Document:

Blue Sphere Corporation 10-Q

Exhibit 10.21

 

SECURITIES PURCHASE
AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT (the “Agreement”),
dated as of June 22, 2018, by and between Blue Sphere Corporation,
a Nevada corporation, with its address at 301 McCullough Drive, 4th Floor, Charlotte, North Carolina 28262 (the “Company”),
and POWER UP LENDING GROUP LTD., a Virginia corporation,
with its address at 111 Great Neck Road, Suite 216, Great Neck, NY 11021 (the “Buyer”).

 

WHEREAS:

 

A.           The
Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under
the Securities Act of 1933, as amended (the “1933 Act”); and

 

B.           Buyer
desires to purchase and the Company desires to issue and sell, upon the terms and
conditions set forth in this Agreement a convertible note of the Company, in the form attached hereto as
Exhibit A, in the aggregate principal amount of $53,000.00 (together with any note(s) issued in
replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the
terms thereof, the “Note”), convertible into shares of common stock, $0.001 par value per share, of the
Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth
in such Note.

 

NOW
THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

 

1.           Purchase
and Sale of Note.

 

a.        Purchase
of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase
from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages
hereto.

 

b.        Form
of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and
sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds
to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal
amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and
(ii) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase
Price.

 

c.
       Closing Date. Subject to the satisfaction (or written waiver) of the conditions
thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant to this Agreement
(the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on or about June 25, 2018, or such other mutually
agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the
Closing Date at such location as may be agreed to by the parties.

 

     

     

    

  

2.           Buyer’s
Representations and Warranties. The Buyer represents and warrants to the Company that:

 

a.
       Investment Purpose. As of the date hereof, the Buyer is purchasing the Note
and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (such shares of Common Stock
being collectively referred to herein as the “Conversion Shares” and, collectively with the Note, the
“Securities”) for its own account and not with a present view towards the public sale or distribution thereof,
except pursuant to sales registered or exempted from registration under the 1933 Act.

 

b.
       Accredited Investor Status. The Buyer is an “accredited investor”
as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

 

c.
       Reliance on Exemptions. The Buyer understands that the Securities are being
offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and
state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with,
the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

 

d.
       Information. The Company has not disclosed to the Buyer any material
nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or
promptly following such disclosure to the Buyer.

 

e.
       Legends. The Buyer understands that the Note and, until such time as the
Conversion Shares have been registered under the 1933 Act; or may be sold pursuant to an applicable exemption from
registration, the Conversion Shares may bear a restrictive legend in substantially the following form:

 

“THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR
OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR (2) THE ISSUER OF SUCH SECURITIES RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH
SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY ACCEPTABLE TO THE ISSUER’S TRANSFER AGENT, THAT SUCH SECURITIES
MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.”

 

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The legend
set forth above shall be removed and the Company shall issue a certificate without
such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by
applicable state securities laws, (a) such Security is registered for sale under an effective registration
statement filed under the 1933 Act or otherwise may be sold pursuant to an exemption from registration
without any restriction as to the number of securities as of a particular date that can then be immediately
sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope
customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer
of such Security may be made without registration under the 1933 Act, which opinion shall be accepted
by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including
those represented by a certificate(s) from which the legend has been removed, in compliance with
applicable prospectus delivery requirements, if any. In the event that the Company does not accept the
opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an
exemption from registration, such as Rule 144, at the Deadline, it will be considered an Event of Default
pursuant to Section 3.2 of the Note.

 

f.
       Authorization; Enforcement. This Agreement has been duly and validly
authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a
valid and binding agreement of the Buyer enforceable in accordance with its terms.

 

3.           Representations
and Warranties of the Company. The Company represents and warrants to the Buyer that:

 

a.
       Organization and Qualification. The Company and each of its Subsidiaries (as
defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate
its properties and to carry on its business as and where now owned, leased, used, operated and conducted.
“Subsidiaries” means any corporation or other organization, whether incorporated or unincorporated, in which the
Company owns, directly or indirectly, any equity or other ownership interest.

 

b.
       Authorization; Enforcement. (i) The Company has all requisite corporate
power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby
and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of
this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby
(including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion
Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and
no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been
duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and
official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind
the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each
of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance
with its terms.

 

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c.
       Capitalization. As of the date hereof, the authorized common stock of the
Company consists of 1,750,000,000 authorized shares of Common Stock, $0.001 par value per share, of which 3,993,561 shares
are issued and outstanding; and 1,207,977 shares are reserved for issuance upon conversion of the Note. All of such
outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and
non-assessable. 

 

d.
       Issuance of Shares. The Conversion Shares are duly authorized and reserved
for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and
non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be
subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability
upon the holder thereof.

 

e.
       No Conflicts. The execution, delivery and performance of this Agreement, the
Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including,
without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result
in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result
in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become
a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result
in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and
regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject)
applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). The businesses
of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer owns
any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. “Material Adverse
Effect” means any material adverse effect on the business, operations, assets, financial condition or prospects of the
Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or
instruments to be entered into in connection herewith.

 

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f.
       SEC Documents; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed
prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents
(other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the
“SEC Documents”). Upon written request the Company will deliver to the Buyer true and complete copies of the SEC
Documents, except for such exhibits and incorporated documents. As of their respective dates or if amended, as of the dates
of the amendments, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules
and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time
they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or
updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date
hereof). As of their respective dates or if amended, as of the dates of the amendments, the financial statements of the
Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles, consistently applied, during the periods involved and
fairly present in all material respects the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). The Company is subject to the
reporting requirements of the 1934 Act.

 

g.
       Absence of Certain Changes. Since March 31, 2018, except as set forth in the
SEC Documents, there has been no material adverse change and no material adverse development in the assets, liabilities, business,
properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any
of its Subsidiaries.

 

h.
       Absence of Litigation. Except as set forth in the SEC Documents, there is no
action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened
against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that
could have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might
give rise to any of the foregoing.

 

i.
       No Integrated Offering. Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited
any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the
Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the
Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the
Company or its securities.

 

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j.
       No Brokers. The Company has taken no action which would give rise to any
claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the
transactions contemplated hereby.

 

k.
       No Investment Company. The Company is not, and upon the issuance and sale of
the Securities as contemplated by this Agreement will not be an “investment company” required to be registered
under the Investment Company Act of 1940 (an “Investment Company”). The Company is not controlled by an
Investment Company.

 

l.
       Breach of Representations and Warranties by the Company. If the Company
breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies
available to the Buyer pursuant to this Agreement, it will be considered an Event of default under Section 3.4 of the
Note.

 

4.           COVENANTS.

 

a.
       Best Efforts. The Company shall use its best efforts to satisfy timely each
of the conditions described in Section 7 of this Agreement.

 

b.
       Form D; Blue Sky Laws. The Company agrees to timely make any filings
required by federal and state laws as a result of the closing of the transactions contemplated by this Agreement.

 

c.
       Use of Proceeds. The Company shall use the proceeds for general working
capital purposes.

 

d.
       Expenses. At the Closing, the Company’s obligation with respect to the
transactions contemplated by this Agreement is to reimburse Buyer’ expenses shall be $3,000.00 for Buyer’s legal
fees and due diligence fee.

 

e.
       Corporate Existence. So long as the Buyer beneficially owns any Note, the
Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets,
except with the prior written consent of the Buyer.

 

f.
       Breach of Covenants. If the Company breaches any of the covenants set forth
in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be
considered an event of default under Section 3.4 of the Note.

 

g.
       Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns
the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be
subject to the reporting requirements of the 1934 Act.

 

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h.
       Trading Activities. Neither the Buyer nor its affiliates has an open short
position in the common stock of the Company and the Buyer agrees that it shall not, and that it will cause its affiliates not
to, engage in any short sales of or hedging transactions with respect to the common stock of the Company.

 

5.          Transfer
Agent Instructions. The Company shall issue irrevocable instructions to
its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the
Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon
conversion of the Note in accordance with the terms thereof (the “Irrevocable Transfer Agent
Instructions”). In the event that the Company proposes to replace its transfer agent, the Company shall
provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent
Instructions in a form as initially delivered pursuant to this Agreement (including but not limited to the
provision to irrevocably reserve shares of Common Stock in the Reserved Amount as such term is defined
in the Note) signed by the successor transfer agent to Company and the Company. Prior to registration of
the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold
pursuant to an exemption from registration, all such certificates shall bear the restrictive legend specified
in Section 2(e) of this Agreement. The Company warrants that: (i) no instruction other than the
Irrevocable Transfer Agent Instructions referred to in this Section 5, will be given by the Company to its
transfer agent and that the Securities shall otherwise be freely transferable on the books and records of
the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer
agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or
issuing)(electronically or in certificated form) any certificate for Conversion Shares to be issued to the
Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this
Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays,
and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer
instructions in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon
conversion of or otherwise pursuant to the Note as and when required by the Note and/or this
Agreement. If the Buyer provides the Company and the Company’s transfer, at the cost of the Buyer, with
an opinion of counsel in form, substance and scope customary for opinions in comparable transactions,
to the effect that a public sale or transfer of such Securities may be made without registration under the
1933 Act, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly
instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and
in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the
transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for
a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in
addition to all other available remedies, to an injunction restraining any breach and requiring immediate
transfer, without the necessity of showing economic loss and without any bond or other security being
required.

 

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6.           Conditions
to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note to the Buyer
at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided
that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

 

a.
       The Buyer shall have executed this Agreement and delivered the same to the
Company.

 

b.
       The Buyer shall have delivered the Purchase Price in accordance with Section 1(b)
above.

 

c.
       The representations and warranties of the Buyer shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though made at that time (except for representations
and warranties that speak as of a specific date), and the Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with
by the Buyer at or prior to the Closing Date.

 

d.
       No litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this Agreement.

 

7.           Conditions
to The Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Note at the Closing is subject
to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for
the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:

 

a.
       The Company shall have executed this Agreement and delivered the same to the
Buyer.

 

b.
       The Company shall have delivered to the Buyer the duly executed Note (in such
denominations as the Buyer shall request) in accordance with Section 1(b) above.

 

c.
       The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to
the Buyer, shall have been delivered to and acknowledged in writing by the Company’s Transfer Agent.

 

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d.
       The representations and warranties of the Company shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though made at such time (except for representations
and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with
by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed by the
chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as
may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Board of
Directors’ resolutions relating to the transactions contemplated hereby.

 

e.
       No litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this Agreement.

 

f.
       No event shall have occurred which could reasonably be expected to have a Material
Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the
failure of the Company to be timely in its 1934 Act reporting obligations.

 

g.
       The Conversion Shares shall have been authorized for quotation on an exchange or
electronic quotation system and trading in the Common Stock on such exchange or electronic quotation system shall not have
been suspended by the SEC or an exchange or electronic quotation system.

 

8.           Governing
Law; Miscellaneous.

 

a.
       Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Virginia without regard to principles of conflicts of laws. Any action brought by
either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state
courts of New York or in the federal courts located in the Eastern District of New York. The parties to this Agreement hereby
irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense
based on lack of jurisdiction or venue or based upon forum non
conveniens. The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the
other party its reasonable attorney’s fees and costs. In the event that any provision of this Agreement or any other
agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service
of process and consents to process being served in any suit, action or proceeding in connection with this Agreement, the Note
or any related document or agreement by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any other manner permitted by law.

 

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b.
       Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the other party.

 

c.
       Headings. The headings of this Agreement are for convenience of reference
only and shall not form part of, or affect the interpretation of, this Agreement.

 

d.
       Severability. In the event that any provision of this Agreement is invalid
or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof
which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision
hereof.

 

e.
       Entire Agreement; Amendments. This Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument
in writing signed by the majority in interest of the Buyer.

 

f.
       Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i)
personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or
facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written
notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand
delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address
or number designated below (if delivered on a business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a business day during normal business hours
where such notice is to be received) or (b) on the second business day following the date of mailing by express courier
service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be as set forth in the heading of this Agreement with a copy by fax only to (which
copy shall not constitute notice) to Naidich Wurman LLP, 111 Great Neck Road, Suite 214, Great Neck, NY 11021, Attn: Allison
Naidich, facsimile: 516-466-3555, e-mail: allison@nwlaw.com. Each party shall provide notice
to the other party of any change in address.

 

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g.
       Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or
any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Buyer
may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of
its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

 

h.
       Survival. The representations and warranties of the Company and the
agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence
investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all
their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged
breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its
covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

 

i.
       Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

j.
       No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied
against any party.

 

k.
       Remedies. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated
hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement
will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this
Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition
to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this
Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and
without any bond or other security being required.

 

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IN WITNESS
WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

 

Blue Sphere Corporation  

 

	By:	/s/ Shlomi Palas	 
	Name: 	Shlomi Palas	 
	Title: 	CEO	 

 

 

POWER UP LENDING GROUP LTD.  

	 	 	 
	By:	/s/ Curt Kramer	 
	Name:	Curt Kramer	 
	Title:	Chief Executive Officer 
 111 Great Neck Road, Suite 216 
 Great Neck, NY 11021	 

 

	AGGREGATE SUBSCRIPTION AMOUNT:	 
	 	 
	Aggregate Principal Amount of Note:	$53,000.00
	 	 
	Aggregate Purchase Price:	$53,000.00

 

    	 	12Blue Sphere Corporation 10-Q

Exhibit 10.22

 

 

NEITHER THIS NOTE NOR THE
SECURITIES THAT MAY BE ISSUED BY THE COMPANY UPON CONVERSION HEREOF (COLLECTIVELY, THE “SECURITIES”) HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.
NEITHER THE SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED: (I) IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT, OR APPLICABLE STATE SECURITIES LAWS;
OR (II) IN THE ABSENCE OF AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER THE
1933 ACT OR; (III) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT. 

 

12%
CONVERTIBLE PROMISSORY NOTE

 

Maturity
Date of July 13, 2019 *the “Maturity Date”

 

$83,000
July 13, 2018 *the “Issuance Date”

 

Principal
Amount: $83,000

Purchase Price: $80,000 

 

FOR
VALUE RECEIVED, Blue Sphere Corp., a Nevada Corporation (the “Company”) doing business in Charlotte, NC,
hereby promises to pay to the order of JSJ Investments Inc., an accredited investor and Texas Corporation, or its assigns (the
“Holder”), the principal amount of Eighty-Three Thousand Dollars ($83,000) (“Note”), at
any time on or after July 13, 2018 (the “Maturity Date”), and to pay interest on the unpaid principal balance
hereof at the rate of Twelve Percent (12%) per annum (the “Interest Rate”) commencing on the date hereof (the
“Issuance Date”).

 

The
Principal Amount is Eighty-Three Thousand Dollars ($83,000) and the consideration paid by the Holder is Eighty-Thousand Dollars
($80,000) (the “Consideration”); there exists an original issue discount of $3,000 (the “OID”)).

 

		1.	Payments
                                         of Principal and Interest. 

 

		a.	Pre-Payment
                                         and Payment of Principal and Interest. The Company may pay this Note in full, together
                                         with any and all accrued and unpaid interest, plus any applicable pre-payment premium
                                         set forth herein and subject to the terms of this Section 1.a, at any time on or prior
                                         to the date which occurs 180 days after the Issuance Date hereof (the “Prepayment
                                         Date”). In the event the Note is not prepaid in full on or before the Prepayment
                                         Date, it shall be deemed a “Pre-Payment Default” hereunder. Until the Ninetieth
                                         (90th) day after the Issuance Date the Company may pay the principal at a cash redemption
                                         premium of 115%, in addition to outstanding interest, without the Holder’s consent;
                                         from the 91st day to the One Hundred and Twentieth (120th) day after the Issuance Date,
                                         the Company may pay the principal at a cash redemption premium of 125%, in addition to
                                         outstanding interest, without the Holder’s consent; from the 121st day to the Prepayment
                                         Date, the Company may pay the principal at a cash redemption premium of 130%, in addition
                                         to outstanding interest, without the Holder’s consent. After the Prepayment Date
                                         up to the Maturity Date this Note shall have a cash redemption premium of 140% of the
                                         then outstanding principal amount of the Note, plus accrued interest and Default Interest,
                                         if any, which may only be paid by the Company upon Holder’s prior written consent.
                                         At any time on or after the Maturity Date, the Company may repay the then outstanding
                                         principal plus accrued interest and Default Interest (defined below), if any, to the
                                         Holder.

 

		b.	Demand
                                         of Repayment. The principal and interest balance of this Note shall be paid to the
                                         Holder hereof on demand by the Holder at any time on or after the Maturity Date. The
                                         Default Amount (defined herein), if applicable, shall be paid to Holder hereof on demand
                                         by the Holder at any time such Default Amount becomes due and payable to Holder. 

 

		c.	Interest.
                                         This Note shall bear interest (“Interest”) at the rate of Twelve Percent
                                         (12%) per annum from the Issuance Date until the same is paid, or otherwise converted
                                         in accordance with Section 2 below, in full and the Holder, at the Holder’s sole
                                         discretion, may include any accrued but unpaid Interest in the Conversion Amount. Interest
                                         shall commence accruing on the Issuance Date, shall be computed on the basis of a 365-day
                                         year and the actual number of days elapsed and shall accrue daily and, after the Maturity
                                         Date, compound quarterly. Upon an Event of Default, as defined in Section 10 below, the
                                         Interest Rate shall increase to Eighteen Percent (18%) per annum for so long as the Event
                                         of Default is continuing (“Default Interest”). 

 

		d.	General
                                         Payment Provisions. This Note shall be paid in lawful money of the United States
                                         of America by check or wire transfer to such account as the Holder may from time to time
                                         designate by written notice to the Company in accordance with the provisions of this
                                         Note. Whenever any amount expressed to be due by the terms of this Note is due on any
                                         day which is not a Business Day (as defined below), the same shall instead be due on
                                         the next succeeding day which is a Business Day and, in the case of any interest payment
                                         date which is not the date on which this Note is paid in full, the extension of the due
                                         date thereof shall not be taken into account for purposes of determining the amount of
                                         interest due on such date. For purposes of this Note, “Business Day”
                                         shall mean any day other than a Saturday, Sunday or a day on which commercial banks in
                                         the State of Texas are authorized or required by law or executive order to remain closed.
                                         

 

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		2.	Conversion
                                         of Note. At any time after the Pre-payment Date, the Conversion Amount (see Paragraph
                                         2(a)(i)) of this Note shall be convertible into shares of the Company’s common
                                         stock (the “Common Stock”) according to the terms and conditions set
                                         forth in this Paragraph 2. 

 

		a.	Certain
                                         Defined Terms. For purposes of this Note, the following terms shall have the following
                                         meanings: 

 

		i.	“Conversion
                                         Amount” means the sum of (a) the principal amount of this Note to be converted
                                         with respect to which this determination is being made, (b) Interest; and (c) Default
                                         Interest, if any, if so included at the Holder’s sole discretion. 

 

		ii.	“Conversion
                                         Price” means a 35% discount to the lowest trading price during the previous
                                         fifteen (15) trading days to the date of a Conversion Notice. 

 

		iii.	“Person”
                                         means an individual, a limited liability company, a partnership, a joint venture, a corporation,
                                         a trust, an unincorporated organization and a government or any department or agency
                                         thereof. 

 

		iv.	“Shares”
                                         means the Shares of the Common Stock of the Company into which any balance on this Note
                                         may be converted upon submission of a “Conversion Notice” to the Company
                                         substantially in the form attached hereto as Exhibit 1. 

 

		b.	Holder’s
                                         Conversion Rights. At any time after the Pre-payment Date, the Holder shall be entitled
                                         to convert all of the outstanding and unpaid principal and accrued interest of this Note
                                         into fully paid and non-assessable shares of Common Stock in accordance with the stated
                                         Conversion Price. The Holder shall not be entitled to convert on a Conversion Date that
                                         amount of the Note in connection with that number of shares of Common Stock which would
                                         be in excess of the sum of the number of shares of Common Stock issuable upon the conversion
                                         of the Note with respect to which the determination of this provision is being made on
                                         a Conversion Date, which would result in beneficial ownership by the Holder and its affiliates
                                         of more than 4.99% of the outstanding shares of Common Stock of the Company on such Conversion
                                         Date. For the purposes of the provision to the immediately preceding sentence, beneficial
                                         ownership shall be determined in accordance with Section 13(d) of the Securities Exchange
                                         Act of 1934, as amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the
                                         Holder shall not be limited to aggregate conversions of 4.99% (“Conversion Limitation
                                         1”). The Holder shall have the authority to determine whether the restriction contained
                                         in this Section 2(b) will limit any conversion hereunder, and accordingly, the Holder
                                         may waive the conversion limitation described in this Section 2(b), in whole or in part,
                                         upon and effective after 61 days prior written notice to the Company to increase or decrease
                                         such percentage to any other amount as determined by Holder in its sole discretion (“Conversion
                                         Limitation 2”). 

 

		c.	Fractional
                                         Shares. The Company shall not issue any fraction of a share of Common Stock upon
                                         any conversion; if such issuance would result in the issuance of a fraction of a share
                                         of Common Stock, the Company shall round such fraction of a share of Common Stock up
                                         to the nearest whole share except in the event that rounding up would violate the conversion
                                         limitation set forth in section 2(b) above. 

 

		d.	Conversion
                                         Amount. The Conversion Amount shall be converted pursuant to Rule 144(b)(1)(ii) and
                                         Rule 144(d)(1)(ii) as promulgated by the Securities and Exchange Commission under the
                                         Securities Act of 1933, as amended, into unrestricted shares at the Conversion Price.
                                         

 

		e.	Mechanics
                                         of Conversion. The conversion of this Note shall be conducted in the following manner:
                                         

 

		i.	Holder’s
                                         Conversion Requirements. To convert this Note into shares of Common Stock on any
                                         date set forth in the Conversion Notice by the Holder (the “Conversion Date”),
                                         the Holder shall transmit by email, facsimile or otherwise deliver, for receipt on or
                                         prior to 11:59 p.m., Eastern Time, on such date or on the next business day, a copy of
                                         a fully executed notice of conversion in the form attached hereto as Exhibit 1 to the
                                         Company. 

 

		ii.	Company’s
                                         Response. Upon receipt by the Company of a copy of a Conversion Notice, the Company
                                         shall as soon as practicable, but in no event later than one (1) Business Day after receipt
                                         of such Conversion Notice, send, via email, facsimile or overnight courier, a confirmation
                                         of receipt of such Conversion Notice to such Holder indicating that the Company will
                                         process such Conversion Notice in accordance with the terms herein. Within two (2) Business
                                         Days after the date the Conversion Notice is delivered, the Company shall have issued
                                         and electronically transferred the shares to the Broker indicated in the Conversion Notice;
                                         should the Company be unable to transfer the shares electronically, it shall, within
                                         two (2) Business Days after the date the Conversion Notice was delivered, have surrendered
                                         to an overnight courier for delivery the next day to the address as specified in the
                                         Conversion Notice, a certificate, registered in the name of the Holder, for the number
                                         of shares of Common Stock to which the Holder shall be entitled. 

 

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		iii.	Record
                                         Holder. The person or persons entitled to receive the shares of Common Stock issuable
                                         upon a conversion of this Note shall be treated for all purposes as the record holder
                                         or holders of such shares of Common Stock on the Conversion Date. 

 

		iv.	Timely
                                         Response by Company. Upon receipt by Company of a Conversion Notice, Company shall
                                         respond within one business day to Holder confirming the details of the Conversion, and
                                         provide within two business days the Shares requested in the Conversion Notice. 

 

		v.	Liquidated
                                         Damages for Delinquent Response. If the Company fails to deliver for whatever reason
                                         (including any neglect or failure by, e.g., the Company, its counsel or the transfer
                                         agent) to Holder the Shares as requested in a Conversion Notice within three (3) business
                                         days of the Conversion Date, the Company shall be deemed in “Default of Conversion.”
                                         Beginning on the fourth (4th) business day after the date of the Conversion
                                         Notice, after the Company is deemed in Default of Conversion, there shall accrue liquidated
                                         damages (the “Conversion Damages”) of $2,000 per day for each day
                                         after the third business day until delivery of the Shares is made, and such penalty will
                                         be added to the Note being converted (under the Company’s and Holder’s expectation
                                         and understanding that any penalty amounts will tack back to the Issuance Date of the
                                         Note). The Parties agree that, at the time of drafting of this Note, the Holder’s
                                         damages as to the delinquent response are incapable or difficult to estimate and that
                                         the liquidated damages called for is a reasonable forecast of just compensation. 

 

		vi.	Liquidated
                                         Damages for Inability to Issue Shares. If the Company fails to deliver Shares requested
                                         by a Conversion Notice due to an exhaustion of authorized and issuable common stock such
                                         that the Company must increase the number of shares of authorized Common Stock before
                                         the Shares requested may be issued to the Holder, the discount set forth in the Conversion
                                         Price will be increased by 5 percentage points (i.e. from 40% to 45%) for the Conversion
                                         Notice in question and all future Conversion Notices until the outstanding principal
                                         and interest of the Note is converted or paid in full. These liquidated damages shall
                                         not render the penalties prescribed by Paragraph 2(e)(v) void, and shall be applied in
                                         conjunction with Paragraph 2(e)(v) unless otherwise agreed to in writing by the Holder.
                                         The Parties agree that, at the time of drafting of this Note, the Holder’s damages
                                         as to the inability to issue shares are incapable or difficult to estimate and that the
                                         liquidated damages called for is a reasonable forecast of just compensation. 

 

		vii.	Rescindment
                                         of Conversion Notice. If: (i) the Company fails to respond to Holder within one business
                                         day from the date of delivery of a Conversion Notice confirming the details of the Conversion,
                                         (ii) the Company fails to provide the Shares requested in the Conversion Notice within
                                         three business days from the date of the delivery of the Conversion Notice, (iii) the
                                         Holder is unable to procure a legal opinion required to have the Shares issued unrestricted
                                         and/or deposited to sell for any reason related to the Company’s standing with the SEC
                                         or FINRA, or any action or inaction by the Company, (iv) the Holder is unable to deposit
                                         the Shares requested in the Conversion Notice for any reason related to the Company’s
                                         standing with the SEC or FINRA, or any action or inaction by the Company, (v) if the
                                         Holder is informed that the Company does not have the authorized and issuable Shares
                                         available to satisfy the Conversion, or (vi) if OTC Markets changes the Company’s designation
                                         to ‘Limited Information’ (Yield), ‘No Information’ (Stop Sign), ‘Caveat Emptor’ (Skull
                                         and Crossbones), or ‘OTC’, ‘Other OTC’ or ‘Grey Market’ (Exclamation Mark Sign) on the
                                         day of or any day after the date of the Conversion Notice, the Holder maintains the option
                                         and sole discretion to rescind the Conversion Notice (“Rescindment”)
                                         by delivering a notice of rescindment to the Company in the same manner that a Conversion
                                         Notice is required to be delivered to the Company pursuant to the terms of this Note.
                                         

 

		viii.	Transfer
                                         Agent Fees and Legal Fees. The issuance of the certificates shall be without charge
                                         or expense to the Holder. The Company shall pay any and all Transfer Agent fees, legal
                                         fees, and advisory fees required for execution of this Note and processing of any Notice
                                         of Conversion, including but not limited to the cost of obtaining a legal opinion with
                                         regard to the Conversion. The Holder will deduct $2,000 from the principal payment of
                                         the Note solely to cover the cost of obtaining any and all legal opinions required to
                                         obtain the Shares requested in any given Conversion Notice. These fees do not make provision
                                         for or suffice to defray any legal fees incurred in collection or enforcement of the
                                         Note as described in Paragraph 13. All expenses incurred by Holder, for the issuance
                                         and clearing of the Common Stock into which this Note is convertible into, shall immediately
                                         and automatically be added to the balance of the Note at such time as the expenses are
                                         incurred by Holder. 

 

		ix.	Conversion
                                         Right Unconditional. If the Holder shall provide a Notice of Conversion as provided
                                         herein, the Company’s obligations to deliver Common Stock shall be absolute and
                                         unconditional, irrespective of any claim of setoff, counterclaim, recoupment, or alleged
                                         breach by the Holder of any obligation to the Company. 

 

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		3.	Other
                                         Rights of Holder: Reorganization, Reclassification, Consolidation, Merger or Sale.
                                         Any recapitalization, reorganization, reclassification, consolidation, merger, sale of
                                         all or substantially all of the Company’s assets to another Person or other transaction
                                         which is effected in such a way that holders of Common Stock are entitled to receive
                                         (either directly or upon subsequent liquidation) stock, securities, cash or other assets
                                         with respect to or in exchange for Common Stock is referred to herein as “Organic
                                         Change.” Prior to the consummation of any (i) Organic Change or (ii) other
                                         Organic Change following which the Company is not a surviving entity, the Company will
                                         secure from the Person purchasing such assets or the successor resulting from such Organic
                                         Change (in each case, the “Acquiring Entity”) a written agreement
                                         (in form and substance reasonably satisfactory to the Holder) to deliver to Holder in
                                         exchange for this Note, a security of the Acquiring Entity evidenced by a written instrument
                                         substantially similar in form and substance to this Note, and reasonably satisfactory
                                         to the Holder. Prior to the consummation of any other Organic Change, the Company shall
                                         make appropriate provision (in form and substance reasonably satisfactory to the Holder)
                                         to ensure that the Holder will thereafter have the right to acquire and receive in lieu
                                         of or in addition to (as the case may be) the shares of Common Stock immediately theretofore
                                         acquirable and receivable upon the conversion of the Note, such shares of stock, securities,
                                         cash or other assets that would have been issued or payable in such Organic Change with
                                         respect to or in exchange for the number of shares of Common Stock which would have been
                                         acquirable and receivable upon the conversion of the Note as of the date of such Organic
                                         Change (without taking into account any limitations or restrictions on the convertibility
                                         of the Note set forth in Section 2(b) or otherwise). All provisions of this Note must
                                         be included to the satisfaction of Holder in any new Note created pursuant to this section.
                                         

 

		4.	Representations
                                         and Warranties of the Company. In connection with the transactions provided for herein,
                                         the Company hereby represents and warrants to the Holder the following: 

 

		a.	Organization,
                                         Good Standing and Qualification. The Company is a corporation duly organized, validly
                                         existing and in good standing under the laws of the state of its incorporation and has
                                         all requisite corporate power and authority to carry on its business as now conducted.
                                         The Company is duly qualified to transact business and is in good standing in each jurisdiction
                                         in which the failure to so qualify would have a material adverse effect on its business
                                         or properties. 

 

		b.	Authorization.
                                         All corporate action has been taken on the part of the Company, its officers, directors
                                         and stockholders necessary for the authorization, execution and delivery of this Agreement.
                                         The Company has taken all corporate action required to make all of the obligations of
                                         the Company reflected in the provisions of this Agreement, valid and enforceable obligations.
                                         The shares of capital stock issuable upon conversion of the Note have been authorized
                                         or will be authorized prior to the issuance of such shares. 

 

		c.	Fiduciary
                                         Obligations. The Company hereby represents that it intends to use the proceeds of
                                         the Note primarily for the operations of its business and not for any personal, family,
                                         or household purpose. The Company hereby represents that its board of directors, in the
                                         exercise of its fiduciary duty, has approved the execution of this Agreement based upon
                                         a reasonable belief that the proceeds of the Note provided for herein is appropriate
                                         for the Company after reasonable inquiry concerning its financial objectives and financial
                                         situation. 

 

		d.	Data
                                         Request Form. The Company hereby represents and warrants to Holder that all of the
                                         information furnished to Holder pursuant to the due-diligence form (“DDF”)
                                         dated July 11, 2018 is true and correct in all material respects as of the date hereof.
                                         

 

		5.	Issuance
                                         of Common Stock Equivalents. If the Company, at any time after the Issuance Date,
                                         shall issue any securities convertible into or exchangeable for, directly or indirectly,
                                         Common Stock (“Convertible Securities”), other than the Note, or any
                                         rights or warrants or options to purchase any such Common Stock or Convertible Securities,
                                         shall be issued or sold (collectively, the “Common Stock Equivalents”)
                                         and the aggregate of the price per share for which additional Shares of Common Stock
                                         may be issuable thereafter pursuant to such Common Stock Equivalent, plus the consideration
                                         received by the Company for issuance of such Common Stock Equivalent divided by the number
                                         of shares of Common Stock issuable pursuant to such Common Stock Equivalent (the “Aggregate
                                         Per Common Share Price”) shall be less than the applicable Conversion Price
                                         then in effect, or if, after any such issuance of Common Stock Equivalents, the price
                                         per share for which additional Shares of Common Stock may be issuable thereafter is amended
                                         or adjusted, and such price as so amended shall make the Aggregate Per Share Common Price
                                         be less than the applicable Conversion Price in effect at the time of such amendment
                                         or adjustment, then the applicable Conversion Price upon each such issuance or amendment
                                         shall be reduced to the lower of: (i) the Conversion Price; or (ii) a twenty-five percent
                                         (25%) discount to the lowest Aggregate Per Common Share Price (whether or not such Common
                                         Stock Equivalents are actually then exercisable, convertible or exchangeable in whole
                                         or in part) as of the earlier of (A) the date on which the Company shall enter into a
                                         firm contract for the issuance of such Common Stock Equivalent, or (B) the date of actual
                                         issuance of such Common Stock Equivalent. No adjustment of the applicable Conversion
                                         Price shall be made under this Section 6 upon the issuance of any Convertible Security
                                         which is outstanding on the day immediately preceding the Issuance Date. 

 

		6.	Reservation
                                         of Shares. The Company shall at all times, so long as any principal amount of the
                                         Note is outstanding, reserve and keep available out of its authorized and unissued shares
                                         of Common Stock, solely for the purpose of effecting the conversion of the Note, twelve
                                         times the number of shares of Common Stock as shall at all times be sufficient to effect
                                         the conversion of all of the principal amount, plus Interest and Default Interest, if
                                         any, of the Note then outstanding (“Share Reserve”), unless the Holder
                                         stipulates otherwise in the “Irrevocable Letter of Instructions to the Transfer
                                         Agent.” So long as this Note is outstanding, upon written request of the Holder
                                         or via telephonic communication, the Company’s Transfer Agent shall furnish to
                                         the Holder the then-current number of common shares issued and outstanding, the then-current
                                         number of common shares authorized, the then-current number of unrestricted shares, and
                                         the then-current number of shares reserved for third parties. 

 

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		7.	Voting
                                         Rights. The Holder of this Note shall have no voting rights as a note holder, except
                                         as required by law, however, upon the conversion of any portion of this Note into Common
                                         Stock, Holder shall have the same voting rights as all other Common Stock holders with
                                         respect to such shares of Common Stock then owned by Holder. 

 

		8.	Reissuance
                                         of Note. In the event of a conversion or redemption pursuant to this Note of less
                                         than all of the Conversion Amount represented by this Note, the Company shall promptly
                                         cause to be issued and delivered to the Holder, upon tender by the Holder of the Note
                                         converted or redeemed, a new note of like tenor representing the remaining principal
                                         amount of this Note which has not been so converted or redeemed and which is in substantially
                                         the same form as this Note, as set forth above. 

 

		9.	Default
                                         and Remedies. 

 

		a.	Event
                                         of Default. For purposes of this Note, an “Event of Default” shall
                                         occur upon: 

 

		i.	the
                                         Company’s default in the payment of the outstanding principal, Interest or Default
                                         Interest of this Note when due, whether at Maturity, acceleration or otherwise; 

		ii.	the
                                         occurrence of a Default of Conversion as set forth in Section 2(e)(v); 

		iii.	the
                                         failure by the Company for ten (10) days after notice to it to comply with any material
                                         provision of this Note not included in this Section 10(a); 

		iv.	the
                                         Company’s breach of any covenants, warranties, or representations made by the Company
                                         herein; 

		v.	any
                                         of the information in the DRF is false or misleading in any material respect; 

		vi.	the
                                         default by the Company in any Other Agreement entered into by and between the Company
                                         and Holder, for purposes hereof “Other Agreement” shall mean, collectively,
                                         all agreements and instruments between, among or by: (1) the Company, and, or for the
                                         benefit of, (2) the Holder and any affiliate of the Holder, including without limitation,
                                         promissory notes; 

		vii.	the
                                         cessation of operations of the Company or a material subsidiary; 

		viii.	the
Company pursuant to or within the meaning of any Bankruptcy Law; (a) commences a voluntary case; (b) consents to the entry of
an order for relief against it in an involuntary case; (c) consents to the appointment of a Custodian of it or for all or substantially
all of its property; (d) makes a general assignment for the benefit of its creditors; or (e) admits in writing that it is generally
unable to pay its debts as the same become due;

		ix.	court
                                         of competent jurisdiction entering an order or decree under any Bankruptcy Law that:
                                         (a) is for relief against the Company in an involuntary case; (b) appoints a Custodian
                                         of the Company or for all or substantially all of its property; or (c) orders the liquidation
                                         of the Company or any subsidiary, and the order or decree remains unstayed and in effect
                                         for thirty (30) days; 

		x.	the
                                         Company files a Form 15 with the SEC; 

		xi.	the
                                         Company’s failure to timely file all reports required to be filed by it with the
                                         Securities and Exchange Commission; 

		xii.	the
                                         Company’s failure to timely file all reports required to be filed by it with OTC
                                         Markets to remain a “Current Information” designated company; 

		xiii.	the
                                         Company’s Common Stock is reported as “No Inside” by OTC Markets at
                                         any time while any principal, Interest or Default Interest under the Note remains outstanding;
                                         

		xiv.	the
                                         Company’s failure to maintain the required Share Reserve pursuant to the terms
                                         of the Irrevocable Letter of Instructions to the Transfer Agent; 

		xv.	the
                                         Company directs its transfer agent not to transfer, or delays, impairs, or hinders its
                                         transfer agent in transferring or issuing (electronically or in certificated form) any
                                         certificate for Shares of Common Stock to be issued to the Holder upon conversion of
                                         or otherwise pursuant to this Note as and when required by this Note, or fails to remove
                                         (or directs its transfer agent not to remove or impairs, delays and/or hinders its transfer
                                         agent from removing) any restrictive legend (or to withdraw and stop transfer instructions)
                                         on any certificate for any Shares of Common Stock issued to the Holder upon conversion
                                         of or otherwise pursuant to this Note as and when required by this Note (or makes any
                                         written announcement, statement or threat that it does not intend to honor its obligations
                                         pursuant to a Conversion Notice submitted by the Holder) and any such failure shall continue
                                         uncured for three (3) Business Days after the Conversion Notice has been delivered to
                                         the Company by Holder; 

		xvi.	the
                                         Company’s failure to remain current in its billing obligations with its transfer
                                         agent and such delinquency causes the transfer agent to refuse to issue Shares to Holder
                                         pursuant to a Conversion Notice; 

		xvii.	the
                                         Company effectuates a reverse split of its Common Stock and fails to provide twenty (20)
                                         days prior written notice to Holder of its intention to do so if such notice is lawful;
                                         or 

		xviii.	OTC
                                         Markets changes the Company’s designation to ‘No Information’ (Stop Sign), ‘Caveat Emptor’
                                         (Skull and Crossbones), or ‘OTC’, ‘Other OTC’ or ‘Grey Market’ (Exclamation Mark Sign).
                                         

		xix.	“Change
                                         of Control Transaction” means the occurrence after the date hereof of any of (a)
                                         an acquisition after the date hereof by an individual or legal entity or “group”
                                         (as described in Rule 13d-5(b)(1) promulgated under the Securities Exchange Act of 1934)
                                         of effective control (whether through legal or beneficial ownership of capital stock
                                         of the Company, by contract or otherwise) of in excess of 40% of the voting securities
                                         of the Company, (b) the Company merges into or consolidates with any other Person, as
                                         that term is defined in the Securities Act of 1933, as amended, or any Person merges
                                         into or consolidates with the Company and, after giving effect to such transaction, the
                                         stockholders of the Company immediately prior to such transaction own less than 60% of
                                         the aggregate voting power of the Company or the successor entity of such transaction,
                                         (c) the Company sells or transfers all or substantially all of its assets to another
                                         Person and the stockholders of the Company immediately prior to such transaction own
                                         less than 60% of the aggregate voting power of the acquiring entity immediately after
                                         the transaction, (d) a replacement at one time or within a three year period of more
                                         than one-half of the members of the Board of Directors which is not approved by a majority
                                         of those individuals who are members of the Board of Directors on the Issuance Date (or
                                         by those individuals who are serving as members of the Board of Directors on any date
                                         whose nomination to the Board of Directors was approved by a majority of the members
                                         of the Board of Directors who are members on the date hereof) 

		xx.	Altering
                                         the conversion terms of any notes that are currently outstanding. 

 

    5

     

    

 

 

 

The
Term “Bankruptcy Law” means Title 11, U.S. Code, or any similar Federal or State Law for the relief of debtors.
The term “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.

 

		b.	Remedies.
                                         If an Event of Default occurs, the Holder may in its sole discretion determine to request
                                         immediate repayment of all or any portion of the Note that remains outstanding; at such
                                         time the Company will be required to pay the Holder the Default Amount (defined herein)
                                         in cash. For purposes hereof, the “Default Amount” shall mean: the
                                         product of (A) the then outstanding principal amount of the Note, plus accrued Interest
                                         and Default Interest, divided by (B) the Conversion Price as determined on the Issuance
                                         Date, multiplied by (C) the highest price at which the Common Stock traded at any time
                                         between the Issuance Date and the date of the Event of Default. If the Company fails
                                         to pay the Default Amount within five (5) Business Days of written notice that such amount
                                         is due and payable, then Holder shall have the right at any time, so long as the Company
                                         remains in default (and so long and to the extent there are a sufficient number of authorized
                                         but unissued shares), to require the Company, upon written notice, to immediately issue,
                                         in lieu of the Default Amount, the number of shares of Common Stock of the Company equal
                                         to the Default Amount divided by the Conversion Price then in effect. 

 

		10.	Vote
                                         to Change the Terms of this Note. This Note and any provision hereof may only be
                                         amended by an instrument in writing signed by the Company and the Holder. 

 

		11.	Lost
                                         or Stolen Note. Upon receipt by the Company of evidence satisfactory to the Company
                                         of the loss, theft, destruction or mutilation of this Note, and, in the case of loss,
                                         theft or destruction, of an indemnification undertaking by the Holder to the Company
                                         in a form reasonably acceptable to the Company and, in the case of mutilation, upon surrender
                                         and cancellation of the Note, the Company shall execute and deliver a new Note of like
                                         tenor and date and in substantially the same form as this Note; provided, however, the
                                         Company shall not be obligated to re-issue a Note if the Holder contemporaneously requests
                                         the Company to convert such remaining principal amount, plus accrued Interest and Default
                                         Interest, if any, into Common Stock. 

 

		12.	Payment
                                         of Collection, Enforcement and Other Costs. If: (i) this Note is placed in the hands
                                         of an attorney for collection or enforcement or is collected or enforced through any
                                         legal proceeding; or (ii) an attorney is retained to represent the Holder of this Note
                                         in any bankruptcy, reorganization, receivership or other proceedings affecting creditors’
                                         rights and involving a claim under this Note, then the Company shall pay to the Holder
                                         all reasonable attorneys’ fees, costs and expenses incurred in connection therewith,
                                         in addition to all other amounts due hereunder. 

 

		13.	Cancellation.
                                         After all principal, accrued Interest and Default Interest, if any, at any time owed
                                         on this Note has been paid in full or otherwise converted in full, this Note shall automatically
                                         be deemed canceled, shall be surrendered to the Company for cancellation and shall not
                                         be reissued. 

 

		14.	Waiver
                                         of Notice. To the extent permitted by law, the Company hereby waives demand, notice,
                                         protest and all other demands and notices in connection with the delivery, acceptance,
                                         performance, default or enforcement of this Note. 

 

		15.	Governing
                                         Law. This Note shall be construed and enforced in accordance with, and all questions
                                         concerning the construction, validity, interpretation and performance of this Note shall
                                         be governed by, the laws of the State of Texas, without giving effect to provisions thereof
                                         regarding conflict of laws. Each party hereby irrevocably submits to the non-exclusive
                                         jurisdiction of the state and federal courts sitting in Texas for the adjudication of
                                         any dispute hereunder or in connection herewith or with any transaction contemplated
                                         hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in
                                         any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction
                                         of any such court, that such suit, action or proceeding is brought in an inconvenient
                                         forum or that the venue of such suit, action or proceeding is improper. Each party hereby
                                         irrevocably waives personal service of process and consents to process being served in
                                         any such suit, action or proceeding by sending, through certified mail or overnight courier,
                                         a copy thereof to such party at the address for such notices to it under this Agreement
                                         and agrees that such service shall constitute good and sufficient service of process
                                         and notice thereof. Nothing contained herein shall be deemed to limit in any way any
                                         right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
                                         WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
                                         OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
                                         ANY TRANSACTION CONTEMPLATED HEREBY.

 

		16.	Remedies,
                                         Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies
                                         provided in this Note shall be cumulative and in addition to all other remedies available
                                         under this Note, at law or in equity (including a decree of specific performance and/or
                                         other injunctive relief), and no remedy contained herein shall be deemed a waiver of
                                         compliance with the provisions giving rise to such remedy and nothing herein shall limit
                                         the Holder’s right to pursue actual damages for any failure by the Company to comply
                                         with the terms of this Note. The Company covenants to the Holder that there shall be
                                         no characterization concerning this instrument other than as expressly provided herein.
                                         Amounts set forth or provided for herein with respect to payments, conversion and the
                                         like (and the computation thereof) shall be the amounts to be received by the Holder
                                         thereof and shall not, except as expressly provided herein, be subject to any other obligation
                                         of the Company (or the performance thereof). 

 

    6

     

    

 

 

		17.	Specific
                                         Shall Not Limit General; Construction. No specific provision contained in this Note
                                         shall limit or modify any more general provision contained herein. This Note shall be
                                         deemed to be jointly drafted by the Company and the Holder and shall not be construed
                                         against any person as the drafter hereof. 

 

		18.	Failure
                                         or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise
                                         of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall
                                         any single or partial exercise of any such power, right or privilege preclude further
                                         exercise thereof or of any other right, power or privilege. 

 

		19.	Partial
                                         Payment. In the event of partial payment by the Holder, the principal sum due to
                                         the Holder shall be prorated based on the consideration actually paid by the Holder such
                                         that the Company is only required to repay the amount funded and the Company is not required
                                         to repay any unfunded portion of this Note, with the exception of any OID contemplated
                                         herein. 

 

		20.	Entire
                                         Agreement. This Agreement constitutes the full and entire understanding and agreement
                                         between the parties with regard to the subjects herein. None of the terms of this Agreement
                                         can be waived or modified, except by an express agreement signed by all Parties hereto.
                                         

 

		21.	Additional
                                         Representations and Warranties. The Company expressly acknowledges that the Holder,
                                         including but not limited to its officer, directors, employees, agents, and affiliates,
                                         have not made any representation or warranty to it outside the terms of this Agreement.
                                         The Company further acknowledges that there have been no representations or warranties
                                         about future financing or subsequent transactions between the parties. 

 

		22.	Notices.
                                         All notices and other communications given or made to the Company pursuant hereto shall
                                         be in writing (including facsimile or similar electronic transmissions) and shall be
                                         deemed effectively given: (i) upon personal delivery, (ii) when sent by electronic mail
                                         or facsimile, as deemed received by the close of business on the date sent, (iii) five
                                         (5) days after having been sent by registered or certified mail, return receipt requested,
                                         postage prepaid or (iv) one (1) day after deposit with a nationally recognized overnight
                                         courier, specifying next day delivery. All communications shall be sent either by email,
                                         or fax, or to the email address or facsimile number set forth on the signature page hereto.
                                         The physical address, email address, and phone number provided on the signature page
                                         hereto shall be considered valid pursuant to the above stipulations; should the Company’s
                                         contact information change from that listed on the signature page, it is incumbent on
                                         the Company to inform the Holder. 

 

		23.	Severability.
                                         If one or more provisions of this Agreement are held to be unenforceable under applicable
                                         law, such provision shall be excluded from this Agreement and the rest of the Agreement
                                         shall be enforceable in accordance with its terms. 

 

		24.	Usury.
                                         If it shall be found that any interest or other amount deemed interest due hereunder
                                         violates the applicable law governing usury, the applicable rate of interest due hereunder
                                         shall automatically be lowered to equal the maximum rate of interest permitted under
                                         applicable law. The Company covenants (to the extent that it may lawfully do so) that
                                         it will not seek to claim or take advantage of any law that would prohibit or forgive
                                         the Company from paying all or a portion of the principal, Interest or Default Interest
                                         on this Note. 

 

		25.	Successors
                                         and Assigns. This Agreement shall be binding upon all successors and assigns hereto.
                                         

 

—
SIGNATURE PAGE TO FOLLOW —

    7

     

    

 

 

 

IN
WITNESS WHEREOF, the Company has caused this Note to be signed by its CEO, on and as of the Issuance Date.

 

COMPANY

 

Signature:

 

	By:	/s/ Shlomi
    Palas	 
	Name:	Shlomi Palas 

 	 
	Title:	CEO	 
	 	 	 
	Address:	301
    McCullough, Charlotte , 28262, USA	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	Email:	shlomi@bluespherecorporate.com	 
	 	 	 
	Phone:	704-9092806	 
	 	 	 
	Facsimile:	 	 

 

JSJ Investments
Inc.

 

Signature:

 

	By:	/s/ Sameer Hirji, President	 
	Name: 	Sameer Hirji 	 
	Title: 	President	 
	 	JSJ Investments Inc.

10830 North Central
Expressway, Suite 152

Dallas TX 75231

888-503-2599

	 

 

 

    8

     

    

  

 

 

Exhibit
1

 

Conversion
Notice 

 

Reference
is made to the 12% Convertible Note issued by Blue Sphere Corp. (the “Note”), dated July 13, 2018 in the principal amount
of $83,000 with 12% interest. This note currently holds a principal balance of $83,000. The features of conversion stipulate a
Conversion Price equal to a 35% discount to the lowest trading price during the previous fifteen (15) trading days to the date
of a Conversion Notice.

 

In
accordance with and pursuant to the Note, the undersigned hereby elects to convert $______ of the principal/interest balance
of the Note, indicated below into shares of Common Stock (the “Common Stock”), of the Company, by tendering the Note
specified as of the date specified below.

 

Date of Conversion:
__________ 

 

Please
confirm the following information:

 

Conversion Amount: $ ____________________ 

 

Conversion Price:
$ ____________________ ( ____ % discount from $ ____________________ ) 

 

	Number of Common Stock
    to be issued:  	 
	 	 

	Current Issued/Outstanding:  
    	 

 

If the Issuer is DWAC
eligible, please issue the Common Stock into which the Note is being converted in the name of the Holder of the Note and transfer
the shares electronically to: 

 

[BROKER INFORMATION]

 

Holder Authorization:

 

JSJ Investments Inc.

10830 North Central Expressway, Suite 152          *Do not send certificates
to this address

Dallas, TX 75231

888-503-2599

 

Tax ID: 20-2122354

 

Sameer Hirji, President

 

[DATE] 

 

[CONTINUED
ON NEXT PAGE]

 

    9

     

    

 

 

 

PLEASE
BE ADVISED, pursuant to Section 2(e)(ii) of the Note, “Upon receipt by the Company of a copy of the Conversion Notice,
the Company shall as soon as practicable, but in no event later than one (1) Business Day after receipt of such Conversion Notice,
SEND, VIA EMAIL, FACSIMILE OR OVERNIGHT COURIER, A CONFIRMATION OF RECEIPT OF SUCH CONVERSION NOTICE TO SUCH HOLDER INDICATING
THAT THE COMPANY WILL PROCESS SUCH CONVERSION NOTICE in accordance with the terms herein. Within two (2) Business Days after
the date of the Conversion Confirmation, the Company shall have issued and electronically transferred the shares to the Broker
indicated in the Conversion Notice; should the Company be unable to transfer the shares electronically, they shall, within two
(2) Business Days after the date of the Conversion Confirmation, have surrendered to FedEx for delivery the next day to the address
as specified in the Conversion Notice, a certificate, registered in the name of the Holder, for the number of shares of Common
Stock to which the Holder shall be entitled.”

 

Signature:

 

	By:	/s/ Shlomi Palas	 
	Name: 	Shlomi Palas	 
	Title: 	CEO	 

 

Blue Sphere Corp. 

  

    10

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