable sum of $20,000 for its legal fees and expenses. 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 conversion or exercise notice delivered by a Purchaser), stamp taxes
and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.


 


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


 




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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 e-mail 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 e-mail 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 of
the 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 holding at least 67% in interest of the Preferred
Stock then outstanding 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. 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 4.10.


 




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5.9
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of 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 hereto 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 4.10, 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 Closing 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.


 




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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 a conversion of the Preferred Stock, the applicable Purchaser shall be required to return
any shares of Common Stock subject to any such rescinded conversion notice.


 


5.14
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances
shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement
Securities.


 


5.15
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.


 




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5.17
Usury. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever
claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now
or at any time hereafter in force, in connection with any Action or Proceeding that may be brought by any Purchaser in order to
enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction
Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments
in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”),
and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated
with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed
such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction
Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum
contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date
thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess
of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction Documents,
such excess shall be applied by such Purchaser to the unpaid principal balance of any such indebtedness or be refunded to the
Company, the manner of handling such excess to be at such Purchaser’s election.


 


5.18
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 EGS. EGS does not represent
all of the Purchasers and only represents Sabby. 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.


 


5.19
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.


 




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5.20
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.


 


5.21
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.


 


5.22
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)


 




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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.


 


	inspiremd,
    inc.	 	Address
    for Notice:
	 	           	 	 
	By:	 	 	Fax:
	Name:	 	 	 
	Title:	 	 	Email:
	With
    a copy to (which shall not constitute notice):	 	 


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE
PAGE FOR PURCHASER FOLLOWS]


 




    	42



    	 



    

 


[PURCHASER
SIGNATURE PAGES TO NSPR 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: $____________


 


Shares
of Preferred Stock: ____________


 


EIN
Number: _______________________


 


[SIGNATURE
PAGES CONTINUE]


 




    	43



    	 



    

 


Exhibit
A


 


Form
of Certificate of Designation


 


(See
attached)


 




    	 



    	 



    

 





INSPIREMD,
INC.


 


CERTIFICATE
OF DESIGNATION OF PREFERENCES,

RIGHTS AND LIMITATIONS

OF

SERIES D CONVERTIBLE PREFERRED STOCK


 


PURSUANT
TO SECTION 151 OF THE

DELAWARE GENERAL CORPORATION LAW


 


INSPIREMD,
INC., a Delaware corporation (the “Corporation”), in accordance with the provisions of Section 103
of the Delaware General Corporation Law (the “DGCL”) does hereby certify that, in accordance with Sections
141(c) and 151 of the DGCL, the following resolution was duly adopted by the Board of Directors of the Corporation as of _______,
2017:


 


RESOLVED,
that the Board of Directors of the Corporation pursuant to authority expressly vesting in it by the provisions of the Certificate
of Incorporation of the Corporation, hereby authorizes the issuance of a series of Preferred Stock designated as the Series D
Convertible Preferred Stock, par value $0.0001 per share, of the Corporation and hereby fixes the designation, number of shares,
powers, preferences, rights, qualifications, limitations and restrictions thereof (in addition to any provisions set forth in
the Certificate of Incorporation of the Corporation which are applicable to the Preferred Stock of all classes and series) as
follows:


 


SERIES
D CONVERTIBLE PREFERRED STOCK


 


Section
1. Definitions. For the purposes hereof, the following terms shall have the following meanings:


 


“Affiliate”
means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is
under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act.
With respect to a Holder, any investment fund or managed account that is managed on a discretionary basis by the same investment
manager as such Holder will be deemed to be an Affiliate of such Holder.


 


“Alternate
Consideration” shall have the meaning set forth in Section 7(b).


 


“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 6(b)(iv).


 


“Business
Day” means any day except Saturday, Sunday, any day which shall be a federal legal holiday in the United States
or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.


 


“Certificate
of Designation” means this Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible
Preferred Stock filed by the Corporation.


 


“Commission”
means the Securities and Exchange Commission.


 


“Common
Stock” means the Corporation’s common stock, par value $0.0001 per share, and stock of any other class of
securities into which such securities may hereafter be reclassified or changed into.


 


“Common
Stock Equivalents” means any securities of the Corporation or its subsidiaries which would entitle the holder thereof
to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.


 




    	 



    	 



    

 


“Conversion
Date” shall have the meaning set forth in Section 6(a).


 


“Conversion
Price” shall mean $______1, subject to adjustment for reverse and forward stock splits and the like.


 


“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Series D Preferred
Stock in accordance with the terms hereof.


 


“DGCL”
shall mean the Delaware General Corporation Law.


 


“DWAC
Delivery” shall have the meaning set forth in Section 6(a).


 


“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 or directors of the
Corporation 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 Corporation, (b) 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, and (c) securities issued pursuant to acquisitions
or strategic transactions approved by a majority of the disinterested directors of the Corporation, provided that such securities
are issued as “restricted securities” (as defined in Rule 144) or otherwise subject to a customary lock-up agreement
for a period of at least one hundred eighty (180) days, and, 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 engaged
in an operating business and shall provide to the Corporation additional benefits in addition to the investment of funds, but
shall not include a transaction in which the Corporation is issuing securities primarily for the purpose of raising capital or
to an entity whose primary business is investing in securities (it being understood that any portfolio company of a private equity
sponsor shall not be deemed to have a primary business of investing in securities).


 


“Fundamental
Transaction” shall have the meaning set forth in Section 7(b).


 


“Holder”
means any holder of Series D Preferred Stock.


 


“Issuance
Date” means the date of the “Closing” as defined in the Purchase Agreement.


 


“Notice
of Conversion” shall have the meaning set forth in Section 6(a).


 


“Person”
means any 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.


 





 






1
 The lesser of $0.50 and 60% of the closing bid price immediately prior to the Closing Date subject to a $0.20 floor.


 




    	 



    	 



    

 





“Purchase
Agreement” means the Securities Purchase Agreement, dated on or about the Original Issue Date, among the Corporation
and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.


 


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


 


“Series
D Preferred Stock” shall have the meaning set forth in Section 2(a).


 


“Series
D Preferred Stock Register” shall have the meaning set forth in Section 2(b).


 


“Share
Delivery Date” shall have the meaning set forth in Section 6(c)(i).


 


“Shareholder
Approval” means such approval as may be required by the applicable rules and regulations of the NYSE MKT (or any
successor entity) from the shareholders of the Corporation with respect to the transactions contemplated hereby and by the Purchase
Agreement, including the issuance of all of the Conversion Shares in excess of 19.99% of the issued and outstanding Common Stock
on the Closing Date.


 


“Stated
Value” shall have the meaning set forth in Section 2(a).


 


“Trading
Day” means a day on which the Common Stock is traded for any period on the principal securities exchange or if the
Common Stock is not traded on a principal securities exchange, on a day that the Common Stock is traded on another securities
market on which the Common Stock is then being traded.


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common
Stock are then reported in the “Pink Sheets” published by OTC Markets, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other
cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the
Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Corporation, the fees
and expenses of which shall be paid by the Corporation.


 


Section
2. Designation, Amount and Par Value; Assignment.


 


(a)
The series of preferred stock designated by this Certificate of Designation shall be designated as the Corporation’s Series
D Convertible Preferred Stock (the “Series D Preferred Stock”) and the number of shares so designated
shall be 750 (which shall not be subject to increase without the written consent of the Holders holding a majority of the then
issued and outstanding Series D Preferred Stock). Each share of Series D Preferred Stock shall have a par value of $0.0001 per
share and a stated value equal to $1,000 (the “Stated Value”).


 




    	 



    	 



    

 


(b)
The Corporation shall register shares of the Series D Preferred Stock, upon records to be maintained by the Corporation or any
duly registered transfer agent for that purpose (the “Series D Preferred Stock Register”), in the name
of the Holders thereof from time to time. The Corporation may deem and treat the registered Holder of shares of Series D Preferred
Stock as the absolute owner thereof for the purpose of any conversion thereof and for all other purposes. The Corporation shall
register the transfer of any shares of Series D Preferred Stock in the Series D Preferred Stock Register, upon surrender of the
certificates evidencing such shares to be transferred, duly endorsed by the Holder thereof, to the Corporation at its address
specified herein. Upon any such registration or transfer, a new certificate evidencing the shares of Series D Preferred Stock
so transferred shall be issued to the transferee and a new certificate evidencing the remaining portion of the shares not so transferred,
if any, shall be issued to the transferring Holder, in each case, within three Business Days. The provisions of this Certificate
of Designation are intended to be for the benefit of all Holders from time to time and shall be enforceable by any such Holder.


 


Section
3. Dividends. Holders shall be entitled to receive, and the Corporation shall pay, dividends on shares of Series D
Preferred Stock equal (on an as-if-converted-to-Common-Stock basis, without giving effect for such purposes to any limitation
on conversion set forth in Section 6(b)) to and in the same form as dividends (other than dividends in the form of Common Stock)
actually paid on shares of the Common Stock when, as and if such dividends (other than dividends in the form of Common Stock)
are specifically declared by the Board of Directors of the Corporation to be payable to the holders of the Common Stock. Other
than as set forth in the previous sentence, no other dividends shall be paid on shares of Series D Preferred Stock; and the Corporation
shall pay no dividends (other than dividends in the form of Common Stock) on shares of the Common Stock unless it simultaneously
complies with the previous sentence.


 


Section
4. Voting Rights. Except as otherwise provided by law or in this Section 4, the Series D Preferred Stock shall have
no voting rights. So long as any shares of Series D Preferred Stock are outstanding, the Corporation shall not (by merger, consolidation
or otherwise), without the written consent or affirmative vote of the holders of at least a majority of the then-outstanding shares
of Series D Preferred Stock, consenting or voting (as the case may be) separately as a class, amend, alter or repeal any provision
of the Corporation’s Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws or this Certificate
of Designation in a manner that would adversely affect the powers, preferences or rights of the Series D Preferred Stock or enter
into any agreement with respect to any of the foregoing.


 


Section
5. Rank; Liquidation. Upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary
(a “Liquidation”), each Holder shall be entitled to receive the amount of cash, securities or other
property to which such holder would be entitled to receive with respect to such shares of Series D Preferred Stock if such shares
had been converted to Common Stock immediately prior to such Liquidation (without giving effect for such purposes to the Beneficial
Ownership Limitation set forth in Section 6(b)), subject to the preferential rights of holders of any class or series of Capital
Stock of the Corporation specifically ranking by its terms senior to the Series D Preferred Stock as to distributions of assets
upon Liquidation. The Corporation shall mail written notice of any such Liquidation, not less than 45 days prior to the payment
date stated therein, to each Holder.


 




    	 



    	 



    

 





Section
6. Conversion.


 


(a)
Conversions at Option of Holder. Each share of Series D Preferred Stock shall be convertible, at any time and from time
to time from and after the Issuance Date, at the option of the Holder thereof, into a number of shares of Common Stock (subject
to the limitations set forth in Section 6(b)) equal to the quotient of (i) the sum of the aggregate Stated Value of those shares
being converted divided by (ii) the Conversion Price then in effect (the “Conversion Ratio”); provided,
however, if the Conversion Price at closing is greater than $0.33 and at any time subsequent to the Closing a closing bid
price of the Common Stock on the principal Trading Market is less than $0.33 (subject to adjustment for reverse and forward stock
splits and the like), the Conversion Price shall be reduced, and only reduced, to equal $0.20, subject to adjustment hereunder
Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A
(a “Notice of Conversion”), duly completed and executed. Provided the Corporation’s transfer
agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program
and the applicable Conversion Shares are either registered for issuance, registered for resale or eligible for resale without
volume or manner-of-sale restriction requirements pursuant to Rule 144 of the Securities Act (provided, that the public information
requirement of Rule 144 are then satisfied), the Notice of Conversion may specify, at the Holder’s election, whether the
applicable Conversion Shares shall be credited to the account of the Holder’s prime broker with DTC through its Deposit
Withdrawal Agent Commission system (a “DWAC Delivery”). The “Conversion Date”,
or the date on which a conversion pursuant to this Section 6(a) shall be deemed effective, shall be defined as the Trading Day
that the Notice of Conversion, completed and executed, is sent by facsimile or email to, and received prior to 5:30 p.m. (New
York City time) on any date by, the Corporation. To effect conversions of shares of Preferred Stock, a Holder shall not be required
to surrender the certificate(s) representing the shares of Series D Preferred Stock to the Corporation unless all of the shares
of Series D Preferred Stock represented thereby are so converted, in which case such Holder shall deliver the certificate representing
such shares of Series D Preferred Stock promptly following the Conversion Date at issue. Shares of Series D Preferred Stock converted
into Common Stock shall be canceled and shall not be reissued. The calculations set forth in the Notice of Conversion shall control
in the absence of manifest or mathematical error. No ink-original Notice of Conversion shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. The Corporation represents
and warrants that, as of the Issuance Date, the Corporation’s transfer agent participates in the DTC Fast Automated Securities
Transfer program and the Corporation covenants that, while any shares of Series D Preferred Stock remain outstanding, the Corporation
shall cause its transfer agent to participate in the DTC Fast Automated Securities Transfer program.


 


(b)
Beneficial Ownership Limitation.


 


i.
Notwithstanding anything herein to the contrary, the Corporation shall not effect any conversion of the Series D Preferred Stock,
and a Holder shall not have the right to convert any portion of its Series D Preferred Stock, to the extent that, after giving
effect to an attempted conversion, such Holder (together with such Holder’s Affiliates, and any other Person whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act and the
applicable rules and regulations of the Commission, including any “group” of which the Holder is a member (such Persons,
“Attribution Parties”)) would beneficially own a number of shares of Common Stock in excess of the Beneficial
Ownership Limitation (as defined below).


 







    	 



    	 



    

 


ii.
For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Holder and its
Attribution Parties shall include the number of shares of Common Stock issuable upon conversion of the Series D Preferred Stock
subject to conversion with respect to which the determination of such sentence is being made, but shall exclude the number of
shares of Common Stock which are issuable upon (A) conversion of the remaining, unconverted shares of Series D Preferred Stock
beneficially owned by such Holder or any of its Attribution Parties, and (B) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Corporation beneficially owned by such Holder or any of its Attribution Parties (including,
without limitation, any convertible notes, convertible stock or warrants) that are subject to a limitation on conversion or exercise
analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this Section, beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the applicable rules and regulations of
the Commission. In addition, for purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange
Act and the applicable rules and regulations of the Commission.


 


iii.
To the extent that the limitation contained in this Section 6(b) applies, the determination of whether the Series D Preferred
Stock may be converted (in relation to other securities owned by the Holder together with any Attribution Parties) and of which
portion of its Series D Preferred Stock may be converted shall be in the sole discretion of the Holder and the submission of a
Notice of Conversion shall be deemed to be such Holder’s determination of whether the shares of Series D Preferred Stock
may be converted (in relation to other securities owned by such Holder together with any Attribution Parties) and how many shares
of the Series D Preferred Stock are convertible, in each case subject to the Beneficial Ownership Limitation. For purposes of
this Section, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Corporation’s most recent public filing with the Commission, as the case
may be, (B) a more recent public announcement by the Corporation or (C) a more recent notice by the Corporation or the Corporation’s
transfer agent to the Holder setting forth the number of shares of Common Stock then outstanding. For any reason at any time,
upon the written or oral request of a Holder (which may be by email), the Corporation shall, within two (2) Business Days of such
request, confirm orally and in writing to such Holder (which may be via email) the number of shares of Common Stock then outstanding.
In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to any actual conversion
or exercise of securities of the Corporation, including shares of Series D Preferred Stock, by such Holder or its Attribution
Parties since the date as of which such number of outstanding shares of Common Stock was last publicly reported or confirmed to
the Holder.


 


iv.
The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock pursuant to such conversion of Series D Preferred Stock
held by the applicable Holder (to the extent permitted pursuant to this Section). The Holder, upon notice to the Corporation,
may increase or decrease the Beneficial Ownership Limitation provisions of this Section applicable to its Series D Preferred Stock
provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock upon the conversion the Series D Preferred Stock held
by the Holder and the provisions of this Section shall continue to apply. Any such increase will not be effective until the 61st
day after such notice is delivered to the Corporation and shall only be effective with respect to such Holder. The provisions
of this Section shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section
to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.


 




    	 



    	 



    

 


(c)
Mechanics of Conversion


 


i.
Delivery of Certificate or Electronic Issuance Upon Conversion. Not later than the earlier of (i) three Trading Days after
the applicable Conversion Date, or (ii) the number of Trading Days comprising the Standard Settlement Period after the applicable
Conversion Date (the “Share Delivery Date”), the Corporation shall (a) deliver, or cause to be delivered,
to the converting Holder a physical certificate or certificates representing the number of Conversion Shares being acquired upon
the conversion of shares of Series D Preferred Stock or (b) in the case of a DWAC Delivery, electronically transfer such Conversion
Shares by crediting the account of the Holder’s prime broker with DTC through its DWAC system. If in the case of any Notice
of Conversion such certificate or certificates are not delivered to or as directed by or, in the case of a DWAC Delivery, such
shares are not electronically delivered to or as directed by, the applicable Holder by the Share Delivery Date, the applicable
Holder shall be entitled to elect to rescind such Conversion Notice by written notice to the Corporation at any time on or before
its receipt of such certificate or certificates for Conversion Shares or electronic receipt of such shares, as applicable, in
which event the Corporation shall promptly return to such Holder any original Series D Preferred Stock certificate delivered to
the Corporation and such Holder shall promptly return to the Corporation any Common Stock certificates or otherwise direct the
return of any shares of Common Stock delivered to the Holder through the DWAC system, representing the shares of Series D Preferred
Stock unsuccessfully tendered for conversion to the Corporation. As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Corporation’s primary Trading Market
with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.


 


ii.
Obligation Absolute. Subject to Section 6(b) hereof and subject to Holder’s right to rescind a Conversion Notice
pursuant to Section 6(c)(i) above, the Corporation’s obligation to issue and deliver the Conversion Shares upon conversion
of Series D Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or
inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation
of law by such Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation
of the Corporation to such Holder in connection with the issuance of such Conversion Shares. Subject to Section 6(b) hereof and
subject to Holder’s right to rescind a Conversion Notice pursuant to Section 6(c)(i) above, in the event a Holder shall
elect to convert any or all of its Series D Preferred Stock, the Corporation may not refuse conversion based on any claim that
such Holder or any one Person associated or affiliated with such Holder has been engaged in any violation of law, agreement or
for any other reason, unless an injunction from a court, on notice to such Holder, restraining and/or enjoining conversion of
all or part of the Series D Preferred Stock of such Holder shall have been sought and obtained by the Corporation, and the Corporation
posts a surety bond for the benefit of such Holder in the amount of 150% of the value of the Conversion Shares into which would
be converted the Series D Preferred Stock which is subject to such injunction, which bond shall remain in effect until the completion
of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it
obtains judgment. In the absence of such injunction, the Corporation shall issue Conversion Shares and, if applicable, cash, upon
a properly noticed conversion. If the Corporation fails to deliver to a Holder such Conversion Shares pursuant to Section 6(c)(i)
on the Share Delivery Date applicable to such conversion, the Corporation shall pay to such Holder, in cash, as liquidated damages
and not as a penalty, for each $5,000 of Stated Value of Series D Preferred Stock being converted, $50 per Trading Day (increasing
to $100 per Trading Day on the third Trading Day and increasing to $200 per Trading Day on the sixth Trading Day after such damages
begin to accrue) for each Trading Day after the Share Delivery Date until such Conversion Shares are delivered or Holder rescinds
such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages for the Corporation’s failure
to deliver Conversion Shares within the period specified herein and such Holder shall have the right to pursue all remedies available
to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to any other Section hereof
or under applicable law.


 




    	 



    	 



    

 


iii.
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available
to the Holder, if the Corporation fails to deliver to a Holder the applicable certificate or certificates or to effect a DWAC
Delivery, as applicable, by the Share Delivery Date pursuant to Section 6(c)(i) (other than a failure solely caused by incorrect
or incomplete information provided by Holder to the Corporation), and if after such Share Delivery Date such Holder is required
by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise
purchases, shares of Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which such Holder
was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then
the Corporation shall (A) pay in cash to such Holder (in addition to any other remedies available to or elected by such Holder)
the amount by which (x) such Holder’s total purchase price (including any brokerage commissions) for the shares of Common
Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder was entitled
to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase
obligation was executed (including any brokerage commissions) and (B) at the option of such Holder, either reissue (if surrendered)
the shares of Series D Preferred Stock equal to the number of shares of Series D Preferred Stock submitted for conversion or deliver
to such Holder the number of shares of Common Stock that would have been issued if the Corporation had timely complied with its
delivery requirements under Section 6(c)(i). For example, if a Holder purchases shares of Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Series D Preferred Stock with respect
to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation
was a total of $10,000 under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay such Holder
$1,000. The Holder shall provide the Corporation written notice, within ten (10) Trading Days after the occurrence of a Buy-In,
indicating the amounts payable to such Holder in respect of such Buy-In together with applicable confirmations and other evidence
reasonably requested by the Corporation. Nothing herein shall limit a Holder’s right to pursue any other remedies available
to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief
with respect to the Corporation’s failure to timely deliver certificates representing shares of Common Stock upon conversion
of the shares of Series D Preferred Stock as required pursuant to the terms hereof; provided, however, that the Holder shall not
be entitled to both (i) require the reissuance of the shares of Series D Preferred Stock submitted for conversion for which such
conversion was not timely honored and (ii) receive the number of shares of Common Stock that would have been issued if the Corporation
had timely complied with its delivery requirements under Section 6(c)(i).


 


iv.
Reservation of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Series D Preferred
Stock as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the
Holders of the Series D Preferred Stock, not less than such aggregate number of shares of the Common Stock as shall be issuable
(taking into account the adjustments of Section 7) upon the conversion of all outstanding shares of Series D Preferred Stock.
The Corporation shall take all action required to increase the authorized number of shares of Common Stock (including, if necessary,
seeking stockholder approval to authorize the issuance of additional shares of Common Stock), or any other actions necessary or
desirable, if at any time there shall be insufficient authorized but unissued shares of Common Stock to permit such reservation
or to permit the conversion of all outstanding shares of the Series D Preferred Stock. The Corporation covenants that all shares
of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.


 




    	 



    	 



    

 


v.
Fractional Shares. No fractional shares of Common Stock shall be issued upon the conversion of the Series D Preferred Stock.
As to any fraction of a share which a Holder would otherwise be entitled to receive upon such conversion, the Corporation shall
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Conversion Price or round up to the next whole share.


 


vi.
Transfer Taxes and Expenses. The issuance of certificates for shares of the Common Stock upon conversion of the Series
D Preferred Stock shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in
respect of the issue or delivery of such certificates, provided that the Corporation shall not be required to pay any tax that
may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name
other than that of the registered Holder(s) of such shares of Series D Preferred Stock and the Corporation shall not be required
to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to
the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been
paid. The Corporation shall pay all transfer agent fees required for processing of any Notice of Conversion.


 


(d)
Status as Stockholder. Upon each Conversion Date, (i) the shares of Series D Preferred Stock being converted shall be deemed
converted into shares of Common Stock and (ii) the Holder’s rights as a holder of such converted shares of Series D Preferred
Stock shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies
provided herein or otherwise available at law or in equity to such Holder because of a failure by the Corporation to comply with
the terms of this Certificate of Designation. In all cases, the holder shall retain all of its rights and remedies for the Corporation’s
failure to convert Series D Preferred Stock.


 


(e)
Issuance Limitations. Notwithstanding anything herein to the contrary, if the Corporation has not obtained Shareholder
Approval, then the Corporation may not issue, upon conversion of the Preferred Stock, a number of shares of Common Stock which
would exceed _______2 shares of Common Stock (subject to adjustment for forward and reverse stock splits, recapitalizations
and the like) (such number of shares, the “Issuable Maximum”). Each Holder shall be entitled to a portion of
the Issuable Maximum equal to the quotient obtained by dividing (x) the original Stated Value of such Holder’s Preferred
Stock by (y) the aggregate Stated Value of all Preferred Stock issued on the Original Issue Date to all Holders. In addition,
each Holder may allocate its pro-rata portion of the Issuable Maximum among Preferred Stock and Warrants held by it in its sole
discretion. Such portion shall be adjusted upward ratably in the event a Holder no longer holds any Preferred Stock or Warrants
and the amount of shares issued to such Holder pursuant to such Holder’s Preferred Stock and Warrants was less than such
Holder’s pro-rata share of the Issuable Maximum. For avoidance of doubt, unless and until any required Shareholder Approval
is obtained and effective, warrants issued to any registered broker-dealer as a fee in connection with the Securities issued pursuant
to the Purchase Agreement as described in clause (iii) above shall provide that such warrants shall not be allocated any portion
of the Issuable Maximum and shall be unexercisable unless and until such Shareholder Approval is obtained and effective.


 





 






2
19.99% of the number of shares of Common Stock outstanding on the Trading Day immediately preceding the date of the Purchase
Agreement.


 




    	 



    	 



    

 





Section
7. Certain Adjustments.


 


(a)
[RESERVED]


 


(b)
Fundamental Transaction. If, at any time while this Series D Preferred Stock is outstanding, (A) the Corporation effects
any merger or consolidation of the Corporation with or into another Person (other than a merger in which the Corporation is the
surviving or continuing entity and its Common Stock is not exchanged for or converted into other securities, cash or property),
(B) the Corporation effects any sale of all or substantially all of its assets in one transaction or a series of related transactions,
(C) any tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which all of the
Common Stock is exchanged for or converted into other securities, cash or property, or (D) the Corporation effects any reclassification
of the Common Stock or any compulsory share exchange pursuant (other than as a result of a dividend, subdivision or combination
covered by Section 7(a) above) to which the Common Stock is effectively converted into or exchanged for other securities, cash
or property (in any such case, a “Fundamental Transaction”), then, upon any subsequent conversion of
this Series D Preferred Stock the Holders shall have the right to receive, in lieu of the right to receive Conversion Shares,
for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental
Transaction (without regard to any limitation in Section 6(b)), the same kind and amount of securities, cash or property as it
would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction (without regard to any limitation in Section 6(b)), the holder of one share of Common Stock (the “Alternate
Consideration”). For purposes of any such subsequent conversion, the determination of the Conversion Ratio shall
be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in
respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall adjust the Conversion Ratio in
a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holders
shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Series D Preferred Stock
following such Fundamental Transaction. To the extent any shares of Series D Preferred Stock remain outstanding following a Fundamental
Transaction, the Corporation shall cause any successor entity in a Fundamental Transaction in which the Corporation is not the
survivor (the “Successor Entity”) to assume in writing all of the obligations of the Corporation under
this Certificate of Designation in accordance with the provisions of this Section 7(b) pursuant to written agreements in customary
form and, to the extent necessary to effectuate the foregoing provisions, shall cause any Successor Entity in such Fundamental
Transaction to file a new Certificate of Designation with the same terms and conditions and issue to the Holders new preferred
stock consistent with the foregoing provisions and evidencing the Holders’ right to convert such preferred stock into Alternate
Consideration. The terms of any agreement to which the Corporation is a party and pursuant to which a Fundamental Transaction
is effected shall include terms requiring any such Successor Entity to comply with the provisions of this Section 7(b) and ensuring
that this Series D Preferred Stock (or any such replacement security) will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction. The Corporation shall cause to be delivered to each Holder, at its last address as it
shall appear upon the stock books of the Corporation, written notice of any Fundamental Transaction at least 20 calendar days
prior to the date on which such Fundamental Transaction is expected to become effective or close.


 


(c)
[Reserved]


 




    	 



    	 



    

 





(d)
The Corporation in its sole discretion may lower the Conversion Price for a period of not less than twenty (20) Business Days;
provided, that the Corporation shall provide at least twenty (20) days prior written notice of such reduction to Holders
of the Preferred Stock and provided further that any such reduction shall apply to all shares of Preferred Stock.


 


(e)
Calculations. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued
and outstanding.


 


(f)
Notice to Holders.


 


i.
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 7,
the Corporation shall promptly deliver to each Holder a notice setting forth the Conversion Ratio after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.


 


ii.
Other Notices. If (A) the Corporation shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Corporation shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Corporation shall be required
in connection with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party,
any sale or transfer of all or substantially all of the assets of the Corporation, of any compulsory share exchange whereby the
Common Stock is converted into other securities, cash or property or (E) the Corporation shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be
filed at each office or agency maintained for the purpose of conversion of this Series D Preferred Stock, and shall cause to be
delivered to each Holder at its last address as it shall appear upon the stock books of the Corporation, at least 20 calendar
days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights
or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of
record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice
or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding
the Corporation or any of the Subsidiaries, the Corporation shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K.


 




    	 



    	 



    

 


Section
8. Miscellaneous.


 


(a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile or email, or sent by a nationally
recognized overnight courier service, addressed to the Corporation, at Menorat Hamaor 4, 3rd Floor, Tel Aviv, 67448 Israel, facsimile
number 972-3-691-7692, email address craigs@inspiremd.com, or such other facsimile number, email address or physical address as
the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section. Any and all
notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally,
by facsimile, email, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number,
email address or physical address of such Holder appearing on the books of the Corporation, or if no such facsimile number, email
address or physical address appears on the books of the Corporation, at the principal place of business of such Holder. Any notice
or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission,
if such notice or communication is delivered via facsimile or email at the facsimile number or email address specified in this
Section prior to 5:30 p.m. (New York City time) on any date, (ii) the date immediately following the date of transmission, if
such notice or communication is delivered via facsimile or email at the facsimile number or email address specified in this Section
between 5:30 p.m. and 11:59 p.m. (New York City time) on any date, (iii) the second Business Day following the date of mailing,
if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required
to be given.


 


(b)
Lost or Mutilated Series D Preferred Stock Certificate. If a Holder’s Series D Preferred Stock certificate shall
be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate
for the shares of Series D Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such
loss, theft or destruction of such certificate, and of the ownership thereof, reasonably satisfactory to the Corporation and,
in each case, customary and reasonable indemnity, if requested. Applicants for a new certificate under such circumstances shall
also comply with such other reasonable regulations and procedures.


 


(c)
Waiver. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall
not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of
this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict
adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive
that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this
Certificate of Designation. Any waiver by the Corporation or a Holder must be in writing. Notwithstanding any provision in this
Certificate of Designation to the contrary, any provision contained herein and any right of the holders of Series D Preferred
Stock granted hereunder may be waived as to all shares of Series D Preferred Stock (and the Holders thereof) upon the written
consent of the Holders of not less than a majority of the shares of Series D Preferred Stock then outstanding, unless a higher
percentage is required by the DGCL, in which case the written consent of the holders of not less than such higher percentage shall
be required.


 


(d)
Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of
this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it
shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any amount deemed interest
due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be
lowered to equal the maximum rate of interest permitted under applicable law.


 




    	 



    	 



    

 


(e)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day.


 


(f)
Forum Selection. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of
the transactions contemplated by this Certificate of Designation (whether brought against a party hereto or its respective Affiliates,
directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City
of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of the New York Courts 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 this Certificate of
Designation), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue
for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in
any such suit, 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 Certificate of Designation 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 applicable law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising
out of or relating to this Certificate of Designation or the transactions contemplated hereby. If any party shall commence an
action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or proceeding.


 


(g)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation
and shall not be deemed to limit or affect any of the provisions hereof.


 


(h)
Status of Converted Series D Preferred Stock. If any shares of Series D Preferred Stock shall be converted or reacquired
by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer
be designated as Series D Preferred Stock.


 


Section
9. Exchange Right Upon Qualified Public Offering. Each Holder may elect, in its sole discretion, to exchange all
or some of the Series D Preferred Stock then held by such Holder for any securities or units (including Common Stock purchase
warrants, if any) issued in a Qualified Public Offering on a $1.00 per Stated Value for $1.00 new subscription amount basis (the
“Exchange Right”). The surrender of Series D Preferred Stock shall be in lieu of any cash subscription amount
required for the participation in such Qualified Public Offering. By way of example, if a Holder’s Stated Value of its then
held Series D Preferred Stock is equal to $100,000, then the Holder shall have the right to surrender the $100,000 in Stated Value
of Series D Preferred Stock in lieu of cash consideration in the subsequent offering of $100,000.


 


[Signature
Page Follows]


 




    	 



    	 



    

 


IN
WITNESS WHEREOF, the undersigned has executed this Certificate of Designation this 9th day of March, 2017.


 


	 	INSPIREMD,
    INC.
	 	 	 
	 	By:
    	 
	 	Name:	Craig Shore
	 	Title:	Chief Financial
    Officer, Chief Administrative Officer, Secretary and Treasurer


 




    	 



    	 



    

 





ANNEX
A


 


NOTICE
OF CONVERSION


 


(TO
BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF SERIES D PREFERRED STOCK)


 


The
undersigned Holder hereby irrevocably elects to convert the number of shares of Series D Convertible Preferred Stock indicated
below into shares of common stock, par value $0.0001 per share (the “Common Stock”), of InspireMD, Inc.,
a Delaware corporation (the “Corporation”), according to the conditions hereof, as of the date written
below. If securities are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such
terms in that certain Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock
(the “Certificate of Designation”) filed by the Corporation on March 9, 2017.


 


Conversion
calculations:


 


	Date
    to Effect Conversion: ________________________________________________________
	Number
    of shares of Series D Preferred Stock owned prior to Conversion: __________________
	Number
    of shares of Series D Preferred Stock to be Converted: ___________________________
	Number
    of shares of Common Stock to be Issued: ______________________________________
	Applicable
    Conversion Price: _______________________________________________________
	Number
    of shares of Series D Preferred Stock subsequent to Conversion: ____________________
	 
	Address
    for delivery of physical certificates: __________________________________________
	or
    for DWAC Delivery:
	DWAC
    Instructions:
	Broker
    no: _____________________________________________________________________

    Account no: ____________________________________________________________________


 


	 	[HOLDER]

    By:_______________________________________ 

    Name:______________________________________
	 	Title:
	 	Date:


 




    	 



    	 



    

 


Exhibit
C-2


 


Form
of Amendment to Series C Certificate of Designation


 


(See
attached)


 




    	 



    	 



    

 





CERTIFICATE
OF AMENDMENT


TO


CERTIFICATE
OF DESIGNATION OF PREFERENCES,


RIGHTS
AND LIMITATIONS


OF


SERIES
C CONVERTIBLE PREFERRED STOCK


OF


INSPIREMD,
INC.





 


INSPIREMD,
INC., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”),
in accordance with the provisions of Section 242 thereof, hereby certifies that the following resolutions amending the rights
of the Series C Convertible Preferred Stock (a) were duly adopted by the Board of Directors of the Corporation (the “Board
of Directors”) pursuant to authority conferred upon the Board of Directors by the provisions of the Amended and Restated
Certificate of Incorporation of the Corporation, as amended (the “Certificate of Incorporation”), and the Amended
and Restated Bylaws of the Corporation (the “Bylaws”), at a meeting of the Board of Directors held on November
27, 2017, and (b) was consented to by holders of at least a majority of the outstanding shares of Series C Convertible Preferred
Stock, par value of $0.0001 (the “Series C Preferred Stock”), consenting separately as a class.


 


RESOLVED,
that effective upon the filing of this Certificate of Amendment to Certificate of Designation of Preferences, Rights and Limitations
of Series C Convertible Preferred Stock (this “Certificate of Amendment”), the Certificate of Designation of
Preferences, Rights and Limitations of Series C Convertible Preferred Stock dated and filed with the Delaware Secretary of State
on March 9, 2017 (the “Certificate of Designation”), are hereby amended as follows:


 


1.
The definition of “Exempt Issuance” in Section 1 of the Certificate Designation is hereby amended and restated in
its entirety to read as follows:


 


“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the
Corporation pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors
of the Corporation or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities
exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the Issuance Date, provided
that such securities have not been amended since the Issuance Date to increase the number of such securities or to decrease the
exercise price, exchange price or conversion price of any such securities or to extend the term of such securities, (c) securities
issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Corporation,
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 Corporation and
shall provide to the Corporation additional benefits in addition to the investment of funds, but shall not include a transaction
in which the Corporation is issuing securities primarily for the purpose of raising capital or to an entity whose primary business
is investing in securities and (d) the Series D Convertible Preferred Stock and the transactions contemplated thereunder and in
connection with such issuance under the Securities Purchase Agreement entered into on November 28, 2017, pursuant to which such
preferred stock is issued.”.


 


RESOLVED,
that the Certificate of Designation as amended by the Certificate of Amendment shall remain in full force and effect except as
expressly amended hereby.


 


*****


 


[signature
page follows]


 




    	 



    	 



    

 





THE
UNDERSIGNED, being a duly authorized officer of the Corporation, does file this Certificate of Amendment to Certificate of Designation
of Preferences, Rights and Limitations of Series C Convertible Preferred Stock, hereby declaring and certifying that the facts
herein stated are true and accordingly has hereunto set his hand this 28th day of November, 2017.


 


	 	By:	 
	 	Name:	 
	 	Title: