Document:

Exhibit 10.1

 

EXECUTION VERSION

 

STANDBY
EQUITY DISTRIBUTION AGREEMENT

 

THIS
STANDBY EQUITY DISTRIBUTION AGREEMENT dated as of August 22, 2017 (this “Agreement”) is made by and between
YA II PN, LTD., a Cayman Islands exempt limited partnership (the “Investor”), and MICRONET ENERTEC
TECHNOLOGIES, INC., a company organized under the laws of the State of Delaware (the “Company”).

 

WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall have the right to issue
and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company up to $10,000,000
of the Company’s common stock, par value $0.001 per share (the “Common Stock”); and

 

WHEREAS,
the shares of Common Stock are listed for trading on the Nasdaq Capital Market under the symbol “MICT;” and

 

WHEREAS,
the offer and sale of the Common Stock issuable hereunder will be made in reliance upon the provisions of Regulation D (“Regulation
D”) promulgated under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the
“Securities Act”), or upon such other exemption from the registration requirements of the Securities Act as
may be available with respect to any or all of the transactions to be made hereunder.

 

NOW,
THEREFORE, the parties hereto agree as follows:

 

Article
I. Certain Definitions

 

Section
1.01    “Additional Amount” shall have the meaning set forth in Section
2.01(c)(ii).

 

Section
1.02    “Adjusted Advance Amount” shall have the meaning set forth in
Section 2.01(c)(i).

 

Section
1.03    “Advance” shall mean the portion of the Commitment Amount requested
by the Company in the Advance Notice.

 

Section
1.04    “Advance Date” shall mean the 1st Trading Day after
expiration of the applicable Pricing Period for each Advance.

 

Section
1.05    “Advance Notice” shall mean a written notice in the form of
Exhibit A attached hereto to the Investor executed by an officer of the Company and setting forth the Advance amount that
the Company requests from the Investor.

 

Section
1.06    “Advance Notice Date” shall mean each date the Company is deemed
to have delivered (in accordance with Section 2.01(b) of this Agreement) to the Investor an Advance Notice requiring the Investor
to advance funds to the Company, subject to the terms of this Agreement.

 

Section
1.07    “Affiliate” shall have the meaning set forth in Section 3.07.

 

     

     

    

 

Section
1.08    “Applicable Laws” shall mean all applicable laws, statutes,
rules, regulations, orders, executive orders, directives, policies, guidelines and codes having the force of law, whether local,
national, or international, as amended from time to time, including without limitation (i) all applicable laws that relate to
money laundering, terrorist financing, financial record keeping and reporting, (ii) all applicable laws that relate to anti-bribery,
anti-corruption, books and records and internal controls, including the United States Foreign Corrupt Practices Act of 1977, and
(iii) any applicable Sanctions.

 

Section
1.09    “Commitment Amount” shall mean the aggregate amount of up to
$10,000,000 provided that, the Company shall not effect any sales under this Agreement and the Investor shall not have
the obligation to purchase shares of Common Stock under this Agreement to the extent that after giving effect to such purchase
and sale the aggregate number of shares of Common Stock issued under this Agreement would exceed 19.9% of the outstanding shares
of Common Stock as of the date of this Agreement, except that such limitation shall not apply in the event that the Company (i) obtains
the approval of its stockholders as required by the applicable rules of the Nasdaq Stock Market for issuances of Common Stock
in excess of such amount or (ii) obtains a written opinion from outside counsel to the Company that such approval is not
required, which opinion shall be reasonably satisfactory to the Investor.

 

Section
1.10    “Commitment Fee” shall have the meaning set forth in Section
13.05.

 

Section
1.11    “Commitment Fee Shares” shall have the meaning set forth in
Section 13.05.

 

Section
1.12    “Commitment Period” shall mean the period commencing on the
Effective Date, and expiring upon the date of termination of this Agreement in accordance with Section 11.02.

 

Section
1.13    “Common Stock” shall have meaning set forth in the Recitals.

 

Section
1.14    “Company Indemnitees” shall have the meaning set forth in Section
5.02.

 

Section
1.15    “Condition Satisfaction Date” shall have the meaning set forth
in Section 7.01.

 

Section
1.16    “Consolidation Event” shall have the meaning set forth in Section
6.08.

 

Section
1.17    “Daily Value Traded” in respect of a particular Trading Day
means the product obtained by multiplying the daily trading volume of the Common Stock for that day on the Principal Market by
the VWAP for such day.

 

Section
1.18    “Effective Date” shall mean the date on which the SEC first
declares effective a Registration Statement registering the resale of the Shares.

 

Section
1.19    “Environmental Laws” shall have the meaning set forth in Section
4.08.

 

Section
1.20    “Exchange Act” shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.

 

Section
1.21    “Excluded Day” shall have the meaning set forth in Section 2.01(c)(i).

 

    	 	- 2 -	 

     

    

 

Section
1.22    “Hazardous Materials” shall have the meaning set forth in Section
4.08.

 

Section
1.23    “Indemnified Liabilities” shall have the meaning set forth in
Section 5.01.

 

Section
1.24    “Investor Indemnitees” shall have the meaning set forth in Section
5.01.

 

Section
1.25    “Market Price” shall mean the lowest daily VWAP during the relevant
Pricing Period, other than the daily VWAP on any Excluded Days.

 

Section
1.26    “Material Adverse Effect” shall mean any condition, circumstance,
or situation that would reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability
of this Agreement or the transactions contemplated herein, (ii) a material adverse effect on the results of operations, assets,
business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement.

 

Section
1.27    “Maximum Advance Amount” in respect of each Advance Notice means
the greater of (i) 20% of the aggregate of the Daily Value Traded during the period of five consecutive Trading Days ending on
(and including) (A) the Advance Notice Date if the Advance Notice is delivered after the close of the Principal Market, or (B)
the last Trading Day immediately prior to the Advance Notice Date if the Advance Notice is delivered prior to the closing of the
Principal Market, or (ii) $50,000.

 

Section
1.28    “Material Outside Event” shall have the meaning set forth in
Section 6.07.

 

Section
1.29    “Minimum Acceptable Price” shall be, with respect each Advance
Notice, 85% of the closing price of the Common Stock on the Principal Market on (i) the Advance Notice Date if the Advance Notice
is delivered after the close of the Principal Market, or (ii) the last Trading Day immediately prior to the Advance Notice Date
if the Advance Notice is delivered prior to the closing of the Principal Market.

 

Section
1.30    “Ownership Limitation” shall have the meaning set forth in Section
2.01(d)(i).

 

Section
1.31    “Person” shall mean an individual, a corporation, a partnership,
an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality
thereof.

 

Section
1.32    “Plan of Distribution” shall have the meaning set forth in Section
6.01(a).

 

Section
1.33    “Pricing Period” shall mean the 5 consecutive Trading Days commencing
on the Trading Day immediately following the Advance Notice Date.

 

Section
1.34    “Principal Market” shall mean the OTCQX, the OTCQB, the New
York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market, or the NASDAQ Capital Market, whichever
is at the time the principal trading exchange or market for the Common Stock.

 

    	 	- 3 -	 

     

    

 

Section
1.35    “Purchase Price” shall mean the price per share obtained by
multiplying the Market Price by 98.5%.

 

Section
1.36    “Registrable Securities” shall mean (i) the Shares, and (ii)
any securities issued or issuable with respect to any of the foregoing by way of exchange, stock dividend or stock split or in
connection with a combination of shares, recapitalization, consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, once issued such securities shall cease to be Registrable Securities when (a) the Registration Statement
has been declared effective by the SEC and such Registrable Securities have been disposed of pursuant to the Registration Statement,
(b) such Registrable Securities have been sold under circumstances in which all of the applicable conditions of Rule 144 (or any
similar provision then in force) under the Securities Act (“Rule 144”) are met, or (c) such Registrable Securities
may be sold without any time, volume or manner limitations pursuant to Rule 144.

 

Section
1.37    “Registration Limitation” shall have the meaning set forth in
Section 2.01(d)(ii).

 

Section
1.38    “Registration Period” shall have the meaning set forth in Section
6.01(b).

 

Section
1.39    “Registration Statement” shall mean a registration statement
on Form S-1 or Form S-3 or on such other form promulgated by the SEC for which the Company then qualifies, and which form shall
be available for the registration of the resale by the Investor of the Registrable Securities under the Securities Act.

 

Section
1.40    “Regulation D” shall have the meaning set forth in the recitals
of this Agreement.

 

Section
1.41    “Sanctions” means any sanctions administered or enforced by
U.S. Department of Treasury’s Office of Office of Foreign Asset Control of the U.S. Department of Treasury from time to
time (“OFAC”) or the U.S. State Department, the United Nations Security Council, the European Union, Her Majesty’s
Treasury, or other relevant sanctions authority.

 

Section
1.42    “Sanctions Programs” means any OFAC economic sanction program
(including, without limitation, programs related to Crimea, Cuba, Iran, North Korea, Sudan and Syria).

 

Section
1.43    “SEC” shall mean the U.S. Securities and Exchange Commission.

 

Section
1.44    “SEC Documents” shall have the meaning set forth in Section
4.04.

 

Section
1.45    “Securities Act” shall have the meaning set forth in the recitals
of this Agreement.

 

Section
1.46    “Settlement Document” shall have the meaning set forth in Section
2.02(a).

 

Section
1.47    “Shares” shall mean the Common Stock to be issued from time
to time hereunder pursuant to Advances.

 

Section
1.48    “Subsidiary” and “Subsidiaries” shall have
the respective meanings set forth in Section 4.01.

 

Section
1.49    “Transaction Documents” shall have the meaning set forth in
Section 4.02.

 

    	 	- 4 -	 

     

    

 

Section
1.50    “Trading Day” shall mean any day during which the Principal
Market shall be open for business.

 

Section
1.51    “VWAP” means, for any Trading Day, the daily volume weighted
average price of the Common Stock for such date on the Principal Market as reported by Bloomberg L.P. (or, if not reported on
Bloomberg, L.P., another reporting service reasonably agreed to by the parties) during regular trading hours.

 

Article
II. Advances

 

Section
2.01    Advances; Mechanics. Subject to the terms and conditions of this Agreement
(including, without limitation, the provisions of Article VII hereof), the Company, at its sole and exclusive option, may issue
and sell to the Investor, and the Investor shall purchase from the Company, Shares on the following terms:

 

	 	(a)	Advance
    Notice. At any time during the Commitment Period the Company may require the Investor to purchase Shares by delivering
    an Advance Notice to the Investor, subject to the conditions set forth in Section 7.01, and in accordance with the following
    provisions:

 

	 	(i)	The
    Company shall, in its sole discretion, select the Advance amount it desires to request in each Advance Notice and the time
    it desires to deliver each Advance Notice, which amount shall not exceed the Maximum Advance Amount, provided, however, the
    Company acknowledges and agrees that the total Advance amount that the Company will receive in connection with each Advance
    Notice may be less than the Advance amount requested in the Advance Notice due to reductions to the Advance amount in accordance
    with Section 2.01(c) and 2.01(d).

 

	 	(ii)	There
    shall be no mandatory minimum Advances and no non-usages fee for not utilizing the Commitment Amount or any part thereof.

 

	 	(b)	Date
    of Delivery of Advance Notice. Advance Notices shall be delivered in accordance with the instructions set forth on the
    bottom of Exhibit A. An Advance Notice shall be deemed delivered on (i) the day it is received by the Investor if such notice
    is received prior to 8:00 p.m. Eastern Time in accordance with the instructions set forth on the bottom of Exhibit A or (ii)
    the immediately succeeding day if it is received after 8:00 p.m. Eastern Time, in each case in accordance with the instructions
    set forth on the bottom of Exhibit A.

 

	 	(c)	Minimum
    Acceptable Price.

 

	 	(i)	With
    respect to each Advance Notice, each Trading Day during a Pricing Period for which (A) the VWAP of the Common Stock is below
    the Minimum Acceptable Price in effect with respect to such Advance Notice, or (B) there is no VWAP (each such day, an “Excluded
    Day”), shall result in an automatic reduction to the amount of the Advance set forth in such Advance Notice by 20%
    (the resulting amount of each Advance being the “Adjusted Advance Amount”), and each Excluded Day shall
    be excluded from the Pricing Period for purposes of determining the Market Price.

 

    	 	- 5 -	 

     

    

 

	 	(ii)	The
    total amount of each Advance (after reductions have been made to arrive at the Adjusted Advance Amount) shall be automatically
    increased by an amount (the “Additional Amount”) equal to the product of (A) the number of shares of Common
    Stock sold by the Investor on each Excluded Day, if any, and (B) a price per share equal to the Minimum Acceptable Price in
    effect with respect to such Advance Notice (without any further discount), provided that this increase shall not cause the
    total Advance amount to exceed the amount set forth in the original Advance Notice or any limitations set forth in Section
    2.01(d).

 

	 	(d)	Advance
    Limitations. Regardless of the Advance amount requested by the Company in the Advance Notice and the adjustments contemplated
    by Section 2.01(c), the Adjusted Advance Amount shall be reduced in accordance with each of the following limitations:

 

	 	(i)	Ownership
    Limitation; Commitment Amount. In no event shall the number of Shares issuable to the Investor pursuant to an Advance
    cause the aggregate number of shares of Common Stock beneficially owned (as calculated pursuant to Section 13(d) of the Exchange
    Act) by the Investor and its affiliates to exceed 4.99% of the then outstanding Common Stock (the “Ownership Limitation”).
    In connection with each Advance Notice delivered by the Company, any portion of an Adjusted Advance Amount that would (i)
    cause the Investor to exceed the Ownership Limitation or (ii) cause the aggregate amount of Advances (that is, the aggregate
    amount of prior Advances made to the Company plus such Adjusted Advance Amount) to exceed the Commitment Amount shall automatically
    be withdrawn with no further action required by the Company, and such Advance Notice shall be deemed automatically modified
    to reduce the Adjusted Advance Amount by an amount equal to such withdrawn portion. The Investor shall notify the Company
    promptly of any reduction of the Adjusted Advance Amount due to the Ownership Limitation, but failure to provide such notice
    shall have no effect on the operation or implementation of the other provisions of this Section 2.01(d)(i).

 

	 	(ii)	Registration
    Limitation. In no event shall the aggregate number of Shares subject to an Advance Notice (as such number of Shares may
    be reduced pursuant to Section 2.01(c) and Section 2.01(d)(i)) cause the number of Shares purchased by the Investor pursuant
    to this Agreement to exceed the number of Shares registered for resale by the Investor under the Registration Statement(s)
    then in effect (the “Registration Limitation”). In connection with each Advance Notice, any portion of
    an Adjusted Advance Amount (after giving effect to any reduction in accordance with Section 2.01(d)(i)) that would exceed
    the Registration Limitation shall automatically be withdrawn with no further action required by the Company and such Advance
    Notice shall be deemed automatically modified to reduce the aggregate amount of the Adjusted Advance Notice by an amount equal
    to such withdrawn portion in respect of each Advance Notice.

 

    	 	- 6 -	 

     

    

 

	 	(e)	Notwithstanding
    any other provision in this Agreement, the Company and the Investor acknowledge and agree that (i) upon the Investor’s
    receipt of a valid Advance Notice the parties shall be deemed to have entered into an unconditional contract binding on both
    parties for the purchase and sale of Shares pursuant to such Advance Notice in accordance with the terms of this Agreement
    and subject to applicable law and (ii) subject to Section 3.08, the Investor may sell shares of Common Stock of the Company
    during the Pricing Period.

 

Section
2.02    Closings. Each Closing shall take place as soon as practicable after each
Advance Date in accordance with the procedures set forth below. In connection with each Closing, the Company and the Investor
shall fulfill each of its obligations as set forth below:

 

	 	(a)	On
    each Advance Date, the Investor shall deliver to the Company a written document, in the form attached hereto as Exhibit B
    (each a “Settlement Document”), setting forth the Advance (taking into account any adjustments pursuant
    to Section 2.01), the Market Price, the Purchase Price, the number of Shares to be purchased by the Investor, and a report
    by Bloomberg, L.P. indicating the VWAP for each of the Trading Days during the Pricing Period (or, if not reported on Bloomberg,
    L.P., another reporting service reasonably agreed to by the parties), in each case in accordance with the terms and conditions
    of this Agreement. The number of Shares to be purchased by the Investor at the Closing for such Advance shall equal the sum
    of (i) the Adjusted Advance Amount divided by the Purchase Price, rounded to the nearest whole number of Shares, plus
    (ii) the aggregate number of shares of Common Stock sold by the Investor on Excluded Days during such Pricing Period (as contemplated
    by Section 2.01(c)(ii)).

 

	 	(b)	Promptly
    after receipt of the Settlement Document with respect to each Advance (and, in any event, not later than two Trading Days
    after such receipt), the Company will, or will cause its transfer agent to, electronically transfer such number of Shares
    to be purchased by the Investor (as set forth in the Settlement Document) by crediting the Investor’s account or its
    designee’s account at the Depository Trust Company through its Deposit Withdrawal at Custodian System or by such other
    means of delivery as may be mutually agreed upon by the parties hereto (which in all cases the resale of such Shares shall
    be covered by an effective Registration Statement), and transmit notification to the Investor that such Share transfer has
    been requested. Promptly upon receipt of such notification, the Investor shall pay to the Company the aggregate amount of
    the Advance (as set forth in the Closing Statement) in cash in immediately available funds to an account designated by the
    Company in writing and transmit notification to the Company that such funds transfer has been requested. No fractional shares
    of Common Stock shall be issued, and any fractional amounts shall be rounded to the nearest whole number of shares. Any certificates
    evidencing Common Stock delivered pursuant hereto (other than any Commitment Fee Shares) shall be free of restrictive legends.
    To facilitate the transfer of the shares of Common Stock (other than any Commitment Fee Shares) by the Investor, such shares
    of Common Stock will not bear any restrictive legends so long as there is an effective Registration Statement covering such
    Common Stock. Upon the request of the Investor at any time at which there is an effective Registration Statement covering
    the Commitment Fee Shares and subject to applicable law, the Company will use its commercially reasonable efforts to assist
    the Investor in exchanging the original stock certificate evidencing the Commitment Fee Shares for a certificate free of restrictive
    legends.

 

    	 	- 7 -	 

     

    

 

	 	(c)	On
    or prior to the Advance Date, each of the Company and the Investor shall deliver to the other all documents, instruments and
    writings required to be delivered by either of them pursuant to this Agreement in order to implement and effect the transactions
    contemplated herein.

 

Section
2.03    Hardship. In the event the Investor sells Shares after receipt of an Advance
Notice and the Company fails to perform its obligations as mandated in Section 2.02, the Company agrees that in addition to and
in no way limiting the rights and obligations set forth in Article V hereto and in addition to any other remedy to which the Investor
is entitled at law or in equity, including, without limitation, specific performance, it will hold the Investor harmless against
any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection
with such default by the Company and acknowledges that irreparable damage would occur in the event of any such default. It is
accordingly agreed that the Investor shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement
and to specifically enforce (subject to the Securities Act and rules of the Principal Market), without the posting of a bond or
other security, the terms and provisions of this Agreement.

 

Section
2.04    In the event the Investor fails to perform its obligations as mandated in Section
2.02, the Investor agrees that in addition to and in no way limiting the rights and obligations set forth in Article V hereto
and in addition to any other remedy to which the Company is entitled at law or in equity, including, without limitation, specific
performance, it will hold the Company harmless against any loss, claim, damage, or expense (including reasonable legal fees and
expenses), as incurred, arising out of or in connection with such default by the Investor and acknowledges that irreparable damage
may occur in the event of any such default. It is accordingly agreed that the Company shall be entitled to an injunction or injunctions
to prevent such breaches of this Agreement and to specifically enforce (subject to the Securities Act and other rules of the Principal
Market), without the posting of a bond or other security, the terms and provisions of this Agreement.

 

Article
III. Representations and Warranties of Investor

 

Investor
hereby represents and warrants to, and agrees with, the Company that the following are true and correct as of the date hereof
and as of each Advance Date:

 

Section
3.01    Organization and Authorization. The Investor is duly organized, validly
existing and in good standing under the laws of the Cayman Islands and has all requisite power and authority to execute, deliver
and perform this Agreement, including all transactions contemplated hereby. The decision to invest, the execution and delivery
by the Investor of this Agreement and the other Transaction Documents to which the Investor is a party, the performance by the
Investor of its obligations hereunder and thereunder, and the consummation by the Investor of the transactions contemplated hereby
and thereby have been duly authorized and require no other proceedings on the part of the Investor. The undersigned has the right,
power and authority to execute and deliver this Agreement and the other Transaction Documents to which the Investor is a party,
on behalf of the Investor or its shareholders. This Agreement and such Transaction Documents have been (or, when executed and
delivered, will be) duly executed and delivered by the Investor and, assuming the execution and delivery hereof and acceptance
thereof by the Company, will constitute the legal, valid and binding obligations of the Investor, enforceable against the Investor
in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or other laws relating to, or affecting generally, the enforcement
of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited
by federal or state securities law.

 

    	 	- 8 -	 

     

    

 

Section
3.02    Evaluation of Risks. The Investor has such knowledge and experience in financial,
tax and business matters as to be capable of evaluating the merits and risks of, and bearing the economic risks entailed by, an
investment in the Company and of protecting its interests in connection with the transactions contemplated hereby. The Investor
acknowledges and agrees that its investment in the Company involves a high degree of risk, and that the Investor may lose all
or a part of its investment.

 

Section
3.03    No Legal, Investment or Tax Advice from the Company. The Investor acknowledges
that it had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel
and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations
of the Company or any of the Company’s representatives or agents for legal, tax, investment or other advice with respect
to the Investor’s acquisition of Shares hereunder, the transactions contemplated by this Agreement or the laws of any jurisdiction.

 

Section
3.04    Investment Purpose. The shares of Common Stock purchased by the Investor
hereunder are being or will be purchased for its own account, for investment purposes, and without any view or intention to distribute
such shares in violation of the Securities Act or any other applicable securities laws. The Investor agrees not to assign or in
any way transfer the Investor’s rights to the shares or any interest therein or its obligations under this Agreement and
acknowledges that the Company will not recognize any purported assignment or transfer except in accordance with applicable Federal
and state securities laws. No other Person has or will have a direct or indirect beneficial interest in the shares. The Investor
agrees not to sell, hypothecate or otherwise transfer the Investor’s Common Stock unless such shares are registered under
Federal and applicable state securities laws or unless, in the opinion of counsel satisfactory to the Company, an exemption from
such registration is available.

 

Section
3.05    Accredited Investor. The Investor is an “Accredited Investor”
as that term is defined in Rule 501(a)(3) of Regulation D.

 

    	 	- 9 -	 

     

    

 

Section
3.06    Information. The Investor and its advisors (and its counsel), if any, have
been furnished with all materials relating to the business, finances and operations of the Company and information it deemed material
to making an informed investment decision. The Investor and its advisors, if any, have been afforded the opportunity to ask questions
of the Company and its management and has received answers to such questions. Neither such inquiries nor any other due diligence
investigations conducted by the Investor or its advisors, if any, or its representatives shall modify, amend or affect the Investor’s
right to rely on the Company’s representations and warranties contained in this Agreement. The Investor understands that
its investment involves a high degree of risk. The Investor has sought such accounting, legal and tax advice, as it has considered
necessary to make an informed investment decision with respect to the transactions contemplated hereby.

 

Section
3.07    Not an Affiliate. The Investor is not an officer, director or a person that
directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the
Company or any “affiliate” of the Company (as that term is defined in Rule 405 promulgated under the Securities
Act).

 

Section
3.08    Trading Activities. The Investor’s trading activities with respect
to the Common Stock shall be in compliance with all applicable federal and state securities laws, rules and regulations and the
rules and regulations of the Principal Market on which the Common Stock is listed or traded. Neither the Investor nor its affiliates
has any open short position in the Common Stock, nor has the Investor entered into any hedging transaction that establishes a
net short position with respect to the Common Stock, and the Investor agrees that it shall not, and that it will cause its affiliates
not to, engage in any short sales or hedging transactions with respect to the Common Stock; provided that the Company acknowledges
and agrees that upon receipt of an Advance Notice the Investor has the right to sell (a) the Shares to be issued to the Investor
pursuant to the Advance Notice prior to receiving such Shares or (b) other shares of Common Stock of the Company that it
holds as a long position.

 

Section
3.09    General Solicitation. Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offer or sale of the Common Stock offered hereby.

 

Article
IV. Representations and Warranties of the Company

 

Except
as set forth in the SEC Documents, or in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and
shall qualify any representation or warranty otherwise made herein, the Company represents and warrants to the Investor that,
as of the date hereof and as of each Advance Date (other than representations and warranties which address matters only as of
a certain date, which shall be true and correct as written as of such certain date), that:

 

Section
4.01    Organization and Qualification. Each of the Company and the Subsidiaries
(as defined below) is an entity duly organized and validly existing under the laws of its state of organization or incorporation,
and has the requisite power and authority to own its properties and to carry on its business as now being conducted. Each of the
Company and the Subsidiaries is duly qualified to do business and is in good standing (to the extent applicable) in every jurisdiction
in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure
to be so qualified or be in good standing would not have a Material Adverse Effect. “Subsidiary” means a corporation,
partnership, limited liability company, or other business entity of which a majority of the shares of voting securities is at
the time beneficially owned, or the management of which is otherwise controlled, directly or indirectly, through one or more intermediaries,
or both, by the Company, and all of the foregoing are collectively referred to herein as the “Subsidiaries.”

 

    	 	- 10 -	 

     

    

 

Section
4.02    Authorization, Enforcement, Compliance with Other Instruments. The Company
has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the other Transaction
Documents to which the Company is a party and to issue the Shares and the Commitment Fee Shares in accordance with the terms hereof
and thereof. The execution and delivery by the Company of this Agreement and such other Transaction Documents, and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares)
have been or (with respect to consummation) will be duly authorized by the Company’s board of directors or other governing
body and no further consent or authorization will be required by the Company, its board of directors or its shareholders. This
Agreement and the other Transaction Documents to which it is a party have been (or, when executed and delivered, will be) duly
executed and delivered by the Company and, assuming the execution and delivery thereof and acceptance by the Investor, constitute
(or, when duly executed and delivered, will be) the legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity
or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or other laws relating to, or affecting generally,
the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution
may be limited by federal or state securities law. “Transaction Documents” means, collectively, this Agreement
and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with the
transactions contemplated hereby and thereby, as may be amended from time to time.

 

Section
4.03    No Conflict. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Common Stock) will not (i) result in a violation of the articles of association or other organizational
documents of the Company or any Subsidiary (with respect to consummation, as the same may be amended prior to the date on which
any of the transactions contemplated hereby are consummated), (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture or instrument to which the Company or any Subsidiary is a party, or (iii) result
in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations)
applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected
except, in the case of clause (ii) or (iii) above, to the extent such violations that would not reasonably be expected to have
a Material Adverse Effect.

 

    	 	- 11 -	 

     

    

 

Section
4.04    SEC Documents; Financial Statements. The Company has filed all supplementary
and periodic information, documents and reports required to be filed by it with the SEC pursuant to Section 15(d) of the Exchange
Act for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file
such material), and true and complete copies of all such information, documents and reports are available through the SEC’s
website at http://www.sec.gov. As of their respective dates, (a) the most recent annual report on Form 10-K filed by the
Company and each other report filed by the Company pursuant to Section 15(d) of the Exchange Act since the end of the fiscal year
for which such annual report was filed (the “SEC Documents”) complied in all material respects with the requirements
of the Exchange Act applicable to the SEC Documents and (b) the financial statements of the Company included in the SEC Documents
complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the
notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial position of the Company as of the respective
dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments).

 

Section
4.05    Equity Capitalization. The registered share capital of the Company consists
of 25,000,000 shares of Common Stock. All of outstanding shares of Common Stock are duly authorized, validly issued, fully paid
and nonassessable. As of the date hereof, 7,228,184 shares of Common Stock are issued and outstanding

 

Section
4.06    Intellectual Property Rights. The Company and the Subsidiaries own or possess
adequate rights or licenses to use all material trademarks, trade names, service marks, service mark registrations, service names,
patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary
to conduct their respective businesses as now conducted, except as would not cause a Material Adverse Effect. The Company and
the Subsidiaries do not have any knowledge of any infringement by the Company or any Subsidiaries of trademark, trade name rights,
patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, or trade secrets,
except as would not cause a Material Adverse Effect. To the knowledge of the Company, there is no claim, action or proceeding
being made, brought or threatened, against the Company or any Subsidiaries regarding trademark, trade name, patents, patent rights,
invention, copyright, license, service names, service marks, service mark registrations, trade secret or other infringement, except
as would not reasonably be expected to cause a Material Adverse Effect; and the Company is not aware of any facts or circumstances
which might give rise to any of the foregoing.

 

Section
4.07    Employee Relations. Neither the Company nor any of its Subsidiaries is involved
in any labor dispute nor, to the knowledge of the Company or any of its Subsidiaries, is any such dispute threatened, in each
case which is reasonably likely to cause a Material Adverse Effect.

 

    	 	- 12 -	 

     

    

 

Section
4.08    Environmental Laws. The Company and the Subsidiaries (i) are in compliance
in all material respects with all Environmental Laws (as defined below), (ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all
terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the
failure to so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The term
“Environmental Laws” means all applicable federal, state and local laws relating to pollution or protection
of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

 

Section
4.09    Title. Except as set forth in the SEC Documents, except as would not cause
a Material Adverse Effect, the Company has good and marketable title to its properties and material assets owned by it, free and
clear of any pledge, lien, security interest, encumbrance, claim or equitable interest other than such as are not material to
the business of the Company. Any real property and facilities held under lease by the Company and the Subsidiaries are held by
them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by the Company and the Subsidiaries.

 

Section
4.10    Insurance. The Company and each of the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes
to be prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. The Company has no reason
to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

Section
4.11    Regulatory Permits. Except as would not cause a Material Adverse Effect,
the Company and the Subsidiaries possess all material certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permits.

 

Section
4.12    Internal Accounting Controls. The Company and each of the Subsidiaries maintain
a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect
to any differences.

 

    	 	- 13 -	 

     

    

 

Section
4.13    Absence of Litigation. Except as set forth in the SEC Documents, there is
no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory
organization or body pending against or affecting the Company, the Common Stock or any of the Subsidiaries, wherein an unfavorable
decision, ruling or finding would reasonably be expected to have a Material Adverse Effect.

 

Section
4.14    Subsidiaries. Section 4.14 of the Disclosure Schedules sets forth the name
and jurisdiction of formation of each of the Subsidiaries and the number and percentage of voting securities of each Subsidiary
beneficially owned by the Company.

 

Section
4.15    Tax Status. Each of the Company and the Subsidiaries (i) has timely made
or filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction
to which it is subject, (ii) has timely paid all taxes and other governmental assessments and charges that are material in amount,
shown or determined to be due on such returns, reports and declarations, except those being contested in good faith, and (iii) has
set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which
such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company and the Subsidiaries know of no basis for any such claim.

 

Section
4.16    Certain Transactions. Except as set forth in the SEC Documents, none of
the officers or directors of the Company is presently a party to any transaction with the Company (other than for services as
employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services
to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer
or director, or to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer or director
has a substantial interest or is an officer, director, trustee or partner, other than any of the foregoing that is not required
to be disclosed in the SEC Documents.

 

Section
4.17    Fees and Rights of First Refusal. The Company is not obligated to offer
the Common Stock offered hereunder on a right of first refusal basis or otherwise to any third parties including, but not limited
to, current or former shareholders of the Company, underwriters, brokers, agents or other third parties.

 

Section
4.18    Dilution. The Company is aware and acknowledges that issuance of Common
Stock hereunder could cause dilution to existing shareholders and could significantly increase the outstanding number of shares
of Common Stock.

 

Section
4.19    No General Solicitation. Neither the Company nor any of its affiliates,
nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the Common Stock offered hereby. None of the Company or the Subsidiary,
or any of its or their affiliates or any other Person acting on its or their behalf, has engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D) in connection with the offer or sale of Common Stock hereunder. The
Company shall be responsible for the payment of any financial advisory fees or brokers’ commissions (other than for Persons
engaged by or on behalf of the Investor or its investment advisor) relating to or arising out of the transactions contemplated
hereby based upon arrangements made by or on behalf of the Company. Neither the Company nor any of the Subsidiaries has engaged
any placement agent or other agent in connection with the offer or sale of Common Stock hereunder.

 

    	 	- 14 -	 

     

    

 

Section
4.20    Acknowledgment Regarding Investor’s Purchase of Shares. The Company
acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length investor with respect to this
Agreement and the transactions contemplated hereunder. The Company further acknowledges that the Investor is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated
hereunder and any advice given by the Investor or any of its representatives or agents in connection with this Agreement and the
transactions contemplated hereunder is merely incidental to the Investor’s purchase of the Shares hereunder. The Company
is aware and acknowledges that it shall not be able to request Advances under this Agreement if the Registration Statement is
not effective or if any issuances of Shares pursuant to any Advances would violate any rules of the Principal Market. The Company
further is aware and acknowledges that any fees paid or Commitment Fee Shares issued pursuant to Section 13.05 hereunder shall
be earned on the date hereof and are not refundable or returnable under any circumstances.

 

Section
4.21    Sanctions. Neither the Company nor any Subsidiary of the Company, nor, to
the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary of the Company,
is a Person that is, or is owned or controlled by a Person that is:

 

	 	(a)	on
    the list of Specially Designated Nationals and Blocked Persons maintained by OFAC from time to time;

 

	 	(b)	the
    subject of any Sanctions; or

 

	 	(c)	has
    a place of business in, or is operating, organized, or resident or doing business in a country or territory that is, or whose
    government is, the subject of Sanctions Programs (including without limitation Crimea, Cuba, Iran, North Korea, Sudan and
    Syria)..

 

    	 	- 15 -	 

     

    

 

Article
V. Indemnification

 

The
Investor and the Company represent to the other the following with respect to itself:

 

Section
5.01    Indemnification by the Company. In consideration of the Investor’s
execution and delivery of this Agreement, and in addition to all of the Company’s other obligations under this Agreement,
the Company shall defend, protect, indemnify and hold harmless the Investor, and all of its officers, directors, partners, employees
and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement)
and each person who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act (collectively, the “Investor Indemnitees”) from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and reasonable and documented expenses in connection therewith
(irrespective of whether any such Investor Indemnitee is a party to the action for which indemnification hereunder is sought),
and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred
by the Investor Indemnitees or any of them as a result of, or arising out of, or relating to (a) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed
or in any amendment thereof, or in any related prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Investor specifically for inclusion therein; (b) any material misrepresentation
or breach of any material representation or material warranty made by the Company in this Agreement or any other certificate,
instrument or document contemplated hereby or thereby; (c) any material breach of any material covenant, material agreement or
material obligation of the Company contained in this Agreement or any other certificate, instrument or document contemplated hereby
or thereby; or (d) any cause of action, suit or claim brought or made against such Investor Indemnitee not arising out of any
action or inaction of the Investor Indemnitees, and arising out of or resulting from the execution, delivery, performance or enforcement
of this Agreement or any other instrument, document or agreement executed pursuant hereto by any of the Investor Indemnitees.
To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.

 

Section
5.02    Indemnification by the Investor. In consideration of the Company’s
execution and delivery of this Agreement, and in addition to all of the Investor’s other obligations under this Agreement,
the Investor shall defend, protect, indemnify and hold harmless the Company and all of its officers, directors, shareholders,
employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Company Indemnitees”) from and against any and all Indemnified Liabilities incurred by
the Company Indemnitees or any of them as a result of, or arising out of, or relating to (a) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or
in any amendment thereof, or in any related prospectus, or in any amendment thereof or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that the Investor will only be liable for written
information relating to the Investor furnished to the Company by or on behalf of the Investor specifically for inclusion in the
documents referred to in the foregoing indemnity, and will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written information furnished to the Investor by or on behalf of
the Company specifically for inclusion therein; (b) any misrepresentation or breach of any representation or warranty made by
the Investor in this Agreement or any instrument or document contemplated hereby or thereby executed by the Investor; (c) any
breach of any covenant, agreement or obligation of the Investor contained in this Agreement or any other certificate, instrument
or document contemplated hereby or thereby executed by the Investor; or (d) any cause of action, suit or claim brought or made
against such Company Indemnitee not arising out of any action or inaction of any of the Company Indemnitees and arising out of
or resulting from the execution, delivery, performance or enforcement of this Agreement or any other instrument, document or agreement
executed pursuant hereto by any of the Company Indemnitees. To the extent that the foregoing undertaking by the Investor may be
unenforceable for any reason, the Investor shall make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities, which is permissible under applicable law.

 

    	 	- 16 -	 

     

    

 

Section
5.03    Notice of Claim. Promptly after receipt by an Investor Indemnitee or Company
Indemnitee of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving
an Indemnified Liability, such Investor Indemnitee or Company Indemnitee, as applicable, shall, if a claim for an Indemnified
Liability in respect thereof is to be made against any indemnifying party under this Article V, deliver to the indemnifying party
a written notice of the commencement thereof; but the failure to so notify the indemnifying party will not relieve it of liability
under this Article V except to the extent the indemnifying party is prejudiced by such failure. The indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly
noticed, to assume control of the defense thereof with counsel mutually reasonably satisfactory to the indemnifying party and
the Investor Indemnitee or Company Indemnitee, as the case may be; provided, however, that an Investor Indemnitee or Company Indemnitee
shall have the right to retain its own counsel with the reasonable fees and expenses of not more than one counsel for such Investor
Indemnitee or Company Indemnitee to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the
indemnifying party, the representation by such counsel of the Investor Indemnitee or Company Indemnitee and the indemnifying party
would be inappropriate due to actual or potential differing interests between such Investor Indemnitee or Company Indemnitee and
any other party represented by such counsel in such proceeding. The Investor Indemnitee or Company Indemnitee shall cooperate
fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying
party and shall furnish to the indemnifying party all information reasonably available to the Investor Indemnitee or Company Indemnitee
which relates to such action or claim. The indemnifying party shall keep the Investor Indemnitee or Company Indemnitee fully apprised
at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall
be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however,
that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without
the prior written consent of the Investor Indemnitee or Company Indemnitee, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff
to such Investor Indemnitee or Company Indemnitee of a release from all liability in respect to such claim or litigation. Following
indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Investor Indemnitee
or Company Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification
has been made. The indemnification required by this Article V shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received and payment therefor is due.

 

Section
5.04    Remedies. The remedies provided for in this Article V are not exclusive
and shall not limit any right or remedies which may otherwise be available to any indemnified person at law or in equity. The
obligations of the parties to indemnify or make contribution under this Article V shall survive expiration or termination of this
Agreement for a period of three years.

 

    	 	- 17 -	 

     

    

 

Section
5.05    Limitation of Liability. Notwithstanding the foregoing, no party shall be
entitled to recover from the other party for punitive, indirect, incidental or consequential damages.

 

Article
VI.

Covenants of the Company

 

Section
6.01    Registration Statement.

 

	 	(a)	Filing
    of a Registration Statement. The Company shall prepare and file with the SEC, an initial Registration Statement covering
    the resale of the Registrable Securities. The Company shall not have the ability to request any Advances until the effectiveness
    of a Registration Statement. Each Registration Statement shall contain the “Plan of Distribution” section
    in substantially the form attached hereto as Exhibit C. The Company shall use its commercially reasonable efforts to
    have such initial Registration Statement, and each other Registration Statement required to be filed pursuant to the terms
    of this Agreement, declared effective by the SEC as soon as practicable.

 

	 	(b)	Maintaining
    a Registration Statement. The Company shall use its commercially reasonably efforts to maintain the effectiveness of any
    Registration Statement with respect to Registrable Securities that has been declared effective at all times during the Commitment
    Period or, if earlier, until such time as no Registrable Securities registered thereunder remain outstanding (the “Registration
    Period”). Notwithstanding anything to the contrary contained in this Agreement, the Company shall ensure that, when
    filed and at all times while effective, each Registration Statement (including, without limitation, all amendments and supplements
    thereto) and the prospectus (including, without limitation, all amendments and supplements thereto) used in connection with
    such Registration Statement shall not contain any untrue statement of a material fact or omit to state a material fact required
    to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances
    in which they were made) not misleading.

 

	 	(c)	Filing
    Procedures. Not less than one Trading Day prior to the filing of a Registration Statement and not less than one Trading
    Day prior to the filing of any related amendments and supplements to all Registration Statements (except for any amendments
    or supplements caused by the filing of any annual reports on Form 10-K, current reports on Form 8-K, and any similar or successor
    reports), the Company shall furnish to the Investor copies of all such documents proposed to be filed, which documents (other
    than those incorporated or deemed to be incorporated by reference) will be subject to the reasonable and prompt review of
    the Investor. The Investor shall furnish comments on a Registration Statement and any related amendment and supplement to
    a Registration Statement to the Company within 24 hours of the receipt thereof. If the Investor fails to provide comments
    to the Company within such 24-hour period, then the Registration Statement, related amendment or related supplement, as applicable,
    shall be deemed accepted by the Investor in the form originally delivered by the Company to the Investor.

 

    	 	- 18 -	 

     

    

 

	 	(d)	Delivery
    of Final Documents. The Company shall furnish to the Investor without charge, (i) at least one copy of each Registration
    Statement as declared effective by the SEC and any amendment(s) thereto, including financial statements and schedules, all
    documents incorporated therein by reference, all exhibits and each preliminary prospectus, (ii) at the request of the Investor,
    10 copies of the final prospectus included in such Registration Statement and all amendments and supplements thereto (or such
    other number of copies as the Investor may reasonably request) and (iii) such other documents as the Investor may reasonably
    request from time to time in order to facilitate the disposition of the Registrable Securities owned by the Investor pursuant
    to a Registration Statement. Filing of the forgoing with the SEC via its EDGAR system shall satisfy the requirements of this
    section.

 

	 	(e)	Amendments
    and Other Filings. The Company shall (i) use its commercially reasonable efforts to keep a Registration Statement effective
    at all times during the Registration Period, and in furtherance thereof shall prepare and file with the SEC such amendments (including
    post-effective amendments) and supplements to a Registration Statement and the related prospectus used in connection with
    such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, and
    prepare and file with the SEC such additional Registration Statements in order to register for resale under the Securities
    Act all of the Registrable Securities; (ii) cause the related prospectus to be amended or supplemented by any required prospectus
    supplement (subject to the terms of this Agreement), and as so supplemented or amended to be filed pursuant to Rule 424; and
    (iii) provide the Investor copies of all correspondence from and to the SEC relating to a Registration Statement (provided
    that the Company may excise any information contained therein which would constitute material non-public information).
    In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement
    (including pursuant to this Section 6.01(e)) by reason of the Company’s filing a report on Form 10-K, Form 10-Q, Form
    8-K or any analogous report under the Exchange Act, the Company shall incorporate such report by reference into the Registration
    Statement, if applicable, or shall file such amendments or supplements with the SEC either on the day on which the Exchange
    Act report is filed which created the requirement for the Company to amend or supplement the Registration Statement, if feasible,
    or otherwise promptly thereafter.

 

	 	(f)	Blue-Sky.
    The Company shall use its commercially reasonable efforts to, if applicable, (i) register and qualify the Registrable Securities
    covered by a Registration Statement under such other securities or “blue sky” laws of such jurisdictions in the
    United States as the Investor reasonably requests, (ii) prepare and file in those jurisdictions, such amendments (including
    post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness
    thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and
    qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary
    or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company
    shall not be required in connection therewith or as a condition thereto to (w) make any change to its Articles of Incorporation
    or Bylaws, (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this
    Section 6.01(f), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service
    of process in any such jurisdiction. The Company shall promptly notify the Investor of the receipt by the Company of any notification
    with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the
    securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the
    initiation or threat of any proceeding for such purpose.

 

    	 	- 19 -	 

     

    

 

Section
6.02    Listing of Common Stock. The Company shall use its commercially reasonable
efforts to maintain the Common Stock’s authorization for quotation on the Principal Market and shall notify the Investor
promptly if the Common Stock shall cease to be authorized for quotation on the Principal Market.

 

Section
6.03    Opinion of Counsel. Upon the signing of this Agreement, and in any event
prior to the initial Registration Statement is filed, the Company shall cause its securities counsel to deliver to the Investor
an opinion in a form satisfactory to the Investor for a transaction of this type confirming that the execution and delivery of
this Agreement and the performance of this Agreement by the Company does not conflict with or result in a violation of the Certificate
of Incorporation of the Company or any agreement or instrument to which the Company is a party.

 

Section
6.04    Exchange Act Registration. The Company will file in a timely manner all
reports and other documents required of it as a reporting company under the Exchange Act and will not take any action or file
any document (whether or not permitted by Exchange Act or the rules thereunder) to terminate or suspend its reporting and filing
obligations under the Exchange Act.

 

Section
6.05    Transfer Agent Instructions. Upon effectiveness of the Registration Statement
the Company shall (if required by the transfer agent for the Common Stock) cause legal counsel for the Company to deliver to the
transfer agent for the Common Stock (with a copy to the Investor) confirmation that such Registration Statement has been declared
effective by the SEC and instructions to issue Common Stock to the Investor free of restrictive legends upon each Advance for
so long as the Registration Statement remains in effect.

 

Section
6.06    Corporate Existence. The Company will take all steps necessary to preserve
and continue the corporate existence of the Company during the Commitment Period.

 

    	 	- 20 -	 

     

    

 

Section
6.07    Notice of Certain Events Affecting Registration; Suspension of Right to Make
an Advance. The Company will immediately notify the Investor, and confirm in writing, upon its becoming aware of the occurrence
of any of the following events in respect of a Registration Statement or related prospectus relating to an offering of Registrable
Securities: (i) receipt of any request for additional information by the SEC or any other Federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments or supplements to the Registration Statement or
related prospectus; (ii) the issuance by the SEC or any other Federal governmental authority of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt of any notification
with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction or the initiation or written threat of any proceeding for such purpose; (iv) the happening of any event that
makes any statement made in the Registration Statement or related prospectus of any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement,
related prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not
misleading, and that in the case of the related prospectus, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or of the necessity to amend the Registration Statement or supplement a related prospectus
to comply with the Securities Act or any other law; and (v) the Company’s reasonable determination that a post-effective
amendment to the Registration Statement would be appropriate (other than, in the case of this clause (v), for routine post-effective
amendments required in order to maintain the effectiveness of a Registration Statement filed on Form S-1); and the Company will
promptly make available to the Investor any such supplement or amendment to the related prospectus. The Company shall not deliver
to the Investor any Advance Notice, and the Investor shall not sell any Registrable Securities pursuant to a Registration Statement,
during the continuation of any of the foregoing events (each of the events described in the immediately preceding clauses (i)
through (v), inclusive, a “Material Outside Event”).

 

Section
6.08    Consolidation. If an Advance Notice has been delivered to the Investor,
then the Company shall not effect any consolidation of the Company with or into, or a transfer of all or substantially all the
assets of the Company to an entity other than a Subsidiary before the transaction contemplated in such Advance Notice has been
closed in accordance with Section 2.02 hereof. The Company shall not give an Advance Notice if a shareholder meeting, or the record
date for any shareholder meeting, would fall during the period beginning on the Advance Notice Date and ending 5 Trading Days
following the closing of such Advance.

 

Section
6.09    Issuance of the Company’s Common Stock. Assuming the accuracy of the
representations made by the Investor in Article III, the sale of the Shares and the Commitment Fee Shares hereunder shall be made
in accordance with the provisions and requirements of Regulation D and any applicable state securities laws.

 

Section
6.10    Market Activities. The Company will not, directly or indirectly, take any
action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company under Regulation M of the Exchange Act.

 

Section
6.11    Opinion of Counsel Concerning Resales. Provided that the Investor’s
resale of Common Stock received pursuant to this Agreement may be freely sold by the Investor either pursuant to an effective
Registration Statement, in accordance with Rule 144, or otherwise, the Company shall obtain for the Investor, at the Company’s
expense, any and all opinions of counsel which may be required by any party including the Company’s transfer agent, to issue
such shares free of restrictive legends, or to remove legends from such shares.

 

    	 	- 21 -	 

     

    

 

Section
6.12    Expenses. The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated, will pay all expenses incident to the performance of its obligations hereunder,
including but not limited to (i) the preparation, printing and filing of the Registration Statement and each amendment and supplement
thereto, of each prospectus and of each amendment and supplement thereto; (ii) the preparation, issuance and delivery of any Shares
issued pursuant to this Agreement, (iii) all fees and disbursements of the Company’s counsel, accountants and other advisors,
(iv) the qualification of the Shares under securities laws in accordance with the provisions of this Agreement, including filing
fees in connection therewith, (v) the printing and delivery of copies of any prospectus and any amendments or supplements thereto,
(vi) the fees and expenses incurred in connection with the listing or qualification of the Shares for trading on the Principal
Market, or (vii) filing fees of the SEC and the Principal Market.

 

Section
6.13    Sales. Without the written consent of the Investor, the Company will not,
directly or indirectly, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Stock
(other than the Shares offered pursuant to the provisions of this Agreement, the issuance of shares upon the exercise, conversion
or exchange of outstanding options, warrants or other securities of the Company or any of the Subsidiaries, and/or the issuance
of shares under publicly disclosed equity compensation plans of the Company) or securities convertible into or exchangeable for
Common Stock, warrants or any rights to purchase or acquire, Common Stock (other than the issuance of stock options and other
equity award under publicly disclosed equity compensation plans of the Company) during the period beginning on the 5th Trading
Day immediately prior to an Advance Notice Date and ending on the 5th Trading Day immediately following the corresponding Advance
Date.

 

Section
6.14    Current Report. The Company shall not, and the Company shall cause the Subsidiaries
and each of its and their respective officers, directors, employees and agents not to, provide the Investor with any material,
non-public information regarding the Company or any of its Subsidiaries without the express prior written consent of the Investor
(which may be granted or withheld in the Investor’s sole discretion). Notwithstanding anything contained in this Agreement
to the contrary, the Company expressly agrees that it shall publicly disclose, no later than four (4) Trading Days following the
date hereof, any information communicated to the Investor by or, to the knowledge of the Company, on behalf of the Company in
connection with the transactions contemplated herein, which, following the date hereof would, if not so disclosed, constitute
material, non-public information regarding the Company and the Subsidiaries.

 

Section
6.15    Black-out Periods. Notwithstanding any other provision of this Agreement,
the Company shall not deliver an Advance Notice during any Company black-out periods or during any other period in which the Company
is, or could be deemed to be, in possession of material non-public information.

 

Section
6.16    Use of Proceeds. The Company will use the proceeds from the sale of the
Common Stock hereunder for working capital and other general corporate purposes or, if different, in a manner consistent with
the application thereof described in the Registration Statement. The Company will not, directly or indirectly, use the proceeds
of the transactions contemplated herein, or lend, contribute, facilitate or otherwise make available such proceeds to any
Person, (i) to fund, either directly or indirectly, any activities or business of or with any Person that is identified on the
list of Specially Designated Nationals and Blocker Persons maintained by OFAC, or in any country or territory, that, at the time
of such funding, is, or whose government is, the subject of Sanctions or Sanctions Programs, or (ii) in any other manner that
will result in a violation of Sanctions.

 

    	 	- 22 -	 

     

    

 

Section
6.17    Compliance with Laws. The Company shall comply with all material Applicable
Laws and will not take any action which will cause the Investor to be in violation of any material Applicable Laws.

 

Article
VII.

Conditions for Advance and Conditions to Closing

 

Section
7.01    Conditions Precedent to the Right of the Company to Deliver an Advance Notice.
The right of the Company to deliver an Advance Notice and the obligations of the Investor hereunder with respect to an Advance
is subject to the satisfaction by the Company, on each Advance Notice Date (a “Condition Satisfaction Date”),
of each of the following conditions:

 

	 	(a)	Accuracy
    of the Company’s Representations and Warranties. The representations and warranties of the Company in this Agreement
    and each other Transaction Document to which the Company is a party shall be true and correct in all material respects.

 

	 	(b)	Registration
    of the Common Stock with the SEC. There is an effective Registration Statement pursuant to which the Investor is permitted
    to utilize the prospectus thereunder to resell all of the Shares issuable pursuant to such Advance Notice. The Company shall
    have filed with the SEC all reports, notices and other documents required under the Exchange Act and applicable SEC regulations
    during the twelve-month period immediately preceding the applicable Condition Satisfaction Date.

 

	 	(c)	Authority.
    The Company shall have obtained all permits and qualifications required by any applicable state for the offer and sale of
    all of the Shares issuable pursuant to such Advance Notice, or shall have the availability of exemptions therefrom. The sale
    and issuance of such Shares shall be legally permitted by all laws and regulations to which the Company is subject.

 

	 	(d)	No
    Material Outside Event. No Material Outside Event shall have occurred and be continuing.

 

	 	(e)	Performance
    by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants,
    agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior
    to the applicable Condition Satisfaction Date.

 

	 	(f)	No
    Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
    promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits or directly and materially
    adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced that
    may have a Material Adverse Effect.

 

    	 	- 23 -	 

     

    

 

	 	(g)	No
    Suspension of Trading in or Delisting of Common Stock. The Common Stock is quoted trading on a Principal Market and all
    of the Shares issuable pursuant to such Advance Notice will be listed or quoted for trading on such Principal Market and the
    Company believes, in good faith, that trading of the Common Stock on a Principal Market will continue uninterrupted for the
    foreseeable future. The issuance of Shares with respect to the applicable Advance Notice will not violate the shareholder
    approval requirements of the Principal Market. The Company shall not have received from the Principal Market any written notice
    threatening the continued listing or quotation of the Common Stock on the Principal Market.

 

	 	(h)	Authorized.
    There shall be a sufficient number of authorized but unissued and otherwise unreserved Common Stock for the issuance of all
    of the Shares issuable pursuant to such Advance Notice.

 

	 	(i)	Executed
    Advance Notice. The Investor shall have received the Advance Notice executed by an officer of the Company and the representations
    contained in such Advance Notice shall be true and correct as of the applicable Condition Satisfaction Date.

 

	 	(j)	Consecutive
    Advance Notices. Except with respect to the first Advance Notice, the Company shall have delivered all Shares relating
    to all prior Advances.

 

Article
VIII.

Non-Disclosure of Non-Public Information

 

The
Company covenants and agrees that it shall refrain from disclosing, and shall cause its officers, directors, employees and agents
to refrain from disclosing, any material non-public information (as determined under the Securities Act or the Exchange Act) to
the Investor, unless prior to disclosure of such information the Company identifies such information as being material non-public
information and provides the Investor with the opportunity to accept or refuse to accept such material non-public information
for review. Unless specifically agreed to in writing, in no event shall the Investor have a duty of confidentially, or be deemed
to have agreed to maintain information in confidence, with respect to (i) any information disclosed in violation of this provision
or (ii) the delivery of any Advance Notices.

 

Article
IX.

Non Exclusive Agreement

 

Notwithstanding
anything contained herein, this Agreement and the rights awarded to the Investor hereunder are non-exclusive, and, subject to
the provisions in Section 6.13, the Company and the Subsidiaries may, at any time throughout the term of this Agreement and thereafter,
issue and allot, or undertake to issue and allot, any shares and/or securities and/or convertible notes, bonds, debentures, options
to acquire shares or other securities and/or other facilities which may be converted into, exchanged for or replaced by Common
Stock or other securities of the Company, and to extend, renew and/or recycle any bonds and/or debentures, and/or grant any rights
with respect to its existing and/or future share capital.

 

    	 	- 24 -	 

     

    

 

Article
X.

Choice of Law/Jurisdiction

 

This
Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard to the principles
of conflict of laws. The parties further agree that any action between them shall be heard in New York County, New York, and expressly
consent to the jurisdiction and venue of the Supreme Court of New York, sitting in New York County, New York and the United States
District Court of the Southern District of New York, sitting in New York, New York, for the adjudication of any civil action asserted
pursuant to this paragraph.

 

Article
XI. Assignment; Termination

 

Section
11.01    Assignment. Neither this Agreement nor any rights of the parties hereto may be assigned to any
other Person.

 

Section
11.02    Termination.

 

	 	(a)	Unless
    earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earlier of (i) the second
    anniversary of the Effective Date, or (ii) the date on which the Investor shall have made payment of Advances pursuant to
    this Agreement in the aggregate amount of the Commitment Amount

 

	 	(b)	The
    Company may terminate this Agreement effective upon fifteen Trading Days’ prior written notice to the Investor; provided
    that (i) there are no outstanding Advance Notices, the Shares under which have yet to be issued, and (ii) the Company has
    paid all amounts owed to the Investor pursuant to this Agreement. This Agreement may be terminated at any time by the mutual
    written consent of the parties, effective as of the date of such mutual written consent unless otherwise provided in such
    written consent.

 

	 	(c)	Nothing
    in this Section 11.02 shall be deemed to release the Company or the Investor from any liability for any breach under this
    Agreement, or to impair the rights of the Company and the Investor to compel specific performance by the other party of its
    obligations under this Agreement prior to termination. The indemnification provisions contained in Article V shall survive
    termination hereunder.

 

    	 	- 25 -	 

     

    

 

Article
XII. Notices

 

Any
notices, consents, waivers, or other communications required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by facsimile or e-mail if sent on a Trading Day, or, if not sent on a Trading Day, on the immediately following Trading Day, provided
a copy is mailed by U.S. certified mail, return receipt requested or overnight carrier; (iii) 7 days after being sent by U.S.
or Israeli certified mail, return receipt requested, or (iv) 1 day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications,
except for Advance Notices which shall be delivered in accordance with Exhibit A hereof, shall be:

 

	If to the Company, to:	
        Micronet Enertec Technologies, Inc.

        Attention: David Lucatz

	 	
        28 West Grand Avenue, Suite 3 

        Montvale, NL 07645

	 	
        Telephone:   201-225-0190

        Email:           david@micronet-enertec.com

	 	 
	
        With a copy to (which shall not

        Constitute notice or delivery of process) to:
	Zysman, Aharoni, Gayer and Sullivan & Worcester LLP

        1633 Broadway New

        York, NY 10019 

        Attention: Oded Har-Even, Esq.

        Telephone:    (212) 660-5002 

        Email:            ohareven@zag-sw.com

	 	 
	If to the Investor(s):	YA II PN, Ltd.
	 	1012 Springfield Avenue
	 	Mountainside, NJ 07092
	 	Attention:     Mark Angelo
	 	                      Portfolio Manager
	 	Telephone:   (201) 985-8300
	 	Facsimile:
	 	Email:mangelo@yorkvilleadvisors.com
	 	 
	With a copy (which shall not constitute notice or delivery of process) to:	 
	 	
        David Gonzalez, Esq.

        1012 Springfield Avenue

	 	Mountainside, NJ 07092
	 	Telephone:   (201) 985-8300
	 	Facsimile:
	 	Email:             legal@yorkvilleadvisors.com

  

Either
party may change its information contained in this Article XII by delivering notice to the other party as set forth herein.

 

Article
XIII. Miscellaneous

 

Section
13.01    Counterparts. This Agreement may be executed in identical counterparts, both of which shall be
considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to the other party. Facsimile or other electronically scanned and delivered signatures, including by e-mail attachment, shall
be deemed originals for all purposes of this Agreement.

 

    	 	- 26 -	 

     

    

 

Section
13.02    Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements
between the Investor, the Company, their respective affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement, and the instruments referenced herein contain the entire understanding of the parties with
respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company
nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this
Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.

 

Section
13.03    Reporting Entity for the Common Stock. The reporting entity relied upon for the determination of
the trading price or trading volume of the Common Stock on any given Trading Day for the purposes of this Agreement shall be Bloomberg,
L.P. or any successor thereto. The written mutual consent of the Investor and the Company shall be required to employ any other
reporting entity.

 

Section
13.04    Structuring and Due Diligence Fee. Each of the parties shall pay its own fees and expenses (including
the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Agreement and the
transactions contemplated hereby.

 

Section
13.05    Commitment Fee. The Company shall pay a commitment fee in the amount of $800,000 (the “Commitment
Fee”) to YA Global II SPV, LLC, a wholly owned subsidiary of the Investor. The Commitment Fee shall be paid in eight
equal quarterly installments of $100,000, with the first instalment due and payable on the fifth Trading Day following the date
hereof. Each installment of the Commitment Fee shall be paid (a) in cash to the account designated by the Investor, (b) by the
issuance of such number of shares of Common Stock (each issuance, the “Commitment Fee Shares”) based on the
portion of the Commitment Fee being paid divided by the average of the daily VWAPs over the 5 Trading Days immediately prior to
the due date of such portion of the Commitment Fee, or (c) by a combination of cash and Common Stock in accordance with the foregoing,
in the Company’s option. If the Company elects to pay the Commitment Fee in the form of Commitment
Fee Shares (in whole or in part) then in no event shall the number of shares issuable by the Company (i) cause the aggregate number
of shares of common stock beneficially owned (as calculated pursuant to Section 13(d) of the Exchange Act) by the Investor and
its affiliates (for the avoidance of doubt, including YA Global II SPV, LLC) to exceed 4.99% of the then outstanding common stock,
or (ii) cause the Company to breach the Nasdaq 20% limitation or any Nasdaq rules and regulations. 

 

Section
13.06    Brokerage. Each of the parties hereto represents that it has had no dealings in connection with
this transaction with any finder or broker who will demand payment of any fee or commission from the other party. The Company,
on the one hand, and the Investor, on the other hand, agree to indemnify the other against and hold the other harmless from any
and all liabilities to any person claiming brokerage commissions or finder’s fees on account of services purported to have
been rendered on behalf of the indemnifying party in connection with this Agreement or the transactions contemplated hereby.

 

    	 	- 27 -	 

     

    

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	- 28 -	 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Standby Equity Distribution Agreement to be executed by the undersigned,
thereunto duly authorized, as of the date first set forth above.

 

	 	COMPANY:
	 	 
	 	Micronet
    Enertec Technologies, Inc.
	 	 	 	 	 
	 	By:	/s/ David Lucatz
	 	Name:	David Lucatz
	 	Title:	Authorized Signatory
	 	 	 	 	 
	 	INVESTOR:
	 	 
	 	YA
    II PN, Ltd.
	 	 	 	 	 
	 	By:	Yorkville
    Advisors Global, LP
	 	Its:	Investment
    Manager
	 	 	 
	 	 	By:	Yorkville
    Advisors Global II, LLC
	 	 	Its:	General
    Partner
	 	 	 	 
	 	 	 	By:	/s/ David Gonzalez
	 	 	 	Name:	David Gonzalez
	 	 	 	Title:	Managing Member and
    General Counsel

 

    	 	- 29 -	 

     

    

 

EXHIBIT
A

ADVANCE NOTICE

 

MICRONET
ENERTEC TECHNOLOGIES, INC.

 

	Dated: ______________	Advance Notice Number: _____

 

The
undersigned, _______________________ hereby certifies, with respect to the sale of Common Stock of MICRONET ENERTEC TECHNOLOGIES,
INC. (the “Company”) issuable in connection with this Advance Notice, delivered pursuant to that certain Standby
Equity Distribution Agreement, dated as of August ___, 2017 (the “Agreement”), as follows:

 

1.
The undersigned is the duly elected ______________ of the Company.

 

2.
There are no fundamental changes to the information set forth in the Registration Statement which would require the Company
to file a post-effective amendment to the Registration Statement.

 

3.
The Company has performed in all material respects all covenants and agreements to be
performed by the Company and has complied in all material respects with all obligations and conditions contained in the Agreement
on or prior to the Advance Notice Date, and shall continue to perform in all material respects all covenants and agreements to
be performed by the Company through the applicable Advance Date. All conditions to the delivery of this Advance Notice are satisfied
as of the date hereof.

 

4.
The Advance requested is _____________________.

 

5.
The Minimum Acceptable Price with respect to this Advance Notice is _________ (85% of the closing price of the Common
Stock on the Principal Market on (i) the Advance Notice Date if this Advance Notice is delivered after the close of the
Principal Market, or (ii) the last Trading Day immediately prior to the Advance Notice Date if the Advance Notice is
delivered prior to the close of the Principal Market).

 

6.
The number of shares of Common Stock of the Company outstanding as of the date hereof is ___________.

  

The
undersigned has executed this Advance Notice as of the date first set forth above.

 

	 	MICRONET ENERTEC TECHNOLOGIES, INC.
	 	 	 
	 	By:	                     

 

    	 	- 30 -	 

     

    

 

EXHIBIT
B

FORM
OF SETTLEMENT DOCUMENT

 

VIA
EMAIL

 

MICRONET
ENERTEC TECHNOLOGIES, INC.

 

Attn:

 

Email:

 

	 	Below
    please find the settlement information with respect to the Advance Notice Date of:	 
	1.	Amount
    of Advance Notice	 
	2.	Minimum
    Acceptable Price for this Advance	 
	3.	Number
    of Excluded Days (if any)	 
	4.	Adjusted
    Advance Amount (after taking into account any adjustments pursuant to Section 2.01 other than any amount pursuant to Section
    2.01(c)(ii)):	 
	5.	Market
    Price	 
	6.	Purchase
    Price (Market Price x 98.5%) per share	 
	7.	Number
    of Shares due to Investor (number 4 ÷ by number 6, rounded to nearest whole share)	 
	

                                                                                 

                                                                                 If there were any Excluded Days then add the following (see Section 2.01(c)):

                                                                                 

	8.	Number
    of Shares Sold by Investor on Excluded Days	 
	9.	Additional
    Amount to be paid by Investor (Shares in number 8 x Minimum Acceptable Price)	 
	10.	Total
    Amount to be paid to Company (number 4 + number 9):	 
	11.	Total
    Shares to be issued to Investor (number 7 + number 10):	 

 

Please issue the number of Shares due to the Investor to the account of the Investor as follows:

 

Investor’s
DTC participant #:

 

ACCOUNT
NAME:

ACCOUNT
NUMBER:

ADDRESS:

CITY:

COUNTRY:

Contact
person:

 

    	 	- 31 -	 

     

    

 

	Number
    and/or email: 	 
	 	Sincerely,
    
	 	YA
    II PN, LTD.

 

Approved
By MICRONET ENERTEC TECHNOLOGIES, INC.:

 

	 	 
	Name:
    	 

 

    	 	- 32 -	 

     

    

 

EXHIBIT
C

 

PLAN
OF DISTRIBUTION

  

The
Selling Stockholder and any of its pledgees, assignees and successors-in-interest may, from time to time, sell shares of common
stock offered by this prospectus, which we refer to as the resale shares, either on the OTCQB or any other stock exchange, market
or trading facility on which the common stock is then traded or in private transactions. These sales may be at fixed or negotiated
prices. The Selling Stockholder may use any one or more of the following methods when selling the resale shares:

 

	 	●	ordinary brokerage
    transactions and transactions in which a broker-dealer solicits purchasers;

 

	 	●	block trades in which
    a broker-dealer attempts to sell resale shares as agent but may position and resell a portion of the block as principal to
    facilitate the transaction;

 

	 	●	purchases by a broker-dealer
    as principal, for resale by the broker-dealer for its account;

 

	 	●	an exchange distribution
    in accordance with the rules of the applicable exchange;

 

	 	●	privately negotiated
    transactions;

 

	 	●	sale of a specified
    number of resale shares at a stipulated price per share, as a broker-dealer may agree upon with the Selling Stockholder from
    time to time;

 

	 	●	writing or settlement
    of options or other hedging transactions, whether through an options exchange or otherwise;

 

	 	●	a combination of any
    such methods of sale; or

 

	 	●	any other method permitted
    by applicable law.

 

The
Selling Stockholder may sell resale shares in accordance with Rule 144 under the Securities Act of 1933, or the Securities Act,
rather than under this prospectus.

 

Broker-dealers
engaged by the Selling Stockholder may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholder (or, if any broker-dealer acts as agent for the purchaser of resale shares, from the
purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2121.

 

    	 	- 33 -	 

     

    

 

The
Selling Stockholder is, and any broker-dealer or agent that is involved in selling resale shares may be deemed to be, an “underwriter”
within the meaning of Section 2(a)(11) of the Securities Act in connection with such sales. In such event, any commissions received
by such a broker-dealer or agent and any profit on the resale of the resale shares purchased by the broker-dealer may be deemed
to be underwriting commissions or discounts under the Securities Act. There is no underwriter (other than the Selling Stockholder
and any broker-dealer or agent deemed to be an underwriter as described above) or coordinating broker acting in connection with
the proposed sale of the resale shares by the Selling Stockholder. The Selling Stockholder has informed us that it does not have
any written or oral agreement or understanding, directly or indirectly, with any person to distribute resale shares. In no event
shall any broker-dealer receive fees, commissions and markups that, in the aggregate, would exceed eight percent (8%) of gross
proceeds from a sale of resale shares.

 

Because
the Selling Stockholder is an “underwriter” within the meaning of the Securities Act, it is subject to the prospectus
delivery requirements of the Securities Act including Rule 172 thereunder.

 

We
have agreed to keep this prospectus effective until the earlier of (i) the date on which the resale shares may be resold by the
Selling Stockholders without registration and without regard to any time, volume or manner limitations by reason of Rule 144 under
the Securities Act or any other rule of similar effect or (ii) all of the resale shares have been sold pursuant to this prospectus
or Rule 144 under the Securities Act or any other rule of similar effect. The resale shares will be sold only through registered
or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale
shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with.

 

Expenses,
Indemnification

 

We
will not receive any of the proceeds from the sale of resale shares by the Selling Stockholder and will bear all expenses related
to the registration of this offering, but will not pay for any commissions, fees or discounts, if any, relating to the sale of
resale shares by the Selling Stockholder. We have agreed to indemnify the Selling Stockholder against certain losses, claims,
damages and liabilities, including liabilities under the Securities Act.

 

Supplements

 

In
the event of a material change in the plan of distribution disclosed in this prospectus, the Selling Stockholder will not be able
to effect transactions in the resale shares pursuant to this prospectus until such time as a post-effective amendment to the registration
statement is filed with, and declared effective by, the SEC.

 

    	 	- 34 -	 

     

    

 

Regulation
M

 

We
have informed the Selling Stockholder that it is required to comply with Regulation M promulgated under the Securities Exchange
Act of 1934 with respect to any purchase or sale of our common stock. In general, Rule 102 under Regulation M prohibits any person
connected with a distribution of our common stock from directly or indirectly bidding for, or purchasing for any account in which
it has a beneficial interest, any of the resale shares or any right to purchase the resale shares, for a period of one trading
day before and after completion of its participation in the distribution.

 

During
any distribution period, Regulation M prohibits the Selling Stockholder and any other persons engaged in the distribution from
engaging in any stabilizing bid or purchasing our common stock except for the purpose of preventing or retarding a decline in
the open market price of the common stock. None of these persons may affect any stabilizing transaction to facilitate any offering
at the market.

 

We
have also advised the Selling Stockholder that it should be aware that the anti-manipulation provisions of Regulation M under
the Exchange Act will apply to purchases and sales of common stock by the Selling Stockholder, and that there are restrictions
on market-making activities by persons engaged in the distribution of the resale shares. Under Regulation M, the Selling
Stockholder or its agents may not bid for, purchase, or attempt to induce any person to bid for or purchase, shares of our common
stock while the Selling Stockholder is distributing resale shares. Regulation M may prohibit the Selling Stockholder from covering
short sales by purchasing resale shares while the distribution is taking place, despite any contractual rights to do so under
our agreement with the Selling Stockholder. We have advised the Selling Stockholder that it should consult with its own legal
counsel to ensure compliance with Regulation M.

 

 

-
35 -Exhibit 10.2

 

SUPPLEMENTAL AGREEMENT

  

This Supplemental Agreement
(the “Agreement”), dated as of August 22, 2017, is entered into by and between YA II PN, LTD., a Cayman Islands
exempt limited partnership (the “Investor”), MICRONET ENERTEC TECHNOLOGIES, INC., a corporation organized and
existing under the laws of the State of Delaware (the “Company” or a “Borrower”), and ENERTEC
ELECTRONICS LTD., a corporation organized and existing under the laws of the State of Israel (“Enertec” or a
“Borrower” and collectively with the Company, the “Borrowers”).

 

BACKGROUND

 

		(A)	On June 30, 2016 the parties entered into a note purchase agreement (the “Original Purchase
Agreement”) pursuant to which the Borrowers issued and sold to the Investor, and the Investor purchased from the Borrowers,
a secured promissory note in an aggregate principal amount of $600,000 (as amended from time to time, the “Original Note”).

 

		(B)	On October 28, 2016 the parties entered into a note purchase agreement (the “Second Purchase
Agreement”) pursuant to which the Borrowers issued and sold to the Investor, and the Investor purchased from the Borrowers,
a secured promissory note in an aggregate principal amount of $500,000 (as amended from time to time, the “Second Note”).

 

		(C)	On December 22, 2016 the parties entered into a supplemental agreement to the Second Purchase Agreement
(the “First Supplemental Agreement”) pursuant to which the Borrowers issued and sold to the Investor, and the
Investor purchased from the Borrowers, a secured promissory note in an aggregate principal amount of $1,000,000 (as amended from
time to time, the “Third Note”).

 

		(D)	On June 8, 2017 the parties entered into a second supplemental agreement to the Second Purchase
Agreement (the “Second Supplemental Agreement”) pursuant to which the Borrowers issued and sold to the Investor,
and the Investor purchased from the Borrowers, a secured promissory note in an aggregate principal amount of $600,000 (as amended
from time to time, the “Fourth Note”).

 

		(E)	In connection with the Original Note the parties entered in a pledge agreement and escrow deed
on June 30, 2016 (collectively, the “Pledge Agreements”) pursuant to which Enertec provided a first priority
lien and security interest over certain shares of Micronet Ltd. (“Micronet”) and deposited such pledged shares
into a bank account in Israeli (the “Escrow Account”) controlled by an escrow agent appointed by the parties
pursuant to an escrow deed dated June 30, 2016 (the “Escrow Deed”). As of the date hereof, the number of Ordinary
Shares of Micronet pledged as collateral security by Enertec in connection with both the Original Note, the Second Note, and the
Third Note is 3,700,000 (the “Micronet Stock” and collectively, along with any such additional shares of Micronet
Stock as pledged from time to time in accordance with Section 1(f) of the Second Purchase Agreement, collectively, the “Pledged
Shares”).

  

     

     

    

 

		(F)	The parties desire to further supplement the Second Purchase Agreement in order to provide for
an additional Closing of the issuance and sale of a new Note (as defined in the Second Purchase Agreement) in the principal amount
of $1,500,000 on the terms and conditions set forth herein.

 

AGREED TERMS

 

1.           Definitions
and interpretation

 

		1.1	Capitalized terms not otherwise defined herein shall have the meanings set forth in the Original
Purchase Agreement or the Second Purchase Agreement, as applicable.

 

2.           Additional
Closing

 

2.1          Purchase
of Note. The Investor shall purchase, and the Borrowers shall sell, a Note in the aggregate principal amount of $1,500,000,
which shall be purchased for 100% of the face amount of the Note issued and sold. This Closing of the purchase and sale of this
Note (the “Fourth Closing”) shall occur in one tranche as soon as possible after the first date that all the
conditions precedent to the Closing set forth in Section 1(e) of the Second Purchase Agreement have been satisfied (or such other
date as may be agreed upon by the parties) (the “Fourth Closing Date”), subject to the satisfaction of all the
conditions precedent set forth therein and herein.

 

2.2          Form
of Payment. Subject to the satisfaction of the terms and conditions of the Second Purchase Agreement as supplemented by this
Agreement, on the Fourth Closing Date (i) the Investor shall deliver to the Borrowers as set forth herein the principal amount
of the Note to be issued and sold to the Investor on such Closing, and (ii) the Borrowers shall deliver to the Investor, the Note
duly executed on behalf of the Borrowers in the principal amount so purchased. The Note issued to the Investor at the Fourth Closing
shall be in the form of Exhibit A attached hereto with a maturity date of 90 days from the issuance date of the Note, subject
to further extension as set forth in the Note.

 

2.3          Warrants.
No warrants shall be granted to the Investor upon the issuance of the Note at the Fourth Closing, however, on the Fourth Closing
Date the Company shall authorize the issuance to the Investor of a warrant in the form of Exhibit B attached hereto to purchase
158,000 shares of common stock of the Company at an exercise price of $1.50 per share and a term of 5 years from the date of issuance
conditional upon the Company becoming obligated to issue such warrants pursuant to Section 1(a) of the Note.

 

2.4          Fees.
In connection with the Fourth Closing, the Borrowers shall pay to YA Global II SPV LLC (as designee of the Investor) a commitment
fee in the amount equal to $150,000, of which $100,000 shall be due and payable in cash on the date hereof, and the remaining $50,000
shall be due and payable in cash on the date 120 days from the date hereof.

 

    	 	2	 

     

    

 

2.5          Conditions
Precedent to the Fourth Closing. The obligation of the Investor hereunder to purchase the Note at the Third Closing is subject
to the satisfaction, at or before the Third Closing Date, of each of the conditions precedent set forth in Section 1(e) of the
Second Purchase Agreement, provided that these conditions are for the Investor’s sole benefit and may be waived by the Investor
at any time in its sole discretion. The parties agree that clause (ii) of Section 1(e)(v) of the Second Purchase Agreement shall
be satisfied by Enertec’s commitment to grant a first priority perfected lien and security interest over an additional 737,000
Micronet Shares set forth in Section 2.6 herein.

 

2.6          Commitment
to Grant Security Interest. Enertec hereby agrees to grant a first priority perfected lien and security interest over an additional
737,000 Micronet Shares and deposit such pledged shares into the Escrow Account within 30 days of the date hereof.

 

		4.	Representations and warranties 

 

4.1          The
Borrowers represents and warrants to the Investor as of the date of this Agreement that:

 

		(a)	it has the requisite corporate power and authority to enter into this Agreement and to consummate
the transactions contemplated by this Agreement;

 

		(b)	it has taken all necessary corporate actions to authorize the execution, delivery and performance
of this Agreement and no further action is required by the Company, the Board of Directors or the Company’s stockholders
in connection therewith;

 

		(c)	the obligations assumed by the Borrowers in this Agreement are legal, valid, and enforceable obligations
binding on it in accordance with its terms; and

 

		5.	Counterparts and delivery

 

This Agreement
may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood
that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or
by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.

 

		6.	Governing law

 

This Agreement
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 Agreement (whether brought against a party hereto or its 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
the Second Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

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    	 	3	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Supplemental Agreement to be signed by their duly authorized officers.

 

	 	BORROWERS:
	 	 
	 	MICRONET ENERTEC TECHNOLOGIES, INC.
	 	 	 
	 	By:	/s/ David Lucatz
	 	Name:	David Lucatz
	 	Title:	Authorize signature

 

	 	ENERTEC ELECTRONICS LTD
	 	 	 
	 	By:	/s/ Tali Dinar
	 	Name:	Tali Dinar 
	 	Title:	Authorize signature

 

	 	INVESTOR: 
	 	 
	 	YA II PN, LTD.
	 	 	 
	 	By:	Yorkville Advisors Global LP
	 	Its:	Investment Manager
	 	 	 
	 		By:	Yorkville Advisors Global II, LLC
	 		Its:	General Partner

 

	 	By:	/s/ David Gonzalez
	 	Name:	David Gonzalez 
	 	Title:	Managing Member and General Counsel

 

    	 	4	 

     

    

 

EXHIBIT A

 

FORM OF NOTE

 

     

     

    

 

EXHIBIT B

 

FORM OF CONDITIONAL
WARRANT

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