Blue Sphere Corporation S-1/A


 


Exhibit 10.40


 


 PERSONAL EMPLOYMENT AGREEMENT 


   


 THIS EMPLOYMENT
AGREEMENT (“Agreement”) is made and entered into as of the 1st, day of January 2016 by and between Eastern
Sphere Ltd. an Israeli company registered number 514415702 with registered offices at 35 Asuta, Even Yehuda, P.B. 35, Israel
(hereinafter the “Company”), and Dr. Elad Kerner, Israeli ID number 022939128, 69 HaAlon, Gimzo, 7313000,
Israel (hereinafter “Executive”) 


   


 RECITALS 


   


 WHEREAS, the
Company is a fully owned subsidiary of Blue Sphere Corp., a Nevada corporation (hereinafter the “Group”), operating
in the business of Build, Own, Operate and Acquisitions of Anaerobic Digester facilities generating electricity; and 


   


 WHEREAS, the
Company wishes to employ Executive as Executive Vice President for the Group and the Executive wishes to be employed by the company,
subject to the terms and conditions set forth below in this Agreement; 


   


 AGREEMENT 


   


 NOW, THEREFORE,
in consideration of the promises and mutual covenants herein contained, and other good and valuable consideration, the sufficiency
and receipt of which are hereby acknowledged, the parties agree as follows: 


   


 1.            Term
and Services. 


   


 1.1           Term.
The Company hereby agrees to employ Executive and the Executive hereby agrees to be employed by the Company, on the terms
and conditions set forth herein, for the period commencing on April 1st 2016 and expiring on April 1st,
2021 (the “Initial Term”) unless sooner terminated as hereinafter set forth. This Agreement shall be extended
for an additional five (5) year term (the “Renewal Term,” and collectively with the Initial Term, the “Term”)
upon prior written mutual agreement between the Company and the Executive of at least ninety (90) days prior to the expiration
of the Initial Term. 


   


 1.2           Tasks
of Executive. The Executive shall serve as Executive Vice President of the Group and among other tasks that shall be agreed
upon with CEO of the Group, the Executive shall develop and implement the finance strategy of the Group. The Executive shall report
to the CEO of the Group. The Executive shall perform such tasks as provided in this Section 1.2 to the best of his ability, and
use his best efforts to promote the interests of the Group. The Executive is permitted to pursue other business activities so
long as the same do not conflict or compete with the business of the Group or the Executive’s ability to perform his tasks
as provided in this Section 1.2 to the Group and so long as such activities do not significantly interfere with the performance
of the Executive’s responsibilities to the Group in accordance with this Agreement. 


 






    	 



    	 



    

 


 2.            Compensation. 


   


 2.1          (a)           Base
Salary. Commencing on April 1st 2016, the Company shall pay Executive an annual base salary of $ 180,000 but not
less than 720,000 New Israeli Shekels during the first year of the Initial Term, with an annual increase review per year thereafter
during the Term of this Agreement (the “Base Compensation”). Such Base Compensation review shall be on or about
January 1st of a given contract year. The Base Compensation shall be payable in 12 equal installments consistent with the Company’s
normal payroll schedule, subject to applicable withholding and other taxes, and shall not be decreased for any reason. The Base
Compensation will be paid, at Executive discretion in NIS translated pursuant to the official representative rate of exchange
of the US$ as published by the Bank of Israel on the payment date. Any deductions required to be made by the Company and submitted
to relevant tax or other authorities will be deducted at source. 


   


 (b)           Taxes.
The Company shall be solely responsible for, and will make proper and timely payment of, any and all withholding, taxes, duties,
other impositions that may be levied pursuant to applicable law upon the Executive in connection with this Employment Agreement. 


   


 2.2          Incentive
Compensation. The Executive shall be entitled to receive such bonus payments or incentive compensation as may be determined
at any time or from time to time by the Board of Directors of the Group (or any authorized committee thereof) in its discretion.
Such potential bonus payments and/or incentive compensation shall be considered at least annually by the Board or committee and
shall relate to the following: 


 


		1.	As of the date of the execution of this Agreement, a share price incentive bonus associated with
the share price of the Group’s Common Stock, as reported, quoted or traded, as the case may, as more fully described on Annex
1 to this Agreement.



 


		2.	A cash incentive bonus for each project the Group achieves a full financial close. Full financial
close is defined as follows.



 


		(a)	For acquisition of projects. When the Group buys the project assets and gets the project shares.
	 	 	 
		(b)	For a new project, when the Group has a definitive signed agreement for the full funding required for the project and starts
execution of the project.
	 	 	 
		(c)	Cash incentive bonus amount will be decided from case to case by the Group’s Board of Directors.
The bonus amount shall not exceed 3% of the project total value.



 






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		3.	Any shares issued to Executive pursuant to this Section 2.2 shall be valued at $ 0.001 per share
of Common Stock and shall be deemed restricted stock of the Company unless and until a registration statement covering the shares
is declared effective or the Executive is able to rely on Rule 144 for any resales and/or any plans based on article 102 of the
Israeli Tax Income Order.



 


 2.3          Shares
and Stock Options.  


   


 (a)           The
Executive shall be entitled to participate in all shares and stock option plans of the Group (the “Plans”) in
effect during the Term of this Agreement. 


   


 (b)           Upon
execution of this Agreement, the Group will issue Executive stock options, pursuant to a stock option agreement to be entered
into between the Group and the Executive (the “Options”), to purchase on execution of this Agreement and thereafter
at the end of each anniversary of this Agreement 850,000 shares of the Company’s common stock, $0.001 par value per share
(“Common Stock”) at an exercise price of 1 (one) US cent. 


   


 (c)           Milestone
Bonus Options. The Executive shall also be entitled to receive shares and options for special events as may be determined
by the Board of Directors, from time to time. 


   


 (d)           All
Options issued to the Executive in accordance with this Agreement shall become immediately exercisable as to 100% of the shares
of Common Stock not otherwise vested upon any termination of Executive’s Employment Agreement pursuant to Sections 3.8 or
3.9 or 3.10 or 3.11 hereof, it being agreed that the Group shall vest the unvested portion of the Executive’s Option shares
and cooperate in good faith to afford the Executive the right to accelerate the exercise of the Options in full immediately prior
to any Change in Control (as hereinafter defined). In the event that Executive terminates or is terminated pursuant to Sections
3.7 or 3.8 or 3.9 or 3.10 or 3.11 hereof, Executive shall have the greater of (i) Five years after termination, or (ii) the remaining
term of the Options, in order to exercise his Options. 


   


 (e)           The
Group shall take all action reasonably requested by the Executive to permit any “cashless” exercise of the Options
that is permitted under Agreement. 


   


 (f)            Upon
proper exercise of an Option, the Executive shall be deemed for all purposes the owner of the shares of Common Stock that are
purchasable upon such exercise. 


   


 (g)           The
provisions of the Plans and/or Agreement shall not be adversely modified as to the Executive without the Executive’s prior
written consent. 


   


 (h)           All
Option and shares under Agreement shall be fully adjusted for events such as splits. 


 






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 (i)            All
shares under Executive possession at a specific point in time will not exceed 10% of the Company then allocated shares. 


   


 2.4          Recruitment
Grant. It is agreed that the Executive shall be entitled to a recruitment grant on April 1st, as shall be furthered agreed
between the CEO of the Group and the Executive. 


   


 3.            Expense
Reimbursement and Other Benefits. 


   


 3.1          Expense
Reimbursement. During the Term of Executive’s Agreement hereunder, the Company, upon the submission of reasonable supporting
documentation by the Executive, shall reimburse the Executive for all reasonable expenses actually paid or incurred by the Executive
in the course of and pursuant to the business of the Group, including expenses for travel, lodging and entertainment. The Company/Group
may elect to provide Executive with a debit card or credit card in order to facilitate such expenses. 


   


 3.2          Incentive,
Savings and Retirement Plans. During the Term of this Agreement, the Executive shall be entitled to 13.334% of the Yearly
Base Compensation to be paid monthly or quarterly by the Company to a “Kupat Gemel” or a “Pension
Fund” in Executive’s name, according to Executive’s choice as severance payment at a rate of 8.33% of Base
Salary and 5% of Base Salary as provident payments. This sum includes the Company’s obligation on account of the severance
and provident payments. Executive is entitled to instruct the Company that up to 5% of the Yearly Base Compensation shall be deducted
and transferred to the pension fund in respect of Executive’s part. 


   


 3.3          Welfare
Benefit Plans. During the Term of Executive’s Agreement, the Executive and/or the Executive’s family, as the case
may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by the Company/Group and its subsidiaries (including, without limitation, medical, prescription, dental,
disability, remuneration continuance, Executive life, group life, accidental death and travel accident insurance plans and programs),
at least as favorable as the most favorable of such plans, practices, policies and programs. The Executive may substitute the
above with a yearly lump sum representing 10% of Executive Base Compensation to be paid in advance quarterly by the Company. 7.5%
of the sum to a “Kern Hishtalmot” and 2.5% of the sum to an insurance company (on account of loss of working
capacity) in Executive’s name according to Executive choice. Executive is entitled to instruct the Company that up to 2.5%
of the Yearly Base Compensation shall be deducted and transferred to the Kern Hishtalmot in respect of Executive’s
part. 


   


 3.4          Vacation.
During the Term of Executive’s Agreement, the Executive shall be entitled to be paid vacation in accordance with the
most favorable plans, policies, programs and practices of the Company/Group and its subsidiaries as in effect at any time hereafter
with respect to other key Advisors/Executives of the Company and its subsidiaries; provided, however, that in no event shall Executive
be entitled to fewer than 25 business days paid vacation per year, as well as pay for all holidays observed by the Company/Group. 


 






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 3.5          Directors
and Officers Insurance. The Company/Group will insure the Executive (including his heirs, executors and administrators) with
coverage under an appropriate directors’ and officers’ liability insurance policy at the Company’s/Group’s
expense with a run-off period of seven (7) years following termination of this Agreement and will provide the Executive with a
customary officer indemnification agreement. 


   


 3.6          Car.
The Company will provide Executive with the use of a car in the 6th category of the Israeli Income Authority (similar to Nissan
Maxima or Chevrolet Impala). The Company shall compensate Executive monthly to the extent that the use of the car results in imputation
of income to the Executive under the income tax laws of Israel. All car expenses shall be borne by the company. Executive, at
his sole discretion may elect to use his personal car and be compensated in cash by the Company. The compensation amount will
be based on section 3.6 subject to the Executive discretion. 


   


 3.7          Termination:
Termination for Cause. Notwithstanding anything contained to the contrary in this Agreement, this Agreement may be terminated
by the Company for Cause. As used in this Agreement, “Cause” shall only mean: 


   


 (a)           an
act or acts of personal dishonesty taken by the Executive and intended to result in substantial personal enrichment of the Executive
at the expense of the Company/Group; 


   


 (b)           subject
to the following sentences, repeated violation by the Executive of the Executive’s material obligations under this Agreement
which are demonstrably willful, persistent and deliberate on the Executive’s part and which are not remedied in a reasonable
period of time after receipt of written notice from the Company’s/Group’s Board of Directors; or 


   


 (c)           the
conviction of the Executive for any crime involving dishonesty, or fraud and moral turpitude. 


   


  Upon any
reasonable and good faith determination by the Company’s/Group’s Board of Directors that Cause exists under clause
(a) of the preceding sentence and clause (b) of the preceding sentence (to the extent the violation under said clause (b) has
not been cured by the Executive), the Company/Group shall cause a special meeting of the Board to be called and held at a time
mutually convenient to the Board and Executive, but in no event later than ten (10) business days after Executive’s receipt
of the notice contemplated by clauses (a) and (b). Executive shall have the right to appear before such special meeting of the
Board with legal counsel of his choosing to refute any determination of Cause specified in such notice, and any termination of
Executive’s service by reason of such Cause determination shall not be effective until Executive is afforded such opportunity
to appear. Any termination for Cause pursuant to clause (a) or (b) of the first sentence of this Section 3.7 shall be made in
writing to Executive, which notice shall set forth in detail all acts or omissions upon which the Company is relying for such
termination. Upon any termination pursuant to this Section 3.7, the Executive shall be entitled to be paid six months of his Base
Compensation from the date of the termination or the remaining unexpired term, of this Agreement, whichever shall be shorter.
The Executive shall be entitled to enjoy all benefits given under this Agreement, including but without limiting the generality
thereof, those referred to in clauses 2 and 3 and sub-clauses thereof. Thereafter the Company shall have no further liability
hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination). 


 






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 3.8           Disability.
Notwithstanding anything contained in this Agreement to the contrary, the Company, by written notice to the Executive, shall
at all times have the right to terminate this Agreement, and the Executive’s service hereunder, if the Executive shall,
as the result of mental or physical incapacity, illness or disability, fail to perform his duties and responsibilities provided
for herein for a period of more than one hundred (100) days per year in the first two years of this agreement and two hundred
(200) days per year in the remaining time of this agreement. Upon any termination pursuant to this Section 3.8, the Executive
shall be entitled to a payment equal to twelve months of his Base Compensation and benefits. In addition, Executive shall be entitled
to reimbursement for all business expenses incurred prior to his disability. 


   


 3.9           Death.
In the event of the death of the Executive during the Term of this Agreement hereunder, the Company shall pay to the estate
of the deceased Executive the compensation, bonuses and benefits for an additional period of twelve months following the event. 


   


 3.10         Optional
Termination. Notwithstanding anything contained in this Agreement to the contrary, the Executive, by giving thirty (30) days
prior written notice to the Company, shall have the right, to terminate this Agreement at his sole discretion. Upon any termination
pursuant to this Section 3.10, the Executive shall be entitled to be paid his Base Compensation and the benefits referred to hereinbefore
for a period of 3 months from the date of termination and the immediate vesting of Options as described in Section 2.3(d) if the
notice was given between 6 to 12 months as of execution of this Agreement and for a period of 6 months from the date of termination
and the immediate vesting of Options as described in Section 2.3(d), if the notice was given between 12 to 24 months as of execution
of this Agreement, and for a period of 12 months from the date of termination and the immediate vesting of Options as described
in Section 2.3(d), if the notice was given after 24 months as of execution of this Agreement and the Company shall have no further
liability hereunder thereafter (other than for reimbursement for reasonable business expenses incurred prior to the date of termination)
unless the Executive and the Company agree to a different arrangement. 


 






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 3.11        Termination
without Cause. At any time, the Company shall have the right to terminate Executive ‘s employment hereunder by written
notice to Executive; provided, however, that the Company shall: 


   


 (a)           pay
to Executive any all unpaid Base Compensation for an additional period of 24 months and allow the Executive to enjoy all the benefits
given hereunder, for an additional period of 24 months, and will further allow to receive all bonuses, incentives, option and
shares under Plan and this Agreement that would be payable had Executive completed an additional full two years of service under
this Agreement; 


   


 (b)           continue
to pay the Executive’s health and disability insurance for the longer of a period of twenty-four (24) months or the remaining
term of this Agreement. 


   


 (c)           The
Company shall be deemed to have terminated the Executive’s Agreement pursuant to this Section 3.11 if such service is terminated
by the Company without Cause, by the Executive voluntarily for Good Reason, or as a result of a Change in Control. 


   


 (i)           For
purposes of this Agreement, “Good Reason” means: 


   


 1)           the
assignment to the Executive of any duties inconsistent in any respect with the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 1.2 of this Agreement, or
any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive; 


   


 2)           any
failure by the Company/Group to comply with any of the provisions of Section 2 or Section 3 of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of
notice thereof given by the Executive; 


   


 3)           the
Company’s/Group’s requiring the Executive to be based at any office or location more than fifty (50) miles from its
current Executive offices, except for travel reasonably required in the performance of the Executive’s responsibilities; 


   


 4)           any
change in the designation of the particular Executive that the Executive is obligated to report to under Section 1.2 hereof; 


   


 5)           any
purported termination by the Group/Company of the Executive’s tasks otherwise than as expressly permitted by this Agreement;
or 


 






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 6)           any
termination by the Executive for any reason during the twelve-month period following the effective date of any Change in Control. 


   


 (ii)          For
purposes of this Agreement, a “Change in Control” shall mean: 


   


 1)           The
acquisition (other than by or from the Group), at any time after the date hereof, by any person, entity or “group,”
within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more
of either the then outstanding shares of common stock or the combined voting power of the Group’s then outstanding voting
securities entitled to vote generally in the election of directors; 


   


 2)           All
or any of the five (5) individuals who, as of the date hereof, constitute the Board of the Group (as of the date hereof the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for election by the Group’s shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual
whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of
the directors of the Group, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall
be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board; 


   


 3)           Approval
by the shareholders of the Group of (A) a reorganization, merger or consolidation with respect to which persons who were the shareholders
of the Group immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 75%
of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated
company’s then outstanding voting securities, (B) a liquidation or dissolution of the Group, or (C) the sale of all or substantially
all of the assets of the Group, unless the approved reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned. 


   


 4)           The
approval by the Board of the sale, distribution and/or other transfer or action (and/or series of sales, distributions and/or
other transfers or actions from time to time or over a period of time), that results in the Group’s ownership of less than
50% of the Group’s current assets. 


 






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 4.            Restrictive
Covenants. 


   


 4.1           (a)          Nondisclosure.
During his Service and for twelve (12) months thereafter, Executive shall not divulge, communicate, use to the detriment of
the Company/Group or for the benefit of any other person or persons, or misuse in any way, any Confidential Information (as hereinafter
defined) pertaining to the business of the Company/Group, unless required to do so by a governmental agency or court of law. Any
Confidential Information or data now or hereafter acquired by the Executive with respect to the business of the Company/Group
shall be deemed a valuable, special and unique asset of the Company that is received by the Executive in confidence and as a fiduciary,
and Executive shall remain a fiduciary to the Company with respect to all of such information. For purposes of this Agreement,
“Confidential Information” means all material information about the Group’s business disclosed to the
Executive or known by the Executive as a consequence of or through fulfilling his tasks to the Company (including information
conceived, originated, discovered or developed by the Executive) after the date hereof, and not generally known. 


   


 (b)          Exceptions.
The general prohibition contained in Section 4.1(a) against the unauthorized disclosure, use or dissemination of the Confidential
Information will not apply in respect of any Confidential Information that: 


   


 (i)           is
available to the public generally; 


   


 (ii)          becomes
part of the public domain through no fault of the Executive; 


   


 (iii)         is
already in the lawful possession of the Executive at the time of receipt of the Confidential Information; or 


   


 (iv)         is
compelled by applicable law to be disclosed, provided that the Executive gives the Company prompt written notice of such requirement
prior to such disclosure and provides assistance at the request at the expense of the Company, in obtaining an order protecting
the Confidential Information from public disclosure. 


   


 4.2          No
solicitation of Employees. While employed by the Company and for a period of twelve (12) months thereafter, Executive shall
not directly or indirectly, for himself or for any other person, firm, corporation, partnership, association or other entity,
attempt to employ or enter into any contractual arrangement with any employee or former employee of the Company, unless such employee
or former employee has not been employed by the Company for a period in excess of six months. Notwithstanding the foregoing, the
Executive shall not be restricted in hiring any person who responds to any general solicitation for employees or public advertising
of employment opportunities (including through the use of employment agencies) not specifically directed at any such person. 


   






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 4.3           Covenant
Not to Compete. Executive will not, at any time, during the Term of this Agreement, and for a period of twelve (12) months
thereafter, either directly or indirectly, engage in, with or for any enterprise, institution, whether or not for profit, business,
or company, competitive with the business (as identified herein) of the Group/Company as such business may be conducted on the
date thereof, as a creditor, guarantor, or financial backer, stockholder, director, officer, consultant, advisor, employee, member,
or otherwise of or through any corporation, partnership, association, sole proprietorship or other entity; provided, that an investment
by Executive, his spouse or his children is permitted if such investment is not more than four percent (4%) of the total debt
or equity capital of any such competitive enterprise or business. As used in this Agreement, the business of Employer shall be
deemed to include any business which directly competes with the Group/Company in the Build Own and Operate Anaerobic Digester
electricity production industry. The covenant not to compete for twelve (12) months after termination shall only be effective
if the Executive has received all compensation due to him pursuant to this Agreement. The Company shall have the right in its
sole discretion to waive this non-compete provision. 


   


 4.4           Injunction.
It is recognized and hereby acknowledged by the parties hereto that a breach by the Executive of any of the covenants contained
in Sections 4.1, 4.2 or 4.3 of this Agreement will cause irreparable harm and damage to the Company, the monetary amount of which
may be virtually impossible to ascertain. As a result, the Executive recognizes and hereby acknowledges that the Company shall
be entitled to an injunction from any court of competent jurisdiction enjoining and restraining any violation of any or all of
the covenants contained in this Section 4 by the Executive or any of his affiliates, associates, partners or agents, either directly
or indirectly, and that such right to injunction shall be cumulative and in addition to whatever other remedies the Company may
possess. 


   


 5.            Re-negotiate.
This contract may be re-negotiated by the Executive should the circumstances and the economic situation of the Group/Company
shows improvement beyond the Group’s forecast. 


   


 6.            Entire
Agreement. This instrument contains the entire agreement of the parties, and supersedes any prior or contemporaneous statements
or understandings by or between the parties. This Agreement may be changed only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or discharge is sought, and any such modification on behalf
of the Company must be approved by the Board. 


   


 7.            Governing
Law/Jurisdiction. This Agreement shall be governed by the laws of Israel. The competent courts of the city of Tel Aviv, shall
have exclusive jurisdiction over any matter in connection with this Agreement. 


 






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 8.            Notices:
Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given
(a) when delivered by hand, (b) when deposited by registered or certified mail, return receipt requested, postage prepaid, or
via overnight courier, (c) one day after electronically mailed either in the text of an email message or attached in a commonly
readable format, and the sender has received no generated notice that the email message has not been successfully delivered, or
(d) upon receipt of proof of sending thereof when sent by facsimile, addressed as follows: 


 


 [REDACTED] 


   


 or to such other addresses as either
party hereto may from time to time give notice of to the other in the aforesaid manner. 


   


 9.            Successors. 


   


 (a)           This
Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive’s legal representatives. 


   


 (b)           This
Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. 


   


 (c)           The
Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement,
“Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets which assumes
and agrees to perform this Agreement by operation of law or otherwise. 


   


 10.          Severability.
The invalidity of any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall
not affect the enforceability of the remaining portions of this Agreement or any part thereof, all of which are inserted conditionally
on their being valid in law, and, in the event that any one or more of the words, phrases, sentences, clauses or sections contained
in this Agreement shall be declared invalid, this Agreement shall be construed as if such invalid word or words, phrase or phrases,
sentence or sentences, clause or clauses, or section or sections had not been inserted. If such invalidity is caused by length
of time or size of area, or both, the otherwise invalid provision will be considered to be reduced to a period or area which would
cure such invalidity. 


 






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 11.           Waivers.
The waiver by either party hereto of a breach or violation of any term or provision of this Agreement shall not operate nor
be construed as a waiver of any subsequent breach or violation. 


   


 12.           Damages.
Nothing contained herein shall be construed to prevent the Company or the Executive from seeking and recovering from the other
damages sustained by either or both of them as a result of its or his breach of any term or provision of this Agreement. 


   


 13.           No
Third Party Beneficiary. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon
or give any person (other than the parties hereto and, in the case of Executive, his heirs, personal representative(s) and/or
legal representative) any rights or remedies under or by reason of this Agreement. 


   


 14.           Full
Settlement. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action
which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other service
or employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions
of this Agreement. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive
may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof, plus in each case
interest at the applicable Federal rate provided for in Section 7872(0(2) of the Internal Revenue Code of 1986, as amended. 


   


 15.           Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. 


   


 16.           Executive’s
Recognition of Agreement. Executive acknowledges that Executive has read and understood this Agreement, and agrees that its
terms are necessary for the reasonable and proper protection of the Company’s business. Executive acknowledges that Executive
has been advised by the Company that Executive is entitled to have this Agreement reviewed by an attorney of Executive’s
selection, at Executive’s expense, prior to signing, and that Executive has either done so or elected to forgo that right. 


   


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


 





	 	COMPANY:
	 	 	 
	 	/s/
    Shlomi Palas
	 	 	 
	 	By:	Shlomi Palas, Chief Executive Officer



 








	 	EXECUTIVE:
	 	 	 
	 	/s/
    Elad Kerner
	 	 	 
	 	By:	Elad Kerner


 


 Irrevocable Guaranty 


   


 Blue Sphere corp. a Nevada corporation
hereby irrevocably guaranties towards the Executive to fulfill all the undertakings of the Company towards the Executive as stipulated
in the above Agreement. 


   


 Blue Sphere Corporation 


 





	/s/
    Shlomi Palas	 
	 	 	 
	By:	Shlomi Palas, Chief Executive Officer	 



 






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 ANNEX I 


 





	Share price in US cents	 	Shares to be allocated in thousands
	 	 	 
	4  	 	150
	 	 	 
	5  	 	150
	 	 	 
	6  	 	150
	 	 	 
	7  	 	150
	 	 	 
	8  	 	150
	 	 	 
	9  	 	150
	 	 	 
	10	 	150
	 	 	 
	11	 	200
	 	 	 
	12	 	200
	 	 	 
	13	 	200
	 	 	 
	14	 	200
	 	 	 
	15	 	200
	 	 	 
	16	 	200
	 	 	 
	17	 	200
	 	 	 
	18	 	200
	 	 	 
	19	 	200
	 	 	 
	20	 	200
	 	 	 
	21	 	250
	 	 	 
	22 and further on	 	250




 






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