Document:

Exhibit

INVESTMENT MANAGEMENT AGREEMENT
THIS INVESTMENT MANAGEMENT AGREEMENT (this “Agreement”) is made as of [date], between VENTURE LENDING & LEASING IX, INC., a Maryland corporation (the “Fund”), and WESTECH INVESTMENT ADVISORS LLC, a California limited liability company (“Westech Advisors”).  Westech Advisors is sometimes referred to herein as the “Manager”.
WHEREAS, the Fund is a newly organized, non-diversified closed-end management investment company that has elected status as a business development company (“BDC”) under the Investment Company Act of 1940 (“1940 Act”), whose sole shareholder is Venture Lending & Leasing IX, LLC, a Delaware limited liability company (the “LLC”);
WHEREAS, the Manager is an investment adviser registered as such under the Investment Advisers Act of 1940 (“Advisers Act”); and
WHEREAS, the Fund desires to retain the Manager to furnish certain investment advisory, portfolio management and administrative services to the Fund, and the Manager is willing to furnish such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed between the parties as follows:
1.Appointment.  The Fund hereby appoints Westech Advisors as Investment Manager for the period and on the terms set forth in this Agreement.  Westech Advisors accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided.
2.    Investment Duties.  Subject to the supervision of the Fund’s Board of Directors (the “Board”), the Manager will provide a continuous investment program for the Fund and will determine from time to time what securities and other investments will be purchased, retained or sold by the Fund.  Subject to investment policies and guidelines established by the Board, the Manager will identify, evaluate, structure and close the investments to be made by the Fund, provide portfolio management and servicing of loans held in the Fund’s portfolio, and administer the Fund’s day-to-day affairs.  The Manager will also arrange and recommend debt financing for the Fund, provided that no such debt may be incurred without the prior approval of the Board.
3.    Administrative Duties.  The Manager will administer the affairs of the Fund under the supervision of the Board and subject to the following:
(a)    The Manager will supervise all aspects of the operations of the Fund, including oversight of transfer agency, custodial and accounting services; provided, however, that nothing contained herein shall be deemed to relieve or deprive the Board of its responsibility for and control of the conduct of the affairs of the Fund.
(b)    The Manager will arrange, but not pay, for the periodic preparation, updating, filing and dissemination (as required) of the Fund’s registration statement under the Securities Exchange 

GDSVF&H\3074285.4    

Act of 1934, proxy material, tax returns and required reports to the Fund’s shareholders and the Securities and Exchange Commission (“SEC”) and other appropriate federal or state regulatory authorities.
(c)    The Manager will oversee the computation of the net asset value and the net income of the Fund in accordance with procedures adopted by the Board.
(d)    The Manager will maintain or oversee the maintenance of all books and records with respect to the Fund, and will furnish the Board with such periodic and special reports as the Board reasonably may request.  In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Manager hereby agrees that all records that it maintains for the Fund are the property of the Fund, agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any records that it maintains for the Fund and that are required to be maintained by Rule 31a-1 under the 1940 Act, and further agrees, upon request by the Fund, to surrender promptly to the Fund any records that it maintains for the Fund.
(e)    All cash, securities and other assets of the Fund will be maintained in the custody of one or more banks in accordance with the provisions of Section 17(f) of the 1940 Act and the rules thereunder; the authority of the Manager to instruct the Fund’s custodian(s) to deliver and receive such cash, securities and other assets on behalf of the Fund will be governed by a custodian agreement between the Fund and each such custodian, and by resolution of the Board.
(f)    The Manager will arrange for the Fund, at the Fund’s expense, to obtain (i) annual audited financial statements and cause such financial statements to be distributed to the Fund’s shareholders within 120 days of the end of the Fund’s fiscal year, and (ii) audited financial statements upon the Fund’s liquidation, and cause such financial statements to be distributed to the Fund’s shareholders promptly after the completion of such audit.  All such financial statements shall be prepared in accordance with generally accepted accounting principles and audited by an independent public accountant that is registered with, and subject to regular inspection as of the commencement of the professional engagement period, and as of each calendar year-end, by, the Public Company Accounting Oversight Board in accordance with its rules.
4.    Further Duties.  In all matters relating to the performance of this Agreement, the Manager will act in conformity with the Articles of Incorporation and Amended and Restated Bylaws of the Fund and with the instructions and directions of the Board and will comply with the requirements of the 1940 Act, the rules thereunder, and all other applicable federal and state laws and regulations.
5.    Services Not Exclusive.
(a)    The services furnished by the Manager hereunder are not to be deemed exclusive and the Manager, except as otherwise expressly provided in this Section 5, shall be free to furnish similar services to others so long as its services under this Agreement are not impaired thereby.  Except as otherwise expressly provided in this Section 5, nothing in this Agreement shall limit or restrict the right of any director, officer or employee of the Manager, who may also be a director, officer or employee of the Fund, to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar or dissimilar nature.

    
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(b)    Until the earlier of (i) the termination of the Investment Period (as defined below) and (ii) such time as the LLC has called capital and either the LLC and/or the Fund has invested at least 75% of the total amounts subscribed for by the investors in the LLC, except as provided below, neither the Manager, Venture Lending and Leasing IX GP, LLC (in its role as the managing member of the LLC, the “Managing Member”) nor any “Controlled Person” of the Manager or the Managing Member will, without the consent of the LLC, call down capital from any pooled investment vehicle other than VLLI Holdings II, LLC, Venture Lending & Leasing III, LLC, Venture Lending & Leasing IV, LLC, Venture Lending & Leasing V, LLC, Venture Lending & Leasing VI, Inc., Venture Lending & Leasing VI, LLC, Venture Lending & Leasing VII, Inc., Venture Lending & Leasing VII, LLC, Venture Lending & Leasing VIII, Inc., Venture Lending & Leasing VIII, LLC (such entities, collectively, the “Prior Debt Fund Entities”), the LLC or the Fund, or act as investment adviser or manager to any client, if the investment program of such pooled investment vehicle or client includes, as a primary or major component, the provision of asset-backed debt financing to domestic venture capital­backed companies.  In the event that the LLC elects irrevocably to release the members of the LLC from any uncalled portion of their subscription obligations, then solely for purposes of determining when the 75% investment threshold described above has occurred, the “total amounts subscribed for” shall be deemed reduced to reflect such release.  The foregoing restriction shall not be deemed to prohibit the Manager, the Managing Member or any Controlled Person thereof from acting as investment adviser or manager with respect to any of the Prior Debt Fund Entities; provided, however, that, until the 75% investment threshold described above has occurred, such party shall not, without the consent of the Fund, accept from the Prior Debt Fund Entities any additional investment funds (other than amounts required for follow­on investments to existing investments) beyond the funds invested or committed to the Prior Debt Fund Entities (for this purpose treating commitments to Venture Lending & Leasing VIII, LLC as also being commitments to Venture Lending & Leasing VIII, Inc.) as of [first closing date].  A “Controlled Person” of the Manager or the Managing Member, as used in this paragraph, means any entity (i) 50% or more of whose voting securities are beneficially owned by the Manager or the Managing Member, as applicable, or (ii) 50% or more of whose voting securities are controlled in the aggregate by Ronald W. Swenson, Salvador O. Gutierrez, Maurice C. Werdegar, David R. Wanek or Jay L. Cohan.  “Investment Period” as used in this paragraph means the period commencing on the date of the first investment by the Fund (or, if earlier, the LLC) and ending on the last day of the calendar quarter during which the fifth anniversary of such date occurs; provided, however, that the Managing Member shall be permitted to extend such period by up to two (2) additional calendar quarters in its sole and absolute discretion.
The Manager acts as the investment adviser to WTI Equity Opportunity Fund I, L.P. (the “EOF I” and together with the Prior Debt Fund Entities, collectively, the “Prior Funds”) and as managing member of the general partner of EOF I.  In addition to EOF I, the Manager, the Managing Member and/or one or more of the Controlled Person of the Manager or Managing Member may sponsor and/or act as the investment adviser or manager to one or more other private investment entities formed for the purpose of making equity and equity-oriented investments (other than asset-backed investments) in privately held companies (any such entity or entities, along with EOF I, collectively, the “Equity Fund”).  For the avoidance of doubt, nothing in this Agreement shall prevent the Manager, the Managing Member and/or any Controlled Person of the Manager or Managing Member from at any time forming, calling down capital from and/or acting as the investment adviser or manager to the Equity Fund or any successor thereto.

    
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6.    Expenses.  
(a)    The Fund will pay all expenses (including, without limitation, accounting, legal, printing, clerical, filing and other expenses) incurred by the Fund, the Manager or its affiliates on behalf of the Fund in connection with the organization of the Fund and the initial offering of its shares.  In addition, except as otherwise expressly provided for in Section 6(b), during the term of this Agreement, the Fund will bear all of its expenses incurred in its operations including, but not limited to, the following:  (i) brokerage, legal, accounting and commission fees and expenses and other transaction costs related to the acquisitions, dispositions and/or restructurings (including collection and/or workout costs and expenses) of investments (including investments that are not consummated), any hedging transactions with respect thereto and the creation and perfection of security interests with respect thereto; (ii) federal, state and local taxes and fees, including transfer taxes and filing fees, incurred by or levied upon the Fund; (iii) interest charges and other fees and expenses incurred in connection with borrowings (including without limitation costs and expenses incurred in connection with negotiating with one or more lenders to the Fund (including prospective lenders) to structure a loan syndicate and to satisfy any conditions imposed by lenders to the Fund); (iv) SEC fees and expenses, as well as expenses of compliance by the Fund and its directors with SEC rules, regulations, examinations, and filing requirements, and any fees and expenses of other federal or state securities or other regulatory authorities (such as obtaining a surety bond); (v) expenses of preparing, printing and distributing Fund reports and notices; (vi) costs of proxy solicitation; (vii) costs of meetings of shareholders and the Board; (viii) charges and expenses of the Fund’s custodian, transfer and dividend disbursing agents; (ix) any fees and expenses incurred to conduct background checks on the management personnel of prospective Fund investments; (x) compensation and expenses of the Fund’s disinterested directors (which at present include a $20,000 annual fee for each disinterested director, an additional $5,000 annual fee for the chair of the Fund’s Audit Committee, and a fee of $1,000 per meeting attended in person, which amounts may be revised as determined by the Fund’s Nominating and Corporate Governance Committee), and expenses of directors in attending Board meetings, expenses of directors and officers liability insurance, and payments under indemnification agreements; (xi) expenses of administrators, custodians, counsel and auditors; (xii) costs of any certificates representing the shares of stock of the Fund, if any; (xiii) costs of stationery and supplies; (xiv) the costs of membership by the Fund in any trade organizations (including Investment Company Institute membership dues for both the Fund and the Manager); (xv) expenses associated with the preparation of tax returns, and financial statements and obtaining accounting and tax advice; (xvi) all costs and expenses associated with litigation involving the Fund and the amount of any judgment or settlement in connection therewith; (xvii) costs and expenses incurred in connection with valuing the Fund’s investments, including valuation software and the retention of any valuation expert; and (xviii) other extraordinary or non-recurring expenses (such as litigation expenses or indemnification expenses).
(b)    The expenses to be borne by the Manager in connection with its duties to the Fund hereunder are limited to the following:  (i) all costs and fees incident to the selection and investigation of prospective Fund investments, such as travel expenses and professional fees (but excluding broker, legal and accounting fees and other costs incident to the closing, documentation, or consummation of such transactions, and further excluding any fees and expenses incurred to conduct background checks on the management personnel of prospective Fund investments); (ii) the cost of adequate office space for the Fund and all necessary office equipment and services, including telephone service, heat, utilities and similar items; (iii) the cost of providing the Fund with such corporate, administrative and clerical 

    
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personnel (including officers and directors of the Fund who are interested persons of the Manager and are acting in their respective capacities as officers and directors) as the Board reasonably deems necessary or advisable to perform the services required to be performed by the Manager under this Agreement; and (iv) costs and expenses associated with the Manager’s registration or compliance with, or examination by the SEC with respect to, the Advisers Act (other than charges and expenses of the Fund’s custodian, transfer and dividend disbursing agents or any other costs or expenses associated with the acquiring, holding or disposing of the Fund’s assets, whether required by the Advisers Act (or similar state laws) or otherwise).
(c)    The Fund may pay directly any expenses incurred by it in its normal operations and, if any such payment is consented to by the Manager and acknowledged as otherwise payable by the Manager pursuant to this Agreement, the Fund may reduce the fee payable to the Manager pursuant to Section 7 hereof by such amount.  To the extent that such deductions exceed the fee payable to the Manager on any quarterly payment date, such excess shall be carried forward and deducted in the same manner from the fee payable on succeeding quarterly payment dates.
(d)    The payment or assumption by the Manager of any expense of the Fund that the Manager is not required by this Agreement to pay or assume shall not obligate the Manager to pay or assume the same or any similar expense of the Fund on any subsequent occasion.
7.    Management Fee.
(a)    For the services provided and the expenses assumed pursuant to this Agreement, commencing as of the date on which capital contributions are due in connection with the first capital call issued by the LLC to the members of the LLC, the Fund or its successor trustees will pay to the Manager, whether before or after dissolution of the Fund, a management fee (the “Management Fee”), computed and paid quarterly as follows:
(i)    the aggregate annual amount of Management Fees for each annual period (which shall be comprised of four (4) whole fiscal quarters and which, in the case of the first annual period, shall commence on the first day of the first fiscal quarter commencing on or following the Initial Contribution Date) shall be equal to the product of the Annual Percentage (as defined below) with respect to such annual period (as set forth below) and the Member Committed Equity Capital (as defined below) (regardless of when or if such committed capital is called or released); 
(ii)    the “Annual Percentage” with respect to each annual period shall be as follows:

    
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	Annual Period
	Annual Percentage

	First
	1.575%

	Second
	1.600%

	Third
	1.575%

	Fourth
	1.500%

	Fifth
	1.250%

	Sixth
	0.900%

	Seventh
	0.600%

	Eighth
	0.350%

	Ninth
	0.150%

(iii)    There shall be no Management Fee payable by the Fund with respect to any fiscal quarter commencing following the nine year anniversary of the Initial Contribution Date;
(iv)    The “Member Committed Equity Capital” shall be the aggregate amount of subscription obligations for the purchase of interests in the LLC (including any amounts of such obligations that have been satisfied).  For purposes of calculating the Management Fee, any capital committed to the LLC at a closing subsequent to the first closing (regardless of when or if such committed capital is called or released) shall be deemed to have been committed to the LLC as of the first closing.
(b)    The amount of Management Fees for the period beginning on the Initial Contribution Date and ending on the last day of the fiscal quarter during which the Initial Contribution Date occurs shall accrue at the same rate as applies for the first annual period, and shall be payable on the last day of such fiscal quarter.  In general, the amount of Management Fees payable with respect to any annual period shall be payable in equal quarterly installments, in arrears, provided, however, that the management fee for any partial period shall be pro rated based on the ratio that the number of days in such partial period bears to the actual number of days in the applicable annual period.
(c)    In the event of the liquidation of the Fund, the Management Fee which is payable by the Fund as set forth above with respect to the fiscal quarter during which such liquidation occurs and for each subsequent fiscal quarter shall be payable by the LLC.
(d)    If (i) the Manager, (ii) an officer, director or employee of the Manager, (iii) a company controlling, controlled by or under common control with the Manager, or (iv) an officer, director or employee of any such company receives any compensation from a company whose securities are held in the Fund’s portfolio in connection with the provision to that company of significant managerial assistance, the compensation due to the Manager hereunder shall be reduced by the amount of such fee.  If such amounts have not been fully offset at the time of termination of this Agreement, the Manager shall pay such excess amounts to the Fund upon termination. In the event that any such compensation is received from a company whose securities are also held by one or more Prior Funds, then, for purposes of reducing the amount of compensation due to the Manager from the Fund, the amount of the 

    
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compensation received from such company shall be allocated between the Fund and such Prior Funds pro rata in accordance with the relative investment made by each of them in such company.
8.    Limitation of Liability of Manager.  The Manager shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with the matters to which this Agreement relates except a loss resulting from willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement.  Any person, even though also an officer, director, employee or agent of the Manager, who may be or become an officer, director, employee or agent of the Fund shall be deemed, when rendering services to the Fund or acting with respect to any business of the Fund, to be rendering such service to, or acting solely on behalf of, the Fund and not as an officer, director, employee or agent or one under the control or direction of the Manager even though paid by it.
9.    Duration and Termination.
(a)    This Agreement shall become effective upon the date hereabove written provided that this Agreement shall not take effect unless it has first been approved (i) by a vote of a majority of those directors of the Fund who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, and (ii) by vote of a majority of the Fund’s outstanding voting securities.
(b)    Unless sooner terminated as provided herein, this Agreement shall continue in effect for two years from the above written date.  Thereafter, regardless of the dissolution of the Fund, if not terminated, this Agreement shall continue automatically for successive periods of twelve months each, provided that such continuance is specifically approved at least annually (i) by a vote of a majority of those directors of the Fund who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, and (ii) by the Board or by vote of a majority of the outstanding voting securities of the Fund.
(c)    Notwithstanding the foregoing, this Agreement may be terminated:  (i) by vote of the Board or by a vote of a majority of the outstanding voting securities of the Fund at any time, without the payment of any penalty, on sixty days’ written notice to the Manager or (ii) by the Manager at any time, without the payment of any penalty, on sixty days’ written notice to the Fund.  This Agreement will automatically terminate in the event of its assignment.
10.    Amendment of this Agreement.  No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought, and no amendment of this Agreement shall be effective until approved by vote of a majority of the Fund’s outstanding voting securities.
11.    Governing Law.  This Agreement shall be construed in accordance with the laws of the State of Maryland, without giving effect to the conflicts of laws principles thereof, and in accordance with the 1940 Act.  To the extent that the applicable laws of the State of Maryland conflict with the applicable provisions of the 1940 Act, the latter shall control.

    
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12.    Miscellaneous.  The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.  If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors.  As used in this Agreement, the terms “majority of the outstanding voting securities”, “interested person”, “assignment”, “broker”, “investment adviser”, “security” and “significant managerial assistance” shall have the same meaning as such terms have in the 1940 Act, subject to such exemption as may be granted by the SEC by any rule, regulation or order.  Where the effect of a requirement of the 1940 Act reflected in any provision of this Agreement is relaxed by a rule, regulation or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated as of the day and year first above written.
	
				
	 
	VENTURE LENDING & LEASING IX, INC.
	 
	WESTECH INVESTMENT ADVISORS LLC

	 
	 
	 
	 

	By:
	__________
	By:
	_______________

	 
	Jay Cohan
	 
	Maurice Werdegar

	 
	Vice President
	 
	Chief Executive Officer

    
8Exhibit
10.3

 

PHOTOMEDEX,
INC.

2300 Computer Drive, Building G

Willow Grove, Pennsylvania 19090

 

October
11, 2017

 

Mr.
Suneet Singal

Authorized Representative

First
Capital Real Estate Operating Partnership, L.P.

First Capital Real Estate Trust Incorporated

60 Broad Street, 34th
Floor

New York, NY 10004

 

		Re:	Amendment
                                         No. 2 to Interest Contribution Agreement Dear

 

Dear Suneet,

 

We
refer to that certain Interest Contribution Agreement, dated March 31, 2017, among First Capital Real Estate Operating Partnership,
L.P., First Capital Real Estate Trust Incorporated, FC Global Realty Operating Partnership, LLC and PhotoMedex, Inc., as amended
by Amendment No. 1 dated August 3, 2017 (collectively, the “Contribution Agreement”). Capitalized terms used
but not otherwise defined herein have the meanings ascribed to them in the Contribution Agreement.

 

As
you know, in connection with the Contribution Agreement, the parties agreed to a form of Payout Note attached as Exhibit H to
the Contribution Agreement and a form of Payout Notes Security Agreement attached as Exhibit I to the Contribution Agreement.
The Executives have since requested certain changes to the forms of Payout Note and Payout Notes Security Agreement, including
the removal of certain subordination provisions and the addition of a provision regarding acceleration of payment. The parties
have agreed to make these changes and amend the Contribution Agreement as follows:

 

		1.	The
                                         form of Payout Note attached as Exhibit H to the Contribution Agreement is hereby amended
                                         in its entirety and replaced with the form of Payout Note attached as Exhibit H hereto.

 

		2.	The
                                         form of Payout Notes Security Agreement attached as Exhibit I to the Contribution Agreement
                                         is hereby amended in its entirety and replaced with the form of Payout Notes Security
                                         Agreement attached as Exhibit I hereto.

 

Except
as aforesaid, the Contribution Agreement remains unmodified and in full force and effect.

 

    

     

    

 

	Very truly yours,	 	 	 
	 	 	 	 
	Photomedex,
    Inc.	 	Fc
                    Global Realty Operating

                    Partnership,
                    LLC

	 	 	 	 	 
	By:	 /s/
    Stephen Johnson 	 	By:	 /s/
    Stephen Jhonson
	Stephen Johnson, CFO	 	Stephen Johnson, CFO
	 	 	 	 	 
	ACCEPTED AND AGREED TO:	 	 	 
	 	 	 	 	 
	First
                    Capital Real Estate

                    Operating
                    Partnership, L.P.
	 	First
                    Capital Real Estate Trust

                    Incorporated

	 	 	 	 	 
	By:	 /s/
    Suneet Signal	 	By:	/s/ Suneet
    Signal
	Suneet Singal, CEO	 	Suneet Singal, CEO

 

    

     

    

 

Exhibit
H

 

Form
of Payout Notes

 

    

     

    

 

NEITHER
THIS NOTE NOR THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR STATE LAW OR AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

 

	$[                 ].00			[                 ],
    201_

 

PHOTOMEDEX,
INC.

 

SECURED
CONVERTIBLE PAYOUT NOTE DUE [
                  ],
201_

 

FOR
VALUE RECEIVED, PhotoMedex, Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order
of [                 ] (the “Holder”), the principal amount of [                 ] ($[ ]) (the “Principal Amount”),
together with interest as hereinafter provided, on [                 ], 201_1 (the “Maturity Date”).

 

This
Secured Convertible Payout Note (this “Note”) is being issued in connection with the closing of the transactions
contemplated by that certain Interest Contribution Agreement, dated March 31, 2017 (the “Contribution Agreement”),
by and among First Capital Real Estate Operating Partnership, L.P., a Delaware limited partnership, First Capital Real Estate
Trust Incorporated, a Maryland corporation, FC Global Realty Operating Partnership, LLC, a Delaware limited liability company,
and the Company. All capitalized terms used but not otherwise defined in this Note shall have the same meanings ascribed to them
in the Contribution Agreement.

 

By
his receipt hereof, the Holder acknowledges and agrees that: (i) the Principal Amount represents, as of the date hereof, the full
and complete amount of all compensation liabilities owed by the Company and its Subsidiaries and affiliates to the Holder (“Compensation
Liabilities”); (ii) all such Compensation Liabilities are being memorialized in this Note and no other oral or written
agreement, document or instrument; and (iii) upon payment in full of all obligations hereunder, the Company shall have repaid
all Compensation Liabilities to the Holder.

 

Any
payments on account of the Note shall be applied first to interest and then to principal.

 

Interest
on the outstanding Principal Amount shall be paid in: (i) cash or (ii) at the election of the Holder, in restricted shares of
the Company’s common stock, par value $.01 per share (“Common Stock”) as provided in Article 1(a). Interest
shall be paid at the rate of ten percent (10%) per annum and shall be payable monthly in arrears commencing on [  ], 2017 (each
such payment, a “Monthly Interest Payment” and each date of such payment, an “Interest Payment Date”).
Interest shall be computed on the basis of a 360-day year, and any partial periods (other than monthly) shall be computed using
the number of days actually elapsed.

 

The
Principal Amount shall be mandatorily convertible into shares of Common Stock as provided in Article 1(b).

 

The
Company’s obligations under this Note are subject to a security interest in all of the Company’s assets, which security
interest shall be memorialized in a Security Agreement entered into between the Holder and the Company as of the date hereof (the
“Security Agreement”).

 

 

		1	One year
                                                                                                                                                              anniversary of Approval Date.

 

    

     

    

 

Article
1.

CONVERSION

 

(a)
           Interest. Should the Holder elect to have a Monthly Interest Payment paid in shares of Common Stock (such shares, the “Interest
Shares”), the Holder shall make such election by written notice delivered to the Company not less than three (3) NASDAQ
Trading Days prior to the applicable Interest Payment Date. The number of Interest Shares to be issued to the Holder shall be
determined by dividing: (i) the applicable interest payment owed by (ii) the VWAP with respect to on-exchange transactions in
Common Stock executed on the NASDAQ during the thirty (30) NASDAQ Trading Days ending five (5) NASDAQ trading days prior to the
applicable Interest Payment Date as reported by Bloomberg L.P. Any Interest Shares shall be delivered to the Holder with five
(5) Business Days of the applicable Interest Payment Date.

 

(b)
          Principal. The Principal Amount shall be mandatorily convertible on the Maturity Date into restricted shares of Common
Stock (such shares, the “Principal Shares”) which shall be delivered within three (3) Business Days of the
Maturity Date. The Number of Principal Shares to be issued to the Holder shall be determined by dividing: (i) the Principal Amount
by (ii) a price (the “Note Conversion Price”) equal to the lower of (A) the Per Share Value or (B) the VWAP
with respect to on-exchange transactions in Common Stock executed on the NASDAQ during the thirty (30) NASDAQ Trading Days prior
to the Maturity Date as reported by Bloomberg L.P; provided, however, that the Note Conversion Price shall (except as adjusted
pursuant to Article 1(f)) in no event be less than $1.75 per share (the “Floor Price”). In the event that the
Note Conversion Price on the Maturity Date is lower than the Floor Price, then the Company may, in its discretion undertaken by
a vote of a majority of the disinterested members of the Company’s board of directors, elect to either: (i) pay the Principal
Amount in cash to the Holder or (ii) extend the Maturity Date for a period of sixty (60) days, at the conclusion of which the
foregoing mechanism for determining the Note Conversion Price and repayment of the Principal Amount shall be determined with finality;
provided, however, that at the conclusion of such sixty (60) day period, no Floor Price shall apply in the determining the Note
Conversion Price and the Principal Shares shall be issued within three (3) Business Days of the extended Maturity Date.

 

(c)
          Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock solely for the purpose of issuance upon conversion of this Note, free
from preemptive rights or any other actual contingent purchase rights of persons other than the Holder, not less than such number
of shares of the Common Stock as shall be issuable upon the conversion of this Note. The Company covenants that all shares of
Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid, non-assessable.

 

(d)
          Fractional Shares. Upon a conversion hereunder, the Company shall not be required to issue stock certificates representing
fractions of shares of the Common Stock. All fractional shares shall be rounded up to the nearest whole number of shares.

 

(e)          
Transfer Taxes. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without
charge to the Holder thereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery
of such certificate, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder, and the
Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance
of such shares upon transfer shall have paid to the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.

 

    2

     

    

 

(f)
          Adjustments for Stock Dividends, Splits and Other Capital Transactions. If the
Company, at any time from and after the date of this Note and as long as this Note is outstanding: (i) shall pay a stock dividend,
effect a stock split or otherwise make a distribution or distributions on shares of its Common Stock payable in shares of any
class of capital stock, (ii) subdivide outstanding shares of Common Stock into a larger number of shares, (iii) combine (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issue by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then the Note Conversion Price shall be computed on
the applicable measuring date to reflect such occurrences. Any adjustment made pursuant to this Article 1(f) shall become effective
on the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination or re-classification.

 

(g)         
Subsequent Rights Offerings. In addition to any adjustments pursuant to Article 1(f) above, if at any time the Company
grants, issues or sells any Common Stock Equivalents (as defined below) or rights to purchase stock, warrants, securities or other
property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then
the Holder of will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which
the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion
of this Note immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or,
if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights.

 

(h)
          Pro Rata Distributions. During such time as this Note is outstanding, if the
Company declares or makes any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares
of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other
securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement
or other similar transaction) (a “Distribution”), at any time after the issuance of this Note, then, in each
such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated
therein if the Holder had held the number of shares of Common Stock acquirable upon complete Conversion of this Note immediately
before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the participation in such Distribution.

 

    3

     

    

 

(i)
          Fundamental Transaction. If, at any time while this Note is outstanding, (i)
the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with
or into another person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance
or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or
indirect, purchase offer, tender offer or exchange offer (whether by the Company or another person) is completed pursuant to which
holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has
been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one
or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property,
or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement
or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including
any shares of Common Stock held by the other person or other persons making or party to, or associated or affiliated with the
other persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental
Transaction”), then, upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each
Principal Share or Interest Share, as the case may be, that would have been issuable upon such conversion immediately prior to
the occurrence of such Fundamental Transaction, the number of shares of Common Stock of the successor or acquiring corporation
or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Note
is convertible immediately prior to such Fundamental Transaction. For purposes of any such conversion, the determination of the
Note Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion
the Note Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any conversion of this Note following such Fundamental Transaction. To the extent necessary to effectuate the
foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder
a new Note with the same terms and conditions as this Note that is otherwise consistent with the foregoing provisions and evidencing
the Holders’ right to convert this Note into Alternate Consideration. The Company shall cause any successor entity in a
Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing
all of the obligations of Company under this Note and the other Transaction Documents in accordance with the provisions of this
Article 1(i) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder
(without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note, deliver
to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar
in form and substance to this Note which is convertible for a corresponding number of shares of capital stock of such Successor
Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Note
prior to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such shares
of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction
and the value of such shares of capital stock, such number of shares of capital stock and such conversion price being for the
purpose of protecting the economic value of this Note immediately prior to the consummation of such Fundamental Transaction),
and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction,
the provisions of this Note and the other Transaction Documents referring to the “Company” shall refer instead to
the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company
under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company
herein.

 

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

 

(k)
         Notice to the Holders.

 

(i)
          Adjustment to Note Conversion Price. Whenever the Note Conversion Price is adjusted
pursuant to any provision of this Article 1, the Company shall promptly deliver to Holder a notice setting forth the Note Conversion
Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

    4

     

    

 

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

 

Article
2.

EVENTS OF DEFAULT

 

(a)
        Events of Default Defined. The entire unpaid Principal Amount of this Note, together with interest thereon shall, on written
notice to the Company given by the Holder of this Note, forthwith become and be due and payable without presentment, demand, protest
or any other action nor obligation of the Holder of any kind, all of which are hereby expressly waived, if any one or more the
following events (“Events of Default”) shall have occurred and be continuing; provided, however, that no notice
shall be required and this Note shall automatically become due and payable if any of the events described in Article 2(a)(iii)
through (vi) occurs. An Event of Default shall occur:

 

(i)
          if failure shall be made in the payment of the Principal Amount or any interest under
or on this Note when, as and in the manner (i.e., cash or Common Stock) as the same shall become due pursuant to the terms hereof;
or

 

(ii)
         if the Company shall violate or breach to a material extent any of the representations, warranties and covenants contained in
this Note or the Security Agreement and such violation or breach shall continue for thirty (30) days after written notice of such
breach shall been received by the Company from the Holder; or

 

    5

     

    

 

(iii)
        if the Company shall consent to the appointment of a receiver, trustee or liquidator of itself or of a substantial part of its
property, or shall admit in writing its inability to pay its debts generally as they become due, or shall make a general assignment
for the benefit of creditors, or shall file a voluntary petition in bankruptcy, or an answer seeking reorganization in a proceeding
under any bankruptcy law (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against
the Company in any such proceeding, or shall by voluntary petition, answer or consent, seek relief under the provisions of any
other now existing or future bankruptcy or other similar law providing for the reorganization or winding up of corporations, or
an arrangement, composition, extension or adjustment with its or their creditors, or shall, in a petition in bankruptcy filed
against it or them be adjudicated a bankrupt, or the Company or its board of directors or a majority of its stockholders shall
vote to dissolve or liquidate the Company; or

 

(iv)
        if an involuntary petition shall be filed against the Company seeking relief against the Company under any now existing or future
bankruptcy, insolvency or other similar law providing for the reorganization or winding up of corporations, or an arrangement,
composition, extension or adjustment with its or their creditors, and such petition shall not be vacated or set aside within ninety
(90) days from the filing thereof; or

 

(v)         
if a court of competent jurisdiction shall enter an order, judgment or decree (not subject to appeal) appointing, without consent
of the Company, a receiver, trustee or liquidator of the Company, or of all or any substantial part of the property of the Company,
or approving a petition filed against the Company seeking a reorganization or arrangement of the Company under the Federal bankruptcy
laws or any other applicable law or statute of the United States of America or any State thereof, or any substantial part of the
property of the Company shall be sequestered; and such order, judgment or decree shall not be vacated or set aside within ninety
(90) days from the date of the entry thereof; or

 

(vi)        
if, under the provisions of any law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody
or control of the Company or of all or any substantial part of the property of the Company and such custody or control shall not
be terminated within ninety (90) days from the date of assumption of such custody or control.

 

Article
3.

REGISTRATION RIGHTS

 

The
Company hereby grants the following registration rights to the Holder.

 

(a)
        Registration Statement. The Company shall file with the Securities and Exchange Commission (the “SEC”)
not later than thirty (30) days after the date of this Note a registration statement on an appropriate form (the “Registration
Statement”) covering the resale of the Principal Shares and the Interest Shares (collectively, the “Shares”)
issuable upon conversion of this Note and shall use its commercially reasonable efforts to cause the Registration Statement to
be declared effective within one hundred twenty (120) days following the date hereof. Notwithstanding anything to the contrary
herein, at any time, the Company may delay the disclosure of material, non-public information concerning the Company the disclosure
of which at the time is not, in the good faith opinion of the Board of Directors of the Company, in the best interest of the Company
and otherwise required (a “Grace Period”); provided, that the Company shall promptly: (i) notify the
Holder in writing of the existence of material, non-public information giving rise to a Grace Period (provided that in each notice
the Company will not disclose the content of such material, non-public information to the Holder) and the date on which the Grace
Period will begin, and (ii) use commercially reasonable efforts to resolve any issue that makes disclosure of the material, non-public
information not in the best interests of the Company.

 

    6

     

    

 

(b)        
Registration Procedures. In connection with the Registration Statement, the Company will:

 

(i)
          Prepare and file with the SEC such amendments and supplements to the Registration Statement
and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective with respect
to the Holder until all the Shares owned by such Holder may be resold without restriction under the Securities Act; and

 

(ii)         
Immediately notify the Holders when the prospectus included in the Registration Statement is required to be delivered under the
Securities Act of 1933, as amended (the “Securities Act”), of the happening of any event of which the Company
has knowledge as a result of which the prospectus contained in such Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing. If the Company notifies the Holders to suspend the use of
any prospectus until the requisite changes to such prospectus have been made, then the Holders shall suspend use of such prospectus.
In such event, the Company will use its commercially reasonable efforts to update such prospectus as promptly as is practicable.

 

(c)
          Provision of Documents etc. In connection with the Registration Statement, the Holder will furnish to the Company
in writing such information and representation letters with respect to itself and the proposed distribution by it as reasonably
shall be necessary in order to assure compliance with federal and applicable state securities laws. The Company may require the
Holder, upon five business days’ notice, to furnish to the Company a certified statement as to, among other things, the
number of Shares and the number of other shares of the Company’s Common Stock beneficially owned by such Holder and the
person that has voting and dispositive control over such shares. The Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act, if applicable, in connection with sales of Shares pursuant to the Registration
Statement.

 

(d)
         Expenses. All expenses incurred by the Company in complying with this article, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees
of transfer agents and registrars are called “Registration Expenses.” All underwriting discounts and selling
commissions applicable to the sale of the Shares, including any fees and disbursements of any counsel to the Holder, are called
“Selling Expenses.” The Company will pay all Registration Expenses in connection with the Registration Statement.
Selling Expenses in connection with the Registration Statement shall be borne by the applicable Holder.

 

(e)
         Indemnification and Contribution.

 

(i)
          The Company will, to the extent permitted by law, indemnify and hold harmless the Holder,
and, as applicable, each officer of Holder, each director of Holder, and each other person, if any, who controls Holder within
the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such Holder
or such other person (a “controlling person”) may become subject under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof) (“Claims”) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement at the
time of its effectiveness, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the circumstances when made, and will, subject to the limitations
herein, reimburse such Holder and each such controlling person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such Claim; provided, however, that the Company shall not be liable to Holder to
the extent that any Claim arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged
omission made in conformity with information furnished by such Holder or any such controlling person in writing specifically for
use in the Registration Statement or related prospectus, as amended or supplemented.

 

    7

     

    

 

(ii)
          The Holder will, to the extent permitted by law, indemnify and hold harmless the Company,
and each person, if any, who controls the Company within the meaning of the Securities Act, each underwriter, each officer of
the Company who signs the Registration Statement and each director of the Company against all Claims to which the Company or such
officer, director, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such
Claims arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration
Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or the omission
or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company and each such officer, director, underwriter and controlling person for any legal
or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability
or action, provided, however, that such Holder will be liable hereunder in any such case if and only to the extent that any such
Claim arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with information pertaining to such Holder, as such, furnished in writing to the Company by such Holder
specifically for use in the Registration Statement or related prospectus, as amended or supplemented.

 

(iii)
          Promptly after receipt by an indemnified party hereunder of notice of the commencement
of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to such indemnified party other than under this section and shall only relieve it from any liability
which it may have to such indemnified party under this section except and only if and to the extent the indemnifying party is
materially prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent
it shall wish, to assume and undertake the defense thereof with counsel satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this section for any legal expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected;
provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different
from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be
deemed to conflict with the interests of the indemnifying party, the indemnified parties, as a group, shall have the right to
select one separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with
the reasonable expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by
the indemnifying party as incurred. The indemnifying party shall not be liable for any settlement of any such proceeding affected
without its written consent, which consent shall not be unreasonably withheld.

 

(iv)
          In order to provide for just and equitable contribution in the event of joint liability under
the Securities Act in any case in which either (i) the Holder, or any controlling person of the Holder, makes a claim for indemnification
pursuant to this section but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction
and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced
in such case notwithstanding the fact that this section provides for indemnification in such case, or (ii) contribution under
the Securities Act may be required on the part of the Holder or controlling person of the Holder in circumstances for which
indemnification is not provided under this section, then, and in each such case, the Company and the Holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in a manner
that reflects, as near as practicable, the economic effect of the foregoing provisions of this section. Notwithstanding the foregoing,
no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Securities Act) will be
entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

 

    	8 

    

    

 

(f)           Delivery
of Unlegended Shares.

 

(i)          Within
three business days (such business day, the “Unlegended Shares Delivery Date”) after the business day
on which the Company has received (i) a notice that Shares have been sold either pursuant to, and in compliance with, the Registration
Statement or Rule 144 under the Securities Act (“Rule 144”) and (ii) in the case of sales under Rule 144, customary
representation letters of the Holder and Holder’s broker regarding compliance with the requirements of Rule 144, the Company
at its expense, (A) shall deliver the Shares so sold without any restrictive legends relating to the Securities Act (the
“Unlegended Shares”); and (B) shall cause the transmission of the certificates representing the Unlegended
Shares together with a legended certificate representing the balance of the unsold Shares, if any, to the Holder at the address
specified in the notice of sale, via express courier, by electronic transfer or otherwise on or before the Unlegended Shares Delivery
Date. Transfer fees shall be the responsibility of the Holder.

 

(ii)
          In lieu of delivering physical certificates representing the Unlegended
Shares, if the Company’s transfer agent is participating in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer program, upon request of Holder, so long as the certificates therefor do not bear a legend
and the Holder is not obligated to return such certificate for the placement of a legend thereon, the Company shall use its best
efforts to cause its transfer agent to electronically transmit the Unlegended Shares by crediting the account of Holder’s
broker with DTC through its Deposit/Withdrawal at Custodian system. Such delivery must be made on or before the Unlegended Shares
Delivery Date but is subject to the cooperation of the Holder’s broker (the so-called DTC participant).

 

(iii)
          The Holder agrees that the removal of the restrictive legend from certificates representing
the Shares as set forth in this section is predicated upon the Company’s reliance that the Holder will sell any Shares pursuant
to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an
exemption therefrom.

 

(g)
          Rule 144. The Company agrees that until all the Shares have been sold under a
Registration Statement or pursuant to Rule 144 or other available exemption from Securities Act registration requirements,
it shall use its reasonable commercial efforts to keep current in filing all reports, statements and other materials required
to be filed with the SEC to permit the Investors to sell the Shares under Rule 144. The Company shall use commercially reasonable
efforts to facilitate sales of the Shares under Rule 144, including the delivery of customary transfer agent instructions to the
Company’s transfer agent and causing its counsel to deliver any required opinion to the Company’s transfer agent if
resales under Rule 144 are permissible under the Securities Act.

 

Article
4.

MISCELLANEOUS

 

(a)
          Security. The obligations of the Company under this Note are secured by a lien
on all of the assets of the Company as more fully described in the Security Agreement.

 

    	9 

    

    

 

(b)          Taxes, Charges, and Expenses. The Company, at its own cost, shall report interest
income, if any, to the IRS and/or other applicable tax authorities and to the Holder on a Form 1099-INT or other appropriate form
in accordance with applicable law. The Company shall bear sole responsibility for any costs or fees in connection with the payment
of Interest with respect to this Note, including, but not limited to, wire transfer fees, bank check fees and escrow agent fees.

 

(c)          Transferability. The Company may not assign this Note. This Note will be binding
upon the Company and its successors and will inure to the benefit of the Holder and its successors and assigns and may be assigned
by the Holder to anyone of its choosing without the Company’s approval, but subject to transfer restrictions under applicable
law.

 

(d)          Prepayment. This Note may not be prepaid by the Company without
the written consent of the Holder. Notwithstanding the foregoing, if the Company sells any of its securities, whether equity,
equity-linked or debt securities (a “Capital Raising Transaction”), prior to the Maturity Date, then forty
percent (40%) of the funds raised in such Capital Raising Transaction shall be used to pay down this Note and the other Payout
Notes issued pursuant to the Contribution Agreement on a pro rata basis based upon the relative principal amounts of this Payout
Note and the other Payout Notes; provided, however, that if the investors in such Capital Raising Transaction stipulate that the
proceeds cannot be used to pay down indebtedness, then none of the proceeds of such Capital Raising Transaction shall be used
to pay down the Payout Notes on an accelerated basis; provided further, however, that a committee consisting of board members
Michael R. Stewart and Dennis M. McGrath unanimously consent to the use of proceeds from such Capital Raising Transaction.

 

(e)          WAIVER OF TRIAL BY JURY. COMPANY AND HOLDER HEREBY KNOWINGLY
AND VOLUNTARILY WITH THE BENEFIT OF COUNSEL WAIVE TRIAL BY JURY IN ANY ACTIONS, PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS, WHETHER
IN CONTRACT OR TORT OR OTHERWISE, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING TO THIS NOTE.

 

(f)
          Mutilated, Destroyed, Lost or Stolen Notes. If this Note shall become mutilated
or defaced, or be destroyed, lost or stolen, the Company shall execute and deliver a new note of like principal amount in exchange
and substitution for the mutilated or defaced Note, or in lieu of and in substitution for the destroyed, lost or stolen Note certificate.
In the case of a mutilated or defaced Note certificate, the Holder shall surrender such Note certificate to the Company. In the
case of any destroyed, lost or stolen Note certificate, the Holder shall furnish to the Company: (i) evidence to its satisfaction
of the destruction, loss or theft of such Note certificate and (ii) such security or indemnity (which shall not include the posting
of any bond) as may be reasonably required by the Company to hold the Company harmless.

 

(g)
          Waiver of Demand, Presentment, etc. The Company hereby expressly waives demand
and presentment for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, notice of acceleration or intent
to accelerate, bringing of suit and diligence in taking any action to collect amounts called for hereunder and shall be directly
and primarily liable for the payment of all sums owing and to be owing hereunder, regardless of and without any notice, diligence,
act or omission as or with respect to the collection of any amount called for hereunder. The Company agrees that, in the event
of an Event of Default, to reimburse the Holder for all reasonable costs and expenses (including reasonable legal fees of one
counsel) incurred in connection with the enforcement and collection of this Note.

 

(h)
          Payment. All payments with respect to this Note shall be made in lawful money
of the United States of America, at the address of the Holder as of the date hereof or as designated in writing by the Holder
from time to time. The receipt by the Holder of immediately available funds shall constitute a payment of principal and interest
hereunder and shall satisfy and discharge the liability for principal and interest on this Note to the extent of the sum
represented by such payment. Payment shall be credited first to the accrued interest then due and payable and the remainder applied
to principal.

 

    	10 

    

    

 

(i)
          Waiver and Amendment. Any provision of this Note, including, without limitation,
the due date hereof, and the observance of any term hereof, may be amended, waived or modified (either generally or in a particular
instance and either retroactively or prospectively) only with the written consent of the Company and the Holder.

 

(j)
          Severability. If one or more provisions of this Note are held to be unenforceable
under applicable law, such provisions shall be excluded from this Note, and the balance of this Note shall be interpreted as if
such provisions were so excluded and shall be enforceable in accordance with its terms.

 

(k)
          Notices. All notices that are required or may be given pursuant to this Agreement
shall be sufficient in all respects if given in writing, in English and by personal delivery (if signed for receipt), by certified
or registered United States mail (postage prepaid, return receipt requested), by a nationally recognized overnight delivery service
for next day delivery, or transmitted via electronic mail (following appropriate confirmation of receipt by return email, including
an automated confirmation of receipt) and shall be deemed to have been made and the receiving Party charged with notice, when
received except that if received after 5:00 p.m. (in the recipient’s time zone) on a Business Day or if received on a day
that is not a Business Day, such notice, request or communication will not be effective until the next succeeding Business Day.
All notices shall be addressed as follows:

 

If
to the Company: 

 

PhotoMedex,
Inc. 

2300
Computer Drive, Building G 

Willow Grove, PA 19090

Attention:
Stephen Johnson 

Email:
sjohnson@photomedex.com 

 

If
to the Holder: 

 

[Holder]

[address] 

Email:
[                      ]

 

(l)      
    Governing Law; Venue. This Agreement shall be governed and construed in accordance with
the laws of the State of New York applicable to agreements executed and to be performed wholly within such State, without
regard to any principles of conflicts of law. Each of the parties hereby (i) irrevocably consents and agrees that any legal
or equitable action or proceeding arising under or in connection with this Agreement may be brought in the federal or state
courts located in the County of New York in the State of New York, (ii) by execution and delivery, or receipt, of this Note ,
irrevocably submits to and accepts the jurisdiction of said courts, (iii) waives any defense that such court is not a
convenient forum, and (iv) consent that any service of process may be made (x) in the manner set forth in Article 4(k) of
this Note, or (y) by any other method of service permitted by law.

 

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    	11 

    

    

 

IN
WITNESS WHEREOF, the Company has executed this Note as of the date and year first aforesaid.

 

	 	PHOTOMEDEX, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 

    

    

  

Exhibit
I

 

Payout
Notes Security Agreement 

 

    	 

    

    

 

SECURITY
AGREEMENT

 

This
SECURITY AGREEMENT (“Agreement”) is made as of __________, 2017, by and between PhotoMedex, Inc., a Nevada
corporation (to be renamed ____________) (the “Debtor”), and Dolev Rafaeli (“Rafaeli”),
Dennis M. McGrath (“McGrath”) and Yoav Ben-Dror (“Ben-Dror”) (each, a “Secured Party”
and together, the “Secured Parties”).

 

WHEREAS,
each Secured Party is the holder of a Secured Payout Note Due ___________, 2018 made by the Debtor in favor of such Secured
Party as of the date hereof in the principal amount of $________ with respect to Rafaeli, $__________ with respect to McGrath,
and $__________ with respect to Ben-Dror (each, a “Note” and together, the “Notes”); and

 

WHEREAS,
in connection with the Notes, Secured Parties desire to obtain from Debtor, and Debtor desires to grant to Secured Parties,
a security interest in the collateral more particularly described below.

 

NOW,
THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

1.
          Grant of Security Interest. Debtor hereby grants to Secured
Parties a security interest in all of the properties, assets and personal property of Debtor, whether now owned or hereafter acquired
(collectively, the “Collateral”) including, without limitation, the following:

 

(a)
          presently existing and hereafter arising accounts, contract rights,
and all other forms of obligations owing to Debtor arising out of the sale or lease of goods or the rendition of services
by Debtor, whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as
well as all merchandise returned to or reclaimed by Debtor and Debtor’s Books relating to any of the foregoing (collectively,
“Accounts”);

 

(b)
          present and future general intangibles and other personal property
(including payment intangibles, choses or things in action, goodwill, intellectual property, patents, trade names, trademarks,
servicemarks, copyrights, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds,
route lists, monies due under any royalty or licensing agreements, infringement claims, software, computer programs, computer
discs, computer tapes, literature, reports, catalogs deposit accounts, insurance premium rebates, tax refunds, and tax refund
claims) (collectively, “General Intangibles”);

 

(c)
          present and future letters of credit, letter-of-credit rights (whether
or not evidenced by a writing) and other supporting obligations, notes, drafts, instruments (including promissory notes),
certificated and uncertificated securities, documents, leases, and chattel paper (whether tangible or electronic), and Debtor’s
Books relating to any of the foregoing (collectively, “Negotiable Collateral”);

 

(d)
          present and future inventory in which Debtor has any interest, including
goods held for sale or lease or to be furnished under a contract of service and all of Debtor’s present and future
raw materials, work in process, finished goods, and packing and shipping materials, wherever located, and any documents of title
representing any of the above, and Debtor’s Books relating to any of the foregoing (collectively, “Inventory”);

 

    	 

    

    

 

(e)
          present and hereafter acquired machinery, machine tools, motors, equipment, furniture,
furnishings, fixtures, vehicles (including motor vehicles and trailers), tools, parts, dies, jigs, goods (other than consumer
goods or farm products), and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing, wherever located (collectively, “Equipment”);

 

(f)
          present and hereafter acquired books and records including: ledgers;
records indicating, summarizing, or evidencing Debtor’s assets or liabilities, or the collateral; all information relating
to Debtor’s business operations or financial condition; and all computer programs, disc or tape files, printouts, funds
or other computer prepared information, and the equipment containing such information (collectively, “Debtor’s
Books”);

 

(g)          “Investment
Property,” as that term is defined in Section 9 of the UCC (defined below).

 

(h)
          substitutions, replacements, additions, accessions, proceeds, products
to or of any of the foregoing, including, but not limited to, proceeds of insurance covering any of the foregoing, or any
portion thereof, and any and all Accounts, General Intangibles, Inventory, Equipment, Investment Property, money, deposits, accounts,
or other tangible or intangible property resulting from the sale or other disposition of the Accounts, General Intangibles, Inventory,
Equipment, Investment Property or any portion thereof or interest therein and the proceeds thereof.

 

The
security interests granted hereby shall secure the prompt payment of the principal and all accrued interest due under and pursuant
to the terms of the Notes (the “Obligations”).

 

2.
          Perfection by Filing. Debtor hereby specifically authorizes
Secured Parties at any time and from time to time to file financing statements, continuation statements and amendments thereto
that describe the Collateral and contain any other information required by Article 9 of the Uniform Commercial Code, as enacted
in New York (the “UCC”) for the sufficiency or filing office acceptance of any financing statement, continuation
statement or amendment, including whether Debtor is an organization, the type of organization and any organization identification
number issued to Debtor. Debtor agrees to furnish any such information to the Secured Parties promptly upon request. Any such
financing statements, continuation statements or amendments may be signed by an agent of Secured Parties on behalf of Debtor and
may be filed at any time in any jurisdiction. Debtor hereby irrevocably constitutes and appoints Secured Parties and any officer
or agent thereof, with full power of substitution, as its true and lawful attorney-in- fact with full irrevocable power and authority
in the place and stead of Debtor and in the name of Debtor or in its own name, from time to time in such Secured Parties’
discretion, for the limited purpose of carrying out the terms of this subsection regarding perfection by filing. Debtor hereby
ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this subsection are coupled with an interest and are irrevocable until all of the Obligations (as defined in the
Loan Documents) have been paid and satisfied in full.

 

3.
          Perfection Other Than by Filing, etc. At any time and from
time to time, Debtor shall take such steps as Secured Parties may reasonably request for Debtor (a) to obtain an acknowledgment,
in form and substance reasonably satisfactory to Secured Parties, of any bailee having possession of any of the Collateral, that
such bailee holds such Collateral for the Secured Parties, (b) to obtain control of any investment property, deposit accounts,
letter-of-credit rights or electronic chattel paper (as such terms are defined in Article 9 of the UCC) as set forth in Article
9 of the UCC, and, where control is established by written agreement, such agreement shall be in form and substance reasonably
satisfactory to Secured Parties, and (c) otherwise to insure the continued perfection and priority of Secured Parties’ security
interest in any of the Collateral and of the preservation of its rights therein.

 

    	2 

    

    

 

4.            Agreements
With Respect to the Collateral. Debtor covenants and agrees with Secured Parties as follows:

 

(a)          Debtor shall notify Secured Parties in writing of any change in the
location of Debtor’s principal place of business or the location of any material tangible Collateral or the place(s)
where the records concerning all intangible Collateral are kept or maintained.

 

(b)          Debtor will keep the Collateral in good condition and repair, ordinary
wear and tear excepted, and will pay and discharge all taxes, levies and other impositions levied thereon as well as the
cost of repairs to or maintenance of same, and will not permit anything to be done that may materially impair the value of any
of the Collateral. If Debtor fails to pay such sums, Secured Parties may do so for Debtor’s account and add the amount thereof
to the Obligations.

 

(c)           Until
the occurrence of an Event of Default (as defined in the Note), Debtor shall be entitled to exercise the remedies set forth
herein.

 

(d)          So long as an Event of Default has not occurred, Debtor shall have
the right to process and sell the Collateral in the regular course of business. Secured Parties’ security interest
hereunder shall attach to all proceeds of all sales of the Collateral. If at any time any such proceeds shall be represented by
any instruments, chattel paper or documents of title, then such instruments, chattel paper or documents of title shall be subject
to the security interest granted hereby.

 

5.
            Remedies Upon Default. Upon the occurrence
of an Event of Default under and as defined in the Notes, including without limitation, a payment default under the Notes, Secured
Parties may (subject in all instances to Article 3 of the Notes) pursue any or all of the following remedies:

 

(a)
          Secured Parties shall give written notice of default to Debtor, following
which Debtor shall not dispose of, conceal, transfer, sell or encumber any of the Collateral (including, but not limited
to, cash proceeds) without Secured Parties prior written consent, except in the ordinary course of business.

 

(b)
          Secured Parties may dispose of the Collateral at private or public
sale in accordance with the applicable provisions of the UCC. Any required notice of sale shall be deemed commercially reasonable
if given at least twenty (20) days prior to sale.

 

(c)
          Secured Parties may exercise their lien upon and right of setoff against
any monies, items, credits, deposits or instruments that Secured Parties may have in their possession and that belong to
Debtor or to any other person or entity liable for the payment of any or all of the Obligations.

 

(d)
          Secured Parties may exercise any right that they may have under any
other document evidencing or securing the Obligations or otherwise available to Secured Party at law or equity.

 

(e)
          Notwithstanding anything herein to the contrary, Secured Parties shall
not be entitled to exercise any rights with respect to the Collateral to the extent that the reasonable value of the Collateral
exceeds the amount then due and owing to the Secured Parties.

 

(f)
          The Secured Party acknowledges and agrees that Collateral is subject
to security interests granted to other secured parties by the Debtor. In exercising any of Secured Parties’ rights
hereunder, the Secured Parties shall undertake to (i) coordinate its efforts with such other secured parties to minimize any inconvenience
to the Secured Parties or disruption to its business activities, and (ii) effect the exercise of their rights hereunder so as
to not adversely affect in any manner the value of the Collateral or to impose costs or obligations on Secured Parties in excess
of what Secured Parties would reasonably be expected to bear were the Debtor the sole party with rights to the Collateral.

 

    	3 

    

    

 

6.
          Termination Statement. Upon receipt of proper written demand
following the payment in full of the Obligations, Secured Parties shall promptly file a termination statement with respect to
any financing statement filed to perfect Secured Party’s security interests in any of the Collateral to Debtor or cause
such termination statement to be filed with the appropriate filing officer(s). If the Secured Parties shall fail to file any such
termination statement within ten (10) days of the payment in full of all Obligations, Debtor shall have the right to file such
termination statements.

 

7.            Binding
Effect. This Agreement shall inure to the benefit of Secured Parties’ successors and assigns and shall bind
Debtor’s successors and assigns.

 

8.
           Severability. If any provision of this Agreement is held
invalid, such invalidity shall not affect the validity or enforceability of the remaining provisions of this Agreement.

 

9.
           Governing Law and Amendments. This Agreement shall be construed
and enforced under the laws of the State of New York applicable to contracts to be wholly performed in such State. No amendment
or modification hereof shall be effective except in a writing executed by each of the parties hereto.

 

10.
          Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original instrument, but all such counterparts together shall constitute but one agreement. Signatures
to this Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (.pdf) form,
or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the
same effect as physical delivery of the paper document bearing the original signature.

 

11.
          Construction and Interpretation. Should any provision of
this Agreement require judicial interpretation, the parties hereto agree that the court interpreting or construing the same shall
not apply a presumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction
that a document is to be more strictly construed against the party that itself or through its agent prepared the same, it being
agreed that Debtor, Secured Parties and their respective agents have participated in the preparation hereof.

 

12.
          Exclusive Venue. Each of the parties hereby (i) irrevocably
consents and agrees that any legal or equitable action or proceeding arising under or in connection with this Agreement may be
brought in the federal or state courts located in the County of New York in the State of New York, (ii) by execution and delivery,
or receipt, of this Note , irrevocably submits to and accepts the jurisdiction of said courts, (iii) waives any defense that such
court is not a convenient forum, and (iv) consent that any service of process may be made (x) in the manner set forth in Article
4(e) of this Note, or (y) by any other method of service permitted by law.

 

13.
          Waiver of Trial by Jury. SECURED PARTIES AND DEBTOR HEREBY
KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COUNSEL WAIVE TRIAL BY JURY IN ANY ACTIONS, PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS,
WHETHER IN CONTRACT OR TORT OR OTHERWISE, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT OR THE
LOAN DOCUMENTS.

 

14.          Notice.
Any notice under this Agreement shall be made in accordance with the terms of the Notes.

 

    	4 

    

    

 

IN
WITNESS WHEREOF, Debtor and Secured Party have executed this Agreement, or have caused this Agreement to be executed as of the
date first above written.

 

	 	DEBTOR:
	 	 
	 	PHOTOMEDEX, INC. 
	 	 	 
	 	By:	
	 	 	Name:
	 	 	Title:
	 	 	 
	 	SECURED PARTY:
	 	 	 
	 	Dr. Dolev Rafaeli
	 	 	 
	 	Dennis M. McGrath
	 	 	 
	 	Yoav Ben-Dror

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