Document:

Protalix
BioTherapeutics, Inc.

 

$60,000,000
4.50% Convertible Notes Due 2018

 

Purchase
Agreement

 

September
12, 2013

 

Citigroup Global Markets Inc.

As Representatives of the Initial Purchasers

388 Greenwich Street

New York, New York 10013

 

Ladies and Gentlemen:

 

Protalix BioTherapeutics,
Inc., a corporation organized under the laws of Florida (the “Company”), proposes to issue and sell to the several
parties named in Schedule I hereto (the “Initial Purchasers”), for whom you (the “Representatives”) are
acting as representatives, U.S.$60,000,000 principal amount of its 4.50% Convertible Notes due 2018 (the “Firm Securities”).
The Company also proposes to grant to the Initial Purchasers an option to purchase up to U.S.$9,000,000 additional principal amount
of such Notes, if any (the “Option Securities” and, together with the Firm Securities, the “Securities”).
The Securities are convertible into shares of Common Stock, par value U.S.$0.001 per share (the “Common Stock”), of
the Company. The Securities are to be issued under an indenture (the “Indenture”), to be dated as of the Closing Date,
between the Company and The Bank of New York Mellon, as trustee (the “Trustee”). To the extent there are no additional
parties listed on Schedule I other than you, the term Representatives as used herein shall mean you as the Initial Purchasers,
and the terms Representatives and Initial Purchasers shall mean either the singular or plural as the context requires. The use
of the neuter in this Agreement shall include the feminine and masculine wherever appropriate. Certain terms used herein are defined
in Section 22 hereof.

 

The sale of
the Securities to the Initial Purchasers will be made without registration of the Securities or the Common Stock issuable upon
conversion thereof under the Act in reliance upon exemptions from the registration requirements of the Act.

 

In connection
with the sale of the Securities, the Company has prepared a preliminary offering memorandum, dated September 11, 2013 (as amended
or supplemented at the date thereof, including any and all exhibits thereto and any information incorporated by reference therein,
the “Preliminary Memorandum”), and a final offering memorandum, dated September 12, 2013 (as amended or supplemented
at the Execution Time, including any and all exhibits thereto and any information incorporated by reference therein, the “Final
Memorandum”). Each of the Preliminary Memorandum and the Final Memorandum sets forth certain information concerning the Company,
the Securities and the Common Stock issuable upon conversion thereof. The Company hereby confirms that it has authorized the use
of the Disclosure Package, the Preliminary Memorandum and the Final Memorandum, and any

 

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amendment or supplement thereto,
in connection with the offer and sale of the Securities by the Initial Purchasers. Unless stated to the contrary, any references
herein to the terms “amend”, “amendment” or “supplement” with respect to the Final Memorandum
shall be deemed to refer to and include any information filed under the Exchange Act subsequent to the Execution Time that is incorporated
by reference therein.

 

1.     
Representations and Warranties. The Company represents and warrants to, and agrees with, each Initial Purchaser
as set forth below in this Section 1.

 

(a)   
The Preliminary Memorandum, at the date thereof, did not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
At the Execution Time, on the Closing Date and on any settlement date, the Final Memorandum did not and will not (and any amendment
or supplement thereto, at the date thereof, at the Closing Date and on any settlement date, will not) contain any untrue statement
of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company makes no representation or warranty
as to the information contained in or omitted from the Preliminary Memorandum or the Final Memorandum, or any amendment or supplement
thereto, in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Initial
Purchasers through the Representatives specifically for inclusion therein, it being understood and agreed that the only such information
furnished by or on behalf of any Initial Purchaser consists of the information described as such in Section 8(b) hereof.

 

(b)  
The Disclosure Package, as of the Execution Time, does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. The preceding sentence does not apply to statements in or omissions from the Disclosure Package based upon and
in conformity with written information furnished to the Company by any Initial Purchaser through the Representatives specifically
for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Initial Purchaser
consists of the information described as such in Section 8(b) hereof.

 

(c)   
None of the Company, its Affiliates or any person acting on its or their behalf has directly or indirectly, made offers
or sales of any security, or solicited offers to buy, any security under circumstances that would require the registration of the
Securities or the Common Stock issuable upon conversion thereof under the Act.

 

(d)  
None of the Company, its Affiliates or any person acting on its or their behalf has: (i) engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Securities
or (ii) engaged in any directed selling efforts (within the meaning of Regulation S) with respect to the Securities or the Common
Stock issuable upon conversion thereof.

 

(e)   
The Securities satisfy the eligibility requirements of Rule 144A(d)(3) under the Act.

 

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(f)   
 No registration under the Act of the Securities or the Common Stock issuable upon conversion thereof is required for the
offer and sale of the Securities to or by the Initial Purchasers in the manner contemplated herein, in the Disclosure Package and
the Final Memorandum.

 

(g)  
The Company is not, and after giving effect to the offering and sale of the Securities and the application of the proceeds
thereof as described in the Disclosure Package and the Final Memorandum will not be, an “investment company” as defined
in the Investment Company Act.

 

(h)  
The Company is subject to and in full compliance with the reporting requirements of Section 13 or Section 15(d) of the Exchange
Act.

 

(i)    
The Company has not paid or agreed to pay to any person any compensation for soliciting another to purchase any securities
of the Company (except as contemplated in this Agreement).

 

(j)    
The Company has not taken, directly or indirectly, any action designed to or that has constituted or that might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities.

 

(k)  
The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State
of Florida with full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct
its business as described in the Disclosure Package and the Final Memorandum, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction that requires such qualification, except where the failure
to be so qualified would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course
of business (a “Material Adverse Effect”).

 

(l)    
 Each subsidiary of the Company has been duly incorporated and is validly existing under the laws of its respective state
of incorporation or formation, is duly qualified to do business in each jurisdiction in which its ownership or lease of property
or the conduct of its businesses requires such qualification, and has all power and authority necessary to own or hold its properties
and to conduct the businesses in which it is engaged, except where the failure to be so qualified, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect. No proceeding has been instituted by the Israeli Registrar
of Companies in Israel for the dissolution of Protalix Ltd. Protalix B.V. has no material assets and no employees.

 

(m)
All the outstanding shares of capital stock of each subsidiary have been duly authorized and validly issued and are fully
paid and nonassessable, and, except as otherwise set forth in the Disclosure Package and the Final Memorandum, all outstanding
shares of capital stock of the subsidiaries are owned by the Company either directly or through wholly owned subsidiaries free
and clear of any security interest, claim, lien or encumbrance.

 

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(n)  
 The authorized, issued and outstanding capital stock of the Company is as set forth in each
of the Disclosure Package and the Final Memorandum (other than for subsequent issuances, if any, pursuant to employee benefit plans
described in each of the Disclosure Package and the Final Memorandum or upon the exercise of outstanding options or warrants described
in each of the Disclosure Package and the Final Memorandum); the Common Stock conforms in all material respects to the description
thereof contained in each of the Disclosure Package and the Final Memorandum; all of the issued and outstanding shares of Common
Stock have been duly authorized and validly issued, are fully paid and nonassessable and have been issued in compliance with federal
and state securities laws; none of the outstanding shares of Common Stock was issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase securities of the Company; there are no authorized or outstanding
options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible
into or exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other than those accurately
described in each of the Disclosure Package and the Final Memorandum; the description of the Company’s stock option, stock
bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in each of the Disclosure
Package and the Final Memorandum accurately and fairly presents the information required to be shown with respect to such plans,
arrangements, options and rights; all grants of options to acquire shares of Common Stock (each, a “Company Stock Option”)
were validly issued and approved by the Board of Directors of the Company, a committee thereof or an individual with authority
duly delegated by the Board of Directors of the Company or a committee thereof; grants of Company Stock Options were (i) made in
material compliance with all applicable laws and (ii) as a whole, made in material compliance with the terms of the plans under
which such Company Stock Options were issued; there is no and has been no policy or practice of the Company to coordinate the grant
of Company Stock Options with the release or other public announcement of material information regarding the Company or its results
of operations or prospects; the shares of Common Stock initially issuable upon conversion of the Securities have been duly
authorized and, when issued upon conversion of the Securities against payment of the conversion price, will be validly issued,
fully paid and nonassessable; the Board of Directors of the Company has duly and validly adopted resolutions reserving such shares
of Common Stock for issuance upon conversion of the Securities; the holders of outstanding shares of capital stock of the Company
are not entitled to preemptive or other rights to subscribe for the Securities or the shares of Common Stock issuable upon conversion
thereof; and, except as described in the each of the Disclosure Package and the Final Memorandum,
the Company has not sold or issued any shares of Common Stock during the six-month period preceding the date of the Final Memorandum,
including any sales pursuant to Rule 144A under, or Regulations D or S of, the Act other than shares issued pursuant to employee
benefit plans, qualified stock options plans or other employee compensation plans or pursuant to outstanding options, rights or
warrants.

 

(o)  
The statements in or incorporated by reference in the Preliminary Memorandum and the Final Memorandum under the headings
“U.S. Federal Income Tax Consequences”, “Business-Acetylcholinesterase”, “Business-Commercialization
Agreement for taliglucerase alfa”, “Business-Strategic Collaborations”, “Business-Intellectual Property”
“Business-International Regulation”, “Business-Israeli Government Programs”, “Risk Factors-Risks
Related to Intellectual Property Matters-If we fail to adequately protect or enforce our

 

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intellectual property rights
or secure rights to third party patents, the value of our intellectual property rights would diminish and our business, competitive
position and results of operations would suffer”, “Risk Factors-Risks Related to Intellectual Property Matters-If we
cannot meet requirements under our license agreements, we could lose the rights to our products, which could have a material adverse
effect on our business”, and “Risk Factors-Risks Relating to Our Operations in Israel,” insofar as such statements
summarize legal matters, agreements, documents or proceedings discussed therein, are accurate and fair summaries in all material
respects of such legal matters, agreements, documents or proceedings.

 

(p)  
This Agreement has been duly authorized, executed and delivered by the Company; the Indenture has been duly authorized and,
assuming due authorization, execution and delivery thereof by the Trustee, when executed and delivered by the Company, will constitute
a legal, valid, binding instrument enforceable against the Company in accordance with its terms (subject, as to the enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally
from time to time in effect and to general principles of equity); and the Securities have been duly authorized, and, when executed
and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Initial Purchasers, will
have been duly executed and delivered by the Company and will constitute the legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture (subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors’ rights generally from time to time in effect and to general principles
of equity) and will be convertible into Common Stock in accordance with their terms.

 

(q)  
No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection
with the transactions contemplated herein or in the Indenture, except such as may be required under the blue sky laws of any jurisdiction
in which the Securities are offered and sold.

 

(r)    
None of the execution and delivery of the Indenture or this Agreement, the issuance and sale of the Securities or the issuance
of the Common Stock upon conversion thereof, or the consummation of any other of the transactions herein or therein contemplated,
or the fulfillment of the terms hereof or thereof will conflict with, result in a breach or violation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, (i) the charter or by-laws
or comparable constituting documents of the Company or any of its subsidiaries; (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which
the Company or any of its subsidiaries is a party or bound or to which its or their property is subject; or (iii) any statute,
law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator
or other authority having jurisdiction over the Company or any of its subsidiaries or any of its or their properties, except, in
the cases of clauses (ii) and (iii), as would not, singly or in the aggregate, have a Material Adverse Effect.

 

(s)   
The consolidated historical financial statements and schedules of the Company and its consolidated subsidiaries included
or incorporated by reference in the

 

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Disclosure Package and the Final
Memorandum present fairly the financial condition, results of operations and cash flows of the Company as of the dates and for
the periods indicated, comply as to form with the applicable accounting requirements of Regulation S-X and have been prepared in
conformity with generally accepted accounting principles in the United States applied on a consistent basis throughout the periods
involved (except as otherwise noted therein); and the selected financial data set forth under the caption “Selected Consolidated
Financial Data” in the Preliminary Memorandum and the Final Memorandum fairly present, on the basis stated in the Preliminary
Memorandum and the Final Memorandum, the information included or incorporated by reference therein.

 

(t)    
No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving
the Company or any of its subsidiaries or its or their property is pending or, to the knowledge of the Company, threatened that
(i) could reasonably be expected to have a material adverse effect on the performance of this Agreement, the Indenture, or the
consummation of any of the transactions contemplated hereby or thereby or (ii) could reasonably be expected to have a Material
Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment
or supplement thereto).

 

(u)  
Each of the Company and its subsidiaries owns or leases all such properties as are reasonably necessary to the conduct of
its operations as presently conducted.

 

(v)  
Neither the Company nor any of its subsidiaries is in violation or default of (i) any provision of its charter or bylaws
or comparable constituting documents; (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its
property is subject; or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the Company or any of
its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such subsidiary or any of its properties, as applicable, except, in the cases of clauses (ii)
and (iii), as would not, singly or in the aggregate, have a Material Adverse Effect.

 

(w)
Kesselman & Kesselman, a member of PricewaterhouseCoopers International Limited, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered their report with respect to the audited consolidated
financial statements and schedules included or incorporated by reference in the Disclosure Package and the Final Memorandum, is
an independent registered public accounting firm with respect to the Company within the meaning of the Act and the applicable published
rules and regulations thereunder, and under the rules of the Public Company Accounting Oversight Board.

 

(x)  
There are no stamp, or other issuance or transfer taxes or duties or other similar fees or charges required to be paid in
connection with the execution and delivery of this Agreement or the issuance, sale or resale of the Securities or upon the issuance
of Common Stock upon the conversion thereof.

 

(y)  
The Company has filed all applicable tax returns that are required to be filed or has requested extensions thereof (except
in any case in which the failure so to file would not

 

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have a Material Adverse Effect
and except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement
thereto)) and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the
extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested
in good faith or as would not have a Material Adverse Effect and except as set forth in or contemplated in the Disclosure Package
and the Final Memorandum (exclusive of any amendment or supplement thereto).

 

(z)   
No labor problem or dispute with the employees of the Company or any of its subsidiaries exists or is threatened or imminent,
and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or its subsidiaries’
principal suppliers, contractors or customers, except as would not have a Material Adverse Effect, and except as set forth in or
contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto).

 

(aa)The Company
and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they are engaged; all policies of insurance and fidelity or
surety bonds insuring the Company or any of its subsidiaries or their respective businesses, assets, employees, officers and directors
are in full force and effect; the Company and its subsidiaries are in compliance with the terms of such policies and instruments;
there are no claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company
is denying liability or defending under a reservation of rights clause; neither the Company nor any of its subsidiaries has been
refused any insurance coverage sought or applied for; and neither the Company nor any of its subsidiaries has any 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 except
as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto).

 

(bb)          
No subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company,
from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances
to such subsidiary from the Company or from transferring any of such subsidiary’s property or assets to the Company or any
other subsidiary of the Company, except as described in or contemplated in the Disclosure Package and the Final Memorandum (exclusive
of any amendment or supplement thereto).

 

(cc)The Company
and its subsidiaries possess and are in compliance in all material respects with the terms of all licenses, approvals, orders,
certificates, permits and other authorizations (collectively, “Licenses”) issued by all applicable authorities, including
without limitation, all such Licenses required by the U.S. Food and Drug Administration or any component thereof and/or by any
other U.S., state, local or foreign government or drug regulatory agency (collectively, the “Regulatory Agencies”),
necessary to conduct their respective businesses as described in the Disclosure Package and the Final Memorandum, and

 

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neither the Company nor any such
subsidiary has received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such
License which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment
or supplement thereto); and all such Licenses are in full force and effect.

 

(dd)         
The preclinical tests and clinical trials that are described in, or the results of which are referred to in, the Disclosure
Package and the Final Memorandum were and, if still pending, are being conducted in all material respects in accordance with protocols
filed with the appropriate Regulatory Agencies for each such test or trial, as the case may be, and with standard medical and scientific
research procedures and all applicable statutes, directives, rules and regulations of the Regulatory Agencies, including, without
limitation, the Federal Food, Drug and Cosmetic Act and the rules and regulations promulgated thereunder; each description of such
tests and trials, and the results thereof, contained in the Disclosure Package and the Final Memorandum is accurate and complete
in all material respects and fairly presents the data about and derived from such tests and trials, and the Company has no knowledge
of any other studies or tests the results of which are inconsistent with, or otherwise call into question, the results described
or referred to in the Disclosure Package and the Final Memorandum; neither the Company nor its subsidiaries has received any notices
or other correspondence from any Regulatory Agency requiring the termination, suspension or modification of any clinical trials
that are described or referred to in the Disclosure Package and the Final Memorandum; and each of the Company and its subsidiaries
has operated and currently is in compliance in all material respects with all applicable rules and regulations of the Regulatory
Agencies.

 

(ee)The Company
and each of its subsidiaries: (i) are and have been in material compliance with applicable health care laws, including without
limitation, the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 301 et seq.), the Federal Anti-kickback Statute (42 U.S.C.
§ 1320a-7b(b)), Physician Payment Sunshine Act (42 U.S.C. § 1320a-7h), the civil False Claims Act (31 U.S.C. §§
3729 et seq.), the administrative False Claims Law (42 U.S.C. § 1320a-7b(a)), the Anti-Inducement Law (42 U.S.C. § 1320a-7a(a)(5)),
the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. § 1320d et seq.), as amended by the Health Information
Technology for Economic and Clinical Health Act of 2009, the exclusion laws, Social Security Act § 1128 (42 U.S.C. §
1320a-7), Medicare (Title XVIII of the Social Security Act), Medicaid (Title XIX of the Social Security Act), and the regulations
promulgated pursuant to such laws, and comparable state laws, and all other local, state, federal, national, supranational and
foreign laws, manual provisions, policies and administrative guidance relating to the regulation of the Company and its subsidiaries
(collectively, “Health Care Laws”); (ii) have not received notice of any ongoing claim, action, suit, proceeding,
hearing, enforcement, investigation, arbitration or other action from any Regulatory Agency or third party alleging that any product
operation or activity is in material violation of any Health Care Laws and has no knowledge that any such Regulatory Agency or
third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; and (iii) are
not a party to any corporate integrity agreement, deferred prosecution agreement, monitoring agreement, consent decree, settlement
order, or similar agreements, or has any reporting obligations pursuant to any such agreement, plan or correction or other remedial
measure entered into with any

 

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Governmental Authority. Neither
the Company, its subsidiaries nor their officers, directors, employees, agents or contractors has been or is currently debarred,
suspended or excluded from participation in the Medicare and Medicaid programs or any other state or federal health care program.

 

(ff)            
The Company and each of its 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
in the United States 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. The Company and its subsidiaries’ internal controls
over financial reporting are effective and the Company and its subsidiaries are not aware of any material weakness in their internal
control over financial reporting.

 

(gg)          
The Company and its subsidiaries maintain “disclosure controls and procedures” (as such term is defined in Rule
13a-15(e) under the Exchange Act); such disclosure controls and procedures are effective to provide
reasonable assurance that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed,
summarized and reported within the time periods specified by the Commission, and that material information related to the Company
and its consolidated subsidiaries is made known to management, including the Company’s Chief Executive Officer and Chief
Financial Officer, particularly during the period when the Company’s periodic reports are being prepared to allow timely
decisions regarding required disclosure.

 

(hh)          
The Company and its subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (“Environmental Laws”); (ii) have received and are in compliance with all permits, licenses
or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) have
not received notice of any actual or potential liability under any Environmental Law, except where such non-compliance with Environmental
Laws, failure to receive required permits, licenses or other approvals, or liability would not, individually or in the aggregate,
have a Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive
of any amendment or supplement thereto). Except as set forth in the Disclosure Package and the Final Memorandum, neither the Company
nor any of its subsidiaries has been named as a “potentially responsible party” under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.

 

(ii)              
In the ordinary course of its business, the Company periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course of which it identifies and evaluates associated costs
and liabilities (including, without limitation, any capital or operating expenditures required for clean-up,

 

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closure of properties or compliance
with Environmental Laws, or any permit, license or approval, any related constraints on operating activities and any potential
liabilities to third parties); on the basis of such review, the Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a Material Adverse Effect, except as set forth in or contemplated in the
Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto).

 

(jj)              
None of the following events has occurred or exists: (i) a failure to fulfill the obligations, if any, under the minimum
funding standards of Section 302 of the United States Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
and the regulations and published interpretations thereunder with respect to a Plan, determined without regard to any waiver of
such obligations or extension of any amortization period; (ii) an audit or investigation by the Internal Revenue Service, the U.S.
Department of Labor, the Pension Benefit Guaranty Corporation or any other federal or state governmental agency or any foreign
regulatory agency with respect to the employment or compensation of employees by any of the Company or any of its subsidiaries
that could have a Material Adverse Effect except as set forth in or contemplated in the Disclosure Package and the Final Memorandum
(exclusive of any supplement thereto); (iii) any breach of any contractual obligation, or any violation of law or applicable qualification
standards, with respect to the employment or compensation of employees by the Company or any of its subsidiaries that could have
a Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive
of any supplement thereto). None of the following events has occurred or is reasonably likely to occur: (i) a material increase
in the aggregate amount of contributions required to be made to all Plans in the current fiscal year of the Company and its subsidiaries
compared to the amount of such contributions made in the most recently completed fiscal year of the Company and its subsidiaries;
(ii) a material increase in the “accumulated post-retirement benefit obligations” (within the meaning of Statement
of Financial Accounting Standards 106) of the Company and its subsidiaries compared to the amount of such obligations in the most
recently completed fiscal year of the Company and its subsidiaries; (iii) any event or condition giving rise to a liability under
Title IV of ERISA that could have a Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and
the Final Memorandum (exclusive of any supplement thereto); or (iv) the filing of a claim by one or more employees or former employees
of the Company or any of its subsidiaries related to their employment that could have a Material Adverse Effect, except as set
forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any supplement thereto). For purposes
of this paragraph, the term “Plan” means a plan (within the meaning of Section 3(3) of ERISA) subject to Title
IV of ERISA with respect to which the Company or any of its subsidiaries may have any liability.

 

(kk)          
The subsidiaries listed on Annex A attached hereto are the only “significant subsidiaries” of the Company (as
defined in Rule 1-02 of Regulation S-X).

 

(ll)              
None of the Company, its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or Affiliate
of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly,
that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules
and regulations thereunder (the “FCPA”), including, without limitation, making use of the

 

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mails or any means or instrumentality
of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money,
or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official”
(as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA; and the Company, its subsidiaries and, to the knowledge of the Company, its Affiliates have
conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure,
and which are reasonably expected to continue to ensure, continued compliance therewith.

 

(mm)      
The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements and money laundering statutes and the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively,
the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.

 

(nn)          
None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee
or Affiliate of the Company or any of its subsidiaries is currently subject to any sanctions administered by the Office of Foreign
Assets Control of the U.S. Department of the Treasury (“OFAC”); and the Company will not directly or indirectly use
the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.

 

(oo)          
There is and has been no failure on the part of the Company and any of the Company’s directors
or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections
302 and 906 related to certifications.

 

(pp)          
The Company and its subsidiaries own, possess, license or have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property (collectively, the “Intellectual Property”) necessary
for the conduct of the Company’s business as now conducted and as proposed in the Final Memorandum to be conducted. Except
as set forth or incorporated by reference in the Preliminary Memorandum and the Final Memorandum, or otherwise would not, singly
or in the aggregate, have a Material Adverse Effect: (a)  there are no rights of third parties to any such Intellectual Property;
(b) to the Company’s knowledge, there is no material infringement by third parties of any such Intellectual Property;
(c) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging
the Company’s rights in or to any such Intellectual Property, and the Company is unaware of any facts which

 

    	11

    	 

    

would form a reasonable basis
for any such claim; (d) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim
by others challenging the validity or scope of any such Intellectual Property, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; (e) there is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others that the Company infringes or otherwise violates any patent, trademark, copyright, trade secret or
other proprietary rights of others, and the Company is unaware of any other fact which would form a reasonable basis for any such
claim; (f) there is no U.S. patent or published U.S. patent application which contains claims that dominate or may dominate any
Intellectual Property described in the Disclosure Package and the Final Memorandum as being owned by or licensed to the Company
or that interferes with the issued or pending claims of any such Intellectual Property; and (g) there is no prior art of which
the Company is aware that may render any U.S. patent held by the Company invalid or any U.S. patent application held by the Company
unpatentable which has not been disclosed to the U.S. Patent and Trademark Office.

 

(qq)          
Prior to the date hereof, the Company has furnished to the Representatives letters, each substantially in the form of Exhibit
A hereto, duly executed by each current officer and director of the Company and addressed to the Representatives.

 

Any certificate
signed by any officer of the Company and delivered to the Representatives or counsel for the Initial Purchasers in connection with
the offering of the Securities shall be deemed a representation and warranty by the Company, as to matters covered thereby, to
each Initial Purchaser.

 

2.     
Purchase and Sale. (a) Subject to the terms and conditions and in reliance upon the representations and warranties
herein set forth, the Company agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees, severally and not jointly,
to purchase from the Company, at a purchase price of 97.00% of the principal amount thereof, plus accrued interest, if any, from
September 18, 2013 to the Closing Date, the principal amount of Firm Securities set forth opposite such Initial Purchaser’s
name in Schedule I hereto.

 

(b)  
Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company
hereby grants an option to the several Initial Purchasers to purchase, severally and not jointly, the Option Securities at the
same purchase price as Initial Purchasers shall pay for the Firm Securities, plus accrued interest, if any, from September 18,
2013 to the settlement date for the Option Securities. The option may be exercised in whole or in part at any time or from time
to time on or before the 30th day after the date of the Final Memorandum upon written or telegraphic notice by the Representatives
to the Company setting forth the principal amount of Option Securities as to which the several Initial Purchasers are exercising
the option and the settlement date.  Delivery of the Option Securities, and payment therefor, shall be made as provided
in Section 3 hereof. The principal amount of Option Securities to be purchased by each Initial Purchaser shall be the same percentage
of the total principal amount of Option Securities to be purchased by the several Initial Purchasers as such Initial Purchaser
is purchasing of the Firm Securities, subject to such adjustments as you in your absolute discretion shall make to eliminate any
fractional Securities.

 

    	12

    	 

    

3.     
 Delivery and Payment. (a) Delivery of and payment for the Firm Securities and the Option Securities (if the
option provided for in Section 2(b) hereof shall have been exercised on or before the first Business Day immediately preceding
the Closing Date) shall be made at 10:00 A.M., New York City time, on September 18, 2013, or at such time on such later
date not more than three Business Days after the foregoing date as the Representatives shall designate, which date and time may
be postponed by agreement between the Representatives and the Company or as provided in Section 9 hereof (such date and time of
delivery and payment for the Securities being herein called the “Closing Date”). Delivery of the Securities shall be
made to the Representatives for the respective accounts of the several Initial Purchasers against payment by the several Initial
Purchasers through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable
in same-day funds to the account specified by the Company. Delivery of the Securities shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct.

 

(b)  
If the option provided for in Section 2(b) hereof is exercised after the first Business Day immediately preceding the Closing
Date, the Company will deliver the Option Securities (at the expense of the Company) to the Representatives on the date specified
by the Representatives (which shall be within three Business Days after exercise of said option) for the respective accounts of
the several Initial Purchasers, against payment by the several Initial Purchasers through the Representatives of the purchase price
thereof to or upon the order of the Company by wire transfer payable in same-day funds to the account specified by the Company.
If settlement for the Option Securities occurs after the Closing Date, the Company will deliver to the Representatives on the settlement
date for the Option Securities, and the obligation of the Initial Purchasers to purchase the Option Securities shall be conditioned
upon receipt of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters
delivered on the Closing Date pursuant to Section 6 hereof.

 

4.     
Offering by Initial Purchasers. (a) Each Initial Purchaser acknowledges that the Securities and the Common
Stock issuable upon conversion thereof have not been and will not be registered under the Act and may not be offered or sold except
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Act.

 

(b)  
Each Initial Purchaser, severally and not jointly, represents and warrants to and agrees with the Company that

 

(i)                
it has not offered or sold, and will not offer or sell, any Securities within the United States, as part of their distribution
at any time, except to those it reasonably believes to be “qualified institutional buyers” (as defined in Rule 144A
under the Act) and in connection with each such sale, it has taken or will take reasonable steps to ensure that the purchaser of
such Securities is aware that such sale may be made in reliance on Rule 144A;

 

(ii)              
neither it nor any person acting on its behalf has made or will make offers or sales of the Securities by means of any form
of general solicitation or general advertising (within the meaning of Section 502(c) of Regulation D); and

 

    	13

    	 

    

(iii)            
 it is an “accredited investor” (as defined in Rule 501(a) of Regulation D).

 

5.     
Agreements. The Company agrees with each Initial Purchaser that:

 

(a)   
The Company will furnish to each Initial Purchaser and to counsel for the Initial Purchasers, without charge, during the
period referred to in Section 5(c) below, as many copies of the materials contained in the Disclosure Package and the Final Memorandum
and any amendments and supplements thereto as they may reasonably request.

 

(b)  
The Company will not amend or supplement the Disclosure Package or the Final Memorandum, other than by filing documents
under the Exchange Act that are incorporated by reference therein, without the prior written consent of the Representatives; provided,
however, that prior to the completion of the distribution of the Securities by the Initial Purchasers (as determined by
the Initial Purchasers), the Company will not file any document under the Exchange Act that is incorporated by reference in the
Disclosure Package or the Final Memorandum unless, prior to such proposed filing, the Company has furnished the Representatives
with a copy of such document for their review and the Representatives have not reasonably objected to the filing of such document.
The Company will promptly advise the Representatives when any document filed under the Exchange Act that is incorporated by reference
in the Disclosure Package or the Final Memorandum shall have been filed with the Commission.

 

(c)   
If at any time prior to the completion of the sale of the Securities by the Initial Purchasers (as determined by the Representatives),
any event occurs as a result of which the Disclosure Package or the Final Memorandum, as then amended or supplemented, would include
any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made or the circumstances then prevailing, not misleading, or if it should be necessary
to amend or supplement the Disclosure Package or the Final Memorandum to comply with applicable law, the Company will promptly
(i) notify the Representatives of any such event; (ii) subject to the requirements of Section 5(b), prepare an amendment or supplement
that will correct such statement or omission or effect such compliance; and (iii) supply any supplemented or amended Disclosure
Package or Final Memorandum to the several Initial Purchasers and counsel for the Initial Purchasers without charge in such quantities
as they may reasonably request.

 

(d)  
Without the prior written consent of the Representatives, the Company has not given and will not give to any prospective
purchaser of the Securities any written information concerning the offering of the Securities other than materials contained in
the Disclosure Package, the Final Memorandum or any other offering materials prepared by or with the prior written consent of the
Representatives.

 

(e)   
The Company will arrange, if necessary, for the qualification of the Securities for sale by the Initial Purchasers under
the laws of such jurisdictions as the Representatives may designate and will maintain such qualifications in effect so long as
required for the sale of the Securities; provided that in no event shall the Company be obligated to qualify to do business
in any jurisdiction where it is not now so qualified or to take any action that would subject it to

 

    	14

    	 

    

service of process in suits,
other than those arising out of the offering or sale of the Securities, in any jurisdiction where it is not now so subject. The
Company will promptly advise the Representatives of the receipt by the Company of any notification with respect to the suspension
of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such
purpose.

 

(f)   
The Company will not, and will not permit any of its Affiliates to, resell any Securities or Shares of Common Stock issued
upon conversion thereof that have been acquired by any of them.

 

(g)  
None of the Company, its Affiliates or any person acting on its or their behalf will, directly or indirectly, make offers
or sales of any security, or solicit offers to buy any security, under circumstances that would require the registration of the
Securities or Common Stock issuable upon conversion thereof under the Act.

 

(h)  
Any information provided by the Company, its Affiliates or any person acting on its or their behalf to publishers of publicly
available databases about the terms of the Securities shall include a statement that the Securities have not been registered under
the Act and are subject to restrictions under Rule 144A under the Act;

 

(i)    
None of the Company, its Affiliates or any person acting on its or their behalf will engage in any form of general solicitation
or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Securities.

 

(j)    
For so long as any of the Securities or the Common Stock issuable upon the conversion thereof are “restricted securities”
within the meaning of Rule 144(a)(3) under the Act, the Company will, during any period in which it is not subject to and in compliance
with Section 13 or 15(d) of the Exchange Act or it is not exempt from such reporting requirements pursuant to and in compliance
with Rule 12g3-2(b) under the Exchange Act, provide to each holder of such restricted securities and to each prospective
purchaser (as designated by such holder) of such restricted securities, upon the request of such holder or prospective purchaser,
any information required to be provided by Rule 144A(d)(4) under the Act. This covenant is intended to be for the benefit of the
holders, and the prospective purchasers designated by such holders, from time to time of such restricted securities.

 

(k)  
None of the Company, its Affiliates or any person acting on its or their behalf will engage in any directed selling efforts
(as defined under Regulation S) with respect to the Securities.

 

(l)    
The Company will cooperate with the Representatives and use its best efforts to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company and any other relevant clearing system. 

 

(m)
The Company will reserve and keep available at all times, free of pre-emptive rights, the full number of shares of Common
Stock issuable upon conversion of the Securities.

 

    	15

    	 

    

(n)  
 Each of the Securities and the shares of Common Stock issuable upon conversion thereof will bear, to the extent applicable,
the legend contained in “Transfer Restrictions” in the Preliminary Memorandum and the Final Offering Memorandum for
the time period and upon the other terms stated therein.

 

(o)  
The Company will not for a period of 90 days following the Execution Time, without the prior written consent of Citigroup,
directly or indirectly, offer, sell, contract to sell, pledge, otherwise dispose of, enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) by the Company or any Affiliate of the Company or any person in privity with the Company or
any Affiliate of the Company of, file (or participate in the filing of) a registration statement with the Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act in respect of, any shares of capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for, shares of capital stock of the Company (other than the Securities), or publicly announce an intention
to effect any such transaction; provided, however, that the Company may (i) issue and sell Common Stock or securities
convertible into or exchangeable for Common Stock pursuant to any employee stock option plan, stock ownership plan or dividend
reinvestment plan of the Company described in the Disclosure Package and the Final Memorandum and in effect at the Execution Time,
(ii) may issue Common Stock issuable upon the conversion of securities or the exercise of warrants outstanding at the Execution
Time and described in the Disclosure Package and the Final Memorandum or (iii) enter into (or seek to enter into) a strategic transaction,
whether structured as a merger, sale of the Company or of all or substantially all of its assets.

 

(p)  
The Company will not take, directly or indirectly, any action designed to or that has constituted, or that might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities.

 

(q)  
Between the date hereof and the Closing Date, the Company will not do or authorize any act or thing that would result in
an adjustment of the conversion price of the Securities.

 

(r)    
The Company will, for a period of twelve months following the Execution Time, furnish to the Representatives (i) all reports
or other communications (financial or other) generally made available to stockholders, and deliver such reports and communications
to the Representatives as soon as they are available, unless such documents are furnished to or filed with the Commission or any
securities exchange on which any class of securities of the Company is listed and generally made available to the public and (ii)
such additional information concerning the business and financial condition of the Company as the Representatives may from time
to time reasonably request (such statements to be on a consolidated basis to the extent the accounts of the Company and its subsidiaries
are consolidated in reports furnished to stockholders).

 

(s)   
The Company will comply with all applicable securities and other laws, rules and regulations, including, without limitation,
the Sarbanes-Oxley Act, and use its best efforts to

 

    	16

    	 

    

cause the Company’s directors
and officers, in their capacities as such, to comply with such laws, rules and regulations, including, without limitation, the
provisions of the Sarbanes-Oxley Act.

 

(t)    
The Company will prepare a final term sheet, containing solely a description of the Securities and the offering thereof,
in the form approved by you and attached as Schedule II hereto.

 

(u)  
The Company agrees to pay the costs and expenses relating to the following matters: (i) the preparation of the Indenture,
the issuance of the Securities, the fees of the Trustee and the issuance of the Common Stock upon conversion of the Securities;
(ii) the preparation, printing or reproduction of the materials contained in the Disclosure Package and the Final Memorandum and
each amendment or supplement to either of them; (iii) the printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the materials contained in the Disclosure Package and the Final
Memorandum, and all amendments or supplements to either of them, as may, in each case, be reasonably requested for use in connection
with the offering and sale of the Securities; (iv) the preparation, printing, authentication, issuance and delivery of the Securities;
(v) any stamp, transfer or similar taxes in connection with the original issuance, sale or resale of the Securities; (vi) the printing
(or reproduction) and delivery of this Agreement, any blue sky memorandum and all other agreements or documents printed (or reproduced)
and delivered in connection with the offering of the Securities; (vii) any registration or qualification of the Securities for
offer and sale under the securities or blue sky laws of the several states and any other jurisdictions specified pursuant to Section
5(e) (including filing fees and the reasonable fees and expenses of counsel for the Initial Purchasers relating to such registration
and qualification); (viii) the transportation and other expenses incurred by or on behalf of Company representatives in connection
with presentations to prospective purchasers of the Securities; (ix) the fees and expenses of the Company’s accountants and
the fees and expenses of counsel (including local and special counsel) for the Company; and (x) all other costs and expenses incident
to the performance by the Company of its obligations hereunder.

 

6.     
Conditions to the Obligations of the Initial Purchasers. The obligations of the Initial Purchasers to purchase
the Firm Securities and the Option Securities, as the case may be, shall be subject to the accuracy of the representations and
warranties of the Company contained herein at the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional conditions:

 

(a)   
The Company shall have requested and caused Morrison & Foerster LLP, counsel for the Company, to furnish to the Representative
its opinion, dated the Closing Date and addressed to the Representative, substantially in the form of Exhibit B-1, as well
as a Rule 10b-5 letter, substantially in the form of Exhibit B-2. In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of Florida, the State of New York or the federal laws
of the United States, to the extent they deem proper and specified in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the Initial Purchasers and (B)

 

    	17

    	 

    

as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company and public officials. References to the Disclosure
Package, the Preliminary Memorandum and the Final Memorandum in this Section 6(a), Exhibit B-1, Exhibit B-2, and Exhibit B-3 include
any amendment or supplement thereto at the Closing Date.

 

(b)  
The Company shall have requested and caused Morrison & Foerster LLP, special intellectual property counsel for the Company,
to have furnished to the Representative their opinion, dated the Closing Date and addressed to the Representative, substantially
in the form of Exhibit B-3.

 

(c)   
The Representatives shall have received from Latham & Watkins LLP, counsel for the Initial Purchasers, such opinion
or opinions, dated the Closing Date and addressed to the Representatives, with respect to the issuance and sale of the Securities,
the Indenture, the Disclosure Package, the Final Memorandum (as amended or supplemented at the Closing Date) and other related
matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.

 

(d)  
The Company shall have furnished to the Representatives a certificate of the Company, signed by (x) the Chief Executive
Officer and (y) the principal financial or accounting officer of the Company, dated the Closing Date, to the effect that the signers
of such certificate have carefully examined the Disclosure Package and the Final Memorandum and any amendments or supplements thereto,
and this Agreement and that:

 

(i)                
the representations and warranties of the Company in this Agreement are true and correct on and as of the Closing Date with
the same effect as if made on the Closing Date, and the Company has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied hereunder at or prior to the Closing Date; and

 

(ii)              
since the date of the most recent financial statements included or incorporated by reference in the Disclosure Package and
the Final Memorandum (exclusive of any amendment or supplement thereto), there has been no material adverse change in the condition
(financial or otherwise), prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Disclosure Package
and the Final Memorandum (exclusive of any amendment or supplement thereto).

 

(e)   
At the Execution Time and at the Closing Date, the Company shall have requested and caused Kesselman & Kesselman, a
member of PricewaterhouseCoopers International Limited, to furnish to the Representatives letters, dated respectively as of the
Execution Time and as of the Closing Date, in form and substance satisfactory to the Representatives and confirming that they are
independent accountants within the meaning of the Exchange Act and the applicable published rules and regulations thereunder and
stating in effect that:

 

    	18

    	 

    

(i)                
 in their opinion, the audited financial statements and financial statement schedules included or incorporated by reference
in the Preliminary Memorandum and the Final Memorandum and reported on by them comply as to form with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and regulations adopted by the Commission;

 

(ii)they
have performed certain other specified procedures as a result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general
accounting records of the Company and its subsidiaries) set forth in the Preliminary Memorandum and the Final Memorandum, including
the information set forth under the captions “The Offering,” “Summary Consolidated Financial Data,” “Risk
Factors,” and “Capitalization” in the Preliminary Memorandum and the Final Memorandum, the information incorporated
by reference in Items 1, 2, 6, 7 and 11 of the Company’s Annual Report on Form 10-K, incorporated by reference in the Preliminary
Memorandum and the Final Memorandum, agrees with the accounting records of the Company and its subsidiaries, excluding any questions
of legal interpretation.

 

All references
in this Section 6(d) to the Preliminary Memorandum and the Final Memorandum include any amendment or supplement thereto at the
date of the applicable letter.

 

(f)   
Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Disclosure Package (exclusive
of any amendment or supplement thereto) and the Final Memorandum (exclusive of any amendment or supplement thereto), there shall
not have been (i) any change or decrease specified in the letter or letters referred to in paragraph (d) of this Section 6; or
(ii) any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive
of any amendment or supplement thereto), the effect of which, in any case referred to in clause (i) or (ii) above, is, in the sole
judgment of the Representatives, so material and adverse as to make it impractical or inadvisable to proceed with the offering
or delivery of the Securities as contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or
supplement thereto).

 

(g)  
Prior to the Execution Time, the Company shall have furnished to the Representatives a letter substantially in the form
of Exhibit A hereto from each officer and director of the Company addressed to the Representatives.

 

(h)  
The Company shall have caused the shares of Common Stock initially issuable upon conversion of the Securities to be approved
for listing, subject to issuance, on The NYSE MKT.

 

(i)    
Prior to the Closing Date, the Company shall have furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.

 

    	19

    	 

    

If any of the
conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the
Representatives and counsel for the Initial Purchasers, this Agreement and all obligations of the Initial Purchasers hereunder
may be cancelled at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given
to the Company in writing or by telephone or facsimile confirmed in writing.

 

The documents
required to be delivered by this Section 6 will be delivered at the office of Latham & Watkins LLP, counsel for the Initial
Purchasers, at 12636 High Bluff Drive, Suite 400, San Diego, California 92130, on the Closing Date.

 

7.     
Reimbursement of Expenses. If the sale of the Securities provided for herein is not consummated because any
condition to the obligations of the Initial Purchasers set forth in Section 6 hereof is not satisfied, because of any termination
pursuant to Section 10 hereof or because of any refusal, inability or failure on the part of the Company to perform any agreement
herein or comply with any provision hereof other than by reason of a default by any of the Initial Purchasers, the Company will
reimburse the Initial Purchasers severally through Citigroup on demand for all expenses (including reasonable fees and disbursements
of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities.

 

8.     
Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each Initial Purchaser,
the directors, officers, employees, Affiliates and agents of each Initial Purchaser and each person who controls any Initial Purchaser
within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several,
to which they or any of them may become subject under the Act, the Exchange Act or other U.S. federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Preliminary
Memorandum, the Final Memorandum, any Issuer Written Information or any other written information used by or on behalf of the Company
in connection with the offer or sale of the Securities, or in any amendment 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, in the light of the circumstances under which they were made, not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by it in connection with investigating or defending any
such loss, claim, damage, liability or action; 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 in the Preliminary Memorandum, the Final Memorandum, or in any amendment
thereof or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by or on behalf
of any Initial Purchaser through the Representatives specifically for inclusion therein. This indemnity agreement will be in addition
to any liability that the Company may otherwise have.

 

    	20

    	 

    

(b)  
 Each Initial Purchaser severally, and not jointly, agrees to indemnify and hold harmless the Company, each of its directors,
each of its officers, and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the
same extent as the foregoing indemnity to each Initial Purchaser, but only with reference to written information relating to such
Initial Purchaser furnished to the Company by or on behalf of such Initial Purchaser through the Representatives specifically for
inclusion in the Preliminary Memorandum, the Final Memorandum or in any amendment or supplement thereto. This indemnity agreement
will be in addition to any liability that any Initial Purchaser may otherwise have. The Company acknowledges that (i) the statements
set forth in the last paragraph of the cover page regarding delivery of the Securities and (ii), under the heading “Plan
of Distribution”, (A) the fourth sentence of the seventh paragraph and (B) the ninth, tenth and eleventh paragraphs in the
Preliminary Memorandum and the Final Memorandum constitute the only information furnished in writing by or on behalf of the Initial
Purchasers for inclusion in the Preliminary Memorandum, the Final Memorandum or in any amendment or supplement thereto.

 

(c)   
Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying
party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph
(a) or (b) above. The indemnifying party shall be entitled to appoint counsel (including local counsel) of the indemnifying party’s
choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel,
other than local counsel if not appointed by the indemnifying party, retained by the indemnified party or parties except as set
forth below); provided, however, that such counsel shall be satisfactory to the indemnified party. Notwithstanding
the indemnifying party’s election to appoint counsel (including local counsel) to represent the indemnified party in an action,
the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of interest; (ii) the actual or potential defendants
in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel satisfactory
to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action;
or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying
party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent
to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such

 

    	21

    	 

    

claim or action) unless such
settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of
such claim, action, suit or proceeding.

 

(d)  
In the event that the indemnity provided in paragraph (a) or (b) of this Section 8 is unavailable to or insufficient to
hold harmless an indemnified party for any reason, the Company and the Initial Purchasers severally agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating
or defending any loss, claim, damage, liability or action) (collectively “Losses”) to which the Company and one or
more of the Initial Purchasers may be subject in such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and by the Initial Purchasers on the other from the offering of the Securities; provided, however,
that in no case shall any Initial Purchaser be responsible for any amount in excess of the purchase discount or commission applicable
to the Securities purchased by such Initial Purchaser hereunder. If the allocation provided by the immediately preceding sentence
is unavailable for any reason, the Company and the Initial Purchasers severally shall contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Initial Purchasers
on the other in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the Initial Purchasers shall be deemed to be equal to the total purchase
discounts and commissions. Relative fault shall be determined by reference to, among other things, whether any untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided
by the Company on the one hand or the Initial Purchasers on the other, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Initial Purchasers
agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation
that does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph
(d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person who controls
an Initial Purchaser within the meaning of either the Act or the Exchange Act and each director, officer, employee, Affiliate and
agent of an Initial Purchaser shall have the same rights to contribution as such Initial Purchaser, and each person who controls
the Company within the meaning of either the Act or the Exchange Act and each officer and director of the Company shall have the
same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).

 

9.     
Default by an Initial Purchaser. If any one or more Initial Purchasers shall fail to purchase and pay for
any of the Securities agreed to be purchased by such Initial Purchaser hereunder and such failure to purchase shall constitute
a default in the performance of its or their obligations under this Agreement, the remaining Initial Purchasers shall be obligated
severally to take up and pay for (in the respective proportions which the principal amount of Securities set forth opposite their
names in Schedule I hereto bears to the aggregate principal amount of Securities set forth opposite the names of all the remaining
Initial Purchasers) the Securities

 

    	22

    	 

    

which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided, however, that in the event that the aggregate
principal amount of Securities which the defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase shall
exceed 10% of the aggregate principal amount of Securities set forth in Schedule I hereto, the remaining Initial Purchasers shall
have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting
Initial Purchasers do not purchase all the Securities, this Agreement will terminate without liability to any nondefaulting Initial
Purchaser or the Company. In the event of a default by any Initial Purchaser as set forth in this Section 9, the Closing Date shall
be postponed for such period, not exceeding five Business Days, as the Representatives shall determine in order that the required
changes in the Final Memorandum or in any other documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Initial Purchaser of its liability, if any, to the Company or any nondefaulting Initial Purchaser
for damages occasioned by its default hereunder.

 

10. 
Termination. This Agreement shall be subject to termination in the absolute discretion of the Representatives,
by notice given to the Company prior to delivery of, and payment for, the Securities, if at any time prior to such delivery and
payment (i) trading in the Company’s Common Stock shall have been suspended by the Commission or The NYSE MKT, or trading
in securities generally on the New York Stock Exchange  shall have been suspended or limited or minimum prices shall have
been established on any such exchanges; (ii) trading in the Company’s Common Stock shall have been suspended by the Tel Aviv
Stock Exchange which suspension is not related to the offering under this Agreement; (iii) a banking moratorium shall have been
declared either by U.S. federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or other calamity or crisis the effect of which
on financial markets is such as to make it, in the sole judgment of the Representatives, impractical or inadvisable to proceed
with the offering or delivery of the Securities as contemplated in the Disclosure Package and the Final Memorandum (exclusive of
any amendment or supplement thereto).

 

11. 
Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities
and other statements of the Company or its officers and of the Initial Purchasers set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or on behalf of the Initial Purchasers or the Company
or any of the indemnified persons referred to in Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement.

 

12. 
Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the
Representatives, will be mailed, delivered or telefaxed to the Citigroup General Counsel (fax no.: (212) 816-7912) and confirmed
to Citigroup at 388 Greenwich Street, New York, New York 10013, Attention: General Counsel; or, if sent to the Company, will be
mailed, delivered or telefaxed to +972 (4) 988-8926 and confirmed to it at Protalix BioTherapeutics, Inc., 2 Snunit Street,
Science Park, POB 455, Carmiel 20100, Israel, attention of David Aviezer, President and Chief Executive Officer.

 

    	23

    	 

    

13. 
 Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their
respective successors and the indemnified persons referred to in Section 8 hereof and their respective successors, and, except
as expressly set forth in Section 5(j) hereof, no other person will have any right or obligation hereunder.

 

14. 
Internet Document Service. The Company hereby agrees that Citigroup may provide copies of the Preliminary
Memorandum and Final Memorandum and any other agreement or document relating to the offer and sale of the Securities, including,
without limitation, the Registration Rights Agreement and the Indenture, to Xtract Research LLC (“Xtract”) following
the Closing Date for inclusion in an online research service sponsored by Xtract, access to which is restricted to “qualified
institutional buyers” (as defined in Rule 144A under the Act).

 

15. 
Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral) between
the Company and the Initial Purchasers, or any of them, with respect to the subject matter hereof.

 

16. 
Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State
of New York applicable to contracts made and to be performed within the State of New York.

 

17. 
Waiver of Jury Trial. The Company hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.

 

18. 
No Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and sale of the Securities pursuant
to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the Initial Purchasers
and any Affiliate through which it may be acting, on the other, (b) the Initial Purchasers are acting as principal and not as an
agent or fiduciary of the Company and (c) the Company’s engagement of the Initial Purchasers in connection with
the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore,
the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of
whether any of the Initial Purchasers has advised or is currently advising the Company on related or other matters). The Company
agrees that it will not claim that the Initial Purchasers have rendered advisory services of any nature or respect, or owe an agency,
fiduciary or similar duty to the Company in connection with such transaction or the process leading thereto.

 

19. 
Waiver of Tax Confidentiality. Notwithstanding anything herein to the contrary, purchasers of the Securities
(and each employee, representative or other agent of a purchaser) may disclose to any and all persons, without limitation of any
kind, the U.S. tax treatment and U.S. tax structure of any transaction contemplated herein and all materials of any kind (including
opinions or other tax analyses) that are provided to the purchasers of the Securities relating to such U.S. tax treatment and U.S.
tax structure, other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities
laws.

 

    	24

    	 

    

20. 
 Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an
original and all of which together shall constitute one and the same agreement.

 

21. 
Headings. The section headings used herein are for convenience only and shall not affect the construction
hereof.

 

22. 
Definitions. The terms that follow, when used in this Agreement, shall have the meanings indicated.

 

“Act”
shall mean the U.S. Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

 

“Affiliate”
shall have the meaning specified in Rule 501(b) of Regulation D.

 

“Business
Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in The City of New York.

 

“Citigroup”
shall mean Citigroup Global Markets Inc.

 

“Commission”
shall mean the Securities and Exchange Commission.

 

“Disclosure
Package” shall mean (i) the Preliminary Memorandum, as amended or supplemented at the Execution Time, (ii) the final term
sheet prepared pursuant to Section 5(t) hereto and in the form attached as Schedule II hereto and (iii) any Issuer Written Information.

 

“Exchange
Act” shall mean the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated
thereunder.

 

“Execution
Time” shall mean the date and time that this Agreement is executed and delivered by the parties hereto.

 

“Investment
Company Act” shall mean the U.S. Investment Company Act of 1940, as amended, and the rules and regulations of the Commission
promulgated thereunder.

 

“Issuer
Written Information” shall mean any writings in addition to the Preliminary Memorandum that the parties expressly agree in
writing to treat as part of the Disclosure Package.

 

“NASDAQ”
shall mean the NASDAQ Stock Market.

 

“Regulation D”
shall mean Regulation D under the Act.

 

“Regulation S”
shall mean Regulation S under the Act.

 

“Regulation
S-X” shall mean Regulation S-X under the Act.

 

    	25

    	 

    

“Trust
Indenture Act” shall mean the U.S. Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission
promulgated thereunder.

 

 

    	26

    	 

    

If the foregoing
is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the Company and the several Initial Purchasers.

 

Very truly yours,

 

PROTALIX BIOTHERAPEUTICS,
INC.

 

By:___________________________

Name:

Title:

 

The foregoing Agreement is hereby
confirmed

and accepted as of the date first above written.

 

Citigroup Global Markets Inc.

 

		By:	_____________________

Name:

Title:

 

For itself and the
other several Initial Purchasers named in Schedule I to the foregoing Agreement.

 

    	 

    	 

    

 

	SCHEDULE I
	
        Initial
        Purchasers

         

         
	
        Principal
        Amount

        of Firm

        Securities to be

        Purchased

         

         

	Citigroup Global Markets Inc.	U.S.$60,000,000
	 	 
	Total	U.S.$60,000,000
	 	 	 

 

 

    	 

    	 

    

SCHEDULE
II

 

PRICING TERM SHEET

Dated September 12, 2013

 

Protalix
BioTherapeutics, Inc.

 

Offering
of

$60,000,000
aggregate principal amount of

4.50% Convertible Senior Notes due 2018

 

·        
The information in this pricing term sheet supplements Protalix BioTherapeutics, Inc.’s preliminary offering memorandum,
dated September 11, 2013 (the “Preliminary Offering Memorandum”), and supersedes the information in the Preliminary
Offering Memorandum to the extent inconsistent with the information in the Preliminary Offering Memorandum. In all other respects,
this pricing term sheet is qualified in its entirety by reference to the Preliminary Offering Memorandum. Terms used herein but
not defined herein shall have the respective meanings as set forth in the Preliminary Offering Memorandum. All references to dollar
amounts are references to U.S. dollars.

 

	Issuer:	Protalix BioTherapeutics, Inc., a Florida corporation.
	Exchange/Symbol for the Issuer’s Common Stock:	The NYSE MKT (“NYSE MKT”) and the Tel Aviv Stock Exchange/PLX.
	Security:	4.50% Convertible Senior Notes due 2018 (the “Notes”).
	Trade Date:	September 13, 2013.
	Expected Settlement Date:	September 18, 2013.
	Offering Size:	$60,000,000 aggregate principal amount of Notes.
	Initial Purchaser’s Option to Purchase Additional Notes:	Up to $9,000,000 aggregate principal amount of additional Notes.
	Distribution:	Rule 144A.
	Maturity Date:	September 15, 2018, unless earlier purchased, converted or redeemed.

    	1

    	 

    

 

	Optional Redemption:	The Issuer may not redeem the Notes prior to September 19, 2016 and no sinking fund is provided for the notes.  On or after September 19, 2016, the Issuer may from time to time redeem for cash all or part of the Notes, except for the Notes that the Issuer is required to repurchase as described under “Description of the Notes—Purchase of Notes at Your Option upon a Fundamental Change” in the Preliminary Offering Memorandum, but only if the closing sale price per share of the Issuer’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the trading day immediately preceding the date on which the Issuer provides the notice of redemption exceeds 130% of the applicable conversion price for the Notes on each applicable trading day. The redemption price will equal 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, plus the sum of the present values of each of the remaining scheduled payments of interest that would have been made on the Notes being redeemed had such Notes remained outstanding from the redemption date to the maturity date, calculated as described under “Description of the Notes—Optional Redemption on or after September 19, 2016” in the Preliminary Offering Memorandum.
	Interest Rate:	4.50% per annum, accruing from September 18, 2013.
	Issue Price:	100%, plus accrued interest, if any, from September 18, 2013.
	Interest Payment Dates:	Each March 15 and September 15, beginning on March 15, 2014.
	NYSE MKT Closing Sale Price on September 12, 2013:	$4.72 per share of the Issuer’s common stock.  The closing sale price of the Issuer’s common stock on the Tel Aviv Stock Exchange on September 12, 2013 was NIS 18.63 per share.
	Conversion Premium:	Approximately 22.0% above the NYSE MKT Closing Sale Price on September 12, 2013.
	Initial Conversion Rate:	173.6593 shares of the Issuer’s common stock per $1,000 principal amount of Notes, subject to adjustment.
	Initial Conversion Price:	Approximately $5.76 per share of the Issuer’s common stock, subject to adjustment.
	Use of Proceeds:	
        The Issuer estimates that the
        net proceeds from the offering of the Notes, after deducting estimated expenses payable by the Issuer and the initial purchaser’s
        discount, will be approximately $58.1 million (or $66.8 million if the initial purchaser exercises its option to purchase
        additional Notes in full).

         

        The Issuer currently intends
        to use the net proceeds of the offering of the Notes to fund clinical trials for the Issuer’s product candidates, to fund
        the Issuer’s research and development activities, to enhance the Issuer’s manufacturing capacity and for working capital
        and general corporate purposes.

         

	Sole Book-Running Manager	Citigroup Global Markets Inc.
	CUSIP / ISIN Numbers:	74365A AA9 / US74365AAA97
	Adjustment to Conversion Rate upon Conversion upon a Make-Whole Adjustment Event or a Notice of Redemption:	The following table sets forth the number of additional shares (as defined under “Description of the Notes—Adjustment to Conversion Rate upon Conversion upon a Make-Whole Adjustment Event or a Notice of Redemption” in the Preliminary Offering Memorandum) to be added to the conversion rate for each $1,000 principal amount of Notes based on the hypothetical stock prices and effective dates or dates of the notice of redemption, as the case may be, set forth below:

 

 

    	2

    	 

    

 

 

 

	Effective Date / Date of Notice of Redemption 	
        Stock
        Price

        

	
 

	$4.72	$5.25	$5.76	$7.00	$8.00	$10.00	$15.00	$20.00	$30.00	$40.00
	September 18, 2013	38.2051 	33.3972 	28.5534 	22.1721 	19.0258 	14.7709 	9.1263 	6.3087 	3.5021 	2.1181 
	September 15, 2014	38.2051 	31.4452 	25.7782 	18.8941 	16.1042 	12.5101 	7.7618 	5.3900 	3.0232 	1.8505 
	September 15, 2015	38.2051 	29.6911 	23.1601 	15.2405 	12.8318 	9.9413 	6.1935 	4.3203 	2.4485 	1.5169 
	September 15, 2016	38.2051 	27.8757 	20.4111 	11.2181 	9.0687 	7.0364 	4.4015 	3.0841 	1.7668 	1.1090 
	September 15, 2017	38.2051 	25.2159 	16.6432 	6.6408 	4.8227 	3.7466 	2.3523 	1.6551 	0.9579 	0.6094 
	September 15, 2018	38.2051 	16.8168 	0.0000 	0.0000 	0.0000 	0.0000 	0.0000 	0.0000 	0.0000 	0.0000 

 

 

Notwithstanding
anything in the indenture governing the Notes to the contrary, the Issuer may not increase the conversion rate to more than 211.8644
shares per $1,000 principal amount of Notes pursuant to the events described under “Description of the Notes—Adjustment
to Conversion Rate upon Conversion upon a Make-Whole Adjustment Event or a Notice of Redemption” in the Preliminary Offering
Memorandum, though the Issuer will adjust such number of shares for the same events for which the Issuer must adjust the conversion
rate as described under “Description of the Notes—Conversion of Notes—Conversion Rate Adjustments” in the
Preliminary Offering Memorandum.

 

The
exact stock prices and effective dates or dates of the notice of redemption, as the case may be, may not be set forth in the table
above, in which case if the stock price is:

 

		•	between two stock prices in the table or the effective
date or date of the notice of redemption, as the case may be, is between two effective dates or dates of the notice of redemption,
as the case may be, in the table, the number of additional shares will be determined by a straight-line interpolation between
the number of additional shares set forth for the higher and lower stock prices and the earlier and later effective dates or dates
of the notice of redemption, as the case may be, based on a 365-day year, as applicable;

 

		•	in excess of $40.00 per share (subject to adjustment
in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added
to the conversion rate; and

 

		•	less than $4.72 per share (subject to adjustment in
the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to
the conversion rate.

 

The
provisions of the fourth paragraph under “Description of the Notes—Adjustment to Conversion Rate upon Conversion upon
a Make-Whole Adjustment Event or a Notice of Redemption” in the Preliminary Offering Memorandum Preliminary Offering Memorandum
are hereby amended by making the following deletion and insertion (as well as by making any additional conforming changes consistent
with such deletion and insertion):

 

		•	deleting the phrase “, subject to the exceptions
and limitations set forth in the indenture,” in clause (3) of the first bullet under such paragraph; and

 

		•	inserting the phrase “, in the case of clause
(2) above,” immediately before the phrase “subject to the exceptions, set forth in the indenture” at the end
of the first bullet under such paragraph.

 

___________

 

This communication
is intended for the sole use of the person to whom it is provided by the sender.

 

    	3

    	 

    

You should rely on the information
contained or incorporated by reference in the Preliminary Offering Memorandum, as supplemented by this final pricing term sheet
in making an investment decision with respect to the Notes.

 

This communication shall not
constitute an offer to sell or the solicitation of an offer to buy securities nor shall there be any sale of these securities in
any state in which such solicitation or sale would be unlawful prior to registration or qualification of these securities under
the laws of any such state.

 

The Notes and the shares of common
stock issuable upon conversion of the Notes, if any, have not been registered under the Securities Act of 1933, as amended (the
“Securities Act”), or any other state securities laws. Unless they are registered, the Notes and the shares
of common stock issuable upon conversion of the Notes, if any, may be offered only in transactions exempt from or not subject to
registration under the Securities Act or any other state securities laws. Accordingly, the Notes are only being offered to “qualified
institutional buyers” (as defined in Rule 144A under the Securities Act).

 

ANY DISCLAIMERS OR OTHER NOTICES
THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE
AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER SYSTEM.

 

 

 

 

 

 

 

    	4

    	 

    

EXHIBIT
A

 

Form of
Lock-Up Agreement

 

________
__, 2013

 

Citigroup Global Markets Inc.

As Representative of the Initial
Purchasers

c/o Citigroup Global Markets
Inc.

388 Greenwich Street

New York, New York 10013

 

Ladies and Gentlemen:

 

This letter
is being delivered to you in connection with a proposed Purchase Agreement (the “Purchase Agreement”) between Protalix
BioTherapeutics, Inc., a Florida corporation (the “Company”), and you as representative of a group of Initial Purchasers
named therein, relating to an offering of Convertible Notes due 2018, which will be convertible into common stock, $0.001 par value
(the “Common Stock”), of the Company.

 

In order to
induce you and the other Initial Purchasers to enter into the Purchase Agreement, the undersigned will not, without the prior written
consent of Citigroup Global Markets Inc., directly or indirectly, offer, sell, contract to sell, pledge or otherwise dispose of,
enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the undersigned
or any person in privity with the undersigned or any affiliate of the undersigned of, file (or participate in the filing of) a
registration statement with the U.S. Securities and Exchange Commission (the "Commission") in respect of, or establish
or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder (the "Exchange
Act") in respect of, any shares of capital stock of the Company or any securities convertible into, or exercisable or exchangeable
for such capital stock, or publicly announce an intention to effect any such transaction, for a period of 90 days after the date
of the Purchase Agreement.

 

The foregoing
restrictions shall not apply to: (a) transactions relating to shares of Common Stock or other securities acquired in the open market
after the completion of the offering; provided that no filing by any party under the Exchange Act shall be required or shall be
voluntarily made in connection with such transaction (other than a filing on a Form 5, Schedule 13D or Schedule 13G (or 13D-A or
13G-A) made after the expiration of the 90-day period referred to above); (b) bona fide gifts; (c) bona fide gifts, sales or other
dispositions of shares of any class of the Company’s capital stock, in each case that are made exclusively between and among
the undersigned or members of the undersigned’s immediate family (or a trust to their benefit), or affiliates of the undersigned,
including its partners (if a partnership) or members (if a limited liability company); provided, that in the case of the
foregoing clauses (b) and (c), it shall be a condition to any such transfer that (i) the transferee/donee agrees to be

 

    	A-1

    	 

    

bound by the terms of this letter
agreement (including, without limitation, the restrictions set forth in the preceding paragraph) to the same extent as if the transferee/donee
were a party hereto, (ii) no filing by any party (donor, donee, transferor or transferee) under the Exchange Act, shall be required
or shall be voluntarily made in connection with such transfer or distribution (other than a filing on a Form 5, Schedule 13D or
Schedule 13G (or 13D-A or 13G-A) made after the expiration of the 90-day period referred to above) and (iii) each party (donor,
donee, transferor or transferee) shall not be required by law (including without limitation the disclosure requirements of the
Securities Act of 1933, as amended, and the Exchange Act) to make, and shall agree to not voluntarily make, any public announcement
of the transfer or disposition; (d) the exercise of warrants or the exercise of stock options granted pursuant to the Company’s
stock option/incentive plans or otherwise outstanding on the date hereof; provided, that the restrictions shall apply to shares
of Common Stock issued upon such exercise or conversion; and (e) the establishment of any contract, instruction or plan (a ‘‘Plan’’)
that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act; provided, however, that
no sales of Common Stock or securities convertible into, or exchangeable or exercisable for, Common Stock, shall be made pursuant
to a Plan prior to the expiration of the lock-up period; provided further, that the Company is not required to report the establishment
of such Plan in any public report or filing with the Commission under the Exchange Act during the lock-up period and does not otherwise
voluntarily effect any such public filing or report regarding such Plan. For purposes of this paragraph, ‘‘immediate
family’’ shall mean the undersigned and the spouse, any lineal descendent, father, mother, brother or sister of the
undersigned.

 

If for any
reason the Purchase Agreement shall be terminated prior to the Closing Date (as defined in the Purchase Agreement), the agreement
set forth above shall likewise be terminated.

 

Very truly yours,

 

By:__________________________________

Name:

Title:

 

 

 

    	A-2

    	 

    

EXHIBIT
B-1

 

Form of
Company Counsel Opinion

 

September ___, 2013

 

 

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

 

Re:Protalix
BioTherapeutics, Inc. — $60,000,000 4.50% Convertible Notes due 2018

 

Ladies and Gentlemen:

 

We
have acted as counsel to Protalix BioTherapeutics, Inc., a Florida corporation (the “Company”), in connection with
the issuance and sale of $60,000,000 aggregate principal amount of the Company’s 4.50% Convertible Notes due 2018 (the “Notes”)
pursuant to the terms of a Purchase Agreement dated September 12, 2013 (the “Purchase Agreement”) between the Company
and Citigroup Global Markets Inc. (the “Initial Purchaser”). The Notes will be issued pursuant to the terms and conditions
of, and in the form set forth in, an Indenture to be dated as of the date hereof (the “Indenture”) between the Company
and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The Notes initially shall be convertible
into [ ] shares of common stock, $0.001 par value, of the Company (the “Common Stock”), as described in the Offering
Memorandum. The shares of Common Stock into which the Shares may be converted are referred to herein as the “Conversion Shares.”
This opinion is furnished to you at the request of the Company pursuant to Section 6(a) of the Purchase Agreement. All capitalized
terms used herein and not otherwise defined shall have the respective meanings assigned to them in the Purchase Agreement.

 

In
connection with this opinion, we have examined such corporate records, documents, instruments, certificates of public officials
and of the Company and such questions of law as we have deemed necessary for the purpose of rendering the opinions set forth herein.

 

We
have also examined (a) the Preliminary Offering Memorandum, dated September 11, 2013 and related pricing term sheet, dated September
12, 2013 (together, the “Preliminary Offering Memorandum”) and the Offering Memorandum, dated September 12, 2013 (the
“Final Offering Memorandum” and, together with the Preliminary Offering Memorandum, the “Offering Memoranda”)
pertaining to the Notes, (b) the documents filed by the Company under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), that are incorporated or deemed incorporated by reference in the Offering Memoranda through the date hereof (the “Incorporated
Documents”) and (c) executed copies of the Purchase Agreement, the Indenture and the Notes, (together, the “Transaction
Documents”).

 

In such examination,
we have assumed the genuineness of all signatures and the authenticity of all items submitted to us as originals and the conformity
with originals of all items submitted to us as copies. In making our examination of documents executed by parties

 

    	B-1-1

    	 

    

other than the Company, we have
assumed that each other party has the power and authority to execute and deliver, and to perform and observe the provisions of,
such documents, and the due authorization by each such party of all requisite action and the due execution and delivery of such
documents by each such party, and that such documents constitute the legal, valid and binding obligations of each such party enforceable
against such party in accordance with their terms. We also have assumed the legal capacity of all natural persons.

 

Our
opinion in paragraph 1 below as to the qualification and good standing of the Company is based solely on certificates of public
officials in the state named in such paragraphs. We have made no independent investigation as to whether those certificates are
accurate or complete, but we have no knowledge of any such inaccuracy or incompleteness. With respect to the opinions expressed
below, we have relied as to certain factual matters upon the certificate of an authorized officer of the Company. We have made
no independent investigation as to whether the foregoing certificate is accurate or complete. With respect to our opinion in paragraph 15
below, we have not conducted a docket search in any jurisdiction with respect to litigation that may be pending against the Company
or any of its officers or directors or undertaken any further inquiry.

 

The
opinions hereinafter expressed are subject to the following qualifications and exceptions:

 

(a)               
We express no opinion as to the effect of bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar
laws relating to or affecting the rights of creditors generally, including, without limitation, laws relating to fraudulent transfers
or conveyances, preferences and equitable subordination;

 

(b)              
We express no opinion as to limitations imposed by general principles of equity upon the availability of equitable remedies
or the enforcement of provisions of the Transaction Documents and the effect of judicial decisions which have held that certain
provisions are unenforceable where their enforcement would violate the implied covenant of good faith and fair dealing, or would
be commercially unreasonable, or where their breach is not material;

 

(c)               
The provisions of the Transaction Documents purporting to provide for indemnification under certain circumstances may be
unenforceable as violative of public policy expressed in the Act, and accordingly, we are unable to render an opinion as to the
enforceability of such provisions;

 

(d)              
Our opinion is based upon current statutes, rules, regulations, cases and official interpretive opinions, and it covers
certain items that are not directly or definitively addressed by such authorities;

 

(e)               
Except to the extent encompassed by an opinion set forth below, we express no opinion as to the effect on the opinions expressed
herein of (1) the compliance or non-compliance of any party to the Transaction Documents with any law, regulation or order
applicable to it or (2) the legal or regulatory status or the nature of the business of any such party; and

 

    	A-2

    	 

    

(f)               
 We express no opinion as to the effect of judicial decisions that may permit the introduction of extrinsic evidence to
modify the terms or the interpretation of the Transaction Documents.

 

When
reference is made in our opinion herein to our knowledge, it means the actual knowledge of the attorneys within the firm who have
represented the Company.

 

Please
note that we are opining only as to the matters expressly set forth herein, that no opinion should be inferred as to any other
matter. In rendering the foregoing opinions, we have relied, for matters involving Florida law, solely on the opinion of Shutts
& Bowen LLP, Miami, Florida, and for matters of Israeli law, solely on the opinion of Horn & Co., Tel Aviv, Israel.

 

Based
upon and subject to the foregoing, we are of the opinion that:

 

1.                 
The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State
of Florida, with full corporate power and authority to own, lease and operate its properties and conduct its business as described
in the Disclosure Package and the Final Memorandum, and to perform its obligations under each of the Transaction Documents, including,
without limitation, to issue, sell and deliver the Notes to be sold by the Company as contemplated by the Purchase Agreement.

 

2.                 
Protalix Ltd. (the “Subsidiary”) has been duly incorporated and is validly existing as a company under the laws
of the State of Israel, with full corporate power and authority to own, lease and operate its properties and to conduct its business
as described in the Disclosure Package and the Final Memorandum.

 

3.                 
The Company and the Subsidiary are each duly qualified to do business as a foreign corporation and are in good standing
in each jurisdiction in the United States where the ownership or leasing of their respective properties or the conduct of their
respective businesses requires such qualification, except where the failure to be so qualified and in good standing would not,
individually or in the aggregate, have a Material Adverse Effect.

 

4.                 
The Purchase Agreement has been duly authorized, executed and delivered by the Company.

 

5.                 
The Indenture has been duly authorized, executed and delivered by the Company and assuming due authorization, execution
and delivery thereof by the Trustee, will constitute a valid and legally binding agreement of the Company enforceable against the
Company in accordance with its terms.

 

6.                 
The Notes have been duly authorized and, when executed and authenticated by the Trustee in accordance with the provisions
of the Indenture and delivered against payment therefor pursuant to the terms of the Purchase Agreement and the Indenture, will
constitute valid and binding obligations of the Company entitled to the benefits of the Indenture and enforceable against the Company
in accordance with their terms.

 

    	A-3

    	 

    

7.                 
 The Company has an authorized and outstanding capitalization as set forth in the Disclosure Package and the Final Memorandum;
all of the issued and outstanding shares of capital stock of the Company issued on or after October 31, 2007 have been duly authorized
and validly issued, are fully paid and non-assessable and are free of statutory preemptive rights and, to our knowledge, contractual
preemptive rights, resale rights, rights of first refusal and similar rights; neither the articles of incorporation nor the bylaws
of the Company include preemptive rights, resale rights, rights of first refusal or similar rights; no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities
for, shares of capital stock of or ownership interests in the Company are outstanding.

 

8.                 
The Notes and the Indenture conform in all material respects to the descriptions thereof contained in the Disclosure Package
and the Final Memorandum.

 

9.                 
All of the outstanding shares of capital stock of the Subsidiary have been duly authorized and validly issued, are fully
paid and non-assessable and, except as otherwise disclosed in the Disclosure Package and the Final Memorandum, are owned by the
Company, in each case subject to no security interest, other encumbrance or adverse claim.

 

10.             
The Conversion Shares have been validly reserved for issuance, and when issued and delivered in accordance with the terms
of the Indenture, will have been duly and validly issued, and will be fully paid and non-assessable and free of statutory preemptive
rights and, to our knowledge, contractual preemptive rights, resale rights, rights of first refusal and similar rights.

 

11.             
No approval, authorization, consent or order under any federal law, the laws of the State of New York, the laws of the State
of Israel or under the Florida Business Corporation Act or approval, authorization, consent of or filing with any New York, Israeli
or Florida governmental or regulatory commission, board, body, authority or agency, or approval of the shareholders of the Company,
is required in connection with the issuance and sale of the Notes to be sold by the Company pursuant to the Purchase Agreement
or with the consummation of the transactions contemplated by the Purchase Agreement.

 

12.             
Based on the representations, warranties and agreements of the Company and the Initial Purchaser contained in the Purchase
Agreement, no registration of the Notes or the Common Stock under the Act, and no qualification of the Indenture under the Trust
Indenture Act, is required in connection with (a) the offer, sale and delivery of the Notes to the Initial Purchaser, (b) the initial
resale of the Notes by the Initial Purchasers or (c) the conversion of the Notes into Common Stock, in each case in the manner
contemplated by the Disclosure Package, Final Memorandum, the Purchase Agreement, the Indenture and the Notes. The Notes, when
issued, will not be of the same class (within the meaning of Rule 144A under the Act) as securities that are listed on a national
securities exchange registered pursuant to Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system.

 

13.             
The execution, delivery and performance of the Purchase Agreement by the Company, the execution and delivery of the Indenture
by the Company, the issuance and sale of the Notes to be sold by the Company pursuant to the Purchase Agreement and the Common

 

    	A-4

    	 

    

Stock issuable upon conversion
of the Notes, and the consummation of the transactions contemplated by the Purchase Agreement do not and will not result in any
breach or violation of or constitute a default under (nor constitute any event which, with notice, lapse of time or both, would
result in any breach or violation of or constitute a default under or give the holder of any indebtedness (or a person acting on
such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a part of such indebtedness
under) (or result in the creation or imposition of a lien, charge or encumbrance on any property or assets of the Company or the
Subsidiary pursuant to) (i) the articles of incorporation or bylaws (or similar organizational documents, as applicable) of the
Company or the Subsidiary, (ii) any indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness,
or any license, lease, contract or other agreement or instrument which is filed as an exhibit to any Incorporated Document, (iii)
applicable federal laws, the laws of the State of New York, the laws of the State of Israel or the Florida Business Corporation
Act or (iv) any decree, judgment or order applicable to the Company or the Subsidiary or any of their respective properties, which
decree, judgment or order is known by us, except in the case of clauses (ii) through (iv), such breaches, violations or defaults
that would not, individually or in the aggregate, result in a Material Adverse Effect.

 

14.             
To our knowledge, there are no contracts, licenses, agreements, leases or documents to which the Company or the Subsidiary
is a party or by which any of them or any of their respective properties may be bound or are otherwise of a character which are
required to be described in the Disclosure Package or the Final Memorandum or to be filed as an exhibit to any Incorporated Document
which have not been so described or filed as required.

 

15.             
To our knowledge, (i) the Company is not a party to any legal or governmental action or proceeding that challenges the validity
or enforceability, or seeks to enjoin the performance, of the Purchase Agreement and (ii) there are no actions, suits, claims,
investigations or proceedings pending, threatened or contemplated to which the Company or the Subsidiary or any of their respective
directors or officers is or would be a party or to which any of their respective properties is or would be subject at law or in
equity, before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency
which are required to be described in the Disclosure Package or the Final Memorandum but are not so described as required.

 

16.             
The Company is not and, after giving effect to the offering and sale of the Notes and the application of the proceeds thereof
as described in the Final Memorandum, will not be an “investment company” or an entity “controlled” by
an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.

 

17.             
The statements in (or incorporated by reference in) the Disclosure Package or the Final Memorandum under the headings “Description
of The Notes” and “U.S. Federal Income Tax Consequences” insofar as such statements constitute summaries of documents
or legal proceedings or refer to matters of law or legal conclusions, are accurate and complete in all material respects and present
fairly the information purported to be shown.

 

18.             
No person has the right, pursuant to the terms of any contract, agreement or other instrument described in or filed as an
exhibit to any Incorporated Document or otherwise known

 

    	A-5

    	 

    

to us, to cause the Company to
register under the Act any shares of Common Stock or shares of any other capital stock or other equity interest in the Company.

 

19.             
We do not know of any contracts or other documents, relating to the patents, trade secrets, trademarks, service marks or
other proprietary information or materials of the Company or the Subsidiary that are of a character required to be described in
the Disclosure Package or the Final Memorandum or to be filed as an exhibit to any Incorporated Document which have not been so
described or filed as required.

 

20.             
The statements in any of the Incorporated Documents under the heading “Legal Proceedings” (the “Litigation
Statements”), insofar as such Litigation Statements constitute summaries of documents or legal proceedings or refer to
matters of law or legal conclusions, are, to our knowledge, accurate and complete in all material respects and present fairly the
information purported to be shown.

 

Very truly
yours,

 

 

 

Morrison
& Foerster LLP

 

 

 

 

    	A-6

    	 

    

EXHIBIT
B-2

 

Form of
Company Counsel Negative Assurance Letter

 

September ____, 2013

 

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

 

Re:Protalix
BioTherapeutics, Inc. — $60,000,000 4.50% Convertible Notes due 2018

 

Ladies and Gentlemen:

 

We
have acted as counsel to Protalix BioTherapeutics, Inc., a Florida corporation (the “Company”), in connection with
the issuance and sale of $60,000,000 aggregate principal amount of the Company’s 4.50% Convertible Notes due 2018 (the “Notes”)
pursuant to the terms of a Purchase Agreement dated September 12, 2013 (the “Purchase Agreement”) between the Company
and Citigroup Global Markets Inc. (the “Initial Purchaser”). The Notes will be issued pursuant to the terms and conditions
of, and in the form set forth in, an Indenture to be dated as of the date hereof (the “Indenture”) between the Company
and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). This opinion is furnished to you at
the request of the Company pursuant to Section 6(a) of the Purchase Agreement. All capitalized terms used herein and not otherwise
defined shall have the respective meanings assigned to them in the Purchase Agreement.

 

In
connection with this letter, we have examined such corporate records, documents, instruments, certificates of public officials
and of the Company and such questions of law as we have deemed necessary for the purpose of rendering the opinions set forth herein.

 

We have also
examined (a) the Preliminary Offering Memorandum, dated September 11, 2013 and related pricing term sheet, dated September 12,
2013 (together, the “Preliminary Offering Memorandum”) and the Offering Memorandum, dated September 12, 2013 (the “Final
Offering Memorandum” and, together with the Preliminary Offering Memorandum, the “Offering Memoranda”) pertaining
to the Notes, (b) the documents filed by the Company under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), that are incorporated or deemed incorporated by reference in the Offering Memoranda through the date hereof (the “Incorporated
Documents”), (c) executed copies of the Purchase Agreement, the Indenture, and the Notes, (together, the “Transaction
Documents”).

 

In
addition, we have participated in conferences with officers and other representatives of the Company, representatives of the independent
public accountants of the Company and representatives of the Initial Purchaser at which the contents of the Disclosure Package
and the Final Memorandum were discussed and, although we are not passing upon and do not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the Disclosure Package and the Final Memorandum (except as and to the extent
stated in numbered paragraphs 7, 8, 15 and 18 of our corporate opinion letter and paragraph 1 of our intellectual

 

    	B-2-1

    	 

    

property
opinion letter, each addressed to you and the dated the date hereof), on the basis of the foregoing, nothing has come to our attention
that causes us to believe that (i) the Disclosure Package (as defined below), as of the Execution Time (as defined below), or as
of the date hereof, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not misleading or (iii) the Final Memorandum,
as of the date of the Final Memorandum, or as of the date hereof, contained or contains an untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that we express no opinion in this paragraph with respect to the
financial statements and schedules, and other financial data derived therefrom, included in the Disclosure Package or the Final
Memorandum).

 

As used
herein, (A) “Disclosure Package” means the Preliminary Prospectus and the final term sheet prepared pursuant
to Section 5(t) of the Purchase Agreement and (B) “Execution Time” means [____] [A.M./P.M.], New York City time,
on September 12, 2013.

 

Very truly
yours,

Morrison
& Foerster LLP

 

 

 

 

 

 

 

 

    	A-2

    	 

    

EXHIBIT
B-3

 

Form of
Intellectual Property Counsel Opinion

 

September _____, 2013

 

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

 

Ladies and Gentlemen:

 

We have acted as special intellectual
property counsel to Protalix BioTherapeutics, Inc., a Florida corporation (the “Company”), in connection with the issuance
and sale of $60,000,000 aggregate principal amount of the Company’s 4.50% Convertible Notes due 2018 (the “Notes”)
pursuant to the terms of a Purchase Agreement dated September 12, 2013 (the “Purchase Agreement”) between the Company
and Citigroup Global Markets Inc. (the “Initial Purchaser”). This opinion is being delivered to you pursuant to Section
6(b) of the Purchase Agreement. All capitalized terms used herein and not otherwise defined shall have the respective meanings
assigned to them in the Purchase Agreement.

 

In connection with this opinion,
we have examined the statements under the captions the sections entitled “Intellectual Property” and “Risks Related
to Intellectual Property Matters--If we fail to adequately protect or enforce our intellectual property rights or secure rights
to third party patents, the value of our intellectual property rights would diminish and our business, competitive position and
results of operations would suffer” (collectively, the “Patent Paragraphs”) in the Company’s Annual Report
on Form 10-K (the “Annual Report”), filed with the U.S. Securities and Exchange Commission (the “Commission”)
for the year ended December 31, 2012, which is incorporated by reference into the Preliminary Offering Memorandum, dated September
11, 2013 and related pricing term sheet, dated September 12, 2013 (together, the “Preliminary Offering Memorandum”)
and the Offering Memorandum, dated September 12, 2013 (the “Final Offering Memorandum” and, together with the Preliminary
Offering Memorandum, the “Offering Memoranda”). We have not made any independent verification
of any corporate records or other documents of the Company.

 

We have assumed the genuineness
of all signatures, the authenticity of all items submitted to us as originals and the conformity with originals of all items submitted
to us as copies. As to questions of fact material to the opinions expressed herein, we have relied in part (except as provided
in the immediately following paragraph) upon (i) an Officer’s Certificate, (ii) representations regarding the status and
prosecution of issued patents and pending patent applications from Ehrlich and Fenster Ltd., Israel, the Company’s patent
counsel and (iii) representations regarding the status of issued patents and pending patent applications as certified in the Officer’s
Certificate, and have not independently investigated such questions.

 

Whenever our opinions or views
herein with respect to the existence or absence of facts are indicated to be based on our knowledge or belief, it is intended to
signify that, in the course of our representation of the Company in connection with the matters referred to in the first sentence

 

    	B-3-1

    	 

    

of the first paragraph hereof,
no information has come to the attention of Gladys Monroy, Jie Zhou, James R. Tanenbaum, Anna T. Pinedo, Edward M. Welch and Michael
J. Rosenberg (who are the only attorneys in this firm who have devoted significant attention to such matters) that would give them
actual knowledge of the existence or absence of such facts. We have not undertaken any independent investigation to determine the
existence or absence of such facts, and no inference as to our knowledge of the existence or absence of such facts should be drawn
from the fact of our representation of the Company as described above.

 

Except as expressly set forth
below, we express no opinions or views (a) with respect to any patent rights or other intellectual property rights of the Company
other than the Patent Rights, (b) as to whether the Company is infringing any patents or other rights of others or whether others
are infringing any patents or other rights of the Company, (c) as to whether the Company owns or possesses sufficient licenses
or other rights to use all patents or other rights necessary for the conduct of the Company’s business, or (d) with respect
to the Company’s license agreements or similar agreements. In addition, except as expressly set forth below, we express no
opinions or views as to (i) whether any patent applications within the Patent Rights will issue as patents, (ii) whether any patents
within the Patent Rights or any patents that may issue from any patent applications within the Patent Rights, if challenged, will
be held valid and enforceable, (iii) the scope of claim coverage of any patents within the Patent Rights or any patents that may
issue from any patent applications within the Patent Rights, (iv) whether the Company will be able to conduct its business without
infringing the patents or other intellectual property rights of third parties, or (v) whether the Company will be able to prevent
third parties from competing with the Company or developing products or business methods similar to those of the Company.

 

		1.	To our knowledge, the statements in the Patent Paragraphs in the Annual Report are accurate and
fairly summarize the information purported to be shown with the exception of the updated status of Patent Rights as presented in
Officer’s Certificate - Appendix A. The Company exclusively owns those patent rights listed under Company Patent Rights,
co-owns those patent rights listed under Co-owned Patent Rights, and has licensed those patent rights listed under Licensed Patent
Rights.

 

		2.	We are not aware of any pending or threatened claims, suits or judicial or governmental proceedings
relating to the Company Patents or the Company Applications or any trademarks or service marks of the Company or the subject matter
therein. We are not aware of any rights of third parties to any of the Company Patents or the Company Applications or any trademarks
or service marks of the Company which could reasonably be expected to materially affect the ability of the Company or the Subsidiary
to conduct its business as described in the Offering Memoranda.

 

		3.	To our knowledge, (i) neither the Company nor the Subsidiary is, or has received notice that it
is, infringing or otherwise violating, and, upon the commercialization and sale of the products or services described in the Offering
Memoranda as under development, would infringe or otherwise violate, any patents, trademarks or service marks of others, and we
are unaware of any facts which would form a reasonable basis for a claim of any such infringement, except that we are aware of
U.S. Patent Nos. 8,063,182 B1 and 8,163,522 B1 in relation to PRX-106; and to our knowledge (ii) there are no infringements by
others of any of the patents, trademarks or service marks of the Company or the Subsidiary, and we are

    	B-3-2

    	 

    

unaware
of any facts which would form a reasonable basis for a claim of any such infringement.

 

		4.	To our knowledge, the Company and its Subsidiary owns or possesses sufficient licenses or other
rights to use all technology covered by patents and to use all trademarks, necessary to conduct the business now being and proposed
to be conducted by the Company and its Subsidiaries as described in the Offering Memoranda except that we are aware of U.S. Patent
Nos. 8,063,182 B1 and 8,163,522 B1 that could prevent the making, using, selling and/or importation of PRX-106 in the U.S.

 

		5.	To our knowledge, with the exception of patents related to the taliglucerase alfa product the Company
has not monitored or searched third party patent applications or patents that may cover product candidates or expression methods
and that could interfere with their business.

 

		6.	We have no knowledge of any fact that would preclude the Company or Protalix Ltd. (the “Subsidiary”)
from having valid license rights or clear title, free and clear of any liens or security interest, to the patents referenced in
the Annual Report, as updated in Officer’s Certificate - Appendix A; we have no knowledge that the Company or the Subsidiary
lacks or will be unable to obtain any rights or licenses to use patents, trademarks or service marks that are, or would be, necessary
to conduct the business now conducted or proposed to be conducted by the Company or the Subsidiary as described in the Offering
Memoranda, except as disclosed in the Offering Memoranda; and we are unaware of any facts which would form a basis for a finding
of unenforceability or invalidity of any of the patents, trademarks or service marks of the Company or the Subsidiary. We are not
aware of any material defects of form in the preparation or filing of the patent applications of the Company or the Subsidiary.
To our knowledge, the Company has complied with the U.S. Patents and Trademark Office duties of candor and disclosure for each
patent and patent application of the Company or the Subsidiary.

 

		7.	We are not aware of any fact with respect to the patent applications of the Company or the Subsidiary
presently on file that (i) would preclude the issuance of patents with respect to such applications, (ii) would lead us to conclude
that such patents, when issued, would not be valid and enforceable in accordance with applicable regulations or (iii) would result
in a third party having any rights in any patents issuing from such patent applications.

 

		8.	To our knowledge the foreign associates who were instructed to attend to the filing of the non-U.S.
patent applications of the Company or the Subsidiary have confirmed the timely filing of each such application and have reported
the application serial numbers assigned to such non-U.S. patent applications, where such serial numbers have issued.

 

    	B-3-3

    	 

    

We express no opinion as to matters
governed by the laws of any jurisdiction other than the federal laws of the United States. This letter is solely for your benefit,
and neither this letter nor any opinion expressed herein may be relied upon, nor may copies be delivered or disclosed to, any other
person or entity without our prior written consent.

 

Very truly yours,

 

 

Morrison
& Foerster LLP

 

 

    	B-3-4

    	 

    

ANNEX
A

 

Significant
Subsidiaries

 

Protalix Ltd.

 

Protalix B.V.EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT
(this “Agreement”) is made and entered into effective as of January 1, 2014 (the “Effective Date”), by
and between Emerald Oil, Inc., a Montana corporation (the “Company”), and McAndrew Rudisill (“Employee”).
Notwithstanding the foregoing, the provisions of Section 8 shall be effective immediately on the signing of this Agreement by the
Company and the Employee.

 

WITNESSETH:

 

WHEREAS, the Company
and Employee have previously entered into a certain Employment Agreement, dated as of July 26, 2012, as amended (the “Original
Agreement”); and

 

WHEREAS, the Company
and Employee desire to substitute this Agreement for the Original Agreement in its entirety effective as of the Effective Date,
and the Original Agreement shall thereafter have no force and effect.

 

NOW, THEREFORE, in
consideration of the promises and mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and Employee hereby agree as follows:

 

Section
1. Definitions.

 

(a) “Accrued Obligations”
shall mean (i) all accrued but unpaid Base Salary through the date of termination of Employee’s employment, (ii) any unpaid
or unreimbursed expenses incurred in accordance with Section 7 below, (iii) any benefits provided under the Company’s employee
benefit plans upon a termination of employment, in accordance with the terms contained therein, and (iv) reasonable relocation
costs, to the extent unpaid or unreimbursed, payable to Employee by the Company, in accordance with written Company policy.

 

(b) “Affiliate”
shall mean any person controlling, controlled by, or under common control with, another Person.

 

(c) “Annual Bonus”
shall mean the aggregate value of the Annual Cash Bonus and the Annual Equity Bonus.

 

(d) “Annual Cash
Bonus” shall have the meaning set forth in Section 4(b).

 

(e) “Annual Equity
Bonus” shall have the meaning set forth in Section 4(c).

 

(f) “Agreement”
shall have the meaning set forth in the preamble hereto.

 

(g) “Base Salary”
shall mean the salary provided for in Section 4(a) or any increased salary granted to Employee pursuant to Section 4(a).

 

(h) “Board”
shall mean the Board of Directors of the Company.

 

    	 

    	 

    

 

(i) “Cause”
shall mean (i) a material breach of the terms and conditions of Employee’s employment agreement with the Company, (ii) Employee’s
act(s) of gross negligence or willful misconduct in the course of Employee’s employment hereunder that is injurious to the
Company or any other member of the Company Group, (iii) willful failure or refusal by Employee to perform in any material respect
Employee’s duties or responsibilities, (iv) misappropriation by Employee of any assets of the Company or any other member
of the Company Group, (v) embezzlement or fraud committed by Employee, or at Employee’s direction, (vi) Employee’s
conviction of, or pleading “guilty” or “no contest” to a felony under United States state or federal law.

 

(j) “Change of
Control” shall mean the first to occur of any of the following:

 

(i) “change
of control event” with respect to the Company, within the meaning of Treas. Reg. 1.409A-3(i)(5); or

 

(ii) During
any period of two years, individuals who at the beginning of such period constitute the Board (and any new Director whose election
by the Company’s shareholders was approved by a vote of at least a majority of the Directors then still in office who either
were Directors at the beginning of the period or whose election or nomination for election was so approved) cease for any reason
to constitute a majority thereof; or

 

(iii) A merger,
consolidation, or reorganization of the Company with or involving any other entity, other than a merger, consolidation, or reorganization
that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting
power of the securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or
reorganization.

 

(k) “Code”
shall mean the Internal Revenue Code of 1986, as amended.

 

(l) “Company”
shall have the meaning set forth in the preamble hereto, and shall include any of its successors or assigns.

 

(m) “Company Business”
shall have the meaning in set forth in Section 13(a).

 

(n) “Company Group”
shall mean the Company together with any direct or indirect subsidiaries of the Company or any of its Affiliates.

 

(o) “Compensation
Committee” shall mean the committee of the Board designated to make compensation decisions relating to senior executive officers
of the Company Group.

 

(p) “Confidential
Information” shall have the meaning in set forth in Section 11(b).

 

    	2

    	 

    

 

(q) “Disability”
shall mean any physical or mental disability or infirmity of the Employee that has prevented the performance of Employee’s
duties for a period of (i) ninety (90) consecutive days or (ii) one hundred twenty (120) non-consecutive days during any six (6)
month period. Any question as to the existence, extent, or potentiality of Employee’s Disability upon which Employee and
the Company cannot agree shall be determined by a qualified, independent physician selected by the Company and approved by Employee
(which approval shall not be unreasonably withheld). The determination of any such physician shall be final and conclusive for
all purposes of this Agreement.

 

(r) “Dispute”
shall have the meaning set forth in Section 19.

 

(s) “Dodd-Frank
Act” shall have the meaning in set forth in Section 23.

 

(t) “Effective
Date” shall have the meaning set forth in the preamble hereto.

 

(u) “Employee”
shall have the meaning set forth in the preamble hereto.

 

(v) “Excise Tax”
shall have the meaning in set forth in Section 9.

 

(w) “Good Reason”
shall mean, without Employee’s consent, (i) a material diminution in Employee’s title, duties, or responsibilities,
(ii) the failure of the Company to pay any compensation hereunder when due or to perform any other obligation of the company under
this Agreement, or (iii) the relocation of Employee’s Principal Place of Employment by more than fifty (50) miles.

 

(x) “Non-Exempt
Deferred Compensation” shall have the meaning set forth in Section 14(d).

 

(y) “Performance
Criteria” shall have the meaning set forth in Section 4(b).

 

(z) “Payments”
shall have the meaning in set forth in Section 9.

 

(aa) “Person”
shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company,
trust (charitable or non-charitable), unincorporated organization, or other form of business entity.

 

(bb) “Principal
Place of Employment” shall mean Denver, Colorado or any future geographic location that is mutually agreed upon by the Company
and Employee.

 

(cc) “Required
Delay Period” shall have the meaning in set forth in Section 14.

 

(dd) “Restricted
Territory” shall have the meaning set forth in Section 13(a).

 

(ee) “Severance
Benefits” shall have the meaning in set forth in Section 8(d).

 

(ff) “Term of Employment”
shall mean the period specified in Section 2.

 

(gg) “Work Product”
shall have the meaning set forth in Section 12.

 

    	3

    	 

    

 

Section
2. Acceptance and Term of Employment. The Company agrees to employ Employee, and Employee agrees
to serve the Company, on the terms and conditions set forth herein. The “Term of Employment” shall mean the period
commencing on the Effective Date and, unless terminated sooner as provided in Section 8 hereof, continuing until December 31, 2015;
provided, however, that the Term of Employment shall be extended automatically following December 31, 2015 for a one (1) year term
and thereafter for successive one (1) year terms on the first anniversary of the then current term if
neither the Company nor Employee has advised the other in writing in accordance with Section 20 at least sixty (60) days prior
to the end of the then current term that such term will not be extended for an additional one (1) year term, subject to the provisions
in Section 8 hereof.  

 

Section
3. Position, Duties, and Responsibilities; Place of Performance.

 

(a) During the Term
of Employment, Employee shall be employed and serve as Chief Executive Officer and President of the Company and shall
have such duties and responsibilities as are commensurate with such title. The Employee shall report to the Board of the
Company and shall carry out and perform all orders, directions and policies given to Employee by the Board of the Company
consistent with his position and title.

 

(b) Employee shall devote
his best efforts to the performance of his duties under this Agreement and shall not engage in any other business or occupation
during the Term of Employment that interferes with Employee’s exercise of judgment in the Company’s best interests.
Notwithstanding the foregoing, nothing herein shall preclude Employee from (i) serving as a member of the boards of directors or
advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses, (ii) engaging in charitable
activities and community affairs, and (iii) managing his personal investments and affairs; provided, however, that
the activities set out in clauses (i), (ii), and (iii) shall be limited by Employee so as not to materially interfere, individually
or in the aggregate, with the performance of his duties and responsibilities hereunder.

 

Section
4. Compensation. During the Term of Employment, Employee shall be entitled to the following compensation:

 

(a) Base
Salary. Employee shall be paid an annualized Base Salary, payable in United States dollars and less applicable taxes and deductions
and in accordance with the regular payroll practices of the Company, of Four Hundred Fifty Thousand Dollars ($450,000)
with increases, if any, as may be approved in writing by the Compensation Committee. 

 

    	4

    	 

    

 

(b) Annual Cash Bonus.
Beginning with the Company’s 2014 fiscal year starting January 1, 2014 and ending December 31, 2014 and annually thereafter,
and subject to the satisfaction of applicable Performance Criteria (as defined below) and any other conditions required by the
Compensation Committee, the Employee shall be entitled to grants of annual bonus cash awards (“Annual Cash Bonus”)
with a minimum Annual Cash Bonus equal to two (2) times the Base Salary and a maximum amount of five (5) times the Base Salary
for the applicable fiscal year of the Company as determined by the Compensation Committee in its sole discretion; provided, however,
that the annual bonus for any performance period, including fiscal year 2014, will be paid to the Employee within the period necessary
to satisfy the exemption from Code Section 409A (as defined below) for short term deferrals set forth in Treas. Reg. §1.409A-1(b)(4)
(which generally requires that payment be made not later than 2-1/2 months after the end of the year in which the amount becomes
vested). A minimum threshold level of performance predetermined by the Compensation Committee for such Performance Criteria must
be achieved or no Annual Cash Bonus will be paid with respect to such performance period. All Annual Cash Bonuses shall be based
on the Compensation Committee’s evaluation of the condition of Company’s business, the results of operations, Employee’s
individual performance for the relevant period, the satisfaction by Employee or Company of goals and milestones, including goals
based on Performance Objectives (as that term is defined in the 2011 Equity Incentive Plan), as may be established by the Compensation
Committee, or any combination thereof (collectively, “Performance Criteria”). The applicable performance period for
the Annual Bonus shall be the fiscal year of the Company or such other performance period as established by the Compensation Committee
in its sole discretion, with the applicable Annual Cash Bonus amounts adjusted for such performance period in proportion to the
annual amounts set above. For Annual Cash Bonus payments that are intended to constitute performance-based compensation exempt
form the deduction limitations of Section 162(m) of the Code, the amount of the Annual Cash Bonus payable shall be contingent upon
the achievement of reasonable, pre-established, and objective performance goals established by the Compensation Committee in accordance
with Treas. Reg. §1.162-27(e) for such fiscal year and communicated to Employee and shall be subject to applicable limitations
as specified in the 2011 Equity Incentive Plan (or any applicable successor plan).

 

(c)     Annual Equity
Bonus Grants. Beginning with the Company’s 2014 fiscal year starting January 1, 2014 and ending December 31, 2014 and
annually thereafter, and subject to the satisfaction of applicable Performance Criteria and any other conditions required by the
Compensation Committee, the Employee shall be eligible to receive annual equity grants (“Annual Equity Bonus”) pursuant
to the 2011 Equity Incentive Plan (or any applicable successor plan subject to applicable limitations in such plan(s)) with a minimum
value equal to five (5) times the Base Salary and a maximum value of eight (8) times the Base Salary for the applicable fiscal
year of the Company as determined by the Compensation Committee in its sole discretion. A minimum threshold level of performance
predetermined by the Compensation Committee for such Performance Criteria must be achieved or no Annual Equity Bonus will be paid
with respect to such performance period. For Annual Equity Bonus grants that are intended to constitute performance-based compensation
exempt form the deduction limitations of Section 162(m) of the Code (other than grants of options or stock appreciation rights),
the amount of the Annual Equity Bonus payable shall be contingent upon the achievement of reasonable, pre-established, and objective
performance goals established by the Compensation Committee in accordance with Treas. Reg. §1.162-27(e) for such taxable year
and communicated to Employee and shall be subject to applicable limitations as specified in the 2011 Equity Incentive Plan (or
any applicable successor plan).

 

Section
5. Employee Benefits.

 

(a) General. During
the Term of Employment, Employee shall be entitled to participate in health insurance, retirement plans, directors’ and officers’
insurance coverage and other benefits provided to other senior executives of the Company, as in effect from time to time.

 

    	5

    	 

    

 

(b) Vacation and Time
Off. During each calendar year of the Term of Employment, Employee shall be eligible for twenty (20) days paid vacation, as
well as sick pay and other paid and unpaid time off in accordance with the policies and practices of the Company, as in effect
from time to time.

 

(c) Relocation Expenses.
If the Company requires Employee to relocate to accommodate business needs, the Company shall pay reasonable expenses of relocation,
subject to documentation in accordance with written Company policy, as in effect from time to time.

 

(d) Vehicle Allowance.
The Company will pay to Employee a vehicle allowance not to exceed $1,500.00 per month, in United States dollars, which amount
shall be grossed up to cover any regular income taxes required to be paid on such amount by Employee. For the avoidance of doubt,
in no event shall the Company be obligated to gross up the Employee for any taxes that may be imposed upon the Employee under Section
409A of the Code.

 

Section
6. Key-Man Insurance. At any time during the Term of Employment, the Company shall have the right
to insure the life of Employee for the sole benefit of the Company, in such amounts, and with such terms, as it may determine.
All premiums payable thereon shall be the obligation of the Company. Employee shall have no interest in any such policy, but agrees
to cooperate with the Company in procuring such insurance by submitting to physical examinations, supplying all information required
by the insurance company, and executing all necessary documents, provided that no financial obligation is imposed on Employee by
any such documents. Upon the termination of his employment for any reason, Company will allow Employee to convert the insurance
policy to a permanent personal life insurance policy.

 

Section
7. Reimbursement of Business Expenses. Employee is authorized to incur reasonable business expenses
in carrying out his duties and responsibilities under this Agreement, and the Company shall promptly reimburse Employee for all
such reasonable business expenses, subject to documentation in accordance with written Company policy, as in effect from time to
time.

 

Section
8. Termination of Employment.

 

(a) General.
The Term of Employment shall terminate earlier than as provided in Section 2 hereof upon the earliest to occur of (i) Employee’s
death, (ii) a termination by reason of a Disability, (iii) a termination by the Company with or without Cause, or (iv) a termination
by Employee with or without Good Reason. 

 

(b) Termination
Due to Death or Disability. Employee’s employment shall terminate automatically upon his death. The Company may terminate
Employee’s employment immediately upon the occurrence of a Disability. In the event Employee’s employment is terminated
due to his death or Disability, Employee or his estate or his beneficiaries, as the case may be, shall be entitled to: 

 

(i) The Accrued
Obligations, which amount shall be paid within thirty (30) days from the date of such termination; and

 

    	6

    	 

    

 

(ii) Any unpaid
Annual Bonus in respect of any completed fiscal year that has ended prior to the date of such termination with such amount determined
based on actual performance during such fiscal year as determined by the Compensation Committee, which amount shall be paid on
the sixtieth (60th) day following the date of such termination, subject to Section 8(i) of this Agreement; and

 

(iii) Any Annual
Bonus that would have been payable based on actual performance with respect to the year of termination in the absence of the Employee’s
death or Disability, pro-rated for the period the Employee worked prior to his death or Disability, and payable at the same time
as the bonus would have been paid in the absence of the Employee’s death or Disability; and

 

(iv) Immediate
vesting of any and all equity or equity-related awards previously awarded to the Employee, irrespective of type of award.

 

Following such termination
of Employee’s employment by reason of death or Disability, except as set forth in this Section 8, Employee shall have no
further rights to any compensation or any other benefits under this Agreement.

 

(c) Termination by
the Company for Cause.

 

(i) The Company
may terminate Employee’s employment at any time for Cause; provided, however, that with respect to any Cause
of termination relying on clause (i) or (ii) of the definition of Cause set forth in Section 1(f) hereof, to the extent such act
or acts are curable, Employee shall be given not less than sixty (60) days’ written notice by the Board of the Company’s
intention to terminate Employee’s employment for Cause, such notice to state in detail the particular act or acts or failure
or failures to act that constitute the grounds on which the proposed termination for Cause is based, and such termination shall
be effective at the expiration of such sixty (60) day notice period, unless Employee has substantially cured, to the Company’s
satisfaction, such act or acts or failure or failures to act that give rise to Cause during such period.

 

(ii) In the
event the Company terminates Employee’s employment for Cause, Employee shall be entitled only to the Accrued Obligations,
which amount shall be paid within thirty (30) days from the date of such termination, and any equity awards or equity-related awards
that are not vested as of the date of termination shall be cancelled. Following such termination of Employee’s employment
for Cause, except as set forth in this Section 8(c)(ii), Employee shall have no further rights to any compensation or any other
benefits under this Agreement (including, but not limited to, any payment of any bonus that has not been paid as of the date of
Employee’s termination of employment).

 

(d) Termination by
the Company without Cause. The Company may terminate Employee’s employment at any time without Cause. In the event Employee’s
employment is terminated by the Company without Cause (other than due to death or Disability), Employee shall be entitled to:

 

(i) The Accrued
Obligations; and

 

    	7

    	 

    

 

(ii) Any unpaid
Annual Bonus in respect of any completed fiscal year that has ended prior to the date of such termination with such amount determined
based on actual performance during such fiscal year as determined by the Compensation Committee; and

 

(iii) A lump-sum
cash payment equal to two and one-half (2.5) times the total of (i) Employee’s Base Salary plus (ii) an amount equal to the
total value of the Annual Bonus amounts paid during the fiscal year immediately preceding the year of such termination pursuant
to Section 4 (or the amount of cash bonus and equity compensation paid employee during fiscal 2013 if a Change of Control occurs
the initial year of this Agreement); and

 

(iv) A
lump sum cash payment equal to eighteen (18) times the “applicable percentage” of the monthly COBRA premium cost applicable
to Employee if Employee (or his dependents) were to elect COBRA coverage, or similar coverage as provided by similar state law,
in connection with such termination, (for purposes hereof, the “applicable percentage” shall be the percentage of Employee’s
health care premium costs covered by the Company as of the date of termination); and 

 

(v)
Immediate vesting of any and all equity or equity-related awards previously awarded to the Employee, irrespective of type of award.

 

Any amounts payable
to Employee under clause (i), (ii), (iii) or (iv) of this Section 8(d) shall be paid in lump sum on the sixtieth (60th)
day following the date of Employee’s termination of employment (the “Severance Benefits”), subject to Section
8(i) of this Agreement. Following such termination of Employee’s employment by the Company without Cause, except as set forth
in this Section 8(d), Employee shall have no further rights to any compensation or any other benefits under this Agreement.

 

(e) Termination by
Employee with Good Reason. Employee may terminate Employee’s employment with Good Reason by providing the Company thirty
(30) days’ written notice setting forth in reasonable specificity the event that constitutes Good Reason (which notice must
be given no later than ninety (90) days after the initial occurrence of such event). During such thirty (30) day notice period,
the Company shall have a cure right (if curable), and if not cured within such period, Employee’s termination will be effective
upon the expiration of such cure period, and Employee shall be entitled to the same payments and benefits as provided in Section
8(d) above for a termination by the Company without Cause, subject to the same conditions on payment and benefits as described
in Section 8(d) above. Following such termination of Employee’s employment by Employee with Good Reason, except as set forth
in this Section 8(e), Employee shall have no further rights to any compensation or any other benefits under this Agreement.

 

(f) Termination
by Employee without Good Reason. Employee may terminate Employee’s employment without Good Reason by providing the Company
sixty (60) days’ written notice of such termination. In the event of a termination of employment by Employee under this Section
8(f), Employee shall be entitled only to the Accrued Obligations, and any equity awards or equity-related awards that
are not vested as of the date of termination shall be cancelled. In the event of termination of Employee’s employment under
this Section 8(f), the Company may, in its sole and absolute discretion, by written notice accelerate such date of termination
without changing the characterization of such termination as a termination by Employee without Good Reason. Following such termination
of Employee’s employment by Employee without Good Reason, except as set forth in this Section 8(f), Employee shall have no
further rights to any compensation or any other benefits under this Agreement.

 

    	8

    	 

    

 

(g) Non-Extension
of the Term of Employment. Employee’s employment hereunder shall terminate upon the close of business of the last day
of the then current term if either the Company or Employee gives timely notice of its or his intention not to extend the then current
term of employment, as provided in Section 2. If the Company’s decision not to extend is without Cause, or if Employee’s
decision not to extend is with Good Reason, then Employee shall be entitled to the  payments and benefits as provided in Sections
8(d) (i), (ii), (iv) and (v) above, subject to the
same conditions on payment and benefits as described therein. Otherwise, upon the termination of the Term of Employment by reason
of the parties’ non-extension, Employee shall be entitled to the Accrued Obligations, which amount shall be paid within thirty
(30) days of such date of termination. Following such termination of Employee’s employment pursuant to Section 2, except
as set forth in this Section 8(g), Employee shall have no further rights to any compensation or any other benefits under this Agreement
and any equity or equity-related awards that are not vested as of the date of termination shall be cancelled.

 

(h) Termination
Following Change of Control. If, upon a Change of Control of the Company or during the twenty-four (24) month period
following such Change of Control, Employee is terminated by the Company without Cause or Employee terminates Employee’s
employment with Good Reason, Employee shall be entitled to the same payments and benefits as provided in Section 8(d) above
for a termination by the Company without Cause, subject to the same conditions on payment and benefits as described in
Section 8(d) above. Notwithstanding the foregoing, in the event that the Aggregate Change of Control Payments (as
defined below) exceed $15,000,000, the total value of the cash payments to be made to Employee pursuant to this paragraph
Section 8(h) (“Total Payments”) shall not exceed the “Severance Cap”. The “Severance Cap”
shall equal an amount determined by multiplying $15,000,000 by a fraction, the numerator of which shall equal Total Payments
and the denominator of which shall equal the “Aggregate Change of Control Payments”. The “Aggregate Change
of Control Payments” shall equal the aggregate value of all cash severance payments which would be made to all
employees who have employment agreements with the Company assuming that all such employees were terminated without Cause on
the day following a Change of Control. Following such termination of Employee’s employment by the Company without Cause
or by Employee with Good Reason, except as set forth in this Section 8(h), Employee shall have no further rights to any
compensation or any other benefits under this Agreement.

 

(i) Release.
Notwithstanding any provision herein to the contrary, and as a condition precedent to payment of any amount or provision of any
benefit pursuant to subsection 8(b), (d), (e), (g) and (h) (other than payment of any Accrued Obligations), Employee or Employee’s
estate, as applicable, shall execute and shall not rescind, a release in favor of the Company
Group and all related companies, individuals, and entities in a form satisfactory to the Company, and any revocation period applicable
to such release must have expired as of the sixtieth (60th) day following Employee’s termination of employment.
If Employee fails to execute the release in such a timely manner so as to permit any revocation period to expire prior to
the end of such sixty (60) day period, or timely revokes his acceptance of such release following its execution, Employee shall
not be entitled to any of the Severance Benefits. Further, to the extent that (i) such termination of employment occurs within
sixty (60) days of the end of any calendar year, and (ii) any of the Severance Benefits constitutes “nonqualified deferred
compensation” for purposes of Section 409A, any payment of any amount or provision of any benefit otherwise scheduled to
occur prior to the sixtieth (60th) day following the date of Employee’s termination of employment hereunder, but
for the condition on executing the release as set forth herein, shall not be made prior to the first day of the second calendar
year, after which any remaining Severance Benefits shall thereafter be provided to Employee according to the applicable schedule
set forth herein.

 

    	9

    	 

    

 

Section
9. Parachute Payments; Modified Cutback. 

 

(a)        If
any payment, benefit or distribution of any type to or for the benefit of Executive, whether paid or payable, provided or to be
provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (collectively, the “Parachute
Payments”) would subject Employee to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”),
the Parachute Payments shall be reduced so that the maximum amount of the Parachute Payments (after reduction) shall be one dollar
($1.00) less than the amount which would cause the Parachute Payments to be subject to the Excise Tax; provided that the Parachute
Payments shall only be reduced to the extent the after-tax value of amounts received by Employee after application of the above
reduction would exceed the after-tax value of the amounts received without application of such reduction.  For this purpose,
the after-tax value of an amount shall be determined taking into account all federal, state, and local income, employment and excise
taxes applicable to such amount.  Unless Employee shall have given prior written notice to the Company to effectuate a reduction
in the Parachute Payments if such a reduction is required, any such notice consistent with the requirements of Section 409A to
avoid the imputation of any tax, penalty or interest thereunder, the Company shall reduce or eliminate the Parachute Payments by
first reducing or eliminating any cash severance benefits (with the payments to be made furthest in the future being reduced first),
then by reducing or eliminating any accelerated vesting of stock options or similar awards, then by reducing or eliminating any
accelerated vesting of restricted stock or similar awards, then by reducing or eliminating any other remaining Parachute Payments;
provided, that no such reduction or elimination shall apply to any non-qualified deferred compensation amounts (within the meaning
of Section 409A) to the extent such reduction or elimination would accelerate or defer the timing of such payment in manner that
does not comply with Section 409A.

 

(b)         An initial determination
as to whether (i) any of the Parachute Payments received by Employee in connection with the occurrence of a change in the
ownership or control of the Company or in the ownership of a substantial portion of the assets of the Company shall be subject
to the Excise Tax, and (ii) the amount of any reduction, if any, that may be required pursuant to Section 9(a) above, shall
be made by an independent accounting firm selected by the Company and reasonably acceptable to Employee (the “Accounting
Firm”) prior to the consummation of such change in the ownership or effective control of the Company or in the ownership
of a substantial portion of the assets of the Company.  Employee shall be furnished with notice of all determinations made
as to the Excise Tax payable with respect to Employee’s Parachute Payments, together with the related calculations of the
Accounting Firm, promptly after such determinations and calculations have been received by the Company.

 

(c)          For purposes of this Section
9:

 

(i)       no portion
of the Parachute Payments, the receipt or enjoyment of which Employee shall have effectively waived in writing prior to the date
of payment of the Parachute Payments, shall be taken into account;

 

    	10

    	 

    

 

(ii)       no
portion of the Parachute Payments shall be taken into account which in the opinion of the Accounting Firm does not constitute a
“parachute payment” within the meaning of Section 280G(b)(2) of the Code;

 

(iii)       the
Parachute Payments shall be reduced only to the extent necessary so that the Parachute Payments (other than those referred to in
the immediately preceding clause (i) or (ii)) in their entirety constitute reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4) of the Code or are otherwise not subject to disallowance as deductions, in the opinion
of the auditor or tax counsel referred to in such clause (ii); and

 

(iv)       the
value of any non-cash benefit or any deferred payment or benefit included in the Parachute Payments shall be determined by the
Accounting Firm based on Sections 280G and 4999 of the Code, or on substantial authority within the meaning of Section 6662 of
the Code.

 

Section
10. Representations and Warranties of Employee. Employee represents and warrants to the Company that:

 

(a) Employee
is entering into this Agreement voluntarily and that Employee’s employment hereunder and compliance with the terms and conditions
hereof will not conflict with or result in the breach by Employee of any agreement to which Employee is a party or by which Employee
may be bound;

 

(b) Employee has not
violated, and in connection with Employee’s employment with the Company will not violate, any non-solicitation, non-competition,
or other similar covenant or agreement of a prior employer by which Employee is or may be bound; and

 

(c) in
connection with Employee’s employment with the Company, Employee will not use any confidential or proprietary information
Employee may have obtained in connection with employment with any prior employer.

 

Section
11. Nondisclosure and Nonuse of Confidential Information.

 

(a) Employee will not
disclose or use at any time, either during the Term of Employment or thereafter, any Confidential Information (as defined below)
of which Employee is or becomes aware, whether or not such information is developed by him, except to the extent that such disclosure
or use is directly related to and required by Employee’s performance in good faith of duties assigned to Employee by the
Company. Employee will take all appropriate steps to safeguard Confidential Information and to protect it against disclosure, misuse,
espionage, loss and theft. Employee shall deliver to the Company at the termination of the Term of Employment, or at any time the
Company may request, all memoranda, notes, plans, records, reports, disks, computer tapes and software and other documents and
data (and copies thereof, regardless of the form thereof, including electronic copies) relating to the Confidential Information
or the Work Product (as defined below) of the business of the Company or any of the Company’s Affiliates, which Employee
may then possess or have under his control.

 

    	11

    	 

    

 

(b) As
used in this Agreement, the term “Confidential Information” means confidential, proprietary, trade secret, proprietary,
scientific, technical, business or financial information that is not generally known to the public and that is used, developed
or obtained by the Company or any Affiliate, in connection with their respective businesses, including, but not limited to, information,
observations and data obtained or learned by Employee while employed by the Company or any of its Affiliates (including those obtained
or learned prior to the date of this Agreement) concerning (i) the business or affairs of the Company or any Affiliate, (ii) products
or services, (iii) geologic data, (iv) seismic data, (v) analyses, (vi) drawings, photographs and reports, (vii) computer software,
including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) data bases,
(x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether patentable or unpatentable
and whether or not reduced to practice, (xii) customers, clients, suppliers and subcontractors and customer, client, supplier and
subcontractor lists, (xiii) other copyrightable works, (xiv) all drilling methods, processes, technology and trade secrets, (xv)
business strategies, acquisition plans and target properties, financial or other performance data and personnel lists and data,
and (xvi) all similar and related information in whatever form. All such Confidential Information is extremely valuable and is
intended to be kept secret to the Company and its clients and customers, is the sole and exclusive property of the Company or its
clients and customers, and is subject to the restrictive covenants set forth herein.

 

Notwithstanding anything
to the contrary contained herein, Employee shall not be required to maintain as confidential any information or material which:

 

(i) is now,
or hereafter becomes, through no act or failure to act on the part of Employee which would constitute a breach of this Section
11, generally known or available to the public;

 

(ii) is furnished
to Employee by a third party who, to the knowledge of Employee, is not under obligations of confidentiality to the Company or any
of its Affiliates, without restriction on disclosure;

 

(iii) is disclosed
with the written approval of the Company;

 

(iv) is required
to be disclosed by law, court order, or similar compulsion; provided, however, that such disclosure shall be limited to the extent
so required or compelled; and provided, further, that Employee shall give the Company notice of such disclosure and cooperate (without
cost to Employee) with the Company in seeking suitable protection; or

 

(v) is
disclosed pursuant to or in connection with any legal proceeding involving Employee and/or the Company or any Affiliate thereof.

 

    	12

    	 

    

 

Section
12. Inventions, Discoveries and Patents. Employee agrees that all inventions, discoveries, innovations,
improvements, technical information, systems, software developments, methods, designs, analyses, drawings, reports, service marks,
trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable) which relate to the
Company’s or any of its Affiliates’ business or research and development and any existing or future products or services
and which are or were discovered, conceived, developed or made by Employee (whether or not during usual business hours or on the
premises of the Company and whether or not alone or in conjunction with any other person) while employed by the Company or any
Affiliate (including those conceived, developed or made prior to the date of this Agreement) together with all patent applications,
letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may
be granted for or upon any of the foregoing (collectively referred to herein as, the “Work Product”), belong in all
instances to the Company or such Affiliate. Employee will promptly disclose such Work Product to the Board and assign to and otherwise
perform (without cost to Employee) all actions reasonably requested by the Board (whether during or after the employment period)
to establish and confirm the Company’s or Affiliate’s exclusive ownership of such Work Product (including, without
limitation, the execution and delivery of assignments, consents, oaths, powers of attorney and other instruments) and to provide
reasonable assistance to the Company or any of its Affiliates in connection with the prosecution of any applications for patents,
trademarks, trade names, service marks or reissues thereof or in the prosecution or defense of interferences relating to any Work
Product.

 

Section
13. Post-Termination Non-Compete, Non-Solicitation.

 

(a) If
Employee’s employment terminates pursuant to Sections 8(c), 8(d), 8(e), 8(f) or 8(g) hereof, or as a result of non-extension
by Company without Cause or by Employee with Good Reason as contemplated by Section 8(g), Employee agrees that, for a period ending
one (1) year from the date of his termination of employment, Employee shall not (except on behalf of the Company or with the prior
written consent of the Company), directly or indirectly, (i) engage in the business in which the Company is engaged or proposes
to be engaged (the “Company Business”), within the Restricted Territory (as defined below), (ii) interfere with the
Company Business or the business of any Affiliate, or (iii) own, manage, control, participate in, consult with, render services
for or in any manner engage in or represent any business within the Restricted Territory that is competitive with the Company Business
or the business of any Affiliate thereof or any product of the Company or any Affiliate, as such business is conducted or proposed
to be conducted from and after the date of this Agreement. As used in this Agreement, the term “Restricted Territory”
means any county in the United States where the company holds mineral lease interests. Nothing herein shall prohibit Employee from
being a passive owner of not more than two percent (2%) of the outstanding stock of any class of a corporation which is publicly
traded, so long as Employee has no active participation in the business of such corporation.

 

(b) If
Employee’s employment terminates pursuant to Sections 8(c), 8(d), 8(e), 8(f) or 8(g) hereof, or as a result of non-extension
by Company without Cause or by Employee with Good Reason as contemplated by Section 8(g), Employee agrees that, for a period ending
one (1) year from the date of his termination of employment, Employee shall not directly or indirectly through another person or
entity (i) induce or attempt to induce any employee of the Company or any Affiliate of the Company to leave the employ of the Company
or such Affiliate, or in any way interfere with the relationship between the Company or any such Affiliate, on the one hand, and
any employee or consultant thereof, on the other hand, (ii) hire or engage as a consultant or otherwise any person who is or was
an employee or consultant of the Company or any Affiliate thereof until six months after such individual’s employment or
consulting relationship with the Company or such Affiliate has been terminated or (iii) induce or attempt to induce any customer,
supplier, subcontractor, licensee or other business relation of the Company or any Affiliate to cease doing business with the Company
or such Affiliate, or in any way interfere with the relationship between any such customer, supplier, licensee or business relation,
on the one hand, and the Company or any Affiliate, on the other hand.

 

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(c) Employee
acknowledges that the covenants contained in Section 13, including those related to duration, geographic scope, and the scope of
prohibited conduct, are reasonable and necessary to protect the legitimate interests of the Company. Employee acknowledges that
he is an executive and management level employee as referenced in, and governed by, C.R.S. § 8-2-113(2)(d). Employee further
acknowledges that the covenants contained in Section 13 are necessary to protect, and reasonably related to the protection of,
the Company’s trade secrets, to which Employee will be exposed and with which Employee will be entrusted.

 

(d) Employee
shall inform any prospective or future employer of any and all restrictions contained in this Agreement and provide such employer
with a copy of such restrictions (but no other terms of this Agreement), prior to the commencement of that employment.

 

Section
14. Taxes.

 

(a)       Withholding.
The Company may withhold and deduct from any payments made under this Agreement all applicable taxes, including but not limited
to income, employment, and social security taxes, as shall be required by applicable law. Employee acknowledges and represents
that the Company has not provided any tax advice to Employee in connection with this Agreement and that Employee has been advised
by the Company to seek tax advice from Employee’s own tax advisors regarding this Agreement and payments that may be made,
and the benefits to be provided, to Employee pursuant to this Agreement, including specifically, the application of the provisions
of Section 409A of the Code to such payments.

 

(b)       Section 409A
– General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder
shall be paid or provided in a manner that is either exempt from or compliant with the requirements Section 409A of the Code and
applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder.

 

(c)       Definitional
Restrictions. Notwithstanding anything in this Agreement to the contrary, no payment that is due upon Employee’s termination
of employment shall be made unless and until Employee has incurred a “separation from service,” as defined under Treas.
Reg. Section 1.409A-1(h).

 

(d)       Six-Month Delay
in Certain Circumstances. Notwithstanding any other provision of this Agreement, if Employee is a Specified Employee (as defined
below) at the time of termination of employment, then, to the extent that payments and benefits under this Agreement constitute
“deferred compensation” under Section 409A of the Code and are not eligible for any exemption thereunder (“Non-Exempt
Deferred Compensation”), and payment of cash or provision of his benefits is pursuant to a termination of employment, then:

 

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(i) the amount of such
Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following Employee’s
separation from service will be accumulated through and paid or provided on the first day of the seventh month following Employee’s
separation from service (or, if Employee dies during such period, within 30 days after Employee’s death) (in either case,
the “Required Delay Period”); and

 

(ii) the normal payment
or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

 

For purposes of this
Agreement, the term “Specified Employee” has the meaning given such term in Treas. Reg. Section 1.409A-1(i).

 

(e)       Treatment of
Installment Payments. Each payment of termination benefits under Section 8 of this Agreement shall be considered a separate
payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.

 

(f)       Timing of Reimbursements
and In-kind Benefits. If Employee is entitled to be paid or reimbursed for any taxable expenses under Sections 5(c) or (d)
or Section 7, and such payments or reimbursements are includible in Employee’s federal gross taxable income, the amount of
such expenses reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, the reimbursement
of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred, and
the right of Employee to reimbursement of such expenses shall not be subject to exchange or liquidation for any other benefit or
payment.

 

(g)       Permitted Acceleration.
The Company shall have the sole authority to make any accelerated distribution permissible under Treas. Reg. Section 1.409A-3(j)(4)
to Employee of deferred amounts, provided that such distribution meets the requirements of Treas. Reg. Section 1.409A-3(j)(4).

 

Section
15. Set Off; Mitigation. The Company’s obligation to pay Employee the amounts provided
and to make the arrangements provided hereunder shall be subject to set-off, counterclaim, or recoupment of amounts owed by Employee
to the Company or its Affiliates, provided that such amounts owed have been acknowledged by Employee in writing. To the extent
any amount so subject to set-off, counterclaim, or recoupment is payable in installments hereunder, such set-off, counterclaim,
or recoupment shall not modify the applicable payment date of any installment, and to the extent an obligation cannot be satisfied
by reduction of a single installment payment, any portion not satisfied shall remain an outstanding obligation of Employee and
shall be applied to the next installment only at such time the installment is otherwise payable pursuant to the specified payment
schedule.

 

Section
16. Successors and Assigns; No Third-Party Beneficiaries.

 

(a) The Company.
This Agreement shall inure to the benefit of the Company and its respective successors and assigns. In the event of the merger
or consolidation, or transfer or sale of all or substantially all of the assets, of the Company with or to any other individual
or entity, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor,
and such successor shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder.

 

    	15

    	 

    

 

(b) Employee.
Employee’s rights and obligations under this Agreement shall not be transferable by Employee by assignment or otherwise,
without the prior written consent of the Company; provided, however, that if Employee shall die, all amounts then
payable to Employee hereunder shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee,
or other designee, or if there be no such designee, to Employee’s estate.

 

(c) No Third-Party
Beneficiaries. Except as otherwise set forth in Section 16(a) or Section 16(b) hereof, nothing expressed or referred to in
this Agreement will be construed to give any Person other than the Company, the other members of the Company Group, and Employee
any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement.

 

(d) Enforcement.
Because Employee’s services are unique and because Employee has access to Confidential Information and Work Product, the
parties hereto agree that money damages would be an inadequate remedy for any breach of this Agreement. Therefore, in the event
of a breach or threatened breach of this Agreement, all parties hereto and their respective successors or assigns will be entitled
to injunctive relief, in addition to other rights and remedies existing in their favor at law or in equity in order to enforce,
or prevent any violations of, the provisions hereof without posting a bond or other security.

 

Section
17. Waiver and Amendments. Any waiver, alteration, amendment, or modification of any of the terms
of this Agreement shall be valid only if made in writing and signed by each of the parties hereto. No waiver by either of the parties
hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions
hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.

 

Section
18. Severability. If any covenants or such other provisions of this Agreement are found to be invalid or unenforceable by
a final determination of a court of competent jurisdiction, (a) the remaining terms and provisions hereof shall be unimpaired,
and (b) the invalid or unenforceable term or provision hereof shall be deemed replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision hereof.

 

Section
19. Governing Law. In the event of any dispute under this Agreement, or relating or arising under the employment relationship
(a “Dispute”), this Agreement shall be governed by the laws of the State of Colorado. Each party shall bear his, her,
or its own costs, including attorneys’ fees; provided, however, that nothing herein shall interfere with either party’s
right to seek or receive damages or costs as may be allowed by applicable statutory law (such as, but not necessarily limited to,
reasonable attorneys’ fees).

 

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Section
20. Notices.

 

(a) Every notice or other
communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom or which
it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party
as herein provided; provided, that unless and until some other address be so designated, all notices and communications
by Employee to the Company shall be mailed or delivered to the Company at its principal executive office at 1600 Broadway, Suite
1360, Denver, Colorado 80202, and all notices and communications by the Company to Employee may be given to Employee personally
or may be mailed to Employee at Employee’s last known address, as reflected in the Company’s records.

 

(b) Any
notice so addressed shall be deemed to be given (i) if delivered by hand, on the date of such delivery, (ii) if mailed by courier
or by overnight mail, on the first business day following the date of such mailing, and (iii) if mailed by registered or certified
mail, on the third business day after the date of such mailing.

 

Section
21. Section Headings; Mutual Drafting.

 

(a) The headings of the
sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof
or affect the meaning or interpretation of this Agreement or of any term or provision hereof.

 

(b) The parties are sophisticated
and have been represented (or have had the opportunity to be represented) by their separate attorneys throughout the transactions
contemplated by this Agreement in connection with the negotiation and drafting of this Agreement and any agreements and instruments
executed in connection herewith. As a consequence, the parties do not intend that the presumptions of laws or rules relating to
the interpretation of contracts against the drafter of any particular clause should be applied to this Agreement or any document
or instrument executed in connection herewith, and therefore waive their effects.

 

Section
22. Entire Agreement. This Agreement, together with any exhibits attached hereto, constitutes the entire understanding and
agreement of the parties hereto regarding the employment of Employee. This Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings, and agreements between the parties relating to the subject matter of this Agreement.

 

Section
23. Dodd-Frank Act and Other Applicable Law Requirements. Employee agrees (i) to abide by any compensation recovery, recoupment,
anti-hedging or other policy applicable to executives of the Company and its Affiliates, as may be in effect from time to time,
as approved by the Board or a duly authorized committee thereof or as required by the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (“Dodd-Frank Act”) or other applicable law, and (ii) that the terms and conditions of this Agreement
shall be deemed automatically amended as may be necessary from time to time to ensure compliance by Employee and this Agreement
with such policies, the Dodd-Frank Act, or other applicable law.

 

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Section
24. Survival of Operative Sections. Upon any termination of Employee’s employment, the provisions of this Agreement
(together with any related definitions set forth in Section 1 hereof) shall survive to the extent necessary to give effect to the
provisions thereof.

 

Section
25. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original but all of which together shall constitute one and the same instrument. The execution of this Agreement
may be by actual or facsimile signature.

  

[Remainder of Page Intentionally
Left Blank]

 

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IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date first above written.

 

	 	COMPANY:
	 	 
	 	EMERALD OIL, INC.
	 	 
	 	By:	/s/  Seth Setrakian
	 	Name: Seth Setrakian
	 	Title: Chairman of the Compensation Committee
	 	Date: September 18, 2013
	 	 
	 	EMPLOYEE:
	 	 
	 	By:	/s/ McAndrew Rudisill
	 	Name: McAndrew Rudisill
	 	Title: Chief Executive Officer and President
	 	Date: September 18, 2013

 

    	19

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