Document:

Exhibit 10.1

 

SEVENTH
AMENDMENT TO

LOAN AND SECURITY AGREEMENT

 

This
Seventh Amendment to Loan and Security Agreement (this “Amendment”) is entered into as of February _15__, 2017,
by and among MODERN SYSTEMS CORPORATION, a Delaware corporation, formerly known as BluePhoenix Solutions USA, Inc., a Delaware
corporation (“Modern”) and MS MODERNIZATION SERVICES, INC., a Texas corporation, formerly known as Sophisticated
Business Systems, Inc., successor by merger to BP-AT Acquisition LLC, a Delaware limited liability company f/k/a BP-AT Acquisition
Corporation, a Delaware corporation (“MS”, and collectively with Modern, “Borrowers”, and
each individually, a “Borrower”), and COMERICA BANK (“Bank”).

 

RECITALS

 

Borrowers
and Bank are parties to that Loan and Security Agreement dated October 2, 2013, as it may be amended from time to time, including
without limitation by that certain First Amendment to Loan and Security Agreement, Joinder, and Modification to Loan Documents
dated September 25, 2014, that certain Omnibus Modification to Loan Documents and Consent dated January 8, 2015, that certain
Third Amendment to Loan and Security Agreement, Modification to Loan Documents and Consent dated May 1, 2015, that certain Fourth
Amendment to Loan and Security Agreement dated May 11, 2015, that certain Fifth Amendment to Loan and Security Agreement and Waiver
dated as of March 9, 2016, and that certain Sixth Amendment to Loan and Security Agreement and Waiver dated as of August 4, 2016
(as amended, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this
Amendment.

 

NOW,
THEREFORE, the parties agree as follows:

 

1.            Exhibit A of the Agreement is amended by adding or amending and restating, as applicable, the following defined terms to read
in their entireties as follows:

 

“Non-Formula
Revolving Line” means a Credit Extension of up to Three Million Dollars ($3,000,000).

 

“Non-Formula
Revolving Line Maturity Date” means February _15__, 2019.

 

“Pricing
Addendum” means that certain Prime Referenced Rate Addendum, dated as of Seventh Amendment Date, by and between Borrowers
and Bank (as the same may be amended and/or restated from time to time).

 

“Revolving
Line” means a Credit Extension of up to One Million Dollars ($1,000,000).

 

“Revolving
Line Maturity Date” means February _15__, 2019.

 

“Seventh
Amendment Date” means February _15__, 2017.

 

2.            Section 2.1(b)(ii) of the Agreement is amended and restated to read in its entirety as follows:

 

“(ii) Form
of Request. Whenever Borrower desires an Advance, Borrower will notify Bank (which notice shall be irrevocable) by facsimile
transmission or telephone no later than 3:00 p.m. Pacific time, on the Business Day that the Advance is to be made. Each such
telephonic notification shall be promptly confirmed by a Loan Advance/Paydown Request Form in accordance with the Pricing Addendum.
Bank is authorized to make Advances under this Agreement, based upon instructions received from a Responsible Officer, or without
instructions if in Bank’s discretion such Advances are necessary to meet Obligations which have become due and remain unpaid.
The notice shall be signed by a Responsible Officer.”

 

    	 	1	 

     

    

 

3.            Section 2.1(c)(ii) of the Agreement is amended and restated to read in its entirety as follows:

 

“(ii) Whenever
Borrower desires a Non-Formula Revolving Line Advance, Borrower will notify Bank (which notice shall be irrevocable) by facsimile
transmission or telephone no later than 3:00 p.m. Pacific time, on the Business Day that the Non-Formula Revolving Line Advance
is to be made. Each such telephonic notification shall be promptly confirmed by a Loan Advance/Paydown Request Form in accordance
with the Pricing Addendum. Bank is authorized to make Non-Formula Revolving Line Advances under this Agreement, based upon instructions
received from a Responsible Officer, or without instructions if in Bank’s discretion such Non-Formula Revolving Line Advances
are necessary to meet Obligations which have become due and remain unpaid. The notice shall be signed by a Responsible Officer.”

 

4.            The references to “Payment/Advance Form” in Section 3.2 of the Agreement are deleted and replaced with “Loan
Advance/Paydown Request”.

 

5.            Section 6.2(ix) of the Agreement is amended and restated to read in its entirety as follows:

 

“(ix)
within thirty (30) days of the last day of each June and December, a report signed by Borrower, in form reasonably acceptable
to Bank, listing any applications or registrations that Borrower has made or filed in respect of any Patents, Copyrights or Trademarks
and the status of any outstanding applications or registrations, as well as any material change in Borrower’s Intellectual
Property Collateral, including but not limited to any subsequent ownership right of Borrower in or to any Trademark, Patent or
Copyright not specified in Exhibits A, B, and C of any Intellectual Property Security Agreement delivered
to Bank by Borrower in connection with this Agreement.”

 

6.            Sections 6.7(b) and (c) of the Agreement are amended and restated to read in their entireties as follows:

 

“(b) New
Equity Event. Borrowers shall provide, or cause to be provided, to Bank evidence satisfactory to Bank that Borrowers received
cash proceeds from the issuance of a Borrower’s equity securities after the Seventh Amendment Date, on terms and from investors
satisfactory to Bank, of not less than (i) Five Hundred Thousand Dollars ($500,000) on or before April 30, 2017 (the “First
Tranche”) and (ii) an additional Five Hundred Thousand Dollars ($500,000), excluding the amount of the First Tranche, on
or before July 31, 2017.

 

(c) EBITDA.
Tested monthly, EBITDA of Parent, measured on a trailing six (6) month basis ending on the date of determination, of not
less than the following amounts on the following dates:

 

	Testing Dates	 	Minimum EBITDA	 
	January 31, 2017	 	$	(1,500,000	)
	February 28, 2017	 	$	(1,500,000	)
	March 31, 2017	 	$	(1,500,000	)
	April 30, 2017	 	$	(1,500,000	)
	May 31, 2017	 	$	(1,500,000	)
	June 30, 2017	 	$	(1,500,000	)
	July 31, 2017	 	$	(1,000,000	)
	August 31, 2017	 	$	(1,000,000	)
	September 30, 2017	 	$	(500,000	)
	October 31, 2017	 	$	(500,000	)
	November 30, 2017	 	$	0	 
	December 31, 2017	 	$	0	 
	January 31, 2018	 	$	500,000	 
	February 28, 2018	 	$	500,000	 
	March 31, 2018	 	$	500,000	 
	April 30, 2018	 	$	500,000	 
	May 31, 2018	 	$	500,000	 
	June 30, 2018	 	$	500,000	 

 

    	 	2	 

     

    

 

7.            Exhibits C and F to the Agreement are hereby deleted.

 

8.            Exhibit E to the Agreement is deleted and replaced with Exhibit E attached hereto.

 

9.            Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement,
as amended hereby, shall be and remains in full force and effect in accordance with its terms and hereby is ratified and confirmed
in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate
as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date
hereof.

 

10.          Borrowers represent and warrant that the representations and warranties contained in the Agreement are true and correct in all
material respects as of the date of this Amendment and that no Event of Default has occurred and is continuing.

 

11.          As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the
following:

 

(a)        this Amendment, executed by Borrowers;

 

(b)        a Prime Referenced Rate Addendum to Loan and Security Agreement, executed by Borrowers;

 

(c)        an Amendment to and Affirmation of Guaranty, executed by Prescott Group Aggressive Small Cap Master Fund;

 

(d)        Affirmations of Guaranty, executed by Columbia Pacific Opportunity Fund, L.P., ModSys International Ltd., and MS Modernisation
Services UK Ltd.;

 

(e)        a non-refundable facility fee in the amount of $5,000, which may be debited from any of any Borrower’s accounts; and

 

(f)         all reasonable Bank Expenses incurred through the date of this Amendment, which may be debited from any of Borrowers’ accounts.

 

12.          This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one instrument.

 

[Remainder
of Page Intentionally Left Blank]

 

    	 	3	 

     

    

 

IN
WITNESS WHEREOF, Borrowers and Bank have executed and delivered this Seventh Amendment to Loan and Security Agreement as of the
date first set forth above.

 

	 	MODERN
    SYSTEMS CORPORATION
	 	 
	 	By:	/s/
    Richard Chance
	 	Printed
    Name: 	Richard
    T. Chance
	 	Title:	CFO
	 	 
	 	MS
    MODERNIZATION SERVICES, INC.
	 	 
	 	By:	/s/
    Richard Chance
	 	Printed
    Name: 	Richard
    T. Chance
	 	Title:	CFO
	 	 
	 	COMERICA
    BANK
	 	 
	 	By:	/s/
    Walter Weston
	 	Printed
    Name: 	Walter
    Weston
	 	Title:	Vice
    President

  

[Signature Page to Seventh Amendment to Loan and Security
Agreement (13339483)]

     

     

    

 

EXHIBIT
E

 

COMPLIANCE
CERTIFICATE

 

	Please send all Required Reporting to:	Comerica Bank

Technology
& Life Sciences Division

Loan
Analysis Department

250
Lytton Avenue

3rd
Floor, MC 4240

Palo
Alto CA 94301

Phone:
(650) 462-6060

Fax:
(650) 462-6061

 

FROM:
Modern Systems Corporation and MS Modernization Services, Inc.

 

The
undersigned authorized Officer of Modern Systems Corporation and MS Modernization Services, Inc. (individually and collectively,
“Borrower”), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement
between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending                    ,
201___ with all required covenants, including without limitation the ongoing registration of intellectual property rights in accordance
with Section 6.8, except as noted below and (ii) all representations and warranties of Borrower stated in the Agreement are true
and correct in all material respects as of the date hereof; provided, however, that those representations and warranties expressly
referring to another date shall be true, correct and complete in all material respects as of such date. Attached herewith are
the required documents supporting the above certification (“Supporting Documents”). The Officer further certifies
the Supporting Documents are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently
applied form one period to the next except as explained in an accompanying letter or footnotes.

 

Please
indicate compliance status by circling Yes/No under “Complies” or “Applicable” column,

 

	REPORTING
    COVENANTS	 	REQUIRED	 	COMPLIES
	Company Prepared Monthly F/S	 	Monthly, within 30 days	 	YES	 	NO
	Compliance Certificate	 	Monthly, within 30 days	 	YES	 	NO
	CPA Audited, Unqualified F/S for Parent	 	Annually, within 150 days of FYE	 	YES	 	NO
	Company Prepare Annual Consolidating F/S for
    Parent	 	Annually, within 150 days of FYE (commencing 2014 FY)	 	YES	 	NO
	Company Prepared Annual F/S	 	Annually, within 150 days of FYE	 	YES	 	NO
	Borrowing Base Cert, A/R & A/P Agings	 	Monthly, within 30 days	 	YES	 	NO
	Annual Business Plan	 	Annually, on or before 1/31	 	YES	 	NO
	Intellectual Property Report	 	Within 30 days after each June 30 and December 31	 	YES	 	NO
	Audit	 	Semi-annual	 	YES	 	NO
	 	 	 	 	 	 	 
	If Public:	 	 	 	 	 	 
	10-Q	 	Quarterly, within 5 days of SEC filing (50 days)	 	YES	 	NO
	10-K	 	Annually, within 5 days of SEC filing (95 days)	 	YES	 	NO
	 	 	 	 	 	 	 
	Total amount of Borrower’s cash and investments	 	Amount: $____________________________	 	YES	 	NO
	Total amount of Borrower’s cash and investments
    maintained with Bank	 	Amount: $____________________________	 	YES	 	NO

 

	 	 	 DESCRIPTION	 	APPLICABLE
	Legal Action > $250,000 (Sect. 6.2(iv))	 	Notify promptly upon notice _____________________	 	YES	 	NO
	Inventory Disputes> $250,000 (Sect. 6.3)	 	Notify promptly upon notice _____________________	 	YES	 	NO
	Mergers & Acquisitions> $250,000 (Sect. 7.3)	 	Notify promptly upon notice _____________________	 	YES	 	NO
	Cross default with other agreements >$250,000 (Sect. 8.6)	 	Notify promptly upon notice _____________________	 	YES	 	NO
	Judgments/Settlements >  $250,000 (Sect. 8.8)	 	Notify promptly upon notice _____________________	 	YES	 	NO

 

	FINANCIAL COVENANTS	 	REQUIRED	 	ACTUAL	 	COMPLIES
	Bank Debt Liquidity Ratio (tested monthly commencing
    on the Revolving Line Increase Effective Date)	 	1.25:1.00	 	_________:1.00	 	YES	 	NO
	New Equity	 	See Sec. 6.7(b)	 	$________________________	 	YES	 	NO
	Minimum EBITDA	 	See Sec. 6.7(c)	 	$________________________	 	YES	 	NO

 

	FINANCIAL COVENANTS	 	REQUIRED	 	ACTUAL	 	COMPLIES
	Permitted Indebtedness for equipment leases	 	<$250,000	 	$________________________	 	YES	 	NO
	Permitted Investments for stock repurchase	 	<$250,000	 	$________________________	 	YES	 	NO
	Permitted Investments for subsidiaries	 	<$250,000	 	$________________________	 	YES	 	NO
	Permitted Investments for employee loans	 	<$250,000	 	$________________________	 	YES	 	NO
	Permitted Investments for joint ventures	 	<$250,000	 	$________________________	 	YES	 	NO
	Permitted Liens for equipment leases	 	<$250,000	 	$________________________	 	YES	 	NO
	Permitted Transfers	 	<$250,000	 	$________________________	 	YES	 	NO
	Cash Transfer to Parent	 	<$450,000	 	$________________________	 	YES	 	NO

 

     

     

    

 

Please
Enter Below Comments Regarding Violations:

 

The
undersigned further acknowledges that at any time Borrower is not in compliance with all the terms set forth in the Agreement,
including, without limitation, the financial covenants, no Credit Extensions will be made.

 

Very
truly yours,

 

MODERN
SYSTEMS CORPORATION, for itself and on behalf of MS Modernization Services, Inc.

  

 

 

Authorized
Signer

 

 

 

Name

 

 

 

Title

 

     

     

    

 

AFFIRMATION
OF GUARANTY

 

This
AFFIRMATION OF GUARANTY (“Affirmation”) is made as of February ___, 2017, by the undersigned (“Guarantor”)
for the benefit of Comerica Bank (“Bank”).

 

RECITALS

 

A.           MODERN SYSTEMS CORPORATION, a Delaware corporation, formerly known as BluePhoenix Solutions USA, Inc., a Delaware corporation
and MS MODERNIZATION SERVICES, INC., a Texas corporation, formerly known as Sophisticated Business Systems, Inc., successor by
merger to BP-AT Acquisition LLC, a Delaware limited liability company f/k/a BP-AT Acquisition Corporation, a Delaware corporation
(individually and collectively, the “Borrower”) have obtained certain loans or other credit accommodations from Bank
pursuant to that certain Loan and Security Agreement dated as of October 2, 2013, as may be amended from time to time, including,
without limitation, by that certain First Amendment to Loan and Security Agreement, Joinder, and Modification to Loan Documents
dated September 25, 2014, that certain Omnibus Modification to Loan Documents and Consent dated January 8, 2015, that certain
Third Amendment to Loan and Security Agreement, Modification to Loan Documents and Consent dated May 1, 2015, that certain Fourth
Amendment to Loan and Security Agreement dated May 11, 2015, that certain Fifth Amendment to Loan and Security Agreement and Waiver
dated as of March 9, 2016, and that certain Sixth Amendment to Loan and Security Agreement and Waiver dated as of August 4, 2016
(collectively, the “Loan Agreement”), which loans and certain credit accommodations are guaranteed by Guarantor pursuant
to the terms of the Guaranty, dated September 25, 2014, by Guarantor in favor of Bank (as it may be amended from time to time,
the “Guaranty”). Borrower and Bank propose to enter into a Seventh Amendment to Loan and Security Agreement dated
as of the date hereof (the “Amendment”). Unless otherwise defined, all capitalized terms in this Affirmation shall
be as defined in the Guaranty.

 

B.           Bank has agreed to enter into the Amendment provided, among other things, that Guarantor acknowledges the entry by Bank into the
Amendment and agrees that the Guaranty will remain effective.

 

AGREEMENT

 

NOW,
THEREFORE, Guarantor:

 

1.            Consents to the execution, delivery and performance by Borrower of the Amendment and the documents and instruments executed in
connection therewith, as well as all other amendments and modifications to the Loan Documents;

 

2.            Acknowledges and agrees that its Guaranty is and shall remain in full force and effect in accordance with its terms with respect
to all Obligations (as defined in the Loan Agreement), subject to no setoff, defense or counterclaim;

 

3.            Represents and warrants that the representations and warranties contained in its Guaranty are true and correct in all material
respects as of the date of this Affirmation.

 

4.            Confirms that this Affirmation is not required by the terms of its Guaranty and need not be obtained in connection with any prior
or future waivers or amendments or extensions of additional credit to Borrower.

 

IN
WITNESS WHEREOF, the undersigned has executed this Affirmation of Guaranty as of the first date above written.

 

	 	GUARANTOR:
	 	 
	 	COLUMBIA PACIFIC OPPORTUNITY FUND, L.P.
	 	 
	 	By:	                   
	 	Its:	 

 

     

     

    

 

AFFIRMATION
OF GUARANTIES

 

This
AFFIRMATION OF GUARANTIES (“Affirmation”) is made as of February ___, 2017, by the undersigned (collectively, “Guarantors”
and each, a “Guarantor”) for the benefit of Comerica Bank (“Bank”).

 

RECITALS

 

A.           MODERN SYSTEMS CORPORATION, a Delaware corporation, formerly known as BluePhoenix Solutions USA, Inc., a Delaware corporation
and MS MODERNIZATION SERVICES, INC., a Texas corporation, formerly known as Sophisticated Business Systems, Inc., successor by
merger to BP-AT Acquisition LLC, a Delaware limited liability company f/k/a BP-AT Acquisition Corporation, a Delaware corporation
(individually and collectively, the “Borrower”) have obtained certain loans or other credit accommodations from Bank
pursuant to that certain Loan and Security Agreement dated as of October 2, 2013, as may be amended from time to time, including,
without limitation, by that certain First Amendment to Loan and Security Agreement, Joinder, and Modification to Loan Documents
dated September 25, 2014, that certain Omnibus Modification to Loan Documents and Consent dated January 8, 2015, that certain
Third Amendment to Loan and Security Agreement, Modification to Loan Documents and Consent dated May 1, 2015, that certain Fourth
Amendment to Loan and Security Agreement dated May 11, 2015, that certain Fifth Amendment to Loan and Security Agreement and Waiver
dated as of March 9, 2016, and that certain Sixth Amendment to Loan and Security Agreement and Waiver dated as of August 4, 2016
(collectively, the “Loan Agreement”), which loans and certain credit accommodations are guaranteed by Guarantors pursuant
to the terms of Guaranties, each dated July 1, 2016, by Guarantors in favor of Bank (as it may be amended from time to time, collectively,
the “Guaranties” and each, a “Guaranty”). Borrower and Bank propose to enter into a Seventh Amendment
to Loan and Security Agreement dated as of the date hereof (the “Amendment”). Unless otherwise defined, all capitalized
terms in this Affirmation shall be as defined in the Guaranty.

 

B.           Bank has agreed to enter into the Amendment provided, among other things, that, Guarantors acknowledge the entry by Bank into
the Amendment and agree that the Guaranties will remain effective.

 

AGREEMENT

 

NOW,
THEREFORE, each Guarantor:

 

1.            Consents to the execution, delivery and performance by Borrower of the Amendment and the documents and instruments executed in
connection therewith, as well as all other amendments and modifications to the Loan Documents;

 

2.            Acknowledges and agrees that its respective Guaranty is and shall remain in full force and effect in accordance with its terms
with respect to all Obligations (as defined in the Loan Agreement), subject to no setoff, defense or counterclaim;

 

3.            Represents and warrants that the representations and warranties contained in its respective Guaranty are true and correct in all
material respects as of the date of this Affirmation.

 

4.            Confirms that this Affirmation is not required by the terms of its respective Guaranty and need not be obtained in connection
with any prior or future waivers or amendments or extensions of additional credit to Borrower.

 

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

 

	 	GUARANTOR:
	 	 
	 	MODSYS INTERNATIONAL LTD.
	 	 
	 	By:	            
	 	Its:	 
	 	 	 
	 	MS MODERNISATION SERVICES UK LTD.
	 	 	 
	 	By:	 
	 	Its:	 

  

     

     

    

 

Prime
Referenced Rate Addendum To

Loan and Security Agreement

 

This
Prime Referenced Rate Addendum to Loan and Security Agreement (this “Addendum”) is entered into as of February _15__,
2017, among Comerica Bank (“Bank”), Modern Systems Corporation, and MS Modernization Services, Inc. (individually
and collectively, the “Borrower”). This Addendum supplements the terms of the Loan and Security Agreement dated as
of October 2, 2013 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Agreement”).

 

1.            Definitions.
As used in this Addendum, the following terms shall have the following meanings. Initially capitalized terms used and not defined
in this Addendum shall have the meanings ascribed thereto in the Agreement.

 

a.       “Advance”
means a borrowing requested by the Borrower and made by Bank under the Agreement.

 

b.       “Applicable
Margin” means with respect to Advances of the Non-Formula Revolving Line, three quarters of one percent (0.75%) per annum,
and with respect to Advances of the Revolving Line, and all other Obligations other than Non-Formula Revolving Line Advances,
two percent (2.00%) per annum.

 

c.       
“Business Day” means any day, other than a Saturday, Sunday or any other day designated as a holiday under Federal
or applicable State statute or regulation, on which Bank is open for all or substantially all of its domestic and international
business (including dealings in foreign exchange) in San Jose, California, and, in respect of notices and determinations relating
the Daily Adjusting LIBOR Rate, also a day on which dealings in dollar deposits are also carried on in the London interbank market
and on which banks are open for business in London, England.

 

d.       “Change
in Law” means the occurrence, after the date hereof, of any of the following: (i) the adoption or introduction of, or any
change in any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether
or not applicable to Bank on such date, or (ii) any change in interpretation, administration or implementation thereof of any
such law, treaty, rule or regulation by any Governmental Authority, or (iii) the issuance, making or implementation by any Governmental
Authority of any interpretation, administration, request, regulation, guideline, or directive (whether or not having the force
of law), including without limitation, any risk-based capital guidelines or any interpretation, administration, request, regulation,
guideline, or directive relating to liquidity. For purposes of this definition, (x) a change in law, treaty, rule, regulation,
interpretation, administration or implementation shall include, without limitation, any change made or which becomes effective
on the basis of a law, treaty, rule, regulation, interpretation administration or implementation then in force, the effective
date of which change is delayed by the terms of such law, treaty, rule, regulation, interpretation, administration or implementation,
and (y) the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, H.R. 4173) and all requests, rules,
regulations, guidelines, interpretations or directives promulgated thereunder or issued in connection therewith shall be deemed
to be a “Change in Law”, regardless of the date enacted, adopted, issued or promulgated, whether before or after the
date hereof, and (z) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the
Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in
each case pursuant to Basel III, shall each be deemed to be a “Change in Law”, regardless of the date enacted, adopted,
issued or implemented.

 

e.       “Daily
Adjusting LIBOR Rate” means, for any day, a per annum interest rate which is equal to the quotient of the following:

 

		(1)	for
                                         any day, the per annum rate of interest determined on the basis of the rate for deposits
                                         in United States Dollars for a period equal to one (1) month appearing on Page BBAM of
                                         the Bloomberg Financial Markets Information Service at or about 11:00 a.m. (London, England
                                         time) (or as soon thereafter as practical) on such day, or if such day is not a Business
                                         Day, on the immediately preceding Business Day. In the event that such rate does not
                                         appear on Page BBAM of the Bloomberg Financial Markets Information Service (or otherwise
                                         on such Service) on any day, the “Daily Adjusting LIBOR Rate” for such day
                                         shall be determined by reference to such other publicly available service for displaying
                                         eurodollar rates as may be reasonably selected by Bank, or in the absence of such other
                                         service, the “Daily Adjusting LIBOR Rate” for such day shall, instead, be
                                         determined based upon the average of the rates at which Bank is offered dollar deposits
                                         at or about 8:00 a.m. (California time) (or as soon thereafter as practical), on such
                                         day, or if such day is not a Business Day, on the immediately preceding Business Day,
                                         in the interbank eurodollar market in an amount comparable to the applicable principal
                                         amount of Obligations hereunder which is to bear interest on the basis of the Daily Adjusting
                                         LIBOR Rate and for a period equal to one (1) month;

 

divided
by

 

    	 	1	 

     

    

 

		(2)	1.00
                                         minus the maximum rate (expressed as a decimal) on such day at which Bank is required
                                         to maintain reserves on “Euro-currency Liabilities” as defined in and pursuant
                                         to Regulation D of the Board of Governors of the Federal Reserve System or, if such regulation
                                         or definition is modified, and as long as Bank is required to maintain reserves against
                                         a category of liabilities which includes eurodollar deposits or includes a category of
                                         assets which includes eurodollar loans, the rate at which such reserves are required
                                         to be maintained on such category.

 

provided,
however, and notwithstanding anything to the contrary set forth in the Agreement, if at any time the Daily Adjusting LIBOR
Rate determined as provided above would be less than zero percent (0%) then the Daily Adjusting LIBOR Rate shall be deemed to
be zero percent (0%) per annum for all purposes of the Agreement (the “Daily Adjusting LIBOR 0% Floor”), except for
any portion of any outstanding Advance(s) hereunder or any principal Obligations outstanding under this Agreement which at any
such time is/are subject to any Specified Hedging Agreement, in which case the Daily Adjusting LIBOR Rate for such portion of
such Advance(s) and Obligations shall be determined without giving effect to the Daily Adjusting LIBOR 0% Floor. Each calculation
by Bank of the Daily Adjusting LIBOR Rate shall be conclusive and binding for all purposes, absent manifest error.

 

f.       “Governmental
Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including,
without limitation, any supranational bodies such as the European Union or the European Central Bank).

 

g.       “Prime
Rate” means the per annum interest rate established by Bank as its prime rate for its borrowers, as such rate may vary from
time to time, which rate is not necessarily the lowest rate on loans made by Bank at any such time.

 

h.       “Prime
Referenced Rate” means, for any day, a per annum interest rate which is equal to the Prime Rate in effect on such day, but
in no event and at no time shall the Prime Referenced Rate be less than the sum of the Daily Adjusting LIBOR Rate for such day
plus two and one-half percent (2.50%) per annum. If, at any time, Bank determines that it is unable to determine or ascertain
the Daily Adjusting LIBOR Rate for any day, the Prime Referenced Rate for each such day shall be the Prime Rate in effect at such
time, but not less than two and one-half percent (2.50%) per annum.

 

i.       “Request
for Advance” means a Loan Advance/Paydown Request Form issued by the Borrower under the Agreement in the form annexed to
this Addendum as Exhibit A.

 

j.       “Specified
Hedging Agreement” means any agreement or other documentation between the Borrower (or any of them) and Bank providing for
an interest rate swap that does not provide for a minimum rate of zero percent (0%) with respect to determinations of the Daily
Adjusting LIBOR Rate, for the purposes of such interest rate swap (e.g., determines the floating amount by using the “negative
interest method” rather than the “zero interest rate method” in the case of any such interest rate swap made
under any master agreement or other documentation published by the International Swaps and Derivatives Association, Inc.).

 

2.            Interest
Rate Options. Subject to the terms and conditions of this Addendum, the Obligations under the Agreement shall bear interest
at the Prime Referenced Rate plus the Applicable Margin.

 

3.            Payment
of Interest. Accrued and unpaid interest on the unpaid principal balance of the Obligations outstanding under the Agreement
shall be payable monthly, in arrears, on the first Business Day of each month, from the date made until the same is paid in full
(whether in accordance with the terms hereof, by acceleration, or otherwise). In the event that any payment under this Addendum
becomes due and payable on any day which is not a Business Day, the due date thereof shall be extended to the next succeeding
Business Day, and, to the extent applicable, interest shall continue to accrue and be payable thereon during such extension at
the rates set forth in this Addendum. Interest accruing hereunder shall be computed on the basis of a year of 360 days, and shall
be assessed for the actual number of days elapsed, and in such computation, effect shall be given to any change in the applicable
interest rate as a result of any change in the Prime Referenced Rate on the date of each such change.

 

4.            Bank’s
Records. The amount and date of each advance under the Agreement, its applicable interest rate, and the amount and date of
any repayment shall be noted on Bank’s records, which records shall be conclusive evidence thereof, absent manifest error;
provided, however, any failure by Bank to make any such notation, or any error in any such notation, shall not relieve
Borrower of its obligations to repay Bank all amounts payable by Borrower to Bank under or pursuant to this Addendum and the Agreement,
when due in accordance with the terms hereof.

 

    	 	2	 

     

    

 

5.            Selection/Conversion
of Interest Rate Options.

 

a.       Borrower
may request an Advance hereunder either (i) upon the delivery to Bank of a written Request for Advance duly completed and executed
by Borrower (as herein provided) or, (ii) to the extent applicable, pursuant to a request submitted through Bank’s Loan
Management System (each a “Request”).

 

b.       In
the event that Borrower is unable to request Advances hereunder through the Bank’s Loan Management System, Advances hereunder
may be requested by delivery or submission to Bank by hand delivery, first class mail, overnight courier, facsimile, email or
other means of delivery acceptable to Bank, of a written Request duly completed and executed by Borrower. Advances hereunder may
be requested in Borrower’s discretion by telephonic notice to Bank. Any Advance requested by telephonic notice shall be
confirmed by Borrower that same day by submission to Bank of a written Request, as provided herein. Borrower acknowledge(s) that
if Bank makes an Advance based on a request made by telephone, facsimile, email or other means of delivery (other than by hand
delivery, first class mail or overnight courier), it shall be for Borrower’s convenience and all risks involved in the use
of any such procedure shall be borne by Borrower, and Borrower expressly agree(s) to indemnify and hold Bank harmless therefor.
Bank shall have no duty to confirm the authority of anyone requesting an Advance by telephone, facsimile, email or any such other
means of delivery. In the event that Borrower elect(s) to request Advances by telephonic notice, facsimile, email or other means
of delivery acceptable to Bank, Borrower acknowledge(s) and agree(s) that Bank may impose or require such verification, authentication
and other procedures as Bank may require from time to time.

 

6.            Default
Interest Rate. From and after the occurrence of any Event of Default, and so long as any such Event of Default remains unremedied
or uncured thereafter, the Obligations outstanding under the Agreement shall bear interest at a per annum rate of five percent
(5%) above the otherwise applicable interest rate hereunder, which interest shall be payable upon demand. In addition to the foregoing,
a late payment charge equal to five percent (5%) of each late payment hereunder may be charged on any payment not received by
Bank within ten (10) calendar days after the payment due date therefor, but acceptance of payment of any such charge shall not
constitute a waiver of any Event of Default under the Agreement. In no event shall the interest payable under this Addendum and
the Agreement at any time exceed the maximum rate permitted by law. THE MAXIMUM INTEREST RATE SHALL NOT EXCEED THE HIGHEST APPLICABLE
USURY CEILING.

 

7.             Prepayment.
Borrower may prepay all or part of the outstanding balance of any Obligations at any time without premium or penalty. Any prepayment
hereunder shall also be accompanied by the payment of all accrued and unpaid interest on the amount so prepaid. Borrower hereby
acknowledges and agrees that the foregoing shall not, in any way whatsoever, limit, restrict, or otherwise affect Bank’s
right to make demand for payment of all or any part of the Obligations under the Agreement due on a demand basis in Bank’s
sole and absolute discretion.

 

8.             Regulatory
Developments or Other Circumstances Relating to the Daily Adjusting LIBOR Rate.

 

a.       If
any Change in Law shall: (a) subject Bank to any tax, duty or other charge with respect to this Addendum or any Obligations under
the Agreement, or shall change the basis of taxation of payments to Bank of the principal of or interest under this Addendum or
any other amounts due under this Addendum in respect thereof (except for changes in the rate of tax on the overall net income
of Bank imposed by the jurisdiction in which Bank’s principal executive office is located); or (b) impose, modify or deem
applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special
deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by Bank, or shall impose
on Bank or the foreign exchange and interbank markets any other condition affecting this Addendum or the Obligations; and the
result of any of the foregoing is to increase the cost to Bank of maintaining any part of the Obligations or to reduce the amount
of any sum received or receivable by Bank under this Addendum by an amount deemed by Bank to be material, then Borrower shall
pay to Bank, within fifteen (15) days of Borrower’s receipt of written notice from Bank demanding such compensation, such
additional amount or amounts as will compensate Bank for such increased cost or reduction. A certificate of Bank, prepared in
good faith and in reasonable detail by Bank and submitted by Bank to Borrower, setting forth the basis for determining such additional
amount or amounts necessary to compensate Bank shall be conclusive and binding for all purposes, absent manifest error.

 

b.       In
the event that any Change in Law affects or would affect the amount of capital or liquidity required or expected to be maintained
by Bank (or any corporation controlling Bank), and Bank determines that the amount of such capital or liquidity is increased by
or based upon the existence of any obligations of Bank hereunder or the maintaining of any Obligations, and such increase has
the effect of reducing the rate of return on Bank’s (or such controlling corporation’s) capital as a consequence of
such obligations or the maintaining of such Obligations to a level below that which Bank (or such controlling corporation) could
have achieved but for such circumstances (taking into consideration its policies with respect to capital adequacy and liquidity),
then Borrower shall pay to Bank, within fifteen (15) days of Borrower’s receipt of written notice from Bank demanding such
compensation, additional amounts as are sufficient to compensate Bank (or such controlling corporation) for any increase in the
amount of capital and/or liquidity and reduced rate of return which Bank reasonably determines to be allocable to the existence
of any obligations of Bank hereunder or to maintaining any Obligations. A certificate of Bank as to the amount of such compensation,
prepared in good faith and in reasonable detail by Bank and submitted by Bank to Borrower, shall be conclusive and binding for
all purposes absent manifest error.

 

9.             Legal
Effect. Except as specifically modified hereby, all of the terms and conditions of the Agreement remain in full force and
effect.

 

10.           Conflicts.
As to the matters specifically the subject of this Addendum, in the event of any conflict between this Addendum and the Agreement,
the terms of this Addendum shall control.

 

11.           Amendment
and Restatement. This Addendum amends, restates and replaces in its entirety that certain Prime Referenced Rate Addendum to
Loan and Security Agreement dated October 2, 2013 between Borrower and Bank.

 

[Remainder
of Page Intentionally Left Blank]

 

    	 	3	 

     

    

 

IN
WITNESS WHEREOF, the parties have agreed to the foregoing as of the date first set forth above.

 

 

	COMERICA
    BANK	MODERN
    SYSTEMS CORPORATION

 

	By:
	/s/
Walter Weston
	 	By:
	/s/
Richard Chance

	Name:
	Walter
Weston	 	Name:
	Richard
T. Chance

	Title:
	Vice
President
	 	Title:
	CFO

 

	 	MS
MODERNIZATION SERVICES, INC.

 

	 	By:
	/s/
Richard Chance

	 	Name:
	Richard
T. Chance

	 	Title: 
	CFO

 

[Signature Page to Prime Referenced Rate Addendum to
Loan and Security Agreement (13339549)]

 

    	 	4	 

     

    

 

EXHIBIT
A

 

TECHNOLOGY
& LIFE SCIENCES DIVISION

LOAN
ANALYSIS

LOAN
ADVANCE/PAYDOWN REQUEST FORM

DEADLINE
FOR SAME DAY PROCESSING IS 3:00* P.M., P.S.T.

DEADLINE
FOR EQUIPMENT ADVANCES IS 3:00 P.M., P.S.T.**

*At
month end and the day before a holiday, the cut off time is 1:30 P.M., P.S.T.

**Subject
to 3 day advance notice.

 

	To:	Loan
    Analysis	DATE:
    _____________________	TIME:
    ______________

	FAX#:	(650)462-6060

Email
directly to:

	●	wrweston@comerica.com
	●	PaloAltoTLSCompliance@comerica.com

 

	 

        FROM: 
	 

        Modern
        Systems Corporation and MS 

        Modernization
        Services, Inc.

        Borrower’s
        Name
	TELEPHONE
        REQUEST (For Bank Use Only):

         

        The
        following person is authorized to request the loan payment transfer/loan advances on the designated account and is known
        to me.

	 	 	 
	

        FROM: 
	______________________________________
	                                   ___________________________________

	 	Authorized
        Signer’s Name	                                   Authorized
        Request & Phone #
	 	 	 
	FROM:
	

        ______________________________________
	
                                   ___________________________________
	 	Authorized
        Signer’s Signature	                                   Received
by (Bank) & Phone #
	 	 	 

	PHONE #:______________________________________

         

        FROM ACCOUNT #:______________________________

        (please
        include Note number, if applicable)

         

        TO ACCOUNT #: ________________________________

        (please
        include Note number, if applicable)
	                                   ___________________________________

                                           Authorized
        Signature (Bank)

 

	REQUESTED
                                         TRANSACTION TYPE                          
                                         REQUESTED DOLLAR

 AMOUNT

         

        PRINCIPAL
        INCREASE* (ADVANCE)        $_________________________

        PRINCIPAL
        PAYMENT (ONLY)                   $_________________________

         

        OTHER
        INSTRUCTIONS:

 

 

 

 

        
	For
        Bank Use Only

         

        Date
        Rec’d:

        Time:

        Comp.
        Status:         YES         NO

        Status
        Date:

        Time:

        Approval:

         

 

Borrower
represent(s), warrant(s) and certify(ies) that no Default, Event of Default, or any condition or event which, with the giving
of notice or the running of time, or both, would constitute a Default or Event of Default, has occurred and is continuing under
the Agreement, and none will exist upon the making of the Advance requested hereunder. Borrower further certify(ies) that upon
advancing the sum requested hereunder, the outstanding Advances under the Non-Formula Revolving Line or Revolving Line (as applicable)
will not exceed the Non-Formula Revolving Line or Revolving Line (as applicable). If the Advances shall at any time exceed the
Non-Formula Revolving Line or Revolving Line (as applicable), Borrower will immediately pay such excess amount, without any necessity
of notice or demand (if applicable).

 

Capitalized
terms used but not otherwise defined herein shall have the respective meanings given to them in the Agreement.

 

 

EXHIBIT A

     

     

    

 

AMENDMENT TO AND AFFIRMATION OF GUARANTY

 

THIS AMENDMENT TO AND AFFIRMATION
OF GUARANTY (“Amendment”) is dated as of February _15__, 2017, between PRESCOTT GROUP AGGRESSIVE SMALL CAP MASTER FUND
(“Guarantor”) and COMERICA BANK (“Bank”).

 

RECITALS:

 

A.       MODERN
SYSTEMS CORPORATION, a Delaware corporation, formerly known as BluePhoenix Solutions USA, Inc., a Delaware corporation and MS MODERNIZATION
SERVICES, INC., a Texas corporation, formerly known as Sophisticated Business Systems, Inc., successor by merger to BP-AT Acquisition
LLC, a Delaware limited liability company f/k/a BP-AT Acquisition Corporation, a Delaware corporation (individually and collectively,
the “Borrower”) have obtained certain loans or other credit accommodations from Bank pursuant to that certain Loan
and Security Agreement dated as of October 2, 2013, as may be amended from time to time, including, without limitation, by that
certain First Amendment to Loan and Security Agreement, Joinder, and Modification to Loan Documents dated September 25, 2014, that
certain Omnibus Modification to Loan Documents and Consent dated January 8, 2015, that certain Third Amendment to Loan and Security
Agreement, Modification to Loan Documents and Consent dated May 1, 2015, that certain Fourth Amendment to Loan and Security Agreement
dated May 11, 2015, that certain Fifth Amendment to Loan and Security Agreement and Waiver dated as of March 9, 2016, and that
certain Sixth Amendment to Loan and Security Agreement and Waiver dated as of August 4, 2016 (collectively, the “Loan Agreement”),
which loans and certain credit accommodations are guaranteed by Guarantor pursuant to the terms of the Guaranty, dated September
25, 2014, by Guarantor in favor of Bank (as it may be amended from time to time, the “Guaranty”). Borrower and Bank
propose to enter into a Seventh Amendment to Loan and Security Agreement dated as of the date hereof (the “Amendment”).
Unless otherwise defined, all capitalized terms in this Amendment shall be as defined in the Guaranty.

 

B.       Guarantor
and Bank desire to amend the Guaranty as set forth herein.

 

NOW, THEREFORE, in consideration
of the premises and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Guarantor
and Bank agree as follows:

 

1.       Section
13(c) of the Guaranty is amended and restated to read in its entirety as follows:

 

		“(c)	Anything contained in the foregoing to the contrary notwithstanding, the maximum liability of the
undersigned to Bank pursuant to this Guaranty shall not exceed $1,750,000, plus thirty seven and one half percent (37.5%) multiplied
by the accrued and unpaid interest, at the time Bank makes demand for payment under this Guaranty, under the Non-Formula Revolving
Line (as defined in the Loan Agreement), plus the costs and expenses (including reasonable attorneys’ fees) incurred by Bank
in enforcing this Guaranty and in collecting such Indebtedness. No payment by any person or entity other than the undersigned (including,
without limitation, Borrower or any other guarantor of such Indebtedness) with respect to such Indebtedness shall reduce the obligations
of the undersigned to Bank hereunder unless and until the Indebtedness is fully and indefeasibly satisfied in cash. No application
of any collateral or proceeds thereof (including, without limitation, any collateral given by the undersigned, Borrower or any
other person or entity) with respect to such Indebtedness shall reduce the obligations of the undersigned to Bank hereunder unless
and until the Indebtedness is fully and indefeasibly satisfied in cash.”

 

2.       Guarantor
affirms Guarantor’s obligations to Bank under the Guaranty and acknowledges that, except as amended by this Amendment, all
of the terms and conditions of the Guaranty shall remain in full force and effect, subject to no setoff, defense or counterclaim.

 

3.       Guarantor
confirms that no affirmation (including without limit this Amendment) is required by the terms of the Guaranty and need not be
obtained in connection with any prior or future waivers or amendments or extensions of additional credit to Borrower.

 

4.       This
Amendment shall be effective as of the date hereof.

 

[Remainder of Page Intentionally Left Blank]

 

    

     

    

 

WITNESS WHEREOF, the parties have executed this Amendment
as of the first date written above.

 

	COMERICA BANK	 	PRESCOTT GROUP AGGRESSIVE SMALL CAP MASTER FUND
	 	 	 
	By:	/s/ Walter Weston	 	By:	/s/
    Phil Frohlich
	 	 	 	 	 
	Its:	Vice President	 	Its:	Manager

 

 

[Signature Page to Amendment to and Affirmation of
Guaranty]Exhibit
10.2

 

SHARE
PURCHASE AGREEMENT #1

 

This
SHARE PURCHASE AGREEMENT dated as of February 14, 2017 (this “Agreement”) by and between Modsys International
Ltd., an Israeli company (the “Company”), and Columbia Pacific Opportunity Fund, LP (the “Purchaser”).

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement, the Company desires to issue and sell to the Purchaser, and the
Purchaser desires to purchase from the Company, ordinary shares 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 the Purchaser agrees as follows:

 

ARTICLE
I

 

PURCHASE
AND SALE OF SHARES

 

Section
1.1     Purchase and Sale of Shares. Upon the following terms and conditions, the Company shall issue and sell to the Purchaser,
and the Purchaser shall purchase from the Company, 757,575 ordinary shares of the Company, par value NIS 0.04 per share (the “Shares”)
at a price per share equal to $0.66 (“Price Per Share”) amounting to an aggregate purchase price of US $500,000.00
(the “Purchase Price”).

 

Section
1.2     Closing. The closing of the purchase and sale of the Shares under this Agreement, shall take place at the offices
of the Company at 6600 LBJ Freeway, Ste 210, Dallas, TX (the “Closing”) at 8:00 a.m., central time, or such
other location as mutually agreed by the Parties on April 1, 2017 (the “Closing Date”). Subject to the fulfillment
or waiver of all of the other conditions set forth in Article IV hereof, at the Closing the Company shall deliver or cause to
be delivered to the Purchaser the Shares and, concurrently, the Purchaser shall deliver the Purchase Price by wire transfer to
the Company.

 

ARTICLE
II

 

REPRESENTATIONS
AND WARRANTIES

 

Section
2.1     Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchaser, as of
the date hereof and the Closing Date, as follows:

 

(a)       Organization
and Good Standing. The Company is a company duly incorporated or otherwise organized and validly existing under the laws of
the State of Israel and has the requisite power to own, lease and operate its properties and assets and to conduct its business
as it is now being conducted. Each subsidiary of the Company (“Subsidiary”) is duly qualified to do business
and is in good standing (if applicable) in every jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary except for any jurisdiction(s) (alone or in the aggregate) in which the failure to be
so qualified will not have a Material Adverse Effect. For the purposes of this Agreement, “Material Adverse Effect”
means any material adverse effect on the business, operations, properties or financial condition of the Company and its Subsidiaries
taken as a whole (other than effects resulting from conditions affecting the Company’s or its Subsidiaries’ markets
generally or from general economic conditions) and/or any condition, circumstance or situation that would prohibit or otherwise
materially interfere with the ability of the Company to perform any of its obligations under this Agreement in any material respect.

 

    	 	1	 

     

    

 

(b)       Power;
Authorization; Enforcement. The Company has the requisite power and authority to enter into and perform its obligations under
this Agreement, and to issue and sell the Shares. The execution, delivery and performance of this Agreement by the Company and
the consummation by it of the transactions contemplated hereby have been duly and validly authorized by all necessary action,
and no further consent or authorization of the Company, its board of directors or shareholders is required. This Agreement constitutes
a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as such
enforceability may be limited by applicable bankruptcy, reorganization, moratorium, liquidation, conservatorship, receivership
or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable
principles of general application, (ii) as limited by laws relating to the availability of specific performance, injunctive relief
or other equitable remedies; and (iii) insofar as indemnification provisions may be limited by applicable law.

 

(c)       Issuance
of Shares. The Shares are duly authorized, and when issued and paid in accordance with the terms hereof, shall be duly and
validly issued, fully paid, non-assessable, and free and clear of all liens.

 

(d)       No
Conflicts. The execution, delivery and performance of this Agreement by the Company, the performance by the Company of its
obligations and the consummation by the Company of the transactions contemplated hereby do not and will not (i) violate any
provision of the Company’s memorandum or articles of association as amended to date, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement or obligation to which the Company is a party or by which
the Company’s properties or assets are bound, or (iii) result in a violation of any federal, state, local or foreign statute,
rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company
or by which any property or asset of the Company is bound or affected, except, with respect to clauses (ii) and (iii) above for
such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in
the aggregate, have a Material Adverse Effect.

 

(e)       SEC
Documents, Financial Statements. The Company has filed all reports, schedules forms, statements and other documents required
to be filed in the last 12 months by the Company under the Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the “Securities Act”) and the Securities Exchange Act of 1934, as amended and the rules and regulations
promulgated thereunder (the “Exchange Act”), all of the foregoing including filings incorporated by reference
therein being referred to as the “SEC Documents”). At the times of its filing, the SEC Documents complied in
all material respects with the requirements of the Exchange Act and the Securities Act, as applicable. As of their respective
dates, the financial statements of the Company included in any SEC Documents filed by the Company in the last 12 months have been
prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) applied
on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed
or summary statements), and fairly present in all material respects the financial position of the Company and its Subsidiaries
as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).

 

    	 	2	 

     

    

 

(f)       No
Undisclosed Liabilities. Except as disclosed in the SEC Documents, since September 30, 2016, the Company has not incurred
any liabilities, obligations, claims or losses (whether liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent
or otherwise) other than those incurred in the ordinary course of the Company’s or its Subsidiaries respective businesses
or which, individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect.

 

(g)       Actions
Pending. Except as set forth in the SEC Documents, there is no action, suit, claim, investigation, arbitration, alternate
dispute resolution proceeding or other proceeding pending or, to the knowledge of the Company, threatened against or involving
the Company or any of its respective properties or assets, which individually or in the aggregate, would reasonably be expected,
if adversely determined, to have a Material Adverse Effect. There are no outstanding orders, judgments, injunctions, awards or
decrees of any court, arbitrator or governmental or regulatory body against the Company or any officers or directors of the Company
in their capacities as such, which individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

(h)       Compliance
with Law. The business of the Company has been and is presently being conducted in accordance with all applicable federal,
state, local and foreign governmental laws, rules, regulations and ordinances, except as set forth in the SEC Documents or such
that, individually or in the aggregate, the noncompliance therewith could not reasonably be expected to have a Material Adverse
Effect.

 

(i)       Taxes.
Except for matters that would not, individually or in the aggregate, have or reasonable expected to have a Material Adverse Effete,
the Company has prepared and filed all material federal, state, foreign and other tax returns required by law to be filed by it,
has paid or made provisions for the payment of all taxes shown to be due and all additional assessments, and adequate provisions
have been and are reflected in the financial statements of the Company and the Subsidiaries for all current taxes and other charges
to which the Company or any Subsidiary is subject and which are not currently due and payable. The Company has no knowledge of
any additional assessments, adjustments or contingent tax liability of any nature whatsoever, whether pending or threatened against
the Company for any period, nor of any basis for any such assessment, adjustment or contingency, which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

 

(j)       Disclosure.
All disclosure furnished by or on behalf of the Company to the Purchaser regarding the Company, its business and the transactions
contemplated hereby is true and correct and does not contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.
The Company acknowledges and agrees that the Purchaser does not make or has not made any representations or warranties with respect
to the transactions contemplated hereby other than those specifically set forth in Section 2.2 hereof.

 

(k)       Transactions
with Affiliates. Except as set forth in the SEC Documents, none of the officers or directors of the Company or, to the knowledge
of the Company, none of the employees of the Company is presently a party to any transaction with the Company (other than for
services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing
of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from
or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge
of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director,
trustee, stockholder, member or partner, in each case in excess of 5% other than for (i) payment of salary or consulting fees
for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including
stock option agreements under any stock option plan of the Company.

 

    	 	3	 

     

    

 

(l)       Investment
Company Act Status. The Company is not, and as a result of and immediately upon the Closing will not be, an “investment
company” or, to the Company’s knowledge, a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as amended.

 

(m)       Title
to Assets. The Company and the Subsidiaries have valid land use rights for all real property that is material to their respective
businesses and good and marketable title in all personal property owned by them that is material to their respective businesses,
in each case free and clear of all liens, except for liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries. Any real property and
facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases
of which the Company and the Subsidiaries are in compliance, except as could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.

 

(n)       Accounting
Controls. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company,
including its Subsidiaries, is made known to the certifying officers by others within those entities. The Company’s certifying
officers have evaluated the effectiveness of the Company’s controls and procedures in accordance with Item 4 of the Quarterly
Report on Form 10-Q for the Quarter Ended September 30, 2016 (the “10-Q”). The Company presented in the 10-Q
the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations
as of as of September 30, 2016. Since such date, there have been no significant changes in the Company’s internal controls
(as such term is defined in Rule 13a-15(e) of the Exchange Act) or, to the Company’s knowledge, in other factors that could
significantly affect the Company’s internal controls.

 

(o)       Application
of Takeover Protections. The Company has no knowledge of any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Articles
of Association or the laws of the state of Israel that is or could become applicable to the Purchaser as a result of the Purchaser
and the Company fulfilling their obligations or exercising their rights under this Agreement, including without limitation the
Company’s issuance of the Shares and the Purchaser’s ownership of the Shares.

 

(p)       No
Additional Agreements. The Company does not have any agreement or understanding with Purchaser with respect to the transactions
contemplated by this Agreement other than as specified in this Agreement.

 

(q)       Foreign
Corrupt Practices Act. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf
of any of the Company has, directly or indirectly, (i) used any funds, or will use any proceeds from the sale of the Shares, for
unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties
or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made
by any person acting on their behalf of which the Company is aware) which is in violation of law, or (iv) has violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.

 

    	 	4	 

     

    

 

(r)       Money
Laundering Laws. The operations of the Company is and has been conducted at all times in compliance with the applicable money
laundering statutes of the United States and the state of Israel, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any applicable governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the best knowledge of the
Company, threatened.

 

(s)       OFAC.
Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee, Affiliate or person acting on
behalf of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the sale
of the Shares, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other
person or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC
or for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

 

(t)       Acknowledgment
Regarding Purchaser’s Purchase of Shares. The Company acknowledges and agrees that the Purchaser is acting solely in
the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby. The Company
further acknowledges that Purchaser is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any advice given by Purchaser or any of its representatives
or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to the Purchaser’s
purchase of the Shares.

 

Section
2.2     Representations, Warranties and Agreements of the Purchaser. The Purchaser hereby represents, warrants and agrees
to the Company as follows as of the date hereof and as of the Closing Date:

 

(a)       Organization
and Standing of the Purchaser. Purchaser is a partnership organized, validly existing and in good standing under the laws
of the jurisdiction of its organization.

 

(b)       Authorization
and Power. Purchaser has the requisite power and authority to enter into and perform its obligations under this Agreement
and to purchase the Shares being sold to it hereunder. The execution, delivery and performance of this Agreement by Purchaser
and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary partnership action,
and no further consent or authorization of Purchaser or its board of directors or partners, as the case may be, is required. When
executed and delivered by the Purchaser, this Agreement shall constitute valid and binding obligations of the Purchaser enforceable
against Purchaser in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the
enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

 

(c)       No
Conflict. The execution, delivery and performance of this Agreement by the Purchaser and the consummation by the Purchaser
of the transactions contemplated hereby do not and will not (i) violate any provision of the Purchaser’s organizational
documents, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage,
deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Purchaser is a party or
by which the Purchaser’s properties or assets are bound, or (iii) result in a violation of any federal, state, local or
foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable
to the Purchaser or by which any property or asset of the Purchaser are bound or affected, except, with respect to clauses (ii)
or (iii) (other than with respect to federal and state securities laws) for such conflicts, defaults, terminations, amendments,
acceleration, cancellations and violations as would not, individually or in the aggregate, materially and adversely affect the
Purchaser’s ability to perform its obligations under this Agreement.

 

    	 	5	 

     

    

 

(d)       Acquisition
for Own Account. Purchaser is purchasing the Shares solely for its own account and not with a view to, or for sale in connection
with, public sale or distribution thereof. Purchaser does not have a present intention to sell any of the Shares, nor a present
arrangement (whether or not legally binding) or intention to effect any distribution of any of the Shares to or through any person
or entity.

 

(e)       Experience.
Purchaser acknowledges that it (i) has such knowledge and experience in financial and business matters such that Purchaser is
capable of evaluating the merits and risks of Purchaser’s investment in the Company, (ii) is able to bear the financial
risks associated with an investment in the Shares and (iii) has been given full access to such records of the Company and the
Subsidiaries and to the officers of the Company and the Subsidiaries as it has deemed necessary or appropriate to conduct its
due diligence investigation.

 

(f)       General.
Purchaser understands that the Shares are being offered and sold in reliance upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of Purchaser set forth herein in order to determine the applicability
of such exemptions and the suitability of Purchaser to acquire the Shares.

 

(g)       No
General Solicitation. Purchaser acknowledges that the Shares were not offered to Purchaser by means of any form of general
or public solicitation or general advertising, or publicly disseminated advertisements or sales literature, including (i) any
advertisement, article, notice or other communication published in any newspaper, magazine, Internet website or similar media,
or broadcast over television or radio, or (ii) any seminar or meeting to which Purchaser was invited by any of the foregoing means
of communications. Purchaser, in making the decision to purchase the Shares, has relied upon independent investigation made by
it and has not relied on any information or representations made by third parties.

 

(h)       Accredited
Investor. Purchaser is an “accredited investor” (as defined in Rule 501 of Regulation D), and Purchaser has such
experience in business and financial matters that it is capable of evaluating the merits and risks of an investment in the Shares.
Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act and Purchaser is not a broker-dealer
or an “associated person” of a broker-dealer. Purchaser acknowledges that an investment in the Shares is speculative
and involves a high degree of risk.

 

(i)       Certain
Fees. Purchaser has not employed any broker or finder or incurred any liability for any brokerage or investment banking fees,
commissions, finders’ structuring fees, financial advisory fees or other similar fees in connection with this Agreement
or the transactions contemplated hereby.

 

(j)       No
Trading. Purchaser has not directly or indirectly, nor has any person acting on behalf of or pursuant to any understanding
with Purchaser, engaged in any transactions in the securities of the Company (including, without limitations, any Short Sales
involving the Company’s securities) since the time that Purchaser was first contacted by the Company regarding the consummation
of this transaction. Purchaser covenants that neither it nor any person or entity acting on its behalf or pursuant to any understanding
with it will engage in any transactions in the securities of the Company (including Short Sales) prior to the time that the transactions
contemplated by this Agreement are publicly announced. For purposes of this Section 2.2(j), “Short Sales” shall
include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange
Act and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, swaps and similar arrangements
(including on a total return basis), and sales and other transactions through non-US broker dealers or foreign regulated brokers.

 

    	 	6	 

     

    

 

(k)       Restricted
Securities.

 

(i)       Purchaser
understands that none of the Shares have been registered under the Securities Act. Purchaser also understands that the Shares
are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Purchaser’s
representations contained in the Agreement.

 

(ii)       Purchaser
acknowledges and agrees that the Shares are “restricted securities” as defined in Rule 144 promulgated under the Securities
Act as in effect from time to time and must be held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Purchaser has been advised or is aware of the provisions of Rule 144,
which permits limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions, including,
among other things: the availability of certain current public information about the Company, the resale occurring following the
required holding period under Rule 144 and the number of shares being sold during any three-month period not exceeding specified
limitations.

 

(iii)       Certificates
evidencing the Shares shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend
in substantially the following form until such time as they are not required (and a stock transfer order may be placed against
transfer of the certificates for the Shares):

 

THESE
SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE
STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OR (B) 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 OR BLUE SKY LAWS
AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.

 

(iv)       Purchaser
hereunder acknowledges its primary responsibilities under the Securities Act and accordingly will not sell or otherwise transfer
the Shares or any interest therein without complying with the requirements of the Securities Act.

 

ARTICLE
III

 

COVENANTS

 

Section
3.1     Other Agreements. The Company covenants that it will not enter into any agreement in which the terms of such agreement
would restrict or impair the right or ability of the Company to perform its obligations under this Agreement.

 

    	 	7	 

     

    

 

Section
3.2     Certain Transactions and Confidentiality. Purchaser 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. Purchaser covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company, Purchaser will maintain the confidentiality of the existence and terms of this
transaction and the information included in the this Agreement.

 

ARTICLE
IV

 

CONDITIONS

 

Section
4.1     Conditions Precedent to the Obligation of the Company to Close and to Sell the Shares. The obligation hereunder
of the Company to close and issue and sell the Shares to the Purchaser at the Closing is subject to the satisfaction or waiver,
at or before the Closing of the conditions set forth below. These conditions are for the Company’s sole benefit and may
be waived by the Company at any time in its sole discretion.

 

(a)       Accuracy
of the Purchaser’s Representations and Warranties. The representations and warranties of the Purchaser shall be true
and correct in all material respects (except for those representations and warranties that are qualified by materiality, which
shall be true and correct in all respects) as of the date when made and as of the Closing Date as though made at that time, except
for representations and warranties that are expressly made as of a particular date, which shall be true and correct in all material
respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which
shall be true and correct in all respects) as of such date.

 

(b)       Performance
by the Purchaser. Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied with by the Purchaser at or prior to the Closing
Date.

 

(c)       Delivery
of Purchase Price. The Purchaser shall have delivered to the Company the Purchase Price for the Shares.

 

(d)       Shareholder
Approval. The required approval of the shareholders of the Company shall have been obtained.

 

Section
4.2     Conditions Precedent to the Obligation of the Purchaser to Close and to Purchase the Shares. The obligation hereunder
of the Purchaser to purchase the Shares and consummate the transactions contemplated by this Agreement is subject to the satisfaction
or waiver, at or before the Closing, of each of the conditions set forth below.

 

(a)       Accuracy
of the Company’s Representations and Warranties. Each of the representations and warranties of the Company in this Agreement
shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality
or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date
as though made at that time, except for representations and warranties that are expressly made as of a particular date, which
shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality
or Material Adverse Effect, which shall be true and correct in all respects) as of such date.

 

    	 	8	 

     

    

 

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

 

ARTICLE
V

 

INDEMNIFICATION

 

Section
5.1     Company Indemnity. Subject to the provisions of this Section 5.1, the Company will indemnify and hold the Purchaser
and its directors, officers, members, managers, partners, employees and agents (and any other persons with a functionally equivalent
role of a persons holding such titles notwithstanding a lack of such title or any other title), each person who controls 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, managers, partners or employees (and any other persons with a functionally equivalent role of a persons 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, 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 any breach of any of the representations, warranties, covenants or agreements made by the Company
in this Agreement. 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 reasonable
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 such separate 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 (i) for any settlement by a Purchaser Party effected without the
Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (ii) 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.

 

ARTICLE
VI

 

MISCELLANEOUS

 

Section
6.1     Specific Performance; Consent to Jurisdiction; Venue.

 

(a)       The
Company and the Purchaser acknowledge and agree that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions hereof or thereof, this being in addition to any other remedy to which any
of them may be entitled by law or equity.

 

    	 	9	 

     

    

 

(b)       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 conflicts of law
thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. The parties
agree that venue for any dispute arising under this Agreement will lie exclusively in the state or federal courts located in New
York County, New York, and the parties irrevocably waive any right to raise forum non conveniens or any other argument
that New York is not the proper venue. The parties irrevocably consent to personal jurisdiction in the state and federal courts
of the state of New York. The Company and Purchaser consent to process being served in any such suit, action or proceeding by
mailing a copy thereof 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 in this Section 6.1 shall affect or limit
any right to serve process in any other manner permitted by law. THE PARTIES HEREBY
WAIVE ALL RIGHTS TO A TRIAL BY JURY. If either 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 reasonable
attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action
or proceeding.

 

Section
6.2     Entire Agreement. This Agreements contain the entire understanding and agreement of the parties with respect to
the matters covered hereby and, except as specifically set forth herein, neither the Company nor Purchaser make any representation,
warranty, covenant or undertaking with respect to such matters, and they supersede all prior understandings and agreements with
respect to said subject matter, all of which are merged herein.

 

Section
6.3     Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder
shall be in writing and shall be effective (a) upon (i) hand delivery at the address designated below, (ii) delivery by telecopy
or facsimile at the number designated below or (iii) delivery by e-mail at the e-mail address designated below (in each case,
if delivered on a business day during normal business hours where such notice is to be received), or, in each case, the first
business day following such delivery (if delivered other than on a business day during normal business hours where such notice
is to be received) or (b) on the third business day following the date of mailing by express courier service, fully prepaid, addressed
to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall
be:

 

	If to the Company: 	Modsys International Ltd.

6600
LBJ Freeway, Ste 210

Dallas,
TX

Attention:
Richard Chance

Tel.
No.: (206) 395-4152

 

	If to
    Purchaser:	Columbia Pacific Opportunity Fund, LP

c/o
Columbia Pacific Advisors, LLC

1910
Fairview Avenue East, Suite 500

Seattle,
WA 98102

Attention:
Alex Washburn

Tel.
No.: (206) 453-0291

 

    	 	10	 

     

    

 

Any
party hereto may from time to time change its address for notices by giving written notice of such changed address to the other
party hereto pursuant to the provisions of this Section 6.3.

 

Section
6.4     Amendments and Waivers. No provision of this Agreement may be amended or waived except in a written instrument signed
by the Company and Purchaser. Any amendment or waiver effected in accordance with this Section 6.4 shall be binding upon the Purchaser
(and its permitted assigns) and the Company. No waiver by either party 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 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 accruing to it thereafter.

 

Section
6.5     Headings. The article, section and subsection headings in this Agreement are for convenience only and shall not
constitute a part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof.

 

Section
6.6     Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and assigns. After the Closing, the assignment by a party to this Agreement of any rights hereunder shall not affect the obligations
of such party under this Agreement.

 

Section
6.7     No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

Section
6.8     Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State
of New York, without giving effect to any of the conflicts of law principles which would result in the application of the substantive
law of another jurisdiction. This Agreement shall not be interpreted or construed with any presumption against the party causing
this Agreement to be drafted.

 

Section
6.9     Survival. The representations and warranties of the Company and the Purchaser shall survive the execution and delivery
hereof and the Closing hereunder for the applicable statute of limitations period.

 

Section
6.10     Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute
one and the same instrument and shall become effective when counterparts have been signed by each party and delivered to the other
parties hereto, it being understood that all parties need not sign the same counterpart.

 

Section
6.11     Severability. The provisions of this Agreement are severable and, in the event that any court of competent jurisdiction
shall determine that any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason,
be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision or part of a provision of this Agreement and this Agreement shall be reformed and construed as if such invalid
or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would
be valid, legal and enforceable to the maximum extent possible.

 

Section
6.12     Further Assurances. From and after the date of this Agreement, upon the request of the Purchaser or the Company,
the Company and the Purchaser shall execute and deliver such instruments, documents and other writings as may be reasonably necessary
or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement.

 

Section
6.13     Waiver of Conflicts. Each party to this Agreement acknowledges that Cooley LLP
(“Cooley”), outside general counsel to the Company, has in the past performed and is or may now or in
the future represent Purchaser or its affiliates in matters unrelated to the transactions contemplated by this Agreement (the
“Financing”), including representation of Purchaser or its affiliates in matters of a similar nature to the
Financing. The applicable rules of professional conduct require that Cooley inform the parties hereunder of this representation
and obtain their consent. Cooley has served as outside general counsel to the Company and has negotiated the terms of the Financing
solely on behalf of the Company. The Company and Purchaser hereby (a) acknowledge that they have had an opportunity to ask
for and have obtained information relevant to such representation, including disclosure of the reasonably foreseeable adverse
consequences of such representation; (b) acknowledge that with respect to the Financing, Cooley has represented solely the
Company, and not Purchaser or any stockholder, director or employee of the Company or Purchaser; and (c) gives its informed
consent to Cooley’s representation of the Company in the Financing.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

    	 	11	 

     

    

 

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

 

	 	MODSYS
    INTERNATIONAL LTD.
	 	 	 
	 	By:	/s/
    Richard T. Chance
	 	Name:
    	Richard
    T. Chance
	 	Title:	CFO
    
	 	 	 
	 	COLUMBIA
    PACIFIC OPPORTUNITY FUND, LP
	 	 	 
	 	By:	/s/
    Alex Washburn
	 	Name:	Alex
    Washburn
	 	Title:	Manager

 

 

12

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