BINDING HEADS OF AGREEMENT PRIVATE AND CONFIDENTIAL

Subject to the satisfaction (or waiver) of the Conditions (as defined in clause 5 below) and in consideration for the issue of the Consideration Securities (as that term is defined in clause 2) by the Purchaser to the Selling Shareholders, the Purchaser agrees to purchase, and the Vendors agree to sell, the Physimax Shares, free from any encumbrances and waiving any pre-emptive or call option rights associated with the Physimax Shares, on the terms and conditions pursuant to this Heads of Agreement (Acquisition).

Title to and risk in the Physimax Shares shall pass to the Purchaser on completion of the Acquisition.

(a)             In consideration for the Acquisition, the Purchaser will issue the Selling Shareholders and the current holders of Physimax Options (or their nominees):

(i)       AHI Shares at the Deemed Issue Price (Consideration Shares); and

(ii)       AHI Options at the Deemed Conversion Price (Consideration Options),

worth a total of $6,000,000 in aggregate (together, the Consideration Securities).

(b)             The allocation of the Consideration Securities between the Selling Shareholders and the holders of the Physimax Options will be in accordance with an allocation list to be provided by Physimax as part of the due diligence.

(c)             It is acknowledged and agreed that 50% of the Consideration Securities of each Vendor will be subject to six (6) months of voluntary escrow. The terms of the voluntary escrow will be set out in voluntary restriction deeds (Voluntary Restriction Deeds) in form and substance to be agreed upon before Completion.

The issue of AHI ASX Shares and AHI Options that is contemplated in this Heads of Agreement is subject to and conditional on the Purchaser obtaining the required approvals from its shareholders at a General Meeting to issue AHI ASX Shares to the Selling Shareholders and the Consideration Options to the current holders of Physimax Options (Shareholder Approval).

The Purchaser shall initiate the process of the Shareholder Approval (and its filing with the ASX) as soon as possible after execution of this Heads of Agreement.

Completion of the Acquisition is conditional upon the satisfaction (or waiver by the Parties) of the following conditions precedent, in addition to the satisfaction of the conditions for completion set forth in clause 8:

(a)             the Purchaser obtaining all required third party, regulatory and governmental approvals and consents to give effect to the Acquisition, including any necessary shareholder approvals required by the Corporations Act or ASX Listing Rules (and any other applicable law or regulations);

(b)             the Purchaser completing due diligence on Physimax to its satisfaction (in its sole and absolute discretion);

(c)             Physimax and each of the parties that hold Physimax Option executing a deed in relation to the cancellation of the Physimax Options upon issuance of the Consideration Options, with effect from Completion (Option Cancellation Deeds);

(d)             the Purchaser adopting an Israeli appendix to its share option plan, allowing issuance of options under the capital gain track (through a trustee) under section 102 of the Israeli Tax Ordinance and ready for filing with the Israeli tax authority immediately following Completion (the "IL Plan");

(e)             Physimax obtaining all required third party, regulatory and governmental approvals and consents to give effect to the Acquisition, including any necessary shareholder approvals and the consent of the Israeli Innovation Authority;

(f)             the issuance of a ruling by the Israeli Taxing Authority, approving the deferral of taxes arising from the Acquisition; and

(g)             Physimax completing due diligence on Purchaser (for the benefit of its shareholders) to its satisfaction (in its sole and absolute discretion, (together, the Conditions).

Conditions (a), (b) and (c) are for the benefit of the Purchaser and may only be waived by the Purchaser.

Conditions (d) through (g) (inclusive)are for the benefit of the Vendors and may only be waived by the Controlling Shareholders (on behalf of the other Vendors).

The Parties will use their respective best endeavours and agree to cooperate and provide each other with all reasonable assistance, and to execute such documents and take such actions as required to ensure that the Conditions are satisfied promptly after the date of this Heads of Agreement.

If by June 30, 2021, the Conditions are not satisfied or waived (as set forth above), either Party may terminate the agreement constituted by this Heads of Agreement by notice in writing to the other and the Parties will be released from their obligations under this Heads of Agreement. In addition, this Heads of Agreement may be terminated by mutual written consent of the parties at any time before June 30, 2021. In such events, this agreement will be at an end and the Parties will be released from their obligations under this agreement (other than in respect of any breaches that occur prior to termination).

In the event this Heads of Agreement is in effect on May 21, 2021, then the mutual Due Diligence process will be considered as successfully completed and the Purchaser shall pay Physimax an amount of US$60,000 (Due Diligence Payment) within no later than ten (10) days thereafter. The Due Diligence Payment shall be in addition to the Consideration Securities.

The Due Diligence Payment is fully refundable in the event that any of the warranties set out in Part 2 of Schedule 3 are misleading or incorrect in circumstances involving fraud or intentional or deliberate misleading or deceptive conduct on the part of a Controlling Shareholder.

(a)             Physimax must provide the Purchaser with a list of its key employees and consultants (Key Contributors).

(b)             The Purchaser is to use reasonable endeavours to amend the employment and consultancy agreements of the Key Contributors as soon as practicable after Completion, under which the Key Contributors are to agree to serve a minimum term of two additional years from the date of Completion (AHI Agreements). The terms and conditions of the AHI Agreements to be offered to the Key Contributors, including the engagement term and performance criteria, shall be agreed upon between the management of Physimax and the Purchaser prior to and as a condition to Completion.

(c)             Subject to (f) below, the Key Contributors (and/or future employees and consultant identified as key contributors at the discretion of the founders of Physimax) will receive an aggregate of $2,000,000 worth of AHI Performance Rights at the same conversion price as the conversion price determined for the conversion of the ordinary shares of Physimax to Consideration Shares (Key Contributor Performance Rights) under the Purchaser’s Incentive Performance Rights Plan in proportions to be decided by Mr Ram Shalev, Physimax’s Chief Executive Officer at the date of this Heads of Agreement. The Purchaser shall work together with the management of Physimax in order to determine the appropriate mechanism for issuance of the Performance Rights (such as options / shares / RSUs) taking into account the tax benefits available to the Key Contributors. The AHI Performance Rights shall be for ADRs or AHI ASX, as shall be chosen by the Vendors for their Consideration Shares.

(d)             The terms of the Key Employee Performance Rights, including any milestones, are to be set out in the AHI Agreements.

(e)             If required, the Purchase must obtain ASX approval of the terms of the Key Employee Performance Rights prior to issuing them to the Key Contributors (which approval shall be obtained before Completion).

(f)             The Purchaser shall initiate the process of the Shareholder Approval (and its filing with the ASX) as soon as possible after execution of this Heads of Agreement for the issue of the AHI Performance Rights.

(g)             Subject to Physimax continuing to meet reasonable commercial objectives that are determined by the board of directors of the Purchaser (AHI Board) and the AHI Board determining that it continues to be the best interests of AHI’s shareholders to do so, the Purchaser shall fund the operation of Physimax as of Completion with a budget of US$60,000 per month. The budget shall be updated from time to time according to plan and needs as required to facilitate adequate resources to obtain the business goals agreed mutually by the Physimax management and the Purchaser.

Completion of the Acquisition (Completion) will occur on the Completion Date at a time and place to be agreed by the Controlling Shareholders and the Purchaser. Without derogating from clause 3 above, at Completion:

(a)             the Purchaser must issue the Consideration Shares to the Vendors in the proportions set out in the Formal Agreement;

(b)             Physimax and the Vendors shall deliver, or cause to be delivered, to the Purchaser:

(i)             share certificates in respect of 100% of the Physimax Shares;

(ii)             the fully executed Option Cancellation Deeds;

(iii)             separate instruments of transfer in registrable form for 100% of the Physimax Shares in favour of the Purchaser (as transferee) which have each been duly executed by or on behalf of the Vendors (as transferor);

(iv)             the list of the Key Contributors;

(v)             the common seal (and any duplicate common seal, share seal or official seal) of Physimax (if any);

(vi)             all available copies of the constituent documents of Physimax;

(vii)            the minute books and other records of meetings or resolutions of shareholders and directors of Physimax (as available); and

(viii)          all registers of Physimax (including the register of shareholders, register of directors, register of charges and all registers required by applicable laws) in proper order and condition and fully entered up to the Completion Date;

(ix)             all cheque books, financial and accounting books and records, copies of tax returns and assessments, mortgages, leases, agreements, insurance policies, title documents, licences, indicia of title, contracts, passwords to computers, certificates and all other records, papers, books and documents of Physimax;

(x)             every current permit, approval, authorisation, consent, exemption, filing, licence, notarisation, registration, password and waiver however described and any renewal or variation to any of them and all other documents issued to Physimax under any legislation, ordinance or otherwise relating to Physimax’s business activities;

(xi)            all documents of right and/or title to the assets and undertakings of Physimax; and

(xii)           the corporate records for Physimax, including all information relating to the assets and undertakings of Physimax and instruments of title for such assets and undertaking.

(c)             The Vendors must procure that a meeting of the directors of Physimax is held to attend to the following matters (as applicable):

(i)             the approval of the registration (subject to payment of duty) of the transfers of 100% of the Physimax Shares and the issue of a new appropriate certificates for the Physimax Shares in the name of the Purchaser;

(ii)             recording the Purchaser as the holder of 100% of the Physimax Shares in Physimax’s registers of shareholders;

(iii)             taking all other steps required under Physimax’s constituent documents and applicable laws to constitute and evidence the Purchaser as the sole holder of the Physimax Shares;

(iv)             the reconstitution of the Physimax board of directors as directed by the Purchaser; and

(v)             such other business as may reasonably be required by the Purchaser to give effect to the Acquisition.

The Parties’ obligations at Completion are interdependent and must take place simultaneously, as nearly as possible, unless otherwise agreed by the Purchaser and the Vendors, except that the Purchaser may, in its sole discretion, waive any or all of the actions that Physimax and/or the Vendors are required to perform under this clause 8.

If a Party (Defaulting Party) fails to satisfy its obligations under clause 3 or this clause 8 on the day and at the place and time for Completion, then any other Party (Notifying Party) may give the Defaulting Party a notice requiring the Defaulting Party to satisfy those obligations within a period of 10 Business Days from the date of the notice and declaring time to be of the essence. The Parties agree, however, that none of Physimax or the Vendors can be a Notifying Party, in the event that one or more of them is a Defaulting Party; and that the Purchaser cannot be a Notifying Party, in the event that it is a Defaulting Party.

If the Defaulting Party fails to satisfy those obligations within those 10 Business Days the Notifying Party may, without limitation to any other rights it may have, terminate this Heads of Agreement by giving written notice to the Defaulting Party.

(a)             Vendor Warranties

By execution of this Heads of Agreement, each Vendor makes the representations and warranties set out in Part 1 of Schedule 3 at the date of this Heads of Agreement and on the Completion Date, subject to adjustments to be disclosed by the Vendor to the Purchaser in writing after the date hereof and on or before Completion (if any). In the event the Purchaser believes such adjustment to have a material adverse effect, the Purchaser may decide that Condition 5(b) above is not completed.

(b)             Physimax Warranties

By execution of this Heads of Agreement, each Controlling Shareholder makes the representations and warranties set out in Part 2 of Schedule 3 at the date of this Heads of Agreement and on the Completion Date, subject to any adjustment to be disclosed by the Controlling Shareholders to the Purchaser in writing after the date hereof and on or before Completion. In the event the Purchaser believes such adjustment to have a material adverse effect, the Purchaser may decide that Condition 5(b)

above is not completed.

(c)              Purchaser Warranties

By execution of this Heads of Agreement, the Purchaser makes the representations and warranties set out in Schedule 4 at the date of this Heads of Agreement and on the Completion Date, subject to any adjustment to be disclosed by the Controlling Shareholders to the Purchaser in writing after the date hereof and on or before Completion. In the event the Controlling Shareholders believe such adjustment to have a material adverse effect, the Controlling Shareholders may decide that Condition 5(g) above

is not completed.

The following provisions shall become effective as of and subject to Completion:

(a)             Each Vendor:

(i)             is severally liable for a breach of the representations and warranties set out in Part 1 of Schedule 3 in relation to itself only; and

(ii)             indemnifies and must hold the Purchaser harmless against all direct loss, damage and costs suffered by the Purchaser by reason of the warranties or representations set out in Part 1 of Schedule 3 proving to be false, misleading or incorrect in relation to itself only.

(b)             The Controlling Shareholders jointly and severally indemnify and must hold the Purchaser harmless against all direct loss, damage and costs suffered by the Purchaser by reason of the warranties or representations set out in Part 2 of Schedule 3 proving to be false, misleading or incorrect. In the event the Purchaser chooses to file a Claim under Part 2 of Schedule 3, it must file it against both the Controlling Shareholders.

(c)             The Purchaser indemnifies and keeps indemnified the Vendors against all loss, damage and costs suffered by Physmiax or the Vendors by reason of the warranties or representations set out in Schedule 4 proving to be false, misleading or incorrect.

(a)             The maximum aggregate amount that a Vendor is required to pay in respect of a claim that is made under or in respect of Part 1 of Schedule 3 of this Heads of Agreement is limited to the value of the Consideration Shares that it receives on Completion.

(b)             The maximum aggregate amount that a Controlling Shareholder is required to pay in respect of a claim that is made under or in respect of

(i)             the warranties set out in paragraphs (a), (b), (c), (d), (m), (n), (p), (q), (r) and (s) of Part 2 of Schedule 3 of this Heads of Agreement is limited to 100% (Fundamental Warranties); and

(ii)             all the other warranties set out in Part 2 of Schedule 3 of this Heads of Agreement is limited to 50%, of the value of the Consideration Shares that it receives on Completion. Notwithstanding the above, the Controlling Shareholders shall not be liable for claims, unless the aggregated amount exceeds 60,000USD.

(c)             Notwithstanding any other provisions of this Heads of Agreement, no Party will be liable for a claim that is made in respect of the warranties set out in Schedule 3 (Claim) unless written notice of the Claim is given to the applicable Party on or prior to:

(i)             for the Fundamental Warranties, 30 September 2022; and

(ii)             for the other warranties that are set out in Schedule 3, the date that is 12 months from Completion.

(d)             Where a Vendor (including, for the purpose of clauses

(d) through (i) hereof, a Controlling Shareholder) is liable under a Claim:

(i)             the Vendor may elect to settle the Claim by the cancellation of the Consideration Shares held by it equal in value the liability amount in accordance with clause 11(f); and

(ii)             where any of the Consideration Shares issued to the Vendor have been sold or transferred, the Vendor is liable to settle the Claim in cash in cleared funds to the Purchaser up to the amount of the value of the Consideration Shares sold or transferred (pro rata based on the value of the Consideration Shares that it receives on Completion).

(e)             If a Vendor elects to cancel Consideration Shares in accordance with clause 11(d)(i) above, then such cancellation shall be in full and final satisfaction of all liability that the Vendor has in relation to a Claim up to the value of the Consideration Shares cancelled. In the event the Consideration Shares issued to a Vendor are insufficient to cover the damage, no additional compensation shall be payable by the Vendor (subject to (d)(ii) above).

(f)             For the purposes of clause 11(d)(i):

(i)             the number of Consideration Shares that must be cancelled or relinquished will be determined by the following formula:

A = B ÷ C

where:

(g)

(h)

(i)

A= The number of Consideration Shares that a Vendor must cancel or relinquish;

B= The total liability of the Vendor in respect of the relevant Claim (as agreed or adjudicated by a court of competent jurisdiction); and

C= the higher of the market value of the Consideration Shares as quoted on the ASX or NASDAQ (as applicable) (a) at the date of issuance of the Consideration Shares issued to the Vendors, and (b) at the time the relevant Claim is payable;

(ii)            the Vendor by this clause grants the Purchaser a power of attorney to do all things necessary including to execute any document to give effect to the cancellation or relinquishment of the Consideration Shares on the Vendor’s behalf (to the extent the Vendor elects to satisfy the claim by cancellation or relinquishment of shares); and

where more than one of the Vendors are liable as a result of a Claim, all of the Vendors so liable shall participate in satisfaction of such Claim pro rata to their portion of the Consideration Shares (as determined upon issuance).

The limitations in this clause 11 do not apply to any Claim for loss or damage arising from an act of fraud or intentional or deliberate misleading or deceptive conduct on behalf of the Vendor or Controlling Shareholders (as applicable).

The indemnity provisions set forth herein are the exclusive remedy available in connection with a breach of warranties under this Heads of Agreement.

(g)

(h)

(i)

over existing issued capital, or rights to be issued securities in the capital of Physimax;

alter or agree to alter its constituent documents;

create or permit the creation of any encumbrance over any of the assets or undertaking of Physimax; and

enter into a buy-back agreement or resolve to approve the terms of a buy-back agreement.

This Heads of Agreement and all other information disclosed by the Parties to each other (Confidential Information) is confidential and each Party shall ensure that the Confidential Information remains confidential and shall not be disclosed to any third party, save as required by applicable law or regulations. For the avoidance of doubt, the Vendors is required to comply with the continuous disclosure provisions of the ASX Listing Rules and subject to clause 14(b) will make such ASX announcements as is reasonably necessary in order to comply with the ASX Listing Rules.

No modification or alteration of the terms of this Heads of Agreement shall be binding unless made in writing dated subsequent to the date of this Heads of Agreement and duly executed by the Purchaser, the Controlling Shareholders and the Vendors holding a majority of the issued capital of the Company.

The Vendors hereby irrevocably nominate the Controlling Shareholders as their representatives and constitute them as their proxy with a power of attorney to execute any document, waiver and consent required to give effect to this Agreement.

In this Heads of Agreement:

(a)             Acquisition means the acquisition by the Purchaser of 100% of the Physimax Shares.

(b)             ADR mean an American Depositary Receipt representing an interest in fully paid ordinary shares in the in the Purchaser (based on the ratio used under the IPO).

(c)             AHI Share means:

(i)             if the NASDAQ Listing has occurred prior to the relevant issue date, an ADR (or, at the election of the Vendors, an AHI ASX Share); and

(ii)             if the NASDAQ Listing has not occurred prior to the relevant issue date, an AHI ASX Share.

(d)             AHI Option means the right to acquire an unissued AHI Share.

(e)             AHI Performance Right means a right to be issued or transferred an ASHI Share, subject to the terms of the Purchaser’s Incentive Performance Rights Plan.

(f)             Applicable Law means the constitutions of the Vendors and Purchaser and all applicable laws and regulations in any jurisdiction.

(g)             ASX means ASX Limited (ACN 008 624 691) or the financial market operated by it as the context requires.

(h)             ASX Listing Rules means the official listing rules of ASX.

(i)             Controlling Shareholders means Ram Shalev and ▇▇▇▇▇ Kahani.

(j)             Conditions means the conditions precedents set out in clause 5.

(k)             Completion Date means the day that is five business days after the last of the Conditions have been satisfied or waived in accordance with this Heads of Agreement.

(l)             Corporations Act means the Corporations ▇▇▇ ▇▇▇▇ (Cth).

(m)             Deemed Conversion Price means the Deemed Issue Price for the issue of a Consideration Share under clause 2(a)(i).

(n)             Deemed Issue Price means:

(i)             for AHI ASX Shares, the volume weighted average price of AHI ASX Shares for the five trading days prior to the relevant issue date; and

(ii)             for ADRs, the issue price of the Purchaser’s ADRs under the IPO.

(o)             Formal Agreement has the meaning given in clause 13.

(p)             IPO means the Purchaser’s initial public offering of ADRs on the NASDAQ.

(q)             NASDAQ means the NASDAQ Stock Market.

(r)             NASDAQ Listing means the Purchaser announcing that NASDAQ has provided confirmation to the Purchaser that it has approved the Purchaser’s application for admission to NASDAQ, subject only to conditions that the Purchaser reasonably believes it can satisfy.

(s)             Physimax Share means the Physimax Ordinary Shares and the Physimax Preference Shares.

(t)             Physimax Option means an option to acquire a Physimax Share.

(u)             Physimax Ordinary Share means a fully paid ordinary share in the capital of Physimax.

Interpretation:

(a)             a reference to the symbol "$" or to dollars in this Heads of Agreement are to US dollars;

(b)             capitalised terms used in this Heads of Agreement have the definition ascribed above or otherwise in the terms of this Heads of Agreement;

(c)             headings are for convenience only and do not affect its interpretation;

(d)             an obligation or liability assumed by, or a right conferred on, 2 or more Parties or persons binds or benefits all of them jointly and each of them severally;

(e)             the expression person includes an individual, the estate of an individual, a corporation, an authority, an association or joint venture (whether incorporated or unincorporated), a partnership and a trust;

(f)             a reference to any Party includes that Party’s executors, administrators, successors and permitted assigns, including any person taking by way of novation;

(g)             a reference to any document (including this Heads of Agreement) is to that document as varied, novated, ratified or replaced from time to time;

(h)             a reference to any statute or to any statutory provision includes any statutory modification or re-enactment of it or any statutory provision substituted for it, and all ordinances, by-laws, regulations, rules and statutory instruments (however described) issued under it;

(i)             words importing the singular include the plural (and vice versa) and words indicating a gender include every other gender;

(j)             reference to Parties, clauses, Schedules or paragraphs are references to Parties, clauses, Schedules and paragraphs to or of this Heads Agreement and a reference to this Heads Agreement includes any Schedule to this Heads Agreement; and

(k)             where a word or phrase is given a defined meaning, any other part of speech or grammatical form of that word or phrase has a corresponding meaning.

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EXECUTED by [INSERT COMPANY NAME]

in accordance with its constituent documents and place of incorporation:

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SIGNED by [INSERT NAME OF INDIVIDUAL]

in the presence of:

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