Exhibit
10.1


 


FORM
OF SECURITIES PURCHASE AGREEMENT


 


This
Securities Purchase Agreement (this “Agreement”) is dated as of February 14, 2020 by and among Integrity Applications,
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,
the Company is offering, through the Placement Agent acting on a “best efforts” basis, pursuant to one or more similar
agreements (the “Other Securities Purchase Agreements”), in a private placement to “accredited investors”
(as such term in defined in Regulation D promulgated under the Securities Act (as defined in Article I below), up to an
aggregate of 42,500,000 shares (collectively, the “Shares”) of common stock, par value $0.001 per share, of
the Company (the “Common Stock”), at a purchase price of $0.40 per Share (the “Offering”);
and


 


WHEREAS,
subject to the terms and conditions set forth in this Agreement, and pursuant to Section 4(a)(2) of the Securities Act and Rule
506 of Regulation D 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, such number of Shares as set forth opposite such Purchaser’s name
on the signature pages to this Agreement.


 


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


 


ARTICLE
I.

DEFINITIONS


 


1.1       Definitions.
In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings set forth in this Section
1.1:


 


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


 


“Affiliate”
means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls,
is controlled by or is under common control with such first Person. As used in this definition, the term “control”
(including the corollary terms “controlled by” or “under common control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership
of voting securities, by contract, or otherwise.


 


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


 


“Business
Day” means any day except (i) any Saturday, (ii) any Sunday, (iii) any day which is a federal legal holiday in the United
States, (iv) any day which is an official holiday in the State of Israel and (v) any day on which banking institutions in the
State of New York are authorized or required by law or other governmental action to close.


 


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


 


“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Shares, in each case, have been satisfied or waived; provided no Closing may occur
after March 31, 2020, unless such date is extended by mutual agreement of the Company and the Placement Agent.


 


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


 




    	 



    	 



    


 


“Common
Stock” shall have the meaning set forth in the Recitals to this Agreement.


 


“Common
Stock Equivalents” means all securities of the Company or any of its Subsidiaries that 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 Jolie Kahn, Esq. with offices located at 12 E. 49th Street, 11th Floor, New York,
New York 10017.


 


“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.


 


“Escrow
Agreement” means the escrow agreement to be employed in connection with the sale of the Shares, in the form agreed to
between the Company and the Placement Agent (on behalf of the Purchasers).


 


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


 


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


 


“Exempt
Issuance” means the issuance of (i) securities pursuant to the Integrity Applications, Inc. 2010 Incentive Compensation
Plan to any employee, officer, director, consultant or other person who provides services to the Company or any Related Party
(as defined in the Integrity Applications, Inc. 2010 Incentive Compensation Plan), (ii) securities to employees, officers, directors
or consultants pursuant to any other stock or option plan duly adopted for such purpose by either 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, (iii) securities upon
the exercise or exchange of any Common Stock Equivalents described in clause (i) or clause (ii), (iv) securities upon the exercise
or exchange of Common Stock Equivalents issued hereunder or under any of the Other Securities Purchase Agreements, (v) securities
upon the exercise or exchange of Common Stock Equivalents issued and outstanding on the date of this Agreement, provided that
such Common Stock Equivalents have not been amended since the date of this Agreement to increase the number of such Common Stock
Equivalents or to decrease the exercise price, exchange price or conversion price thereof (except for any such amendment resulting
from the issuance of the Shares pursuant to this Agreement and/or the Other Securities Purchase Agreements), (vi) warrants to
the Placement Agent as compensation for its services as placement agent to the Company in connection with the offering of the
Shares pursuant to this Agreement and/or the Other Securities Agreement and the issuance of securities upon the exercise thereof
or in connection with any other offering of securities by the Company, and (vii) securities issued pursuant to any bona-fide acquisition
or strategic transaction approved by a majority of the disinterested members of the Board of Directors and which is not effected
primarily for the purpose of raising capital for the Company or any of its Subsidiaries.


 


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


 


“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(z).


 


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


 


“Knowledge
of the Company” or any similar expression or phrase qualifying any matter as to the knowledge of the Company shall mean
the actual knowledge of the Chief Executive Officer of the Company.


 


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


 




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


 


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


 


“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.16.


 


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


 


“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.


 


“Placement
Agent” means Andrew Garrett, Inc., with offices at 52 Vanderbilt Avenue, Suite 510, New York, New York 10017, Fax: (646)
708-9671.


 


“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 4.9.


 


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


 


“Registration
Statement” shall have the meaning ascribed to such term in the Registration Rights Agreement.


 


“Required
Filings” 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.


 


“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.


 


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


 


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


 


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


 


“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Shares purchased by such Purchaser hereunder
or under the Other Securities Purchase Agreements (as applicable), as specified below such Purchaser’s name and next to
the heading “Subscription Amount” on the signature pages to this Agreement or an Other Securities Purchase Agreement
(as applicable), in United States dollars and in immediately available funds.


 




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“Subsidiary”
shall have the meaning ascribed to such term in Section 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 AMERICAN, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
the New York Stock Exchange, the OTCQX marketplace or the OTCQB marketplace (or any successors to any of the foregoing).


 


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


 


“Transfer
Agent” means American Stock Transfer & Trust Company, LLC, with offices at 6201 15th Avenue, Brooklyn, New York
11219, Fax: (718) 765-8717, and any successor transfer agent of the Company.


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (i) 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)), (ii) if the Common Stock is not then
listed or quoted for trading on any Trading Market and if prices for the Common Stock are then reported on the Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent closing price per share
of the Common Stock so reported, or (iii) 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 Shares then outstanding and
reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.


 


ARTICLE
II.

PURCHASE AND SALE


 


2.1       Subscription
and Closing.


 


(a)       The
minimum Subscription Amount for each Purchaser is $250,000, subject to the Company and the Placement Agent’s mutual agreement
to accept a lesser amount. 


 


(b)       Each
Purchaser acknowledges and agrees that there is no minimum number of Shares that must be sold to conduct a Closing, and that the
Company may issue and sell Shares in one or more additional Closings and pursuant to one or more Other Securities Purchase Agreements
(up to a maximum aggregate amount of 42,500,000 Shares).


 


(c)       The
Subscription Amounts received from the Purchasers will be placed in a non-interest bearing escrow account set up pursuant to the
Escrow Agreement, and shall be released to the Company at each Closing.


 


(d)       On
the Closing Date, upon the terms and subject to the conditions set forth herein, the Company shall sell to the Purchasers, and
each Purchaser, severally and not jointly, shall purchase from the Company, such number of Shares as set forth on the signature
page hereto executed by such Purchaser. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and
2.3, the Closing shall occur at the offices of Company Counsel or at such other location as the parties may mutually agree.
For the elimination of doubt, each Purchaser acknowledges and agrees that, except where the context otherwise requires, any references
to the “Purchasers” hereunder shall include the Purchasers under this Agreement and all Other Securities Purchase
Agreements.


 




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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)	the
    Registration Rights Agreement duly executed by the Company;
	 	 	 
	 	(iii)	a
    legal opinion of Company Counsel, substantially in the form agreed to between the Company and the Placement Agent (on behalf
    of the Purchasers);
	 	 	 
	 	(iv)	(A)
    evidence of the issuance to such Purchaser, in book entry form, of such number of Shares as set forth on the signature page
    hereto executed by such Purchaser or (B) if such Purchaser has elected to receive certificated Shares, one or more certificates,
    registered in the name of the Purchaser, representing the number of Shares as set forth on the signature page hereto executed
    by such Purchaser;


 


(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, including a fully completed Accredited Investor Certification set forth as Exhibit
    A;
	 	 	 
	 	(ii)	the
    Registration Rights Agreement duly executed by such Purchaser;
	 	 	 
	 	(iii)	the
    payment of the Subscription Amount by such Purchaser to the escrow agent:


 


If
by wire transfer:


 


	 	Receiving
    Bank Name & Address: 	Cross
    River Bank
	 	 	885
    Teaneck Road.
	 	 	Teaneck,
    NJ 07666
	 	ABA/Routing
    #:	021214273
	 	Beneficiary
    Bank Account Title:	Cross
    River Bank as Escrow Agent for 
	 	 	Integrity
    Applications Inc.
	 	Beneficiary
    Account Number:	[                                        ]


 


If
by check:


 


	 	Payable
    to: 	Cross
    River Bank, Escrow Agent for Integrity Applications, Inc.
	 	 	
	 	Mail
    to: 	400
    Kelby Street, 14th Floor, Fort Lee, NJ 07024


 


	 	(iv)	a
    joint written instruction, executed by the Placement Agent on behalf of the Purchasers and the Company, authorizing the escrow
    agent under the Escrow Agreement to release to the Company such Purchaser’s Subscription Amount.


 


2.3       Closing
Conditions.


 


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


 


		(i)	the
                                         accuracy in all material respects on the Closing Date of the representations and warranties
                                         of the Purchasers contained herein, including the Accredited Investor Certification set
                                         forth as Exhibit A (unless such representations and warranties speak only as of a specific
                                         date, in which case they shall be accurate as of such date);



 




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	 	(ii)	all
    obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have
    been performed in all material respects;
	 	 	 
	 	(iii)	the
    delivery by each Purchaser of the items required to be delivered by it at or prior to Closing as set forth in Section 2.2(b)
    of this Agreement;
	 	 	 
	 	(iv)	the
    Subscription Amount of a Purchaser is accepted by the Company as evidenced by the Company’s counter-signature on such
    Purchaser’s signature page to this Agreement; and
	 	 	 
	 	(v)	no
    statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or
    endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions
    contemplated by this Agreement or any of the other Transaction Documents.


 


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


 


	 	(i)	the
    accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained
    herein (unless such representations and warranties speak only as of a specific date, 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 in all material respects;
	 	 	 
	 	(iii)	the
    delivery by the Company of the items required to be delivered by it at or prior to Closing as set forth in Section 2.2(a)
    of this Agreement;
	 	 	 
	 	(iv)	there
    shall have been no Material Adverse Effect with respect to the Company since the date hereof;
	 	 	 
	 	(v)	from
    the date hereof to the Closing Date, trading in the Common Stock (if any) 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 Shares at the Closing; and


 




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	 	(vi)	no
    statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or
    endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions
    contemplated by this Agreement or any of the other Transaction Documents.


 


ARTICLE
III.

REPRESENTATIONS AND WARRANTIES


 


3.1       Representations
and Warranties of the Company. Except as set forth in the SEC Reports or the Disclosure Schedules, which Disclosure Schedules
shall be deemed a part hereof and shall qualify any representation or warranty otherwise made herein only to the extent of the
disclosure contained in the corresponding section of the Disclosure Schedules or in another Section of the Disclosure Schedules,
to the extent that it is reasonably apparent on the face of such disclosure that such disclosure is applicable to such Section,
the Company hereby makes the following representations and warranties to each Purchaser:


 


(a)       Subsidiaries.
The only subsidiary of the Company is A.D. Integrity Applications Ltd., an Israeli limited company (the “Subsidiary”).
The Company owns, directly or indirectly, all of the capital stock or other equity interests of the Subsidiary free and clear
of any Liens, and all of the issued and outstanding shares of capital stock of the Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. All other references to
the Subsidiaries or any of them in the Transaction Documents shall be disregarded except to the extent such reference speaks to
a time in the past or future with respect to a Subsidiary.


 


(b)       Organization
and Qualification. Each of the Company and the Subsidiary 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 the Subsidiary
is in violation or 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 Subsidiary is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may
be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business or condition (financial
or otherwise) of the Company and the Subsidiary, taken as a whole, or (iii) a material adverse effect on the Company’s ability
to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a “Material Adverse Effect”), and no Proceeding has been instituted in any such jurisdiction revoking, limiting
or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.


 


(c)       Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders
in connection herewith or therewith other than in connection with the Required Filings. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.


 




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(d)       No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Shares 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 the 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 the 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 the Subsidiary is a party or by which
any property or asset of the Company or the Subsidiary is bound or affected, or (iii) subject to the Required Filings, 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 the Subsidiary is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or the Subsidiary is bound or affected; except in the case of each of clauses
(ii) and (iii), such as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse
Effect.


 


(e)       Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to Section 4.5 of this Agreement, (ii) the filing with the Commission of any Registration
Statement, any Prospectus and any amendments or supplements thereto pursuant to the Registration Rights Agreement, and (iii) the
filing of a Form D with the Commission and such filings (if any) as are required to be made under applicable state securities
laws (collectively, the “Required Filings”).


 


(f)       Issuance
of the Shares. The Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, nonassessable, free and clear of all Liens imposed by the Company. 


 


(g)       Capitalization.
The capitalization of the Company is as set forth on Schedule 3.1(g)(i). Except as set forth on this Schedule, the Company
has not issued any capital stock since its most recently filed periodic report under the Exchange Act. Except as set forth on
Schedule 3.1(g)(ii), 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)(iii)
and except as a result of the purchase and sale of the Shares, there are no outstanding options, warrants, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or the Subsidiary is or may become bound to issue additional shares of Common
Stock or Common Stock Equivalents. Except as set forth on Schedule 3.1(g)(iv), the issuance and sale of the Shares will
not obligate the Company 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. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid
and nonassessable, have been issued in material 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. 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 complied 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 the Subsidiary 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. Except as set forth on Schedule 3.1(i), 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 material 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 Shares contemplated by this Agreement, no
event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist
with respect to the Company or the Subsidiary 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 two Trading Days prior to the date that this representation is made.


 


(j)       Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the Knowledge of the Company,
threatened against or affecting the Company, the 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
Shares or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.
Except as set forth in the SEC Reports, since December 31, 2017, neither the Company nor the Subsidiary, nor, to the Knowledge
of the Company, 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. Other than to consent to the withdrawal of the Company’s registration statement
on Form S-1 (Registration No. 333-176415) in 2013, 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 the Subsidiary’s
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 the Subsidiary is a party to a collective bargaining agreement, and the Company and the Subsidiary believe that
their relationships with their employees are good. To the Knowledge of the Company, no executive officer of the Company or the
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 the Subsidiary
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 would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.


 


(l)       Compliance.
Neither the Company nor the 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 the 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
would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.


 


(m)       Regulatory
Permits. The Company and the Subsidiary 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
(“Material Permits”), except where the failure to possess such permits would not, individually or in the aggregate,
be reasonably be expected to result in a Material Adverse Effect, and neither the Company nor the Subsidiary has received any
notice of proceedings relating to the revocation or modification of any Material Permit.


 


(n)       Title
to Assets. The Company and the Subsidiary have good and marketable title in all personal property owned by them that is material
to the business of the Company and the Subsidiary, in each case free and clear of all Liens, except for (i) Liens that 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 Subsidiary and (ii) Liens for the payment of federal, state or other taxes, for which appropriate
reserves have been made in accordance with GAAP and the payment of which is neither delinquent nor subject to penalties. Neither
the Company nor the Subsidiary owns any real property. The Company currently leases office facilities in Ashdod, Israel.


 


(o)       Intellectual
Property. The Company and the Subsidiary 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 the Company or the 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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(p)       Insurance.
The Company and the Subsidiary 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 Subsidiary are engaged, including,
but not limited to (in the case of the Company), directors and officers insurance coverage at least equal to the aggregate Subscription
Amount. Neither the Company nor the 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 on terms consistent in all material respects with the market for similarly sized companies as the Company and the
Subsidiary for the lines of business of the Company and the Subsidiary at a cost that would not reasonably be expected to have
a Material Adverse Effect.


 


(q)       Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports and on Schedule 3.1, none of the officers or directors
of the Company or the 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 service as an employee, officer and/or
director), 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 $100,000 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.


 


(r)       Sarbanes-Oxley;
Internal Controls and Disclosure Controls. The Company is in compliance with any and all requirements of the Sarbanes-Oxley
Act of 2002 that are applicable to it, except where such non-compliance would not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect. The Company and Subsidiary 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’s certifying officers have established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company 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 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.


 




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(s)       Certain
Fees. As compensation in connection with the placement of the Shares in this Offering, the Placement Agent will receive, as
a commission, an amount in cash equal to 7% of the total Subscription Amounts raised in this Offering, plus 3% of the total Subscription
Amounts as a management fee plus a 3% non-accountable expense allowance. In addition, the Company will be required to issue to
the Placement Agent, or its sub-agents, warrants to purchase up to such number of shares of Common Stock equal to 10% of the aggregate
Shares sold in the Offering. Any warrants issued to the Placement Agent will have cashless exercise provisions as well as full
anti-dilution protection. Other than the compensation paid or to be paid to the Placement Agent in connection with the placement
of the Shares, no brokerage, finder’s fees, commissions or due diligence fees 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
3.1(s) that may be due in connection with the transactions contemplated by the Transaction Documents.


 


(t)       Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not
be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.


 


(u)       Registration
Rights. Except as set forth in the SEC Reports, no Person other than the Purchasers and the holders of Series B Preferred
Stock and Series C Preferred Stock has any right to cause the Company or any Subsidiary to effect the registration under the Securities
Act of any securities of the Company or any Subsidiary.


 


(v)       Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(g) of the Exchange Act, and the Company
has taken no action designed to, or which to the Knowledge of the Company 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 (if any) 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 applicable listing and maintenance requirements.


 


(w)       Application
of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, to render inapplicable
any provision in the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation
that is or could render applicable any control share acquisition, combination, poison pill (including any distribution under a
rights agreement) or other similar anti-takeover provision 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 Shares and the Purchasers’ ownership of the Shares.


 


(x)       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 the Company 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
following the Closing. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company
and the Subsidiary, their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to
this Agreement, when taken together as a whole, 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 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.


 




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(y)       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 Shares to be integrated with prior offerings by the Company which would require the registration of any such securities
under the Securities Act.


 


(z)       Solvency.
Based on the consolidated financial condition of the Company as of the date hereof, and the Company’s good faith estimate
of the fair market value of its assets, after giving effect to the receipt by the Company of the proceeds from the sale of the
Shares hereunder: (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid
on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they
mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted
and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business
conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current
cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after
taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities
when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as
they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no
knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the
bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. Schedule 3.1(z) 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 the Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities
for borrowed money or amounts owed in excess of $250,000 (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 $250,000 due under leases required to be capitalized in accordance
with GAAP. Neither the Company nor the Subsidiary is in default with respect to any Indebtedness.


 


(aa)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, each of the Company and the Subsidiary (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, to the Knowledge
of the Company, no basis for any such claim exists.


 


(bb)Foreign
Corrupt Practices. Neither the Company nor the Subsidiary, nor, to the Knowledge of the Company, any agent or other person
acting on behalf of the Company or the 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 the 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.


 


(cc)Regulation
M Compliance. The Company has not, and, to the Knowledge of the Company, no Person 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 Shares, (ii) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Shares, 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 or to be
paid to the Placement Agent in connection with the placement of the Shares.


 




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(dd)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 the Subsidiary or
their financial results or prospects.


 


(ee)Office
of Foreign Assets Control. Neither the Company, the Subsidiary nor, to the Knowledge of the Company, any director, officer,
agent, employee or affiliate of the Company or Subsidiary is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).


 


(ff)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 Shares by the Company to the Purchasers as
contemplated hereby. The issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Trading
Market (if any).


 


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


 


(hh)No
Disqualification Events. With respect to the Shares to be offered and sold hereunder in reliance on Rule 506(b) 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.


 


(ii)       Other
Covered Persons. Other than the Placement Agent, 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 Shares.


 


(jj)Notice
of Disqualification Events. The Company will notify the Purchasers and the Placement Agent 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.


 


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):


 




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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)       No
Conflicts. The execution, delivery and performance by the Purchaser of this Agreement and the other Transaction Documents
to which it is a party 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 Purchaser’s certificate or articles of incorporation, bylaws or other organizational
or charter documents (as applicable), (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 Purchaser
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 or other understanding to which the Purchaser is a party or
by which any property or asset of the Purchaser is bound or affected, or (iii) subject to the Required Filings, 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 Purchaser is subject (including federal and state securities laws and regulations), or by
which any property or asset of such Purchaser is bound or affected; except in the case of each of clauses (ii) and (iii), for
such that do not materially adversely affect the ability of such Purchaser to consummate the transactions contemplated hereby.


 


(c)       Understandings
or Arrangements. Such Purchaser understands that the Shares are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Shares as principal for its own account and
not with a view to or for distributing or reselling such Shares 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 Shares 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 Shares 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 Shares pursuant to a Registration Statement or otherwise in
compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Shares hereunder in the ordinary
course of its business.


 


(d)       Risk
Factors and Review of Transaction Documents. Prior to its investment in the Shares, such Purchaser has reviewed and understood
the Risk Factors set forth in the SEC Reports and those set forth on Exhibit B. The Purchaser further acknowledges that, prior
to its investment in the Shares, it has reviewed the SEC Reports and the Transaction Documents and has been provided with the
opportunity to ask questions of and receive answers from the Company relating to the Company, the SEC Reports, the Transaction
Documents and the terms and conditions of this Offering, and to obtain any additional information necessary to verify the accuracy
of the information made available to such Purchaser.


 


(e)       Purchaser
Status. At the time such Purchaser was offered the Shares, it was, and as of the date hereof it is an “accredited investor”
as defined in Rule 501 under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer under Section
15 of the Exchange Act. The Purchaser has completed or caused to be completed and delivered to the Company the Accredited Investor
Certification set forth as Exhibit A hereto, which certification (as completed by the Purchaser) is true, correct and complete
in all material respects.


 




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(f)       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 Shares, 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 Shares and, at the present time, is able to afford a complete loss of such investment.


 


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


 


(h)       Solicitation.
The Purchaser is not purchasing the Shares as a result of any advertisement, article, notice or other communication regarding
the Shares published in any newspaper, magazine or similar media, broadcast over television or radio, disseminated over the Internet
or presented at any seminar or, to its knowledge, any other general solicitation or general advertisement.


 


(i)       Discretion
to Accept Subscription and Terminate Offering. The Company or the Placement Agent, may, in their sole discretion, reject any
subscription of the Shares, in whole or in part, by any Purchaser. The Company may, in its sole discretion, terminate or withdraw
the Offering in its entirety at any time prior to a Closing in relation thereto. If a Purchaser’s subscription is rejected
in whole or the Offering is terminated, all funds received from the Purchaser will be returned without interest or offset, and
this Agreement (as it relates to such Purchaser) shall thereafter be of no further force or effect. If a Purchaser’s subscription
is rejected in part, the funds for the rejected portion of the subscription will be returned without interest or offset, and this
Agreement (as it relates to such Purchaser) will continue in full force and effect to the extent the subscription was accepted.


 


(j)       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 Shares covered by this Agreement. Other than to other Persons party to this Agreement, 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 avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any
actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect
Short Sales or similar transactions in the future.


 




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The
Company acknowledges and agrees that the representations contained in 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 transaction contemplated hereby.


 


ARTICLE
IV.

OTHER AGREEMENTS OF THE PARTIES


 


4.1       Transfer
Restrictions.


 


(a)       The
Shares may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Shares
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 Shares under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to
be bound by the terms of this Agreement and the Registration Rights Agreement and shall have the rights and obligations of a Purchaser
under this Agreement and the Registration Rights Agreement.


 


(b)       The
Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Shares in the
following form (with the bracketed text inserted or excluded, as applicable):


 


[NEITHER]
THIS SECURITY [HAS] [HAVE] [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, SUCH SECURITIES MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 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.


 


(c)       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 Shares to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement
and the Registration Rights Agreement and, if required under the terms of such arrangement, such Purchaser may transfer, pledge
or secure Shares 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 Shares may reasonably request in connection with a pledge or transfer
of the Shares, including, if the Shares are subject to registration pursuant to the Registration Rights Agreement, the preparation
and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of
the Securities Act to appropriately amend the list of selling stockholders thereunder.


 




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(d)       Each
Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Shares
pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom, and that if Shares 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
Shares 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 Shares 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, except
as otherwise set forth in this Agreement and the other Transaction Documents, its obligations under 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 Shares 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 even if the Company
is not then subject to the reporting requirements of the Exchange Act.


 


(b)       At
any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of
the Shares may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction
or limitation pursuant to Rule 144, if the Company shall fail for any reason to satisfy the current public information requirement
under Rule 144(c) (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 Shares, an amount in cash equal to two percent (2.0%) of the aggregate value
of the Shares held by such Purchaser 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 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 Shares in a manner that would require
the registration under the Securities Act of the sale of the Shares or that would be integrated with the offer or sale of the
Shares for purposes of the rules and regulations of any Trading Market (if any) 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.


 




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4.5       Securities
Laws Disclosure; Publicity. The Company shall, when required, file a Current Report on Form 8-K disclosing the material terms
of the transactions contemplated hereby and including the Transaction Documents as exhibits thereto. The Company and the Placement
Agent (on behalf of the Purchasers) shall consult with each other prior to 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 with respect to the transactions contemplated hereby without the prior consent of the Company, with
respect to any such press release of any Purchaser, or without the prior consent of the Placement Agent (on behalf of the Purchasers),
with respect to any such 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
other than the Registration Statement registering the Shares for sale, without the prior written consent of such Purchaser, except:
(a) as required by federal securities law in connection with the filing of final Transaction Documents with the Commission or
in connection with the filing of the Registration Statement 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).


 


4.6       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
Shares under the Transaction Documents or under any other agreement between the Company and the Purchasers.


 


4.7       Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company covenants and agrees that neither it, nor any other Person acting on its behalf, will knowingly provide
any Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information,
unless prior thereto such Purchaser shall have entered into a written agreement with the Company regarding the confidentiality
and use of such information. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant
in effecting transactions in securities of the Company.


 


4.8       Use
of Proceeds. Except as set forth on Schedule 4.7, the Company intends to use the net proceeds from the sale of the
Shares hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of any portion of the
Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices),
(b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or
(d) in violation of FCPA or OFAC regulations.


 




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4.9       Indemnification
of Purchasers. Subject to the provisions of this Section 4.9, 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 any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction Documents. 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 and the Purchasers agree that Company Counsel shall be deemed reasonably acceptable
to all Purchaser Parties for such purposes. Any Purchaser Party shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party
except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company
has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in
the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position
of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one
such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (x) for any settlement by a
Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed;
or (y) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of its 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. The indemnification
required by this Section 4.9 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.


 


4.10       Reservation
and Listing of Shares.


 


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


 


(b)       If,
on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate
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, as soon as possible and in any event not later than the 120th day after such date.


 


(c)       The
Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such
Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required
Minimum on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for
listing or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing
or quotation and (iv) 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.


 


4.11       Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of this Agreement or Other Securities Purchase
Agreement unless the same consideration is also offered to all of the Purchasers party to this Agreement. For clarification purposes,
this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser,
and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting
in concert or as a group with respect to the purchase, disposition or voting of Shares or otherwise. For the avoidance of doubt,
nothing contained in this Section 4.11 shall prevent the Company or its Subsidiary from entering into bona fide agreements
and/or arrangements with any Purchaser or from appointing any Purchaser to serve as an officer, employee, director and/or consultant
to the Company or any of its Subsidiaries on arms-length terms approved by a majority of the disinterested directors of the Board
of Directors or a committee comprised solely of disinterested directors (or require the Company or its Subsidiary to enter into
similar agreements or arrangements with, or provide a similar appointment to, each other Purchaser).


 




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4.12       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
or Form 8-K as described in Section 4.5. 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 or Form 8-K as described in Section 4.5, 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 Form 8-K described in Section 4.5, (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 Form 8-K described
in Section 4.5 and (iii) except as otherwise provided herein or as the parties may agree in the future, no Purchaser shall
have any duty of confidentiality to the Company or its Subsidiaries after the filing of the Form 8-K described in Section 4.5.
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 Shares covered by this Agreement.


 


4.13       Capital
Changes. Until the one year anniversary of the Closing 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, unless such reverse or forward split is made in conjunction with the listing of the Common Stock on a national securities
exchange.


 


4.14       Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Shares 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 Shares 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.


 


ARTICLE
V.

MISCELLANEOUS


 


5.1       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 Shares to the Purchasers.


 


5.2       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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5.3       Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number set forth on the signature pages attached hereto at or prior to 5:30 p.m. (local time, based
on the location of the recipient) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 5:30 p.m. (local time, based on the location of the recipient) on any Trading Day, (c) the
second (2nd) Trading Day following the date of mailing, if sent for overnight delivery via 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 to each Purchaser shall be as set forth on the signature pages attached hereto. The address for such notices
and communications to the Company shall be:


 


19
Ha’Yahalomim St.


P.O.
Box 12163


Ashdod,
Israel


Fax:
972 (8) 675-7850


Attn:
Chief Executive Officer


 


With
a copy to (which shall not constitute notice):


 


Jolie
Kahn, Esq.


12
E. 49th Street, 11th floor


New
York, NY 10017


 


5.4       Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Purchasers holding at least a majority in interest of the Shares then outstanding,
or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future
or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay
or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.


 


5.5       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.


 


5.6       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
Purchasers holding a majority in interest of the Shares then outstanding; provided, however, that the Company shall be permitted
to assign this Agreement to any Person that acquires the Company or its business (whether by merger, stock purchase or the acquisition
or all or substantially all of the Company’s assets). Any Purchaser may assign any or all of its rights under this Agreement
to any Person to whom such Purchaser assigns or transfers any Shares in accordance with the terms of this Agreement and the other
Transaction Documents, provided that such transferee agrees in writing to be bound, with respect to the transferred Shares, by
the provisions of the Transaction Documents that apply to the “Purchasers.”


 


5.7       No
Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary of the representations and warranties
of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement
is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.9 and this
Section 5.7.


 




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5.8       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, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such
suit, 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 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 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 either
party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the
obligations of the Company under Section 4.9, the prevailing party in such action, suit or proceeding shall be reimbursed
by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.


 


5.9       Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Shares for a period of twelve
(12) months.


 


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


 


5.11       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.


 


5.12       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 material 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 no liquidated damages or other fees and expenses shall accrue with respect to such delivery failure following the date of
the Purchaser’s rescission or withdrawal.


 




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5.13       Replacement
of Shares. If any certificate or instrument evidencing any Shares 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
Shares.


 


5.14       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.


 


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


 


5.16       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. The Company has elected to provide all Purchasers with
the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do
so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each
other Transaction Document is between the Company and the Purchaser party thereto, solely, and not between the Company and the
Purchasers collectively and not between and among the Purchasers.


 


5.17       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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5.18       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.


 


5.19       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.


 


5.20       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.


 


	Shares
    Subscribed For:	 	________________________________
	 	 	 
	Subscription
    Amount ($___ for each Unit): 	 	$_______________________________


 


	Purchaser:	 	 
	 	 	 
	 	 	 
	Full
    Legal Name of Purchaser (Please print)	 	Full
    Legal Name of Co- Purchaser (if applicable)
	 	 	 
	 	 	 
	Signature
    of (or on behalf of) Purchaser	 	Signature
    of or on behalf of Co- Purchaser (if  applicable)
	 	 	 
	Name:	 	 
	Title:
    	 	 


 


	 	 	 
	Address
    of Purchaser	 	Address
    of Co- Purchaser (if applicable)
	 	 	 
	 	 	 
	Telephone
    No. of Purchaser	 	Telephone
    No. of Co- Purchaser (if applicable)
	 	 	 
	 	 	 
	Social
    Security or Taxpayer	 	Social
    Security or Taxpayer Identification 
	Identification
    Number of Purchaser	 	Number
    of Co- Purchaser (if applicable)


 


Accepted
by the Company:


 


	INTEGRITY APPLICATIONS, INC. 	 
	 	 	 
	By:
    	            	 
	Name:	 	 
	Title:
    	 	 


 




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