Exhibit 4.1


 


Ayala
Pharmaceuticals, Inc.


 


Amendment
No. 2 


to 


Amended
and Restated Investors’ Rights Agreement


 


This Amendment No. 2 to Amended
and Restated Investors’ Rights Agreement (this “Amendment”), is made and entered into as of June 4, 2021,
by and among Ayala Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and the Investors signatory
hereto.


 


WHEREAS, the Company,
the Investors signatory hereto and other Investors entered into that certain Amended and Restated Investors’ Rights Agreement, dated
as of December 19, 2018, as amended by Amendment No. 1 to Amended and Restated Investors’ Rights Agreement, dated as of May 3, 2020
(as amended, the “Agreement”);


 


WHEREAS, pursuant to
Section 6.6 of the Agreement, the Agreement may be amended by written agreement of the Company and the Required Holders;


 


WHEREAS, the Investors
signatory hereto constitute the Required Holders; and


 


WHEREAS, the parties hereto desire to amend
the Agreement as set forth herein.


 


NOW, THEREFORE, for
good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby covenant and agree
as follows:


 


1. Capitalized
Terms. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings assigned to them in the Agreement.


 


2. Amendments.


 


(a) Section
1.10 of the Agreement is hereby amended and restated in its entirety to read as follows:


 


“1.10 “Excluded Registration”
means (i) a registration relating to the sale or grant of securities to employees of the Company or a subsidiary pursuant to a stock option,
stock purchase, equity incentive or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on
any form that does not include substantially the same information as would be required to be included in a registration statement covering
the sale of the Registrable Securities; (iv) a registration in which the only Common Stock being registered is Common Stock issuable upon
conversion of debt securities that are also being registered; (v) a registration relating to the resale of securities acquired from the
Company in the private placement consummated on February 23, 2021, or securities issued upon the conversion, exchange or exercise of securities
acquired from the Company in such private placement; or (vi) one (1) registration statement on Form S-3 filed with the SEC on or before
June 30, 2021 registering the sale by the Company from time to time of securities of the Company, including without limitation, any amendments
and supplements thereto and combined registration statements therewith, and any offering of securities thereunder.”


 






     


     


    

 


(b) Section
1.25 of the Agreement is hereby amended and restated in its entirety to read as follows:


 


“1.25 “Registrable Securities”
means (i) the Common Stock issuable or issued upon conversion of the Preferred Stock; (ii) any Common Stock, or any Common Stock
issued or issuable (directly or indirectly) upon conversion and/or exercise of any other securities of the Company, held of record by
the Investors on May 3, 2020 or acquired by the Investors from the Company after May 3, 2020; (iii) the Key Holder Registrable Securities,
provided, however, that such Key Holder Registrable Securities shall not be deemed Registrable Securities, and the Key Holders
shall not be deemed Holders for the purposes of Subsections 2.1, 2.10, 3.1, 3.2, 4.1 and 6.6;
and (iv) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is
issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in clauses
(i) and (ii) above; excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which
the applicable rights under this Agreement are not assigned pursuant to Subsection 6.1 and any shares for which registration
rights have terminated pursuant to Subsection 2.13 of this Agreement.”


 


(c) Section
2.10 of the Agreement is hereby terminated in its entirety, effective as of February 19, 2021, and shall have no further force or effect.


 


3. No
Further Amendment. Except as expressly amended hereby, the Agreement is in all respects ratified and confirmed and all of the terms
and conditions and provisions thereof shall remain in full force and effect. This Amendment is limited precisely as written and, except
as set forth in Section 2 of this Amendment, shall not be deemed to be an amendment to any other term or condition of the Agreement
or any of the documents referred to therein. In the event of a conflict between the terms of the Agreement and the terms of this Amendment,
the terms of this Amendment shall control.


 


4. Effect
of Amendment. This Amendment shall form a part of the Agreement for all purposes, and each party thereto and hereto shall be bound
hereby. From and after the execution of this Amendment by the parties hereto, any reference in the Agreement to “this Agreement,”
“hereof,” “herein,” “hereunder” and words or expressions of similar import shall be deemed a reference
to the Agreement as amended hereby. This Amendment shall be binding on all parties to the Agreement, regardless of whether such party
has consented to this Amendment.


 


5. Governing
Law. This Amendment and any controversy arising out of or relating to this Amendment shall be governed by and construed in accordance
with the internal laws of the State of Delaware, without regard to conflict of law principles that would result in the application of
any law other than the law of the State of Delaware.


 






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6. Captions.
All articles and section headings or captions contained in this Amendment are inserted only as a matter of convenience and for reference
and in no way define, limit, extend or describe the scope of this Amendment or the intent of any provision thereof.


 


7. Severability.
If any provision of this Amendment or application to any party or circumstance shall be determined by any court of competent jurisdiction
to be invalid or unenforceable to any extent, the remainder of this Amendment or the application of such provision to any other party
or circumstances shall not be affected thereby, and each provision shall be valid and shall be enforced to the fullest extent permitted
by law.


 


8. Counterparts;
Execution. This Amendment may be executed in counterparts, each of which so executed shall be deemed to be an original, and all of
which together shall constitute one instrument. Delivery or acceptance of this Amendment or any portion thereof by facsimile transmission
or digitally, or in any electronic fashion or other transmission method (including without limitation, pdf or any electronic signature
complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com), shall have the same effect as if delivered personally and
any such transmission signature, initial or notation, shall have the same effect as if it were an original and shall be binding upon the
maker thereof.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 




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IN WITNESS WHEREOF,
each of the undersigned has executed this Amendment No. 2 to Amended and Restated Investors’ Rights Agreement as of the date first
written above.


 


	COMPANY:



	AYALA PHARMACEUTICALS, INC.
	 
	 
	By:	/s/ Roni Mamluk	 
	Name:	Roni Mamluk	 
	Title:	Chief Executive Officer	 


 


[Signature Page to Amendment No. 2 to Amended
and Restated Investors’ Rights Agreement]


 




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IN WITNESS WHEREOF,
each of the undersigned has executed this Amendment No. 2 to Amended and Restated Investors’ Rights Agreement as of the date first
written above.


 


	
    INVESTORS:
	 
	Israel Biotech Fund I, L.P	 
	By its general partner:	 
	Israel Biotech Fund GP Partners, L.P.	 
	By its general partner:	 
	I.B.F. Management, Ltd.	 
	 	 
	By:	/s/ Yuval Cabilly	 
	Name: 	Yuval Cabilly	 
	Title:	Director & CEO	 


 


[Signature Page to Amendment No. 2 to Amended
and Restated Investors’ Rights Agreement]


 




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IN WITNESS WHEREOF,
each of the undersigned has executed this Amendment No. 2 to Amended and Restated Investors’ Rights Agreement as of the date first
written above.


 


	
    INVESTORS:
	 
	aMoon Growth Fund Limited Partnership	 
	 	 
	By:	/s/ Dr. Yair Schindel	 
	Name: 	Yair Schindel, M.D.	 
	Title:	Managing Partner	 
	 	 	 
	By:	/s/ Todd Sone	 
	Name:	Todd Sone	 
	Title:	GP	 


 


[Signature Page to Amendment No. 2 to Amended
and Restated Investors’ Rights Agreement]


 


 


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