Document:

Blue Sphere Corporation 8-K

 

Exhibit 10.2

 

BLUE
SPHERE CORPORATION

 

CONVERTIBLE
SENIOR DEBENTURE

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

	PRINCIPAL
    AMOUNT:	$[___]
	DEBENTURE
    NUMBER:	D-MAY-2017-[___]
	ISSUANCE
    DATE:	 [___],
    2017
	MATURITY
    DATE:	December
    31, 2018

 

FOR
VALUE RECEIVED, BLUE SPHERE CORPORATION, a Nevada corporation (the “Company”), as of [___], 2017 (the “Issuance
Date”), hereby unconditionally promises to pay subject to the provisions stated herein to the order of [______] (“Holder”),
in lawful money of and within the United States of America and in immediately available funds, up to USD $[_____] (the “Principal
Amount”), together with accrued and unpaid interest (“Interest”) thereon, at December 31, 2018 (the
“Maturity Date”).

 

This
Convertible Senior Debenture (this “Debenture”) and all other identical Convertible Senior Debentures dated
the date hereof (collectively, the “Debentures”) are issued in connection with and in accordance with a Debenture
Refinance and Purchase Agreement, dated [ ], 2017, by and among the Company, the debenture holders signatory thereto, and Mstead
Ltd (the “Refinance Agreement”), a copy of which agreement is available for inspection at the Company’s
principal office. Notwithstanding any provision to the contrary contained herein, this Debenture is subject and entitled to certain
terms, conditions, covenants and agreements contained in the Refinance Agreement. Any transferee of this Debenture, by its acceptance
hereof, assumes the obligations of the Holder in the Refinance Agreement with respect to the conditions and procedures for transfer
of this Debenture. Reference to the Refinance Agreement shall in no way impair the absolute and unconditional obligation of the
Company to pay both Principal Amount and Interest.

 

		1.	Principal
Repayment; Interest Repayment.

 

(a)           Repayment of the Principal Amount by the Company to the Holder shall be made in full no later than the Maturity Date; provided
that before making any repayment that will occur before the Maturity Date, the Company shall provide notice to the Holder at least
five (5) business days prior to the date specified for repayment in such notice, and the Holder shall have the right, during such
period and through the date immediately preceding the date specified for such repayment, to deliver a Conversion Notice pursuant
to Section 2 hereof. Any repayment of the Principal Amount by the Company pursuant to this Section 1(a) must be in full, unless
otherwise agreed to in writing by the Holder.

 

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(b)           Interest shall accrue on the outstanding principal balance of this Debenture for the period beginning on the Issuance Date of
this Debenture through and including the Maturity Date, unless redeemed pursuant to the terms hereof, at a rate of eleven percent
(11%) per annum. All Interest payable under this Debenture shall be paid quarterly in arrears on or before the fifteenth (15th)
day of each month following the end of the calendar quarter throughout the term of this Debenture Agreement with the first interest
payment due at the end of the first calendar quarter after closing, and each calendar quarter thereafter.

 

(c)           This Debenture is, for so long as it is outstanding, subject to the terms and conditions set forth in the Pledge Agreement between
the Company and Subscriber dated as of the date hereof (the “Pledge Agreement”).

 

		2.	Optional
Conversion.

 

(a)           On or after the six (6) month anniversary of the Issuance Date, Holder may, at any time that is not less than ten (10) days prior
to the Maturity Date, deliver a dated and signed notice to the Company (a “Conversion Notice”), a copy of which
is attached hereto, of its election to convert some or all of the outstanding Principal Amount and accrued but unpaid interest
into shares of the Company’s common stock, $0.001 par value per share (“Common Stock”). The Holder shall
have the right to deliver one (1) or more Conversion Notices to the Company in accordance with this Section 2.

 

(b)           The “Conversion Price” shall be the lesser of (i) 80% of the price per combination of Common Stock and warrants
to purchase shares of Common Stock offered in the Public Offering, less the closing price of such warrants on the first day of
the Uplist, or (ii) an amount that is equal to 80% of the volume weighted average price (VWAP), calculated using the five (5)
trading days immediately following the Uplist.

 

(c)           For the purposes of this Debenture, the “Uplist” shall mean the initial listing on [ ], 2017 of the Company’s
Common Stock on The NASDAQ Capital Market, and the “Public Offering” shall mean the Company’s public
offering of its Common Stock and warrants to purchase shares of Common Stock, as fully contemplated in the Company’s Registration
Statement on Form S-1, as amended, filed with the U.S. Securities and Exchange Commission under Registration No. 333-215110.

 

(d)           The number of shares of Common Stock that shall be issuable upon any conversion pursuant to a Conversion Notice shall equal the
number derived by dividing the amount of the Principal Amount and accrued but unpaid interest that the Holder elects to convert
to Common Stock (the “Conversion Amount”) by the Conversion Price. The Conversion Notice shall be deemed delivered
to the Company on a date based on the form of delivery, in each case in accordance with Section 9.

 

(e)           The issuance of shares of the Company’s Common Stock and delivery of certificates representing such shares shall be made
promptly following the Company’s receipt of the Conversion Notice, and without charge to the Holder. Immediately upon the
issuance of shares of Common Stock pursuant to a Conversion Notice, the Principal Amount of the Debenture shall be automatically
amended to subtract the Principal Amount of the Debenture converted, as set forth on such Conversion Notice.

 

(f)            If a timely Conversion Notice is not received by the Company, the Debenture shall be subject to repayment as set forth in Section
1(a). If a Conversion Notice is received by the Company after the deadline for such notice, the Company may, in its sole discretion,
waive the deadline for such notice, or deem the Debenture to be subject to repayment as set forth in Section 1(a).

 

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(g)           Immediately upon the satisfaction of the Principal Amount and all interest due under the Debenture, whether such satisfaction
is by conversion, repayment, or a combination of both, the Debenture and any and all obligations of the Company thereunder, including
the Pledge Agreement, shall be automatically terminated.

 

3.
           Place of Payment; Application of Payments. All Principal Amount and Interest
due hereunder shall be payable to Holder in United States Dollars to such bank account as shall be designated by Holder in immediately
available funds or as otherwise specified to the Company in writing. Payment on this Debenture shall be applied first to any expenses
of collection, then to accrued interest, and thereafter to the outstanding principal balance hereof.

 

4.
           Default. The occurrence of any of the following events of default shall each
constitute and be an “Event of Default” under this Debenture:

 

(a)           Bankruptcy
or insolvency of the Company;

 

(b)           The
Company’s failure to pay any of the Principal Amount due under this Debenture on the date the same becomes due and payable,
or any accrued Interest or other amounts due under this Debenture after the same becomes due and payable;

 

(c)           Breach
of any material covenant or agreement contained in this Debenture and such breach remains uncured for a period of fifteen (15)
days after written notice thereof is received by the Company from Holder;

 

(d)           The
dissolution of the Company or any vote in favor thereof by the board of directors (or similar governing body) and/stockholders
of the Company; and

 

(e)           The
Company makes an assignment for the benefit of creditors, or files an application for the appointment of a receiver or similar
official with respect to it or any substantial part of its assets.

 

Upon
the occurrence of an Event of Default, the unpaid Principal Amount, all unpaid accrued Interest thereon and all other amounts
owing hereunder may, at the option of Holder, become immediately due and payable to Holder, provided, however, that upon
the occurrence of an Event of Default described in Section 4(a), all indebtedness of the Company to Holder shall become immediately
due and payable without any action of Holder.

 

5.            Adjustments.

 

(a)           Adjustment
for Subdivisions, Combinations and Other Issuances. If the outstanding shares of Common Stock are divided into a greater number
of shares, by forward stock split or otherwise, if a dividend in stock is paid on the Common Stock, or if the outstanding shares
of Common Stock are combined into a smaller number of shares of Common Stock, by reverse stock split or otherwise, then the Conversion
Price will be proportionately adjusted. The adjustments provided for in this Section 5(a) will be made with the intent and, as
nearly as practicable, the effect that neither the percentage of the total equity of the Company obtainable on conversion of the
Debenture nor the price payable for such percentage upon such exercise will be affected by any event described in this Section
5(a).

 

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(b)          Adjustment
for Merger, Consolidation, Reclassification, Reorganization, Etc. In case of any change in Common Stock through merger, consolidation,
reclassification, reorganization, partial or complete liquidation, purchase of all or substantially all the assets of the Company,
or other change in the capital structure of the Company, then, as a condition of such change, lawful and adequate provision will
be made so that the Holder will have the right thereafter to receive upon conversion of this Debenture the kind and amount of
shares of stock or other securities or property to which the Holder would have been entitled if, immediately prior to such event,
the Holder had held the number of shares then-obtainable upon the conversion of this Debenture. In any such case, appropriate
adjustment will be made in the application of the provisions set forth herein with respect to the rights and interest thereafter
of the Holder, to the end that the provisions set forth herein will thereafter be applicable, as nearly as reasonably may be,
in relation to any shares of stock deliverable upon the conversion of this Debenture. The Company will not permit any change in
its capital structure to occur unless the issuer of the shares of stock or other securities to be received by the Holder agrees
to comply with the provisions of this Debenture.

 

(c)          Adjustment
Upon Issuance of Common Stock.

 

(i)           Except
as provided in Section 5(c)(ii) and except in the case of an event described in either Section 5(c)(iv) or Section 5(c)(v), if
the Company shall, at any time or from time to time after the Issuance Date, issue or sell, or in accordance with Section 5(c)(iii)
is deemed to have issued or sold, any shares of Common Stock without consideration or for consideration per share less than the
Conversion Price in effect immediately prior to such issuance or sale (or deemed issuance or sale), then immediately upon such
issuance or sale (or deemed issuance or sale), the Conversion Price in effect immediately prior to such issuance or sale (or deemed
issuance or sale) shall be reduced (and in no event increased) to a Conversion Price equal to the quotient obtained by dividing:

 

(A)       the
sum of (1) the product obtained by multiplying the Common Stock Deemed Outstanding immediately prior to such issuance or sale
(or deemed issuance or sale) by the Conversion Price then in effect plus (2) the aggregate consideration, if any, received by
the Company upon such issuance or sale (or deemed issuance or sale); by

 

(B)       the
sum of (1) the Common Stock Deemed Outstanding immediately prior to such issuance or sale (or deemed issuance or sale) plus (2)
the aggregate number of shares of Common Stock issued or sold (or deemed issued or sold) by the Company in such issuance or sale
(or deemed issuance or sale).

 

(ii)          Anything
herein to the contrary notwithstanding, there shall be no adjustment to the Conversion Price with respect to any Excluded Issuance.

 

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(iii)         For
purposes of determining the adjusted Conversion Price under Section 5(c)(i) hereof, the following shall be applicable:

 

(A)       If
the Company shall, at any time or from time to time after the Issuance Date, in any manner grant or sell (whether directly or
by assumption in a merger or otherwise) any Options, whether or not such Options or the right to convert or exchange any Convertible
Securities issuable upon the exercise of such Options are immediately exercisable, and the lowest price per share (determined
as provided in this paragraph and in Section 5(c)(iii)(E)) for which any one share of Common Stock is issuable upon the exercise
of any such Option or upon the conversion or exchange of any Convertible Security issuable upon the exercise of any such Option
is less than the Conversion Price in effect immediately prior to the time of the granting or sale of such Options, then such share
of Common Stock issuable upon the exercise of such Option or upon conversion or exchange of such Convertible Security issuable
upon the exercise of such Option shall be deemed to have been issued as of the date of granting or sale of such Options (and thereafter
shall be deemed to be outstanding for purposes of adjusting the Conversion Price under Section 5(c)(i)), at a price per share
equal to such lowest price per share. For purposes of this Section 5(c)(iii)(A) , the lowest price per share for which any one
share of Common Stock is issuable upon the exercise of any such Option or upon the conversion or exchange of any Convertible Security
issuable upon the exercise of any such Option shall be equal to the sum (which sum shall constitute the applicable consideration
received for purposes of Section 5(c)(i)) of the lowest amounts of consideration, if any, received or receivable by the Company
as consideration with respect to any one share of Common Stock upon each of (1) the granting or sale of the Option, plus (2) the
exercise of the Option, plus (3) in the case of an Option which relates to Convertible Securities, the issuance or sale of the
Convertible Security and the conversion or exchange of the Convertible Security. Except as otherwise provided in Section 5(c)(iii)(C),
no further adjustment of the Conversion Price shall be made upon the actual issuance of Common Stock or of Convertible Securities
upon exercise of such Options or upon the actual issuance of Common Stock upon conversion or exchange of Convertible Securities
issuable upon the exercise of such Options.

 

(B)       If
the Company shall, at any time or from time to time after the Issuance Date, in any manner grant or sell (whether directly or
by assumption in a merger or otherwise) any Convertible Securities, whether or not the right to convert or exchange any such Convertible
Securities is immediately exercisable, and the lowest price per share (determined as provided in this paragraph and in Section
5(c)(iii)(E)) for which one share of Common Stock is issuable upon the conversion or exchange of any such Convertible Securities
is less than the Conversion Price in effect immediately prior to the time of the granting or sale of such Convertible Securities,
then such share of Common Stock issuable upon conversion or exchange of such Convertible Security shall be deemed to have been
issued as of the date of granting or sale of such Convertible Securities (and thereafter shall be deemed to be outstanding for
purposes of adjusting the Conversion Price under Section 5(c)(i)), at a price per share equal to such lowest price per share.
For purposes of this Section 5(c)(iii)(B), the lowest price per share for which any one share of Common Stock is issuable upon
the conversion or exchange of any such Convertible Security shall be equal to the sum (which sum shall constitute the applicable
consideration received for purposes of Section 5(c)(i)) of the lowest amounts of consideration, if any, received or receivable
by the Company as consideration with respect to any one share of Common Stock upon each of (1) the granting or sale of the Convertible
Security, plus (2) the conversion or exchange of the Convertible Security. Except as otherwise provided in Section 5(c)(iii)(C),
no further adjustment of the Conversion Price shall be made upon the actual issuance of Common Stock upon conversion or exchange
of such Convertible Securities or by reason of the issue or sale of Convertible Securities upon exercise of any Options to purchase
any such Convertible Securities for which adjustments of the Conversion Price have been made pursuant to the other provisions
of this Section 5(c)(iii).

 

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(C)       Upon
any change in any of (1) the lowest amounts of consideration, if any, received or receivable by the Company as consideration with
respect to any one share of Common Stock upon the granting or sale of any Options or Convertible Securities referred to in Section
5(c)(iii)(A) or Section 5(c)(iii)(B) hereof, (2) the lowest amounts of additional consideration, if any, payable to the Company
with respect to any one share of Common Stock upon exercise of any Options or upon the issuance, conversion or exchange of any
Convertible Securities referred to in Section 5(c)(iii)(A) or Section 5(c)(iii)(B) hereof, (3) the rate at which Convertible Securities
referred to in Section 5(c)(iii)(A) or Section 5(c)(iii)(B) hereof are convertible into or exchangeable for Common Stock, or (4)
the maximum number of shares of Common Stock issuable in connection with any Options referred to in Section 5(c)(iii)(A) hereof
or any Convertible Securities referred to in Section 5(c)(iii)(B) hereof (in each case, other than in connection with an Excluded
Issuance), then (whether or not the original issuance or sale of such Options or Convertible Securities resulted in an adjustment
to the Conversion Price pursuant to this Section 5(c)) the Conversion Price in effect at the time of such change shall be adjusted
or readjusted, as applicable, to the Conversion Price which would have been in effect at such time pursuant to the provisions
of this Section 5(c) had such Options or Convertible Securities still outstanding provided for such changed consideration, conversion
rate or maximum number of shares, as the case may be, at the time initially granted, issued or sold, but only if as a result of
such adjustment or readjustment the Conversion Price then in effect is reduced.

 

(D)       Upon
the expiration or termination of any unexercised Option (or portion thereof) or any unconverted or unexchanged Convertible Security
(or portion thereof) for which any adjustment (either upon its original issuance or upon a revision of its terms) was made pursuant
to this Section 5(c) (including without limitation upon the redemption or purchase for consideration of all or any portion of
such Option or Convertible Security by the Company), the Conversion Price then in effect hereunder shall forthwith be changed
pursuant to the provisions of this Section 5(c) to the Conversion Price which would have been in effect at the time of such expiration
or termination had such unexercised Option (or portion thereof) or unconverted or unexchanged Convertible Security (or portion
thereof), to the extent outstanding immediately prior to such expiration or termination, never been issued.

 

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(E)       If
the Company shall, at any time or from time to time after the Issuance Date, issue or sell, or is deemed to have issued or sold
in accordance with Section 5(c)(iii), any shares of Common Stock, Options or Convertible Securities: (1) for cash, the consideration
received therefor shall be deemed to be the net amount received by the Company therefor; (2) for consideration other than cash,
the amount of the consideration other than cash received by the Company shall be the fair value of such consideration, except
where such consideration consists of marketable securities, in which case the amount of consideration received by the Company
shall be the market price (as reflected on any securities exchange, quotation system or association or similar pricing system
covering such security) for such securities as of the end of business on the date of receipt of such securities; (3) for no specifically
allocated consideration in connection with an issuance or sale of other securities of the Company, together comprising one integrated
transaction, the amount of the consideration therefor shall be deemed to be the fair value of such portion of the aggregate consideration
received by the Company in such transaction as is attributable to such shares of Common Stock, Options or Convertible Securities,
as the case may be, issued in such transaction; or (4) to the owners of the non-surviving entity in connection with any merger
in which the Company is the surviving corporation, the amount of consideration therefor shall be deemed to be the fair value of
such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options
or Convertible Securities, as the case may be, issued to such owners. The net amount of any cash consideration and the fair value
of any consideration other than cash or marketable securities shall be determined in good faith jointly by the Board of Directors
of the Company and the Holder.

 

(F)        For
purposes of any adjustment to the Conversion Price in accordance with this Section 5(c), in case the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them (1) to receive a dividend or other distribution payable in
Common Stock, Options or Convertible Securities or (2) to subscribe for or purchase Common Stock, Options or Convertible Securities,
then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued
or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right
of subscription or purchase, as the case may be; provided, that if before the distribution to its holders of Common Stock the
Company legally abandons its plan to pay or deliver such dividend, distribution, subscription or purchase rights, then thereafter
no adjustment shall be required by the taking of such record and any such adjustment previously made in respect thereof shall
be rescinded and annulled.

 

(G)       The
number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of
the Company or any of its wholly-owned subsidiaries, and the disposition of any such shares (other than the cancellation or retirement
thereof or the transfer of such shares among the Company and its wholly-owned subsidiaries) shall be considered an issue or sale
of Common Stock for the purpose of this Section 5(c).

 

(H)       For
purposes of this Section 5(c):

 

“Common
Stock Deemed Outstanding” means, at any given time, the number of shares of Common Stock actually outstanding at such
time.

 

“Convertible
Securities” means any securities (directly or indirectly) convertible into or exchange for Common Stock, but excluding
Options.

 

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“Excluded
Issuances” means any issuance or sale (or deemed issuance or sale in accordance with Section 5(d)(iii)) by the Company
after the Issuance Date of: (1) shares of Common Stock issued upon the conversion of this Debenture; (2) shares of Common Stock
(as such number of shares is equitably adjusted for subsequent stock splits, stock combinations, stock dividends and recapitalizations)
issued directly or upon the exercise of Options to directors, officers, employees, or consultants of the Company in connection
with their service as directors of the Company, their employment by the Company or their retention as consultants by the Company,
in each case authorized by the Board of Directors of the Company and issued pursuant to the Company’s Global Share and Options
Incentive Enhancement Plan (2016) (including all such shares of Common Stock and Options outstanding prior to the Issuance Date);
or (3) shares of Common Stock issued upon the conversion or exercise of Options (other than Options covered by clause (2) above)
or Convertible Securities issued prior to the Issuance Date, provided that such securities are not amended after the date hereof
to increase the number of shares of Common Stock issuable thereunder or to lower the exercise or conversion price thereof.

 

“Options”
means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities.

 

6.
           Covenants.

 

(a)           Use
of Proceeds. The Company shall use the net cash proceeds loaned to the Company pursuant to this Debenture for working capital
and general corporate purposes, provided however, the Company shall have broad discretion in the application of the net proceeds
allocated to working capital and general corporate purposes.

 

(b)           Compliance
with Agreements. The Company shall perform and observe, or cause to be performed or observed, as the case may be, all of the
provisions in its certificate of incorporation, its by-laws, and the obligations pursuant to the terms, agreements, and covenants
of this Debenture and all documents and agreements executed or delivered in connection with this Debenture. The Company expressly
represents that the Company has the full power and authority to deliver this Debenture that this Debenture has been duly authorized,
executed, and delivered by the Company, and that the Company’s obligations under this Debenture are legal, valid, binding,
and enforceable, absolute, and unconditional.

 

(c)           Preservation
of Corporate Existence and Business. The Company shall use its best efforts to preserve intact its present business organization,
rights, and privileges and present goodwill and, to the best of its ability, its relationships existing with other parties and
shall at all times cause to be done all things necessary to maintain, preserve, and renew its corporate existence in the State
of Nevada, and shall observe and conform with all valid requirements of such governmental authorities relating to the conduct
of the business of the Company, the failure of which would have a material adverse effect upon the Company’s business or
financial condition. The Company shall maintain and keep in force all material licenses, permits and agreements necessary to the
conduct of its businesses.

 

(d)           Maintenance
of Properties. The Company shall maintain and keep its properties, real and personal, in good repair, working order, and condition,
and from time to time make all necessary or desirable repairs, renewals, and replacements, so that its business may be properly
and advantageously conducted at all times.

 

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(e)           Compliance
with Obligations, Laws, etc. The Company shall comply with all of the obligations which it has incurred or to which it becomes
subject pursuant to any contract or agreement, whether oral or written, express or implied, the breach of which might have a material
adverse effect upon its business or financial condition, unless and to the extent that the same are being contested in good faith
and by appropriate proceedings and adequate reserves have been set aside on its books with respect thereto. The Company shall
comply with all applicable laws, rules, and regulations of all governmental authorities.

 

(f)            Books
of Account. The Company will, and will cause each of its subsidiaries to, at all times maintain books of account in which
its financial transactions are duly recorded in conformance with generally accepted accounting principles.

 

(g)           Unconditional
Obligation; No Waiver. The obligations to make payments provided for in this Debenture are absolute and unconditional and
are not subject to any defense, set-off counterclaim, rescission, recoupment, or adjustment whatsoever. No forbearance, indulgence,
delay, or failure to exercise any right or remedy with respect to this Debenture shall operate as a waiver or as an acquiescence
in any default, nor shall any single or partial exercise of any right or remedy preclude any other or further exercise thereof
or exercise of any other right or remedy.

 

7.
           Waiver and Arbitration. TO THE FULLEST EXTENT PERMITTED BY LAW, HOLDER AND THE
COMPANY AGREE THAT NEITHER OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (i) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM
OR ANY OTHER ACTION BASED UPON, OR ARISING OUT OF, THIS DEBENTURE, ANY RELATED AGREEMENTS OR INSTRUMENTS OR THE DEALINGS OR THE
RELATIONSHIP BETWEEN THEM, (ii) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS
NOT BEEN WAIVED, OR (iii) MAKE ANY CLAIM FOR CONSEQUENTIAL, PUNITIVE, OR SPECIAL DAMAGES. THE PROVISIONS OF THIS PARAGRAPH HAVE
BEEN FULLY DISCUSSED BY HOLDER AND THE COMPANY, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER HOLDER NOR THE
COMPANY HAS AGREED WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
THE COMPANY WAIVES PRESENTMENT AND WRITTEN DEMAND FOR PAYMENT, NOTICE OF DISHONOR, PROTEST, AND NOTICE OF PROTEST OF THIS DEBENTURE.

 

All
disputes arising under this Debenture shall be governed by and interpreted in accordance with the laws of the State of Nevada,
without regard to principles of conflict of laws. The parties to this Debenture shall submit all disputes arising under this Debenture
to arbitration in New York, New York before a single arbitrator of the American Arbitration Association (the “AAA”).
The arbitrator shall be selected by application of the rules of the AAA, or by mutual agreement of the parties, except that such
arbitrator shall be an attorney admitted to practice law in the State of New York. No party hereto will challenge the jurisdiction
or venue provisions as provided in this Section 7. Nothing in this Section 7 shall limit the Holder’s right to obtain an injunction
for a breach of this Debenture from a court of law. Any injunction obtained shall remain in full force and effect until the arbitrator
fully adjudicates the dispute.

 

8.
           Attorney’s Fees; Collection Costs. If there has been an Event of Default
by the Company hereunder, Holder shall be entitled to receive and the Company agrees to pay all costs of enforcement and collection
incurred by Holder, including, without limitation, reasonable attorney’s fees relating thereto.

 

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9.
            Notices. Unless otherwise specified herein, all notices, requests, demands, claims
and other communications hereunder shall be in writing and shall be delivered by certified or registered mail (first class postage
pre-paid), guaranteed overnight delivery, or email transmission if such transmission is confirmed by delivery by certified or
registered mail (first class postage pre-paid) or guaranteed overnight delivery, to the addresses set forth in the Refinance Agreement
(or to such other addresses which such party shall subsequently designate in writing to the other party).

 

10.
          No Waivers of Holder’s Rights. No failure or delay by Holder in exercising
any right, power, or privilege hereunder or under any other documents or agreements executed in connection herewith shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies in this Debenture provided are cumulative and not exclusive of
any rights or remedies otherwise provided by agreement or law.

 

11.           Record
Ownership. The Company or its attorney shall maintain a register of the Holder of the Debentures (the “Register”)
showing their names and addresses and the serial numbers and principal amounts of Debentures issued to them. The Register may
be maintained in electronic, magnetic or other computerized form. The Company may treat the person named as the Holder of this
Debenture in the Register as the sole owner of this Debenture. The Holder of this Debenture is exclusively entitled to receive
payments on this Debenture, receive notifications with respect to this Debenture and otherwise exercise all of the rights and
powers as the absolute owner hereof.

 

12.           Worn
or Lost Debenture. If this Debenture becomes worn, defaced or mutilated but is still substantially intact and recognizable,
the Company or its agent may issue a new Debenture in lieu hereof upon its surrender. Where the Holder of this Debenture claims
that the Debenture has been lost, destroyed or wrongfully taken, the Company shall issue a new Debenture in place of the Debenture
if the Holder so requests by written notice to the Company.

 

13.
          Amendments. Neither this Debenture nor any provision hereof may be waived,
discharged or terminated except by a written instrument signed by the Holder. Neither this Debenture nor any provision hereof
may be amended except by a written instrument signed by the Holder and the Company.

 

14.
          Transferability. This Debenture has been issued by the Company for the sole benefit
of Holder and may not be sold, transferred or otherwise assigned without the prior written consent of the Company, such consent
not to be unreasonably withheld, and the Holder agrees not to take any actions which would cause any third party to have such
an interest in this Debenture.

 

15.           Assignment.
The rights and obligations of the Company and Holder shall be binding upon any entity which becomes the successor of the Company
or which otherwise assumes the Company’s obligations hereunder.

 

16.           Partial
Invalidity. The invalidity or unenforceability of any one or more phrases, clauses or sections of this Debenture shall not
affect the validity or enforceability of the remaining portions of it.

 

17.
          Captions. The captions and headings of the various sections and subsections of
this Debenture are provided for’ convenience only and shall not be construed to modify the meaning of such sections or’
subsections.

 

    	10 

     

    

 

18.
          Entire Agreement. This Debenture and the documents and any agreements executed
in connection herewith constitute the ‘final agreement of the parties hereto and supersede any prior agreement or understanding,
written or oral, with respect to the matters contained herein and therein.

 

[Signature
Page Follows]

 

    	11 

     

    

 

THIS
DEBENTURE HAS BEEN EXECUTED AND DELIVERED IN THE STATE OF NEW YORK, UNITED STATES OF AMERICA. THIS DEBENTURE SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEVADA, EXCLUDING CONFLICT OF LAWS PRINCIPLES THAT
WOULD CAUSE THE APPLICATION OF LAWS OF ANY OTHER JURISDICTION.

	 	 	 
	 	BLUE SPHERE CORPORATION
	 	 	 
	 	By:	 
	 	Name: 	Shlomi Palas
	 	Title: 	Chief Executive Officer

 

    	12 

     

    

 

EXHIBIT
A

 

NOTICE
OF CONVERSION

 

(To
Be Signed Only Upon Conversion of the Debenture)

 

The
undersigned, the holder of the foregoing Convertible Secured Debenture dated ________, 2017 (the “Debenture”), hereby
surrenders such Debenture for conversion into shares of Common Stock of Blue Sphere Corporation to the extent of the Conversion
Amount of $ _______________, representing unpaid Principal Amount and accrued but unpaid interest of such Debenture, and requests
that the certificates for such Common Stock be issued in the name of, and delivered to:

	 

 

At
the following address:

	 

	 

  

Calculation:

 

	Principal
Amount of Debenture to be Converted	 	 
	 	 	 
	Unpaid
& Accrued Interest on Principal Amount of Debenture to be Converted	+	 
	 	 	 
	Conversion Amount	=	 
	 	 	 
	Conversion
Price	÷	 
	 	 	 
	Number of Shares of the Company’s Common Stock to be Issued	=	 

 

The
date of this Conversion Notice is: ____________________________________

 

	 	 
	 	(Signature
must conform in all respects to name of

 holder as specified on the face of the Debenture)
	 	 
	 	 
	 	(Address)

 

    	13Blue Sphere Corporation 8-K

 

Exhibit
10.3 

 

BLUE
SPHERE CORPORATION

 

WARRANT

 

THIS
WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS AND MAY ONLY BE ACQUIRED FOR INVESTMENT
PURPOSES ONLY AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. THIS WARRANT AND THE SECURITIES
ISSUABLE UPON ITS EXERCISE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS WARRANT OR SUCH SECURITIES UNDER THE SECURITIES ACT AND QUALIFICATION UNDER APPLICABLE STATE LAW WITHOUT
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED UNDER THE SECURITIES
ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.

 

	WARRANT
    NUMBER:	W-MAY-2017-[___]
	ISSUANCE DATE:	[___],
    2017

 

FOR
VALUE RECEIVED, BLUE SPHERE CORPORATION, a Nevada corporation (the “Company”), as of [___], 2017 (the
“Issuance Date”), hereby certifies that [___], or its registered assigns (the “Warrant Holder”),
is entitled, subject to the terms set forth below, to purchase from the Company [___] shares (the “Warrant Shares”)
of the Company’s common stock, $0.001 par value per share (“Common Stock”), exercisable at the per share
Exercise Price (as defined in Section 7). This Warrant may be exercised any time after issuance through and including the fifth
(5th) anniversary of the Issuance Date (the “Expiration Date”), subject to the following terms and conditions
set out in this Warrant.

 

1.          Registration
of Warrant. The Company shall register this Warrant upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Warrant Holder hereof from time to time. The Company may deem and treat the registered
Warrant Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the
Warrant Holder, and for all other purposes, and the Company shall not be affected by notice to the contrary.

 

2.          Investment
Representation. The Warrant Holder by accepting this Warrant represents that the Warrant Holder is acquiring this Warrant
for its own account or the account of an affiliate for investment purposes and not with the view to any offering or distribution
and that the Warrant Holder will not sell or otherwise dispose of this Warrant or the underlying Warrant Shares in violation of
applicable securities laws. The Warrant Holder acknowledges that the certificates representing any Warrant Shares may bear a legend
indicating that they have not been registered under the Securities Act and may not be sold by the Warrant Holder except pursuant
to an effective registration statement or pursuant to an exemption from registration requirements of the Securities Act and in
accordance with federal and state securities laws. If this Warrant was acquired by the Warrant Holder pursuant to the exemption
from the registration requirements of the Securities Act afforded by Regulation S thereunder, the Warrant Holder acknowledges
and covenants that this Warrant may not be exercised by or on behalf of a Person during the one year distribution compliance period
(as defined in Regulation S) following the date hereof. “Person” means an individual, partnership, firm, limited
liability company, trust, joint venture, association, corporation, or any other legal entity.

 

    1 

     

    

 

3.         Validity
of Warrant and Issue of Shares. The Company represents and warrants that this Warrant has been duly authorized and validly
issued and warrants and agrees that all of Common Stock that may be issued upon the exercise of the rights represented by this
Warrant will, when issued upon such exercise, be duly authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof. The Company further warrants and agrees that during the period within
which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved a sufficient
number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant.

 

4.         Registration
of Transfers and Exchange of Warrants.

 

(a)          Subject
to compliance with the legend set forth on the face of this Warrant, the Company shall register the transfer of any portion of
this Warrant in the Warrant Register, upon surrender of this Warrant with the Form of Assignment attached hereto duly completed
and signed, to the Company at the office specified in or pursuant to Section 10. Upon any such registration or transfer, a new
warrant to purchase Common Stock, in substantially the form of this Warrant (any such new warrant, a “New Warrant”),
evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining
portion of this Warrant not so transferred, if any, shall be issued to the transferring Warrant Holder. The acceptance of the
New Warrant by the transferee thereof shall be deemed the acceptance of such transferee of all of the rights and obligations of
a Warrant Holder of a Warrant.

 

(b)          This
Warrant is exchangeable, upon the surrender hereof by the Warrant Holder to the office of the Company specified in or pursuant
to Section 10 for one or more New Warrants, evidencing in the aggregate the right to purchase the number of Warrant Shares which
may then be purchased hereunder. Any such New Warrant will be dated the date of such exchange.

 

5.         Exercise
of Warrants.

 

(a)          This
Warrant may be exercised at any time and from time to time from and after the Issuance Date and through and including the Expiration
Date, for such number of Warrant Shares as is indicated in the form of “Election to Purchase”, which is attached
hereto and incorporated herein as Exhibit A. If less than all of the Warrant Shares which may be purchased under this Warrant
are exercised at any time, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares for which no exercise has been evidenced by this Warrant. At 5:00 P.M., New York
time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value.

 

(b)          Exercise
of this Warrant shall be made upon surrender of this Warrant with an Election to Purchase in the form attached hereto (or attached
to such New Warrant), duly completed and signed to the Company, at its address set forth in Section 10.

 

(c)          A
“Date of Exercise” means the date on which the Company shall have received (i) this Warrant (or any New Warrant,
as applicable), with an Election to Purchase in the form attached hereto (or attached to such New Warrant), appropriately completed
and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares so indicated by the Warrant Holder to
be purchased, as set forth herein.

 

    2 

     

    

 

(d)          Payment
upon exercise may be made at the written option of the Warrant Holder either by cashless exercise, as set forth in Section 6,
or in cash, wire transfer or by certified or official bank check payable to the order of the Company equal to the applicable aggregate
purchase price, for the number of Warrant Shares specified in the Election to Purchase (as such exercise number shall be adjusted
to reflect any adjustment in the total number of Warrant Shares issuable to the Warrant Holder per the terms of this Warrant)
and the Warrant Holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and non-assessable
Warrant Shares determined as provided herein.

 

(e)          The
Company shall promptly, but in no event later than ten (10) business days after the Date of Exercise as defined herein, issue
or cause to be issued and cause to be delivered to or upon the written order of the Warrant Holder and in such name or names as
the Warrant Holder may designate (subject to the restrictions on transfer described in the legend set forth on the face of this
Warrant), a certificate for the Warrant Shares issuable upon such exercise, with such restrictive legend as required by the Act.
If no such restrictive legend is applicable, upon request of the Warrant Holder, the Warrant Shares will be recorded by book entry
with the Company’s transfer agent. Any person so designated by the Warrant Holder to receive Warrant Shares shall be deemed
to have become holder of record of such Warrant Shares as of the Date of Exercise of this Warrant.

 

6.         Cashless
Exercise.

 

(a)          If
at any time after six (6) months following the Issuance Date and prior to the Expiration Date there is not an effective registration
statement on file with the U.S. Securities and Exchange Commission covering the resale of the Warrant Shares by the Warrant Holder,
then at such time this Warrant may also be exercised by means of a cashless exercise. In such event, the Holder shall surrender
this Warrant to the Company, together with a notice of cashless exercise, and the Company shall issue to the Holder the number
of Warrant Shares determined as follows:

 

X
= Y (A-B)/A

 

where:

 

X  
=   The number of Warrant Shares to be issued to the Holder.

 

Y  
=   The number of Warrant Shares with respect to which this Warrant is being exercised.

 

A
  =   The average closing price of Common Stock for the five (5) trading days immediately prior to the
Date of Exercise.

 

B
  =   The Exercise Price.

 

(b)          For
purposes of Rule 144 of the Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise
transaction shall be deemed to have been acquired by the Warrant Holder, and the holding period for the Warrant Shares shall be
deemed to have been commenced, on the issue date.

 

    3 

     

    

 

7.         Exercise
Price. The “Exercise Price” shall be the lesser of (a) 80% of the price per combination of Common Stock
and warrants to purchase shares of Common Stock offered in the Public Offering, less the closing price of such warrants on the
first day of the Uplist, or (b) an amount that is equal to 80% of the volume weighted average price (VWAP), calculated using the
five (5) trading days immediately following the Uplist. For the purposes of this Warrant, the “Uplist” shall
mean the initial listing on [ ], 2017 of the Company’s Common Stock on The NASDAQ Capital Market, and the “Public
Offering” shall mean the Company’s public offering of its Common Stock and warrants to purchase shares of Common
Stock, as fully contemplated in the Company’s Registration Statement on Form S-1, as amended, filed with the U.S. Securities
and Exchange Commission under Registration No. 333-215110.

 

8.         Fractional
Shares. The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise of this
Warrant. The number of full Warrant Shares that shall be issuable upon the exercise of this Warrant shall be computed on the basis
of the aggregate number of Warrants Shares purchasable on exercise of this Warrant so presented. If any fraction of a Warrant
Share would, except for the provisions of this Section 8, be issuable on the exercise of this Warrant, the Company shall, at its
option, (a) pay an amount in cash equal to the Exercise Price multiplied by such fraction or (b) round the number of Warrant Shares
issuable, up to the next whole number.

 

9.         Adjustments.

 

(a)          Adjustments
for Subdivisions, Combinations and Other Issuances. If the outstanding shares of Common Stock are divided into a greater number
of shares, by forward stock split or otherwise, or a dividend in stock is paid on the Common Stock, then the number of shares
of Warrant Shares for which the Warrant is then exercisable will be proportionately increased and the Exercise Price will be proportionately
reduced. Conversely, if the outstanding shares of Common Stock are combined into a smaller number of shares of Common Stock, by
reverse stock split or otherwise, then the number of Warrant Shares for which the Warrant is then exercisable will be proportionately
reduced and the Exercise Price will be proportionately increased. The increases and reductions provided for in this Section 9(a)
will be made with the intent and, as nearly as practicable, the effect that neither the percentage of the total equity of the
Company obtainable on exercise of the Warrants nor the price payable for such percentage upon such exercise will be affected by
any event described in this Section 9(a).

 

(b)          Adjustments
for Merger, Consolidation, Reclassification, Reorganization, Etc. In case of any change in Common Stock through merger, consolidation,
reclassification, reorganization, partial or complete liquidation, purchase of all or substantially all the assets of the Company,
or other change in the capital structure of the Company, then, as a condition of such change, lawful and adequate provision will
be made so that the Warrant Holder will have the right thereafter to receive upon the exercise of the Warrant the kind and amount
of shares of stock or other securities or property to which the Warrant Holder would have been entitled if, immediately prior
to such event, the Warrant Holder had held the number of Warrant Shares obtainable upon the exercise of the Warrant. In any such
case, appropriate adjustment will be made in the application of the provisions set forth herein with respect to the rights and
interest thereafter of the Warrant Holder, to the end that the provisions set forth herein will thereafter be applicable, as nearly
as reasonably may be, in relation to any shares of stock deliverable upon the exercise of the Warrant. The Company will not permit
any change in its capital structure to occur unless the issuer of the shares of stock or other securities to be received by the
Warrant Holder agrees to comply with the provisions of this Warrant.

 

    4 

     

    

 

(c)         Adjustment
Upon Issuance of Common Stock.

 

(i)          Except
as provided in Section 9(c)(iii) and except in the case of an event described in either Section 9(c)(v) or Section 9(c)(vi), if
the Company shall, at any time or from time to time after the Issuance Date, issue or sell, or in accordance with Section 5(d)(iv)
is deemed to have issued or sold, any shares of Common Stock without consideration or for consideration per share less than the
Exercise Price in effect immediately prior to such issuance or sale (or deemed issuance or sale), then immediately upon such issuance
or sale (or deemed issuance or sale), the Exercise Price in effect immediately prior to such issuance or sale (or deemed issuance
or sale) shall be reduced (and in no event increased) to an Exercise Price equal to the quotient obtained by dividing:

 

(A)          the
sum of (1) the product obtained by multiplying the Common Stock Deemed Outstanding immediately prior to such issuance or sale
(or deemed issuance or sale) by the Exercise Price then in effect plus (2) the aggregate consideration, if any, received by the
Company upon such issuance or sale (or deemed issuance or sale); by

 

(B)          the
sum of (1) the Common Stock Deemed Outstanding immediately prior to such issuance or sale (or deemed issuance or sale) plus (2)
the aggregate number of shares of Common Stock issued or sold (or deemed issued or sold) by the Company in such issuance or sale
(or deemed issuance or sale).

 

(ii)          Upon
any and each adjustment of the Exercise Price as provided in Section 9(c)(i), the number of Warrant Shares issuable upon the exercise
of this Warrant immediately prior to any such adjustment shall be increased to a number of Warrant Shares equal to the quotient
obtained by dividing:

 

(A)          the
product of (1) the Exercise Price in effect immediately prior to any such adjustment multiplied by (2) the number of Warrant Shares
issuable upon exercise of this Warrant immediately prior to any such adjustment; by

 

(B)           the
Exercise Price resulting from such adjustment.

 

(iii)          Anything
herein to the contrary notwithstanding, there shall be no adjustment to the Exercise Price or the number of Warrant Shares issuable
upon exercise of this Warrant with respect to any Excluded Issuance.

 

(iv)         For
purposes of determining the adjusted Exercise Price under Section 9(c)(i) hereof, the following shall be applicable:

 

(A)          If
the Company shall, at any time or from time to time after the Issuance Date, in any manner grant or sell (whether directly or
by assumption in a merger or otherwise) any Options, whether or not such Options or the right to convert or exchange any Convertible
Securities issuable upon the exercise of such Options are immediately exercisable, and the lowest price per share (determined
as provided in this paragraph and in Section 9(c)(iv)(E)) for which any one share of Common Stock is issuable upon the exercise
of any such Option or upon the conversion or exchange of any Convertible Security issuable upon the exercise of any such Option
is less than the Exercise Price in effect immediately prior to the time of the granting or sale of such Options, then such share
of Common Stock issuable upon the exercise of such Option or upon conversion or exchange of such Convertible Security issuable
upon the exercise of such Option shall be deemed to have been issued as of the date of granting or sale of such Options (and thereafter
shall be deemed to be outstanding for purposes of adjusting the Exercise Price under Section 9(c)(i)), at a price per share equal
to such lowest price per share. For purposes of this Section 9(c)(iv)(A) , the lowest price per share for which any one share
of Common Stock is issuable upon the exercise of any such Option or upon the conversion or exchange of any Convertible Security
issuable upon the exercise of any such Option shall be equal to the sum (which sum shall constitute the applicable consideration
received for purposes of Section 9(c)(i)) of the lowest amounts of consideration, if any, received or receivable by the Company
as consideration with respect to any one share of Common Stock upon each of (1) the granting or sale of the Option, plus (2) the
exercise of the Option, plus (3) in the case of an Option which relates to Convertible Securities, the issuance or sale of the
Convertible Security and the conversion or exchange of the Convertible Security. Except as otherwise provided in Section 9(c)(iv)(C),
no further adjustment of the Exercise Price shall be made upon the actual issuance of Common Stock or of Convertible Securities
upon exercise of such Options or upon the actual issuance of Common Stock upon conversion or exchange of Convertible Securities
issuable upon the exercise of such Options.

 

    5 

     

    

 

(B)          If
the Company shall, at any time or from time to time after the Issuance Date, in any manner grant or sell (whether directly or
by assumption in a merger or otherwise) any Convertible Securities, whether or not the right to convert or exchange any such Convertible
Securities is immediately exercisable, and the lowest price per share (determined as provided in this paragraph and in Section
9(c)(iv)(E)) for which one share of Common Stock is issuable upon the conversion or exchange of any such Convertible Securities
is less than the Exercise Price in effect immediately prior to the time of the granting or sale of such Convertible Securities,
then such share of Common Stock issuable upon conversion or exchange of such Convertible Security shall be deemed to have been
issued as of the date of granting or sale of such Convertible Securities (and thereafter shall be deemed to be outstanding for
purposes of adjusting the Exercise Price under Section 9(c)(i)), at a price per share equal to such lowest price per share. For
purposes of this Section 9(c)(iv)(B), the lowest price per share for which any one share of Common Stock is issuable upon the
conversion or exchange of any such Convertible Security shall be equal to the sum (which sum shall constitute the applicable consideration
received for purposes of Section 9(c)(i)) of the lowest amounts of consideration, if any, received or receivable by the Company
as consideration with respect to any one share of Common Stock upon each of (1) the granting or sale of the Convertible Security,
plus (2) the conversion or exchange of the Convertible Security. Except as otherwise provided in Section 9(c)(iv)(C), no further
adjustment of the Exercise Price shall be made upon the actual issuance of Common Stock upon conversion or exchange of such Convertible
Securities or by reason of the issue or sale of Convertible Securities upon exercise of any Options to purchase any such Convertible
Securities for which adjustments of the Exercise Price have been made pursuant to the other provisions of this Section 9(c)(iv).

 

    6 

     

    

 

(C)          Upon
any change in any of (1) the lowest amounts of consideration, if any, received or receivable by the Company as consideration with
respect to any one share of Common Stock upon the granting or sale of any Options or Convertible Securities referred to in Section
9(c)(iv)(A) or Section 9(c)(iv)(B) hereof, (2) the lowest amounts of additional consideration, if any, payable to the Company
with respect to any one share of Common Stock upon exercise of any Options or upon the issuance, conversion or exchange of any
Convertible Securities referred to in Section 9(c)(iv)(A) or Section 9(c)(iv)(B) hereof, (3) the rate at which Convertible Securities
referred to in Section 9(c)(iv)(A) or Section 9(c)(iv)(B) hereof are convertible into or exchangeable for Common Stock, or (4)
the maximum number of shares of Common Stock issuable in connection with any Options referred to in Section 9(c)(iv)(A) hereof
or any Convertible Securities referred to in Section 9(c)(iv)(B) hereof (in each case, other than in connection with an Excluded
Issuance), then (whether or not the original issuance or sale of such Options or Convertible Securities resulted in an adjustment
to the Exercise Price pursuant to this Section 9(c)) the Exercise Price in effect at the time of such change shall be adjusted
or readjusted, as applicable, to the Exercise Price which would have been in effect at such time pursuant to the provisions of
this Section 9(c) had such Options or Convertible Securities still outstanding provided for such changed consideration, conversion
rate or maximum number of shares, as the case may be, at the time initially granted, issued or sold, but only if as a result of
such adjustment or readjustment the Exercise Price then in effect is reduced, and the number of Warrant Shares issuable upon the
exercise of this Warrant immediately prior to any such adjustment or readjustment shall be correspondingly adjusted or readjusted
pursuant to the provisions of Section 9(c)(ii).

 

(D)          Upon
the expiration or termination of any unexercised Option (or portion thereof) or any unconverted or unexchanged Convertible Security
(or portion thereof) for which any adjustment (either upon its original issuance or upon a revision of its terms) was made pursuant
to this Section 9(c) (including without limitation upon the redemption or purchase for consideration of all or any portion of
such Option or Convertible Security by the Company), the Exercise Price then in effect hereunder shall forthwith be changed pursuant
to the provisions of this Section 9(c) to the Exercise Price which would have been in effect at the time of such expiration or
termination had such unexercised Option (or portion thereof) or unconverted or unexchanged Convertible Security (or portion thereof),
to the extent outstanding immediately prior to such expiration or termination, never been issued.

 

(E)          If
the Company shall, at any time or from time to time after the Issuance Date, issue or sell, or is deemed to have issued or sold
in accordance with Section 9(c)(iv), any shares of Common Stock, Options or Convertible Securities: (1) for cash, the consideration
received therefor shall be deemed to be the net amount received by the Company therefor; (2) for consideration other than cash,
the amount of the consideration other than cash received by the Company shall be the fair value of such consideration, except
where such consideration consists of marketable securities, in which case the amount of consideration received by the Company
shall be the market price (as reflected on any securities exchange, quotation system or association or similar pricing system
covering such security) for such securities as of the end of business on the date of receipt of such securities; (3) for no specifically
allocated consideration in connection with an issuance or sale of other securities of the Company, together comprising one integrated
transaction, the amount of the consideration therefor shall be deemed to be the fair value of such portion of the aggregate consideration
received by the Company in such transaction as is attributable to such shares of Common Stock, Options or Convertible Securities,
as the case may be, issued in such transaction; or (4) to the owners of the non-surviving entity in connection with any merger
in which the Company is the surviving corporation, the amount of consideration therefor shall be deemed to be the fair value of
such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options
or Convertible Securities, as the case may be, issued to such owners. The net amount of any cash consideration and the fair value
of any consideration other than cash or marketable securities shall be determined in good faith jointly by the Board of Directors
of the Company and the Holder.

 

    7 

     

    

 

(F)         For
purposes of any adjustment to the Exercise Price or the number of Warrant Shares in accordance with this Section 9(c), in case
the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (1) to receive a dividend
or other distribution payable in Common Stock, Options or Convertible Securities or (2) to subscribe for or purchase Common Stock,
Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the shares of
Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase, as the case may be; provided, that if before the distribution
to its holders of Common Stock the Company legally abandons its plan to pay or deliver such dividend, distribution, subscription
or purchase rights, then thereafter no adjustment shall be required by the taking of such record and any such adjustment previously
made in respect thereof shall be rescinded and annulled.

 

(G)         The
number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of
the Company or any of its wholly-owned subsidiaries, and the disposition of any such shares (other than the cancellation or retirement
thereof or the transfer of such shares among the Company and its wholly-owned subsidiaries) shall be considered an issue or sale
of Common Stock for the purpose of this Section 9(c).

 

(H)         For
purposes of this Section 9(c):

 

“Common
Stock Deemed Outstanding” means, at any given time, the number of shares of Common Stock actually outstanding at such
time.

 

“Convertible
Securities” means any securities (directly or indirectly) convertible into or exchange for Common Stock, but excluding
Options.

 

“Excluded
Issuances” means any issuance or sale (or deemed issuance or sale in accordance with Section 9(c)(iv)) by the Company
after the Issuance Date of: (1) shares of Common Stock issued upon the exercise of this Warrant; (2) shares of Common Stock (as
such number of shares is equitably adjusted for subsequent stock splits, stock combinations, stock dividends and recapitalizations)
issued directly or upon the exercise of Options to directors, officers, employees, or consultants of the Company in connection
with their service as directors of the Company, their employment by the Company or their retention as consultants by the Company,
in each case authorized by the Board of Directors of the Company and issued pursuant to the Company’s Global Share and Options
Incentive Enhancement Plan (2016) (including all such shares of Common Stock and Options outstanding prior to the Issuance Date);
or (3) shares of Common Stock issued upon the conversion or exercise of Options (other than Options covered by clause (2) above)
or Convertible Securities issued prior to the Issuance Date, provided that such securities are not amended after the date hereof
to increase the number of shares of Common Stock issuable thereunder or to lower the exercise or conversion price thereof.

 

    8 

     

    

 

“Options”
means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities.

 

10.        Notice.
All notices, requests, demands, claims and other communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight delivery, or email transmission if such transmission is
confirmed, by certified or registered mail (first class postage pre-paid) or guaranteed overnight delivery, to the following addresses
(or to such other addresses which such party shall subsequently designate in writing to the other party):

 

(a)          If
to the Company:

 

Blue
Sphere Corporation 

301
McCullough Drive, 4th Floor 

Charlotte,
North Carolina 28262 

Attention:
Shlomi Palas 

Email:
shlomi@bluespherecorporate.com

 

with
a copy to:

 

Thompson
Hine LLP 

335
Madison Avenue, 12th Floor 

New
York, NY 10017 

Attention:
Peter J. Gennuso, Esq. 

Email:
peter.gennuso@thompsonhine.com

 

(b)          If
to the Warrant Holder:

 

	 	 	 
	 	 	 
	 	 	 
	 	Attention:	 	 
	 	Email:	 	 

 

11.       Miscellaneous.

 

(a)          This
Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
This Warrant may be amended only in writing and signed by the Company and the Warrant Holder.

 

(b)          Nothing
in this Warrant shall be construed to give to any person or corporation other than the Company and the Warrant Holder any legal
or equitable right, remedy or cause of action under this Warrant; this Warrant shall be for the sole and exclusive benefit of
the Company and the Warrant Holder.

 

    9 

     

    

 

(c)          Without
the prior written consent of the Company, this Warrant, or any of the rights granted hereunder, shall not be transferred, assigned,
pledged, hypothecated or otherwise disposed of (whether by operation of law or otherwise) by the Warrant Holder, and shall not
be subject to execution, attachment or similar process, unless (i) an effective registration statement is on file with the U.S.
Securities and Exchange Commission covering the resale of the Warrant Shares by the Warrant Holder, or (ii) the Warrant Shares
are otherwise exempt from the registration requirements under the Act. Any such attempted transfer or disposition of the Warrant
or of any rights granted hereunder contrary to the provisions of this section, or the levy of any attachment or similar process
upon the Warrant or such rights, shall be null and void.

 

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

 

(e)          In
case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will
attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonably substitute therefore,
and upon so agreeing, shall incorporate such substitute provision in this Warrant.

 

(f)          The
Warrant Holder shall not, by virtue hereof, be entitled to any voting or other rights of a shareholder of the Company, either
at law or equity, and the rights of the Warrant Holder are limited to those expressed in this Warrant.

 

(g)          This
Warrant shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of
conflicts of laws.

 

(h)          The
Company and the Warrant Holder shall submit all disputes arising under this Warrant to arbitration in New York, New York before
a single arbitrator of the American Arbitration Association (the “AAA”). The arbitrator shall be selected by
application of the rules of the AAA, or by mutual agreement of the parties, except that such arbitrator shall be an attorney admitted
to practice law in the State of New York. No party hereto will challenge the jurisdiction or venue provisions as provided in this
section. Nothing in this section shall limit the Warrant Holder’s right to obtain an injunction for a breach of this Agreement
from a court of law. Any injunction obtained shall remain in full force and effect until the arbitrator fully adjudicates the
dispute.

 

    10 

     

    

 

IN
WITNESS WHEREOF, the Company and Holder have caused this Warrant to be duly executed by the authorized officer as of the date
first above stated.

 

	 	THE
    COMPANY:
	 	 	 
	 	BLUE
    SPHERE CORPORATION
	 	 	 
	 	 	 
	 	By:	 
	 	Name:	Shlomi
    Palas
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	 	 
	 	WARRANT
    HOLDER:
	 	 
	 	 
	 	 	 
	 	 	 
	 	By:	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 

 

[Signature
Page to Warrant]

 

    

     

    

 

FORM
OF ELECTION TO PURCHASE

(To
be executed by the Warrant Holder to exercise the right to 

purchase
shares of Common Stock under the foregoing Warrant)

 

Blue
Sphere Corporation

 

Re:
Election to Purchase Shares of Common Stock Under the Warrant

 

Gentlemen:

 

In
accordance with the Warrant enclosed with this Election to Purchase, the undersigned hereby irrevocably elects to purchase _____________
shares of Common Stock of Blue Sphere Corporation at an original Exercise Price of USD $________ per share, subject to adjustment
under the terms and conditions of the Warrant, and encloses herewith $____________ in cash, certified or official bank check(s),
which sum represents the aggregate price for the number of shares of Common Stock to which this Election to Purchase relates,
together with any applicable taxes payable by the undersigned pursuant to the Warrant. Any capitalized terms used but not defined
in this Election to Purchase shall have the meaning ascribed to them in the accompanying Warrant.

 

The
undersigned requests that certificates for the shares of Common Stock issuable upon this exercise be issued in the name of:

 

	Name:	 
	Taxpayer ID:	 
	Address:	 
	 	 

 

If
the number of shares of Common Stock issuable upon this exercise shall not be all of the shares of Common Stock which the undersigned
is entitled to purchase in accordance with the enclosed Warrant, the undersigned requests that a New Warrant evidencing the right
to purchase the shares of Common Stock not issuable pursuant to the exercise evidenced hereby be issued in the name of and delivered
to:

 

	Name:	 
	Address:	 
	 	 

 

The
undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the
within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities
Act”), or pursuant to an exemption from registration under the Securities Act.

 

	HOLDER:	 
	 	 	 
	Name:	 	 
	 	 	 
	By:	 	 
	Title:	 	 
	Dated:		,
    __________	 

 

(Signature
must conform in all respects to name of Holder as specified on the face of the Warrant)

 

    

     

    

 

NOTICE
OF CASHLESS EXERCISE

 

TO:
Blue Sphere Corporation 

[Address] 

Attn:
Secretary

 

The
undersigned hereby elects to purchase ______________ shares (the “Shares”) of the Common Stock of Blue Sphere
Corporation, at an original Exercise Price of USD $______ per share, pursuant to the cashless exercise provision of Section 6
of the attached Warrant.

 

Please
issue a certificate or certificates representing the Shares in the name of the undersigned or in such other name as is specified
below:

 

	Name:	 
	Taxpayer ID:	 
	Address:	 

 

The
undersigned represents that the undersigned is an “accredited investor,” and that the Shares are being acquired for
the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof,
and that the undersigned has no present intention of distributing or reselling such shares.

 

	HOLDER:	 
	 	 	 
	Name:	 	 
	 	 	 
	By:	 	 
	Title:	 	 
	Dated:		,
    __________

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