Exhibit 10.2


 


SHARE PURCHASE AGREEMENT


 


THIS SHARE PURCHASE AGREEMENT (this "Agreement")
is made and entered into as of the 29 day of November 2009 (the “Effective Date”), by and among all the current
shareholders of Nano Size Ltd. (the “Company”), as listed in Schedule 1 attached hereto (each
a “Seller” and together the “Sellers”) and P.V. Nano Cell Ltd. (the "Purchaser").


 


W I T N E S S E T H:


 


WHEREAS, the Sellers desire
to sell their shares of the Company and all other outstanding securities (including warrants and options) subject to the terms
and conditions of this Agreement; and


 


WHEREAS, the Purchaser
agrees to purchase such shares and other securities of the Sellers; provided that all the shares and securities of the Company
are sold to Purchaser pursuant to the Company's articles of association, all as set-forth herein on the terms and subject to the
conditions set forth in this Agreement.


 


NOW, THEREFORE, in consideration
of the mutual promises and covenants set forth herein, the parties hereby agree as follows:


 


	1.	Sale of the Shares.




 


		1.1	Subject to the terms and conditions hereof, the Sellers shall sell to the Purchaser, and the Purchaser
shall purchase from the Sellers such number of shares of the Company of par value of NIS1.00 per share and all other securities
(including options, warrants and such other rights to purchase shares) as detailed in Schedule 3.7 attached hereto. Purchaser
shall purchase the securities (the “Purchased Shares”) at the Closing, at an aggregate price for all Purchased
Shares of the Sellers, as set forth in Section 1A below.



 


		1.2	Pursuant to the Bring-Along provision under the Company's articles of association in the form attached
hereto as Schedule 1.2 (the "Articles"), in the event shareholders holding more than eighty percent
(80%) of the Ordinary Shares of the Company (calculated on an as-converted basis), execute this Agreement, then, at the Closing
all of the shareholders of the Company will be required, according to the Articles, to transfer their shares to Purchaser on the
same terms and conditions as defined herein.



 


	1A.	Purchase Price.
	 	 
	 	The Purchaser shall pay the Sellers
the following consideration for the sale of the Purchased Shares ("Purchase Price"):



 





	 	1A.1	Initial
Consideration.The initial consideration is US $120,000 (subject to any adjustments according to the formula below) (the "Initial
Consideration") out of which US $30,000 has been already paid by the Purchaser to the Company pursuant to the MOU, and
additional US $30,000 has been already paid by the Purchaser to the Company pursuant to the MOU on August 31, 2009.





  


	 		It is agreed that the aforesaid US $60,000 out of the
    Initial Consideration is held by the Company in trust for the Sellers until the Closing, and such amount shall be transferred
    by the Company to the Escrow (as defined below) prior to the Closing and shall be distributed to the Sellers according to the
    provisions of Section 2.1 below at or as soon as practical after the Closing.



 






    	 



    	 



    

 


	 		At the Closing, the Purchaser shall pay to the
    Sellers, in accordance with Section 1A.4 below, the remaining installment out of the Initial Consideration (the "Last
    Installment") calculated according to the following formula:
	 	 	 
	 		Last Installment = US $60,000 – (minus) any
    outstanding debts of the Company, as set forth in Schedule 2.3.4 attached hereto, that were not paid by the Company
    prior to the Closing in accordance with Section 2.3.4 below + (plus) any amounts due to the Company from the Purchaser
    pursuant to the MOU, that were not paid by the Purchaser prior to the Closing + (plus) any credit balance in the Company's
    bank account as of the Closing.
	 	 	 
	 	1A.2	Additional Consideration.In
addition to the Initial Consideration, the Purchaser shall pay the Sellers, in accordance with Section 1A.4 below, an Additional
Consideration (as such term is defined below) as follows:






  


		1A.2.1	In this Section 1A the following terms shall have the meaning ascribed to them herein:



 


		(i)	"Affiliate": of a Party is an entity controlling that Party
or controlled by it or under the same control with it; and "control" means the holding (directly and indirectly)
of more than 50% of either the equity rights or the voting rights, or the right to appoint the majority of the directors.



 


		(ii)	"Products": all Company's Products using the Technology
(as defined in Section 3.8 below), or any part thereof.



 


		(iii)	"Sales Proceeds": shall mean the gross ex-factory invoice
price actually received (net of import/export taxes, customs, duties, VAT, sales taxes, refunds, returns and rebates), by which
the Company or its Affiliates shall sell the Products or otherwise grant any right of use in the Products to distributors, representatives,
agents, and direct sales to customers (if any).



 


		(iv)	"Consideration Period": is the period from the first commercial
sale of the first Product or the performance of Sublicense Transaction (as applicable) and until the aggregate Additional Consideration
together with the Initial Consideration reaches US $1,520,000 (including any sums that were duly off set pursuant to the terms
of this Agreement and including any adjustment made pursuant to Section 1A.1 above to the Initial Consideration).



 


		(v)	"Sublicense Transaction"- sale, transfer, grant of license
or other right or assignment by the Company of its rights in the Technology (or any part thereof), during the Consideration Period,
to any third party excluding Affiliates of the Company.



 


		(vi)	"Sublicense Proceeds"- the consideration actually received
by the Company or its Affiliates in the Sublicense Transaction with respect to the Technology (or any part thereof), net of any
direct expenses incurred by the Company and its Affiliates with respect to the Sublicense Transaction.



 






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		1A.2.2	Sales Consideration. Subject to the terms of this Agreement, during the Consideration Period
the Purchaser shall pay the Sellers a consideration in an amount equal to 3% of the Sales Proceeds actually received by the Purchaser
("Sales Consideration ").



 


		1A.2.3	Sublicense Consideration. Subject to the terms of this Agreement, during the Consideration
Period the Purchaser shall pay the Sellers a consideration in an amount equal to 10% of the Sublicense Proceeds actually received
by the Purchaser ("Sublicense Consideration", and together with the Sales Consideration – "Additional
Consideration").



 


		1A.2.4	The Sales Consideration and/or the Sublicense Consideration shall be paid by the Purchaser to the
Sellers on a quarterly basis in arrears for such Products and Sublicense Transactions for which Sales Proceeds and Sublicense Proceeds
were actually received by the Company or an Affiliate during the relevant quarter.



 


		1A.2.5	Within 21 days after the end of each calendar quarter, the Purchaser shall provide to the Escrow
with a report, showing the quantities of Products and Sales Proceeds received by the Company or its Affiliates during such quarter,
and the Sublicense Proceeds received by the Company or its Affiliates during that quarter, and accordingly, the calculation of
the Sales Consideration and Sublicense Consideration due to the Sellers from the Purchaser (the "Quarterly Report/s").



 


		1A.2.6	Together with each Quarterly Report and against the receipt of a tax invoice from the Escrow, the
Purchaser will pay the Escrow the Sales Consideration and\or the Sublicense Consideration due to the Sellers. The payment of Sales
Consideration and\or the Sublicense Consideration shall be paid to the Escrow by cash or wire transfer, in US dollars or in NIS,
calculated at the last representative exchange rate known on the date of transfer. VAT shall be added to any payment of Sales Consideration
and\or the Sublicense Consideration, according to any applicable law. Any withholding taxes required by applicable law shall be
deducted by the Escrow, and a copy of a document showing such withholding and payment of the withheld amount to the tax authorities
shall be provided by the Escrow to the Purchaser after such payment is made.



 


		1A.2.7	If the Company accepts return of Products for which Sales Consideration have already been paid
by the Purchaser to the Sellers, or grants refunds or rebates for such Products, the Purchaser shall be entitled to offset the
sum of such Sales Consideration against future Sales Consideration due to the Sellers.



 


		1A.2.8	Within 180 days after each calendar year commencing as of the end of the year in which the Company
has its first commercial sale of Products or the performance of Sublicense Transaction (as applicable), the Purchaser shall provide
the Escrow with a confidential report of the Company, certified by the Company's auditors, setting forth the Sales Proceeds and
the Sublicense Proceeds received by the Company during the previous calendar year, according to the Company's financial reports
("Annual Report").



 






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		1A.2.8A	Audit Rights. Without derogating from the above, the Purchaser shall maintain accurate records
with respect to the sales of Products, the Sales Proceeds, the Sublicense Transactions and the Sublicense Proceeds. Not more than
once a year, the Purchaser shall provide to the Escrow and/or other auditor designated by the Sellers, at Sellers sole discretion,
sufficient access, during normal business hours, to the Company's and/or to the Purchaser's (as applicable) facilities, personnel
and records relating to the sales of Products, the Sales Proceeds, the Sublicense Transactions and the Sublicense Proceeds, to
verify the Purchaser’s compliance with its obligation to pay the Sales Consideration and/or the Sublicense Consideration
due to the Sellers. The Escrow or auditor shall execute a confidentially undertaking towards the Purchaser as customary. The aforesaid
audits shall be conducted at Sellers’ expense. If, as a result of any audit, the auditor determines that the Purchaser has
underpaid the Sellers, the Purchaser shall promptly pay to the Sellers the delinquent amount, plus annual interest at a rate of
12 month Libor + 8% calculated from the date the delinquent amount became due until the date of actual payment to the Sellers.
If the audit shows an underpayment, and the Purchaser contests part or all of the findings, the uncontested part shall be paid
without delay and the contested sums shall be resolved between the auditors of the Purchaser and the auditor or Escrow on behalf
of the Sellers. If the audit discovers an overpayment, the overpayment shall be deemed on account of future Sales Proceeds, and
the Sublicense Proceeds that become due. If any audit reveals an underpayment, during any audit period, exceeding 10% of the Sales
Consideration and/or the Sublicense Consideration due during such period, the Purchaser shall reimburse the Seller, notwithstanding
the above, for the reasonable costs and expenses of such audit.



 


		1A.2.9	Security. As security for the payment of the Additional Consideration up to US $1,520,000 in accordance
with this Section 1A, the Purchaser shall create at the Closing, in favor of the Sellers, a first ranking fixed charge on the Purchased
Shares, all as set forth in the Fixed Charge Deed attached hereto as Schedule 1A.2.9.



 


		1A.2.10	In the event that during a period of 24 months following the Closing (the "Objective Period"),
the Sellers shall not receive from the Purchaser Sales Consideration and/or Sublicense Consideration in a cumulative amount of
at least US$ 60,000 (including any sums that were duly off-set pursuant to the terms of this Agreement) ("Minimum Additional
Consideration"), then the Sellers shall be entitled, during a period of 6 months following the lapse of the Objective
Period, to repurchase the Purchased Shares from the Purchaser, upon the payment of their nominal value.



 


			Notwithstanding the above it is agreed, that in the event that during the Objective Period, the
Sales Consideration and/or Sublicense Consideration received by the Sellers from the Purchaser do not reach the Minimum Additional
Consideration, the Purchaser shall have the option to pay to the Sellers, until the termination of the Objective Period, any deficient
amount required in order to reach the Minimum Additional Consideration (the "Deficient Amount"). In such event,
the Deficient Amount shall be off-set from any future Sales Consideration and/or Sublicense Consideration due to the Sellers.



 






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In the event in which the Sellers
exercise their right to repurchase the Purchased Shares as aforesaid, the Purchaser undertakes to transfer the Purchased Shares
to the Sellers, free and clear of all pledges, debts, security interests and other third party interests or rights, and the escrow
of PGS as set out below in this Section 1A.2.10 shall be terminated.


 


For the purpose of this Section 1A.2.10,
the Purchaser shall deliver to Primes, Shiloh, Givon, Meir – Law Firm (“PGS”) as an escrow agent at the
Closing, a validly executed deed of transfer (without setting the date) with respect to the Purchased Shares, in the form attached
hereto as Schedule 1A.2.10(a). PGS shall act according to the letter of instructions attached as Schedule 1A.2.10(b)
(the "Letter of Instructions"). It is hereby agreed that the Purchaser and the Sellers (including the
representative of the Sellers) may provide a release notice and/or an objection notice to PGS according to the Letter of Instructions
solely with respect to the payment or the non payment of the Minimum Additional Consideration to the Sellers, as applicable.


 


		1A.3	Emulsions Technology Consideration. In addition to the Initial Consideration and the Additional
Consideration, the Sellers shall be entitled to receive from the Purchaser net (after payment of all applicable taxes and expenses
incurred by the Company and the Purchaser) sums actually received by the Company from Nano Em Ltd. in connection with the Emulsion
Technology (as such term is defined below) sold by the Company to Nano Em Ltd. under the Technology Sale Agreement, dated November
28, 2009 ("Emulsions Technology Consideration"). Sections 1A.2.5, 1A.2.8 and 1A.2.8A above shall apply also with
respect to the Emulsions Technology Consideration, mutatis mutandis.



 


		1A.4	Without derogating from the above, it is agreed that the Purchase Price due to Sellers pursuant
to this Section 1A (i.e. the Initial Consideration, the Additional Consideration and the Emulsions Technology Consideration), as
well as the Quarterly Report and the Annual Report, shall be provided by the Purchaser to the Sellers solely via Adv. Shuky Regev
(the "Escrow"), and not directly. The Escrow shall distribute the Purchase Price between the Sellers pro-rata
with the holdings of each Seller, and shall be responsible to deduct and pay to the tax authorities any withholding taxes required
by applicable laws.



 


	2.	Closing of Sale and Purchase of the Purchased Shares.




 


		2.1	Closing. The purchase of the Purchased Shares by the Purchaser shall take place on November
29, 2009, or such other date agreed upon by the Sellers and the Purchaser at 10:00 AM (the "Closing"). The Closing
shall not be later than November 30, 2009 (unless agreed in writing by the Purchaser). The Closing shall take place at the offices
of Primes, Shiloh, Givon, Meir – Law Firm.



 






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		2.2	Conditions to Closing:



 


		2.2.1	The Sellers and the Purchaser received the Company's Board of Directors’ resolution by a
unanimous written consent, attached hereto as Schedule 2.2.1, approving the sale and transfer of the Purchased Shares
from the Sellers to the Purchaser.



 


		2.2.2	All Eligible Shareholders, as defined in the Articles, have waived their rights of first refusal
in connection with the transaction contemplated in this Agreement.



 


		2.2.3	Prior to the Closing, the Company's Board of Directors shall have issued a notice to all the shareholders
of the Company, in the form attached as Schedule 2.2.3 hereto, notifying the shareholders of the sale of the Purchased
Shares by the Sellers to the Purchaser.



 


		2.3     
	Transactions at the Closing. At the Closing the following transactions shall
            occur, which transactions shall be deemed to take place simultaneously and no transaction shall be deemed to have
            been completed or any document delivered until all such transactions have been completed and all required documents
            delivered:



 


		2.3.1	The Purchaser shall transfer to the Sellers, in accordance with Section
1A.4 above, the Last Installment, in accordance with Section 1A above;



 


		2.3.2	Each Seller shall deliver to the Purchaser: (i) the original share certificates
representing its respective Purchased Shares if any (or applicable affidavits of lost certificates in the absence thereof); and
(ii) validly executed Deed of Transfer in respect of its respective Purchased Shares in the form attached hereto as Schedule
2.3.2;



 


		2.3.3	All directors appointed to the Board of Directors of the Company, shall
deliver a resignation letter in a form attached hereto as Schedule 2.3.3.



 


		2.3.4	Company shall pay all debts detailed in Schedule 2.3.4 attached
hereto; or alternatively reserve such amounts in the Company’s bank account at the Closing.



 


		2.3.5	A compliance certificate, in the form attached hereto as Schedule
2.3.5, dated as of the Closing and signed by the Company’s Chief Executive Officer, stating that: (i) except as set
forth in Schedule 2.3.5(i), there have not been and there are no legal or administrative actions, suits, proceedings
or investigations nor to the Company’s knowledge pending or threatened against the Company, or any such proceedings which
are related in any material way to the Company or to the Company’s business, its assets and properties or against any of
the Company’s employees, officers, shareholders or directors in their capacity as such, and the Company is not aware of any
fact which may result in any such proceedings; (ii) except for the securities held by the Sellers and specified in the Capitalization
Table in Schedule 3.7 below, there are no securities issued or promised to be issued by the Company that have not been cancelled
in accordance with Section 2.3.7 below; (iii) the bank account balance as of the Closing is positive and is sufficient to cover
the debts set out in Schedule 2.3.4, as far as such debts were not paid by the Company as set forth in Section 2.3.4 above;
(iv) all needed corporate actions and transactions made at the Closing on behalf of the Company have been fulfilled.



 






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		2.3.6	The Sellers shall establish their engagement with the Escrow, including
letters of instructions to comply with the undertakings attributed to the Escrow in this Agreement. Such documents to be attached
as Schedule 2.3.6. The Escrow shall also serve on behalf of the Company solely with respect to any withholding obligations.



 


		2.3.7	The Sellers and the Purchaser shall receive a Resolution of the Board cancelling
all options exercisable into ordinary shares of the Company that were previously granted to Company's employees, consultants and
services providers. Such resolution shall also include (i) the cancellation of all share certificates, if any; (ii) the registration
of the transfer of all the Purchased Shares in the name of the Purchaser; and (iii) the issuance to the Purchaser of a share certificate
representing all the Purchased Shares, all such actions to take place at the Closing. Such resolution to be attached hereto as
Schedule 2.2.1.



 


		2.3.8	The Company shall cancel all pledges registered at the Companies Registrar
(excluding one pledge registered with respect to one remaining leased car) and in any other applicable registry, all as set forth
in the extract of the Company's Registrar attached hereto as Schedule 2.3.8.



 


		2.3.9	The Company shall receive all third parties approvals needed with respect
to the sale of the Purchased Shares by the Sellers to the Purchaser, all as set forth in Schedule 2.3.9 attached
hereto.



 


		2.3.10	The Sellers and the Company shall terminate the shareholders agreement and
any other agreement between the shareholders pertaining to their holdings in the Company. Such termination letter to be attached
as Schedule 2.3.10
	 	 	 
	 	2.3.11	 The
Sellers shall cause the Company to provide the Purchaser with a share Certificate representing all the Purchased Shares in a form
attached hereto as Schedule 2.3.11.

	 	 	 
	 	2.3.12	 The
Sellers shall cause the Company to provide the Purchaser with an updated Share Registry reflecting the sale and purchase of the
Purchased Shares in the form attached hereto as Schedule 2.3.12.




 


		2.3.13	The Purchaser and the Sellers shall sign the Fixed Charge Debenture and
take any action required in order to carry out the creation of the first ranking fixed charge in favor of the Sellers, as set forth
in Section 1A.2.9 above.



 


		2.4	Promptly following the Closing, the Company shall file to the Registrar of Companies a notice with
respect to the transfer of the Purchased Shares from the Sellers to the Purchaser.



 






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	3.	Representations and Warranties of the Sellers. 




 


Each Seller represents
and warrants to the Purchaser with respect to itself only, that at the Closing and the signing of this Agreement:


 


		3.1	The Purchased Shares. Currently and throughout the period until and at the Closing, the
Purchased Shares shall be free, clear of all pledges, debts, security interests and other third party interests or rights, except
for the first ranking fixed charge that will be created at the Closing in favor of the Sellers, in accordance with Section 1A.2.9
above.



 


		3.2	Entire Holdings. The shares as set out in Schedule 3.7, being sold by each Seller
are the only securities the Seller has in the Company and such Seller has no additional rights to purchase or receive shares, options,
warrants or other convertible securities from the Company.



 


		3.3	Litigation. To the Sellers' actual knowledge without making any investigation, except as
set forth in Schedule 2.3.5(i), there have not been and there are no legal or administrative actions, suits, proceedings
or investigations pending or threatened against the Company, the Sellers or against any of the Company’s employees, officers
or directors in their capacity as such.



 


		3.4	No claims. The Seller has no claims, demands or rights of whatever nature against the Company,
its officers or directors and the Seller hereby waives any such claims, demands or rights to the extent existing. Each Seller,
for itself, its predecessors, heirs, executors, administrators, assigns, and successors, hereby confirms that the Company does
not have any debt towards him.



 


		3.5	Economic Value and Tax implications. The Seller is capable and fully understands the economic
value of selling the Purchased Shares pursuant to the terms of this Agreement and shall have no rights if in the future the Company’s
valuation is considerably higher than the valuation reflected in this Agreement. The Seller agrees that all tax implications arising
out of the sale of its Purchased Shares, and/or receipt of any other sums pursuant to this Agreement shall be borne by the Seller
alone.



 


		3.6	Authorization. All acts and conditions required by law or agreement on the part of the Seller
necessary for the authorization, execution and delivery of this Agreement and the transactions contemplated herein, and the performance
of all obligations of the Seller hereunder, have been duly performed and obtained and this Agreement constitutes a valid and legally
binding obligation of the Seller, enforceable in accordance with its terms.



 


		3.7	Capitalization. To the Sellers' best knowledge, the capitalization table attached hereto
as Schedule 3.7 (the “Capitalization Table”) sets forth the Company’s issued and paid-up
share capital, the beneficial and registered holders thereof, and their respective percentage holdings in the Company - all as
of the date hereof and immediately prior to the Closing.



 






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		3.8	Technology. To the Sellers' best knowledge, the Company has developed and is the sole owner
of the intellectual property rights in the technology as set forth in Schedule 3.8 attached hereto (“Technology”)
and has the capability, know-how, equipment, infrastructure and arrangements for the production of dispersion of silver nano particles
and other products. For the avoidance of doubt it is hereby clarified that any intellectual property, know-how or other rights
that the Company has in connection with the production of emulsions in ultrasound technology (the "Emulsions Technology"),
shall not constitute a part of the Technology and shall be therein excluded. To the Sellers' best knowledge, (i) the Company's
representations with respect to the Emulsions Technology, as set forth in the Technology Sale Agreement between the Company and
Nano Em Ltd., dated November 28, 2009, are true and correct in all material respects; and (ii) as part of such Technology Sale
Agreement there are no patents or patents applications of the Company, whether registered or pending, assigned or transferred from
the Company to Nano Em Ltd.



 


		3.9	Company's Debts. To the Sellers' best knowledge, the content of Schedule 2.3.4 is
true, correct and not misleading in any material way or manner.



 


	4.	Reserved.



 


	5.	Representations and Warranties of the Purchaser. 




 


The Purchaser hereby represents
and warrants to the Seller as follows:


 


		5.1	Authorization. All acts and conditions required by law or agreement on the part of the Purchaser
necessary for the authorization, execution and delivery of this Agreement and the transactions contemplated herein, and the performance
of all obligations of the Purchaser hereunder, have been duly performed and obtained and this Agreement constitutes a valid and
legally binding obligation of the Purchaser, enforceable in accordance with its terms.



 


		5.1A	Disclosure of Information. Without derogating from
the representations of the Sellers set out above, Purchaser confirms and warrants that it has received and reviewed information
about the Company, and has had an opportunity to discuss the Company’s business, management and financial affairs with its
management. The Purchaser has conducted an independent due diligence examination (including legal, financial and technological
examination) of the information and materials relating to the Company and/or the Purchased Shares, as the Purchaser and its advisors
deemed necessary. In addition, the Purchaser used and examined the Technology in the Company’s facilities, and found it appropriate
to its business needs.



 


		5.2	Shares Purchased “As Is”. Except for the representations and warranties set
forth in Sections 3 hereof or otherwise expressly set out herein, Purchaser agrees that the Purchased Shares are being purchased
“As Is” without warranties or representations of any kind with respect to the Company’s assets, liabilities,
business, or operations.



 


		5.3	Going Concern. Purchaser represents that following the Closing the Purchaser shall use reasonable
commercial efforts to keep active the Company's business operation and to sell the Company’s Products (as such term is defined
above) for a period of at least 2 years, and the Purchaser estimates (based on Company statements) that it shall be required to
finance the Company's activities in an amount of at least US$900,000 per each year. Without derogating from the above, it is clarified
that there is no certainty and no covenant by the Purchaser that the Company shall be successful and that Additional Consideration
shall become due.



 


		5.4	OCS. Purchaser is aware that the Office of the Chief Scientist of the Ministry of Industry,
Trade and Labor of Israel (“OCS”), has throughout the years, provided the Company with approximately US $___________
for funding of certain research and development projects of the Company's Technology and that the Company is subject to the provisions
of The Encouragement of Research and Development in Industry Law 5744-1984 (the "R&D Law"). Purchaser
is aware that the Company is required to pay royalties for products developed with the aid of the OCS, and undertakes to cause
the Company to pay such royalties as required. The Purchaser is also aware of additional restrictions and undertakings towards
the OCS including restrictions concerning the transfer of technologies outside of Israel, and Purchaser undertakes to comply with
any of such restrictions, obligations and undertakings according to the provisions of the R&D Law.



 






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		5.5	Tami Imi R&D Institute Ltd. (“Tami”). Without derogating from other
undertakings or agreements that the Company may be subject to, Purchaser is aware of the memorandum of understanding signed between
the Company and Tami on December 14, 2005 as an on-going obligation of the Company.



 


		5.6	Nano Em License Agreement & Technology Sale Agreement. Purchaser is aware of the Nano
Em License Agreement, in which Nano Em Ltd. was originally granted by the Company a license to use the Emulsions Technology. Purchaser
acknowledges that following the sale of the Emulsions Technology to Nano Em Ltd., including ,inter alia, the assignment
to Nano Em Ltd of all rights and/or obligations towards the OCS in connection with the Emulsions Technology (if such rights
and/or obligations are exist), and the cancellation of Nano Em License Agreement, the Company shall not have any rights in connection
with the Emulsions Technology and or the Nano Em License Agreement, and Purchaser hereby waives any claim, demand or other right
that it may have with respect thereto.



 


		5.7	Financing. Purchaser has, or will have sufficient cash, available lines of credit or other
sources of immediately available funds to enable it to make payment of the Purchase Price and any other amounts to be paid by it
hereunder.



 


	6.	Covenants by the Purchaser and the Sellers 




 


		6.1	Ordinary Course. From the date of the MOU and until the Closing, the Sellers have and shall
continue to cause the Company to act in the ordinary course and to not assume new obligations, except as required for minimal day
to day operations and except for such actions as are necessary to fulfill the conditions as provided in Section 2.3.4 above.



 


		6.2	Transition. At the Closing, the Sellers shall cause the Company to designate a representative,
that together with a representative of the of the Purchaser shall effect a full and effective transfer of relevant details, for
example keys and codes/passwords for the operation of the alarm and the computers in the Company's facilities, introduction with
the lessor and the relevant contacts in the bank, etc..



 


		6.3	Full Cooperation. Each of the Sellers and Purchaser shall fully cooperate with each other,
sign and execute any reasonably needed document, instrument or agreement in a timely manner and take all such reasonable measures
to bring about the Closing without delay.



 


		6.4	One Representative. Each Seller represents and warrants that the Escrow is its sole and
exclusive representative with respect to the receipt of the Purchase Price pursuant to this Agreement from the Purchaser and the
distribution of the Purchase Price between the Sellers and/or in connection with the receipt of the Quarterly Reports and the Annual
Reports. It is specifically agreed that payment of any sums to the Escrow shall be deemed due payment of such sums to the Sellers.



 






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		6.5	Confidentiality. Each Seller, shall maintain the confidentiality of the Company information
and not disclose it to any person or entity, nor use it. These undertakings shall apply for a period of five (5) years from the
Effective Date.



 


		6.6	Compete: Each Seller undertakes that it and/or any of its Affiliate (as such term is defined
in section 1A.2.1 above) shall not directly compete or assist others to compete, with the Technology of the Company during the
shorter period between the Consideration Period or a period of four (4) years as of the Closing.



 


	7.	Reserved.




 


	8.	Indemnification; Limitation of Liability.



 


		8.1	Indemnification by each Seller. Each Seller, shall severally and not jointly be liable for
and shall indemnify and hold the Purchaser harmless from and against all claims, actions, damages, costs, expenses and liabilities
(including reasonable attorneys’ fees incident to the foregoing) (collectively referred to as “Damages”)
actually incurred by the Purchaser and resulting from or arising out of:



 


		8.1.1	the failure of the representations and warranties of the Seller contained in Sections 3 of the
Agreement to have been true at the Closing;



		8.1.2	the failure of the Seller to comply in all material respects with any of the Seller’s covenants
contained in the Agreement, specifically as set out in Section 6.3, 6.4, 6.5 and 6.6;



Indemnification
by off-set. Any indemnification by the Sellers pursuant to this Section 8.1 may be made by way of off-set by the Purchaser,
from any Additional Consideration due to the Sellers under this Agreement, all subject to Section 8.7 below.


Indemnification
Limitations. Notwithstanding anything to the contrary contained in this Agreement, (i) the Purchaser shall not be entitled
to seek indemnification from the Sellers unless and until the Damages sought by the Purchaser exceeds $US10,000, and if the Damages
exceed said amount the indemnification shall be made from the first dollar; and (ii) each Seller shall not be obligated to pay
any indemnification in the aggregate in excess of its pro-rata share of the Initial Consideration; (iii) no claim shall be brought
against the Sellers after the lapse of 24 months following the Closing, except for a claim, based on third parties' claim that
the Emulsions Technology infringes such third parties' intellectual property rights, that can not be brought against the Sellers
after the lapse of 36 months following the Closing.






		8.2	Indemnification by the Purchaser. The Purchaser shall be liable for and shall indemnify
and hold the Sellers harmless from and against all Damages resulting from or arising out of:



 


		8.2.1	the failure of the representations and warranties of the Purchaser contained in Section 5 of the
Agreement to have been true at the Closing;
	 	 	 
		8.2.2	the failure of the Purchaser to comply in all material respects with any of the Purchaser’s covenants contained in the Agreement, specifically as set out in Section 6.3 and the obligation to

                                                       pay any part of the Purchase Price when due;

	 	 	 







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Indemnification
Limitations. Notwithstanding anything to the contrary contained in this Agreement, (i) the Sellers shall not be entitled to
seek indemnification from the Purchaser unless and until the Damages sought by the Sellers exceeds $US10,000, and if the Damages
exceed said amount the indemnification shall be made from the first dollar. Notwithstanding the aforesaid, the above limitation
shall not apply to Damages resulting from the failure of the Purchaser to comply with its obligation to pay any part of the Purchase
Price when due; (ii) The Purchaser shall not be obligated to pay any indemnification to all the Sellers in the aggregate in excess
of the then unpaid and outstanding balance out of the Purchase Price; and (iii) no claim shall be brought against the Purchaser
after the lapse of 12 months following the termination of the Consideration Period.


 


Notwithstanding
the aforesaid, none of the limitations set forth in this Section 8.2 shall apply to Damages caused to the Sellers as a result of
third parties' claims.


		8.3	Conditions to Indemnification. The obligations to defend and indemnify a party against third
party claims provided under Sections 8.1 and 8.2 above shall apply only if (i) the party requesting the indemnity (the
“Indemnified Party”) promptly notifies the party obligated to provide the indemnity (“Indemnifying
Party”) in writing of any claim; (ii) the Indemnified Party provides the Indemnifying Party with all reasonable
assistance and information requested by the Indemnifying Party, at the Indemnifying Party’s expense, for the defense and
settlement of any claim; and (iii) the Indemnified Party provides the Indemnifying Party with the exclusive right to control
and the authority to defend and settle any claim, provided that the Indemnifying Party will not enter into any settlement that
adversely affects the Indemnified Party’s rights or interest without the Indemnified Party’s prior written approval,
which shall not be unreasonably withheld or delayed.



		8.4	LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO
THE OTHER FOR SPECIAL, INDIRECT, INCIDENTAL, LOST PROFIT, TORT OR CONSEQUENTIAL DAMAGES OR PUNITIVE DAMAGES, REGARDLESS OF THE
NATURE OF THE CLAIM. 



		8.5	The indemnification provisions of Sections 8 shall be the sole and exclusive remedy of each of
the Parties against any Damages arising from, or in connection with, this Agreement, except in the case of fraud, willful breach
or intentional misrepresentation.



	9.	Miscellaneous




 


		9.1	The Preamble to this Agreement and any schedule attached hereto shall be deemed an integral part
hereof.



 


		9.2	Governing Law; Jurisdiction. This Agreement shall be governed by and construed according
to the laws of the State of Israel. Any dispute arising under or in relation to this Agreement shall be governed by and construed
according to the laws of the State of Israel and exclusively resolved by the courts of the city of Tel Aviv, and each of the parties
hereby submits irrevocably to such jurisdiction.



 


		9.3	Entire Agreement; Amendment and Waiver. This Agreement and the Schedules hereto constitute
the full and entire understanding and agreement between the parties with regard to the subject matters hereof and thereof and terminates
and cancels any prior agreement or understanding between the Parties, including the Terms Sheet signed between the parties on April
10, 2009 and amended on June 29, 2009. Any term of this Agreement may be amended and the observance of any term hereof may be waived
(either prospectively or retroactively and either generally or in a particular instance) only with the written consent of the parties
to this Agreement.



 






    	12



    	 



    

 


		9.4	Notices, etc. All notices and other communications required or permitted hereunder to be
given to a party to this Agreement shall be in writing by registered mail, faxed, e-mailed, or otherwise delivered by hand or by
messenger, addressed to such party's address as set forth below or at such other address as the party shall have furnished to each
other party in writing in accordance with this provision. If sent by fax, e-mail or delivered by hand or messenger, the notice
shall be deemed to have been delivered on the next business day after transmission, if sent by registered mail, the notice shall
be deemed to have been delivered on the 3rd business day after it was sent by mail.
	 	 	 
	 	 	If to the Purchaser to:



  


	 	
        P.V Nanocell Ltd.

        7 Bialik St., Zichron Ya’akov, Israel

         
	
        With a copy to:

        Galia Amir Cheyne, Adv.

        Primes, Shiloh, Givon, Meir – Law Firm

        16 Derech Hayam, Haifa 34741, Israel



 


	 	 	If to the Sellers:






 


	 	
        C/O Escrow

        Adv. Shuky regev

        45 Reines st. Tel-Aviv 64597, Israel
	
        With a copy to:

        Inbal Sustiel, Adv.

        Furth, Wilensky, Mizrachi, Knaani – Law Offices

        1 Azrieli Center, Tel Aviv 67021, Israel



 


			or such other address with respect to the Escrow or the Purchaser as they shall notify in writing.



 


		9.5	Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing
to any party upon any breach or default under this Agreement, shall be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent, or approval of any kind or character on the part of any party of any breach
or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must
be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any of the parties, shall be cumulative and not alternative.



 


		9.6	Expenses. The Sellers and the Purchaser shall each bear its own expenses with respect to
this agreement including due diligence costs by the Purchaser, setting up the Escrow by the Sellers, etc.



 


		9.7	Counterparts. This Agreement may be executed in any number of facsimile counterparts, each
of which shall be deemed an original and enforceable against the parties actually executing such counterpart, and all of which
together shall constitute one and the same instrument.



 






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IN WITNESS WHEREOF, each
of the parties has signed this Share Purchase Agreement as of the date first hereinabove set forth.


 


The Purchaser:


 


	
        _____________________________

        P.V. Nanocell Ltd.

        By:_____________________________

        Name: _____________________________

        Title: _____________________________
	 	 


  




[Share Purchase Agreement – Sellers signature page]


 






    	14



    	 



    

 


The Seller:


 


	
        By (signature):

         

	
        Signed by:

        (Please Print Name + Title of Authorized Signatory)

	ID Number (or passport number for non-Israelis citizens):
	Address:	 	 
	Name of Addressee: 	 	 
	Attention of: 	 	 
	Address: 	 	 
	 	 	 
	 	 	 
	 	 	 
	Tel:	+_______- ___ - __________________
	Fax: 	+ _______- ___ - _________________
	E-mail:	___________@__________________
	 	 	 	 


 


 


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