Document:

Exhibit

Exhibit 4.1

FIRST SUPPLEMENTAL INDENTURE
dated as of June 21, 2016
between
FORESTAR (USA) REAL ESTATE GROUP INC.,
THE GUARANTORS NAMED HERETO
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
to the
INDENTURE
dated as of May 12, 2014
between
FORESTAR (USA) REAL ESTATE GROUP INC.,
THE GUARANTORS NAMED THEREIN
and 

U.S. BANK NATIONAL ASSOCIATION

as Trustee

8.500% SENIOR SECURED NOTES DUE 2022
THIS FIRST SUPPLEMENTAL INDENTURE (the “First Supplemental Indenture”), dated as of June 21, 2016, among Forestar (USA) Real Estate Group Inc., a Delaware corporation (the “Company”), Forestar Group Inc., a Delaware corporation and the parent of the Company (the “Parent”), each of the subsidiary guarantors of the Company listed on Schedule I hereto (the “Subsidiary Guarantors” and, together with Parent, the “Guarantors”) and U.S. Bank National Association (the “Trustee”), under the Indenture referred to below.
W I T N E S S E T H :
WHEREAS, the Company has heretofore executed and delivered an indenture dated as of May 12, 2014 (the “Indenture”), between the Company, each of the Guarantors and the Trustee, pursuant to which the Company has issued its 8.500% Senior Secured Notes due 2022 (the “Notes”) and the Guarantors have provided guarantees (the Notes together with the guarantees, the “Securities”);
WHEREAS, Section 9.02 of the Indenture provides that, subject to certain conditions, the Company, the Guarantors and the Trustee may amend the Indenture or the Securities with the consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding; 
WHEREAS, Section 9.02 of the Indenture further provides that, subject to certain conditions, the Company, the Guarantors and the Trustee may amend the Indenture or any Security Document to effect the release of all or substantially all of the Collateral from the Liens securing the Notes with the consent of the Holders of at least 66 2⁄3% in aggregate principal amount of the Notes then outstanding;
WHEREAS, the Company and each of the Guarantors are undertaking to execute and deliver this First Supplemental Indenture to amend certain terms and covenants in the Indenture in connection with the Offer to Purchase and Consent Solicitation Statement of the Company, dated as of May 23, 2016, and any amendments, modifications or supplements thereto (the “Tender Offer and Solicitation”); and
WHEREAS, the Board of Directors of the Company and the Boards of Directors, Boards of Managers or Partners of the Guarantors have authorized and approved the execution and delivery of this First Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company, the Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows:
ARTICLE I
CAPITALIZED TERMS
Section 1.01    Amendments to the Indenture.  Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture.
ARTICLE II
AMENDMENTS AND WAIVERS
Section 2.01    Amendments to the Indenture.  Effective at the time of payment or deposit with DTC (the “Payment Date”) of an amount of money sufficient to pay for all Notes validly tendered and accepted pursuant to the Tender Offer and Solicitation (and the receipt of consents of the Holders representing at least 66 2⁄3% of the outstanding Notes) and to pay all early tender premiums required under the Tender Offer and Solicitation:
		
	(i)
	The Indenture is hereby amended to delete Section 4.03 (Reports), Section 4.07 (Restricted Payments), Section 4.08 (Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries), Section 4.09 (Incurrence of Indebtedness and Issuance of Preferred Stock), Section 4.10 (Asset Sales), Section 4.11 (Transactions with Affiliates), Section 4.12 (Liens), Section 4.15 (Offer to Repurchase Upon a Change of Control), Section 4.16 (Additional Note Guarantees), Section 4.17 (Designation of Restricted and Unrestricted Subsidiaries), Section 4.18 (Payment for Consent), and clauses (3) and (4) of Section 5.01 (Mergers, Consolidation or Sale of Assets);

		
	(ii)
	The failure to comply with the terms of any of the Sections of the Indenture set forth in clause (i) above shall no longer constitute a Default or an Event of Default under the Indenture and shall no longer have any other consequence under the Indenture;

		
	(iii)
	The Indenture is hereby amended to delete clauses (4), (5), (6), (7) and (8) of Section 6.01 (Events of Default) in their entirety and all references thereto contained in Section 6.01 and elsewhere in the Indenture in their entirety, and the occurrence of the events described in (4), (5), (6), (7) and (8) of Section 6.01 shall no longer constitute Events of Default;

		
	(iv)
	All definitions set forth in Section 1.01 of the Indenture that relate to defined terms used solely in sections deleted by this First Supplemental Indenture are hereby deleted in their entirety; and

		
	(v)
	All references to Sections 5.01 and 6.01 of the Indenture shall mean Sections 5.01 and 6.01 as amended by this First Supplemental Indenture.

ARTICLE III
RELEASE OF SUBSIDIARY GUARANTEES AND COLLATERAL
Section 3.01    Release of Guarantees and Collateral.  Upon the operative date of this First Supplemental Indenture in accordance with Section 2.01 hereof, (i) each of the Guarantors shall be fully and unconditionally released from its Guarantee, (ii) all collateral securing any such Guarantee shall be fully and unconditionally released without any further action on behalf of the Holders, the Company or any Guarantor (and notwithstanding any other consent that may be required under any Security Document), (iii) the Holders consent to an amendment to any of the Security Documents to evidence the foregoing and (iv) the Notes will no longer constitute a Parity Lien Obligation.
ARTICLE IV
MISCELLANEOUS
Section 4.01    Ratification of Indenture; First Supplemental Indenture Part of Indenture.
		
	(i)
	Except as expressly supplemented hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.  This First Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of the Securities heretofore or hereafter authenticated and delivered shall be bound hereby.  In the event of a conflict between the terms and conditions of the Indenture and the terms and conditions of this First Supplemental Indenture, then the terms and conditions of this First Supplemental Indenture shall prevail.

		
	(ii)
	The Notes include certain of the foregoing provisions from the Indenture. Upon the operative date of this First Supplemental Indenture, such provisions from the Notes shall be deemed deleted or amended as applicable.

		
	(iii)
	Notwithstanding an earlier execution date, the provisions of this Supplemental Indenture shall not become operative until the time and date upon which the Company pays the Purchase Price or Total Consideration (as such terms are defined in the Offer to Purchase and Consent Solicitation Statement), as applicable, to all Holders who have validly delivered and not validly revoked consents pursuant to the terms of the Offer to Purchase and Consent Solicitation Statement.

Section 4.02    Governing Law.  
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS FIRST SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 4.03    Trustee Makes No Representation.
The recitals contained herein are those of the Company and the Guarantors and not the Trustee, and the Trustee assumes no responsibility for the correctness of same. The Trustee makes no representations as to the validity or sufficiency of this First Supplemental Indenture. All rights, protections, privileges, indemnities and benefits granted or afforded to the Trustee under the Indenture shall be deemed incorporated herein by this reference and shall be deemed applicable to all actions taken, suffered or omitted by the Trustee under this First Supplemental Indenture.
Section 4.04    Counterparts.
The parties may sign any number of copies of this First Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.
Section 4.05    Effect of Headings.  
The section headings herein are for convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the date first written above.
FORESTAR GROUP INC.

By:    /s/ Charles D. Jehl    
Name:    Charles D. Jehl     
Title:    Chief Financial Officer and
 Treasurer

FORESTAR (USA) REAL ESTATE GROUP INC.

By:    /s/ Charles D. Jehl    
Name:    Charles D. Jehl     
Title:    Chief Financial Officer and
 Treasurer    

FORESTAR MINERALS, LP
FORESTAR OIL & GAS LLC
FORESTAR REALTY INC.
FORESTAR HOTEL HOLDING COMPANY INC.
CAPITOL OF TEXAS INSURANCE GROUP INC.
FORESTAR CAPITAL INC. 
FORESTAR MINERALS GP LLC
JOHNSTON FARMS LLC
SAN JACINTO I LLC
SUSTAINABLE WATER RESOURCES LLC
SWR HOLDINGS LLC
STONEY CREEK PROPERTIES LLC
FORCO REAL ESTATE INC. 
FORESTAR PETROLEUM CORPORATION
SECO ENERGY CORPORATION
UNITED OIL CORPORATION
FORESTAR MOUNTAIN INVESTMENTS LLC

By:    /s/ Charles D. Jehl    
Name:    Charles D. Jehl     
Title:    Chief Financial Officer and
 Treasurer    

FORESTAR MINERALS HOLDINGS LLC

By:    /s/ Michael Quinley    
Name:    Michael Quinley
Title:    President

U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:    /s/ Mauri J. Cowen    
Name:    Mauri J. Cowen
Title:    Vice President

SCHEDULE I 
SUBSIDIARY GUARANTORS

Capitol of Texas Insurance Group Inc.
Forestar Hotel Holding Company Inc.
Forestar Realty Inc.
Forestar Oil & Gas LLC
SWR Holdings LLC
Sustainable Water Resources LLC
Johnstown Farms LLC
San Jacinto I LLC
Forestar Petroleum Corporation
Forestar Minerals, LP
Forestar Mountain Investments LLC
Forestar Capital Inc.
Forestar Minerals GP LLC
Stoney Creek Properties LLC
Forco Real Estate Inc.
Seco Energy Corporation
United Oil Corporation
Forestar Minerals Holdings LLCExhibit 4.3

      

THE REGISTERED HOLDER OF THIS UNIT PURCHASE
OPTION BY ITS ACCEPTANCE HEREOF, AGREES THAT THE SECURITIES EVIDENCED BY THIS UNIT PURCHASE OPTION MAY NOT BE SOLD, TRANSFERED
OR ASSIGNED EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS UNIT PURCHASE OPTION AGREES THAT THE SECURITIES EVIDENCED
BY THIS UNIT PURCHASE OPTION WILL NOT BE SOLD, TRANSFERED, ASSIGNED, PLEDGED OR HYPOTHECATED, OR BE THE SUBJECT OF ANY HEDGING,
SHORT SALE, DERIVATIVE, PUT, OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION OF THIS UNIT PURCHASE
OPTION OR THE SECURITIES EVIDENCED BY THIS UNIT PURCHASE OPTION, FOR A PERIOD OF ONE HUNDRED EIGHTY (180) DAYS FOLLOWING THE EFFECTIVE
DATE (DEFINED BELOW) TO ANYONE OTHER THAN TO ANY MEMBER PARTICIPATING IN THE OFFERING AND THE OFFICERS OR PARTNERS THEREOF, IF
ALL SECURITIES SO TRANSFERRED REMAIN SUBJECT TO THE LOCK-UP RESTRICTION SET FORTH ABOVE FOR THE REMAINDER OF THE TIME PERIOD.

 

UNIT PURCHASE OPTION

 

FOR THE PURCHASE OF [•] UNITS

 

OF INSPIREMD, INC.

 

1.           Unit
Purchase Option.

 

THIS CERTIFIES THAT, in
consideration of $100.00 duly paid by or on behalf of Dawson James Securities, Inc. (“Dawson” or “Holder”),
as registered owner of this Unit Purchase Option, to InspireMD, Inc. (the “Company”), Holder is entitled, at
any time or from time to time commencing on the 180th day after the effective date (the “Effective Date”)
of the registration statement (the “Registration Statement”) pursuant to which certain units are offered for
sale to the public (the “Offering”) (the “Commencement Date”), and at or before 5:00 p.m.,
Eastern Time, on the fifth anniversary of the Effective Date (the “Expiration Date”), but not thereafter, to
subscribe for, purchase and receive, in whole or in part, up to [•] [INSERT [•]% OF UNITS ISSUED IN PUBLIC OFFERING]
units (the “Units”) of the Company, each Unit consisting of [__] Preferred Shares each convertible into [ ]
shares of the Company’s common stock, par value $0.0001 per share (the “Shares”) and [__] warrants, each
to purchase one Share (the “Warrant(s)”). Each Warrant is the same as the warrants included in the Units being
registered for sale to the public (the “Public Warrants”) under the Securities Act of 1933, as amended (the
“Act”). If the Expiration Date is a day on which banking institutions are authorized by law to close, then this
Unit Purchase Option may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During
the period ending on the Expiration Date, the Company agrees not to take any action that would terminate the Unit Purchase Option.
This Unit Purchase Option is initially exercisable at $[•] per Unit (or 125% of the public offering price of the Units being
sold in the Offering) so purchased; provided, however, that upon the occurrence of any of the events specified in Section 5
hereof, the rights granted by this Unit Purchase Option, including the exercise price per Unit and the number of Units to be received
upon such exercise, shall be adjusted as therein specified. The term “Exercise Price” shall mean the initial
exercise price or the adjusted exercise price, depending on the context.

 

     

     

    

 

2.           Exercise.

 

(a)         Exercise
Procedure. In order to exercise this Unit Purchase Option, the exercise form attached hereto must be duly executed and completed
and delivered to the Company, together with this Unit Purchase Option and payment of the Exercise Price for the Units being purchased
payable in cash or by certified check or official bank check. If the subscription rights represented hereby shall not be exercised
at or before 5:00 p.m., Eastern time, on the Expiration Date, this Unit Purchase Option shall become and be void without further
force or effect, and all rights represented hereby shall cease and expire.

 

(b)         Legend.
If required by applicable law at the time of any exercise, each certificate for the securities purchased under this Unit Purchase
Option shall bear a legend as follows unless such securities have been registered under the Act:

 

“The securities represented
by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”) or applicable
state law. The securities may not be offered for sale, sold or otherwise transferred except pursuant to an effective registration
statement under the Act, or pursuant to an exemption from registration under the Act and applicable state law.”

 

(c)         Cashless
Exercise.

 

(i)           In
lieu of the payment of the Exercise Price multiplied by the number of Units for which this Unit Purchase Option is exercisable
(and in lieu of being entitled to receive Shares and Warrants) in the manner required by Section 2(a), the Holder shall have
the right (but not the obligation) to convert any exercisable but unexercised portion of this Unit Purchase Option into Units consisting
of Shares and Warrants (the “Conversion Right”) as follows: upon exercise of the Conversion Right, the Company
shall deliver to the Holder (without payment by the Holder of any of the Exercise Price in cash) that number of Shares underlying
the Preferred Shares and Warrants comprising that number of Units equal to the quotient obtained by dividing (x) the “Value”
(as defined below) of the portion of the Unit Purchase Option being converted by (y) the Current Market Value (as defined
below). The “Value” of the portion of the Unit Purchase Option being converted shall equal the remainder derived by
subtracting (a) (i) the Exercise Price multiplied by (ii) the number of Units underlying the portion of this Unit
Purchase Option being converted from (b) the Current Market Value of a Unit multiplied by the number of Units underlying the
portion of the Unit Purchase Option being converted. As used herein, the term “Current Market Value” per Unit at any
date means the remainder derived by subtracting (x) the exercise price of the Warrants multiplied by the number of Shares
issuable upon exercise of the Warrants underlying one Unit from (y) the Current Market Price of the Shares multiplied by the
number of Shares included within one Unit and underlying the Warrants included within one Unit. The “Current Market Price”
of a Share shall mean (i) if the Shares are listed on a national securities exchange or quoted the OTC Bulletin Board (or
any successor exchange or entity), the closing or last sale price of the Shares in the principal trading market for the Shares
on the last trading day preceding the day in question as reported by the exchange or the OTC Bulletin Board, as the case may be;
(ii) if the Shares are not listed on a national securities exchange or quoted on the OTC Bulletin Board, but are traded in
the residual over-the-counter market, the closing bid price for the Shares on the last trading day preceding the date in question
for which such quotations are reported by the Pink Sheets, LLC or similar publisher of such quotations; and (iii) if the fair
market value of the Shares cannot be determined pursuant to clause (i) or (ii) above, such price as the Board of Directors
of the Company shall determine, in good faith.

 

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(ii)           The
Cashless Exercise Right may be exercised by the Holder on any business day on or after the Commencement Date and not later than
the Expiration Date by delivering the Unit Purchase Option with the duly executed exercise form attached hereto with the cashless
exercise section completed to the Company, exercising the Cashless Exercise Right and specifying the total number of Units the
Holder will purchase pursuant to such Cashless Exercise Right.

 

3.           Transfer.

 

(a)         Restrictions—General.
The securities evidenced by this Unit Purchase Option shall not be sold, transferred, assigned, pledged or hypothecated, or be
the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition
of, this Unit Purchase Option (or any securities underlying this Unit Purchase Option) for a period of one hundred eighty (180)
days following the Effective Date to anyone other than to any member participating in the offering and the officers or partners
thereof, if all securities so transferred remain subject to the lock-up restriction set forth above for the remainder of the time
period. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto duly
executed and completed, together with the Unit Purchase Option and payment of all transfer taxes, if any, payable in connection
therewith. The Company shall within three business days transfer this Unit Purchase Option on the books of the Company and shall
execute and deliver a new Unit Purchase Option or Unit Purchase Options of like tenor to the appropriate assignee(s) expressly
evidencing the right to purchase the aggregate number of Units purchasable hereunder or such portion of such number as shall be
contemplated by any such assignment.

 

(b)         Restrictions—Securities.
The securities evidenced by this Unit Purchase Option shall not be transferred unless and until (i) the Company has received
the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption from registration under the
Act and applicable state securities laws, the availability of which is established to the reasonable satisfaction of the Company,
or (ii) a registration statement or a post-effective amendment to the Registration Statement relating to such securities has
been filed by the Company and declared effective by the Securities and Exchange Commission (the “Commission”)
and compliance with applicable state securities law has been established.

 

4.           New
Unit Purchase Options to be Issued.

 

(a)         Partial
Exercise. Subject to the restrictions in Section 3 hereof, this Unit Purchase Option may be exercised or assigned in whole
or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Unit Purchase Option for cancellation,
together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price, the Company shall cause
to be delivered to the Holder without charge a new Unit Purchase Option of like tenor to this Unit Purchase Option in the name
of the Holder evidencing the right of the Holder to purchase the number of Units purchasable hereunder as to which this Unit Purchase
Option has not been exercised or assigned.

 

    3 

     

    

 

(b)         Loss,
Theft, Destruction. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation
of this Unit Purchase Option and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute
and deliver a new Unit Purchase Option of like tenor and date. Any such new Unit Purchase Option executed and delivered as a result
of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.

 

5.           Adjustments.

 

(a)         Exercise
Price and Number of Securities. The Exercise Price and the number of Units underlying the Unit Purchase Option shall be subject
to adjustment from time to time as hereinafter set forth:

 

(i)           If
after the date hereof, and subject to the provisions of Section 5(c) below, the number of outstanding Shares is increased
by a stock dividend payable in Shares or by a split-up of Shares or other similar event, then, on the effective date thereof, the
number of Shares underlying each of the Units purchasable hereunder shall be increased in proportion to such increase in outstanding
shares. In such case, the number of Shares, and the exercise price applicable thereto, underlying the Warrants underlying each
of the Units purchasable hereunder shall be adjusted in accordance with the terms of the Warrants. For example, if the Company
declares a two-for-one stock dividend and immediately prior to such dividend this Unit Purchase Option is for the purchase of one
Unit at $10.00 per whole Unit (with each Warrant underlying the Units being exercisable for $12.00 per share), upon effectiveness
of the dividend, this Unit Purchase Option will be adjusted to allow for the purchase of one Unit at $10.00 per Unit, each Unit
entitling the holder to receive two Shares and two Warrants (each Warrant exercisable for $6.00 per share).

 

(ii)          If
after the date hereof, and subject to the provisions of Section 5(c), the number of outstanding Shares is decreased by a consolidation,
combination or reclassification of the Shares or other similar event, then, on the effective date thereof, the number of Shares
underlying each of the Units purchasable hereunder shall be decreased in proportion to such decrease in outstanding shares. In
such case, the number of Shares, and the exercise price applicable thereto, issuable upon exercise of the Warrants included in
each of the Units purchasable hereunder shall be adjusted in accordance with the terms of the Warrants. For example, if the Company
effects a one-for-two stock reverse stock split and immediately prior to such stock split this Unit Purchase Option is for the
purchase of one Unit at $10.00 per whole Unit (with each Warrant underlying the Units being exercisable for $12.00 per share),
upon effectiveness of the stock split, this Unit Purchase Option will be adjusted to allow for the purchase of one Unit at $10.00
per Unit, each Unit entitling the holder to receive 0.5 Shares and 0.5 Warrants (each Warrant exercisable for $24.00 per share).

 

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(iii)         In
case of any reclassification or reorganization of the outstanding Shares other than a change covered by Section 5(a)(i) or
5(a)(ii) hereof or that solely affects the par value of such Shares, or in the case of any merger or consolidation of the Company
with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that
does not result in any reclassification or reorganization of the outstanding Shares), or in the case of any sale or conveyance
to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with
which the Company is dissolved, the Holder of this Unit Purchase Option shall have the right thereafter (until the expiration of
the right of exercise of this Unit Purchase Option) to receive upon the exercise hereof, for the same aggregate Exercise Price
payable hereunder immediately prior to such event plus the aggregate exercise price of the Shares underlying the Warrants immediately
prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, by a Holder
of the number of Shares of the Company obtainable upon exercise of this Unit Purchase Option and the underlying Warrants immediately
prior to such event; and if any reclassification also results in a change in Shares covered by Section 5(a)(i) or 5(a)(ii),
then such adjustment shall be made pursuant to Sections 5(a)(i) or 5(a)(ii) and this Section 5(a)(iii). The provisions
of this Section 5(a)(iii) shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations,
sales or other transfers.

 

(iv)         This
form of Unit Purchase Option need not be changed because of any change pursuant to this Section 5, and Unit Purchase Options
issued after such change may state the same Exercise Price and the same number of Units as are stated in the Unit Purchase Options
initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new Unit Purchase Options reflecting
a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the Commencement Date
or the computation thereof.

 

(b)         Substitute
Unit Purchase Option. In case of any consolidation of the Company with, or merger of the Company with, or merger of the Company
into, another corporation (other than a consolidation or merger which does not result in any reclassification or change of the
outstanding Shares), the corporation formed by such consolidation or merger shall execute and deliver to the Holder a supplemental
Unit Purchase Option providing that the holder of each Unit Purchase Option then outstanding or to be outstanding shall have the
right thereafter (until the stated expiration of such Unit Purchase Option) to receive, upon exercise of such Unit Purchase Option,
the kind and amount of shares of stock and other securities and property receivable upon such consolidation or merger, by a holder
of the number of Shares of the Company for which such Unit Purchase Option might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplemental Unit Purchase Option shall provide for adjustments which shall be identical
to the adjustments provided in this Section 5. The above provision of this Section 5 shall similarly apply to successive
consolidations or mergers.

 

(c)         Fractional
Interests. The Company shall not be required to issue certificates representing fractions of Shares or Warrants upon the exercise
of the Unit Purchase Option, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up to the nearest whole number
of Warrants, Shares or other securities, properties or rights.

 

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6.           Reservation
and Listing. The Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose
of issuance upon exercise of the Warrants underlying the Unit Purchase Option, such number of Shares or other securities, properties
or rights as shall be issuable upon the conversion or exercise thereof. The Company further covenants and agrees that upon exercise
of the Warrants underlying the Unit Purchase Option and payment of the respective Warrant exercise price therefor, all Shares and
other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to
preemptive rights of any stockholder. As long as the Unit Purchase Option shall be outstanding, the Company shall use its best
efforts to cause all (i) Units issuable upon exercise of the Unit Purchase Option, and (ii) Shares issuable upon exercise
of the Warrants included in the Units issuable upon exercise of the Unit Purchase Option to be listed (subject to official notice
of issuance) on all securities exchanges (or, if applicable on the OTC Bulletin Board or any successor trading market) on which
the Shares issued to the public in connection with the Offering may then be listed and/or quoted; provided, however, that the Company
shall only be required to comply with (i) above to the extent the Units issued to the public in the Offering are still listed on
a securities exchange.

 

7.           Certain
Notice Requirements.

 

(a)         Right
to Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent as a stockholder for
the election of directors or any other matter, or as having any rights whatsoever as a stockholder of the Company. If, however,
at any time prior to the expiration of the Unit Purchase Option and its exercise, any of the events described in Section 7(b)
shall occur, then, in one or more of said events, the Company shall give written notice of such event at least fifteen days prior
to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders entitled
to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to vote on such proposed
dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of the closing of the transfer
books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder a copy of each notice given
to the other stockholders of the Company with respect to the events enumerated in Section 7(b) at the same time and in the same
manner that such notice is given to all stockholders, even if less than fifteen days.

 

(b)         Enumerated
Events. The Company shall be required to give the notice described in this Section 7 upon one or more of the following
events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a
dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained
earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company, or (ii) the
Company shall offer to all the holders of its Shares any additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, or (iii) a
dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all
or substantially all of its property, assets and business shall be proposed.

 

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(c)         Change
in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section 5
hereof, send notice to the Holders of such event and change (the “Price Notice”). The Price Notice shall describe
the event causing the change and the method of calculating same and shall be certified as being true and accurate by the Company’s
President and Chief Financial Officer.

 

(d)         Notice
Delivery. All notices, requests, consents and other communications under this Unit Purchase Option shall be in writing and
shall be deemed to have been duly made when hand delivered, or mailed by express mail or private courier service: (i) If to
the registered Holder of the Unit Purchase Option, to the address of such Holder as shown on the books of the Company, or (ii) If
to the Company, to the following address or to such other address as the Company may designate by notice to the Holders:

 

InspireMD, Inc.

Menorat Mamaor 4

Tel Aviv 67448 Israel

Facsimile: +972 3 6917691

Attn: Chief Financial Officer

 

8.           Registration
Rights.

 

(a)         Covenant
to Register the Shares.

 

(i)           If
requested in writing by the Holder, the Company agrees to register for resale the Shares underlying the Units (including the Shares
underlying the Warrants included in the Units) (collectively, the “Registrable Securities”). The Holder may
only make one demand request pursuant to this Section 8(a). The Company will use commercially reasonable efforts to file a short-form
registration statement on Form S-3 (the “Form S-3”) with the Commission covering the resale of the Registrable
Securities pursuant to Rule 415(a)(1)(i) within thirty (30) days after the Company is eligible to use such Form S-3. The Company
shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to this Section. The Company
agrees to use its commercially reasonable efforts to cause the Form S-3 filing required herein to become effective promptly. Notwithstanding
anything to the contrary, the obligations of the Company pursuant to this Section 8 shall terminate on the fifth anniversary of
the effective date of the Registration Statement pursuant to which the Offering is being made.

 

    7 

     

    

 

(b)         General
Terms.

 

(i)           Indemnification.
The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder
and each person, if any, who controls such Holders within the meaning of Section 15 of the Act or Section 20 (a) of the Securities
Exchange Act of 1934, as amended (“Exchange Act”), against all loss, claim, damage, expense or liability (including
all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any
claim whatsoever) to which any of them may become subject under the Act, the Exchange Act or otherwise, arising from such registration
statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify
the Placement Agent contained in Section 9 of the Placement Agency Agreement between the Placement Agent and the Company, dated
as of June [__], 2016. The Holder(s) of the Registrable Securities to be sold pursuant to such registration statement, and their
successors and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim, damage, expense or liability
(including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which they may become subject under the Act, the Exchange Act or otherwise, arising from information
furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration
statement to the same extent and with the same effect as the provisions contained in Section 9.C of the Placement Agency Agreement
pursuant to which the Placement Agent has agreed to indemnify the Company.

 

(ii)          Exercise
of Unit Purchase Option. Nothing contained in this Unit Purchase Option shall be construed as requiring the Holder(s) to exercise
their Unit Purchase Option prior to or after the initial filing of any registration statement or the effectiveness thereof.

 

(iii)         Documents
Delivered to Holders. The Company shall deliver promptly to each Holder participating in the offering requesting the correspondence
and memoranda described below and to the managing underwriter, if any, copies of all correspondence between the Commission and
the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to
the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance notice, with
respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of FINRA. Such investigation shall include access to books, records and properties and opportunities
to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable
times, during normal business hours, as any such Holder shall reasonably request.

 

(iv)         Underwriting
Agreement. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any
Holders whose Registrable Securities are being registered pursuant to this Section 8, which managing underwriter shall be reasonably
satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder
and such managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other
terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be parties to
any underwriting agreement relating to an underwritten sale of their Registrable Securities. Such Holders shall not be required
to make any representations or warranties to or agreements with the Company or the underwriters except as they may relate to such
Holders, their Shares and their intended methods of distribution.

 

(v)          Documents
to be Delivered by Holder(s). Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company
a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.

 

    8 

     

    

 

(vi)         Damages.
Should the registration or the effectiveness thereof required by Section 8 hereof be delayed by the Company or the Company otherwise
fails to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief available to the Holder(s),
be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened breach of such
provisions or the continuation of any such breach, without the necessity of proving actual damages and without the necessity of
posting bond or other security.

 

9.           Miscellaneous.

 

(a)         Amendments.
The Company and Dawson may from time to time supplement or amend this Unit Purchase Option without the approval of any of the
Holders in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent
with any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the
Company and Dawson may deem necessary or desirable and that the Company and Dawson deem shall not adversely affect the interest
of the Holders. All other modifications or amendments shall require the written consent of and be signed by the party against whom
enforcement of the modification or amendment is sought.

 

(b)         Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this Unit Purchase Option.

 

(c)         Entire
Agreement. This Unit Purchase Option (together with the other agreements and documents being delivered pursuant to or in connection
with this Unit Purchase Option) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof,
and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.

 

(d)         Binding
Effect. This Unit Purchase Option shall inure solely to the benefit of, and shall be binding upon, the Holder and the Company
and their permitted assignees, respective successors, legal representative and assigns, and no other person shall have or be construed
to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Unit Purchase Option or any provisions
herein contained.

 

(e)         Governing
Law. This Unit Purchase Option shall be governed by and construed and enforced in accordance with the laws of the State of
New York, without giving effect to conflict of laws. The Company hereby agrees that any action, proceeding or claim against it
arising out of, or relating in any way to this Unit Purchase Option shall be brought and enforced in the courts of the State of
New York or of the United States of America for the Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum. Any process or summons to be served upon the Company may be served by transmitting a copy thereof
by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 7
hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding
or claim. The Company and the Holder agree that the prevailing party(ies) in any such action shall be entitled to recover from
the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred
in connection with the preparation therefor.

    9 

     

    

 

(f)         Waivers.
The failure of the Company or the Holder to at any time enforce any of the provisions of this Unit Purchase Option shall not
be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Unit Purchase Option
or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Unit Purchase
Option. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Unit Purchase Option shall
be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such
waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver
of any other or subsequent breach, non-compliance or non-fulfillment.

 

(g)         Counterparts.
This Unit Purchase Option may be executed in one or more counterparts, and by the different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and
shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the
other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic transmission.

 

(h)         Exchange
Agreement. As a condition of the Holder’s receipt and acceptance of this Unit Purchase Option, Holder agrees that, at
any time prior to the complete exercise of this Unit Purchase Option by Holder, if the Company and Dawson enter into an agreement
(the “Exchange Agreement”) pursuant to which they agree that all outstanding Unit Purchase Options will be exchanged
for securities or cash or a combination of both, then Holder shall agree to such exchange and become a party to the Exchange Agreement.

 

[Balance of page intentionally left blank]

 

    10 

     

    

 

IN WITNESS WHEREOF, the
Company has caused this Unit Purchase Option to be signed by its duly authorized officer as of the ____ day of ____, 2016.

 

	 	InspireMD, Inc.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

    	 	 

     

    

 

Form To Be Used To Exercise Unit Purchase
Option

 

InspireMD, Inc.

[____]

[____]

Attn: Chief Financial Officer

 

Date:                  ,
201  

 

The undersigned hereby elects irrevocably to exercise all or a portion
of the within Unit Purchase Option and to purchase         Units of [_____], Inc., and hereby
makes payment of $         (at the rate of $       
per Unit) in payment of the Exercise Price pursuant thereto. Please issue the Shares and Warrants comprising the Units as to which
this Unit Purchase Option is exercised in accordance with the instructions given below.

 

or

 

The undersigned hereby elects irrevocably to
convert its right to purchase         Units purchasable under the within Unit Purchase Option
by surrender of the unexercised portion of the attached Unit Purchase Option (with a “Value” based of $       
based on a “Market Price” of $       ). Please issue the securities comprising the
Units as to which this Unit Purchase Option is exercised in accordance with the instructions given below.

 

	 	 
	 	Signature
	 	 
	 	 

 

INSTRUCTIONS FOR REGISTRATION OF SECURITIES

 

	Name:	 	 
	 	(Print in Block Letters)	 
	 	 	 
	Address:	 	 

 

NOTICE: THE SIGNATURE TO
THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE WITHIN UNIT PURCHASE OPTION IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK, OTHER THAN A SAVINGS BANK, OR BY A TRUST
COMPANY OR BY A FIRM HAVING MEMBERSHIP ON A REGISTERED NATIONAL SECURITIES EXCHANGE.

 

    	 	 

     

    

 

Form To Be Used To Assign Unit Purchase
Option

 

ASSIGNMENT

 

(To be executed by the registered Holder to
effect a transfer of the within Unit Purchase Option)

 

FOR VALUE RECEIVED,         does
hereby sell, assign and transfer unto         the right to purchase        
Units of [_____], Inc., (the “Company”) evidenced by the within Unit Purchase Option and does hereby authorize
the Company to transfer such right on the books of the Company.

 

Dated:              ,
201  

 

	 	 
	 	Signature
	 	 
	 	 

 

NOTICE: THE SIGNATURE TO
THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE WITHIN UNIT PURCHASE OPTION IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK, OTHER THAN A SAVINGS BANK, OR BY A TRUST
COMPANY OR BY A FIRM HAVING MEMBERSHIP ON A REGISTERED NATIONAL SECURITIES EXCHANGE.

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