Document:

Exhibit
10.2

 

SECURITIES
EXCHANGE AGREEMENT

 

This
Securities Exchange Agreement (this “Agreement”) is dated as of November 28, 2016, between Stemcells, Inc.,
a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Sections 3(a)(9) and 4(a)(2) of the Securities
Act of 1933, as amended (the “Securities Act”), and/or Rule 506 promulgated thereunder, the Company desires
to issue to each Purchaser, and each Purchaser, severally and not jointly, desires to exchange with the Company, securities of
the Company as more fully described in this Agreement.

 

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 each Purchaser agree as follows:

 

ARTICLE
I.

 

DEFINITIONS

 

1.1
Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise
defined herein have the meanings given to such terms in the Debentures (as defined herein), and (b) the following terms have the
meanings set forth in this Section 1.1:

 

“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.7.

 

“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Board
of Directors” means the board of directors of the Company.

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.

 

“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.

 

“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to exchange the Existing Debentures and
Exchange Shares and (ii) the Company’s obligations to deliver the Debenture and Rights to Shares, in each case, have been
satisfied or waived.

 

“Commission”
means the United States Securities and Exchange Commission.

 

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“Common
Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.

 

“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.

 

“Company
Counsel” means Ruskin Moscou Faltischek, P.C., with offices located at 1425 RXR Plaza, East Tower, 15th Floor,
Uniondale, New York 11556, or such other counsel retained by the Company from time to time.

 

“Conversion
Price” shall have the meaning ascribed to such term in the Debentures.

 

“Debentures”
means the 6% Convertible Debentures due, subject to the terms therein, three (3) years from their date of issuance, issued by
the Company to the Purchasers hereunder, in the form of Exhibit A attached hereto.

 

“EGS”
means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105-0302.

 

“Effective
Date” means the earliest of the date that (a) all of the Underlying Shares have been sold pursuant to Rule 144 or may
be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public information required
under Rule 144 and without volume or manner-of-sale restrictions, (b) following the one year anniversary of the Closing Date provided
that a holder of the Underlying Shares is not an Affiliate of the Company or (c) all of the Underlying Shares may be sold pursuant
to an exemption from registration under Section 4(1) of the Securities Act without volume or manner-of-sale restrictions and Company
Counsel has delivered to such holders a standing written unqualified opinion that resales may then be made by such holders of
the Underlying Shares pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such holders.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Exchange
Shares” shall mean the shares of Common Stock exchanged hereunder for Rights to Shares as set forth in the Right to
Share Agreement.

 

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“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options or other equity incentive compensation to eligible
persons pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board
of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered
to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this
Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such
securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection
with stock splits or combinations) or to extend the term of such securities and (c) securities issued pursuant to acquisitions
or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance
shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company
or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional
benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

 

“Existing
Note” means the 5.0% Secured Note held by Alpha Capital Anstalt and issued by Stemcells, Inc. on August 15, 2016, with
a principal amount equal to $2,000,000.

 

“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).

 

“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

 

“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.17.

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

 

“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).

 

“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.10.

 

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“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

 

“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon conversion in full of all Debentures
and Rights to Shares (including Underlying Shares issuable as payment of interest on the Debentures), ignoring any conversion
or exercise limits set forth therein, and assuming that the Conversion Price is at all times on and after the date of determination
75% of the then Conversion Price on the Trading Day immediately prior to the date of determination.

 

“Rights
to Shares” shall mean those certain rights to receive shares of Common Stock issuable pursuant to the Right to Shares
Agreement.

 

“Right
to Shares Agreement” shall mean the Right To Shares Agreement entered into between the Company and the Purchasers signatory
hereto pursuant to which the Right to Shares are issued, in the form of Exhibit B attached hereto.

 

“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Securities”
means the Debentures, Rights to Shares and the Underlying Shares.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

 

“Subscription
Amount” means, as to each Purchaser, the principal and accrued but unpaid interest on the Existing Note as of the Closing
Date.

 

“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the date hereof.

 

“Trading
Day” means a day on which the principal Trading Market is open for trading.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).

 

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“Transaction
Documents” means this Agreement, the Debentures, the Rights to Shares Agreement all exhibits and schedules thereto and
hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer
Agent” means the current transfer agent of the Company and any successor transfer agent of the Company and any successor
transfer agent of the Company.

 

“Underlying
Shares” means the shares of Common Stock issued and issuable pursuant to the terms of the Debenture and/or issued and
issuable pursuant to the Rights to Shares, without respect to any limitation or restriction on the conversion of the Debentures
or the Rights to Shares Agreement.

 

“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13(b).

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common
Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d)
in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.

 

ARTICLE
II.

 

PURCHASE
AND SALE

 

2.1
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with
the execution and delivery of this Agreement by the parties hereto, the Company agrees to exchange with the Purchasers, severally
and not jointly, principal and accrued but unpaid interest in the Existing Note and/or Exchange Shares for Debentures and/or Rights
to Shares. Each Purchaser shall deliver to the Company the Existing Note and Exchange Shares, as applicable, and the Company shall
deliver to each Purchaser its respective Debenture and Rights to Shares, as applicable. Upon satisfaction of the covenants and
conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of EGS or such other location as the parties
shall mutually agree. Upon surrender and delivery of the Existing Note and the rights, covenants, agreements and obligations of
the parties thereunder or contemplated thereby will terminate and be of no further force and effect, and all of the obligations
of the Company under the Existing Note are hereby released, extinguished and terminated.

 

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2.2
Deliveries.

 

(a)
On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:

 

(i)
this Agreement duly executed by the Company;

 

(ii)
a certificate evidencing the formation and good standing of the Company and each of its material Subsidiaries, if any;

 

(iii)
a certificate evidencing the Company’s and each material Subsidiary’s qualification as a foreign corporation and good
standing;

 

(iv)
a certificate, in the form acceptable to such Purchaser, executed by the Secretary of the Company and each material Subsidiary
and dated as of the Closing Date, as to the resolutions of the Board of Directors authorizing the transactions contemplated under
this Agreement;

 

(v)
a duly executed and delivered Right to Share Agreement evidencing such Purchasers Right to Shares in an amount equal to the number
of Exchange Shares set forth on such Purchaser’s signature page hereto; and

 

(vi)
a Debenture with a principal amount equal to such Purchaser’s Subscription Amount, registered in the name of such Purchaser.

 

(b)
On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company, as applicable, the following:

 

(i)
this Agreement duly executed by such Purchaser; and

 

(ii)
if applicable, surrender of Existing Note;

 

(iii)
if applicable, the Exchange Shares; and

 

(iv)
a release of security interest duly executed by the Purchaser in the form attached hereto as Exhibit C.

 

2.3
Closing Conditions.

 

(a)
The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)
the accuracy in all material respects on (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) the Closing Date of the representations and warranties of the Purchasers contained herein (unless
as of a specific date therein in which case they shall be accurate as of such date);

 

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(ii)
all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have
been performed;

 

(iii)
the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement; and

 

(iv)
The filing of a UCC-3 Termination Statement with respect to the full release of the security interest under the Existing Note.

 

(b)
The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions
being met:

 

(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein in which case they shall be accurate as of such date);

 

(ii)
all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been
performed; and

 

(iii)
the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement.

 

ARTICLE
III.

 

REPRESENTATIONS
AND WARRANTIES

 

3.1
Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to
each Purchaser:

 

(a)
Subsidiaries. The Company owns, directly or indirectly, all of the capital stock or other equity interests of the Subsidiary
free and clear of any Liens (assuming the release of the Liens with respect to the Existing Note), and all of the issued and outstanding
shares of capital stock of the Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities.

 

(b)
Organization and Qualification. The Company and the Subsidiary is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor the Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiary is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and to the Company’s knowledge no Proceeding
has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power
and authority or qualification.

 

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(c)
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders
in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.

 

(d)
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents
to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby
and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon
any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which
any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court
or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii)
and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

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(e)
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority
or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.6 of this Agreement, (ii) the notice and/or application(s) to each applicable
Trading Market for the issuance and sale of the Securities and the listing of the Underlying Shares for trading thereon in the
time and manner required thereby and (iii) the filing of Form D with the Commission and such filings as are required to be made
under applicable state securities laws (collectively, the “Required Approvals”).

 

(f)
Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company other than restrictions on transfer provided for in the Transaction Documents. The Underlying Shares, when issued in accordance
with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved
from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least equal
to the Required Minimum on the date hereof.

 

(g)
Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers
as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the
Trading Market.

 

(h)
Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the
Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby
and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities.
The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company
and its representatives.

 

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3.2
Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents
and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein,
in which case they shall be accurate as of such date):

 

(a)
Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership,
limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction
Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized
by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser.
Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser
in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against
it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b)
Own Account. Such Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account
and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act
or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons
to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities
law. Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.

 

(c)
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on
each date on which it converts any Debentures or exercises its right to Rights to Shares it will be either: (i) an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities Act.

 

(d)
Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

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(e)
General Solicitation. Such Purchaser is not, to such Purchaser’s knowledge, purchasing the Securities as a result
of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

(f)
Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents
(including all exhibits and schedules thereto) and has been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering
of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its
financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate
its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.

 

(g)
Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser
has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that
such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting
forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives,
including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates,
such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including
the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein
shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability
of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.

 

(h)
The Purchaser is the legal and beneficial owner of the Existing Note, free and clear of any Liens whatsoever, and the Existing
Note has not been assigned, transferred or otherwise hypothecated.

 

 

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The
Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such
Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations
and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection
with this Agreement or the consummation of the transactions contemplated hereby.

 

ARTICLE
IV.

 

OTHER
AGREEMENTS OF THE PARTIES

 

4.1
Transfer Restrictions.

 

(a)
The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of
Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser
or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance
of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration
of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing
to be bound by the terms of this Agreement.

 

(b)
The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the
following form:

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND
THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

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The
Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such
Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be
subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required
in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the
Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request
in connection with a pledge or transfer of the Securities.

 

(c)
Certificates evidencing the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof):
(i) while a registration statement covering the resale of such security is effective under the Securities Act, (ii) following
any sale of such Underlying Shares pursuant to Rule 144, (iii) if such Underlying Shares are eligible for sale under Rule 144,
without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to
such Underlying Shares and without volume or manner-of-sale restrictions or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission).
The Company shall cause its counsel to issue a legal opinion to the Transfer Agent if required by the Transfer Agent to effect
the removal of the legend hereunder. If all or any portion of a Debenture is converted, or Rights to Shares is exercised, at a
time when there is an effective registration statement to cover the resale of the Underlying Shares, or if such Underlying Shares
may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public information required
under Rule 144 as to such Underlying Shares and without volume or manner-of-sale restrictions or if such legend is not otherwise
required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by
the staff of the Commission) then such Underlying Shares shall be issued free of all legends. The Company agrees that following
the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than the
earlier of (i) three (3) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined
below) following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Underlying Shares,
as applicable, issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver
or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other
legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions
on transfer set forth in this Section 4. Certificates for Underlying Shares subject to legend removal hereunder shall be transmitted
by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust
Company System as directed by such Purchaser. As used herein, “Standard Settlement Period” means the standard
settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common
Stock as in effect on the date of delivery of a certificate representing Underlying Shares, as applicable, issued with a restrictive
legend.

 

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(d)
In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as partial
liquidated damages and not as a penalty, for each $1,000 of Underlying Shares (based on the average VWAP of the Common Stock for
the twenty (20) trading days immediately prior to the date such Securities are submitted to the Transfer Agent) delivered for
removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5)
Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal Date until such certificate
is delivered without a legend and (ii) if the Company fails to (a) issue and deliver (or cause to be delivered) to a Purchaser
by the Legend Removal Date a certificate representing the Securities so delivered to the Company by such Purchaser that is free
from all restrictive and other legends and (b) if after the Legend Removal Date such Purchaser purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of all or any portion of the number
of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares
of Common Stock that such Purchaser anticipated receiving from the Company without any restrictive legend, then, an amount equal
to the excess of such Purchaser’s total purchase price (including brokerage commissions and other out-of-pocket expenses,
if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any)
(the “Buy-In Price”) over the product of (A) such number of Underlying Shares that the Company was required
to deliver to such Purchaser by the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Stock on
any Trading Day during the period commencing on the date of the delivery by such Purchaser to the Company of the applicable Underlying
Shares (as the case may be) and ending on the date of such delivery and payment under this clause (ii).

 

4.2
Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the
outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges
that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares
pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay
or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless
of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

 

4.3
Furnishing of Information; Public Information.

 

(a)
Until the earliest of the time that no Purchaser owns Securities, the Company covenants to maintain the registration of the Common
Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within
the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act
even if the Company is not then subject to the reporting requirements of the Exchange Act.

 

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(b)
At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all
of the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without
restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144 (i)(1)(i) or becomes an issuer in the future,
and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”)
then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial
liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an
amount in cash equal to two percent (2.0%) of the aggregate Subscription Amount of such Purchaser’s Securities on the day
of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling less than thirty
days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public
information is no longer required for the Purchasers to transfer the Underlying Shares pursuant to Rule 144. The payments to which
a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public Information Failure Payments.”
Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public
Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the event or failure giving rise
to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments
in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial
months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Public Information
Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief.

 

4.4
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in
a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated
with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require
shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing
of such subsequent transaction.

 

4.5
Conversion and Exercise Procedures. Each of the form of Notice of Conversion included in the Debentures or Notice of Exercise
set forth in the Right to Shares Agreement set forth the totality of the procedures required of the Purchasers in order to convert
the Debentures or exercise the Rights to Shares. Without limiting the preceding sentences, no ink-original Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion
form be required in order to convert the Debentures or exercise the Rights to Shares. No additional legal opinion, other information
or instructions shall be required of the Purchasers to convert their Debentures or exercise their Rights to Shares. The Company
shall honor conversions of the Debentures and exercise of Rights to Shares and shall deliver Underlying Shares in accordance with
the terms, conditions and time periods set forth in the Transaction Documents.

 

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4.6
Securities Laws Disclosure; Publicity. The Company shall file a Current Report on Form 8-K, including the Transaction Documents
as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the Effective Date, the
Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any
of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents
in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon such public disclosure,
the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written
or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates
on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company and each
Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby,
and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without
the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser,
with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such
disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of
such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any
Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market,
without the prior written consent of such Purchaser, except: (a) as required by federal securities law in connection with the
filing or disclosure of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law
or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted
under this clause (b).

 

4.7
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other
Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter
adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue
of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.

 

4.8
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the
Transaction Documents, which shall be disclosed pursuant to Section 4.6, the Company covenants and agrees that neither it, nor
any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes,
or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have
consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
Except as may be governed by any existing confidentiality agreements with the Purchaser, to the extent that the Company delivers
any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees
that such purchaser shall not have any duty of confidentiality to Company, the Subsidiary, or any of their respective officers,
directors, agents, employees or Affiliates, or a duty to the Company, and of its Subsidiaries or any of their respective officers,
directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that
the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document
constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously
file such notice with the Commission pursuant to a Current Report on Form 8-K. The Company understands and confirms that each
Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

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4.9
Tacking of the Debentures. The Company covenants that it will accept an opinion of Purchaser’s legal counsel that
the holding period of the Debentures tack back to August 15, 2016, the holding period of the Existing Note, for Rule 144 purposes.
The Company agrees not to take a position contrary to this paragraph.

 

4.10
Indemnification of Purchasers. Subject to the provisions of this Section 4.10, the Company will indemnify and hold each
Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls
such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser
Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation
that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action
instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of
the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction
Documents (unless such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants
under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or
any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes
fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect
of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the
Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after
a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion
of counsel, a material conflict on any material issue between
the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable
fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this
Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall
not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability
is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made
by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section
4.10 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills
are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar
right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

 

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4.11
Reservation and Listing of Securities.

 

(a)
The Company shall maintain a reserve of the Required Minimum from its duly authorized shares of Common Stock for issuance pursuant
to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.

 

(b)
If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate
or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required
Minimum at such time, as soon as possible and in any event not later than the 75th day after such date.

 

(c)
The Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such
Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required
Minimum on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for
listing or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing
or quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum
on such date on such Trading Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock
for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation,
by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such
electronic transfer.

 

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4.12
[RESERVED]

 

4.13
Subsequent Equity Sales.

 

(a)
From the date hereof until such time as no Purchaser holds any of the Debentures, the Company shall be prohibited from effecting
or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock
Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction”
means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable
or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise
price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares
of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or
exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or
upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market
for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity
line of credit, whereby the Company may issue securities at a future determined price; provided, however, this Section
4.13(a) shall not prohibit the Company from entering into an at-the-market equity financing facility with a registered broker-dealer.
Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall
be in addition to any right to collect damages.

 

(b)
Notwithstanding the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance, except that no Variable Rate
Transaction shall be an Exempt Issuance.

 

4.14
Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered
or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the
same consideration is also offered to all of the parties to such Transaction Documents. Further, the Company shall not make any
payment of principal or interest on the Debentures in amounts which are disproportionate to the respective principal amounts outstanding
on the Debentures at any applicable time. For clarification purposes, this provision constitutes a separate right granted to each
Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers
as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

 

4.15
Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or
sales, including Short Sales, of any of the Company’s securities during the period commencing with the execution of this
Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced as described
in Section 4.6. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section
4.6, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included
in the Transaction Documents.

 

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Notwithstanding
the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and
agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions
in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.6, (ii) no Purchaser shall be restricted or prohibited from effecting
any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the
transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in
Section 4.6 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company
to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.6. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only
apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the
Securities covered by this Agreement.

 

4.16
Form D; Blue Sky Filings. In the event the Company relies upon Regulation D to issue the Debentures and Rights to Shares,
the Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy
thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine
is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions
promptly upon request of any Purchaser.

 

ARTICLE
V.

 

MISCELLANEOUS

 

5.1
Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only
and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other
parties, if the Closing has not been consummated on or before November 29, 2016; provided, however, that such termination
will not affect the right of any party to sue for any breach by any other party (or parties).

 

5.2
Fees and Expenses. At the Closing, the Company has agreed to reimburse Alpha Capital Anstalt (“Alpha”)
the aggregate non-accountable sum of $25,000 for its legal fees and expenses with respect to the transactions contemplated in
this Agreement as well as any other transactions as between the Company and Alpha through December 31, 2016. Accordingly, in lieu
of the foregoing payments, the aggregate amount that Alpha is to pay for the Securities at the Closing shall be reduced by $25,000
in lieu thereof. The Company shall deliver to each Purchaser, prior to the Closing, a completed and executed copy of the Closing
Statement, attached hereto as Annex A. Except as expressly set forth in the Transaction Documents 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 (including, without limitation, any fees required for same-day processing of any instruction
letter delivered by the Company and any conversion or exercise notice delivered by a Purchaser), stamp taxes and other taxes and
duties levied in connection with the delivery of any Securities to the Purchasers.

 

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5.3
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral
or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

5.4
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall
be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto at
or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages
attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
(2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or
(d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications
shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction
Document constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company
shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.

 

5.5
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written
instrument signed, in the case of an amendment, by the Company and Purchasers holding at least 67% in interest of the Debentures
then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided
that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the
consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future
or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay
or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment
or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the
comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser,
Any amendment effected in accordance with accordance with this Section 5.5 shall be binding upon each Purchaser and holder of
Securities and the Company.

 

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5.6
Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed
to limit or affect any of the provisions hereof.

 

5.7
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written
consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any
Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”

 

5.8
No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as
otherwise set forth in Section 4.10.

 

5.9
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard
to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including
with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action
or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such action or Proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under 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. If any party hereto shall
commence an action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations
of the Company under Section 4.10, the prevailing party in such action or Proceeding shall be reimbursed by the non-prevailing
party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such action or Proceeding.

 

5.10
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.

 

    	22

    	 

    

 

5.11
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other
party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

 

5.12
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any
of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

5.13
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar
provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under
a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however,
that in the case of a rescission of a conversion of a Debenture, the applicable Purchaser shall be required to return any shares
of Common Stock subject to any such rescinded conversion.

 

5.14
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances
shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement
Securities.

 

5.15
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of
damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The
parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any
such obligation the defense that a remedy at law would be adequate.

 

    	23

    	 

    

 

5.16
Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction
Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other
Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

5.17
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 action or Proceeding that may be brought by any Purchaser in order to
enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction
Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents 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 Transaction Documents exceed
such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction
Documents 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 Transaction Documents from the effective date
thereof 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 any Purchaser with respect to indebtedness evidenced by the Transaction Documents,
such excess shall be applied by such 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 such Purchaser’s election.

 

5.18
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction
Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way
for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained
herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed
to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated
by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary
for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented
by its own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience
only, each

 

    	24

    	 

    

 

Purchaser
and its respective counsel have chosen to communicate with the Company through EGS. EGS does not represent any of the Purchasers
and only represents Alpha. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for
the convenience of the Company and not because it was required or requested to do so by any of the Purchasers.

 

5.19
Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under
the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated
damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial
liquidated damages or other amounts are due and payable shall have been canceled.

 

5.20
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next
succeeding Business Day.

 

5.21
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity
to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be
subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.

 

5.22
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER
PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

(Signature
Pages Follow)

 

    	25

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Securities Exchange Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

 

 

	MICROBOT
    MEDICAL INC.  	 	 
	 	 	 	 	Address
    for Notice:
	By:	 	/s/
    Harel Gadot	 	Fax:
	 	Name:	Harel
    Gadot	 	 
	 	Title:	Chairman
    and CEO	 	 
	With
    a copy to (which shall not constitute notice):        
	 	 	 	 	 
	Ruskin
    Moscou Faltischek, P.C.	 
	1425
    RXR Plaza	 
	East
    Tower, 15th Floor	 
	Uniondale,
    NY 11556	 
	Attention:
    Stephen E. Fox, Esq.	 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

 

SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

 

 

[PURCHASER
SIGNATURE PAGES TO STEM SECURITIES EXCHANGE AGREEMENT]

 

    	26

    	 

    

 

IN
WITNESS WHEREOF, the undersigned have caused this Securities Exchange Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

 

	Name
    of Purchaser:	 	 

 

	Signature
    of Authorized Signatory of Purchaser:	 	/s/
                                         Konrad Ackermann

 

	Name
    of Authorized Signatory:	 	Konrad
                                         Ackermann

 

	Title
    of Authorized Signatory:	 	Director

 

	Email
    Address of Authorized Signatory:	 	info@alphacapital.li

 

	Facsimile
    Number of Authorized Signatory:	 	 

 

Address
for Notice to Purchaser:

 

Address
for Delivery of Securities to Purchaser (if not same as address for notice):

 

Subscription
Amount: Principal amount and interest surrendered: $2,028,767

 

Exchange
Shares:

 

[SIGNATURE
PAGES CONTINUE]

 

    	27

    	 

    

 

Exhibit
A

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND
THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

 

Original
Issue Date: November 28, 2016

 

Original
Conversion Price (subject to adjustment herein): $0.64

 

$2,028,767

 

6%
CONVERTIBLE DEBENTURE

 

DUE
NOVEMBER 28, 2019

 

THIS
6% CONVERTIBLE DEBENTURE is one or more of a series of duly authorized and validly issued 6% Convertible Debentures of Microbot
Medical Inc. (formerly known as Stemcells, Inc.), a Delaware corporation (the “Company”), having its principal
place of business at 5 Hamada Street, Yokneam 2069204 Israel, designated as its 6% Convertible Debenture due November 28, 2019
(this debenture, the “Debenture” and, collectively with the other debentures of such series, the “Debentures”).

 

FOR
VALUE RECEIVED, the Company promises to pay to Alpha Capital Anstalt or its registered assigns (the “Holder”),
or shall have paid pursuant to the terms hereunder, the principal sum of $2,028,767 on November 28, 2019 (the “Maturity
Date”) or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder, and to pay
interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture in accordance with
the provisions hereof. This Debenture is subject to the following additional provisions:

 

Section
1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Debenture, (a) capitalized
terms not otherwise defined herein shall have the meanings set forth in the Exchange Agreement and (b) the following terms shall
have the following meanings:

 

“Alternate
Consideration” shall have the meaning set forth in Section 5(e).

 

    	28

    	 

    

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in
Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof
any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary
thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered,
(d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant
Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof
calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts, (g) the Company
or any Significant Subsidiary thereof admits in writing that it is generally unable to pay its debts as they become due, (h) the
Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or
acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

 

“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.

 

“Buy-In”
shall have the meaning set forth in Section 4(c)(v).

 

“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act)
of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise)
of in excess of 33% of the voting securities of the Company (other than by means of conversion or exercise of the Debentures and
the Securities issued together with the Debentures), (b) the Company merges into or consolidates with any other Person, or any
Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company
immediately prior to such transaction own less than 66% of the aggregate voting power of the Company or the successor entity of
such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders
of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately
after the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the
Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original
Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board
of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the
execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events
set forth in clauses (a) through (d) above.

 

    	29

    	 

    

 

“Conversion”
shall have the meaning ascribed to such term in Section 4.

 

“Conversion
Date” shall have the meaning set forth in Section 4(a).

 

“Conversion
Price” shall have the meaning set forth in Section 4(b).

 

“Conversion
Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.

 

“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Debenture in accordance with
the terms hereof.

 

“Debenture
Register” shall have the meaning set forth in Section 2(c).

 

“Event
of Default” shall have the meaning set forth in Section 8(a).

 

“Equity
Conditions” means, during the period in question, (a) the Company shall have duly honored all conversions and redemptions
scheduled to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (b) the Company shall have
paid all liquidated damages and other amounts owing to the Holder in respect of this Debenture, (c)(i) there is an effective Registration
statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the shares of Common
Stock issuable pursuant to the Transaction Documents (and the Company believes, in good faith, that such effectiveness will continue
uninterrupted for the foreseeable future) or (ii) all of the Conversion Shares issuable pursuant to the Transaction Documents
(and shares issuable in lieu of cash payments of interest) may be resold pursuant to Rule 144 without volume or manner-of-sale
restrictions or current public information requirements as determined by the counsel to the Company as set forth in a written
opinion letter to such effect, addressed and acceptable to the Transfer Agent and the Holder, (d) the Common Stock is trading
on a Trading Market and all of the shares issuable pursuant to the Transaction Documents are listed or quoted for trading on such
Trading Market (and the Company believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted
for the foreseeable future), (e) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common
Stock for the issuance of all of the shares then issuable pursuant to the Transaction Documents,

 

    	30

    	 

    

 

(f)
there is no existing Event of Default and no existing event which, with the passage of time or the giving of notice, would constitute
an Event of Default, (g) the shares issuable upon conversion in full of the Optional Redemption Amount) to the Holder would not
violate the limitations set forth in Section 4(d) and Section 4(e) herein, (h) there has been no public announcement of a pending
or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated, (i) the applicable Holder
is not in possession of any information provided by the Company, any of its Subsidiaries, or any of their officers, directors,
employees, agents or Affiliates, that constitutes, or may constitute, material non-public information and (j) for each Trading
Day in a period of 30 consecutive Trading Days prior to the applicable date in question, the daily trading volume for the Common
Stock on the principal Trading Market exceeds $250,000 per Trading Day.

 

“Exchange
Agreement” means the Securities Exchange Agreement, dated as of November 28, 2016 among the Company and the original
Holders, as amended, modified or supplemented from time to time in accordance with its terms.

 

“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).

 

“Issuable
Maximum” shall have the meaning set forth in Section 4(e).

 

“Late
Fees” shall have the meaning set forth in Section 2(d).

 

“Mandatory
Default Amount” means the sum of (a) the greater of (i) the outstanding principal amount of this Debenture, plus all
accrued and unpaid interest hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either (A) demanded
(if demand or notice is required to create an Event of Default) or otherwise due or (B) paid in full, whichever has a lower Conversion
Price, multiplied by the VWAP on the date the Mandatory Default Amount is either (x) demanded or otherwise due or (y) paid in
full, whichever has a higher VWAP, or (ii) 130% of the outstanding principal amount of this Debenture, plus 100% of accrued and
unpaid interest hereon, and (b) all other amounts, costs, expenses and liquidated damages due in respect of this Debenture.

 

“New
York Courts” shall have the meaning set forth in Section 9(d).

 

“Notice
of Conversion” shall have the meaning set forth in Section 4(a).

 

“Optional
Redemption” shall have the meaning set forth in Section 6(a).

 

“Optional
Redemption Amount” means the sum of (a) 120% of the then outstanding principal amount of the Debenture, (b) accrued
but unpaid interest and (c) all liquidated damages and other amounts due in respect of the Debenture.

 

“Optional
Redemption Date” shall have the meaning set forth in Section 6(a).

 

    	31

    	 

    

 

“Optional
Redemption Notice” shall have the meaning set forth in Section 6(a).

 

“Optional
Redemption Notice Date” shall have the meaning set forth in Section 6(a).

 

“Optional
Redemption Period” shall have the meaning set forth in Section 6(a).

 

“Original
Issue Date” means the date of the first issuance of the Debentures, regardless of any transfers of any Debenture and
regardless of the number of instruments which may be issued to evidence such Debentures.

 

“Permitted
Indebtedness” means (a) the indebtedness evidenced by the Debentures, (b) the indebtedness existing on the Original
Issue Date or described in the Company’s filings with the Securities and Exchange Commission, (c) lease obligations and
purchase money indebtedness of up to $250,000, in the aggregate, incurred in connection with the acquisition of capital assets
and lease obligations with respect to newly acquired or leased assets and (d) indebtedness that (i) is expressly subordinate to
the Debentures pursuant to a written subordination agreement with the Purchasers that is acceptable to each Purchaser in its sole
and absolute discretion and (ii) matures at a date later than the 91st day following the Maturity Date.

 

“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company)
have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s
business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business
of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien,
(c) Liens incurred in connection with Permitted Indebtedness under clauses (a), (b) and (d)/(e) thereunder, and (d) Liens incurred
in connection with Permitted Indebtedness under clause (c) thereunder, provided that such Liens are not secured by assets of the
Company or its Subsidiaries other than the assets so acquired or leased.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).

 

“Successor
Entity” shall have the meaning set forth in Section 5(e).

 

    	32

    	 

    

 

“Trading
Day” means a day on which the principal Trading Market is open for trading.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common
Stock are then reported in the “Pink Sheets” published by OTC Markets, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other
cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the
Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.

 

Section
2. Interest.

 

a)
Payment of Interest in Cash or Kind. The Company shall pay interest to the Holder on the aggregate unconverted and then
outstanding principal amount of this Debenture at the rate of 6% per annum, payable on each Conversion Date (as to that principal
amount then being converted) and on the Maturity Date (each such date, an “Interest Payment Date”) (if any
Interest Payment Date is not a Business Day, then the applicable payment shall be due on the next succeeding Business Day), in
cash.

 

b)
Interest Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day
periods, and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together
with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made.

 

c)
Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal
to the lesser of 18% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall
accrue daily from the date such interest is due hereunder through and including the date of actual payment in full.

 

    	33

    	 

    

 

d)
Prepayment. Except as otherwise set forth in this Debenture, the Company may not prepay any portion of the principal amount
of this Debenture without the prior written consent of the Holder. The Company may prepay in cash any accrued but unpaid interest
at any time without the prior written consent of the Holder.

 

Section
3. Registration of Transfers and Exchanges.

 

a)
Different Denominations. This Debenture is exchangeable for an equal aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration
of transfer or exchange.

 

b)
Investment Representations. This Debenture has been issued subject to certain investment representations of the original
Holder set forth in the Exchange Agreement and may be transferred or exchanged only in compliance with the Exchange Agreement
and applicable federal and state securities laws and regulations.

 

c)
Reliance on Debenture Register. Prior to due presentment for transfer to the Company of this Debenture, the Company and
any agent of the Company may treat the Person in whose name this Debenture is duly registered on the Debenture Register as the
owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture
is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

 

Section
4. Conversion.

 

a)
Voluntary Conversion. At any time after the one-year anniversary of the Original Issue Date until this Debenture is no
longer outstanding, this Debenture shall be convertible, in whole or in part, into shares of Common Stock at the option of the
Holder, at any time and from time to time (subject to the conversion limitations set forth in Section 4(d) and Section 4(e) hereof).
The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto
as Annex A (each, a “Notice of Conversion”), specifying therein the principal amount of this Debenture
to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”).
If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion
is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other
type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall
not be required to physically surrender this Debenture to the Company unless the entire principal amount of this Debenture, plus
all accrued and unpaid interest thereon, has been so converted in which case the Holder shall surrender this Debenture as promptly
as is reasonably practicable after such conversion without delaying the Company’s obligation to deliver the shares on the
Share Delivery Date. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture
in an amount equal

 

    	34

    	 

    

 

to
the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s) converted and the
date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery
of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative
in the absence of manifest error. The Holder, and any assignee by acceptance of this Debenture, acknowledge and agree that,
by reason of the provisions of this paragraph, following conversion of a portion of this Debenture, the unpaid and unconverted
principal amount of this Debenture may be less than the amount stated on the face hereof.

 

b)
Conversion Price. The conversion price in effect on any Conversion Date shall be equal to $0.64, subject to adjustment
herein (the “Conversion Price”).

 

c)
Mechanics of Conversion.

 

i.
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion
hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be
converted by (y) the Conversion Price.

 

ii.
Delivery of Conversion Shares Upon Conversion. Not later than the earlier of (i) three (3) Trading Days and (ii) the number
of Trading Days comprising the Standard Settlement Period (as defined below) after each Conversion Date (the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) the Conversion Shares which, on or after
the earlier of (i) the six month anniversary of the Original Issue Date or (ii) the Effective Date, shall be free of restrictive
legends and trading restrictions (other than those which may then be required by the Exchange Agreement) representing the number
of Conversion Shares being acquired upon the conversion of this Debenture and (B) a bank check in the amount of accrued and unpaid
interest. On or after the earlier of (i) the six month anniversary of the Original Issue Date or (ii) the Effective Date, the
Company shall deliver any Conversion Shares required to be delivered by the Company under this Section 4(c) electronically through
the Depository Trust Company or another established clearing corporation performing similar functions. As used herein, “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s
primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Conversion.

 

iii.
Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered
to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice
to the Company at any time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which event the
Companyshall promptly return to the Holder any original Debenture delivered to the Company and the Holder shall promptly return
to the Company the Conversion Shares issued to such Holder pursuant to the rescinded Conversion Notice.

 

    	35

    	 

    

 

iv.
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares
upon conversion of this Debenture in accordance with the terms hereof are absolute and unconditional, irrespective of any action
or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged
violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however,
that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In
the event the Holder of this Debenture shall elect to convert any or all of the outstanding principal amount hereof, the Company
may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged
in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining
and or enjoining conversion of all or part of this Debenture shall have been sought and obtained, and the Company posts a surety
bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Debenture, which is subject
to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute
and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction,
the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for
any reason to deliver to the Holder such Conversion Shares pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company
shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted,
$10 per Trading Day (increasing to $20 per Trading Day on the fifth (5th) Trading Day after such liquidated damages
begin to accrue) for each Trading Day after such Share Delivery Date until such Conversion Shares are delivered or Holder rescinds
such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant
to Section 8 hereof for the Company’s failure to deliver Conversion Shares within the period specified herein and the Holder
shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to
enforce damages pursuant to any other Section hereof or under applicable law.

 

    	36

    	 

    

 

v.
Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights
available to the Holder, if the Company fails for any reason to deliver to the Holder such Conversion Shares by the Share Delivery
Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase
(in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the
conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the
Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s
total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the
aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by
(2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage
commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Debenture in a principal amount equal to
the principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder
the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements
under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted conversion of this Debenture with respect to which the actual sale price of the Conversion
Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of
the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company
written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence
of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the
Company’s failure to timely deliver Conversion Shares upon conversion of this Debenture as required pursuant to the terms
hereof.

 

vi.
Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Debenture and
payment of interest on this Debenture, each as herein provided, free from preemptive rights or any other actual contingent purchase
rights of Persons other than the Holder (and the other holders of the Debentures), not less than such aggregate number of shares
of the Common Stock as shall (subject to the terms and conditions set forth in the Exchange Agreement) be issuable (taking into
account the adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Debenture
and payment of interest hereunder. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon
issue, be duly authorized, validly issued, fully paid and nonassessable.

 

    	37

    	 

    

 

vii.
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of
this Debenture. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the
Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Conversion Price or round up to the next whole share.

 

viii.
Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Debenture shall be made without charge
to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such
Conversion Shares, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holder of
this Debenture so converted and the Company shall not be required to issue or deliver such Conversion Shares unless or until the
Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day
processing of any Notice of Conversion and all fees to the Depository Trust Company (or another established clearing corporation
performing similar functions) required for same-day electronic delivery of the Conversion Shares.

 

d)
Holder’s Conversion Limitations. The Company shall not effect any conversion of this Debenture, and a Holder shall
not have the right to convert any portion of this Debenture, to the extent that after giving effect to the conversion set forth
on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”))
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include
the number of shares of Common Stock issuable upon conversion of this Debenture with respect to which such determination is being
made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted
principal amount of this Debenture beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise
or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion
or exercise analogous to the limitation contained herein (including, without limitation, any other Debentures or the Warrants)
beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 4(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(d) applies,
the determination of whether this Debenture is convertible (in relation to other securities owned by the Holder together with
any Affiliates and Attribution Parties) and of which principal amount of this Debenture is convertible shall be in the sole discretion
of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether
this Debenture may be converted (in relation to other securities owned by the Holder together with any Affiliates or Attribution
Parties) and which principal amount of this Debenture is convertible, in each case subject to the Beneficial Ownership Limitation.
To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice
of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall
have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status
as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 4(d), in determining the number of outstanding shares of Common Stock, the Holder may
rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company’s
most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by
the Company, or (iii) a more recent written notice by the Company or the Company’s transfer agent setting forth the number
of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the
Company, including this Debenture, by the Holder or its Affiliates since the date as of which such number of outstanding shares
of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares
of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion
of this Debenture held by the Holder. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 4(d), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the
number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon
conversion of this Debenture held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(d) shall
continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after
such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this paragraph (or
any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein
or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained
in this paragraph shall apply to a successor holder of this Debenture.

 

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e)
Issuance Limitations. Notwithstanding anything herein to the contrary, if the Company has not obtained Shareholder Approval,
then the Company may not issue, upon conversion of this Debenture, a number of shares of Common Stock which, when aggregated with
any shares of Common Stock issued on or after the Original Issue Date and prior to such Conversion Date in connection with the
conversion of any Debentures issued pursuant to the Exchange Agreement, would exceed 7,247,222 shares of Common Stock (subject
to adjustment for forward and reverse stock splits, recapitalizations and the like) (such number of shares, the “Issuable
Maximum”). Each Holder shall be entitled to a portion of the Issuable Maximum equal to the quotient obtained by dividing
(x) the original principal amount of the Holder’s Debenture by (y) the aggregate original principal amount of all Debentures
issued on the Original Issue Date to all Holders. In addition, each Holder may allocate its pro-rata portion of the Issuable Maximum
among Debentures held by it in its sole discretion. Such portion shall be adjusted upward ratably in the event a Holder no longer
holds any Debentures and the amount of shares issued to the Holder pursuant to the Holder’s Debentures was less than the
Holder’s pro-rata share of the Issuable Maximum.

 

Section
5. Certain Adjustments.

 

a)
Stock Dividends and Stock Splits. If the Company, at any time while this Debenture is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock
Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion
of, or payment of interest on, the Debentures), (ii) subdivides outstanding shares of Common Stock into a larger number of shares,
(iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares
or (iv) 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 shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
(excluding any treasury shares of the Company) 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.
The Holder acknowledges and agrees that the Conversion Price in Section 4(b) takes into account the reverse stock split of the
Company’s common stock on or immediately after the Original Issue Date.

 

    	39

    	 

    

 

b)
[Intentionally Omitted].

 

c)
[Intentionally Omitted.].

 

d)
[Intentionally Omitted.]

 

e)
Fundamental Transaction. If, at any time while this Debenture is outstanding, (i) the Company, directly or indirectly,
in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of
the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one
or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent
conversion of this Debenture, the Holder shall have the right to receive, for each Conversion Share that would have been issuable
upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in
Section 4(d) and Section 4(e) on the conversion of this Debenture), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Debenture
is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) and Section
4(e) on the conversion of this Debenture). For purposes of any such conversion, the determination of the Conversion Price shall
be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in
respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price
among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion
of this Debenture following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction
in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations
of the Company under this Debenture and the other Transaction Documents (as defined in the Exchange Agreement) in accordance with
the provisions of this Section 5(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder
and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the
holder of this Debenture, deliver to the Holder in exchange for this Debenture a security of the Successor Entity evidenced by
a written instrument substantially similar in form and substance to this Debenture which is convertible for a corresponding number
of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon conversion of this Debenture (without regard to any limitations on the conversion of this Debenture) prior
to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital
stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the
value of such shares of capital stock, such number of shares of capital stock and such conversion price being for the purpose
of protecting the economic value of this Debenture immediately prior to the consummation of such Fundamental Transaction), and
which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction,
the provisions of this Debenture and the other Transaction Documents referring to the “Company” shall refer instead
to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the
Company under this Debenture and the other Transaction Documents with the same effect as if such Successor Entity had been named
as the Company herein.

 

    	40

    	 

    

 

f)
Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued
and outstanding.

 

g)
Notice to the Holder.

 

i.
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5,
the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.

 

ii.
Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common

 

    	41

    	 

    

 

Stock,
(B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of
all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of this Debenture, and shall cause to be delivered to the Holder at its last address
as it shall appear upon the Debenture Register, at least twenty (20) calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record
to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect
the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled
to convert this Debenture during the 20-day period commencing on the date of such notice through the effective date of the event
triggering such notice except as may otherwise be expressly set forth herein.

 

Section
6. Redemption; Forced Conversion at Maturity.

 

a)
Optional Redemption at Election of Company. Subject to the provisions of this Section 6(a), at any time after the 12-month
anniversary of the Effective Date, the Company may deliver a notice to the Holder (an “Optional Redemption Notice”
and the date such notice is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable
election to redeem some or all of the then outstanding principal amount of this Debenture for cash in an amount equal to the Optional
Redemption Amount on the 30th Trading Day following the Optional Redemption Notice Date (such date, the “Optional
Redemption Date”, such 30 Trading Day period, the “Optional Redemption Period” and such redemption,
the “Optional Redemption”). The Optional Redemption Amount is payable in full on the Optional Redemption Date.
The Company may only effect an Optional Redemption if each of the Equity Conditions shall have been met (unless waived in writing
by the Holder) on each Trading Day during the period commencing on the Optional Redemption Notice Date through to the Optional
Redemption Date and through and including the date payment of the Optional Redemption Amount is actually made in full. If any
of the Equity Conditions shall cease to be satisfied at any time during the Optional Redemption Period, then the Holder may elect
to nullify the Optional Redemption Notice by notice to the Company within 3 Trading Days after the first day on which any such
Equity Condition has not been met (provided that if, by a provision of the Transaction Documents, the Company is obligated to
notify the Holder of the non-existence of an Equity Condition, such notice period shall be extended to the third Trading Day after
proper notice from the Company) in which case the Optional Redemption Notice shall be null and void, ab initio. The Company
covenants and agrees that it will honor all Notices of Conversion tendered from the time of delivery of the Optional Redemption
Notice through the date all amounts owing thereon are due and paid in full. The Company’s determination to pay an Optional
Redemption in cash shall be applied ratably to all of the holders of the then outstanding Debentures based on their (or their
predecessor’s) initial purchases of Debentures pursuant to the Exchange Agreement.

 

    	42

    	 

    

 

b)
Redemption Procedure. The payment of cash pursuant to an Optional Redemption shall be payable on the Optional Redemption
Date. If any portion of the payment pursuant to an Optional Redemption shall not be paid by the Company by the applicable due
date, interest shall accrue thereon at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by
applicable law until such amount is paid in full. Notwithstanding anything herein contained to the contrary, if any portion of
the Optional Redemption Amount remains unpaid after such date, the Holder may elect, by written notice to the Company given at
any time thereafter, to invalidate such Optional Redemption, ab initio, and, with respect to the Company’s failure
to honor the Optional Redemption, the Company shall have no further right to exercise such Optional Redemption. Notwithstanding
anything to the contrary in this Section 6, the Company’s determination to redeem in cash or its elections under Section
6(b) shall be applied ratably among the Holders of Debentures. The Holder may elect to convert the outstanding principal amount
of the Debenture pursuant to Section 4 prior to actual payment in cash for any redemption under this Section 6 by the delivery
of a Notice of Conversion to the Company.

 

c)
Forced Conversion. Notwithstanding anything herein to the contrary, on the Maturity Date, the Company may, upon 30 Trading
Days’ prior written notice to the Holder (a “Forced Conversion Notice” and the date such notice is delivered
to the Holder, the “Forced Conversion Notice Date”), cause the Holder to convert all or part of the then outstanding
principal amount of this Debenture plus, if so specified in the Forced Conversion Notice, accrued but unpaid interest, liquidated
damages and other amounts owing to the Holder under this Debenture, it being agreed that the “Conversion Date” for
purposes of Section 4 shall be deemed to occur on the Maturity Date. The Company may not deliver a Forced Conversion Notice, and
any Forced Conversion Notice delivered by the Company shall not be effective, unless all of the Equity Conditions are met (unless
waived in writing by the Holder) on each Trading Day occurring from the Forced Conversion Notice Date through the Maturity Date.
Any Forced Conversion shall be applied ratably to all Holders based on their initial purchases of Debentures pursuant to the Exchange
Agreement, provided that any voluntary conversions by a Holder shall be applied against the Holder’s pro rata allocation,
thereby decreasing the aggregate amount forcibly converted hereunder if only a portion of this Debenture is forcibly converted.
For purposes of clarification, a Forced Conversion shall be subject to all of the provisions of Section 4, including, without
limitation, the provision requiring payment of liquidated damages and limitations on conversions.

 

    	43

    	 

    

 

Section
7. Negative Covenants. As long as any portion of this Debenture remains outstanding, unless the holders of at least
67% in principal amount of the then outstanding Debentures shall have otherwise given prior written consent, the Company shall
not, and shall not permit any of the Subsidiaries to, directly or indirectly:

 

a)
other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed
money of any kind, including, but not limited to, a guarantee, 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;

 

b)
other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens 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;

 

c)
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;

 

d)
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common
Stock or Common Stock Equivalents other than as to (i) the Conversion Shares or Warrant Shares as permitted or required under
the Transaction Documents and (ii) repurchases of Common Stock or Common Stock Equivalents of departing officers and directors
of the Company, provided that such repurchases shall not exceed an aggregate of $100,000 for all officers and directors during
the term of this Debenture;

 

e)
repay, repurchase or offer to repay, repurchase or otherwise acquire any indebtedness for borrowed money, other than the Debentures
if on a pro-rata basis, other than regularly scheduled principal and interest payments as such terms are in effect as of the Original
Issue Date, provided that such payments shall not be permitted if, at such time, or after giving effect to such payment, any Event
of Default exist or occur;

 

    	44

    	 

    

 

f)
pay cash dividends or distributions on any equity securities of the Company;

 

g)
enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with
the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested
directors of the Company (even if less than a quorum otherwise required for board approval); or

 

h)
enter into any agreement with respect to any of the foregoing.

 

Section
8. Events of Default.

 

a)
“Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event
and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or
order of any court, or any order, rule or regulation of any administrative or governmental body):

 

i.
any default in the payment of (A) the principal amount of any Debenture or (B) interest, liquidated damages and other amounts
owing to a Holder on any Debenture, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity
Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B)
above, is not cured within 3 Trading Days;

 

ii.
the Company shall fail to observe or perform any other covenant or agreement contained in the Debentures (other than a breach
by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in
clause (ix) below) or in any Transaction Document, which failure is not cured, if possible to cure, within the earlier to occur
of (A) 5 Trading Days after notice of such failure sent by the Holder or by any other Holder to the Company and (B) 10 Trading
Days after the Company has become or should have become aware of such failure;

 

iii.
a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which
the Company or any Subsidiary is obligated (and not covered by clause (vi) below);

 

iv.
any representation or warranty made in this Debenture, any other Transaction Documents, any written statement pursuant hereto
or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be
untrue or incorrect in any material respect as of the date when made or deemed made;

 

    	45

    	 

    

 

v.
the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;

 

vi.
the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured
or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves
an obligation greater than $150,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such
indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

vii.
the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within five Trading Days;

 

viii.
the Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose
of all or in excess of 33% of its assets in one transaction or a series of related transactions (whether or not such sale would
constitute a Change of Control Transaction);

 

ix.
the Company shall fail for any reason to deliver Conversion Shares to a Holder prior to the fifth Trading Day after a Conversion
Date pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement,
of the Company’s intention to not honor requests for conversions of any Debentures in accordance with the terms hereof;

 

x.
any Person shall breach any agreement delivered to the initial Holders pursuant to Section 2.2 of the Exchange Agreement;

 

xi.
the electronic transfer by the Company of shares of Common Stock through the Depository Trust Company or another established clearing
corporation is no longer available or is subject to a “chill”; or

 

xii.
any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their
respective property or other assets for more than $150,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 45 calendar days;

 

    	46

    	 

    

 

b)
Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Debenture, plus
accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall
become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. Commencing 5 days
after the occurrence of any Event of Default that results in the eventual acceleration of this Debenture, the interest rate on
this Debenture shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable
law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Debenture to or as directed
by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives,
any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace
period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such
acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights
as a holder of the Debenture until such time, if any, as the Holder receives full payment pursuant to this Section 8(b). No such
rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

Section
9. Miscellaneous.

 

a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, by email attachment, or sent
by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other
facsimile number, email address, or address as the Company may specify for such purposes by notice to the Holder delivered in
accordance with this Section 9(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder
shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight
courier service addressed to each Holder at the facsimile number, email address or address of the Holder appearing on the books
of the Company, or if no such facsimile number or email attachment or address appears on the books of the Company, at the principal
place of business of such Holder, as set forth in the Exchange Agreement. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto
prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the
signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service
or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

    	47

    	 

    

 

b)
Absolute Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable,
on this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is a direct debt
obligation of the Company. This Debenture ranks pari passu with all other Debentures now or hereafter issued under the
terms set forth herein.

 

c)
Lost or Mutilated Debenture. If this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall execute
and deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution
for a lost, stolen or destroyed Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost, stolen
or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof,
reasonably satisfactory to the Company.

 

d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement
and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its
respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts
sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Debenture 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 applicable law. Each party hereto hereby irrevocably waives, to
the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating
to this Debenture or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any
provisions of this Debenture, then the prevailing party in such action or proceeding shall be reimbursed by the other party for
its attorneys fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

    	48

    	 

    

 

e)
Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Debenture shall not operate as or
be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture. The
failure of the Company or the Holder to insist upon strict adherence to any term of this Debenture on one or more occasions shall
not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other
term of this Debenture on any other occasion. Any waiver by the Company or the Holder must be in writing.

 

f)
Severability. If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall
remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable
to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates
the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the
maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal
of or interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Debenture, and the Company (to the extent it may lawfully do so) hereby expressly
waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though
no such law has been enacted.

 

g)
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Debenture
shall be cumulative and in addition to all other remedies available under this Debenture and any of the other Transaction Documents
at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit
the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of
this Debenture. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than
as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and
the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein,
be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition
to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity
of showing economic loss and without any bond or other security being required. The Company shall provide all information and
documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with
the terms and conditions of this Debenture.

 

    	49

    	 

    

 

h)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day.

 

i)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Debenture and shall
not be deemed to limit or affect any of the provisions hereof.

 

Section
10. Disclosure. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Debenture, unless
the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information
relating to the Company or its Subsidiaries, the Company shall within four (4) Business Days after such receipt or delivery publicly
disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes
that a notice contains material, non-public information relating to the Company or its Subsidiaries, the Company so shall indicate
to the 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, nonpublic information relating to the Company
or its Subsidiaries.

 

*********************

 

(Signature
Pages Follow)

 

    	50

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by a duly authorized officer as of the date first above
indicated.

 

 

	 	MICROBOT
    MEDICAL INC. (F/K/A STEMCELLS, INC.)
	 	 	 
	 	By:	/s/
    Harel Gadot 
	 	Name:	Harel
    Gadot
	 	Title:	Chairman
    and CEO
	 	 	 	 
	 	Facsimile
    No. for delivery of Notices:             

 

    	51

    	 

    

 

ANNEX
A

 

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal under the 6% Convertible Debenture due November 28, 2019 of Microbot Medical Inc.,
a Delaware 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 4 of this Debenture, 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.

	 	 
	Conversion
    calculations:	 
	 	 
	 	Date
    to Effect Conversion:
	 	 
	 	Principal
    Amount of Debenture to be Converted:
	 	 
	 	Payment
    of Interest:
	 	 
	 	Number
    of shares of Common Stock to be issued:
	 	 
	 	Signature:
	 	 
	 	Name:
	 	 
	 	Address
    for Delivery of Common Stock Certificates:
	 	 
	 	Or
	 	 
	 	DWAC
    Instructions:
	 	 
	 	Broker
    No:            
	 	Account
    No:           

 

    	52

    	 

    

 

Schedule
1

 

CONVERSION
SCHEDULE

 

The
6% Convertible Debentures due on November 28, 2019 in the aggregate principal amount of $2,028,767 are issued by Microbot Medical
Inc., a Delaware corporation. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Debenture.

 

Dated:

 

	Date
                                         of Conversion

         

        (or
        for first entry,

         

        Original
        Issue Date)
	 	Amount
                                         of

         

        Conversion
	 	Aggregate

         

        Principal

         

        Amount

         

        Remaining

         

        Subsequent
        to

         

        Conversion

         

        (or
        original

         

        Principal

         

        Amount)
	 	Company
    Attest
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

    	53

    	 

    

 

EXHIBIT
B

 

RIGHT
TO SHARES AGREEMENT

 

This
Right to Shares Letter Agreement, dated as of November __, 2016 (this “Agreement”) constitutes an agreement
between Microbot Medical Inc. (f/k/a Stemcells, Inc.)(the “Company”) and Alpha Capital Anstalt (the “Holder”).

 

WHEREAS,
the Company, C&RD Isreal Ltd., an Israeli corporation and wholly owned subsidiary of the Company and Microbot Medical Ltd.,
a company organized under the laws of the State of Israel (“Microbot Israel”), have entered into that certain
Agreement and Plan of Merger and Reorganization (the “Merger Agreement”);

 

WHEREAS,
prior to the consummation of the Merger Agreement, the Holder had acquired equity of Microbot Israel, which equity entitles the
Holder to receive 9,566,237 shares of common stock (“Common Stock”) of the Company upon the consummation of the Merger
Agreement (“Shares”);

 

WHEREAS,
pursuant to that certain Securities Exchange Agreement, in exchange of the Shares, the Company and the Holder have agreed to enter
into this Agreement whereby the Company will presently issue 0 Shares and subject to the terms and conditions set forth herein,
from time to time, the Company shall be obligated to issue and the Holder shall have the right to the issuance of up to 9,566,237
subject to adjustment hereunder (the “Reserved Shares” and such right of the Holder, the “Right”).

 

NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and intending to be legally bound, the parties hereto agree
as follows:

 

Section
1. Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings indicated
in this Section 1:

 

“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.

 

“Commission”
means the United States Securities and Exchange Commission.

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

    	54

    	 

    

 

“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing.

 

“Transfer
Agent” means the current transfer agent of the Company, and any successor transfer agent of the Company.

 

Section
2. Issuance, Delivery and Limitations.

 

Section
2.1 Issuance of Right. In exchange for the Shares, the Company hereby grants the Right to the Holder. The Company and the
Holder hereby agree that no additional consideration is payable in connection with the issuance of the Reserved Shares.

 

Section
2.2 Right of Issuance of Reserved Shares. Subject to the terms hereof, the exercise of the Right may be made, in whole
or in part, at any time or times on or after the date hereof by delivery to the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books
of the Company) of a duly executed facsimile copy of the Notice of Issuance Form annexed hereto as Exhibit A. Partial exercises
of the Right resulting in issuances of a portion of the total number of Reserved Shares available hereunder shall have the effect
of lowering the outstanding number of Reserved Shares purchasable hereunder in an amount equal to the applicable number of Reserved
Shares issued. The Holder and the Company shall maintain records showing the number of Reserved Shares issued and the date of
such issuances. The Company shall deliver any objection to any Notice of Issuance Form within one (1) Business Day of receipt
of such notice. The Holder acknowledges and agrees that, by reason of the provisions of this paragraph, following the issuance
of a portion of the Reserved Shares hereunder, the number of Reserved Shares available for issuance hereunder at any given time
may be less than the amount stated in Section 2.1 hereof.

 

Section
2.3 Delivery of Certificates. Certificates for the Reserved Shares issued hereunder shall be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s prime broker with The Depository Trust Company through its
Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and
either (A) there is an effective registration statement permitting the issuance of the Reserved Shares to or resale of the Reserved
Shares by the Holder or (B) the Reserved Shares are eligible for resale by the Holder without volume or manner-of-sale limitations
pursuant to Rule 144, and otherwise by physical delivery to the address specified by the Holder in the Notice of Issuance by the
date that is three (3) Trading Days after the delivery to the Company of the Notice of Issuance (such date, the “Share
Delivery Date”). The Reserved Shares shall be deemed to have been issued, and Holder or any other Person so designated
to be named therein shall be deemed to have become a holder of record of such Reserved Shares for all purposes, as of the date
the Right has been exercised.

 

Section
2.4 Charges, Taxes and Expenses. Issuance of certificates for Reserved Shares shall be made without charge to the Holder
for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and
expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder. The Company shall pay
all Transfer Agent fees required for same-day processing of any Notice of Issuance.

 

    	55

    	 

    

 

Section
2.5 Authorizations. Before taking any action which would result in an adjustment in the number of Reserved Shares for which
the Right provides, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.

 

Section
2.6 Holder’s Limitations. The Holder shall not have the right to exercise any portion of the Right, pursuant to Section
2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of
Issuance, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder
or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates shall include the number of shares of Common Stock issuable upon exercise of the Right with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining,
nonexercised portion of the Right beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of
the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common
Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates. The Company shall not be liable for any instruction received by the Holder. Except
as set forth in the preceding sentence, for purposes of this Section 2.6, beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder
that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act
and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation
contained in this Section 2.6 applies, the determination of whether the Right is exercisable (in relation to other securities
owned by the Holder together with any Affiliates) and of which portion of the Right is exercisable shall be in the sole discretion
of the Holder, and the submission of a Notice of Issuance shall be deemed to be the Holder’s determination of whether the
Right is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of
the Right is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above
shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2.6, in determining the number of outstanding shares of Common Stock, the Holder may rely on the
number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed
with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice
by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral
request of the Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including the Right, by the Holder or its Affiliates since
the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 4.99% (unless otherwise elected by the Holder on the signature page to the Purchase Agreement) of the number of shares
of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise
of the Right. The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial
Ownership Limitation provisions of this Section 2.6. Any such increase will not be effective until the 61st day after
such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2.6 to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary
or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor
assignee of this Agreement.

 

Section
2.7 Legal Opinion. The Company will provide an opinion of its counsel if required by the Company’s transfer agent
confirming the commencement date of the holding period of the Reserved Shares as determined pursuant to Rule 144 and will provide
at its own cost and expense such other opinions of its counsel and representations as may be required or necessary in the future
in connection with the issuance and resales of the Reserved Shares.

 

Section
2.8 Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely
exercise of the Right, pursuant to the terms hereof.

 

Section
2.9 Benefit of Contractual Rights. Subject to Section 2.12 of this Agreement, all contractual rights and benefits granted
to the holders of Common Stock under the Merger Agreement are hereby granted to the Holder with respect to the Reserved Shares
(ignoring for such purposes any restrictions on limitation hereunder).

 

Section
2.10 No Rights as Stockholder Until Exercise. With respect to the Reserved Shares, this Agreement does not entitle the
Holder to any voting rights, or other rights as a holder of Common Stock of the Company prior to the exercise of the right to
the extent possessing such rights would cause the Holder to exceed the Beneficial Ownership Limitation. It is the purpose of this
Agreement that Holder not be deemed the beneficial owner of Common Stock in excess of the Beneficial Ownership Limitation. To
the extent not available prior to the exercise of the Right, the Holder shall have all of the rights of a Purchaser of shares
of Common Stock under the Merger Agreement.

 

    	56

    	 

    

 

Section
3. Dilution Protection and Liquidated Damages.

 

Section
3.1 Stock Dividends and Splits. If the Company, at any time while the Right exists (other than the currently contemplated
reverse stock split): (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock
or any other equity or equity equivalent securities payable in shares of Common Stock, (ii) subdivides outstanding shares of Common
Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock
into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock
of the Company, then in each case the number of Reserved Shares issuable upon exercise of the Right shall be proportionately adjusted.
Any adjustment made pursuant to this Section 3.1 shall become effective immediately upon the record date for the determination
of stockholders entitled to receive such dividend or distribution (provided that if the declaration of such dividend or distribution
is rescinded or otherwise cancelled, then such adjustment shall be reversed upon notice to the Holder of the termination of such
proposed declaration or distribution as to any unexercised portion of the Right at the time of such rescission or cancellation)
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

Section
3.2 Compensation for Buy-In on Failure to Timely Deliver Certificates. In addition to any other rights available to the
Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing
the Reserved Shares pursuant to an exercise on or before the Share Delivery Date, and if after such date and prior to the delivery
of such certificate or certificates the Holder is required to purchase (in an open market transaction or otherwise) or the Holder’s
broker otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Reserved Shares which
the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to
the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Reserved Shares that
the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell
order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion
of the Right and equivalent number of Reserved Shares for which such exercise was not honored (in which case such exercise shall
be deemed rescinded, and the Holder shall promptly return to the Company the certificates issued to such Holder pursuant to the
rescinded Notice of Issuance) or deliver to the Holder the number of shares of Common Stock that would have been issued had the
Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock
having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with
an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence
the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely
deliver certificates representing shares of Common Stock upon exercise of the Right as required pursuant to the terms hereof.

 

    	57

    	 

    

 

Section
3.3 Subsequent Rights Offerings. If Section 3.1 above does not apply, if at any time the Company grants, issues or sells
any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder
had held the number of shares of Common Stock acquirable upon complete exercise of the Right (without regard to any limitations
on exercise hereof, including without limitation, the Beneficial Ownership Limitation) 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided,
however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent
(or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right
to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the
Holder exceeding the Beneficial Ownership Limitation).

 

Section
3.4 Notice to Allow Exercise of Right. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of Common Stock,
(C) the Company shall authorize the granting to all holders of Common Stock rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in
connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder
at least 10 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record
is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding
the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current
Report on Form 8-K. The Holder shall remain entitled to exercise the Right during the period commencing on the date of such notice
to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

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Section
3.5. Fundamental Transaction. If, at any time while this Agreement is outstanding, the Company, directly or indirectly,
in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of
the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property (other than a reclassification under Section 3(a)),
or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement
or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of
Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated
or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination)
(each a “Fundamental Transaction”), then, upon any subsequent exercise of the Rights, the Holder shall have
the right to receive, for each Reserved Share that would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction (without regard to any limitations set forth in this Agreement), the number of shares of common
stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number
of shares of Common Stock for which this Agreement is exercisable immediately prior to such Fundamental Transaction (without regard
to any limitations set forth in the Agreement).

 

Section
4. Miscellaneous.

 

Section
4.1 Loss, Theft, Destruction or Mutilation of this Agreement. The Company covenants that upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Agreement or any stock certificate
relating to the Reserved Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to
it (which, in the case of this Agreement, shall not include the posting of any bond), and upon surrender and cancellation of this
Agreement or stock certificate, if mutilated, the Company will make and deliver a new Agreement or stock certificate of like tenor
and dated as of such cancellation, in lieu of such Agreement or stock certificate.

 

    	59

    	 

    

 

Section
4.2 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on
the next succeeding Business Day.

 

Section
4.3 Authorized Shares.

 

(a)
The Company covenants that, during the period this Agreement is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the Reserved Shares upon the exercise of any issuance
rights under this Agreement. The Company further covenants that the execution and delivery of this Agreement shall constitute
full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary
Reserved Shares upon the exercise of the purchase rights under this Agreement. The Company will take all such reasonable action
as may be necessary to assure that such Reserved Shares may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that
all Reserved Shares which may be issued upon the exercise of the purchase rights represented by this Agreement will, upon exercise
of the purchase rights represented by this Agreement and payment for such Reserved Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

(b)
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Agreement, but will at all times in good faith assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Agreement against impairment.
Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Reserved Shares above
the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may
be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Reserved Shares
upon the exercise of this Agreement and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions
or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform
its obligations under this Agreement.

 

    	60

    	 

    

 

Section
4.4 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard
to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement
and defense of this Agreement shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan
(the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the
New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives,
and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement. If any party shall commence an action or proceeding to enforce any provisions of
this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’
fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

Section
4.5 Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of
Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding
the fact that all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with
any provision of this Agreement, which results in any material damages to the Holder, the Company shall pay to the Holder such
amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder.

 

Section
4.6 Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including,
without limitation, any Notice of Exercise, shall be in writing and delivered personally, by facsimile, or sent by a nationally
recognized overnight courier service, addressed to the Company, at the address set forth above Attention: _________________,
facsimile number _______________, email address _______________, or such other facsimile number, email address or address as the
Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be
provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized
overnight courier service addressed to each Holder at the facsimile number or address of such Holder appearing on the books of
the Company, or if no such facsimile number or address appears on the books of the Company. Any notice or other communication
or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth in this Section prior to 5:30 p.m. (New York City time)
on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time)
on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

    	61

    	 

    

 

Section
4.7 Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees
to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

Section
4.8 Successors and Assigns. Subject to applicable securities laws, this Agreement and the rights and obligations evidenced
hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors
and permitted assigns of Holder. The provisions of this Agreement are intended to be for the benefit of any Holder from time to
time of this Agreement and shall be enforceable by the Holder or holder of Reserved Shares.

 

Section
4.9 Amendments. This Agreement may be modified or amended or the provisions hereof waived with the written consent of the
Company and the Holder.

 

Section
4.10 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Agreement.

 

[SIGNATURE
PAGE FOLLOWS]

 

    	62

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Right to Shares Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

HOLDER

 

ALPHA
CAPITAL ANSTALT

 

	 	 
	By:
    	 
	Its:	 

 

COMPANY

 

MICROBOT
MEDICAL INC.

 

	 	/s/
    Harel Gadot	 
	By:	Harel
    Gadot	 
	Its:
    	Chairman
    and CEO	 

 

    	63

    	 

    

 

EXHIBIT
A

 

NOTICE
OF ISSUANCE

 

To:
_________________

 

(1)
The undersigned hereby elects in accordance with the terms and conditions of the Right to Shares Agreement, dated as of ___________,
2016 (the “Right to Shares Agreement”), to exercise its Right to the issuance of ________ Reserved Shares of
the Common Stock of ___________ (the “Company”) pursuant to the terms of the Right to Shares Agreement.

 

(2)
Please issue a certificate or certificates representing said Reserved Shares in the name of the undersigned registered holder
or in such other name as is specified below:

 

	 	 	 

 

(3)
The Reserved Shares shall be delivered by physical delivery of a certificate to:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

(4)
The Reserved Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

(5)
Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under
the Securities Act of 1933, as amended.

 

	 	 
	[SIGNATURE OF
    HOLDER]	

 

 

Name
of Registered Holder:

 

 

 

Signature
of Authorized Signatory of Registered Holder:

 

 

 

Name
of Authorized Signatory:______________________________________________________

Title
of Authorized Signatory:_______________________________________________________

Date:___________________________________________________________________________

 

    	64

    	 

    

 

EXHIBIT
CEXHIBIT 10.13

 

 

 

Dated 1st  November 2016

 

 

 

 

NABUFIT Global ApS

 

and

 

Mo Farah Inc.

 

1st  of November 2016 -  31st of October 2019 (3 years)

 

 

 

 

 

 

 

 

 

AMBASSADOR AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

THIS AGREEMENT is made on the 1si of November 2016

 

 

BETWEEN:

 

(1) NABUFIT Global (a company registered in Denmark, Vidensparken, Vesterballevej 5, 7000 Fredericia) ("NABUFIT"); and 

 

(2) Mo Farah Inc. ("MF") a company registered at 760.  SW glh Avenue. Suite  3000, Portland,  OR 97205, USA. Registration  no. 1050662-94. 

 

(together the · Parties ).

 

 

WHEREAS:

 

(A) Mo Farah ("Talent"} is recognised and widely known as an internationaldistancerunner 

 

(B) NABUFIT wishes to utilise the personal services of Talent in an ambassador role for the promotion of NABUFIT worldwide during the Term 

 

(C) NABUFIT wishes to acquire the right to use Talent's name, image and likeness worldwide 

 

(D) PACE Sports Management SARL is the agent (" Agent ") for Talent and Mo Farah Inc. 

 

IT IS HEREBY AGREED AS  FOLLOWS:

 

1. Term 

 

1.1 This Agreement shall come into force on the Commencement Date and, subject to the provisions of clause 1.2 and clause 7, shallcontinue for the Term. 

 

1.2 The Parties shall, not later than the 30m  of April 2019 discuss in good faith the possibility of extending the duration of this Agreement. Any such extension shall be on terms and conditions as mutually agreed between the Parties and only vaHd when documented, in writing, and signed by the Parties. 

 

2. Grant of Rights 

 

2.1 In accordance with the terms and conditions of this Agreement,  MF  grants to NABUFIT, for  the Term and for the Territory, a revocable and non transferable licence to use Talent's Image and the right to require Talent to make the Personal Appearances, as  specified,  only  in respect of the Purpose. 

 

2.2 MF shall not during the Term exploit Talent's Image or procure that Talent makes Personal Appearances in the Territory in connection with (whether for the promotion of or otherwise) a direct competitor of NABUFIT in the online fitness industry. except for Nike, or without the  prior written consent of NABUFIT {not to be unreasonably withheld or delayed). 

 

3. Personal  Appearances by MF 

 

3.1 MF shall procure that Talent shall be available for and shall make Personal Appearances for and/or on behalf of NABUFIT during the Term throughout the Territory as set out below. Talent shall be required to make Personal Appearances as per the schedule below and shall act in good faith and use an reasonable endeavours to comply with a request for a Personal Appearancewhere such request does not conflict with MF's and/or Talent's obligations under the Existing Endorsement Agreements and which fits in with Talent's training and competition schedule. MF and NABUF1T shall discuss in good faith any additional PersonalAppearances that NABUFIT may wish Talent to undertake or attend. 

2

 

 

Contract Year 1 -  1s  1 November 2016 -  31st October 2017 -  1 Personal Appearance

Contract Year 2 - 1a1November 2017 - 31s1October 2018- 2 Personal Appearances Contract Year 3 - 1s1November 2018 - 31i.: October 2019 - 2 Personal Appearances

 

3.2 A Personal Appearance shall mean: 

(a) Talent shall be available to NABUFIT for clinic I Store visit / hospitality visit / press conference / photo shoot/ video shoot for the NABUFIT platforms I PR during the Term for a continuous duration of no more than five [SJ hours in a day at a time and venue mutually  agreedbetween the Parties. 

Talent is to demonstrate exercises which rs to be recorded and used on all NABUFIT platforms

All other material produced is to be used for promoting the NABUFIT services,  apps,

online etc.

 

(b) Talent acts as an ambassador for NABUFIT during the Term. 

 

(c) Talent makes at least 24 NABUFIT related posts/yearon his different official social media platforms (Twitter. Facebook, lnstagrametc.). For the avoidance of doubt. the same or similar post posted on Facebook, Twitter and lnstagramshall count as three individual posts for these purposes. A minimum of one of the posts shall be on Facebook. 

 

3.3 If Talent is unavallable for a Personal Appearance due to a prior engagement which conflicts with that Personal Appearance, due to illness, injury or due to some other reason beyond his reasonable control, the Nominated Representative shall: (i) advise NABUFIT as soon as possible providing reasons for hi.s una vailability; and {ii) if requested by NABUFIT. co-operate with NABUFIT in good faith to identify an altemative date for Talent to fulfil that Personal Appearance within the appropriate Contract Yearor failing that the following Contract Year. 

 

3.4 MF procure that Talent shall carry out the Personal Appearances at all times in accordance with NABUFIT's reasonableinstructions and directions including with respect to the following: 

 

(a) activities to be undertaken at the Personal Appearances (such as posing for photographs, signing autographs and givinginterviews). 

 

3.5 In respect of any Personal Appearance to be made by Talent pursuant to this clause 3, NABUFIT agrees to pay or reimburse MF/Talent within seven (7) days for any reasonable travel,   accommodation,   food  and  beverage   expenses  incurred  by  Talent  and  one  (1) Accompanying Person, provided that (i) such expenses have been approved in advance by NABUFIT; and (ii) valid receipts and/or other documentary proof as reasonably required by NABUFIT are supplied. All travel to be Business Class and accommodation io be five star standard. 

 

3.6 MF shall procure that Talent shall: 

 

(a) observe the highest standards of behaviour generally; 

 

(b} promote  NABUFIT in a  favourable  manner  as reasonable  for  an Ambassador agreemen:t and 

 

(b) not commit any act or become involved in a situationwhich, in the reasonable opinion of and as reasonably demonstrated by NABUFIT: 

i. brings himself and/or NABUFIT into serious disrepute or shocks or offends the public in any way:  and 

ii. seriously devalues the rights granted to NABUFIT hereunder. 

 

3

 

 

 

 

3.7 Without prejudice to clause 4.1 below, MF agrees that all copyright and other intellectual property rights, including performance rights, created as a result of any Personal Appearances (including photographs, videos, and any other audio-visual and audio recordings of Personal Appearances) (the "New Rights'') shall, as between MF and NABUFIT, belong to NABUFIT. NABUFIT agrees to provide MF with a copy of each of the free content from the NABUFIT platforms relating to Talent created hereunder (in the best available format) and grants to MF a royalty free licence in perpetuity to use, reproduce, edit and exploit in any whatsoever (and sub-license} the Materials as it sees fit, for use, by way of example but without limitation, in programmes, films, and/or documentaries about or featuring Talent, or for displaying or streaming on Talent's official website and/or on Talent's social media. 

 

3.8 MF assigns absolutely to NABUFJT by way of past, present and future assignment all its title and interest in and to New Rights and in addition shall, upon the reasonable request of, and  at the expense of, NABUFIT. do all such other acts that are necessary to vest ownership of the New Rights in NABUFIT during the Term and shall procure that MF waives and undertakes not to assert any so-called "moral rights" to the same. This clause 3.8 shall continue in full force and effect following expiry or termination of this Agreement, however caused. 

 

3.9 MF hereby agrees that NABUFIT shall be entitled to use and exploit the New Rights during the Term at no further cost to NABUFIT. However, if any such use and/or exploitation involve using Talent's Image in a manner that, under applicable laws, requires the permission of MF then NABUFIT may only do so pursuant to clause 4 below. 

 

3.10 All activities required during the Personal Appearances under Clause 3 to be approved in advance by the Agent, which shall not be unreasonably withheld, delayed or  conditioned. 

 

3.11 As between the parties, MF is the sole licensee and controller of the Talent's Image and NAFUBIT shall not use Talent's Image save where expressly permitted to do so by this Agreement or otherwise in writing by MR or Agent. Furthermore, NAFUBIT shall use its reasonable endeavours to assist MF and Talent in protecting the Talent's lmage generally and shall not do or cause or permit anything to be done which may endanger the Talent's Image, or the title thereto of MF and/or Talent 

 

4. Talent's Image 

 

4.1 MF hereby grants to NABUFIT for the duration of the Term the revocable and non transferable right and licence to use Talent's Image in the Territory for the Purpose in the following ways: 

 

(a) on NABUFIT website and social medias; and 

{b) in sales material, brochures, in store material, PR, Press Ads and Print Ads.

 

4.2 If NABUFIT wishes at any time during the Term to create a logo, trademark, trademarks, or trade name in any part of the Territory incorporating Talent's Image or any part(s)  thereof ("the Marks"). NABUFIT shall first obtain the prior written consent of MF (to be granted or not at MF's absolute discretion and, if so granted, MF shall apply for registrations at NABUFIT's sole  cost  and  expense  and  in  MF's name,  any  and  all documents  which  are reasonably 

believed by NABUFIT to be necessary and/or desirable for the successful registration and protection of any such Marks,

 

4.3 Upon registration of the Marks, if requested by NABUFIT, MF agrees to grant NABUFIT an exclusive licence for use of the Marks during the Term throughout the Territory in connection with the Purpose. which licence shall be co-extensiveand coterminous with the rights granted pursuant to this Agreement. Such a licence shall not require any increase in the fees payable by NABUFIT to MF under this Agreement.  

4

 

NABUFIT acknowledges  and agrees that under this Agreement tt shall acquire no interest whatsoever in MF's intellectual property rights. MF also acknowledges and agrees that under this Agreement it shall acquire no interest whatsoever in NABUFIT's intellectual property rights.

 

4.4 NABUFIT recognise the value of Talent's Image and, in order to ensure that this is protected for the future benefit of MF, NABUFIT agree that any and all use of the Talent's Image under this Agreement shall only be with the prior written agreement of the Agent, which shall not be unreasonably withheld, delayed or conditioned. 

 

 

4.5 NAFUBIT shall provide Agent with advance copy/samples of all proposed promotional. Marketing and advertising materials. any story board (and following completion of any filming, any creative execution or edit thereof). proposals for any content for social media posts by email to r.simms@pacesportsmanagement.com prior to publication for their prior written approval which shall be exercised reasonably. 

 

 

5. Financial provisions 

 

5.1 MF shall receive one per cent (1%) of the gross income received from any and all subscribers and/or members to the NABUFIT platforms minus default costs ("Royalty"). Default costs meaning there ,s a 30% default cost to App Store . NABUFIT guarantees that MF shall receive a minimum Royalty of two hundred and fifty thousand dollars ($250,000) for the Term as follows: 

 

$ 50,000 for contract Year 1 

$ 100,000   for contract Year 2

$ 100,000   for contract Year 3

 

(Minimum Guarantee):

 

5.2 The Minimum Guarantee for Contract Year 1 shall be paid in four installments , 50% within 10 days of signature of this Agreement and the balance paid in three equal installments at the  end of Q2, Q3 and Q4 as defined in clause 5.3 below. The Minimum Guarantee for Contract Years 2 and 3 shall be payable by way of four equal quarterly installments in accordance with clause 5.3 below 

 

5.3 Unless otherwise provided, Royalties and/or Minimum Guarantees payable under this Agreement shall be paid within 10 days of the end of each quarter period as follows: 

Q1 -  1st November- 31'1 January

Q2 – 1st February - 30th April 

Q3 -  1st May- 31st July

Q4  -  1st August -  31st October

 

5.4 At the end of each quarter period NABUFIT shalt submit a Royalty statement to MF setting out the number of new subscriptions and a breakdown of the default costs and the calculation of the Royalty due to MF. 

 

5.5 All Royalties and other sums payable under this Agreement shall be paid free and clear of an deductions and withholdings unless the deduction or withholding is required by law. If any deduction or withholding is required by law NABUFtT shall pay to MF such sum as will, after the deduction or withholding has been made, leave MF with the same amount as it  would  have been entitled to receive in the absence of any such requirement to make a deduction or withholding. 

 

5.6 In the event of any delay in paying any sum due under this Agreement by the due date NABUFIT shall pay to MF interest (calculated on a daily basis) on the overdue payment from the date such payment was due to the date of actual payment at a rate of 3% over the base lending rate of Barclays Bank Plc. from time to time. 

 

5.7 NAFUBIT permits the duly appointed representatives of  MF  at  their  own  cost  and  on  reasonable notice on dates and times to be mutually agreed in good  faith and  in any  event no more often than twice per year to inspect  all  such accounts  and  records  of NAFUBIT  and to  take copies of them. ln  

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the event that any such inspection reveals any underpayment to MF, then such underpaid amount shall be repaid immediately to MF by NAFUBII  -together.with inter est from the date payment was due on the underpaid amount at 3% per year above the Barclays Bank Pie. base lending rate from time to time, and, if such  underpayment  is  5% or greater of the relevant amount which should have been paid, then NAFUBIT shall immediately reimburse  to  MF, whichever  party is  applicable,  the reasonable  costs of  such  inspection.

 

6. Warranty and indemnity 

 

6.1 The Parties each warrant that they are free to enter into this Agreement and that the rights granted under this Agreement will not infringe upon the rights of any third party. 

 

6.2 MF warrants , represents and undertakes that it has full right to: (i} enter into this Agreement and to give effect to each of its terms; (ii) grant !he rights to NABUFIT and give the warranties and indemnities contained in this Agreement; and (iii) perform (and procure the performance by Talent of) the Personal Appearances and other obligations under this Agreement. 

 

6.3 NABUF!T  warrants, represents and undertakes that 

 

(a) it shall only use Talent Image strictly in relation to the NABUFIT brand and in accordance with the terms of this Agreement. 

(b) NABUFIT shall ensure that wherever it wishes to use Talent's Image, it will comply with all IAAF and Olympic rules, regulations and/or guidelines in force from time  to time (including, without limitation. the Olympic Charter and the rules, regulations and/or guidelines of the International Olympic Committee ("IOC")). Any obligations Talent or MF owes or may in the future owe to any competition organizer or competition promoter relating to the use of Talent Image, and Talent's or MF's observance of the same to the extent so required shall notbe considered by NABUFIT to be a breach of  this Agreement. 

(c) NABUFIT shall respect MF's Existing Endorsement Agreements and acknowledges that Talent is obliged to exclusively wear clothing of Nike during his provision of services hereunder and at all other times. 

(d) Any and all promotional, marketing and advertising materials shall comply with all applicable laws and regulations of governmental or other competent authorities in the Territory from time to time and shall not infringe any third party's  rights. 

 

6.4 MF and Talent shall indemnify and keep NABUFIT indemnified from and against any and all losses, damages, liabilities, penalties, fines and expenses (including reasonable legal fees) resulting from or arising out of any claims or actions resulting directly or indirectly from: 

 

The use by NABUFIT of Talent's Image strictly in accordance with this Agreement PROVIDED THAT: if any third party makes a claim, or notifies an intention to make a claim, against NABUFIT in this regard and which may reasonably be considered likely to give rise to a liability under this indemnity (a Claim), NABUFIT shall give MF the option to take over the conduct of the Claim and to take such action as MF may decide to avoid, dispute, compromise or defend the Claim; and the foregoing indemnity shall apply only to  sums suffered by NABUF IT pursuant to the final order of judgement of a court or tribunal of competent jurisdiction or to a settlement either settled by MF  or  reached  with Mf's  prior written consent.

 

6.5 Clause 6.4 shall survive expiry or earlier termination of this Agreement. 

 

 

7. Termination 

 

7.1 MF sha ll have the right to terminate this Agreement immediately by notice in writing to NABUFIT in the event that 

 

(a) is in breach of any of the warranties in Claus e 6.3; or 

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(b) Comm its a material breach of any of its obligations under this agreement which breach is not capable of remedy; or 

 

(c) NABUFIT fails to perform or observe any material obligation on its part to be performed or observed under this Agreement and does not remedy such breach (if the same is capable of remedy) within 15 days of receipt of written notice requiring it to do so. 

 

7.2 NABUFIT shall have the right to terminate this Agreement immediately by notice in writing to MF in the event  that: 

 

{a} Talent is unwilling or unable, beyond its reasonable control. to make Personal Appearances pursuant to clause 3.1 during a Contract Year;

 

(b) Talent is convicted of any criminal offence (other than a road  traffic  offence punishable by a non-custodial sentence}, including any offence involving the use or distribution of drugs or  any other prohibited substance;

 

{c) MF becomes insolvent such that MF enters into liquidation whether compulsory or voluntary (other than for the purpose of amalgamation or reconstruction)  or  MF makes or proposes to make an arrangement or composition with their creditors or makes  an  application  to  a  Court  of  competent  jurisdiction  for  protection  from its

creditors or  if MF  shall have any distress or  execution levied upon its. assets;

 

(d) MF fails to perform or observe (or fails to procure the performance or observance of} any material obligation on iis part to be performed or observed under this Agreement and does not remedy such breach (if the same is  capable of remedy) within 15 days of receipt of written notice requiring him to do so; 

 

(e) Talent dies or is permanently incapacitated. 

 

 

8. Consequences of termination 

 

8.1 Expiry or termination of this Agreement shall not: (i) release the Parties from any liability or right of action or claim whicn at the time of such expiry or termination has already accrued or may accrue to either Party in respect of any act or omission prior to such  expiry  or termination; or (ii) affect the coming into force or the continuance in force of any provision of this Agreement which is expressly or by implication intended to come into or continue in force on or after such expiry or termination, including for the avoidance of doubt clauses: 3.7, 3.8, 3.9,3.10, 6.3, 8, 9  and 11. 

 

8.2 Upon expiry or earlier termination of this Agreement for any reason, all rights and licenses granted to NABUFIT under this Agreement shall cease and determine and NABUFIT shall discontinue any and all use of Talent's Image. 

 

8.3 NABUFIT shall pay and account for any Royalties due up to the date of expiry or termination. 

 

 

9. Confidentiality and announcements 

 

9.1 Both Parties undertake to each other that they shall treat as confidential and shall not disclose to any person: (i} the contents (including the financial details) of this Agreement; and (ii) all 

information relating in any manner to the business and/or affairs of which may be communicated to or acquired by it under or in connection with this Agreement,

 

9.2 Both Parties undertake to each other that they may disclose (i) information which is within the public domain; and (ii) confidential information to the minimum extent required by any  

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order of any court of competent jurisdiction or any competent judicial, governmental or regulatory body (including any taxation authority).

 

9.3 No Party may make or release statements or other announcements in relation to this Agreement to the press or other media unless such statements or announcements have been approved by the other Party, such approval not to be unreasonably withheld, delayed or conditioned. 

 

 

10. Limitation of Liability 

 

10.1 The parties agree that under no circumstances shall a party be liable to any other party under this Agreement for loss of profits. business, contracts, anticipated  savings,  wasted expenditure , goodwill. or revenue or any type of special, indirect or consequential loss whatsoeverand hOwsoever arising out of or in connection with the performance of a party's obligations under this Agreement or any breach thereof; 

 

10.2 The maximum aggregate liability of MF and/or Talent to NABUFJT in contract , tort or otherwise (including any liability for any negligent act or omission) for damages awarded pursuant to a claim relating to this Agreement, which are not otherwise limited or excluded under this Agreement, howsoever arising shall be limited to the fee  payable. 

 

10.3 Nothing in this Agreement shall exclude or restrict either party's liability for (I} fraud or fraudulent misrepresentation, dishonesty or (ii) any breach of clauses 6.3 {b). (c) and {d);   and 

(iii) for death or Personal injury resulting from the negligence of that party or of its  employees

while acting in the course of their employment

 

11. Notices 

 

11.1 All notices to be given under this Agreement shall be in writing in English and sent by recorded delivery mall or courier to the address(es) set out at the head of this Agreement (or to such other address{es) as the Party concerned shall from time to time designate by notice pursuant hereto}, 

 

11.2 Any such notice shall be  deemed  given at  the time  when a representative  of  the recipient Party signs to confirm receipt of the relevant delivery by recorded delivery mail or courier (as the case may be). 

 

 

12. General 

 

Assignability

 

12.1 MF shall not without the prior consent in writing of NABUFIT (to be given or withheld in NABUFIT's absolute discretion) assign, novate, charge, sub-ilcence and/or sub-contract this Agreement or any of its obligations under this Agreement. 

 

12.2 NABUFIT shall not without the prior consent in writing of MF (to be given or withheld in MF's absolute discretion assign) novate,  charge, sub-licence and/or sub-contract this Agreement  or any of its obligations under this Agreement. 

 

Severability

 

12.3 The illegality or invalidity of any part of this Agreement shall not affect the legality or validity of the remainder of this Agreement. 

 

Preservation of rights

 

12.4 No relaxation, forbearance, delay or indulgence by any Party in enforcing any of the terms and conditions of this Agreement or the granting of time by any Party to  

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the other shall prejudice affect or restrict the rights and powers of any Party under this Agreement, nor shall any waiver by any Party of any breach of this Agreement operate as a waiver of or in relation to any subsequent or any continuing breach of this Agreement.

 

Relationship of  the Parties

 

12.5 Nothing in or arising out of this Agreement is to be taken as constituting a partnership or agency between the Parties and no Party shall have the right or authority to bind or commit the other in any manner or for any purposes whatsoever. 

 

12.6 Nothing contained in this Agreement shall be construed as establishing an employer­ employee relationship between NABUFIT and MF. 

 

Further assurance

 

12.7 MF shall free of charge do, execute and perform such further deeds, documents, assurances, acts and things as may be required to give full legal and practical effect to the terms, intent and purposes of this Agreement. Without prejudice to the foregoing, the Parties shall, and shall use all reasonable endeavours respectively to procure that any necessary third party shall. do, execute and perform such further deeds, documents, assurances. acts and things as may be requ1red to give full legal and practical effect to the terms, intent and purposes of this Agreement. 

 

Entire agreement

 

12.8 This Agreement represents the entire understanding between the Parties in relation to the subject matter hereof and shall cancel and supersede all prior negotiations, understandings and  agreements.  whether  oral  or  written.  This  Agreement  may  only  be  modified  if  such modification is in writing and signed by or by a duly authorised representative of each Party. 

 

Prior representations

 

12.9 Each Party unconditionally waives any rights it may have to damages or to rescind this Agreement on the basis of any statement or representation made by or on its behalf prior to the date of this Agreement and which is not the subject of any warranty or undertaking in this Agreement unless such statement or representation was made fraudulently. 

 

Third party rights

 

12.10 Except where expressly provided under this Agreemen.t a person who is not a Party to this Agreement has no rights torety upon or enforce any term of this Agreement. 

 

Governing law and jurisdiction

 

12.11 This Agreement shall be governed by and construed and interpreted in accordance with the laws of England and Wales and the Parties submit to the exclusive jurisdiction of the English courts. 

 

12.12 Definitions and Interpretation 

 

In this Agreement the capitalised terms used in this Agreement shall have the meanings given to them below and the following expressions shall, unless the context otherwise requires, have the following meanings:

 

 

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	“Commencement Date”

	Means 1st of November 2016, notwithstanding the date this Agreement is executed.

	 

	 

	“Contract Year”

	Means each successive period of twelve months during the Term (or part thereof if this Agreement is terminated by either Party in accordance with its terms), with the first Contract Year commencing on the Commencement Date.

	 

	 

	“Existing Endorsement Agreement”

	means Nike

	 

	 

	"MF”

	means Mo Farah Inc.

	 

	 

	"Talent"

	means Mo Farah.

	 

	 

	“MF's Image"

	means the name, nicknames, likeness, image, photograph. slgnature. lnitials, statements, facsimile. reputation, voice, film (includfng computer  generated or animated portrayai), and other personal characteristics and identification of MF and any  and an intellectual property rights in the  same  whether now known or hereafter invented. in each case whether registered or unregistered and including applications  for registration.

 

	 

	 

	"Personal Appearance”

	means a personal appearance by MF.

	 

	 

	" Purpose”

	means the promotion of NABUFIT, and/or any of their respective brands, products or services.

	··Term"

	means the period commencing on the  Commencement Date and ending on 3151 of October 2019; (three year period).

	 

	 

	"Territory"

	Worldwide.

	 

	 

	"VAT"

	means Danish value added tax or equivalent.

 

 

 

Any reference to the singular includes the plural and vice versa and any reference to one gender includes all genders.

 

Any reference to a person includes natural persons and partnerships. firms and such other unincorporated bodies and companies and corporate bodies and all other legal persons of whatever kind and however constituted.

 

Headings are for ease of reference only and are not to be taken into account in  construing  this Agreement.

 

References to "include" or "including• shall be construed without limitation.

 

Reference to "day·s   means working days unless specified to be otherwise

 

 

 

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IN WITNESS whereof this Agreement has been signed on the day and year first above written.

 

 

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