Document:

Blue Sphere Corporation 8-K

Exhibit 10.1

 

LOAN EXTENSION, ADDITIONAL INVESTMENT &
CONVERSION AGREEMENT

Addendum to the Transaction Documents Dated
October 24, 2016

 

This Loan
Extension, Additional Investment & Conversion Agreement, dated February 21, 2018 (this “Agreement”), is
by and between Blue Sphere Corporation, a Nevada corporation (the “Issuer”) and JMJ Financial (the “Investor”)
(referred to collectively herein as the “Parties”).

WHEREAS,
the Issuer and the Investor entered into a Securities Purchase Agreement Document SPA-10212016 (as amended, the “SPA”)
dated as of October 24, 2016, pursuant to which the Issuer issued to the Investor a Promissory Note (as amended, the “Note”),
a Warrant, and Origination Shares (all capitalized terms not otherwise defined herein shall have the meanings given such terms
in the SPA);

WHEREAS,
the Issuer issued additional common stock purchase warrants to the Investor on December 20, 2016, February 14, 2017, March 14,
2017, April 13, 2017, May 11, 2017, and June 7, 2017 (such warrants, plus the Warrant, plus any additional warrants the Issuer
may be required to issue to the Investor in the future under the SPA, all as previously amended, the “Warrants”);

WHEREAS,
by letter agreement or amendment, on at least ten separate occasions (the “Amendments”), (i) the Issuer and
the Investor agreed to amend certain terms and extend certain milestone dates contained in the SPA, Note and the Warrants, with
the last such Amendment extending the maturity date of the Note, the date the Origination Shares were issuable, the date of the
pricing reset on the Origination Shares and the date to receive conditional approval from The NASDAQ Capital Market to November
22, 2017; and (ii) the Investor agreed to conditionally waive any default in connection with the original dates, but not the damages,
fees, penalties, liquidated damages, or other amounts or remedies otherwise resulting from such a default under the SPA, Note and
the Warrants, and with the waiver conditioned on the Issuer not triggering an event of default at any time subsequent to such Amendment;

WHEREAS,
one of the Amendments increased the Principal Sum of the Note to $2,106,000 and increased the amount of Consideration payable under
the Note to $2,000,000;

WHEREAS,
the Investor had paid all $2,000,000 of Consideration to the Issuer under the Note;

WHEREAS,
on June 30, 2017, the Issuer repaid $1,000,000 of the outstanding balance under the Note;

WHEREAS,
the Issuer requests that the Investor agree (i) to increase the Principal Sum of the Note to $4,212,000 and increase the amount
of Consideration payable under the Note to $4,000,000, and (ii) to invest an additional $1,000,000 into the Issuer under the Note
at this time, which would leave an additional $1,000,000 of Consideration available for payment under the Note at a future date
if necessary;

WHEREAS,
the Issuer further requests that the Investor invest an additional $1,000,000 into the Issuer under a public offering of the Issuer’s
securities to raise gross proceeds to the Issuer of at least $5,000,000 (the “Public Offering”), provided that
such Public Offering may be for less upon the mutual agreement of the Issuer and the Investor and further provided that such Public
Offering occurs in conjunction with an uplisting of the Issuer's securities to The Nasdaq Capital Market or NYSE-MKT;

WHEREAS,
the Issuer has requested several extensions on the Note due to delays in the Public Offering; and

WHEREAS,
in order to improve the likelihood of success of the Public Offering and the uplisting of the Issuer's securities to
The Nasdaq Capital Market or NYSE-MKT, the Issuer requests that the Investor accept shares of stock instead of cash to settle all
of the Issuer’s obligations to the Investor.

    	1 

    	 

    

NOW, THEREFORE,
the Issuer and the Investor agree as follows:

1.

Additional
Investment and Commitment.

A.

$1,000,000
Investment into the Current Note Structure. Within five business days after the date of this Agreement, the Investor shall invest
an additional $1,000,000 into the Issuer under the Note by paying $750,000 cash to the Issuer and by rolling over and applying
to the Note the $250,000 Principal Sum due to the Investor under the $250,000 Note that was funded by the Investor by $250,000
wire transfer and was issued to the Investor on February 13, 2018, after which time the $250,000 Note shall be null and void.

B.

$1,000,000
Investment into the Public Offering. The Investor commits to invest at least $1 million in a Public Offering that occurs contemporaneously
with an uplisting of the Issuer's securities to The Nasdaq Capital Market or NYSE-MKT (the Investor shall not commit to participating
in any offering other than as per the terms of this Agreement and in conjunction with an uplisting). The Investor shall have the
right, at its election, to invest up to $5 million in the Public Offering, and up to $5 million in each of the Issuer's subsequent
financings during the two- year period after the Public Offering, on the same terms as the best terms, as determined by the Investor,
provided to any investor in the Public Offering or in any such subsequent financing.

2. 

Extensions.

A.

Extension
of Maturity Date. In the sentence in the Note (as previously amended) that states “The Maturity Date is the earlier of November
22, 2017 or the third business day after the closing of the Public Offering,” the date of November 22, 2017 shall be replaced
with the date of June 30, 2018.

B. 

Extension
of Origination Shares Dates. The references to the date of November 22, 2017 in Sections 1.3.1 and 1.3.2 of the SPA (as previously
amended) shall be replaced with the date of June 30, 2018.

C. 

Extension
of Nasdaq Approval Date. Section 6(xxiii) of the Note and Section 1.11(xxiii) of the Warrants shall hereinafter be deleted and
replaced with the following text: “(xxiii) the Issuer fails to obtain from Nasdaq or NYSE or another exchange mutually agreed
upon by the Issuer and the Investor by June 30, 2018 and conditional approval of the listing of the Issuer’s common stock
on The Nasdaq Capital Market or NYSE-MKT or another exchange mutually agreed upon by the issuer and the Investor subject only to
completion of the Public Offering pursuant to the Registration Statement and to the Issuer’s common stock maintaining the
minimum price requirements prior to up-listing;”.

D. 

Conditional
Waiver of Default. The Investor conditionally waives the defaults for the Issuer's failure to meet the original and previously
amended Maturity Dates of the Note and delivery dates for the Origination Shares, but the Investor does not waive any damages,
fees, penalties, liquidated damages, or other amounts or remedies otherwise resulting from such defaults (which damages, fees,
penalties, liquidated damages, or other amounts or remedies the Investor may choose in the future to assess, apply or pursue in
its sole discretion) and the Investor's conditional waiver is conditioned on the Issuer's not being in default of and not breaching
any term of the Note or the SPA or any other Transaction Documents at any time subsequent to the date of this Agreement (if the
Issuer triggers an event of default or breaches any term of the Note, the SPA, or the Transaction Documents at any time subsequent
to the date of this Agreement, the Investor may issue a notice of default for the Issuer's failure to meet the original Maturity
Date of the Note and delivery date of the Origination Shares).

    	2 

    	 

    

3. 

Conversion
to Equity Upon Up-listing. Provided that (i) the Issuer closes on the Public Offering and contemporaneously uplists its shares
of common stock on The Nasdaq Capital Market or NYSE-MKT, or contemporaneously uplists to another exchange mutually agreed upon
by the Issuer and the Investor, by June 30, 2018, and (ii) no additional event of default or breach of the Transaction Documents
occurs between the date of this Agreement and the close of the Public Offering, the Issuer may terminate the Note and satisfy all
of the Issuer's obligations to the Investor by payment of stock as follows:

A. 

No
Cash Payment. The Issuer shall not pay to the Investor any part of the Note balance in cash at the closing of the Public Offering.
In consideration of the Investor agreeing to forego payment in cash, the Issuer agrees to pay to the Investor $250,000 in common
stock of the Issuer ("Conversion Shares").

B. 

Repayment
of Note Principal Sum in Stock. The Issuer shall pay the Principal Sum of the Note (Consideration paid plus OID (excluding the
extension fees and damages on the Note, which will be paid in stock under 3.D. and 3.E. below)) in shares of common stock of the
Issuer ("Note Balance Shares").

C.

Warrants.
In order to clean up and simplify the Issuer’s capital structure, all of the Warrants shall be exchanged for an identical
dollar amount of shares of common stock of the Issuer ("Warrant Shares").

D.

Extensions.
The Issuer agrees to pay to the Investor $750,000 in shares of common stock of the Issuer ("Extension Shares")
as fees for the several extensions the Investor has provided under the SPA, the Note, and the Warrants. The Investor agrees that
it will reduce the dollar amount of the Extension Shares by $500,000 to $250,000 if the Issuer lists its common stock on The Nasdaq
Capital Market or NYSE-MKT or another exchange mutually agreed upon by the Issuer and the Investor by March 31, 2018.

E.

Damages.
As negotiated by the Issuer and as a gesture of good faith by the Investor, the Investor agrees to reduce the damages otherwise
payable under the Note by approximately $500,000 in exchange for a settlement payment of $3,000,000 that the Issuer agrees to pay
in shares of common stock of the Issuer ("Settlement Shares").

F. 

Lockup
Fee. The Issuer agrees to pay the Investor a lockup fee of $250,000 payable in shares of common stock of the Issuer ("Lockup
Shares") as consideration for the Investor entering into a lockup agreement on up to 50% of the Investor Shares (defined
below), not to exceed three months, that will be effective upon closing of the Public Offering and that will prohibit the Investor
from selling more than 50% of the Investor Shares at a price lower than the lesser of (i) the price per share of the Issuer's common
stock in the Public Offering, or (ii) the closing price of the Issuer's common stock on the date of this Agreement. The Investor
shall not be subject to a lockup on any shares that the Investor acquires in the Public Offering.

G.

Share
Delivery and Pricing.

1       Pricing
in the Event of Up-listing with a Public Offering. The number of Conversion Shares, Note Balance Shares, Warrant Shares, Extension
Shares, Settlement Shares, and Lockup Shares (collectively, "Investor Shares") deliverable to the Investor, and
the time for delivery of the Investor Shares, shall be determined in accordance with the pricing formula and delivery deadlines
set forth in Section 1.3 of the SPA as if such Investor Shares were Origination Shares. All Origination
Shares remain due and payable as set forth in the SPA and, for the avoidance of doubt, all of the shares deliverable to the Investor
under this Agreement are in addition to the Origination Shares due to the Investor under the SPA.

    	3 

    	 

    

2       Pricing
in the Event of Up-listing without a Public Offering. In the event that Issuer does not complete the Public Offering, but instead
uses an alternative method to list its shares of common stock on The Nasdaq Capital Market or NYSE-MKT or another exchange mutually
agreed upon by the Issuer and the Investor, and if the Issuer and the Investor agree to the Issuer settling its obligations to
the Investor by delivering Investor Shares to the Investor, then on the fifth (5th) trading day after the day the Issuer's shares
of common stock begin trading on The Nasdaq Capital Market or NYSE-MKT or another exchange mutually agreed upon by the Issuer and
the Investor (the "Listing Date") the Issuer shall deliver to the Investor such number of duly and validly issued,
fully paid and non-assessable Investor Shares as equals the dollar amount of the Investor Shares divided by the lowest of (i) the
lowest daily closing price of the Issuer’s common stock during the ten days prior to delivery of the Investor Shares or during
the ten days prior to the date of this Agreement (in each case subject to adjustment for stock splits), (ii) 80% of the closing
price of the common stock on the Listing Date, (iii) 80% of the effective offering price per share of common stock of the Issuer
in any private placement or issuance of securities by the Issuer after the date of this Agreement and prior to the Listing Date
(if applicable), (iv) 80% of the unit offering price in any private placement or issuance of securities by the Issuer after the
date of this Agreement and prior to the Listing Date (if applicable), or (v) $1.60 (subject to adjustment for stock splits) (such
lowest price of (i), (ii), (iii), (iv), or (v) is hereafter referred to as the "Lowest Price"). It is the Issuer’s
and the Investor’s expectation that the issuance date of the Investor Shares dates back to the dates of the Investor's payment
of Consideration under the Note, in proportion to the amount of each payment, for purposes of Rule 144 under the Securities Act
of 1933, as amended.

4. 

Investor
Shares Beneficial Ownership Limitation. Unless otherwise agreed by both Parties, at no time will the Issuer issue to the Investor
such number of Investor Shares that would result in the Investor owning more than 9.99% of the number of shares of common stock
outstanding of the Issuer immediately after giving effect to the issuance of the Investor Shares (the "Beneficial Ownership
Limitation"). In the event that the number of Investor Shares deliverable to the Investor would cause the Investor to
exceed the Beneficial Ownership Limitation, the Issuer shall deliver to the Investor such lesser number of Investor Shares the
Investor requests that would result in the Investor owning less than the Beneficial Ownership Limitation and the Issuer shall deliver
to the Investor the remaining number of Investor Shares at such time as the Investor notifies the Issuer that delivery of such
remaining Investor Shares would not cause the Investor to exceed the Beneficial Ownership Limitation.

5. 

Investor's
Election for Preferred Stock. At the Investor's election at any time the Issuer shall create, within five (5) business days
after the Investor's election, a series of convertible preferred stock out of the Issuer’s existing authorized shares of
preferred stock to address the Beneficial Ownership Limitation on Investor Shares. The Issuer shall cooperate with the Investor
in drafting the terms of the series of convertible preferred stock, and in exchanging the Investor Shares for shares of the newly
created series of convertible preferred stock, so as to accomplish the objectives of this paragraph. The Issuer shall reserve for
this purpose, until such time as the Investor's right to elect expires, 10,000,000 shares out of the Issuer’s 500,000,000
authorized and undesignated shares of the Issuer's $0.001 par value preferred stock.

    	4 

    	 

    

 

6.

Note
Amount. The Principal Sum of the Note, as previously amended, is hereby increased from $2,106,000 to $4,212,000 and the Consideration
is increased to $4,000,000. The first five sentences of the second paragraph of the Note are hereby amended and replaced with the
following:

 

“The Principal Sum is up to
$4,212,000 (four million two hundred twelve thousand) plus accrued and unpaid interest and any other fees. The Consideration is
$4,000,000 (four million) payable by wire. The Investor shall pay $750,000 of Consideration in accordance with the attached Funding
Schedule in its sole election. The Investor may pay up to an additional $3,250,000 of Consideration to the Issuer in such amounts
and at such dates as the Investor may choose, however, the Issuer has the right to reject any of those payments within 24 hours
of receipt of rejected payments. The Principal Sum due to the Investor shall be based on the Consideration actually paid by Investor
(plus an approximate 5% Original Issue Discount that is based on the Consideration actually paid by the Investor as well as any
other interest or fees) such that the Issuer is only required to repay the amount funded and the Issuer is not required to repay
any unfunded portion of this Note.”

 

7.

 SPA
Amendments. The reference to a Note aggregate principal amount of $2,106,000 contained in Section 1.1 of the SPA, as previously
amended, shall be amended to refer to a Note aggregate principal amount of $4,212,000. The reference to a total Consideration amount
of $2,000,000 contained in Section 1.4 of the SPA shall be amended to refer to a total Consideration amount of $4,000,000. All
references to the SPA or the Note in any of the Transaction Documents, including any Warrants issued after the date of the SPA,
shall refer to the SPA, as amended, and to the Note, as amended.

8.

One
Year Prohibition on Issuances of Securities. For a period of one year after the later of the closing of the Public Offering,
the Listing Date, or the closing of a private placement of the Issuer's securities (the "Starting Date"), without
the express written consent of the Investor, the Issuer shall not issue or sell common stock, or grant any option to purchase,
or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase
or other disposition) any common stock (including pursuant to the terms of any outstanding securities issued prior to the Starting
Date (including, but not limited to, warrants, convertible notes, or other agreements)) or any security entitling the holder thereof
to acquire common stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that
is convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive common stock at an
effective price per share less than the greatest of (i) the Lowest Price (as defined Section 3.F.2 above), (ii) the common stock
offering price in the Public Offering or private placement (as may be applicable), (iii) the unit offering price in the Public
Offering or private placement (as may be applicable), and (iv) the exercise price of any warrants issued in the Public Offering
or private placement (as may be applicable). The foregoing prohibition on issuances of securities shall not apply to any issuances
of securities to any project partner or to any funding directly related to project financing, or to any grant or issuance of shares
of the Issuer’s common stock or options to purchase shares of the Issuer’s common stock pursuant to the Issuer’s
2016 and 2018 Stock Incentive Plan, Non-Employee Directors Compensation Plan or service or employment agreements outstanding as
of the date of this Agreement.

9.

TA
Letters. The Issuer agrees that the terms of the irrevocable instruction letter dated October 24, 2016 in which the Issuer
irrevocably authorized and instructed ClearTrust, LLC to issue shares of common stock of the Issuer to the Investor without any
further action or confirmation by the Issuer upon ClearTrust's receipt from the Investor of a Conversion Notice or Exercise Notice
shall apply to the Note as amended and shall apply to all warrants the Issuer has issued or will issue to the Investor pursuant
to the terms of the SPA as amended. In addition, the Issuer agrees that the terms of the irrevocable instruction letter dated October
24, 2016 in which the Issuer irrevocably authorized and instructed ClearTrust, LLC to issue shares of common stock of the Issuer
to the Investor without any further action or confirmation by the Issuer upon ClearTrust's receipt from the Investor of a request
for issuance of Origination Shares pursuant to the Issuer's obligations under the SPA shall apply to all requests for issuance
of Origination Shares pursuant to the Issuer's obligations under the SPA as amended, and also shall apply to the Issuer's obligation
to issue Investor Shares, such that the share reserve also may be used for requests from the Investor
of Investor Shares and ClearTrust hereby is irrevocably authorized and instructed to issue Investor Shares to the Investor upon
ClearTrust's receipt from the Investor of a request for Investor Shares. If ClearTrust requires the Issuer and/or the Investor
to deliver to ClearTrust new irrevocable instruction letters to give effect to the terms of this paragraph, the Issuer agrees that
it will cooperate in good faith with the Investor in drafting and executing the new irrevocable instruction letters and any supporting
documents required by ClearTrust and the Issuer shall promptly deliver the new irrevocable instruction letters to ClearTrust.

    	5 

    	 

    

10.

 All
Other Terms Remain in Full Force and Effect. All other terms and conditions of the Transaction Documents, including all Warrants
and all amendments to such Transaction Documents, remain in full force and effect. The terms of this Agreement do not terminate
or relieve the Issuer of its obligation to perform or forbear from performing under any term of the Transaction Documents that
is meant to survive after the closing of the Public Offering or that does not expressly provide for its termination upon closing
of the Public Offering.

***

 

Please indicate acceptance and approval of this Agreement by signing
below:

 

 

	/s/ Shlomi Palas	 	/s/ JMJ Financial
	Shlomi Palas	 	JMJ Financial
	Blue Sphere Corporation	 	Its Principal
	Chief Executive Officer	 	 

 

 

 

[Loan Extension, Additional Investment &Conversion
Agreement Signature Page]

 

 

    	6Blue Sphere Corporation 8-K

Exhibit 10.2

PROMISSORY NOTE #3

 

This Promissory Note #3, dated February
13, 2018 (this “Note #3”), is entered into by and between Blue Sphere Corporation, a Nevada corporation (the
“Issuer”) and JMJ Financial, a Nevada sole proprietorship, or its assignees (the “Investor”).

 

WHEREAS, the Issuer and the Investor
(collectively, the “Parties”) entered into Securities Purchase Agreement Document SPA-10212016, dated as of October
24, 2016 (the “Securities Purchase Agreement”), pursuant to which the Issuer issued to the Investor, among other things,
a Promissory Note (“Note #2”);

 

WHEREAS, the Parties entered into ten
amendments to the Securities Purchase Agreement and Note #2;

 

WHEREAS, the Parties are negotiating
the terms of another amendment to the Securities Purchase Agreement and Note #2; and

 

WHEREAS, the Issuer requests that the
Investor invest $250,000 into the Issuer under the terms of this Note #3 pending the conclusion of those negotiations.

 

NOW, THEREFORE, the Parties agree as
follows:

 

1.

FOR
VALUE RECEIVED, the Issuer issues this Note #3 and promises to pay to the Investor the Principal Sum and any other fees according
to the terms herein. This Note #3 will become effective only upon execution by both Parties and delivery of the payment of Consideration
by the Investor (the “Effective Date”).

 

2.

This
Note #3 is not issued under the Securities Purchase Agreement and is separate and distinct from Note #2. The terms of this Note
#3 do not amend or supplement the terms of the Securities Purchase Agreement or of Note #2. For clarity, no warrants or origination
shares are due to the Investor under the Securities Purchase Agreement as a result of the Parties entering into this Note #3.

 

3.

The
Principal Sum is $250,000 (two hundred fifty thousand). The Consideration is $250,000 (two hundred fifty thousand) payable by wire.
The Maturity Date of this Note #3 is ten calendar days after the Effective Date of this Note #3. The Principal Sum of this Note
#3, as well as any fees, shall be due and payable on the Maturity Date. The Investor may extend any Maturity Date in its sole discretion
in increments of up to three calendar days at any time before or after any Maturity Date. The Maturity Date shall automatically
be deemed extended unless the Investor provides notice to the Issuer that it is not or has not extended the Maturity Date, which
notice the Investor may provide at any time before or after the Maturity Date.

 

4.

The
Issuer may repay this Note #3 at any time on or before its Maturity Date. In the event the Investor submits a conversion as permitted
by this Note #3, the Issuer may not repay the amount converted. The Parties may agree to apply the Principal Sum of this Note #3
as a payment of Consideration under Note #2 if and when the Parties agree to further amend the Securities Purchase Agreement and
Note #2, in which case the Investor will be entitled to receive any warrants or origination shares payable to the Investor under
the Securities Purchase Agreement as a result of the Investor making a payment of Consideration to the Issuer under Note #2.

 

5.

For
simplicity, this Note #3 borrows the language of certain provisions and sections of Note #2 as follows. The language of Sections
2, 3, 5, 6(i) through 6(xvii), 7 through 14, and 16 of Note #2 are incorporated and apply to this Note #3 as if such Sections were
restated here in full, except that in Section 2 the price of $0.075 shall be replaced with the price of $1.60. Any term not otherwise
defined herein shall have the meaning given such term in Note #2.

 

***

 

	Issuer:	 	Investor:
	 	 	 
	/s/ Shlomi Palas	 	/s/ JMJ Financial
	Shlomi Palas	 	JMJ Financial
	Blue Sphere Corporation	 	Its Principal
	Chief Executive Officer	 	 
	 	 	 
	Date: February 13, 2018	 	Date: February
13, 2018

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