Document:

Exhibit
10.2

 

Libertas
Funding LLC

382
Greenwich Avenue Suite 2 Second Floor Greenwich CT 06830

 

AGREEMENT
OF SALE OF FUTURE RECEIPTS

 

This AGREEMENT
OF SALE OF FUTURE RECEIVABLES (this “Agreement”) dated as of 11/27/2018, is made by and
between Libertas Funding LLC. , a Connecticut limited liability company as purchaser (“Purchaser”), the
merchant whose name, address and other pertinent information is set forth below, as seller (“Merchant”),
and the officer(s)of the Merchant whose name, address and other pertinent information are set forth below
(“Officer”).                           

 

Merchant
Information

 

	Merchant
    Legal Name: SHARING SERVICES, INC., Four Oceans Holdings, Inc, Elepreneur, LLC, Elevacity Global LLC, Elenergy, LLC, Imagine
    University, LLC, Legacy Direct Global, LLC, Total Travel Media, Inc	 	DBA
    Name: Elepreneurs - Elevacity
	Entity
    Type: CORPORATION	 	FEIN:
    300869786
	State
    Of Incorp: TX	 	Bank
    Name:
	Address:
    1700 COIT ROAD , PLANO, TX, 75075	 	Phone:
    4693049400

 

OFFICER
INFORMATION (referred to individually or collectively as the (“Officer”)

 

	Name
    of Officer : John Thatch	 	Cell
    Phone: XXXXXXXX	 	Social
    Security # : XXXXXX
	Home
    Address : XXXXXXXXXXXXXXXXXXXX	 	City/State
    : XXXXXXXXXX	 	Zip
    Code : 33761
	Ownership
    % : 1	 	Email
    : jt@shrvinc.com	 	 

 

	Name
    of Officer 2: Frank Walters	 	Cell
    Phone: XXXXXXXX	 	Social
    Security # : XXXXXX
	Home
    Address : XXXXXXXXXXXXXXXXXXXX	 	City/State
    : XXXXXX	 	Zip
    Code : 75035
	Ownership
    % : 1	 	Email
    : al@shrvinc.com	 	 

 

Background

 

WHEREAS,
Merchant is an entity engaged in the business that it currently conducts and is willing to sell to Purchaser a certain portion
of Merchant’s future receivables (such portion, the “Sold Future Receipts”); and

 

WHEREAS,
Purchaser is an entity engaged in the business of purchasing future receivables and is willing to purchase from Merchant the Sold
Future Receipts; and

 

WHEREAS,
Officer is an individual who, as an officer of Merchant, will derive substantial benefit from Merchant selling the Sold Future
Receipts to Purchaser and who is willing to guaranty to Purchaser Merchant’s performance in accordance with the provisions
of this Agreement

 

NOW,
THEREFORE, for good and valuable consideration, the mutual receipt of which and sufficiency is hereby acknowledged, the parties
to this Agreement agree to the foregoing and as follows.

 

KEY
BUSINESS TERMS AND DEFINITIONS:

 

	Sold
    Amount of Future Receipts	$635,000.00	The
    dollar value of the Sold Future Receipts that Merchant agrees to sell to Purchaser.
	Purchase
    Price	$500,000.00	The
    total amount that Purchaser agrees to pay for the Sold Amount of Future Receipts.
	Future
    Receipts	$3,870,980.67	All
    sums due to Merchant by its customers/clients/vendees as payment for the Merchant’s sale of goods and services in the
    ordinary course of Merchant’s business from and after the date when the Purchase Price is paid to Merchant irrespectively
    of how such sums is paid over and delivered to Merchant (in the form of cash, check, credit, credit card charge, debit card
    payment, ACH or any other form of funds transfer or payment.)
	Direct
    Payments to Third Parties/Renewals	$0.00	Paid
    to Other Funders.
	Total
    Amount Sent to Merchant	$490,000.00	Net
    of Discount and Direct Payments to 3rd Parties:

 

    	 	 	 

     

    

 

	Specified
    Percentage	20%	An
    agreed upon percentage of the Daily daily Future Receipts that Merchant shall deliver to Purchaser until the entire Sold Amount
    of Future Receipts is delivered to Purchaser in accordance with this Agreement.
	Discount
    Factor	1.27	The
    risk adjustment to the Amount Sold that determines the Futures Receivables Discount
	 

        daily
        Delivery
	 

        $4,319.73
	A
    dollar amount that Merchant and Purchaser agree to be a good faith approximation of the Specified Percentage of daily Future
    Receipts as of the date of this Agreement, based upon the information provided by Merchant to Purchaser concerning Merchant’s
    most recent accounts receivables.
	Due
    Diligence & Processing Fee	$10,000.00	The
    amount Purchaser will withhold from the Purchase Price which represents the due diligence and costs of the Purchaser in performing
    its analysis for this agreement.
	Early
    Delivery Discount	None	Discount
    Paid to Merchant for delivering Future Receivables Early
	Estimated
    Term of this Agreement	7
    Month(s)	The
    estimated Term of this Agreement is the period commencing on the date when the Purchase Price is paid to Merchant (the “Commencement
    Date”) and expiring on the date when the Sold Amount of Future Receipts is delivered to Purchaser in full.
	Business
    Day	 	Monday
    through Friday during the Term of this Agreement except the days when the banking institutions in the state where the Merchant’s
    business is located are closed for holidays and do not process ACH transfers.

 

Note:
The bold type terms in the tables above and below shall constitute defined terms with respect to this Agreement. PLEASE NOTE THAT
THE PURCHASER WILL NOT REMIT MORE THAN THE EXPECTED DAILY REMITTANCE PER DAY WITHOUT THE CONSENT OF THE MERCHANT.

 

I.
SALE OF FUTURE RECEIPTS; PAYMENT OF PURCHASE PRICE:

 

1.
Sale of Future Receipts. Merchant hereby sells, assigns, transfers and conveys (hereinafter, the “Sale”)
unto Purchaser all of Merchant’s right, title and interest in to the Specified Percentage of the Future Receipts until the
Sold Amount of Future Receipts is delivered by Merchant to Purchaser; to have and hold the same unto Purchaser, its successors
and assigns, forever. This Sale of the Sold Future Receipts is made without express or implied warranty to Purchaser of collectability
of the Sold Future Receipts by Purchaser and without recourse against Merchant except as specifically set forth in this Agreement.
By virtue of this Agreement, Merchant transfers to Purchaser full and complete ownership of the Sold Future Receipts and Merchant
retains no legal or equitable interest therein.

 

2. Payment
of Purchase Price.

 

	 	a.	In
    consideration of the transfer by Merchant to Purchaser of the Sold Future Receipts, Purchaser agrees to pay to Merchant the
    Purchase Price; subject to the immediately following subsection (b) and the satisfactory completion of Purchaser’s due
    diligence (in its discretion), the Purchase Price shall be turned over and delivered to Merchant immediately after the date
    of this Agreement.
	 	b.	In
    the event as of the date when Purchaser shall deliver to Merchant the Purchase Price, Merchant shall have owed to Purchaser
    a certain amount of debt unrelated to his Agreement or certain sums pursuant to this Agreement including without limitation
    any and all origination fees. (the sum of all such prior obligations of Merchant to Purchaser, the “Prior Debt”)
    Merchant hereby grants Purchaser the right to withhold from the Purchase Price to be delivered to Merchant pursuant to subparagraph
    (a) above, the amount of the Prior Debt in full satisfaction thereof. Furthermore, Merchant agrees that delivery to the Merchant
    of the Purchase Price reduced by the amount of the Prior Debt shall not be deemed to be Purchaser’s breach of its obligations
    under this Agreement and such reduction shall not in any way or form shall modify or reduce Merchant’s obligations under
    this Agreement.
	 	c.	In
    the event the amount of the Purchase Price is reduced by the amount of Prior Debt, any and all references in this Agreement
    to the Purchase Price shall mean “the Purchase Price as reduced by the Prior Debt, if any.”

 

II.
DELIVERY OF SOLD AMOUNT OF FUTURE RECEIPTS:

 

3.
Daily Deliveries. The Sold Amount of Future Receipts shall be delivered to Purchaser in equal amounts of Daily Delivery.
The Daily Deliveries shall be made on each on each and every Business Day commencing on the Commencement Date. The amount of the
Daily Delivery is subject to Merchant’s right for adjustment and/or reconciliation set forth in this Agreement. The last
Daily Delivery shall be made when the Sold Amount of Future Receipts and other amounts due to Purchaser under this Agreement (if
any) are delivered to Purchaser in full.

 

4.
Method of Delivery of Sold Amount of Future Receipts. Purchaser shall have the right, at its sole and absolute discretion,
to choose among the following three methods of delivery of the Daily Delivery to Purchaser:

 

	 	a.	Directly
    from the Merchant’s Approved Bank Account (as such term is defined below) by daily debiting the amount of Daily Delivery
    via ACH debit (“Direct Debit”); or
	 	b.	From
    the Merchant’s Approved Credit Card Processor (as such term is defined below) by instructing such Approved Credit Card
    Processor to remit daily the amount of Daily Delivery to Purchaser (“Credit Card Split”); or
	 	c.	From
    a special bank account established jointly by Purchaser and Merchant whereby all Future Receipts shall be deposited into such
    bank account during the term of this Agreement in accordance with a lockbox arrangement among Merchant, Purchaser and a banking
    institution chosen by Purchaser and Purchaser daily debiting the amount of Daily Delivery from such bank account (the “Lockbox
    Arrangement”).

 

    	 	 	 

     

    

 

At
any time during the term of this Agreement, Purchaser may change the method by which it will accept the Daily Delivery by providing
Merchant with written instructions of a new method of delivery of Daily Delivery to Purchaser.

 

5.
Approved Bank Account and Credit Card Processor. During the term of this Agreement, Merchant shall: (i) deposit
all Future Receipts into one (and only one) bank account which bank account shall be preapproved by Purchaser (the “Approved
Bank Account”), (ii) use one (and only one) credit card processor which processor shall be preapproved by Purchaser
(the “Approved Credit Card Processor”) and (iii) deposit all credit card receipts into the Approved Bank Account.
In the event the Approved Bank Account or Approved Credit Card Processor shall become unavailable or shall cease providing services
to Merchant during the term of this Agreement, prior to the first date of such unavailability or cessation of services, Merchant
shall arrange for another Approved Bank Account or Approved Credit Card Processor, as the case may be.

 

6. Authorization
of Direct Debit, Credit Card Split and Lockbox Arrangement.

 

	 	a.	Merchant
    hereby authorizes Purchaser to initiate Direct Debit by way of electronic checks or ACH debits from the Approved Bank Account
    in the amount of Daily Delivery each Business Day until Purchaser receive the full Sold Amount of Future Receipts; Merchant
    shall provide Purchaser with all access code(s) for the Approved Bank Account.
	 	b.	Merchant
    hereby authorizes Purchaser to initiate Credit Card Split by making the necessary arrangement with the Approved Credit Card
    Processor for remittance of the Daily Delivery each Business Day until the Purchaser receives the full Sold Amount of Future
    Receipts; Merchant shall provide Purchaser with all access code(s) for the Approved Credit Card Processor.
	 	c.	Merchant
     hereby authorizes Purchaser to initiate a Lockbox Arrangement and to instruct Merchant’s Approved Credit Card
    Processor and Merchant’s invoiced customers/clients/vendees to deposit all sums due to Merchant from each of those parties
    directly to the special bank account established in accordance with the Lockbox Arrangement; If required, Merchant shall enter
    into a lockbox agreement with Purchaser and the banking institution chosen by Purchaser for the purpose of establishing such
    bank account.

 

7. Third
Party Appointment and Authorization. By signing below, Merchant acknowledges that the Purchaser may, at any time, at
Purchaser’s sole discretion, and without prior notice, appoint a third party, including but not limited to its wholly
owned subsidiaries, including, without limitation, Kinetic Direct Funding, LLC. (herein referred to as the “Servicing
Agent”) to perform any, or all, of the actions authorized by the ACH Authorization and the Agreement. Merchant further
agrees and acknowledges that Servicing Agent shall have all of the same rights, responsibilities, and authorizations granted
to Purchaser by the ACH Authorization and the Agreement. For purposes of clarity, any Servicing Agent may perform any and all
activities to service the Agreement, including the collection of Funds Arising from Future Receipts (as set forth above), as
if it was the Purchaser.

 

8.
Fees Associated with Debiting Approved Bank Account. It shall be Merchant’s exclusive responsibility to pay
to its banking institution and/or Purchaser’s banking institution directly (or to compensate Purchaser, in case it is charged)
all fees, charges and expenses incurred by either Merchant or Purchaser due to rejected electronic checks or ACH debit attempts,
overdrafts or rejections by Merchant’s banking institution of the transactions contemplated by this Agreement.

 

9.
Read Only Access to the Approved Bank and Credit Card Accounts. Merchant hereby agrees that during the term of this
Agreement Purchaser shall have the right to perform ongoing read only electronic monitoring of transactions occurring in the Approved
Bank Account and Merchant’s account with the Approved Credit Card Processor (the “Approved Credit Card Account”).
Merchant agrees to provide Purchaser all required online access codes for the Approved Bank Account and the Approved Credit Card
Account. If Purchaser’s electronic (online) access to Merchant’s Approved Bank Account or the Approved Credit Card
Account is disabled for any reason, Merchant shall immediately and diligently undertake all steps required from it to restore
Purchaser’s access to both Approved Bank Account and Approved Credit Card Account. Merchant’s failure to comply with
the provisions of this Section 8 shall constitute Merchant’s material breach of its obligations under this Agreement.

 

III.
MERCHANT’S RIGHT FOR RECONCILIATION AND ADJUSTMENT:

 

10.
Merchant’s Right for Reconciliation of Daily Deliveries.

 

	 	a.	If
    any time during the term of this Agreement Merchant will experience sporadic increase or decrease in its daily receipts, Merchant
    shall have the right, at its sole and absolute discretion, but subject to the provisions of Section 10 below, to request retroactive
    reconciliation of the Merchant’s actual daily receipts for one full calendar month immediately preceding the day when
    such request for reconciliation is received by Purchaser (each such calendar month, a “Reconciliation Month”).

 

    	 	 	 

     

    

 

	 	b.	Such
    reconciliation (the “Reconciliation”) of Merchant’s daily receipts for a Reconciliation Month shall
    be performed by Purchaser within five (5) Business Days following its receipt of the Merchant’s request for reconciliation
    by either crediting or debiting the difference back to or from the Approved Bank Account so that the total amount debited
    by Purchaser from the Approved Bank Account during the Reconciliation Month at issue equal the Specific Percentage of the
    Future Receipts that Merchant collected during the Reconciliation Month at issue.
	 	c.	The
    parties acknowledge and agree that one or more Reconciliation procedures performed by Purchaser may reduce the actual Daily
    Delivery amount during the Reconciliation Month in comparison to the one set forth in preamble of this Agreement, and, as
    the result of such reduction, the term of this Agreement during which Purchaser will be debiting the Approved Bank Account
    may extend substantially.

 

		11.	 Request
                                         for Reconciliation Procedure.

 

	 	a.	It
    shall be Merchant’s sole responsibility and the right hereunder to initiate Reconciliation of Merchant’s actual
    receipts during any Reconciliation Month by sending a request for reconciliation to Purchaser.
	 	b.	Any
    such request for Reconciliation of the Merchant’s daily receipts for a specific Reconciliation Month shall be in writing,
    shall include a copy of Merchant’s bank statement and a credit card processing statement for the Reconciliation Month
    at issue, and shall be received by Purchaser via email customer.service@libertasfunding.com within five (5) Business Days
    after the last day of the Reconciliation Month at issue (time being of the essence as to the last day of the period during
    which such demand for reconciliation shall be received by Purchaser).
	 	c.	Purchaser’s
    receipt of Merchant’s request for Reconciliation after the expiration of the Five-Business-Day period following the
    last day of the Reconciliation Month for which such reconciliation is requested nullifies and makes obsolete Merchant’s
    request for Reconciliation for that specific Reconciliation Month.
	 	d.	Merchant
    shall have the right to request Reconciliation as many times during the term of this Agreement as it deems proper, and Purchaser
    shall comply with such request, provided that:

 

	i.		Each
    such request is made in accordance with the terms of this Section 10.
	ii.		If
    a request for Reconciliation is made after the expiration of the term of this Agreement and, as the result of such Reconciliation,
    the total amount actually debited by Purchaser from the Approved Bank Account will become less than the Sold Amount of Future
    Receipts, then and in such event the term of this Agreement shall automatically be extended until the time when the total
    amount actually debited from Approved Bank Account pursuant to this Agreement shall become equal to the Sold Amount of Future
    Receipts.
	iii.		In
    the event after the last day of the term of this Agreement Merchant will determine in good faith that the actual amount debited
    by Purchaser from the Approved Bank Account pursuant to this Agreement is greater than the Sold Amount of Future Receipts,
    then and in such event Merchant shall have the right to request final Reconciliation within five (5) Business Days following
    the expiration date of the term of this Agreement (time being of the essence) and Purchaser shall honor such request within
    five (5) Business Days following the day of its receipt of such request. It shall be noted that if Purchaser receives funds
    that it is not entitled to, then the Purchaser shall be required to return those funds to the Merchant without request by
    the Merchant for reconciliation as set forth above.

 

	 	e.	Nothing
    set forth in Sections 9 or 10 of this Agreement shall be deemed to provide Merchant with the right to interfere with Purchaser’s
    right and ability to debit the Approved Bank Account while the request for Reconciliation of Merchant’s receipts is
    pending or until the Sold Amount of Future Receipts is delivered to Purchaser in full.

 

		12.	Adjustment
                                         of Daily Delivery.

 

	 	a.	If
    any time during the term of this Agreement Merchant will experience steady increase or decrease in its daily receipts, Merchant
    shall have the right, at its sole and absolute discretion, but subject to the provisions of Section 12 below, to request modification
    (“Adjustment”) of the amount of the Daily Delivery that Merchant is obligated to deliver daily to Purchaser
    in accordance with the provisions of Section 3 above. Such Adjustment shall become effective as of the date it is granted
    and the new adjusted amount of the Daily Delivery (the “Adjusted Daily Delivery”) shall replace and supersede
    the amount of the Daily Delivery set forth in the preamble of this Agreement.
	 	b.	The
    Adjustment of the Daily Delivery shall be performed by Purchaser within five (5) Business Days following its receipt of the
    Merchant’s request for Adjustment by modifying daily amounts that shall be debited from the Approved Bank Account until
    the Sold Amount of Future Receipts is delivered in full. Notwithstanding anything to the contrary set forth in Sections 11
    and 12 hereof, no Adjustment shall take place until and unless Reconciliation for at least one (1) Reconciliation Month takes
    place resulting in reduction of the total amount debited from Merchant’s Approved Bank Account during the Reconciliation
    Month by at least 20% in comparison to the amount that would have been debited during that month without Reconciliation.
	 	c.	The
    parties acknowledge and agree that one or more Adjustments performed pursuant to this Agreement may substantially extend the
    term of this Agreement and the period during which Purchaser will be debiting the Approved Bank Account.

 

    	 	 	 

     

    

 

		13.	Request
                                         for Adjustment Procedure.

 

	 	a.	It
    shall be Merchant’s sole responsibility and the right to initiate the Adjustment by sending a request for Adjustment
    to Purchaser.
	 	b.	A
    request for Adjustment (an “Adjustment Request”) shall be in writing, shall include copies of: (i) Merchant’s
    three (3) consecutive bank statements of the Approved Bank Account and credit card processing statements immediately preceding
    the date of Purchaser’s receipt of the Adjustment Request, and (ii) Merchant’s bank statements and credit card
    processing statements previously provided by Merchant to Purchaser based upon which statements the amount of Daily Delivery
    set forth in preamble to this Agreement (or the then current Adjusted Daily Delivery, as the case may be) was determined,
    and shall be received by Purchaser by email at customer.service@libertasfunding.com within five (5) Business Days after the
    date that is the later of the last day of the latest bank statement enclosed with the Adjustment Request and the last date
    of the latest card processing statement enclosed with the Adjustment Request (time being of the essence as to the last day
    of the period during which an Adjustment Request shall be received by Purchaser).
	 	c.	Purchaser’s
    receipt of a Merchant’s Adjustment Request after the expiration of the above referenced Five-Business-Day period nullifies
    and makes obsolete such Adjustment Request.
	 	d.	Merchant
    shall have the right to request Adjustment of the Daily Delivery (or Adjusted Daily Delivery, as the case may be) as many
    times during the term of this Agreement as it seems proper, and Purchaser shall comply with such request, provided that:

 

	 	i.	Each
    such request for Adjustment is made in accordance with the terms of this Section 12.
	 	ii.	A
    request for Adjustment shall not be made after the expiration of the term of this Agreement.

 

	 	e.	Nothing
    set forth in Sections 11 or 12 of this Agreement shall be deemed to provide Merchant with the right to interfere with Purchaser’s
    right and ability to debit the Approved Bank Account while the request for Adjustment is pending or until the Sold Amount
    of Future Receipts is delivered to Purchaser in full.

 

		IV.	RISK
                                         SHARING ACKNOWLEDGMENTS AND AGREEMENTS:

 

		14.	Both
                                         Merchant and Purchaser Acknowledge and Agree that:

 

	 	a.	The
    Sold Amount of Future Receipts represents a portion of Merchant’s Future Receipts.
	 	b.	This
    Agreement consummates the sale of the Sold Amount of Future Receipts at a discount, not borrowing funds by Merchant from Purchaser.
    Purchaser does not charge Merchant and will not collect from Merchant any interest on the monies spent on the purchase of
    the Sold Amount of Future Receipts. The period of time that it will take Purchaser to collect the Sold Amount of Future Receipts
    is not fixed, is unknown to both parties as of the date of this Agreement and will depend on how well or not well Merchant’s
    business will be performing following the date hereof. As an extreme example, in the event Merchant’s business ceases
    to exist after Purchaser’s payment of the Purchase Price and purchase of the Sold Amount of Future Receipts for reason
    outside Merchant’s control, Purchaser may never recover any moneys spent on such purchase without recourse.
	 	c.	The
    amount of the Daily Delivery set forth in preamble to this Agreement is calculated based upon the information concerning an
    average amount of daily receipts collected by Merchant’s business immediately prior to the date of this Agreement which
    information was provided by Merchant to Purchaser.
	 	d.	The
    amounts of Merchant’s future daily receipts may increase or decrease over time.
	 	e.	If,
    based upon the Reconciliation and/or the Adjustment procedures described above, it will be determined that the actual daily
    amounts of the Specified Percentage of the Future Receipts get reduced in comparison to the amount of the Daily Delivery as
    of the date of this Agreement set forth in the preamble of this Agreement, and in comparison to the amount that both Merchant
    and Purchaser may have anticipated or projected because Merchant’s business has slowed down, or if the full Sold Amount
    of Future Receipts is not remitted because Merchant’s business went bankrupt or otherwise ceased operations in the ordinary
    course of business(but not due to Merchant’s willful mishandling of its business), and Merchant shall have not breached
    this Agreement, Merchant would not owe anything to Purchaser and would not be in breach of or in default under this Agreement.

 

	 	15.	Purchaser’s
    Risk Acknowledgments. Purchaser agrees to purchase the Sold Amount of Future Receipts knowing the risks that Merchant’s
    business may slow down or fail, and Purchaser hereby assumes these risks based exclusively upon the information provided to
    it by Merchant and related to the business operations of Merchant’ business prior to the date hereof and upon Merchant’s
    representations, warranties and covenants contained in this Agreement that are designed to give Purchaser a reasonable and
    fair opportunity to receive the benefit of its bargain. Furthermore, Purchaser hereby acknowledges and agrees that Merchant
    shall be excused from performing its obligations under this Agreement in the event Merchant’s business ceases its operations
    exclusively due to the following reasons (collectively, the “Valid Excuses”):

 

	i.	 	adverse
    business conditions that occurred for reasons outside Merchant’s control and not due to Merchant’s willful or
    negligent mishandling of its business;
	ii. 	 	loss
    of the premises where Merchant’s business operates (but not due to Merchant’s violation of its obligations to
    its landlord);
	iii. 	 	bankruptcy
    of Merchant;
	iv. 	 	natural
    disasters or similar occurrences beyond Merchant’s control.

 

    	 	 	 

     

    

 

	 	16.	Not
    a Loan. Merchant and Purchaser agree that the Purchase Price is paid to Merchant in consideration for the ownership
    of the Sold Amount of Future Receipts and that payment of the Purchase Price by Purchaser is not intended to be, nor shall
    it be construed as, a loan from Purchaser to Merchant that requires absolute and unconditional repayment on a maturity date,
    and Officer waives any claims or defenses of usury in any action arising out of this Agreement.. To the contrary, Purchaser’s
    ability to receive the Sold Amount of Future Receipts pursuant to this Agreement, and the date when the Sold Amount of Future
    Receipts is delivered to Purchaser in full (if ever) are subject to and conditioned upon performance of Merchant’s business.

 

		V.	MERCHANT’S
                                         OBLIGATIONS, REPRESENTATIONS, WARRANTIES AND COVENANTS:

 

17.
Merchant represents, warrants and covenants that the following statements are valid, true and correct as of the date
of this Agreement and unless expressly stated otherwise shall remain valid, true and correct during the term of this Agreement:

  

	 	a.	Use of Purchase Price. Merchant hereby acknowledges that it fully understands that: (i) Purchaser’s ability to receive the Sold Amount of Future Receipts is contingent upon Merchant’s continued operation of its business and successful generation of the Future Receipts until the Sold Amount of Future Receipts is delivered to Purchaser in full; (ii) that in the event of decreased efficiency or total failure of Merchant’s business Purchaser’s receipt of the full or any portion of the Sold Amount of Future Receipts may be delayed indefinitely. Based upon the forgoing, Merchant agrees to use the Purchase Price exclusively for the benefit and advancement of Merchant’s business operations and for no other purpose.
	 	b.	Merchant Shall Not. During the term of this Agreement, without first obtaining Purchaser’s consent, Merchant shall not:
	 	 	i.	Change or close
the Approved Bank Account or change or terminate the Approved Processor.
	 	 	ii.	Open
and deposit Future Receipts into a bank account different from the Approved Bank Account.
	 	 	iii.	Add
a credit card processor in addition to the Approved Processor.
	 	 	iv.	Sell
Merchant’s business (as an entity or its assets) to a third party.
	 	 	v.	Disconnect
Purchaser’s bank monitoring software.
	 	 	vi.	Sell
Future Receipts to a third party.
	 	 	vii.	Breach,
or deviate from strict performance of, any and all other obligations of Merchant under this Agreement.
	 	c.	Financial
    Condition and Financial Information. Merchant’s bank and financial statements, copies of which have been furnished
    to Purchaser, and future statements which may be furnished hereafter pursuant to this Agreement or upon Purchaser’s
    request, fairly represent the financial condition of Merchant as of the dates such statements are issued, and prior to execution
    of the Agreement there have been no material adverse changes, financial or otherwise, in such condition, operation or ownership
    of Merchant. Merchant has a continuing, affirmative obligation to advise Purchaser of any material adverse change in its financial
    condition, operation or ownership. Purchaser may request statements at any time during the term of this Agreement and Merchant
    shall provide them to Purchaser within Five (5) Business Days. Merchant’s failure to do so is a material breach of this
    Agreement.
	 	d.	Governmental
    Approvals. Merchant is in compliance and, during the term of this Agreement, shall be in compliance with all laws
    and has valid permits, authorizations and licenses to own, operate and lease its properties and to conduct the business in
    which it is presently engaged.
	 	e.	Good
    Standing. Merchant is a corporation/limited liability company/limited partnership/other type of entity that is in
    good standing and duly incorporated or otherwise organized and validly existing under the laws of its jurisdiction of incorporation
    or organization and has full power and authority necessary to carry its business as it is now being conducted.
	 	f.	Authorization.
    Merchant has all requisite power to execute, deliver and perform this Agreement and consummate the transactions contemplated
    hereunder; entering into this Agreement will not result in breach or violation of, or default under, any agreement or instrument
    by which Merchant is bound or any statute, rule, regulation, order or other law to which Merchant is subject, nor require
    the obtaining of any consent, approval, permit or license from any governmental authority having jurisdiction over Merchant.
    All organizational and other proceedings required to be taken by Merchant to authorize the execution, delivery and performance
    of this Agreement have been taken. The person signing this Agreement on behalf of Merchant has full power and authority to
    bind Merchant to perform its obligations under this Agreement.
	 	g.	Accounting
    Records and Tax Returns. Merchant will treat receipt of the Purchase Price and delivery of the Sold Future Receipts
    in a manner evidencing sale of its future receipts in its accounting records and tax returns and further agrees that Purchaser
    is entitled to audit Merchant’s accounting records upon reasonable Notice in order to verify compliance. Merchant hereby
    waives any rights of privacy, confidentiality or taxpayer privilege in any litigation or arbitration arising out of this Agreement
    in which Merchant asserts that this transaction is anything other than a sale of future receipts.

 

    	 	 	 

     

    

 

	 	h.	Taxes;
    Workers Compensation Insurance. Merchant will promptly pay, when due, all taxes, including without limitation, income,
    employment, sales and use taxes, imposed upon Merchant’s business by law, and will maintain workers compensation insurance
    required by applicable governmental authorities.
	 	i.	Business
    Insurance. Merchant will maintain general liability and business-interruption insurance naming Purchaser as loss payee
    and additional insured in the amounts and against risks as are satisfactory to Purchaser and shall provide Purchaser proof
    of such insurance upon request.
	 	j.	Electronic
    Check Processing Agreement. Merchant shall not change its processor, add terminals, change its financial institution
    or bank account(s) or take any other action that could have any adverse effect upon Merchant’s obligations or impede
    Purchaser’s rights under this Agreement, without Purchaser’s prior written consent.
	 	k.	No
    Diversion of Future Receipts. Merchant shall not allow any event to occur that would cause a diversion of any portion
    of Merchant’s Future Receipts from the Approved Bank Account without first obtaining Purchaser’s approval of such
    diversion.
	 	l.	Change
    of Name or Location. Merchant shall not conduct Merchant’s businesses under any name other than as disclosed
    to the Processor and Purchaser and will not change any of its places of business without first obtaining Purchaser’s
    written consent.
	 	m.	Prohibited
    Business Transactions: Merchant shall not: (i) transfer or sell all or substantially all of its assets without first
    obtaining Purchaser’s consent; or (ii) make or send notice of its intended bulk sale or transfer.
	 	n.	No
    Closing of Business. Merchant will not sell, dispose, transfer or otherwise convey all or substantially all of its
    business or assets without first: (i) obtaining the express written consent of Purchaser, and (ii) providing Purchaser with
    a written agreement of a purchaser or transferee of Merchant’s business or assets assuming all of Merchant’s obligations
    under this Agreement pursuant to documentation satisfactory to Purchaser. Merchant represents that it has no current plans
    to close its business either temporarily (for renovations, repairs or any other purpose), or permanently. Merchant agrees
    that until Purchaser shall have received all of the Sold Amount of Future Receipts, Merchant will not voluntarily close its
    business on a permanent or temporarily basis for renovations, repairs, or any other purposes. Notwithstanding the foregoing,
    Merchant shall have the right to close its business temporarily if such closing is necessitated by a requirement to conduct
    renovations or repairs imposed upon Merchant’s business by legal authorities having jurisdiction over Merchant’s
    business (such as from a health department or fire department) or if such closing is necessitated by circumstances outside
    Merchant’s reasonable control. Prior to any such temporary closure of its business, Merchant shall provide Purchaser
    ten (10) Business Days advance notice.
	 	o.	No
    Pending Bankruptcy. As of the date of Merchant’s execution of this Agreement, Merchant is not insolvent, has
    not filed, and does not contemplate filing, any petition for bankruptcy protection under Title 11 of the United States Code
    and there has been no involuntary bankruptcy petition brought or pending against Merchant. Merchant represents that it has
    not consulted with a bankruptcy attorney on the issue of filing bankruptcy within six months immediately preceding the date
    of this Agreement.
	 	p.	Estoppel
    Certificate. Merchant will at any time, and from time to time, upon at least one (1) day’s prior notice from
    Purchaser to Merchant, execute, acknowledge and deliver to Purchaser and/or to any other person or entity specified by Purchaser
    in its notice, a statement certifying that this Agreement is unmodified and in full force and effect (or, if there have been
    modifications, that the same is in full force and effect as modified and stating the modification(s) and stating the date(s)
    on which the Sold Amount of Future Receipts or any portion thereof has been delivered.
	 	q.	Working
    Capital Funding. Merchant shall not further encumber the Future Receipts, without first obtaining written consent
    of Purchaser.
	 	r.	Unencumbered
    Future Receipts. Merchant has and will continue to have good, complete and marketable title to all Future Receipts,
    free and clear of any and all liabilities, liens, claims, changes, restrictions, conditions, options, rights, mortgages, security
    interests, equities, pledges and encumbrances of any kind or nature whatsoever or any other rights or interests other than
    by virtue or entering into this Agreement.
	 	s.	Business
    Purpose. Merchant is entering into this Agreement solely for business purposes and not as a consumer for personal,
    family or household purposes.
	 	t.	No
    Default Under Contracts with Third Parties. Merchant’s execution of and/or performance of its obligations under
    this Agreement will not cause or create an event of default by Merchant under any contract, which Merchant is or may become
    a party to.
	 	u.	Right
    of Access. In order to ensure Merchant’s compliance with the terms of this Agreement, Merchant hereby grants
    Purchaser the right to enter, without notice, the premises of Merchant’s business for the purpose of inspecting and
    checking Seller’s transaction processing terminals to ensure the terminals are properly programmed to submit and or
    batch Merchant’s daily receipts to the Processor and to ensure that Merchant has not violated any other provision of
    this Agreement. Furthermore, Merchant hereby grants Purchaser and its employees and consultants access to Merchant’s
    employees and records and all other items of property located at the Merchant’s place of business during the term of
    this Agreement. Merchant hereby agrees to provide Purchaser, upon request, all and any information concerning Merchant’s
    business operations, banking relationships, names and contact information of Merchant’s suppliers, vendors and landlord(s),
    to allow Purchaser to interview any of those parties.

 

    	 	 	 

     

    

 

	 	v.	Phone
    Recordings and Contact. Merchant agrees that any call between Merchant and Purchaser and its officer, managers, employees
    and agents may be recorded and/or monitored. Furthermore, Merchant acknowledges and agrees that: (i) it has an established
    business relationship with Purchaser, its managers, employees and agents (collectively, the “Purchaser Parties”)
    and that Merchant may be contacted by any of the Purchaser Parties from time-to-time regarding Merchant’s performance
    of its obligations under this Agreement or regarding other business transactions; (ii) it will not claim that such communications
    and contacts are unsolicited or inconvenient; and (iii) that any such contact may be made by any of the Purchaser Parties
    in person or at any phone number (including mobile phone number), email addresses, or facsimile number belonging to Merchant’s
    office, or its owners, managers, officers, or employees.
	 	w.	Knowledge
    and Experience of Decision Makers. The persons authorized to make management and financial decisions on behalf Merchant
    with respect to this Agreement have such knowledge, experience and skill in financial and business matters in general and
    with respect to transactions of a nature similar to the one contemplated by this Agreement so as to be capable of evaluating
    the merits and risks of, and making an informed business decision with regard to, Merchant entering into this Agreement.
	 	x.	Merchant’s
    Due Diligence. The person authorized to sign this Agreement on behalf of Merchant: (i) has received all information
    that such person deemed necessary to make an informed decision with respect to a transaction contemplated by this Agreement;
    and (ii) has had unrestricted opportunity to make such investigation as such person desired pertaining to the transaction
    contemplated by this Agreement and verify any such information furnished to him or her by Purchaser.
	 	y.	Arm-Length
    Transaction. The person signing this Agreement of behalf of Merchant: (a) has read and fully understands content of
    this Agreement; (b) has consulted to the extent he/she wished with Merchant’s own counsel in connection with the entering
    into this Agreement; (c) he or she has made sufficient investigation and inquiry to determine whether this Agreement is fair
    and reasonable to Merchant, and whether this Agreement adequately reflects his or her understanding of its terms.
	 	z.	No Reliance on Oral Representations. This Agreement contains the entire agreement between Merchant and Purchaser with respect to the subject matter of this Agreement and supersedes each course of conduct previously pursued or acquiesced in, and each oral agreement and representation previously made, by Purchaser or any of the Purchaser Parties with respect thereto (if any), whether or not relied or acted upon. No course of performance or other conduct subsequently pursued or acquiesced in, and no oral agreement or representation subsequently made, by the Purchaser Parties, whether or not relied or acted upon, and no usage of trade, whether or not relied or acted upon, shall amend this Agreement or impair or otherwise affect Merchant’s obligations pursuant to this Agreement or any rights and remedies of the parties to this Agreement.

 

		VI.	PLEDGE
                                         OF SECURITY:

 

18.
Acknowledgment of Security Interest and Security Agreement. The Future Receipts sold by Merchant to Purchaser pursuant
to this Agreement are “accounts” or “payment intangibles” as those terms are defined in the Uniform Commercial
Code as in effect in the state in which the Merchant is located (the “UCC”) and such sale shall constitute and shall
be construed and treated for all purposes as a true and complete sale, conveying good title to the Future Receipts free and clear
of any liens and encumbrances, from Merchant to Purchaser. To the extent the Future Receipts are “accounts” or “payment
intangibles” then (i) the sale of the Future Receipts creates a security interest as defined in the UCC; (ii) this Agreement
constitutes a “security agreement” under the UCC; and (iii) Purchaser has all the rights of a secured party under
the UCC with respect to such Future Receipts. Merchant further agrees that, with or without an Event of Default, Purchaser may
notify account debtors, or other persons obligated on the Future Receipts, on holding the Future Receipts of Merchant’s
sale of the Future Receipts and may instruct them to make payment or otherwise render performance to or for the benefit of Purchaser.

 

19.
Financing Statements. Merchant authorizes Purchaser to file one or more UCC-1 forms consistent with the UCC to give
notice that the Sold Amount of Future Receipts is the sole property of Purchaser. The UCC filing may state that such sale is intended
to be a sale and not an assignment for security and may state that Merchant is prohibited from obtaining any financing that impairs
the value of the Sold Amount of Future Receipts or Purchaser’s right to collect same. Merchant authorizes Purchaser to debit
the Approved Bank Account for all costs incurred by Purchaser associated with the filing, amendment or termination of any UCC
filings.

 

20.
Security. As security for the prompt and complete performance of any and all liabilities, obligations, covenants
or agreements of Merchant under this Agreement, now or hereafter arising from, out of or relating to this Agreement, whether direct,
indirect, contingent or otherwise (hereinafter referred to collectively as the “Merchant Obligations”), Merchant
hereby pledges, assigns and hypothecates to Purchaser and grants to Purchaser a continuing, perfected and first priority lien
upon and security interest in, to and under all of Merchant’s right, title and interest in and to the following (collectively,
the “Collateral”), whether now existing or hereafter from time to time acquired:

 

	 	a.	all
    accounts, including without limitation, all deposit accounts, accounts-receivable, and other receivables, chattel paper, documents,
    equipment, general intangibles, instruments, and inventory, as those terms are defined by Article 9 of the Uniform Commercial
    Code (the “UCC”), now or hereafter owned or acquired by Merchant; and
	 	b.	all
    Merchant’s proceeds, as that term is defined by Article 9 of the UCC.

 

    	 	 	 

     

    

 

21.
Termination of Pledge. Upon the performance by Merchant in full of the Merchant Obligations, the security interest
in the Collateral pursuant to this Pledge shall automatically terminate without any further act of either party being required,
and all rights to the Collateral shall revert to Merchant. Upon any such termination, Purchaser will execute, acknowledge (where
applicable) and deliver such satisfactions, releases and termination statements, as Merchant shall reasonably request.

 

22.
Representations with Respect to Collateral. Merchant hereby represents and warrants to Purchaser that: the execution,
delivery and performance by Merchant of this Pledge, and the remedies in respect of the Collateral under this Pledge (i) have
been duly authorized; (ii) do not require the approval of any governmental authority or other third party or require any action
of, or filing with, any governmental authority or other third party to authorize same (other than the filing of the UCC 1’s);
(iii) do not and shall not (A) violate or result in the breach of any provision of law or regulation, any order or decree of any
court or other governmental authority, (B) violate, result in the breach of or constitute a default under or conflict with any
indenture, mortgage, deed of trust, agreement or any other instrument to which Merchant is a party or by which any of Merchant’s
assets (including, without limitation, the Collateral) are bound.

 

23.
Further Assurances. Upon the request of Purchaser, Merchant, at Merchant’s sole cost and expense, shall execute
and deliver all such further UCC-1s, continuation statements, assurances and assignments of the Collateral and consents with respect
to the pledge of the Collateral and the execution of this Pledge, and shall execute and deliver such further instruments, agreements
and other documents and do such further acts and things, as Purchaser may request in order to more fully effectuate the purposes
of this Pledge and the assignment of the Collateral and obtain the full benefits of this Pledge and the rights and powers herein
created.

 

24.
Attorney-in-fact. Merchant hereby authorizes Purchaser at any time to take any action and to execute any instrument,
including without limitation to file one or more financing statements and/or continuation statements, to evidence and perfect
the security interest created hereby and irrevocably appoints Purchaser as its true and lawful attorney-in-fact, which power of
attorney shall be coupled with an interest, with full authority in the place and stead of Merchant and in the name of Merchant
or otherwise, from time to time, in Purchaser’s sole and absolute discretion, including without limitation (a) for the purpose
of executing such statements in the name of and on behalf of Merchant, and thereafter filing any such financing and/or continuation
statements and (b) to receive, endorse and collect all instruments made payable to Merchant.

 

VII.
EVENTS OF DEFAULT AND REMEDIES:

 

25.
Events of Default by Merchant. The occurrence of any of the following events shall constitute an “Event
of Default” by Merchant:

 

	 	a.	Merchant
    shall violate any term, condition or covenant in this Agreement for any reason whatsoever other than as the result of Merchant’s
    business ceases its operations exclusively due to any of the Valid Excuses.
	 	b.	Any
    representation or warranty by Merchant or Officer made in this Agreement shall prove to have been incorrect, false or misleading
    in any material respect when made.
	 	c.	Merchant
    shall default under any of the terms, covenants and conditions of any other agreement with Purchaser (if any).
	 	d.	Merchant
    uses multiple depository accounts without obtaining prior written consent of Purchaser in each instance.
	 	e.	Merchant
    fails to deposit any portion of its Future Receipts into the Approved Bank Account;
	 	f.	Merchant
    changes the Approved Bank Account or Approved Processor without obtaining prior written consent of Purchaser in each instance;
	 	g.	Merchant
    interferes with Purchaser’s collection of Daily Deliveries (or Adjusted Daily Deliveries, as the case may be.)
	 	h.	Merchant
    fails to provide timely notice to Purchaser such that in any given calendar month there are four or more ACH transactions
    attempted by Purchaser that are rejected by Merchant’s bank.

 

26.
Events of Default by Merchant. The occurrence of any of the following events shall constitute an Event of Default
by the Merchant:

 

	 	a.	Merchant
    shall violate any term, condition or covenant in this Agreement applicable to the Merchant.
	 	b.	Any
    representation or warranty by the Merchant made in this Agreement shall prove to have been incorrect, false or misleading
    in any material respect when made.

 

27.
Default Under this Agreement. In case any Event of Default occurs and is not waived by Purchaser, Purchaser may
declare Merchant and/or Officer in default under this Agreement by sending a default notice to Merchant and/or Officer, as the
case may be.

 

28.
Merchant’s Obligations Upon Default. Upon receipt of such default notice, Merchant shall immediately deliver
to Purchaser the portion of the Sold Amount of Future Receipts that remain undelivered at the time of such default notice together
with all other Fees (as such term is defined below) that Merchant may owe to Purchaser pursuant to this Agreement (the sum of
the then undelivered portion of the Sold Amount of Future Receipts and the Fees hereinafter shall referred to the “Adjusted
Sold Amount of Future Receipts.”) In addition, Merchant shall also pay to Purchaser, as additional damages, any reasonable
expenses incurred by Purchaser in connection with recovering the monies due to Purchaser from Merchant pursuant to this Agreement,
including without limitation the costs of retaining collection firms and reasonable attorneys’ fees and disbursements (collectively,
“Reasonable Damages”). The parties agree that Purchaser shall not be required to itemize or prove its Reasonable
Damages and that the fair value of the Reasonable Damages shall be calculated fifteen percent (15%) of the Adjusted Sold Amount
of Future Receipts at the time of default

 

    	 	 	 

    	 

    

 

29.
Remedies Upon Default. Upon occurrence of an Event of Default, Purchaser may immediately proceed to protect and
enforce its rights under this Agreement against Merchant by:

 

	 	a.	Enforcing
    its rights as a secured creditor under the Uniform Commercial Code including, without limitation, notifying any account debtor(s)
    of Merchant of Purchaser’s security interest;
	 	b.	Filing
    the affidavit of confession of judgment (the “Affidavit”) executed by the Officer(s), individually and on Merchant’s
    behalf, in connection with this Agreement in the amount of the undelivered portion of the Sold Amount of Future Receipts,
    plus the Reasonable Damages, enter the judgment with the Clerk of the Court, without notice, and execute thereon;
	 	c.	Notifying
    Merchant’s credit card processor or customers of Merchant’s default under this Agreement and to direct such credit
    card processor all future receipts and receivables to transfer to Purchaser of all or any portion of the amounts received
    by such credit card processor or customer on behalf of Merchant.
	 	d.	Commencing
    a suit in equity or by action at law, or both, whether for the specific performance of any covenant, agreement or other provision
    contained herein, or to enforce the discharge of Merchant’s and Guarantor’s obligations hereunder or any other
    legal or equitable right or remedy including without limitation Purchaser’s rights of a secured party under the UCC.

 

30.
Remedies are not Exclusive. All rights, powers and remedies of Purchaser in connection with this Agreement may be
exercised at any time after the occurrence of any Event of Default, and are cumulative and not exclusive, and shall be in addition
to any other rights, powers or remedies provided to Purchaser by law or equity.

 

31.
Power of Attorney. Each Merchant irrevocably appoints Purchaser and its representatives as their respective agents
and attorneys- in-fact with full authority to take any action or execute any instrument or document to do the following: (A) to
settle all obligations due to Purchaser from any credit card processor and/or account debtor(s) of Merchant; (B) upon occurrence
of an Event of Default under this Agreement, to perform any and all such obligations of Merchant under this Agreement, including
without limitation

 

(i)
to obtain and adjust insurance; (ii) to collect monies due or to become due under or in respect of any of the Collateral;
(iii) to receive, endorse and collect any checks, notes, drafts, instruments, documents or chattel paper in connection with
clause (i) or clause (ii) above; (iv) to sign Merchant’s name on any invoice, bill of lading, or assignment directing
customers or account debtors to make payment directly to Purchaser; and (v) to file any claims or take any action or
institute any proceeding against Merchant and/or Officer which Purchaser may deem necessary for the collection of any portion
of the undelivered Sold Amount of Future Receipts from the Collateral, or otherwise to enforce its rights under this
Agreement.

 

VIII.
ADDITIONAL TERMS:

 

32.
Additional Fees. In addition to all other sums due to Purchaser under this Agreement, Merchant shall pay to Purchaser
(the sum of all such charges, hereinafter, the “Fee”):

 

	 	a.	Merchant
    will pay all Due Diligence & Processing Fees upon entering into this Agreement as reimbursement of Purchaser’s costs
    associated with entering into this Agreement (the cost of due diligence on the Merchant’s business, financial and legal
    due diligence, etc.)
	 	b.	$35
    in each and every instance when delivery of the Daily Delivery to Purchaser has failed due to the insufficient funds in the
    Merchant’s Approved Account.
	 	c.	$100
    in each and every instance when Merchant blocks Purchaser’s access (or otherwise prevents Purchaser from accessing)
    Merchant’s bank accounts.
	 	d.	$2,500
    in each and every instance when, upon occurrence of an Event of Default, Purchaser shall have agreed to waive Merchant’s
    default.

 

33.
Merchant Deposit Agreement. Merchant shall execute an agreement with Purchaser that would authorize Purchaser to
arrange for electronic fund transfer services and/or “ACH” payments of Daily Delivery from the Approved Bank Account.
Merchant shall provide Purchaser and/or its authorized agent with all information, authorizations and passwords necessary to verify
Merchant’s receivables, receipts and deposits into the Approved Bank Account. Merchant shall authorize Purchaser and/or
it’s agent to deduct daily the amounts of Daily Delivery to Purchaser from settlement amounts which would otherwise be due
to Merchant from electronic check transactions and to pay such amounts to Purchaser by permitting Purchaser to withdraw the Daily
Delivery from such account. The authorization shall be irrevocable.

 

    	 	 	 

    	 

    

 

34.
Financial Condition. Merchant and its Officer(s) authorize Purchaser and its agents to investigate their financial
responsibility and history, and will provide to Purchaser any bank or financial statements, tax returns, etc., as deems necessary
prior to or at any time after execution of this Agreement. A photocopy of this authorization will be deemed as acceptable for
release of financial information. is authorized to update such information and financial profiles from time to time as it deems
appropriate.

 

35.
Transactional History. Merchant shall execute written authorization(s) to their bank(s) to provide Purchaser with
Merchant’s banking and/or credit-card processing history.

 

36.
Indemnification. Merchant hereby does indemnify and hold harmless Approved Processor, its officers, directors and
shareholders against all losses, damages, claims, liabilities and expenses (including reasonable attorney’s fees) incurred
by Approved Processor resulting from (a) claims asserted by Purchaser for monies owed to Purchaser from Merchant and (b) actions
taken by Approved Processor in reliance upon information or instructions provided by Purchaser.

 

37.
No Liability. In no event shall Purchaser be liable for any claims asserted by Merchant or its Officer under any
legal theory for lost profits, lost revenues, lost business opportunities, exemplary, punitive, special, incidental, indirect
or consequential damages, each of which is waived by Merchant and Officer(s).

 

38.
Right to Cancel.

 

	 	I.	Notwithstanding
    anything to the contrary set forth in this Agreement, Purchaser shall have the right to cancel this agreement any time prior
    to its delivery of the Purchase Price to Merchant and, upon such cancellation, this Agreement shall become null and void and
    the parties shall have no obligation to, or rights against, each other, except that all sums delivered by Merchant to Purchaser
    on account of entering into this Agreement shall be promptly returned to Merchant.
	 	II.	Notwithstanding
    anything to the contrary set forth in this Agreement, in the event Merchant has not been in default under this Agreement,
    Merchant shall have the right to cancel this Agreement any time until the midnight of the fifth (5th) Business Day following
    the date of its receipt of the Purchase Price by notifying Purchaser of such cancellation by notice sent in accordance with
    this Agreement. Upon timely delivering such cancellation notice to Purchaser, and further provided that Merchant has otherwise
    complied with the provisions of this Agreement, Merchant shall refund the entire amount of the Purchase Price back to Purchaser
    within five (5) Business Days following the date of Merchant’s receipt of the Purchase Price. Upon such refund of the
    Purchase Price back to Purchaser, this Agreement shall become null and void and the parties shall have no remaining obligations
    to or rights against each other except that Purchaser shall have the right to keep, as fair and adequate compensation for
    its costs of entering into this Agreement with Merchant, the entire amount of Daily Deliveries as well as the origination
    fee (as set forth above) received by Purchaser prior to the date when this Agreement is terminated.

 

IX.
GUARANTY OF PERFORMANCE OF MERCHANT’S OBLIGATIONS:

 

39.
Merchant Representations. Merchant represents and warrants to Purchaser that:

 

	 	a.	Officer,
    or manager of Merchant and will directly benefit from Purchaser and Merchant entering into the Agreement.
	 	b.	It
    understands and acknowledges that Purchaser is not willing to enter into the Agreement unless Merchant irrevocably, absolutely
    and unconditionally guarantees prompt and complete performance of any and all liabilities, obligations, covenants or agreements
    of Merchant under this Agreement, now or hereafter arising from, out of or relating to this Agreement, whether direct, indirect,
    contingent or otherwise (hereinafter referred to collectively as the “Merchant Obligations”).

 

40.
Guaranty of Merchant’s Obligations. Merchant does hereby irrevocably, absolutely and unconditionally guarantees
to Purchaser prompt, full, faithful and complete performance and observance of all of Merchant’s Obligations; Merchant unconditionally
covenants to Purchaser that if default or breach shall at any time be made by Merchant in the Merchant’s Obligations, Merchant
shall or perform (or cause to be performed) the Merchant’s Obligations and pay all damages and other amounts stipulated
in this Agreement with respect to the non-performance of the Merchant’s Obligations, or any of them.

 

41.
Merchants’s Other Agreements. Merchant will not dispose, convey, sell or otherwise transfer, or cause Merchant
to dispose, convey, sell or otherwise transfer, any material business assets of Merchant without the prior written consent of
Purchaser, which consent may be withheld for any reason, until Purchaser’s receipt of the entire Sold Amount of Future Receipts.
Merchant shall pay to Purchaser upon demand all expenses (including, without limitation, reasonable attorneys’ fees and
disbursements) incurred as the result of, or incidental to, or relating to, the enforcement or protection of Purchaser’s
rights against Merchant under the Agreement.. The obligation of the Merchant shall be unconditional and absolute, regardless of
the unenforceability of any provision of any agreement between Merchant and Purchaser, or the existence of any defense, setoff
or counterclaim, which Merchant may assert. Purchaser is hereby authorized, without notice or demand and without affecting the
liability of Merchant hereunder, to at any time renew or extend Merchant’s obligations under the Agreement or otherwise
modify, amend or change the terms of the Agreement.

 

    	 	 	 

    	 

    

 

42.
Waiver; Remedies. No failure on the part of Purchaser to exercise, and no delay in exercising, any right under this
Guaranty shall operate as a waiver, nor shall any single or partial exercise of any right under this Guaranty preclude any other
or further exercise of any other right. The remedies provided in this Guaranty are cumulative and not exclusive of any remedies
provided by law or equity. In the event that Merchant fails to perform any obligation under the Agreement, Purchaser may enforce
its rights under this Guaranty without first seeking to obtain performance for such default from Merchant.

 

43.
Acknowledgment of Purchase. Officer acknowledges and agrees that the Purchase Price paid by Purchaser to Merchant
in exchange for the Sold Amount of Future Receipts is a payment of an adequate consideration and is not intended to be treated
as a loan or financial accommodation from Purchaser to Merchant. Officer specifically acknowledges Purchaser is not a lender,
bank or credit card processor, and that Purchaser has not offered any loans to Merchant, and Officer waives any claims or defenses
of usury in any action arising out of this Agreement. Officer acknowledges the Purchase Price paid to Merchant is good and valuable
consideration for the sale of the Sold Amount of Future Receipts.

 

44.
Severability. If for any reason any court of competent jurisdiction finds any provisions of this Agreement applicable
to the Merchant to be void or voidable, the parties agree that the court may reform such provision(s) to render the provision(s)
enforceable ensuring that the restrictions and prohibitions contained in those provisions shall be effective to the fullest extent
allowed under applicable law.

 

45.
Opportunity for Attorney Review. Merchant represents that he/she has carefully read this Agreement and has, or had
an opportunity to, consult with his or her attorney. Merchant understands the contents of this Agreement, signs it as his or her
free act and deed, and agrees to be bound by the provisions hereof.

 

X.
MISCELLANEOUS:

 

47.
Modifications; Agreements. No modification, amendment, waiver or consent of any provision of this Agreement shall
be effective unless the same shall be in writing and signed by all parties.

 

48.
Assignment. Purchaser may assign, transfer or sell its rights or delegate its duties hereunder, either in whole
or in part without prior notice to the Merchant or the Officer. Neither Merchant nor Officer shall have the right to assign their
respective rights or obligations under this Agreement without first obtaining Purchaser’s written consent.

 

49.
Notices. All notices, requests, consent, demands and other communications hereunder shall be delivered by certified
mail, return receipt requested, to the respective parties to this Agreement at the addresses set forth in this Agreement and shall
become effective as of the date of receipt or declined receipt.

 

50.
Waiver Remedies. No failure on the part of any party to exercise, and no delay in exercising, any right under this
Agreement, shall operate as a waiver thereof, nor shall any single or partial exercise of any right under this Agreement preclude
any other or further exercise thereof or the exercise of any other right. The remedies provided hereunder are cumulative and not
exclusive of any remedies provided by law or equity.

 

51.
Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns.

 

52.
Governing Law, Venue and Jurisdiction. This Agreement shall be governed by and construed exclusively in accordance
with the laws of the State of New York, without regards to any applicable principles of conflicts of law. Any lawsuit, action
or proceeding arising out of or in connection with this Agreement shall be instituted exclusively in any court sitting in New
York State, (the “Acceptable Forums”). Each party signing this Agreement agrees that the Acceptable Forums
are convenient, and irrevocably submits to the jurisdiction of the Acceptable Forums and waives any and all objections to inconvenience
of the jurisdiction or venue. Should a proceeding be initiated in any other forum, the parties waive any right to oppose any motion
or application made by either party to transfer such proceeding to an Acceptable Forum.

 

53.
Survival of Representation, etc. All representations, warranties and covenants herein shall survive the execution
and delivery of this Agreement and shall continue in full force until all obligations under this Agreement shall have been complied
with and satisfied in full and this Agreement shall have terminated.

 

    	 	 	 

    	 

    

 

54.
Severability. In case any of the provisions in this Agreement is found to be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of any other provision contained herein shall not in any way be affected
or impaired.

 

55.
Entire Agreement. Any provision hereof prohibited by law shall be ineffective only to the extent of such prohibition
without invalidating the remaining provisions hereof. This Agreement and all amendments, riders and exhibits thereon (if any)
embody the entire agreement between Merchant, Officer and Purchaser and supersede all prior agreements and understandings relating
to the subject matter hereof.

 

56.
JURY TRIAL WAIVER. THE PARTIES HERETO WAIVE TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER
ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE TRANSACTIONS OF WHICH THIS AGREEMENT IS A PART OR THE ENFORCEMENT HEREOF.
THE PARTIES HERETO ACKNOWLEDGE THAT EACH MAKES THIS WAIVER KNOWINGLY, WILLINGLY AND VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER
EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH THEIR ATTORNEYS.

 

57.
CLASS ACTION WAIVER. THE PARTIES HERETO WAIVE ANY RIGHT TO ASSERT ANY CLAIMS AGAINST ANY OTHER PARTY TO THIS AGREEMENT,
AS A REPRESENTATIVE OR MEMBER IN ANY CLASS OR REPRESENTATIVE ACTION, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW AGAINST PUBLIC
POLICY. TO THE EXTENT ANY PARTY IS PERMITTED BY LAW OR COURT OF LAW TO PROCEED WITH A CLASS OR REPRESENTATIVE ACTION AGAINST THE
OTHER, THE PARTIES HEREBY AGREE THAT: (1) THE PREVAILING PARTY SHALL NOT BE ENTITLED TO RECOVER ATTORNEYS’ FEES OR COSTS
ASSOCIATED WITH PURSUING THE CLASS OR REPRESENTATIVE ACTION (NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT TO THE CONTRARY);
AND (2) THE PARTY WHO INITIATES OR PARTICIPATES AS A MEMBER OF THE CLASS WILL NOT SUBMIT A CLAIM OR OTHERWISE PARTICIPATE IN ANY
RECOVERY SECURED THROUGH THE CLASS OR REPRESENTATIVE ACTION.

 

58.
ARBITRATION. THE PARTIES ACKNOWLEDGE AND AGREE THAT EACH PURCHASER, MERCHANT, AND ANY Officer SHALL HAVE THE RIGHT TO REQUEST
THAT ALL DISPUTES AND CLAIMS ARISING OUT OF OR RELATING TO THE CONSTRUCTION AND INTERPRETATION OF THIS AGREEMENT ARE SUBMITTED
TO ARBITRATION. THE PARTY SEEKING ARBITRATION SHALL FIRST SEND A WRITTEN NOTICE OF INTENT TO ARBITRATE TO ALL OTHER PARTIES, BY
CERTIFIED MAIL. UPON SENDING OF SUCH NOTICE, A PARTY REQUESTING ARBITRATION MAY COMMENCE AN ARBITRATION PROCEEDING WITH THE AMERICAN
ARBITRATION ASSOCIATION (“AAA”) OR NATIONAL ARBITRATION FORUM (“NAF”). EACH MERCHANT, Officer AND PURCHASER
SHALL PAY THEIR OWN ATTORNEYS’ FEES INCURRED DURING THE ARBITRATION PROCEEDING. THE PARTY INITIATING THE ARBITRATION SHALL
PAY ANY ARBITRATION FILING FEE, ADMINISTRATION FEE AND ARBITRATOR’S FEE.

 

59.
RIGHT TO OPT OUT OF ARBITRATION. SELLER AND Officer(S) MAY OPT OUT OF THE ARBITRATION PROVISION ABOVE. TO OPT OUT OF THE
ARBITRATION CLAUSE, SELLER AND EACH Officer MUST SEND BUYER A NOTICE THAT THE SELLER AND EACH Officer DOES NOT WANT THE CLAUSE
TO APPLY TO THIS AGREEMENT. FOR ANY OPT OUT TO BE EFFECTIVE, SELLER AND EACH Officer MUST SEND AN OPT OUT NOTICE TO THE FOLLOWING
ADDRESS BY REGISTERED MAIL, WITHIN 14 DAYS AFTER THE DATE OF THIS AGREEMENT: Libertas Funding LLC. – ARBITRATION OPT OUT,
382 Greenwich Avenue Suite 2 Second Floor Greenwich CT 06830, ATTENTION: [Customer Service].

 

60.
Captions. The captions in this Agreement are inserted for convenience of reference only and in no way define, describe
or limit the scope or intent of this contract or any of the provisions hereof.

 

61.
Counterparts and Facsimile Signatures. This Agreement can be signed in one or more counterparts, each of which shall
constitute an original and all of which when take together shall constitute one and the same agreement. Signatures delivered via
facsimile and/or via Portable Digital Format (PDF) shall be deemed acceptable for all purposes, including without limitation the
evidentially purposes.

 

The
balance of this page is left intentionally blank

 

    	 	 	 

    	 

    

 

	MERCHANT:
    SHARING SERVICES, INC., Four Oceans Holdings, Inc, Elepreneur, LLC, Elevacity Global LLC, Elenergy, LLC, Imagine University,
    LLC, Legacy Direct Global, LLC, Total Travel Media, Inc 	 	Officer
    #1: 
	 	 	 	 	 
	By	 	 	 	 
	Name:	John
    Thatch	 	Name:	John
    Thatch
	Title:	CEO	 	SSN:	 
	FEIN:	 	 	 	 
	 	 	 	 	 
	Libertas
    Funding LLC.	 	Officer
    #2:
	 	 	 
	By:	 	 	 	 
	Name:	Randy
    Saluck	 	Name:	Frank
    Walters 
	Title:	CEO,
    Libertas Funding LLC.	 	SSN:Exhibit 4.1 

 

Pluristem Therapeutics Inc.

 

and

 

American Stock Transfer & Trust Company, LLC, as

Warrant Agent

 

Warrant Agent Agreement

 

Dated as of April 4, 2019

 

WARRANT AGENT AGREEMENT

 

WARRANT AGENT AGREEMENT, dated as of April 4, 2019 (“Agreement”), between Pluristem Therapeutics Inc., a Nevada corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, a New York limited liability trust company (the “Warrant Agent”).

 

W I T N E S S E T H

 

WHEREAS, pursuant to a registered offering by the Company of the Company’s common stock, par value $0.00001 per share (the “Common Stock”), together with warrants (the “Warrants”) to purchase shares of Common Stock, pursuant to an effective registration statement on Form S-3 (File No. 333-218916) (the “Registration Statement”), the Company wishes to issue Warrants in book entry form entitling the respective holders of the Warrants (the “Holders”, which term shall include a Holder’s transferees, successors and assigns and “Holder” shall include, if the Warrants are held in “street name”, a Participant (as defined below) or a designee appointed by such Participant) to purchase an aggregate of up to 28,571,429 shares of Common Stock upon the terms and subject to the conditions hereinafter set forth (the “Offering”);

 

WHEREAS, the shares of Common Stock and Warrants to be issued in connection with the Offering shall be immediately separable and will be issued separately, but will be purchased together in the Offering; and

 

WHEREAS, the Company wishes the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance, registration, transfer, exchange, exercise and replacement of the Warrants and, in the Warrant Agent’s capacity as the Company’s transfer agent, the delivery of the Warrant Shares.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

 

Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated:

 

(a) “Affiliate” has the meaning ascribed to it in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(b) “Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which the Nasdaq Stock Market is authorized or required by law or other governmental action to close.

 

(c) “Close of Business” on any given date means 5:00 p.m., New York City time, on such date; provided, however, that if such date is not a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business Day.

 

(e) “Person” means an individual, corporation, association, partnership, limited liability company, joint venture, trust, unincorporated organization, government or political subdivision thereof or governmental agency or other entity.

 

(f) “Warrant Certificate” means a certificate in substantially the form attached as Exhibit 1 hereto, representing such number of Warrant Shares as is indicated therein.

 

(g) “Warrant Shares” means the shares of Common Stock underlying the Warrants and issuable upon exercise of the Warrants.

 

All other capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Warrant Certificate.

 

Section 2. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the terms and conditions hereof, and the Warrant Agent hereby accepts such appointment. The Company may from time to time appoint a Co-Warrant Agent as it may, in its sole discretion, deem necessary or desirable. The Warrant Agent shall have no duty to supervise, and will in no event be liable for the acts or omissions of, any co-Warrant Agent.

 

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  Section 3. Global Warrants.

 

(a) The Warrants shall be issuable in book entry form (the “Global Warrants”). All of the Warrants shall initially be represented by one or more Global Warrants deposited with the Warrant Agent and registered in the name of Cede & Co., a nominee of The Depository Trust Company (the “Depositary”), or as otherwise directed by the Depositary. Ownership of beneficial interests in the Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) the Depositary or its nominee for each Global Warrant or (ii) institutions that have accounts with the Depositary (such institution, with respect to a Warrant in its account, a “Participant”).  For purposes of Regulation SHO, a holder whose interest in a Global Warrant is a beneficial interest in certificate(s) representing such Warrant held in book-entry form through the Depositary shall be deemed to have exercised its interest in such Warrant upon instructing its broker that is a Participant to exercise its interest in such Warrant, provided that in each such case payment of the applicable aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period, in each case following such instruction.

 

(b) If the Depositary subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant Agent regarding other arrangements for book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to deliver to the Warrant Agent for cancellation each Global Warrant, and the Company shall instruct the Warrant Agent to deliver to each Holder a Warrant Certificate.

 

(c) A Holder has the right to elect at any time or from time to time a Warrant Exchange (as defined below) pursuant to a Warrant Certificate Request Notice (as defined below). Upon written notice by a Holder to the Warrant Agent for the exchange of some or all of such Holder’s Global Warrants for a Warrant Certificate evidencing the same number of Warrants, which request shall be in the form attached hereto as Annex A (a “Warrant Certificate Request Notice” and the date of delivery of such Warrant Certificate Request Notice by the Holder, the “Warrant Certificate Request Notice Date” and the deemed surrender upon delivery by the Holder of a number of Global Warrants for the same number of Warrants evidenced by a Warrant Certificate, a “Warrant Exchange”), the Warrant Agent shall promptly effect the Warrant Exchange and shall promptly issue and deliver to the Holder a Warrant Certificate for such number of Warrants in the name set forth in the Warrant Certificate Request Notice. Such Warrant Certificate shall be dated the original issue date of the Warrants, shall be manually executed by an authorized signatory of the Company, shall be in the form attached hereto as Exhibit 1, and shall be reasonably acceptable in all respects to such Holder. In connection with a Warrant Exchange, the Company agrees to deliver, or to direct the Warrant Agent to deliver, the Warrant Certificate to the Holder within three (3) Business Days of the Warrant Certificate Request Notice pursuant to the delivery instructions in the Warrant Certificate Request Notice (“Warrant Certificate Delivery Date”).  If the Company fails for any reason to deliver to the Holder the Warrant Certificate subject to the Warrant Certificate Request Notice by the seventh Business Day following the Warrant Certificate Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares evidenced by such Warrant Certificate (based on the VWAP (as defined in the Warrants) of the Common Stock on the Warrant Certificate Request Notice Date), $10 per Business Day for each Business Day after such Warrant Certificate Delivery Date until such Warrant Certificate is delivered or, prior to delivery of such Warrant Certificate, the Holder rescinds such Warrant Exchange. The Company covenants and agrees that, upon the date of delivery of the Warrant Certificate Request Notice, the Holder shall be deemed to be the holder of the Warrant Certificate and, notwithstanding anything to the contrary set forth herein, the Warrant Certificate shall be deemed for all purposes to contain all of the terms and conditions of the Warrants evidenced by such Warrant Certificate and the terms of this Agreement.

Section 4. Form of Warrant Certificates. The Warrant Certificate, together with the form of election to purchase Common Stock (“Notice of Exercise”) and the form of assignment to be printed on the reverse thereof, shall be in the form of Exhibit 1 hereto.

 

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Section 5. Countersignature and Registration. The Warrant Certificates shall be executed on behalf of the Company by a Co-Chief Executive Officer or Chief Financial Officer, either manually or by facsimile signature, and, if applicable, have affixed thereto the Company’s seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Warrant Certificates shall be countersigned by the Warrant Agent either manually or by facsimile signature and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Warrant Certificates shall cease to be such officer of the Company before countersignature by the Warrant Agent and issuance and delivery by the Company, such Warrant Certificates, nevertheless, may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person who signed such Warrant Certificate had not ceased to be such officer of the Company; and any Warrant Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be a proper officer of the Company to sign such Warrant Certificate, although at the date of the execution of this Agreement any such person was not such an officer.

 

The Warrant Agent will keep or cause to be kept, at one of its offices, or at the office of one of its agents, books for registration and transfer of the Warrant Certificates issued hereunder. Such books shall show the names and addresses of the respective Holders of the Warrant Certificates, the number of warrants evidenced on the face of each of such Warrant Certificate and the date of each of such Warrant Certificate. The Warrant Agent will create a special account for the issuance of Warrant Certificates.

 

Section 6. Transfer, Split Up, Combination and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates. With respect to the Global Warrant, subject to the provisions of the Warrant Certificate and the last sentence of this first paragraph of Section 6 and subject to applicable law, rules or regulations, or any “stop transfer” instructions the Company may give to the Warrant Agent, at any time after the closing date of the Offering, and at or prior to the Close of Business on the Termination Date, any Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants may be transferred, split up, combined or exchanged for another Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants, entitling the Holder to purchase a like number of shares of Common Stock as the Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants surrendered then entitled such Holder to purchase. Any Holder desiring to transfer, split up, combine or exchange any Warrant Certificate or Global Warrant shall make such request in writing delivered to the Warrant Agent, and shall surrender the Warrant Certificate or Warrant Certificates to be transferred, split up, combined or exchanged at the principal office of the Warrant Agent, provided that no such surrender is applicable to the Holder of a Global Warrant. Any requested transfer of Warrants, whether in book-entry form or certificate form, shall be accompanied by reasonable evidence of authority of the party making such request that may be required by the Warrant Agent. Thereupon the Warrant Agent shall, subject to the last sentence of this first paragraph of Section 6, countersign and deliver to the Person entitled thereto a Warrant Certificate or Warrant Certificates, as the case may be, as so requested. The Company may require payment from the Holder of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Warrant Certificates. The Company shall compensate the Warrant Agent per the fee schedule mutually agreed upon by the parties hereto and provided separately on the date hereof.

 

Upon receipt by the Warrant Agent of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of a Warrant Certificate, which evidence shall include an affidavit of loss, or in the case of mutilated certificates, the certificate or portion thereof remaining, and, in case of loss, theft or destruction, of indemnity in customary form and amount and reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant Agent and cancellation of the Warrant Certificate if mutilated, the Company will make and deliver a new Warrant Certificate of like tenor to the Warrant Agent for delivery to the Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated.

  

Section 7. Exercise of Warrants; Exercise Price; Termination Date.

 

(a) The Warrants shall be exercisable commencing on the Initial Exercise Date. The Warrants shall cease to be exercisable and shall terminate and become void, and all rights thereunder and under this Agreement shall cease, at or prior to the Close of Business on the Termination Date. The Holder of a Warrant may exercise the Warrant in whole or in part in accordance with Section 2 of the Warrant Certificate.  The Company acknowledges that the bank accounts maintained by the Warrant Agent in connection with the services provided under this Agreement will be in its name and that the Warrant Agent may receive investment earnings in connection with the investment at Warrant Agent risk and for its benefit of funds held in those accounts from time to time. Neither the Company nor the Holders will receive interest on any deposits or Exercise Price.

  

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(b) The Warrant Agent shall deposit all funds received by it in payment of the Exercise Price for all Warrants in the account of the Company maintained with the Warrant Agent for such purpose (or to such other account as directed by the Company in writing) and shall advise the Company via telephone or electronic mail at the end of each day on which funds for the exercise of any Warrant are received of the amount so deposited to its account. The Warrant Agent shall promptly confirm such telephonic advice to the Company in writing.

 

(c) In case the Holder of any Warrant Certificate shall exercise fewer than all Warrants evidenced thereby, a new Warrant Certificate evidencing the number of Warrants equivalent to the number of Warrants remaining unexercised may be issued by the Warrant Agent to the Holder of such Warrant Certificate or to his duly authorized assigns in accordance with Section 2(d)(ii) of the Warrant Certificate, subject to the provisions of Section 6 hereof.

 

Section 8. Cancellation and Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Warrant Agent for cancellation or in canceled form, or, if surrendered to the Warrant Agent, shall be canceled by it, and no Warrant Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Warrant Agent for cancellation and retirement, and the Warrant Agent shall so cancel and retire, any other Warrant Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Warrant Agent shall deliver all canceled Warrant Certificates to the Company, or shall, at the written request of the Company, destroy such canceled Warrant Certificates, and in such case shall deliver a certificate of destruction thereof to the Company, subject to any applicable law, rule or regulation requiring the Warrant Agent to retain such canceled certificates.

 

Section 9. Certain Representations; Reservation and Availability of Shares of Common Stock or Cash.

 

(a) This Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery hereof by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, and the Warrants have been duly authorized, executed and issued by the Company and, assuming due authentication thereof by the Warrant Agent pursuant hereto and payment therefor by the Holders as provided in the Registration Statement, constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms and entitled to the benefits hereof; in each case except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

(b) As of the date hereof, and excluding the shares of Common Stock and Warrants to be issued in the Offering, the authorized capital stock of the Company consists of  200,000,000 shares of Common Stock, of which 119,734,663 shares of Common Stock are issued and outstanding, and 28,571,429 shares of Common Stock are reserved for issuance upon exercise of the Warrants. Except as disclosed in the Registration Statement, there are no other outstanding obligations, warrants, options or other rights to subscribe for or purchase from the Company any class of capital stock of the Company.

 

(c) The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Common Stock or its authorized and issued shares of Common Stock held in its treasury, free from preemptive rights, the number of shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants.

 

(d) The Warrant Agent will create a special account for the issuance of Common Stock upon the exercise of Warrants.

 

(e) The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the original issuance or delivery of the Warrant Certificates or certificates evidencing Common Stock upon exercise of the Warrants. The Company shall not, however, be required to pay any tax or governmental charge which may be payable in respect of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance or delivery of certificates for Common Stock in a name other than that of the Holder of the Warrant Certificate evidencing Warrants surrendered for exercise or to issue or deliver any certificate for shares of Common Stock upon the exercise of any Warrants until any such tax or governmental charge shall have been paid (any such tax or governmental charge being payable by the Holder of such Warrant Certificate at the time of surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax or governmental charge is due.

  

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Section 10. Common Stock Record Date. Each Person in whose name any certificate for shares of Common Stock is issued upon the exercise of Warrants shall for all purposes be deemed to have become the holder of record for the Common Stock represented thereby on, and such certificate shall be dated, the date upon which the Notice of Exercise was delivered.

 

Section 11. Adjustment of Exercise Price, Number of Shares of Common Stock or Number of the Company Warrants. The Exercise Price, the number of shares covered by each Warrant and the number of Warrants outstanding are subject to adjustment from time to time as provided in Section 3 of the Warrant Certificate. In the event that at any time, as a result of an adjustment made pursuant to Section 3 of the Warrant Certificate, the Holder of any Warrant thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares contained in Section 3 of the Warrant Certificate, and the provisions of Sections 7, 9 and 13 of this Agreement with respect to the shares of Common Stock shall apply on like terms to any such other shares. All Warrants originally issued by the Company subsequent to any adjustment made to the Exercise Price pursuant to the Warrant Certificate shall evidence the right to purchase, at the adjusted Exercise Price, the number of shares of Common Stock purchasable from time to time hereunder upon exercise of the Warrants, all subject to further adjustment as provided herein.

 

Section 12. Certification of Adjusted Exercise Price or Number of Shares of Common Stock. Whenever the Exercise Price or the number of shares of Common Stock issuable upon the exercise of each Warrant is adjusted as provided in Section 11 or 13, the Company shall promptly deliver to the Holder by facsimile or e-mail a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

Section 13. Fractional Shares of Common Stock.

 

(a) The Company shall not issue fractions of Warrants or distribute Warrant Certificates which evidence fractional Warrants. Whenever any fractional Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution shall reflect a rounding of such fraction to the nearest whole Warrant (rounded down).

 

(b) The Company shall not issue fractions of shares or scrip representing fractions of shares of Common Stock upon exercise of Warrants or distribute stock certificates which evidence fractional shares of Common Stock. Whenever any fraction of a share of Common Stock would otherwise be required to be issued or distributed, the actual issuance or distribution in respect thereof shall be made in accordance with Section 2(d)(v) of the Warrant Certificate.

 

Section 14. Conditions of the Warrant Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the terms and conditions hereof, including the following to all of which the Company agrees and to all of which the rights hereunder of the Holders from time to time of the Warrant Certificates shall be subject:

(a) The Company agrees promptly to pay the Warrant Agent the compensation detailed on Exhibit 2 hereto for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including reasonable counsel fees) incurred without gross negligence, bad faith or willful misconduct by the Warrant Agent in connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred without gross negligence, bad faith or willful misconduct on the part of the Warrant Agent, arising out of or in connection with its acting as Warrant Agent hereunder, including the reasonable costs and expenses of defending against any claim of such liability.

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(b) In acting under this Warrant Agreement and in connection with the Warrant Certificates, the Warrant Agent is acting solely as agent of the Company and does not assume any obligations or relationship of agency or trust for or with any of the Holders of Warrant Certificates or beneficial owners of Warrants.

(c) The Warrant Agent may consult with counsel satisfactory to it, which may include counsel for the Company, and the written advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice of such counsel.

(d) The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted by it in reliance upon any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper parties.

(e) The Warrant Agent, and its officers, directors and employees, may become the owner of, or acquire any interest in, Warrants, with the same rights that it or they would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable law, it or they may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of Holders of Warrant Securities or other obligations of the Company as freely as if it were not the Warrant Agent hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as trustee under any indenture to which the Company is a party.

(f) Unless otherwise agreed with the Company, the Warrant Agent shall have no liability for interest on any monies at any time received by it pursuant to any of the provisions of this Agreement or of the Warrant Certificates.

(g) The Warrant Agent shall have no liability with respect to any invalidity of this Agreement or any of the Warrant Certificates (except as to the Warrant Agent’s countersignature thereon).

(h) The Warrant Agent shall not be responsible for any of the recitals or representations herein or in the Warrant Certificates (except as to the Warrant Agent’s countersignature thereon), all of which are made solely by the Company.

(i) The Warrant Agent shall be obligated to perform only such duties as are herein and in the Warrant Certificates specifically set forth and no implied duties or obligations shall be read into this Agreement or the Warrant Certificates against the Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder which may tend to involve it in any expense or liability, the payment of which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any of the Warrant Certificates authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the Warrant Certificates. The Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements contained herein or in the Warrant Certificates or in the case of the receipt of any written demand from a Holder of a Warrant Certificate with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law.

 

Section 15. Purchase or Consolidation or Change of Name of Warrant Agent. Any corporation into which the Warrant Agent or any successor Warrant Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Warrant Agent or any successor Warrant Agent shall be party, or any corporation succeeding to the corporate trust business of the Warrant Agent or any successor Warrant Agent, shall be the successor to the Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Warrant Agent under the provisions of Section 17. In case at the time such successor Warrant Agent shall succeed to the agency created by this Agreement any of the Warrant Certificates shall have been countersigned but not delivered, any such successor Warrant Agent may adopt the countersignature of the predecessor Warrant Agent and deliver such Warrant Certificates so countersigned; and in case at that time any of the Warrant Certificates shall not have been countersigned, any successor Warrant Agent may countersign such Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.

 

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In case at any time the name of the Warrant Agent shall be changed and at such time any of the Warrant Certificates shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver Warrant Certificates so countersigned; and in case at that time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such Warrant Certificates either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.

 

Section 16. Duties of Warrant Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company, by its acceptance hereof, shall be bound:

 

(a) The Warrant Agent may consult with legal counsel reasonably acceptable to the Company (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted by it in good faith and in accordance with such opinion.

 

(b) Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by either Co-Chief Executive Officer, Chief Financial Officer or Vice President of the Company; and such certificate shall be full authentication to the Warrant Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate.

 

(c) Subject to the limitation set forth in Section 14, the Warrant Agent shall be liable hereunder only for its own gross negligence, bad faith, violation of law or willful misconduct, or for a breach by it of this Agreement.

 

(d) The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Warrant Certificates (except its countersignature thereof) by the Company or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.

 

(e) The Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Warrant Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant Certificate; nor shall it be responsible for the adjustment of the Exercise Price or the making of any change in the number of shares of Common Stock required under the provisions of Section 11 or 13 or responsible for the manner, method or amount of any such change or the ascertaining of the existence of facts that would require any such adjustment or change (except with respect to the exercise of Warrants evidenced by Warrant Certificates after actual notice of any adjustment of the Exercise Price); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant Certificate or as to whether any shares of Common Stock will, when issued, be duly authorized, validly issued, fully paid and nonassessable.

  

(f) Each party hereto agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the other party hereto for the carrying out or performing by any party of the provisions of this Agreement.

 

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(g) The Warrant Agent is hereby authorized to accept instructions with respect to the performance of its duties hereunder from either Co-Chief Executive Officer or the Chief Financial Officer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable and shall be indemnified and held harmless for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer, provided Warrant Agent carries out such instructions without gross negligence, bad faith or willful misconduct.

 

(h) The Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity.

 

(i) The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof.

 

Section 17. Change of Warrant Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing sent to the Company and to each transfer agent of the Common Stock, and to the Holders of the Warrant Certificates. The Company may remove the Warrant Agent or any successor Warrant Agent upon 30 days’ notice in writing, sent to the Warrant Agent or successor Warrant Agent, as the case may be, and to each transfer agent of the Common Stock, and to the Holders of the Warrant Certificates. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent or by the Holder of a Warrant Certificate (who shall, with such notice, submit his Warrant Certificate for inspection by the Company), then the Holder of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment of a new Warrant Agent, provided that, for purposes of this Agreement, the Company shall be deemed to be the Warrant Agent until a new warrant agent is appointed. Any successor Warrant Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States or of a state thereof, in good standing, which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Warrant Agent a combined capital and surplus of at least $50,000,000. After appointment, the successor Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent without further act or deed; but the predecessor Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Warrant Agent and each transfer agent of the Common Stock, and mail a notice thereof in writing to the Holders of the Warrant Certificates. However, failure to give any notice provided for in this Section 17, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Warrant Agent or the appointment of the successor Warrant Agent, as the case may be.

 

Section 18. Issuance of New Warrant Certificates. Notwithstanding any of the provisions of this Agreement or of the Warrants to the contrary, the Company may, at its option, issue new Warrant Certificates evidencing Warrants in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Exercise Price per share and the number or kind or class of shares of stock or other securities or property purchasable under the several Warrant Certificates made in accordance with the provisions of this Agreement.

  

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Section 19. Notices. Notices or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or by the Holder of any Warrant Certificate to or on the Company, (ii) subject to the provisions of Section 17, by the Company or by the Holder of any Warrant Certificate to or on the Warrant Agent or (iii) by the Company or the Warrant Agent to the Holder of any Warrant Certificate, shall be deemed given (a) on the date delivered, if delivered personally, (b) on the first Business Day following the deposit thereof with Federal Express or another recognized overnight courier, if sent by Federal Express or another recognized overnight courier, (c) on the fourth Business Day following the mailing thereof with postage prepaid, if mailed by registered or certified mail (return receipt requested), and (d) the date of transmission, if such notice or communication is delivered via facsimile or email attachment at or prior to 5:30 p.m. (New York City time) on a Business Day and (e) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile or email attachment on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, in each case to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

 

(a) If to the Company, to:

 

Pluristem Therapeutics Inc.

MATAM Advanced Technology Park, Building No. 5

Haifa, Israel  31905

Attn: Chief Financial Officer

Fax:

Email: chenf@Pluristem.com

 

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

 

Zysman, Aharoni, Gayer and Sullivan & Worcester LLP

1633 Broadway, 32nd Floor

Attn: Oded Har-Even, Esq.

Fax: (212) 660-3001

Email: ohareven@zag-sw.com

 

(b) If to the Warrant Agent, to:

 

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, New York 11219

Attention: Frank Ruggiero

email: FRuggiero@amstock.com

Facsimile: (718) 765-8713

 

For any notice delivered by email to be deemed given or made, such notice must be followed by notice sent by overnight courier service to be delivered on the next business day following such email, unless the recipient of such email has acknowledged via return email receipt of such email.

 

(c) If to the Holder of any Warrant Certificate, to the address of such Holder as shown on the registry books of the Company. Any notice required to be delivered by the Company to the Holder of any Warrant may be given by the Warrant Agent on behalf of the Company. Notwithstanding any other provision of this Agreement, where this Agreement provides for notice of any event to a Holder of any Warrant, such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the procedures of the Depositary or its designee.

 

Section 20. Supplements and Amendments.

 

(a) The Company and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any Holders of Global Warrant certificates in order to add to the covenants and agreements of the Company for the benefit of the Holders of the Global Warrant certificates or to surrender any rights or power reserved to or conferred upon the Company in this Agreement, provided that such addition or surrender shall not adversely affect the interests of the Holders of the Global Warrant certificates in any material respect.

  

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(b) In addition to the foregoing, with the consent of Holders of Warrants entitled, upon exercise thereof, to receive not less than a majority of the shares of Common Stock issuable thereunder, the Company and the Warrant Agent may modify this Agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Warrant Agreement or modifying in any manner the rights of the Holders of the Global Warrant certificates; provided, however, that no modification of the terms (including but not limited to the adjustments described in Section 11) upon which the Warrants are exercisable or reducing the percentage required for consent to modification of this Agreement may be made without the consent of the Holder of each outstanding warrant certificate affected thereby. As a condition precedent to the Warrant Agent’s execution of any amendment, the Company shall deliver to the Warrant Agent a certificate from a duly authorized officer of the Company that states that the proposed amendment complies with the terms of this Section 20.

 

Section 21. Successors. All covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

 

Section 22. Benefits of this Agreement. Nothing in this Agreement shall be construed to give any Person other than the Company, the Holders of Warrant Certificates and the Warrant Agent any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates.

 

Section 23. Governing Law. This Agreement and each Warrant Certificate issued hereunder shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to the conflicts of law principles thereof.

 

Section 24. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

 

Section 25. Captions. The captions of the sections of this Agreement have been inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

Section 26.  Warrant Agent Agreement.  To the extent any provision of this Warrant Agent Agreement conflicts with the express provisions of the Warrant Certificate, the provisions of such Warrant Certificate shall govern and be controlling.

 

[Signature Page Follows]

 

11

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

 

	
 

	
PLURISTEM THERAPEUTICS INC.

	
 

	
 

	
 

	
 

	
By:

	
/s/ Yaky Yanay 

	
 

	
Name:

	
Yaky Yanay

	
 

	
Title:

	
Co-Chief Executive Officer

 

	
 

	
AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/ Michael A. Nespoli 

	
 

	
Name:

	
Michael A. Nespoli

	
 

	
Title:

	
Executive Director

 

[Signature Page to Warrant Agent Agreement]

 

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Annex A: Form of Warrant Certificate Request Notice

 

WARRANT CERTIFICATE REQUEST NOTICE

 

To: American Stock Transfer & Trust Company, LLC as Warrant Agent for Pluristem Therapeutics Inc. (the “Company”)

 

The undersigned Holder of Common Stock Purchase Warrants (“Warrants”) in the form of Global Warrants issued by the Company hereby elects to receive a Warrant Certificate evidencing the Warrants held by the Holder as specified below:

 

	
1.

	
Name of Holder of Warrants in form of Global Warrants: _____________________________

	
 

	
 

	
2.

	
Name of Holder in Warrant Certificate (if different from name of Holder of Warrants in form of Global Warrants): ________________________________

	
 

	
 

	
3.

	
Number of Warrants in name of Holder in form of Global Warrants: ___________________

	
 

	
 

	
4.

	
Number of Warrants for which Warrant Certificate shall be issued: __________________

	
 

	
 

	
5.

	
Number of Warrants in name of Holder in form of Global Warrants after issuance of Warrant Certificate, if any: ___________

	
 

	
 

	
6.

	
Warrant Certificate shall be delivered to the following address:

 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

The undersigned hereby acknowledges and agrees that, in connection with this Warrant Exchange and the issuance of the Warrant Certificate, the Holder is deemed to have surrendered the number of Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants evidenced by the Warrant Certificate.

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity:

_____________________________________________________________________

 

Signature of Authorized Signatory of Investing Entity:

______________________________________________

 

Name of Authorized Signatory:

________________________________________________________________

 

Title of Authorized Signatory:

_________________________________________________________________

 

Date:

____________________________________________________________________________________

 

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Exhibit 1: Form of Warrant Certificate

 

COMMON STOCK PURCHASE WARRANT

 

 PLURISTEM THERAPEUTICS INC.

 

	
 

Warrant Shares: _______

	
Initial Issuance Date: April 8, 2019

Initial Exercise Date: April 8, 2019

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, CEDE & CO or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York time) on April 8, 2024 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Pluristem Therapeutics Inc., a Nevada corporation (the “Company”), up to ______ shares of Common Stock (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). This Warrant shall initially be issued and maintained in the form of a security held in book-entry form and the Depository Trust Company or its nominee (“DTC”) shall initially be the sole registered holder of this Warrant, subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agent Agreement, in which case this sentence shall not apply.

 

Section 1.          Definitions.  In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“Board of Directors” means the board of directors of the Company and any authorized committee thereof.

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

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

 

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“Common Stock” means the common stock of the Company, par value $0.00001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

 

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

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

 “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Registration Statement” means the Company’s registration statement on Form S-1 (File No. 333- 218916).

 

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

 

“Trading Day” means a day on which the Common Stock is traded on a Trading Market.

 

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing).

 

“Transfer Agent” means American Stock Transfer & Trust Company, LLC, the current transfer agent of the Company, with a mailing address of 6201 15th Avenue, 2nd Floor, Brooklyn, New York 11219, and any successor transfer agent of the Company.

 

 “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“Warrant Agent Agreement” means that certain warrant agency agreement, dated on or about the Initial Exercise Date, between the Company and the Warrant Agent.

 

“Warrant Agent” means the Transfer Agent and any successor warrant agent of the Company.

 

“Warrants” means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.

 

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Section 2.            Exercise.

 

a)          Exercise of Warrant.  Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before 5:00 p.m. (New York City time) on the Termination Date by delivery to the Company or Warrant Agent of a duly executed facsimile copy or PDF copy submitted by e-mail of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company or the Warrant Agent until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company or Warrant Agent shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice.  The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

Notwithstanding the foregoing in this Section 2(a), a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this Warrant held in book-entry form through DTC (or another established clearing corporation performing similar functions), shall effect exercises made pursuant to this Section 2(a) by delivering to DTC (or such other clearing corporation, as applicable) the appropriate instruction form for exercise, complying with the procedures to effect exercise that are required by DTC (or such other clearing corporation, as applicable), subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agent Agreement, in which case this sentence shall not apply.

 

b)          Exercise Price.  The exercise price per share of Common Stock under this Warrant shall be $0.70, subject to adjustment hereunder (the “Exercise Price”).

 

c)          Cashless Exercise. If at the time of exercise hereof, there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

 (A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

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(B) = the Exercise Price of this Warrant, as adjusted hereunder; and

(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised.  The Company agrees not to take any position contrary to this Section 2(c).

Notwithstanding the foregoing, and without limiting the rights of the Holder under this Section 2(c) and Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.

d)            Mechanics of Exercise.

 

i.           Delivery of Warrant Shares Upon Exercise.  The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with DTC through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company or Warrant Agent of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares further, for purposes of Regulation SHO, a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this Warrant held in book-entry form through DTC shall be deemed to have exercised  its interest in this Warrant upon instructing its broker that is a DTC participant to exercise its interest in this Warrant, provided that in each such case payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise.  If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable.  As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.

 

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ii.          Delivery of New Warrants Upon Exercise.  If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii.          Rescission Rights.  If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv.          Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise.  In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder.  For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

v.          No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either round the Warrant Shares to be issued to the nearest whole share or pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the VWAP.

 

vi.          Charges, Taxes and Expenses.  Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.  The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

 

vii.          Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

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e)          Holder’s Exercise Limitations.  The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other  Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.   To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.  In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.  The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply.  Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

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Section 3.            Certain Adjustments.

 

a)          Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re‐classification.

 

b)          Subsequent Rights Offerings.  In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

c)          Pro Rata Distributions.  During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

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d)          Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant).  For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall have the same rights as the holders of Common Stock as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.  Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company's control, including not approved by the Company's Board of Directors, Holder shall only be entitled to receive from the Company or any Successor Entity, as of the date of consummation of such Fundamental Transaction, the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction.  “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the greater of (x) the last VWAP immediately prior to the public announcement of such Fundamental Transaction and (y) the last VWAP immediately prior to the consummation of such Fundamental Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date.  The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration) within five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction).    The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein. For the avoidance of doubt, if, at any time while this Warrant is outstanding, a Fundamental Transaction occurs, pursuant to the terms of this Section 3(d), the Holder shall not be entitled to receive more than one of (i) the consideration receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction, (ii) an amount of cash equal to the Black Scholes Value of the remaining unexercised  portion of this Warrant as calculated pursuant this Section, or (iii) the assumption by the Successor Entity of all of the obligations of the Company under this Warrant and the other Transaction Documents and the option to receive a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant.

 

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e)          Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

f)          Notice to Holder.

 

i.          Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

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

 

Section 4.            Transfer of Warrant.

 

a)          Transferability.  This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full.  The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

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b)          New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c)          Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Warrant Agent for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company and the Warrant Agent may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

Section 5.          Miscellaneous.

 

a)          No Rights as Stockholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.

 

b)          Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c)          Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

 

d)          Authorized Shares.

 

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

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Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e)          Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, 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 improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

f)          Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

g)          Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies.  Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

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h)          Notices.  Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, at MATAM Advanced Technology Park, Building No. 5, Haifa, Israel, Attention: Chief Financial Officer, facsimile number: +972-74-710-8787, email address: chenf@pluristem.com, or such other facsimile number, email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.  To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.

 

i)          Limitation of Liability.  No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j)          Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k)          Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l)          Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holder or the beneficial owner of this Warrant, on the other hand.

 

m)          Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n)          Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

o)          Warrant Agent Agreement.  If this Warrant is held in global form through DTC (or any successor depositary), this Warrant is issued subject to the Warrant Agent Agreement.  To the extent any provision of this Warrant conflicts with the express provisions of the Warrant Agent Agreement, the provisions of this Warrant shall govern and be controlling.

 

********************

(Signature Page Follows)

25

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	 	
PLURISTEM THERAPEUTICS INC.

 

	 	
By:__________________________________________

     Name:

     Title:

26

 

NOTICE OF EXERCISE

TO:          PLURISTEM THERAPEUTICS INC.

(1)          The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2)          Payment shall take the form of (check applicable box):

 

[  ] in lawful money of the United States; or

 

[  ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3)          Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

The Warrant Shares shall be delivered to the following DWAC Account Number:

_______________________________

_______________________________

_______________________________

[SIGNATURE OF HOLDER]

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required information.  Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	
Name:

	 
	 	
(Please Print)

	
Address:

	 
	
 

Phone Number:

Email Address:

	
(Please Print)

______________________________________

______________________________________

	
Dated: _______________ __, ______

	 
	
Holder’s Signature: _____________________________         

	 
	
Holder’s Address:   _____________________________

	 

 

  

Exhibit 2 – Warrant Agent Compensation

 

 A monthly fee of $250.

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