Document:

Blue Sphere Corporation - 10-K

Exhibit
10.237

 

SECURITIES
PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of December 4, 2017, is entered into by and between BLUE
SPHERE CORP., a Nevada corporation (the “Company”), and EMA Financial, LLC, a Delaware limited liability company (the
“Purchaser”).

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933,
as amended (the “Securities Act” or “1933 Act”), and Rule 506 promulgated thereunder by the United States
Securities and Exchange Commission (the “SEC”), the Company desires to issue and sell to the Purchaser, and the Purchaser
desires to purchase from the Company a 12% Convertible Note of the Company, in the form attached hereto as Exhibit A, in the principal
amount of $125,000.00 (together with any note(s) issued in replacement thereof or as interest thereon or otherwise with respect
thereto in accordance with the terms thereof, the “Note”), convertible into shares (“Conversion Shares”)
of common stock, $0.001 par value per share (the “Common Stock”), of the Company, upon the terms and subject to the
limitations and conditions set forth in such Note.

 

NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:

 

1.          Purchase
and Sale of Note. 

 

a)          Purchase
of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Purchaser, and the Purchaser agrees
to purchase from the Company, the Note for an aggregate purchase price of $117,500.00 (“Purchase Price”).

 

b)          Form
of Payment. On the Closing Date (i) the Purchaser shall pay the Purchase Price by wire transfer of immediately available funds
to the Company, in accordance with the Company’s written wiring instructions, simultaneously with delivery of the Note,
and (ii) the Company shall deliver such Note duly executed on behalf of the Company to the Purchaser, simultaneously with delivery
of such Purchase Price.

 

c)          Closing
Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below,
the closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the first business day
following the date hereof or such other mutually agreed upon time (the “Closing Date”)

 

2.
          Purchaser’s Representations and Warranties. The Purchaser represents and
warrants to the Company that:

 

a)          Investment
Purpose. Purchaser is acquiring the Note and the Conversion Shares (collectively, the “Securities”) for its own
account and not with a view towards, or for resale in connection with, the public sale or distribution thereof in violation of
applicable securities laws; provided, however, by making the representations herein, Purchaser does not agree, or make any representation
or warranty, to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities
at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act. The Purchaser is acquiring
the Securities hereunder in the ordinary course of its business. The Purchaser does not presently have any agreement or understanding,
directly or indirectly, with any person to distribute any of the Securities in violation of applicable securities laws.

 

b)          Accredited
Investor Status. The Purchaser is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D (an “Accredited Investor”).

 

3.
          Representations and Warranties of the Company. Except as disclosed by the Company
in the publicly filed SEC Documents the Company represents and warrants to the Purchaser, as of the date hereof and the Closing
Date, that:

 

a)          Organization
and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate
and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated
and conducted. The SEC Documents set forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each
is incorporated The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such
qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect.
“Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition
or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the
agreements or instruments to be entered into in connection herewith. “Subsidiaries” means any corporation or other
organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership
interest.

 

     

     

    

 

b)          Authorization;
Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement and
the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the
terms hereof and thereof, (ii) the execution and delivery of this Agreement and the Note by the Company and the consummation by
it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance
and reservation for issuance of the Conversion Shares issuable upon conversion and exercise thereof) have been duly authorized
by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its
shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative,
and such authorized representative is the true and official representative with authority to sign this Agreement and the other
documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution
and delivery by the Company of the Note and each of such instruments will constitute, a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms.

 

c)          Capitalization.
As of the date hereof, the authorized capital stock of the Company, and number of shares issued and outstanding, is as
set forth in the Company’s most recent periodic report filed with the SEC. Except as disclosed in the SEC Documents no
shares are reserved for issuance pursuant to the Company’s stock option plans. Except as disclosed in the SEC Documents
no shares are reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for shares of
Common Stock. All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued,
fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any other
similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act
of the Company. As of the effective date of this Agreement, and except as disclosed in the SEC Documents, (i) there are no
outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements,
understandings, claims or other commitments or rights of any character whatsoever relating to, or securities, notes or rights
convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no
anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing
rights to security holders) that will be triggered by the issuance of any of the Securities. The Company has furnished to the
Purchaser true and correct copies of the Company’s Certificate or Articles of Incorporation as in effect on the date
hereof (“Formation Documents”), the Company’s By-laws, as in effect on the date hereof (the
“Bylaws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company
and the material rights of the holders thereof in respect thereto.

 

d)          Issuance
of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note, as the case
may be, in accordance with their respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes,
liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar
rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

 

e)          Acknowledgment
of Dilution. The Company’s executive officers and directors understand the nature of the Securities being sold hereby
and recognize that the issuance of the Securities will have a potential dilutive effect on the equity holdings of other holders
of the Company’s equity or rights to receive equity of the Company. The Board of Directors of the Company has concluded,
in its good faith business judgment that the issuance of the Securities is in the best interests of the Company. The Company specifically
acknowledges that its obligation to issue the Conversion Shares upon conversion of the Notes is binding upon the Company and enforceable
regardless of the dilution such issuance may have on the ownership interests of other stockholders of the Company or parties entitled
to receive equity of the Company.

 

     

     

    

 

f)          No
Conflicts. The execution, delivery and performance of this Agreement, and the Note by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for
issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Formation Documents
or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event
which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of
its Subsidiaries is a party and that is not filed as an SEC Document or other document filed with the SEC, or (iii) result in
a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations
and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company
or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except
for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually
or in the aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation of its Formation
Documents, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and no
event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries in default) under,
and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that would give to others
any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company
or any of its Subsidiaries is a party or by which any property or assets of the Company or any of its Subsidiaries is bound or
affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses
of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Purchaser owns
any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. Except as specifically contemplated
by this Agreement and as required under the 1933 Act and any applicable state securities laws, the Company is not required to
obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory
agency, self-regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of
its obligations under this Agreement and the Note in accordance with the terms hereof or thereof or to issue and sell the Securities
in accordance with the terms hereof and thereof and to issue the Conversion Shares. All consents, authorizations, orders, filings
and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date hereof. The Company is not in violation of the listing requirements of the Over-the-Counter Bulletin Board
(the “OTCBB”), or OTCQB, and does not reasonably anticipate that the Common Stock will be delisted by the OTCBB, or
OTCQB, in the foreseeable future. The Company and its Subsidiaries are unaware of any facts or circumstances which might give
rise to any of the foregoing.

 

g)          SEC
Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC (all of the foregoing filed prior to the date hereof and all exhibits included therein and fmancial
statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being
hereinafter referred to herein as the “SEC Documents”). Upon written request the Company will deliver to the Purchaser
true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the Securities Exchange Act of 1934, as amended (“1934
Act” or “Exchange Act”), and none of the SEC Documents, at the time they were filed with the SEC, contained
any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they were made, not misleading. None of the statements
made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements
as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements
of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present
in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in
the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary
course of business, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required
under generally accepted accounting principles to be reflected in such financial statements, which, individually or in the aggregate,
are not material to the financial condition or operating results of the Company. The Company is subject to the reporting requirements
of the 1934 Act.

 

     

     

    

 

h)          Absence of Certain Changes. Since August 17, 2017, there has been no material adverse change and no
material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of
operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

 

i)          Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or
investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to
the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its
Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. The public
filings contain a complete list and summary description of any pending or, to the knowledge of the Company, threatened
proceeding against or affecting the Company or any of its Subsidiaries, without regard to whether it would have a Material
Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of
the foregoing.

 

j)       
   Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite
licenses or rights to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks,
trademark applications, service marks, service names, trade names and copyrights (“Intellectual Property”)
necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future);
there is no claim or action by any person pertaining to, or proceeding pending, or to the Company’s knowledge
threatened, which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary
to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the
best of the Company’s knowledge, the Company’s or its Subsidiaries’ current and intended products, services
and processes do not infringe on any Intellectual Property or other rights held by any person and/or entity; and the Company
is unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and each of its
Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual
Property.

 

k)          No
Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers
has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party
to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse
Effect.

 

1)          Disclosure.
No event or circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their
business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation,
requires public disclosure or announcement by the Company but which has not been so publicly announced or
disclosed.

 

m)          Brokers.
The Company hereby represents and warrants that it has not hired, retained or dealt with any broker, finder, consultant,
person, firm or corporation (“Broker”) in connection with the negotiation, execution or delivery of this
Agreement or the transactions contemplated hereunder. The Company covenants and agrees that should any claim be made against
Purchaser for any commission or other compensation by the Broker, based upon the Company’s engagement of such person in
connection with this transaction, the Company shall indemnify, defend and hold Purchaser harmless from and against any and
all damages, expenses (including attorneys’ fees and disbursements) and liability arising from such claim. The Company
shall pay the commission of the Broker, to the attention of the Broker, pursuant to their separate agreement(s) between the
Company and the Broker.

 

n)          Permits;
Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and there
is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company
Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company
Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Since August 17, 2017, neither the Company nor any of its Subsidiaries has received
any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to
possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.

 

     

     

    

 

o)          Insurance.
The Company and its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such coverage, amounts as are prudent and customary in the businesses in which the Company is engaged,
including, but not limited to, directors and officer’s insurance coverage with coverage amounts that are at least equal
to the aggregate Purchase Price. Neither the Company nor any Subsidiary 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 without a significant increase in cost.

 

p)          No
“Shell”. As of the date of this Agreement, either (i) the Company is not or has never been a “shell issuer”
as defined in Rule 144 or (ii) at least 12 months have passed since the Company filed Form 10 Type information indicating it is
not a “shell issuer”.

 

q)          Bad
Actor. No officer or director of the Company would be disqualified under Rule 506(d) of the Securities Act as amended on the
basis of being a “bad actor”.

 

4.
          COVENANTS. 

 

a)          Best
Efforts. The parties shall use their best efforts to satisfy timely each of the conditions described in Section 6 and 7 of
this Agreement.

 

b)          Form
D; Blue Sky Laws. The Company agrees when applicable to timely file a Form D with respect to the Securities as required under
Regulation D and to provide a copy thereof to the Purchaser promptly after such filing. The Company shall, on or before the Closing
Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Purchaser
at the applicable closing pursuant to this Agreement under applicable securities or “blue sky” laws of the states
of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken
to the Purchaser on or prior to the Closing Date.

 

c)          Use
of Proceeds. The Company shall use the proceeds from the sale of the Securities for general corporate purposes, marketing
and sales, product development, key personnel recruiting and business development purposes.

 

d)          Financial
Information. Upon written request of the Purchaser, the Company agrees to within (3) three days of the written request send
or make available the following reports filed with the SEC or OTC Markets Group to the Purchaser: a copy of its Annual Report
and its Quarterly Reports and any Supplemental Reports; (ii) copies of all press releases issued by the Company or any of its
Subsidiaries; and (iii) copies of any notices or other information the Company makes available or gives to such shareholders.
Notwithstanding the foregoing, the Company shall not disclose any material nonpublic information to the Purchaser without its
consent unless such information is disclosed to the public prior to or promptly following such disclosure to the Purchaser.

 

e)          Listing.
The Company will obtain and, so long as the Purchaser owns any of the Securities, maintain the listing and trading of
its Common Stock on the OTCBB, and OTCQB, or any equivalent replacement exchange, the NASDAQ Stock Market
(“NASDAQ”), the New York Stock Exchange (“NYSE”), or the NYSE MKT, f/k/a American Stock Exchange
(“AMEX”), and will comply in all respects with the Company’s reporting, filing and other obligations under
the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable.
The Company shall promptly provide to the Purchaser copies of any notices it receives from the SEC, OTC Markets Group and any
other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the
Common Stock for listing on such exchanges and quotation systems, provided that it shall not provide any notices constituting
material nonpublic information.

 

f)          Corporate
Existence. So long as the Purchaser beneficially owns any Securities, the Company shall maintain its corporate existence and
shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale
of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes
the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii)
is a publicly traded corporation whose Common Stock is listed for trading on NASDAQ, NYSE or AMEX.

 

     

     

    

 

g)          No
Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of
the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval
provision applicable to the Company or its securities.

 

h)          Securities
Laws Disclosure; Publicity. The Company shall comply with applicable securities laws by filing a Current Report on Form 8-K,
within four (4) Trading Days following the date hereof, disclosing all the material terms of the transactions contemplated hereby.

 

i)          Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by this Agreement,
the Company covenants and agrees that neither it nor any other person acting on its behalf will provide the Purchaser or its agents
or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto the
Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands
and confirms that the Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

j)          Subsidiaries.
So long as the Note remains outstanding, the Company shall not transfer any assets or rights to any of its subsidiaries
or permit any of its subsidiaries to engage in any significant business or operations, whether such subsidiaries are
currently existing or hereafter created.

 

k)          Insurance.
So long as the Note remains outstanding, the Company and its Subsidiaries shall maintain in full force and effect
insurance reasonably believed by the Company to be adequate coverage (a) on all assets and activities, covering property loss
or damage and loss of income by fire or other hazards or casualty, and (b) against all liabilities, claims and risks for
which it is customary for companies similarly situated to the Company to insure, including without limitation applicable
product liability insurance, required workmen’s compensation insurance, and other insurance covering injury or damage
to persons or property, but excluding directors and officers insurance coverage. The Company shall promptly furnish or cause
to be furnished evidence of such insurance to the Purchaser, in form and substance reasonably satisfactory to the
Purchaser.

 

m)          Future
Financings: From the date hereof until such time as the Purchaser no longer holds any of the Securities, in the event the
Company issues or sells any shares of Common Stock or securities directly or indirectly convertible into or exercisable for Common
Stock (“Common Stock Equivalents”) or amends the transaction documents relating to any sale or issuance of Common
Stock or Common Stock Equivalents, and the Purchaser reasonably believes that the terms and conditions thereunder are more favorable
to such investors as the terms and conditions granted under this Agreement, Note or any document provided by the Purchaser to
the Company relating to any sale or issuance of Common Stock (the “Transaction Documents”), upon notice to the Company
by such Purchaser, the Transaction Documents shall be deemed automatically amended so as to give the Purchaser the benefit of
such more favorable terms or conditions. Promptly following a request to the Company the Company shall provide Purchaser with
all executed transaction documents relating to any such sale or issue of Common Stock or Common Stock Equivalents. Company shall
deliver acknowledgment of such automatic amendment to the Transaction Documents to Purchaser in form and substance reasonably
satisfactory to the Purchaser ( the “Acknowledgment”) within three (3) business days of Company’s receipt of
request from Purchaser (the “Deadline”), provided that Company’s failure to timely provide the Acknowledgement
shall not affect the automatic amendments contemplated hereby. If the Acknowledgement is not delivered by the Deadline, Company
shall pay to the Purchaser $1000.00 per day in cash, for each day beyond the Deadline that the Company fails to deliver such Acknowledgement
Such cash amount shall be paid to Holder by the first day of the month following the month in which it has accrued or, at the
option of the Holder, shall be added to the principal amount of the Note, in which event interest shall accrue thereon in accordance
with the terms of the Note and such additional principal amount shall be convertible into Common Stock in accordance with the
terms of the Note..

 

n)          Piggyback
Registration Rights. Borrower shall include on the next registration statement Borrower files with the SEC (or on the subsequent
registration statement if such registration statement is withdrawn) all shares issuable upon conversion of the Note. Failure to
do so will result in liquidated damages of fifty percent (50%) of the outstanding principal amount of the Note, but not less than
twenty-five thousand dollars ($25,000), being immediately due and payable to Holder at its election in the form of cash payment
or addition to the balance of the Note.

 

     

     

    

 

5.           Transfer
Agent Instructions. Upon receipt of a duly executed Notice of Conversion, the Company shall issue irrevocable instructions
to its transfer agent to issue certificates, registered in the name of the Purchaser or its nominee, for the Conversion Shares
in such amounts as specified from time to time by the Purchaser to the Company upon conversion of the Note, or any part thereof,
in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”). In the event that the Company
proposes to replace its transfer agent, the Company shall provide, prior to the effective date of such replacement, a fully executed
Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to this Agreement and the Securities (including
but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount (as defined in the Note))
signed by the successor transfer agent to Company and the Company. Prior to registration of the Conversion Shares under the 1933
Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities
as of a particular date that can then be immediately sold, all such certificates shall bear the restrictive legend specified in
Section 2(g) of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 5, and stop transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion
Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold
pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately
sold), will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer
agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated
form) any certificate for Conversion Shares to be issued to the Purchaser upon conversion of or otherwise pursuant to the Note
as and when required by the Note and this Agreement; and (iii) it will not fail to remove (or direct its transfer agent not to
remove or impair, delay, and/or hinder its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer
instructions in respect thereof) on any certificate for any Conversion Shares issued to the Purchaser upon conversion of or otherwise
pursuant to the Note as and when required by the Note and this Agreement. Nothing in this Section shall affect in any way the
Purchaser’s obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery
requirements, if any, upon re-sale of the Securities. If the Purchaser provides the Company with (i) an opinion of counsel in
form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such
Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Purchaser provides
reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the
case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend,
in such name and in such denominations as specified by the Purchaser. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Purchaser, by vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Purchaser
shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate
transfer, without the necessity of showing economic loss and without any bond or other security being required.

 

6.           Injunction
Posting of Bond. In the event the Purchaser shall elect to convert the Note or any parts thereof, the Company may not refuse
conversion or exercise based on any claim that Purchaser or anyone associated or affiliated with Purchaser has been engaged in
any violation of law, or for any other reason. In connection with any injunction sought or attempted by the Company, the Company
shall be required to post a bond at least equal to the greater of either: (i) the outstanding principal amount of the Note; and
(ii) the market value of the Conversion Shares sought to be converted, exercised or issued, based on the sale price per share
of Common Stock on the principal market on which it is traded.

 

7.           Delivery
of Unlegended Shares.

 

a)          Within
three (3) business days (such third business day being the “Unlegended Shares Delivery Date”) after the business
day on which the Company has received (i) a notice that Conversion Shares, or any other Common Stock held by the Purchaser has
been sold pursuant to a registration statement or Rule 144 under the 1933 Act, (ii) a representation that the prospectus delivery
requirements, or the requirements of Rule 144, as applicable and if required, have been satisfied, (iii) the original share certificates
representing the shares of Common Stock that have been sold, and (iv) in the case of sales under Rule 144, customary representation
letters of the Purchaser and, if required, Purchaser’s broker regarding compliance with the requirements of Rule 144, the
Company at its expense, (y) shall deliver, and shall cause legal counsel selected by the Company to deliver to its transfer agent
(with copies to Purchaser) an appropriate instruction and opinion of such counsel, directing the delivery of shares of Common
Stock without any legends including the legend set forth in Section 4(h) above (the “Unlegended Shares”); and
(z) cause the transmission of the certificates representing the Unlegended Shares together with a legended certificate representing
the balance of the submitted Common Stock certificate, if any, to the Purchaser at the address specified in the notice of sale,
via express courier, by electronic transfer or otherwise on or before the Unlegended Shares Delivery Date.

 

     

     

    

 

b)          The
Company understands that a delay in the delivery of the Unlegended Shares later than the Unlegended Shares Delivery Date could
result in economic loss to the Purchaser. As compensation to Purchaser for such loss, the Company agrees to pay late payment fees
(as liquidated damages and not as a penalty) to the Purchaser for late delivery of Unlegended Shares in the amount of $1,000.00
per business day after the Unlegended Shares Delivery Date. If during any three hundred and sixty (360) day period, the Company
fails to deliver Unlegended Shares as required by this Section for an aggregate of thirty (30) days, then Purchaser or assignee
holding Securities subject to such default may, at its option, require the Company to redeem all or any portion of the shares
subject to such default at a price per share equal to the greater of (i) 200% of the most recent closing price of the Common Stock
or (ii) the parity value of the Default Sum to be paid (as defined in Section 3.16 of the Note) (“Unlegended Redemption
Amount”). The Company shall pay any payments incurred under this Section in immediately available funds upon demand.

 

8.
          Conditions to the Company’s Obligation to Sell. The obligation of the Company
hereunder to issue and sell the Note to the Purchaser at the Closing is subject to the satisfaction, at or before the Closing
Date of each of the following conditions provided that these conditions are for the Company’s sole benefit and may be waived
by the Company at any time in its sole discretion:

 

a)          The
Purchaser shall have executed this Agreement and delivered the same to the Company.

 

b)          The
Purchaser shall have delivered the Purchase Price to the Company.

 

c)          The
representations and warranties of the Purchaser shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date),
and the Purchaser shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Purchaser at or prior to the Closing Date.

 

d)          No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this
Agreement.

 

9.
          Conditions to The Purchaser’s Obligation to Purchase. The obligation of
the Purchaser hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date of each
of the following conditions, provided that these conditions are for the Purchaser’s sole benefit and may be waived by the
Purchaser at any time in its sole discretion:

 

a)          The
Company shall have executed this Agreement and delivered the same to the Purchaser.

 

b)          The
Company shall have delivered to the Purchaser the duly executed Note (in such denominations as the Purchaser shall request) in
accordance with Section 1 above.

 

c)          The
Irrevocable Transfer Agent Instructions, in form and substance satisfactory to the Purchaser, shall have been delivered to and
acknowledged in writing by the Company’s Transfer Agent (a copy of which written acknowledgment shall be provided to Purchaser
prior to Closing).

 

d)          The
representations and warranties of the Company shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date)
and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Purchaser
shall have received a certificate or certificates reasonably requested by the Purchaser including, but not limited to certificates
with respect to the Company’s Formation Documents, By-laws, and Board of Directors’ resolutions relating to the transactions
contemplated hereby.

 

     

     

    

 

e)          No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this
Agreement.

 

f)          No
event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not
limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act
reporting obligations.

 

g)          The
Conversion Shares shall have been authorized for quotation on the OTCBB, OTCQB, and trading of the Common Stock on the OTCBB,
OTCQB, shall not have been suspended by the SEC or the OTC Markets Group.

 

10.
       Governing Law; Miscellaneous.

 

a)          Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to
principles of conflicts of laws thereof or any other State. Any action brought by any party against any other party hereto concerning
the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts
located in the state and county of New York. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction
and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based
upon forum non conveniens. The parties executing this Agreement and other agreements referred to herein or delivered
in connection herewith on behalf of the Company agree to submit to the in personam jurisdiction of such courts and hereby irrevocably
waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s
fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may
prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any suit, action
or proceeding in connection with this Agreement or any other transaction document contemplated hereby by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted
by law.

 

b)          Removal
of Restrictive Legends. In the event that Purchaser has any shares of the Company’s Common Stock bearing any restrictive
legends, and Purchaser, through its counsel or other representatives, submits to the Transfer Agent any such shares for the removal
of the restrictive legends thereon in connection with a sale of such shares pursuant to any exemption to the registration requirements
under the Securities Act, and the Company and or its counsel refuses or fails for any reason (except to the extent that such refusal
or failure is based solely on applicable law that would prevent the removal of such restrictive legends) to render an opinion
of counsel or any other documents or certificates required for the removal of the restrictive legends, then the Company hereby
agrees and acknowledges that the Purchaser is hereby irrevocably and expressly authorized to have counsel to the Purchaser render
any and all opinions and other certificates or instruments which may be required for purposes of removing such restrictive legends,
and the Company hereby irrevocably authorizes and directs the Transfer Agent to, without any further confirmation or instructions
from the Company, issue any such shares without restrictive legends as instructed by the Purchaser, and surrender to a common
carrier for overnight delivery to the address as specified by the Purchaser, certificates, registered in the name of the Purchaser
or its designees, representing the shares of Common Stock to which the Purchaser is entitled, without any restrictive legends
and otherwise freely transferable on the books and records of the Company.

 

     

     

    

 

c)          Filing
Requirements. From the date of this Agreement until the Notes are no longer outstanding, the Company will timely and voluntarily
comply with all reporting requirements that are applicable to an issuer with a class of shares registered pursuant to Section
12(g) of the 1934 Act, whether or not the Company is then subject to such reporting requirements, and comply with all requirements
related to any registration statement filed pursuant to this Agreement. The Company will use reasonable efforts not to take any
action or file any document (whether or not permitted by the 1933 Act or the 1934 Act or the rules thereunder) to terminate or
suspend such registration or to terminate or suspend its reporting and filing obligations under said acts until the Notes are
no longer outstanding. The Company will maintain the quotation or listing of its Common Stock on the OTCBB, OTCQB, and OTC Pink,
NYSE, or NASDAQ Stock Market (whichever of the foregoing is at the time the principal trading exchange or market for the Common
Stock (the “Principal Market”), and will comply in all respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Principal Market, as applicable. The Company will provide Purchaser with
copies of all notices it receives notifying the Company of the threatened and actual delisting of the Common Stock from any Principal
Market. As of the date of this Agreement and the Closing Date, the OTCQB, is the Principal Market. Until the Note is no longer
outstanding, the Company will continue the listing or quotation of the Common Stock on a Principal Market and will comply in all
respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Principal Market.

 

d)          Fees
and Expenses. On or prior to the Closing, the Company shall pay or reimburse to Purchaser a non-refundable, non-accountable
sum equal to $5,000.00 as and for the fees, costs and expenses (including without limitation legal fees and disbursements and
due diligence and administrative expenses) incurred by the Purchaser in connection with the Purchaser’s due diligence and
negotiation, preparation and execution of the Transaction Documents and consummation of the Transactions. The Purchaser may withhold
and offset the balance of such amount from the payment of its Purchase Price otherwise payable hereunder at Closing, which offset
shall constitute partial payment of such Purchase Price in an amount equal to such offset. Except as expressly set forth in this
Agreement or the Note to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in
connection with the delivery of any Securities to the Purchaser.

 

e)          Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever
claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted,
now or at any time hereafter in force, in connection with any claim, action or proceeding that may be brought by the
Purchaser in order to enforce any right or remedy under the Note. Notwithstanding any provision to the contrary contained in
herein or under the Note, it is expressly agreed and provided that the total liability of the Company under the Note for
payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum
Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of
them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Note
or herein exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable
to the Note is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new
maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Note from the effective date
forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of
the Maximum Rate is paid by the Company to the Purchaser with respect to indebtedness evidenced by the Note, such excess
shall be applied by the Purchaser to the unpaid principal balance of any such indebtedness or be refunded to the Company, the
manner of handling such excess to be at the Purchaser’s election.

 

f)          Headings.
The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the
interpretation of, this Agreement.

 

g)          Severability.
In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any
law shall not affect the validity or enforceability of any other provision hereof.

 

h)          Entire
Agreement Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company
nor the Purchaser makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this
Agreement may be waived or amended other than by an instrument in writing signed by the Purchaser.

 

     

     

    

 

i)          Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be
in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, email or facsimile, addressed as set forth below or to such other address as
such party shall have specified most recently by written notice. Any notice or other communication required or permitted to
be given hereunder shall be deemed effective (a) upon hand delivery or delivery by email or facsimile with accurate
confirmation generated by the transmitting facsimile machine or computer, at the address, email or number designated below
(if delivered on a business day during normal business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal business hours where such notice is to be
received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:

 

	Purchaser:	EMA Financial, LLC
	 	40 Wall Street, Suite 1700
	 	New York, NY 10005
	 	 
	Company:	Blue Sphere, Corp
	 	301 McCullough Drive, 4th Floor
	 	Charlotte, NC 28262
	 	Attn: Shlomo Palas, CEO

 

Each
party shall provide notice to the other party of any change in address.

 

j)          Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns.
Neither the Company nor the Purchaser shall assign this Agreement or any rights or obligations hereunder without the prior written
consent of the other. Notwithstanding the foregoing, subject to Section 2(f), the Purchaser may assign its rights hereunder to
any person that purchases Securities in a private transaction from the Purchaser or to any of its “affiliates,” as
that term is defined under the 1934 Act, without the consent of the Company.

 

k)          Third
Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

1)          Survival.
The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall
survive the Closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Purchaser. The
Company agrees to indemnify and hold harmless the Purchaser and all their officers, directors, employees and agents for loss
or damage arising as a result of or related to any breach or alleged breach by the Purchaser of any of its representations,
warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including
advancement of expenses as they are incurred.

 

m)          Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

n)          No
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.

 

o)          Remedies.
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Purchaser
by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Agreement, that the Purchaser shall be entitled, in addition to
all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or
injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and
provisions hereof, without the necessity of showing economic loss and without any bond or other security being
required.

 

     

     

    

 

p)          Counterparts.
This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which together shall be deemed to be one and the same agreement. Any signature transmitted by
facsimile, e-mail, or other electronic means shall be deemed to be an original signature

 

IN
WITNESS WHEREOF, the undersigned Purchaser and the Company have caused this Agreement to be duly executed as of the date first
above written.

 

BLUE
SPHERE CORP

 

	By:	/s/ Shlomo Palas	 
	 	Name: Shlomo Palas	 
	 	Title:   CEO	 

 

EMA
FINANCIAL, LLC

 

	By:	/s/ Jamie Beitler	 
	 	Name: Jamie Beitler	 
	 	Title: Authorized Signatory	 
	 	 	 

 

     

     

    

 

GUARANTY

 

Each
of the undersigned subsidiaries of the Company jointly and severally, absolutely, unconditionally and irrevocably, guarantees
to the Purchaser and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance
by the Company when due (whether at the stated maturity, by acceleration or otherwise) of all amounts due under, and all other
obligations under, the Note. Each such subsidiary’s liability under this Guaranty shall be unlimited, open and continuous
for so long as this Guaranty remains in force.

 

AGRICERERE
SRL.

 

	By:	/s/ Shlomi Palas	 
	 	Name: Shlomi Palas	 
	 	Title:   Director	 

 

ACRIELEKTRA
SRL

 

	By:	/s/ Shlomi Palas	 
	 	Name: Shlomi Palas	 
	 	Title:   Director	 

 

AGRISORSE
SRL

 

	By:	/s/ Shlomi Palas	 
	 	Name: Shlomi Palas	 
	 	Title:   Director	 

 

GEFA
SRL

 

	By:	/s/ Shlomi Palas	 
	 	Name: Shlomi Palas	 
	 	Title:   General Manager 	 

 

EASTERN
SPHERE LTD

 

	By:	/s/ Shlomi Palas	 
	 	Name: Shlomi Palas	 
	 	Title:   Director	 

 

BINO
SPHERE, LLC

 

	By:	/s/ Shlomi Palas	 
	 	Name: Shlomi Palas	 

 

BLUE
SPHERE BRABENT B.V.

 

	By:	/s/ Shlomi Palas	 
	 	Name: Shlomi Palas	 
	 	Title:   DirectorBlue Sphere Corporation - 10-K

Exhibit 10.238

 

NEITHER THE ISSUANCE AND
SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

	Principal Amount: $125,000.00	Issue Date: December 4, 2017

 

12% CONVERTIBLE NOTE

 

FOR
VALUE RECEIVED, BLUE SPHERE CORP a Nevada corporation (“Borrower” or “Company”), hereby promises to
pay to the order of EMA FINANCIAL, LLC, a Delaware limited liability company, or its registered assigns (the “Holder”),
on December 4, 2018, (subject to extension as set forth below, the “Maturity Date”), the sum of $125,000.00 as set
forth herein, together with interest on the unpaid principal balance hereof at the rate of twelve (12%) per annum (the “Interest
Rate”) from the date of issuance hereof until this Note plus any and all amounts due hereunder are paid in full, and any
additional amounts set forth herein, including without limitation any Additional Principal (as defined herein). Interest shall
be computed on the basis of a 365-day year and the actual number of days elapsed. Any amount of principal or interest on this Note
which is not paid when due shall bear interest at the rate of twenty-four (24%) per annum from the due date thereof until the same
is paid (“Default Interest”). All payments due hereunder shall be made in lawful money of the United States of America.
All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance
with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is
not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest
payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken
into account for purposes of determining the amount of interest due on such date. As used in this Note, the term “business
day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York
are authorized or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined,
shall have the meaning ascribed thereto in that certain Securities Purchase Agreement entered into by and between the Company and
Holder dated on or about the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).
The Holder may, by written notice to the Borrower at least five (5) days before the Maturity Date (as may have been previously
extended), extend the Maturity Date to up to one (1) year following the date of the original Maturity Date hereunder.

 

This Note is free from
all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other
similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

     

    

    

 

The following terms shall apply to this Note:

 

ARTICLE I. CONVERSION RIGHTS

 

1.1.          Conversion
Right. The Holder shall have the right, in its sole and absolute discretion, at any time from time to time, to convert all
or any part of the outstanding amount due under this Note into fully paid and non-assessable shares of Common Stock, as such Common
Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock
shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided
herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion
of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through
the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower
subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of
Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is
being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.9% of the outstanding shares of
Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance
with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation 13D-G thereunder,
except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion
may be waived by the Holder upon, at the election of the Holder, not less than 61 days’ prior notice to the Borrower, and
the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the
Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each Conversion of
this Note (“Conversion Shares”) shall be determined by dividing the Conversion Amount (as defined below) by the applicable
Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the
“Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that
the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result
in, notice) to the Borrower before 11:59 p.m., New York, New York time on such conversion date (the “Conversion Date”).
The term “Conversion Amount” means, with respect to any Conversion of this Note, the sum of (1) the principal amount
of this Note to be converted in such Conversion, plus (2) accrued and unpaid interest, if any, on such principal amount
being converted at the interest rates provided in this Note to the Conversion Date, plus (3) at the Holder’s option,
Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2), plus (4) any Additional
Principal for such Conversion, plus (5) at the Holder’s option, any amounts owed to the Holder pursuant to Sections
1.2(c) and 1.4(g) hereof.

 

1.2.          Conversion
Price.

 

a)          Calculation
of Conversion Price. The conversion price hereunder (the “Conversion Price”) shall equal the lower of: (i) the
closing sale price of the Common Stock on the Principal Market on the Trading Day immediately preceding the Closing Date, and (ii)
65% of either the lowest sale price for the Common Stock on the Principal Market during the twenty (20) consecutive Trading Days
including and immediately preceding the Conversion Date, or the closing bid price, whichever is lower, provided, however, if
the Company’s share price at any time loses the bid (ex: 0.0001 on the ask with zero market makers on the bid on level 2),
then the Conversion Price may, in the Holder’s sole and absolute discretion, be reduced to a fixed conversion price of 0.00001
(if lower than the conversion price otherwise), and provided, that if on the date of delivery of the Conversion Shares to
the Holder, or any date thereafter while Conversion Shares are held by the Holder, the closing bid price per share of Common Stock
on the Principal Market on the Trading Day on which the Common Shares are traded is less than the sale price per share of Common
Stock on the Principal Market on the Trading Day used to calculate the Conversion Price hereunder, then such Conversion Price shall
be automatically reduced such that the Conversion Price shall be recalculated using the new low closing bid price (“Adjusted
Conversion Price”) and shall replace the Conversion Price above, and Holder shall be issued a number of additional shares
such that the aggregate number of shares Holder receives is based upon the Adjusted Conversion Price, and provided, further,
that the Conversion Price shall be subject to Section 1.2(b) below. For the purpose of clarity, any shares required to be issued
as a result of an Adjusted Conversion Price shall be deemed to be “Conversion Shares” under this Note. If an Event
of Default under Section 3.9 of the Note has occurred, Holder, in its sole discretion, may elect to use a Conversion Price which
shall equal the lower of: (i) the closing sale price of the Common Stock on the Principal Market on the Trading Day immediately
preceding the Closing Date; (ii) 65% of either the lowest sale price or the closing bid price, whichever is lower for the Common
Stock on the Principal Market during any Trading Day in which the Event of Default has not been cured. If such Common Stock is
not traded on the OTCBB, OTCQB, NASDAQ or NYSE, then such sale price shall be the sale price of such security on the principal
securities exchange or trading market where such security is listed or traded or, if no sale price of such security is available
in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in
the “pink sheets” by the National Quotation Bureau, Inc. If such sale price cannot be calculated for such security
on such date in the manner provided above, such price shall be the fair market value as mutually determined by the Borrower and
the Holder. If the Borrower’s Common stock is chilled for deposit at DTC, becomes chilled at any point while this Note remains
outstanding or deposit or other additional fees are payable due to a Yield Sign, Stop Sign or other trading restrictions, or if
the closing sale price at any time falls below $0.81 (as appropriately and equitably adjusted for stock splits, stock dividends,
stock contributions and similar events), then such 65% figure specified in clause 1.2(a)(ii) above shall be reduced to 50%. In
the event that the shares of the Borrower’s Common Stock are not deliverable via DWAC following the conversion of any amount
hereunder, an additional 5% discount will be attributed to the Conversion Price. Additionally, the Borrower acknowledges that it
will take all reasonable steps necessary or appropriate, including providing a board of directors resolution authorizing the issuance
of common stock to Holder. So long as the requested sale may be made pursuant to Rule 144, the Company agrees to accept an opinion
of counsel to the Holder confirming the rights of the Holder to sell shares of Common Stock issuable or issued to Holder on conversion
of this Note pursuant to Rule 144 as promulgated by the SEC (“Rule 144”), as such Rule 144 may be in effect from time
to time, which opinion will be issued at the Company’s expense and the conversion dollar amount will be reduced by $750.00
to cover the cost of such legal opinion. “Trading Day” shall mean any day on which the Common Stock is tradable for
any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Stock is then being
traded. Additionally, if the Company ceases to be a reporting company pursuant to the 1934 Act or if the Note cannot be converted
into free trading shares after 181 days from the issuance date, an additional 15% discount will be attributed to the Conversion
Price for any and all Conversions submitted thereafter.

 

     

    

    

 

b)          If
at any time the Conversion Price as determined hereunder for any Conversion would be less than the par value of the Common Stock,
then the Conversion Price hereunder shall equal such par value for such Conversion and the Conversion Amount for such Conversion
shall be increased to include Additional Principal, where “Additional Principal” means such additional amount to be
added to the Conversion Amount to the extent necessary to cause the number of Conversion Shares issuable upon such Conversion to
equal the same number of Conversion Shares as would have been issued had the Conversion Price not been subject to the minimum price
set forth in this Section 1.2(b).

 

c)          Without
in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties
agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline (as defined below)
the Borrower shall pay to the Holder $1,000.00 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver
such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued
or, at the option of the Holder, shall be added to the principal amount of this Note, in which event interest shall accrue thereon
in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance
with the terms of this Note. The Borrower agrees that the right to convert this Note is a valuable right to the Holder. The damages
resulting from a failure, attempt to frustrate, or interference with such conversion right are difficult if not impossible to quantify.
Accordingly the parties acknowledge that the liquidated damages provision contained in this Section are justified.

 

1.3.          Authorized
Shares. The Borrower covenants that the Borrower will at all times while this Note is outstanding reserve from its authorized
and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock
upon the full conversion or adjustment of this Note. The Borrower is required at all times to have authorized and reserved seven
(7) times the number of shares that is actually issuable upon full conversion or adjustment of this Note (based on the Conversion
Price of the Notes in effect from time to time)(the “Reserved Amount”). Initially, the Company will instruct the Transfer
Agent to reserve eight hundred ninety eight thousand (898,000) shares of common stock in the name of the Holder for issuance upon
conversion hereof. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.
In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number
of shares of Common Stock into which this Note shall be convertible at the then current Conversion Price, the Borrower shall at
the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized
and reserved, free from preemptive rights, for conversion of this Note in full. The Borrower (i) acknowledges that it has irrevocably
instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees
that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing
stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and
conditions of this Note.

 

If, at any time the
Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

 

1.4.          Method
of Conversion. 

 

a)          Mechanics
of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time and from time
to time after the Issue Date, by submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means
of communication dispatched on the Conversion Date prior to 11:59 p.m., New York, New York time). 

 

     

    

    

 

b)          Book
Entry upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance
with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid
principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount
so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower,
so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such
records of the Borrower shall, prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding
the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first
physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the
Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request,
representing in the aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of
this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this
Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the
face hereof. 

 

c)          Payment
of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that
of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities
or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are
to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such
tax or shall have established to the satisfaction of the Borrower that such tax has been paid. 

 

d)          Delivery
of Common Stock upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other
reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section
1.4 or upon an event triggering the calculation of an Adjusted Conversion Price, the Borrower shall issue and deliver or cause
to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within
three (3) business days after such receipt or such an event (the “Deadline”) (and, solely in the case of conversion
of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.

 

e)          Obligation
of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a duly and properly executed Notice of Conversion or upon
an event triggering the calculation of an Adjusted Conversion Price, the Holder shall be deemed to be the holder of record of the
Common Stock issuable upon such conversion or as a result of an Adjusted Conversion Price, the outstanding principal amount and
the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion or adjustment, and, unless the
Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted
shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided,
on such conversion. If the Holder shall have given a Notice of Conversion as provided herein or upon an event triggering the calculation
of an Adjusted Conversion Price, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be
absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent
with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure
or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of
any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion.
The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received
by the Borrower before 11:59 p.m., New York, New York time, on such date. 

 

f)      
    Delivery of Common Stock by Electronic Transfer. In lieu of
delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is
participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”)
program, upon request of the Holder and its compliance with the provisions contained in Section 1.1 and in this Section 1.4,
the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon
conversion or upon an event triggering the calculation of an Adjusted Conversion Price to the Holder by crediting the account
of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”)
system. 

 

     

    

    

 

g)          Failure
to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including
actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion or adjustment
of this Note is not delivered by the Deadline, the Borrower shall pay to the Holder $1,000.00 per day in cash, for each day beyond
the Deadline that the Borrower fails to deliver such Common Stock to the Holder. Such cash amount shall be paid to Holder by the
fifth day of the month following the month in which it has accrued or, at the option of the Holder, shall be added to the principal
amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional
principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the
right to convert and/or receive shares in the event of an adjustment is a valuable right to the Holder. The damages resulting from
a failure, attempt to frustrate, or interference with such conversion or adjustment right are difficult if not impossible to qualify.
Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 1.4(g) are justified. 

 

h)          The
Borrower acknowledges that it will take all reasonable steps necessary or appropriate, including accepting an opinion of counsel
to Holder confirming the rights of Holder to sell shares of Common Stock issued to Holder on conversion or adjustment of the Note
pursuant to Rule 144 as promulgated by the SEC (“Rule 144”), as such Rule may be in effect from time to time. So long
as the requested sale may be made pursuant to Rule 144 the Borrower agrees to accept an opinion of counsel to the Holder which
opinion will be issued at the Borrower’s expense. 

 

i)           Charges
and Expenses. Issuance of Common Stock to Holder, or any of its assignees, upon the conversion of this Note shall be made without
charge to the Holder for any issuance fee, transfer tax, legal opinion and related charges, postage/mailing charge or any other
expense with respect to the issuance of such Common Stock. Company shall pay all Transfer Agent fees incurred from the issuance
of the Common Stock to Holder, as well as any and all other fees and charges required by the Transfer Agent as a condition to effectuate
such issuance. That notwithstanding, the Holder may in the interest of securing issuance and/or delivery of Common Stock before
the Deadline, at any time from time to time, in its sole discretion elect to pay any such fees or charges upfront, and Company
agrees that any such fees or charges as noted in this Section that are paid by the Holder (whether from the Company’s delays,
outright refusal to pay, Holder’s interest in securing issuance and/or delivery of Common Stock before the Deadline, or otherwise),
will be at Company’s expense, and the conversion amount will automatically be reduced by that dollar amount to cover the
cost of the fees or charges as noted in this Section.

 

1.5.          Restricted
Securities. The shares of Common Stock issuable upon conversion or adjustment of this Note may not be sold or transferred unless
(i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent
shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions
of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant
to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor
rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the
Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited
Investor (as defined in the Purchase Agreement). Any legend set forth on any stock certificate evidencing any Conversion Shares
shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the
Borrower or its transfer agent shall have received an opinion of counsel form, substance and scope customary for opinions of counsel
in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration
under the Act, which opinion shall be reasonably acceptable to the Company, or (ii) in the case of the Common Stock issued or issuable
upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed
under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular
date that can then be immediately sold.

 

1.6.          Effect
of Certain Events.

 

a)          Effect
of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all
of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more
than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the
Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be
deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder
upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III)
or (ii) be treated pursuant to Section 1.6(b) hereof. “Person” shall mean any individual, corporation, limited liability
company, partnership, association, trust or other entity or organization. 

 

     

    

    

 

b)          Adjustment
Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all
of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar
event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares
of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all
or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower,
then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted
in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such
case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the
provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares
issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities
or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section
1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least fifteen
(15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record
date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event
or sale of assets (during which time, for clarification, the Holder shall be entitled to convert this Note) and (b) the resulting
successor or acquiring entity assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall
similarly apply to successive consolidations, mergers, sales, transfers or share exchanges. 

 

c)          Adjustment
Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets)
to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or
distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this
Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets
which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder
been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.
Such assets shall be held in escrow by the Company pending any such conversion 

 

d)          Purchase
Rights. If, at any time when any Notes are issued and outstanding, the Borrower issues any convertible securities or rights
to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record holders of
any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common
Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken,
the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

e)          Stock
Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (A) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any securities convertible
into or exercisable for Common Stock; (B) subdivides outstanding shares of Common Stock into a larger number of shares; (C) combines
(including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (D) issues,
in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion
Price (and each sale or bid price used in determining the Conversion Price) shall be multiplied by a fraction, of which the numerator
shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the
number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

     

    

    

 

f)           Notice
of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described
in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish
to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment
or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like
certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number
of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion
of the Note.

 

1.7.          Revocation.
If any Conversion Shares are not received by the Deadline, the Holder may revoke the applicable Conversion pursuant to which such
Conversion Shares were issuable. This Note shall remain convertible after the Maturity Date hereof until this Note is repaid or
converted in full.

 

1.8.          Prepayment.
Notwithstanding anything to the contrary contained in this Note, subject to the terms of this Section, at any time during the period
beginning on the Issue Date and ending on the date which is six (6) months following the Issue Date (“Prepayment Termination
Date”), Borrower shall have the right, exercisable on not less than five (5) Trading Days prior written notice to the Holder
of this Note, to prepay the outstanding balance on this Note (principal and accrued interest), in full, in accordance with this
Section. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the
Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the
date of prepayment which shall be not more than ten (10) Trading Days from the date of the Optional Prepayment Notice. On the date
fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount
(as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business
day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall make payment
to the Holder of an amount in cash (the “Optional Prepayment Amount”) equal to the Prepayment Factor (as defined below),
multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on
the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts
referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If
the Borrower delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment Amount due to the Holder of the Note
within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the
Note pursuant to this Section. After the Prepayment Termination Date, the Borrower shall have no right to prepay this Note. For
purposes hereof, the “Prepayment Factor” shall equal one hundred and fifty percent (150%), provided that such Prepayment
factor shall equal one hundred and thirty five percent (135%) if the Optional Prepayment Date occurs on or before the date which
is ninety (90) days following the Issue Date hereof.

 

ARTICLE II. CERTAIN COVENANTS

 

2.1.          Distributions
on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s
written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or
other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares
of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its
capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s
disinterested directors.

 

2.2.          Restriction
on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the
Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities
or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants,
rights or options to purchase or acquire any such shares.

 

2.3.          Borrowings;
Liens. Notwithstanding section 4(1) of the Purchase Agreement, so long as the Borrower shall have any obligation under this
Note, the Borrower shall not (i) create, incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable
upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments
for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed
on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, or (b) indebtedness to trade
creditors or financial institutions incurred in the ordinary course of business, or (ii) enter into, create or incur any liens,
claims or encumbrances of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any
interest therein or any income or profits therefrom, securing any indebtedness occurring after the date hereof.

 

     

    

    

 

2.4.          Sale
of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business.
Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

2.5.          Advances
and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without
limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances in existence
or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof.

 

2.6.          Charter.
So long as the Borrower shall have any obligations under this Note, the Borrower shall not amend its charter documents, including
without limitation its certificate of incorporation and bylaws, in any manner that materially and adversely affects any rights
of the Holder.

 

2.7.          Transfer
Agent. The Borrower shall not change its transfer agent without the prior written consent of the Holder. Any resignation by
the transfer agent without a replacement transfer agent consented to by the Holder prior to such replacement taking effect shall
constitute an Event of Default hereunder.

 

ARTICLE III. EVENTS OF
DEFAULT

 

Any one or more of
the following events which shall occur and/or be continuing shall constitute an event of default (each, an “Event of Default”):

 

3.1.          Failure
to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether
at maturity, upon acceleration or otherwise.

 

3.2.          Conversion
and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that
it will not honor its obligation to do so at any time following the execution hereof or) upon exercise by the Holder of the conversion
rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue)
(electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or
otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays,
impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate
for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required
by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent
from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for
any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this
Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this
paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations
shall not be rescinded in writing) for five (5) business days after the Holder shall have delivered a Notice of Conversion. It
is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of
this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer
agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process
a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of a demand from the
Holder.

 

3.3.          Breach
of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any
collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of three (3) days
after written notice (via email) thereof to the Borrower from the Holder.

 

3.4.          Breach
of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement
or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement),
shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have)
a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

     

    

    

 

3.5.          Receiver
or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply
for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such
a receiver or trustee shall otherwise be appointed.

 

3.6.          Judgments.
Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or
any of its property or other assets for more than $50,000.00, and shall remain unvacated, unbonded or unstayed for a period of
twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

 

3.7.           Bankruptcy.
Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under
any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the
Borrower.

 

3.8.          Delisting
of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTCBB, or OTCQB,
or an equivalent replacement exchange, NASDAQ, the NYSE or AMEX.

 

3.9.          Failure
to Comply with the Exchange Act. The Borrower shall fail to comply in any material respect with the reporting requirements
of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

3.10.
       Liquidation. Any dissolution, liquidation, or winding up of Borrower or any
substantial portion of its business.

 

3.11.        Cessation
of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts
as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going
concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3.12.        Maintenance
of Assets. The failure by Borrower, during the term of this Note, to maintain any material intellectual property rights, personal,
real property or other assets which are necessary to conduct its business (whether now or in the future).

 

3.13.        Financial
Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or period
from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement
would, by comparison to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder
with respect to this Note or the Purchase Agreement.

 

3.14.        Reverse
Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder.

 

3.15.        Replacement
of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior
to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered
pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in
the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

     

    

    

 

3.16.        Cross-Default.
Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default
by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable
notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements,
in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the
terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements”
means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the
Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other
Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted
with each other loan transaction and with all other existing and future debt of Borrower to the Holder. Upon the occurrence and
during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof
or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay
to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein). UPON
THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY
DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO:
(Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event
of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on
this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11,
3.12, 3.13, 3.14, 3.17, 3.18 and/or 3. 15 exercisable through the delivery of written notice to the Borrower by such Holders (the
“Default Notice”), and upon the occurrence of an Event of Default specified in the remaining sections of Articles III
(other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the
Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus
(x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment
Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any
amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the
date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default
Sum”) or (ii) the “parity value” of the Default Sum to be prepaid, where parity value means (a) the highest number
of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating
the Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for purposes of determining
the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion
Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the
Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the
Mandatory Prepayment Date (the “Default Amount”) and all other amounts payable hereunder shall immediately become due
and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including,
without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies
available at law or in equity. If the Borrower fails to pay the Default Amount within five (5) business days of written notice
that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default
(and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately
issue, in lieu of the Default Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided
by the Conversion Price then in effect. The Holder may still convert any amounts due hereunder, including without limitation the
Default Sum, until such time as this Note has been repaid in full.

 

3.17.        Inside Information.
The Borrower or its officers, directors, and/or affiliates attempt to transmit, convey, disclose, or any actual transmittal, conveyance,
or disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public information concerning the
Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower’s filing of a Form 8-K
pursuant to Regulation FD on that same date.

 

3.18.        Bid
Price. The Borrower shall lose the “bid” price for its Common Stock ($0.0001 on the “Ask” with zero
market makers on the “Bid” per Level 2) and/or a market (including the OTC Pink, OTCQB or an equivalent replacement
exchange).

 

ARTICLE IV. MISCELLANEOUS

 

4.1.          Failure
or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative
to, and not exclusive of, any rights or remedies otherwise available.

 

     

    

    

 

4.2.          Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, email or facsimile, addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery or delivery by facsimile or email, with accurate confirmation generated by the transmitting
facsimile machine or computer, at the address, email or number designated in the Purchase Agreement (if delivered on a business
day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day
following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur.

 

4.3.          Amendments.
This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term
“Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes
issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

4.4.          Assignability.
This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and
its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a)
of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with
a bona fide margin account or other lending arrangement.

 

4.5.          Cost of
Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including
reasonable attorneys’ fees.

 

4.6.          Governing
Law. This Note shall be governed by and construed in accordance with the laws of the State of Nevada without regard to conflicts
of laws principles that would result in the application of the substantive laws of another jurisdiction. Any action brought by
either party against the other concerning the transactions contemplated by this Agreement must be brought only in the civil or
state courts of New York or in the federal courts located in the State and county of New York. Both parties and the individual
signing this Agreement on behalf of the Borrower agree to submit to the jurisdiction of such courts. The prevailing party shall
be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of
this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative
to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of any other
provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking
other legal action against the Borrower in any other jurisdiction to collect on the Borrower’s obligations to Holder, to
realize on any collateral or any other security for such obligations, or to enforce a judgment or other decision in favor of the
Holder. This Note shall be deemed an unconditional obligation of Borrower for the payment of money and, without limitation to
any other remedies of Holder, may be enforced against Borrower by summary proceeding pursuant to New York Civil Procedure Law and
Rules Section 3213 or any similar rule or statute in the jurisdiction where enforcement is sought. For purposes of such rule or
statute, any other document or agreement to which Holder and Borrower are parties or which Borrower delivered to Holder, which
may be convenient or necessary to determine Holder’s rights hereunder or Borrower’s obligations to Holder are deemed
a part of this Note, whether or not such other document or agreement was delivered together herewith or was executed apart from
this Note.

 

4.7.          Certain
Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount
(or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest,
the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult
to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate
the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock
acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower
and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the
Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

 

     

    

    

 

4.8.          Disclosure.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Company
or any of its Subsidiaries, the Company shall within one (1) Trading Day after any such receipt or delivery, publicly disclose
such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that
a notice contains material, nonpublic information relating to the Company or any of its Subsidiaries, the Company so shall indicate
to such Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed
to presume that all matters relating to such notice do not constitute material, non-public information relating to the Company
or its Subsidiaries.

 

4.9.          Notice
of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common
Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior
notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders).
In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are
entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including
by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property,
or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed
sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation, dissolution or
winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date
specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date
on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement
regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Borrower
shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with
the notification to the Holder in accordance with the terms of this Section 4.9.

 

4.10.        Remedies.
The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for
a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the
Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law
or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing
any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic
loss and without any bond or other security being required.

 

4.11.        Usury.
This Note shall be subject to the anti-usury limitations contained in the Purchase Agreement.

 

(Remainder of Page intentionally left blank)

 

     

    

    

 

IN WITNESS WHEREOF, Borrower has caused
this Note to be signed in its name by its duly authorized officer as of the Issue Date first set forth above.

 

	BLUE SPHERE CORP	 
	 	 	 
	By:	/s/ Shlomo Palas	 
	 	Name: Shlomo Palas	 
	 	Title: CEO	 

 

     

    

    

 

EXHIBIT A

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert
principal under the 12% Convertible Note of BLUE SPHERE CORP., a Nevada corporation (the Company”), into shares of
common stock (the “Common Stock”), of the Company according to the conditions hereof, as of the date written
below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay
all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested
by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes,
if any.

 

By the delivery of
this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not
exceed the amounts specified under Section 1.1 of this Note, as determined in accordance with Section 13(d) of the Exchange Act.

 

The undersigned agrees
to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the
aforesaid shares of Common Stock pursuant to any prospectus.

 

Conversion calculations:

 

Issue Date of Note:
____________________________________________  Date to Effect Conversion:

 

Conversion Price:

 

Principal Amount of Note to be Converted:_________________________ 

 

Less applicable fees under
the Note:_______________________________  Amount of Note to be Converted:

 

Interest Accrued on Account

of Conversion at Issue:

 

Additional Principal on Accountof Conversion

 

Pursuant to Section 1.2(b) of the Note:_____________________________ 

 

Number of shares of Common Stock to be issued:

 

Remaining Balance of Note*:____________________________________ 

 

Signature:
___________________________________________________ 

 

Name:
______________________________________________________ 

 

Address for Delivery of Common Stock Certificates:
_________________ 

 

Or

 

DWAC Instructions:

 

Broker No:______________ 

Account No:

 

*Sum provided does not include accrued interest

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