Exhibit 10.12


 


STANDBY EQUITY DISTRIBUTION AGREEMENT


 


THIS STANDBY EQUITY
DISTRIBUTION AGREEMENT dated as of July 2, 2015 (this “Agreement”) is made by and between YA GLOBAL MASTER
SPV LTD., a Cayman Islands exempt limited partnership (the “Investor”), and PV NANO CELL LTD., a
company formed in the State of Israel (the “Company”).


 


WHEREAS, the Company
is a non-reporting company and is preparing to file a registration statement on Form F-1 (the “Initial Registration Statement”);


 


WHEREAS, while the
Company’s ordinary shares, par value NIS .01 (the “Ordinary Shares”), are not listed on any stock exchange
or other trading system, after the Initial Registration Statement is declared effective by the U.S. Securities and Exchange Commission
(the “SEC”), the Company intends to seek a qualification for the Ordinary Shares to be quoted on the OTCQB;


 


WHEREAS, in order
for the Ordinary Shares to be qualified for quotation on the OTCQB, a Financial Industry Regulatory Authority (“FINRA”),
registered market maker must file an application on Form 211 with FINRA and receive clearance to make a market in the Ordinary
Shares;


 


WHEREAS, the parties
desire that, upon the terms and subject to the conditions contained herein, after the Initial Registration Statement has been declared
effective by the SEC, and the Ordinary Shares have been qualified for quotation on the OTCQB, the Company shall have the right
to issue and sell to the Investor, from time to time as provided herein, and the Investor shall be irrevocably bound to purchase
from the Company up to $3,000,000 of the Ordinary Shares; and


 


WHEREAS, the offer
and sale of the Ordinary Shares issuable hereunder will be made in reliance upon the provisions of Regulation D (“Regulation
D”) promulgated under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the
“Securities Act”), or upon such other exemption from the registration requirements of the Securities Act as
may be available with respect to any or all of the transactions to be made hereunder.


 


NOW, THEREFORE,
the parties hereto agree as follows:


 


Article I. Certain Definitions


 


Section 1.01   “Advance”
shall mean the portion of the Commitment Amount requested by the Company in the Advance Notice.


 


Section 1.02   “Advance
Date” shall mean the 1st Trading Day after expiration of the applicable Pricing Period for each Advance.


 






    	 



    	 



    

 


Section 1.03   “Advance
Notice” shall mean a written notice in the form of Exhibit A attached hereto to the Investor executed by an officer
of the Company and setting forth the Advance amount that the Company requests from the Investor.


 


Section 1.04   “Advance
Notice Date” shall mean each date the Company delivers (in accordance with Section 2.01(c) of this Agreement) to the
Investor an Advance Notice requiring the Investor to advance funds to the Company, subject to the terms of this Agreement.


 


Section 1.05   “Affiliate”
shall have the meaning set forth in ‎Section 3.07.


 


Section 1.06   “Commitment
Amount” shall mean the aggregate amount of up to $3,000,000.


 


Section 1.07   “Commitment
Fee” shall have the meaning set forth in Section 13.05.


 


Section 1.08   “Commitment
Fee Shares” shall have the meaning set forth in Section 13.05.


 


Section 1.09   “Company
Indemnitees” shall have the meaning set forth in ‎Section 5.02.


 


Section 1.10   “Commitment
Period” shall mean the period commencing on the Effective Date, and expiring upon the date of termination of this Agreement
in accordance with ‎Section 11.02.


 


Section 1.11   “Condition
Satisfaction Date” shall have the meaning set forth in ‎Section 7.01.


 


Section 1.12   “Consolidation
Event” shall have the meaning set forth in Section 6.08.


 


Section 1.13   “Daily
Value Traded” in respect of a particular day means the product obtained by multiplying the daily trading volume of the
Ordinary Shares for that day on the Principal Market by the VWAP for such day.


 


Section 1.14   “Damages”
shall mean any loss, claim, damage, liability, costs and expenses (including, without limitation, reasonable attorney’s fees
and disbursements and costs and expenses of expert witnesses and investigation) ; provided, that “Damages” shall not
include any incidental, consequential (including lost profits), punitive, special, indirect or exemplary damages, damages for diminution
in value, or damages calculated on a multiple of earnings or similar basis.


 


Section 1.15   “Effective
Date” shall mean the date on which the Ordinary Shares are first qualified for quotation on the OTCQB.


 


Section 1.16   “Environmental
Laws” shall have the meaning set forth in Section 4.08.


 


Section 1.17   “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


Section 1.18   “Indemnified
Liabilities” shall have the meaning set forth in ‎Section 5.01.


 


Section 1.19   “Investor
Indemnitees” shall have the meaning set forth in ‎Section 5.01.


 






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Section 1.20   “Market
Price” shall mean the lowest daily VWAP of the Ordinary Shares during the relevant Pricing Period that is greater than
or equal to the Minimum Acceptable Price.


 


Section 1.21   “Material
Adverse Effect” shall mean any condition, circumstance, or situation that may result in, or would reasonably be expected
to result in (i) a material adverse effect on the legality, validity or enforceability of this Agreement or the transactions contemplated
herein, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of
the Company and its Subsidiary, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform
in any material respect on a timely basis its obligations under this Agreement, other than, with respect to each of the foregoing
(x) any event, matter or circumstance generally affecting the economy of the United States or Israel, (y) any national or international
political or social condition or event, including the engagement by the United States or Israel in hostilities, whether or not
pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United
States or Israel or any of their respective territories, possessions, or diplomatic or consular offices, or upon any military installation
of the United States or Israel, and its effect upon the Company or (z) any change in GAAP (provided that, in the case of the preceding
clauses (x), (y) and (z), to the extent the same does not have a disproportionate impact on the Company relative to other companies
in the same industry as the Company).


 


Section 1.22   “Maximum
Advance Amount” in respect of each Advance Notice means such amount as is equal to 20% of the aggregate dollar value
trading (as determined by multiplying the VWAP for such day by the volume on the Principal Market) during the 5 Trading Days immediately
prior to (but not including) the date the Company submits an Advance Notice, but not to exceed $500,000.


 


Section 1.23   “Minimum
Acceptable Price” or “MAP” shall be 80% of the last closing price of the Ordinary Shares on the Principal
Market at the time of delivery of each Advance Notice.


 


Section 1.24   “Ordinary
Shares” shall have meaning set forth in the Recitals.


 


Section 1.25   “Ownership
Limitation” shall have the meaning set forth in Section 2.01(a).


 


Section 1.26   “Person”
shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.


 


Section 1.27   “Plan
of Distribution” shall have the meaning set forth in ‎Section 6.01(a).


 


Section 1.28   “Pricing
Period” shall mean the 5 consecutive Trading Days commencing on the Trading Day immediately following the Advance Notice
Date.


 


Section 1.29   “Principal
Market” shall mean the OTCQB, the New York Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market,
the NASDAQ Capital Market, whichever is at the time the principal trading exchange or market for the Ordinary Shares.


 


Section 1.30   “Purchase
Price” shall mean the price per share obtained by multiplying the Market Price by 95%.


 






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Section 1.31   “Registrable
Securities” shall mean (i) the Shares (including the Commitment Fee Shares), (ii) the Ordinary Shares and the Warrant
Shares issued as part of each Unit, and (iii) any securities issued or issuable with respect to any of the foregoing by way of
exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, consolidation or other
reorganization or otherwise. As to any particular Registrable Securities, once issued such securities shall cease to be Registrable
Securities when (a) the Registration Statement has been declared effective by the SEC and such Registrable Securities have been
disposed of pursuant to the Registration Statement, (b) such Registrable Securities have been sold under circumstances in which
all of the applicable conditions of Rule 144 (or any similar provision then in force) under the Securities Act (“Rule
144”) are met, or (c) such Registrable Securities may be sold without any time, volume or manner limitations pursuant
to Rule 144.


 


Section 1.32   “Registration
Limitation” shall have the meaning set forth in Section 2.01(a).


 


Section 1.33   “Registration
Period” shall have the meaning set forth in ‎Section 6.01(b).


 


Section 1.34   “Registration
Statement” shall mean a registration statement on Form F-1 or Form F-3 or on such other form promulgated by the SEC for
which the Company then qualifies and which counsel for the Company shall deem appropriate, and which form shall be available for
the registration of the resale by the Investor of the Registrable Securities under the Securities Act.


 


Section 1.35   “Regulation
D” shall have the meaning set forth in the recitals of this Agreement.


 


Section 1.36   “SEC”
shall have the meaning set forth in the Recitals.


 


Section 1.37   “SEC
Documents” shall have the meaning set forth in Section 4.05.


 


Section 1.38   “Securities
Act” shall have the meaning set forth in the recitals of this Agreement.


 


Section 1.39   “Settlement
Document” shall have the meaning set forth in ‎Section 2.02(a).


 


Section 1.40   “Shares”
shall mean the Ordinary Shares to be issued from time to time hereunder pursuant to Advances, and any Commitment Fee Shares.


 


Section 1.41    “Trading
Day” shall mean any day during which the Principal Market shall be open for business.


 


Section 1.42   “Unit”
shall comprise of (i) one Ordinary Share and (ii) a warrant, in the form annexed hereto as Exhibit B (each, a “Warrant”),
exercisable for one Ordinary Share (each, a “Warrant Share”) at an exercise price of $1.50.


 


Section 1.43   “VWAP”
means, for any Trading Day, the daily volume weighted average price of the Ordinary Shares for such date on the Principal Market
as reported by Bloomberg L.P. during regular trading hours.


 






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Article II. Advances


 


Section 2.01   Advances;
Mechanics. Subject to the terms and conditions of this Agreement (including, without limitation, the provisions of Article
VII hereof), the Company, at its sole and exclusive option, may issue and sell to the Investor, and the Investor shall purchase
from the Company, Ordinary Shares on the following terms:


 


		(a)	Advance Notice. At any time during the Commitment Period the Company may require the Investor
to purchase Shares by delivering an Advance Notice to the Investor, subject to the conditions set forth in Section 7.01, and in
accordance with the following provisions;



 


		(i)	The Company shall, in its sole discretion, select the Advance Amount it desires to request in each
Advance Notice and the time it desires to deliver each Advance Notice, which amount shall not exceed the Maximum Advance Amount,
provided however, the Company acknowledges and agrees that the total Advance Amount that the Company will receive in connection
with each Advance Notice may be less than the Advance Amount requested in the Advance Notice due to reductions to the Advance Amount
in accordance with Section 2.01(c) of this Agreement.



 


		(ii)	There shall be no mandatory minimum Advances and no non-usages fee for not utilizing the Commitment
Amount or any part thereof.



 


		(b)	Date of Delivery of Advance Notice. Advance Notices shall be delivered in accordance with
the instructions set forth on the bottom of Exhibit A. An Advance Notice shall be deemed delivered on (i) the Trading Day it is
received by the Investor if such notice is received prior to 5:00 p.m. Eastern Time in accordance with the instructions set forth
on the bottom of Exhibit A, or (ii) the immediately succeeding Trading Day if it is received after 5:00 p.m. Eastern Time on a
Trading Day or at any time on a day which is not a Trading Day, in each case in accordance with the instructions set forth on the
bottom of Exhibit A. No Advance Notice may be deemed delivered on a day that is not a Trading Day.



 


		(c)	Advance Limitations. Regardless of the Advance Amount requested by the Company in the Advance
Notice, the final amount of the Advance shall be reduced in accordance with each of the following limitations:



 


		(i)	Ownership Limitation; Commitment Amount. In no event shall the number of Ordinary Shares
issuable to the Investor pursuant to an Advance cause the aggregate number of Ordinary Shares beneficially owned (as calculated
pursuant to Section 13(d) of the Exchange Act) by the Investor and its affiliates to exceed 9.99% of the then outstanding Ordinary
Shares (the “Ownership Limitation”). In connection with each Advance Notice delivered by the Company, any portion
of an Advance that would (i) cause the Investor to exceed the Ownership Limitation or (ii) cause the aggregate amount of Advances
to exceed the Commitment Amount shall automatically be withdrawn with no further action required by the Company, and such Advance
Notice shall be deemed automatically modified to reduce the aggregate amount of the requested Advance by an amount equal to such
withdrawn portion.



 






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		(ii)	Registration Limitation. In no event shall the aggregate number of Shares subject to an
Advance Notice cause the number of Shares purchased by the Investor pursuant to this Agreement to exceed the number of Shares registered
for resale by the Investor under the Registration Statement(s) then in effect (the “Registration Limitation”).
In connection with each Advance Notice, any portion of an Advance that would exceed the Registration Limitation shall automatically
be withdrawn with no further action required by the Company and such Advance Notice shall be deemed automatically modified to reduce
the aggregate amount of the requested Advance by an amount equal to such withdrawn portion in respect of each Advance Notice.



 


		(d)	Minimum Acceptable Price.



 


		(i)	With respect to each Advance Notice (A) the amount of the Advance set forth in such Advance Notice
shall automatically be reduced by 20% for each Trading Day during the Pricing Period for which the VWAP of the Ordinary Shares
is below the MAP in effect with respect to such Advance Notice (each such day, an “Excluded Day”), and (B) for
the avoidance of doubt, each Excluded Day shall be excluded from the Pricing Period for purposes of determining the Market Price.



 


		(ii)	The number of Shares to be issued and delivered to the Investor at each Closing with respect to
an Advance Notice with an Excluded Day shall be determined based on the Advance Notice amount as reduced pursuant to Section 2.01(d)(i)(A)
above (the “Adjusted Advance Amount”); provided, however, that the Adjusted Advance Amount shall be automatically
increased by an amount equal to the number of Shares sold by the Investor on such Excluded Day (in a total amount for each Excluded
Day not to exceed 20% of the amount of the Advance set forth in the original Advance Notice) at a price per share equal to the
MAP in effect with respect to such Advance Notice (without any further discount).



 


		(e)	Notwithstanding any other provision in this Agreement, the Company and the Investor acknowledge
and agree that upon the Investor’s receipt of a valid Advance Notice the parties shall be deemed to have entered into an
unconditional contract binding on both parties for the purchase and sale of Shares pursuant to such Advance Notice in accordance
with the terms of this Agreement and subject to applicable law.



 






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Section 2.02    Closings.
Each Closing shall take place as soon as practicable after each Advance Date in accordance with the procedures set forth below.
In connection with each Closing, the Company and the Investor shall fulfill each of its obligations as set forth below:


 


		(a)	On each Advance Date, the Investor shall deliver to the Company a written document, in the form
attached hereto as Exhibit C (each a “Settlement Document”), setting forth the amount of the Advance (taking
into account any adjustments pursuant to Section 2.01), the Purchase Price, the number of Ordinary Shares to be purchased
by the Investor, and a report by Bloomberg, L.P. indicating the VWAP for each of the Trading Days during the Pricing Period (or,
if not reported on Bloomberg, L.P., another reporting service reasonably agreed to by the parties), in each case in accordance
with the terms and conditions of this Agreement.



 


		(b)	Promptly after receipt of the Settlement Document with respect to each Advance (and, in any event,
not later than two Trading Days after such receipt), the Company will, or will cause its transfer agent to, electronically transfer
such number of Ordinary Shares to be purchased by the Investor (as set forth in the Settlement Document) by crediting the Investor’s
account or its designee’s account at the Depository Trust Company through its Deposit Withdrawal at Custodian System or by
such other means of delivery as may be mutually agreed upon by the parties hereto (which in all cases the resale of such Ordinary
Shares shall be covered by an effective Registration Statement) against payment to the Company of the aggregate Purchase Price
in respect of such shares of Common Stock in cash in immediately available funds to an account designated in writing by the Company,
and transmit notification to the Investor that such share transfer has been requested. No fractional shares shall be issued, and
any fractional amounts shall be rounded to the next higher whole number of shares. Any certificates evidencing Ordinary Shares
delivered pursuant hereto shall be free of restrictive legends. To facilitate the transfer of the Ordinary Shares by the Investor,
the Ordinary Shares will not bear any restrictive legends so long as there is an effective Registration Statement covering such
Ordinary Shares.



 


		(c)	On or prior to the Advance Date, each of the Company and the Investor shall deliver to the other
all documents, instruments and writings required to be delivered by either of them pursuant to this Agreement in order to implement
and effect the transactions contemplated herein.



 


Section 2.03   Reserved.


 


Section 2.04    Initial
Purchase and Sale of Units. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 2.05 and
2.06 below, the Company shall issue and sell to the Investor, and the Investor agrees to purchase from the Company on or
prior to the 5th Trading Day after the date on which the Initial Registration Statement is declared effective by the
SEC, 100,000 Units (the “Initial Closing”). The aggregate purchase price for the Units to be purchased by the
Investor shall be $150,000 (the “Initial Purchase Price”).
The date of the Initial Closing is hereinafter referred to as the “Initial Closing Date.” At the Initial
Closing, the Initial Purchase Price shall be paid by the Investor to the Company by wire transfer to an account designated in writing
by the Company prior to the Initial Closing Date.


 






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Section 2.05   The obligation
of the Investor to purchase the Units at the Initial Closing is subject to the satisfaction, at or before the Initial Closing Date,
of each of the following conditions, provided that these conditions are for the Investor’s sole benefit and may be waived
by the Investor at any time in its sole discretion by providing the Company with prior written notice thereof:


 


		(a)	The Company shall have duly executed and delivered to the Investor each of the Transaction Documents
to which it is a party.



 


		(b)	The Company shall have delivered to the Investor: (i) a certificate registered in the Investor’s
name representing 100,000 Ordinary Shares; and (ii) a Warrant to purchase 100,000 additional Ordinary Shares.



 


		(c)	Each and every representation and warranty of the Company contained in this Agreement shall be
true and correct in all material respects (except to the extent that any of such representations
and warranties are already qualified as to materiality, in which case, such representations and warranties shall be true and correct
in all respects without further qualification) as of the date when made and as of the Initial Closing Date as though originally
made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct
as of such specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required to be performed, satisfied or complied with by the Company under this Agreement at or prior
to the Initial Closing Date. The Investor shall have received a certificate, duly executed by the Chief Executive Officer of the
Company, dated as of the Initial Closing Date, to the foregoing effect.



 


		(d)	The Initial Registration Statement shall have been declared effective by the SEC on or prior to
December 31, 2015.



 


		(e)	Since the date of execution of this Agreement, no event or series of events shall have occurred
that has resulted in a Material Adverse Effect.



 


Section 2.06   The obligation
of the Company hereunder to issue and sell the Units to the Investor at the Initial Closing is subject to the satisfaction, at
or before the Initial Closing Date, of each of the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion by providing the Investor with prior written notice
thereof:


 


		(a)	The Investor shall have duly executed and delivered to the Company each of the Transaction Documents
to which it is a party.



 


		(b)	The Investor shall have delivered to the Company the Initial Purchase Price for the Ordinary Shares
and Warrants being purchased by the Investor at the Closing by wire transfer of immediately available funds.



 


		(c)	The representations and warranties of the Investor shall be true and correct in all material respects
as of the date when made and as of the Initial Closing Date as though originally made at that time (except for representations
and warranties that speak as of a specific date, which shall be true and correct as of such specific date), and the Investor shall
have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Investor at or prior to the Initial Closing Date. The Company shall
have received a certificate, duly executed by an authorized officer of the Investor, dated as of the Initial Closing Date, to the
foregoing effect.



 


		(d)	Since the date of execution of this Agreement, no event or series of events shall have occurred
that has resulted in a Material Adverse Effect.



 






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Article III. Representations
and Warranties of Investor


 


Investor hereby represents
and warrants to, and agrees with, the Company that the following are true and correct as of the date hereof and as of each Advance
Date:


 


Section 3.01   Organization
and Authorization. The Investor is duly organized, validly existing and in good standing under the laws of the Cayman Islands
and has all requisite power and authority to execute, deliver and perform this Agreement, including all transactions contemplated
hereby. The decision to invest and the execution and delivery of this Agreement by the Investor, the performance by the Investor
of its obligations hereunder and the consummation by the Investor of the transactions contemplated hereby have been duly authorized
and require no other proceedings on the part of the Investor. The undersigned has the right, power and authority to execute and
deliver this Agreement and all other instruments on behalf of the Investor or its shareholders. This Agreement has been duly executed
and delivered by the Investor and, assuming the execution and delivery hereof and acceptance thereof by the Company, will constitute
the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms.


 


Section 3.02   Evaluation
of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating
the merits and risks of, and bearing the economic risks entailed by, an investment in the Company and of protecting its interests
in connection with the transactions contemplated hereby. The Investor acknowledges and agrees that its investment in the Company
involves a high degree of risk.


 


Section 3.03   No Legal,
Investment or Tax Advice from the Company. The Investor acknowledges that it had the opportunity to review this Agreement and
the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying
solely on such counsel and advisors and not on any statements or representations of the Company or any of the Company’s representatives
or agents for legal, tax, investment or other advice with respect to the Investor’s acquisition of Ordinary Shares hereunder,
the transactions contemplated by this Agreement or the laws of any jurisdiction, and that the Investor may lose all or a part of
its investment. The Investor has not been provided with a prospectus, an offering memorandum or any other disclosure document in
connection with its acquisition of the Ordinary Shares under this Agreement (other than with respect to the purchase and sale of
the Units), and the Investor’s decision to acquire such Ordinary Shares has not been based upon any verbal or written representation
made by or on behalf of the Company, or any officer, employee, agent or representative of the Company.


 


Section 3.04   Investment
Purpose. The Ordinary Shares purchased by the Investor hereunder are being or will be purchased for its own account, for investment
purposes, and without any view or intention to distribute such shares in violation of the Securities Act or any other applicable
securities laws. The Investor agrees not to assign or in any way transfer the Investor’s rights to the securities or any
interest therein or its obligations under this Agreement and acknowledges that the Company will not recognize any purported assignment
or transfer except in accordance with applicable Federal and state securities laws. No other Person has or will have a direct or
indirect beneficial interest in the securities. The Investor agrees not to sell, hypothecate or otherwise transfer the Investor’s
Ordinary Shares unless such shares are registered under Federal and applicable state securities laws or unless, in the opinion
of counsel satisfactory to the Company, an exemption from such registration is available.


 






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Section 3.05   Accredited
Investor. The Investor is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation
D.


 


Section 3.06   Information.
The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances
and operations of the Company and information it deemed material to making an informed investment decision. The Investor and its
advisors, if any, have been afforded the opportunity to ask questions of the Company and its management and has received answers
to such questions. Neither such inquiries nor any other due diligence investigations conducted by such Investor or its advisors,
if any, or its representatives shall modify, amend or affect the Investor’s right to rely on the Company’s representations
and warranties contained in this Agreement. The Investor understands that its investment involves a high degree of risk. The Investor
has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment decision with respect
to the transactions contemplated hereby.


 


Section 3.07   Not an
Affiliate. The Investor is not an officer, director or a person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with the Company or any “affiliate” of the Company
(as that term is defined in Rule 405 promulgated under the Securities Act).


 


Section 3.08   Trading
Activities. The Investor’s trading activities with respect to the Ordinary Shares shall be in compliance with all applicable
federal and state securities laws, rules and regulations and the rules and regulations of the Principal Market on which the Ordinary
Shares is listed or traded. Neither the Investor nor its affiliates has any open short position in the Ordinary Shares, nor has
the Investor entered into any hedging transaction that establishes a net short position with respect to the Common Stock, and the
Investor agrees that it shall not, and that it will cause its affiliates not to, engage in any short sales or hedging transactions
with respect to the Ordinary Shares; provided that the Company acknowledges and agrees that upon receipt of an Advance Notice
the Investor has the right to sell the shares to be issued to the Investor pursuant to the Advance Notice prior to receiving such
shares.


 


Section 3.09   General
Solicitation. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale
of the Common Stock offered hereby.


 






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Article IV. Representations
and Warranties of the Company


 


Except as set forth in
the SEC Documents, or in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any
representation or warranty otherwise made herein to the extent of the disclosure contained in the corresponding section of the
Disclosure Schedules or in another Section of the Disclosure Schedules, to the extent that it is reasonably apparent on the face
of such disclosure that such disclosure is applicable to such Section, the Company represents and warrants to the Investor that,
as of the date hereof, as of the Initial Closing Date, and as of each Advance Date (other than representations and warranties which
address matters only as of a certain date, which shall be true and correct as written as of such certain date), that:


 


Section 4.01   Organization
and Qualification. Each of the Company and its Subsidiary (as defined below) is an entity duly organized and validly existing
under the laws of its state of organization or incorporation, and has the requisite power and authority to own its properties and
to carry on its business as now being conducted and as presently proposed to be conducted. Each of the Company and its Subsidiary
is duly qualified to do business and is in good standing (to the extent applicable) in every jurisdiction in which the nature of
the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be
in good standing would not have a Material Adverse Effect. “Subsidiaries” means any Person (as defined below)
in which the Company, directly or indirectly, (x) owns any of the outstanding capital stock or holds any equity or similar interest
of such Person or (y) controls or operates all or any part of the business, operations or administration of such Person, and each
of the foregoing, is individually referred to herein as a “Subsidiary”; provided that, for purposes of this
Agreement, Leed PV Nano Science and Technology (Suzhou) Company Ltd. shall not be deemed a subsidiary of the Company.


 


Section 4.02   Authorization,
Enforcement, Compliance with Other Instruments. The Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement and the other Transaction Documents and to issue the Securities in accordance with
the terms hereof and thereof. The execution and delivery by the Company of this Agreement and the other Transaction Documents,
and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance
of the Ordinary Shares and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise of the Warrants)
have been or (with respect to consummation) will be duly authorized by the Company’s board of directors or other governing
body and no further filing, consent or authorization will be required by the Company, its board of directors or its shareholders
other than an amendment to the Company’s articles of organization to reflect its change from a privately traded company to
a publicly traded company. This Agreement and the other Transaction Documents to which it is a party have been (or, when executed
and delivered, will be) duly executed and delivered by the Company and, assuming the execution and delivery thereof and acceptance
by the Investor, constitute (or, when duly executed and delivered, will be) the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or other laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification
and to contribution may be limited by federal or state securities law. “Transaction Documents” means, collectively,
this Agreement, the Warrants, and each of the other agreements and instruments entered into or delivered by any of the parties
hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.


 






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Section 4.03   No Conflict.
The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the issuance of the Ordinary Shares, Warrants and
Warrant Shares and the reservation for issuance of the Warrant Shares) will not (i) result in a violation of the articles of association
or other organizational documents of the Company or its Subsidiary (with respect to consummation, as the same may be amended prior
to the date on which any of the transactions contemplated hereby are consummated), (ii) subject to the receipt by the Company
of the waiver referenced in Section 7(k), conflict with, or constitute a default (or an event which with notice or lapse of time
or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company or its Subsidiary is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment or decree (including Israeli, U.S. and foreign securities laws and regulations and including
all applicable Israeli and US federal laws, rules and regulations) applicable to the Company or its Subsidiary or by which any
property or asset of the Company or its Subsidiary is bound or affected except, in the case of clause (ii) or (iii) above, to the
extent such violations that would not reasonably be expected to have a Material Adverse Effect.


 


Section 4.04   SEC Documents;
Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed
by it with the SEC pursuant to Section 15(d) of the Exchange Act since the Effective Date (all of the foregoing filed preceding
the date hereof or amended after the date hereof, or filed after the date hereof, and all exhibits included therein and financial
statements and schedules thereto and documents incorporated by reference therein, and all registration statements filed by the
Company under the Securities Act, being hereinafter referred to as the “SEC Documents”). The Company has made
available to the Investor through the SEC’s website at http://www.sec.gov, true and complete copies of the SEC Documents.
As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act or
the Securities Act, as applicable, and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally
accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in
such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the
Company as of the respective dates thereof and the results of its operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments).


 






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Section 4.05   Equity
Capitalization. As of the date of this Agreement, the authorized share capital of the Company consists of 100,000,000 Ordinary
Shares, of which, 12,677,751 are issued and outstanding and 2,997,021 shares are reserved for issuance pursuant to options, warrants
and convertible notes (other than the Warrants). All of such outstanding shares are duly authorized, validly issued, fully paid
and nonassessable.


 


Section 4.06   Intellectual
Property Rights. The Company and its Subsidiary own or possess adequate rights or licenses to use all material trademarks,
trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses,
approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses as now conducted,
except as would not cause a Material Adverse Effect. The Company and its Subsidiary do not have any knowledge of any infringement
by the Company or its Subsidiary of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service
names, service marks, service mark registrations, or trade secrets, except as would not cause a Material Adverse Effect. To the
knowledge of the Company, there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge,
being threatened against the Company or its Subsidiary regarding trademark, trade name, patents, patent rights, invention, copyright,
license, service names, service marks, service mark registrations, trade secret or other infringement; and, except as would not
cause a Material Adverse Effect, the Company is not aware of any facts or circumstances which might give rise to any of the foregoing.


 


Section 4.07   Employee
Relations. Neither the Company nor any of its Subsidiary is involved in any labor dispute nor, to the knowledge of the Company
or any of its Subsidiary, is any such dispute threatened, in each case which is reasonably likely to cause a Material Adverse Effect.


 


Section 4.08   Environmental
Laws. The Company and its Subsidiary (i) are in compliance with all Environmental Laws (as defined below), (ii) have received
all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing
clauses (i), (ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect. The term “Environmental Laws” means all applicable Israeli, United States and foreign
federal, state and local laws relating to pollution or protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes
(collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes,
decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations
issued, entered, promulgated or approved thereunder.


 






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Section 4.09   Internal
Accounting Controls. The Company and each of its Subsidiary maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to any differences.


 


Section 4.10   Absence
of Litigation. Except as set forth in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board, government agency, self-regulatory organization or body pending against or affecting the Company,
the Ordinary Shares or any of the Company’s Subsidiary, wherein an unfavorable decision, ruling or finding would have a Material
Adverse Effect.


 


Section 4.11   Subsidiaries.
Except for the Subsidiary, Leed PV Nano Science and Technology (Suzhou) Company Ltd. and as disclosed in the SEC Documents, the
Company does not presently own or control, directly or indirectly, any interest in any other corporation, partnership, association
or other business entity.


 


Section 4.12   Tax Status.
Each of the Company and its Subsidiary (i) has timely made or filed all foreign, federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries know
of no basis for any such claim.


 


Section 4.13   Certain
Transactions. Except as set forth in the SEC Documents (or as not required to be disclosed pursuant to applicable law) none
of the officers or directors of the Company is presently a party to any transaction with the Company (other than for services as
employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services
to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer
or director, or to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer or director
has a substantial interest or is an officer, director, trustee or partner.


 


Section 4.14   Fees and
Rights of First Refusal. The Company is not obligated to offer the Ordinary Shares offered hereunder on a right of first refusal
basis or otherwise to any third parties including, but not limited to, current or former shareholders of the Company, underwriters,
brokers, agents or other third parties.


 


Section 4.15   Dilution.
The Company is aware and acknowledges that issuance of Ordinary Shares hereunder could cause dilution to existing shareholders
and could significantly increase the outstanding number of Ordinary Shares. The Company understands and acknowledges that the number
of Warrant Shares will increase in certain circumstances. The Company further acknowledges that its obligation to issue the Warrant
Shares upon exercise of the Warrants in accordance with this Agreement and the Warrants (and the payment of the exercise price
therefore in cash or on a cashless basis if and to the extent permitted under the Warrants) is, absolute and unconditional regardless
of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company.


 






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Section 4.16   No General
Solicitation. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale
of the Ordinary Shares offered hereby. None of the Company, its Subsidiary, any of its affiliates, or any Person acting on its
or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in
connection with the offer or sale of Ordinary Shares hereunder, or the Units. In addition, the Company has not engaged in any form
of solicitation, advertising or any other action constituting an offer of securities under the Israeli Securities Law 5728-1968,
as amended, and the regulations promulgated thereunder (collectively, the “Israeli Securities Law”) in connection
with the transactions contemplated hereby which would require the Company to publish a prospectus in the State of Israel under
the laws of the State of Israel. The Company shall be responsible for the payment of any financial advisory fees or brokers’
commissions (other than for Persons engaged by any Buyer or its investment advisor) relating to or arising out of the transactions
contemplated hereby based upon arrangements made by or on behalf of the Company. Neither the Company nor any of its Subsidiaries
has engaged any placement agent or other agent in connection with the offer or sale of Ordinary Shares hereunder.


 


Section 4.17   Acknowledgment
Regarding Investor’s Purchase of Shares. The Company acknowledges and agrees that the Investor is acting solely in the
capacity of an arm’s length investor with respect to this Agreement and the transactions contemplated hereunder. The Company
further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereunder and any advice given by the Investor or any of its representatives
or agents in connection with this Agreement and the transactions contemplated hereunder is merely incidental to the Investor’s
purchase of the Shares hereunder. The Company is aware and acknowledges that it may not be able to request Advances under this
Agreement if the Registration Statement is not declared effective or if any issuances of Ordinary Shares pursuant to any Advances
would violate any rules of the Principal Market. The Company further is aware and acknowledges that any fees paid or shares issued
pursuant to Section 13.04 and 13.05 hereunder shall be earned on the date hereof and are not refundable or returnable under any
circumstances.


 






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Article V. Indemnification


 


The Investor and the Company
represent to the other the following with respect to itself:


 


Section 5.01   Indemnification
by the Company. In consideration of the Investor’s execution and delivery of this Agreement, and in addition to all of
the Company’s other obligations under this Agreement, the Company shall defend, protect, indemnify and hold harmless the
Investor, and all of its officers, directors, partners, employees and agents (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement) and each person who controls the Investor within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Investor Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and reasonable and documented expenses in connection therewith (irrespective of whether any such Investor Indemnitee is a party
to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements
(the “Indemnified Liabilities”), incurred by the Investor Indemnitees or any of them as a result of, or arising
out of, or relating to (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement
for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading; provided, however, that
the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on behalf of the Investor specifically for inclusion
therein; (b) any material misrepresentation or breach of any material representation or material warranty made by the Company in
this Agreement or any other certificate, instrument or document contemplated hereby or thereby; or (c) any material breach of any
material covenant, material agreement or material obligation of the Company contained in this Agreement or any other certificate,
instrument or document contemplated hereby or thereby. To the extent that the foregoing undertaking by the Company may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities,
which is permissible under applicable law.


 


Section 5.02   Indemnification
by the Investor. In consideration of the Company’s execution and delivery of this Agreement, and in addition to all of
the Investor’s other obligations under this Agreement, the Investor shall defend, protect, indemnify and hold harmless the
Company and all of its officers, directors, shareholders, employees and agents (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement) (collectively, the “Company Indemnitees”) from
and against any and all Indemnified Liabilities incurred by the Company Indemnitees or any of them as a result of, or arising out
of, or relating to (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement
for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading; provided, however, that
the Investor will only be liable for written information relating to the Investor furnished to the Company by or on behalf of the
Investor specifically for inclusion in the documents referred to in the foregoing indemnity, and will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished
to the Investor by or on behalf of the Company specifically for inclusion therein; (b) any misrepresentation or breach of any representation
or warranty made by the Investor in this Agreement or any instrument or document contemplated hereby or thereby executed by the
Investor; or (c) any breach of any covenant, agreement or obligation of the Investor(s) contained in this Agreement or any other
certificate, instrument or document contemplated hereby or thereby executed by the Investor. To the extent that the foregoing undertaking
by the Investor may be unenforceable for any reason, the Investor shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities, which is permissible under applicable law.


 






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Section 5.03   Notice
of Claim. Promptly after receipt by an Investor Indemnitee or Company Indemnitee of notice of the commencement of any action
or proceeding (including any governmental action or proceeding) involving an Indemnified Liability, such Investor Indemnitee or
Company Indemnitee, as applicable, shall, if a claim for an Indemnified Liability in respect thereof is to be made against any
indemnifying party under this ‎Article V, deliver to the indemnifying party a written notice of the commencement thereof; but
the failure to so notify the indemnifying party will not relieve it of liability under this ‎Article V except to the extent
the indemnifying party is prejudiced by such failure. The indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually reasonably satisfactory to the indemnifying party and the Investor Indemnitee or Company
Indemnitee, as the case may be; provided, however, that an Investor Indemnitee or Company Indemnitee shall have the right to retain
its own counsel with the reasonable fees and expenses of not more than one counsel for such Investor Indemnitee or Company Indemnitee
to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation
by such counsel of the Investor Indemnitee or Company Indemnitee and the indemnifying party would be inappropriate due to actual
or potential differing interests between such Investor Indemnitee or Company Indemnitee and any other party represented by such
counsel in such proceeding. The Investor Indemnitee or Company Indemnitee shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Investor Indemnitee or Company Indemnitee which relates to such action or claim.
The indemnifying party shall keep the Investor Indemnitee or Company Indemnitee fully apprised at all times as to the status of
the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Investor
Indemnitee or Company Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does
not include as an unconditional term thereof the giving by the claimant or plaintiff to such Investor Indemnitee or Company Indemnitee
of a release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Investor Indemnitee or Company Indemnitee with respect to all third
parties, firms or corporations relating to the matter for which indemnification has been made. The indemnification required by
this ‎Article V shall be made by periodic payments of the amount thereof during the course of the investigation or defense,
as and when bills are received and payment therefor is due.


 






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Section 5.04   Contribution.
In the event that the indemnity provided in Section 5.01 or Section 5.02 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Investor severally agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same)
(collectively “Losses”) to which the Company or the Investor may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and by the Investor on the other from transactions contemplated
by this Agreement. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company
and the Investor severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and of the Investor on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total proceeds from the offering (net of all discounts and commissions but before deducting expenses)
received by it, and benefits received by the Investor shall be deemed to be equal to the total discounts received by the Investor.
Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information provided by the Company on the
one hand or the Investor on the other, the intent of the parties and their relative knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The Company and the Investor agree that it would not be just and equitable
if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable
considerations referred to above. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Article V shall be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission
or alleged omission. Notwithstanding the provisions of this Section 5.04, the Investor shall not be required to contribute any
amount in excess of the amount by which the Purchase Price for Shares actually purchased pursuant to this Agreement exceeds the
amount of any damages which the Investor has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Article V, each person who controls the Investor within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act and each director, officer, employee and agent of the Investor shall have the same rights
to contribution as the Investor, and each person who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms
and conditions of this Section 5.04.


 


Section 5.05   Remedies.
The remedies provided for in this Article V are not exclusive and shall not limit any right or remedies which may otherwise be
available to any indemnified person at law or in equity. The obligations of the parties to indemnify or make contribution under
this ‎Article V shall survive expiration or termination of this Agreement for a period of three years.


 






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Section 5.06   Limitation
of liability. Notwithstanding the foregoing, no party shall be entitled to recover from the other party for indirect, incidental
or consequential damages.


 


Article VI.

Covenants of the Company


 


Section 6.01   Registration
Statement.


 


		(a)	Filing of a Registration Statement. The Company shall prepare and, as soon as practicable,
but in no event later than 60 days after the Effective Date, file with the SEC an initial Registration Statement covering the resale
of the Registrable Securities. The Company shall not have the ability to request any Advances until the effectiveness of a Registration
Statement. Each Registration Statement shall contain the “Plan of Distribution” section in substantially the
form attached hereto as Exhibit D. The Company shall use its commercially reasonable efforts to have such initial Registration
Statement, and each other Registration Statement required to be filed pursuant to the terms of this Agreement, declared effective
by the SEC as soon as practicable.



 


		(b)	Maintaining a Registration Statement. The Company shall maintain the effectiveness of any
Registration Statement with respect to Registrable Securities that has been declared effective at all times during the Commitment
Period or, if earlier, until such time as no Registrable Securities registered thereunder remain outstanding (the “Registration
Period”). Notwithstanding anything to the contrary contained in this Agreement, the Company shall ensure that, when filed
and at all times while effective, each Registration Statement (including, without limitation, all amendments and supplements thereto)
and the prospectus (including, without limitation, all amendments and supplements thereto) used in connection with such Registration
Statement shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein,
or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were
made) not misleading.



 


		(c)	Filing Procedures. Not less than three business days prior to the filing of a Registration
Statement and not less than one business day prior to the filing of any related amendments and supplements to all Registration
Statements (except for any amendments or supplements caused by the filing of any annual reports on Form 20-F, current reports on
Form 6-K, and any similar or successor reports), the Company shall furnish to the Investor copies of all such documents proposed
to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the reasonable
and prompt review of the Investor. The Investor shall furnish comments on a Registration Statement and any related amendment and
supplement to a Registration Statement to the Company within 24 hours of the receipt thereof. If the Investor fails to provide
comments to the Company within such 24-hour period, then the Registration Statement, related amendment or related supplement, as
applicable, shall be deemed accepted by the Investor in the form originally delivered by the Company to the Investor.



 






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		(d)	Delivery of Final Documents. The Company shall furnish to the Investor without charge, (i)
at least one copy of each Registration Statement as declared effective by the SEC and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference, all exhibits and each preliminary prospectus, (ii) at
the request of the Investor, 10 copies of the final prospectus included in such Registration Statement and all amendments and supplements
thereto (or such other number of copies as the Investor may reasonably request) and (iii) such other documents as the Investor
may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by the Investor
pursuant to a Registration Statement.



 


		(e)	Amendments and Other Filings. The Company shall (i) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the related prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary
to keep such Registration Statement effective at all times during the Registration Period, and prepare and file with the SEC such
additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities;
(ii) cause the related prospectus to be amended or supplemented by any required prospectus supplement (subject to the terms of
this Agreement), and as so supplemented or amended to be filed pursuant to Rule 424; and (iii) provide the Investor copies of all
correspondence from and to the SEC relating to a Registration Statement (provided that the Company may excise any information contained
therein which would constitute material non-public information. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant to this ‎Section 6.01‎(e) ) by reason of
the Company’s filing a report on Form 10-K, or Form 8-K or any analogous report under the Exchange Act, the Company shall
incorporate such report by reference into the Registration Statement, if applicable, or shall file such amendments or supplements
with the SEC either on the day on which the Exchange Act report is filed which created the requirement for the Company to amend
or supplement the Registration Statement, if feasible, or otherwise promptly thereafter.



 


		(f)	Blue-Sky. The Company shall use its commercially reasonable efforts to, if applicable, (i)
register and qualify the Registrable Securities covered by a Registration Statement under such other securities or “blue
sky” laws of such jurisdictions in the United States as the Investor reasonably requests, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as
may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take
all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided,
however, that the Company shall not be required in connection therewith or as a condition thereto to (w) make any change to its
Articles of Incorporation or Bylaws, (x) qualify to do business in any jurisdiction where it would not otherwise be required to
qualify but for this ‎Section 6.01‎(f), (y) subject itself to general taxation in any such jurisdiction, or (z) file a
general consent to service of process in any such jurisdiction. The Company shall promptly notify the Investor of the receipt by
the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities
for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual
notice of the initiation or threat of any proceeding for such purpose.



 






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Section 6.02   Listing
of Ordinary Shares. From and after the Effective Date, the Company shall use its commercially reasonable efforts to maintain
the Ordinary Shares’ authorization for quotation on the Principal Market and shall notify the Investor promptly if the Ordinary
Shares shall cease to be authorized for quotation on the Principal Market.


 


Section 6.03   Opinion
of Counsel. On the date on which the Registration Statement is filed, he Company shall deliver to the Investor an opinion from
Israeli counsel to the Company in the form attached hereto as Exhibit E.


 


Section 6.04   Exchange
Act Registration. The Company will file in a timely manner all reports and other documents required of it as a reporting company
under the Exchange Act and will not take any action or file any document (whether or not permitted by Exchange Act or the rules
thereunder) to terminate or suspend its reporting and filing obligations under the Exchange Act.


 


Section 6.05   Transfer
Agent Instructions. Upon effectiveness of the Registration Statement the Company shall, and (if required by the transfer agent)
cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with a copy to the Investor)
confirmation that such Registration Statement has been declared effective by the SEC and instructions to issue Ordinary Shares
to the Investor free of restrictive legends upon each Advance.


 


Section 6.06   Corporate
Existence. The Company will take all steps necessary to preserve and continue the corporate existence of the Company during
the Commitment Period.


 


Section 6.07   Notice
of Certain Events Affecting Registration; Suspension of Right to Make an Advance. The Company will immediately notify the Investor,
and confirm in writing, upon its becoming aware of the occurrence of any of the following events in respect of a Registration Statement
or related prospectus relating to an offering of Registrable Securities: (i) receipt of any request for additional information
by the SEC or any other Federal or state governmental authority during the period of effectiveness of the Registration Statement
for amendments or supplements to the Registration Statement or related prospectus; (ii) the issuance by the SEC or any other Federal
governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose; (iii) receipt of any notification with respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction or the initiation or written threat of any proceeding for such
purpose; (iv) the happening of any event that makes any statement made in the Registration Statement or related prospectus of any
document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making
of any changes in the Registration Statement, related prospectus or documents so that, in the case of the Registration Statement,
it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of the related prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading, or of the necessity to amend the Registration
Statement or supplement a related prospectus to comply with the Securities Act or any other law; and (v) the Company’s reasonable
determination that a post-effective amendment to the Registration Statement would be appropriate (other than, in the case of this
clause (v), for routine post-effective amendments required in order to maintain the effectiveness of a Registration Statement filed
on Form F-1); and the Company will promptly make available to the Investor any such supplement or amendment to the related prospectus.
The Company shall not deliver to the Investor any Advance Notice, and the Investor shall not sell any Shares pursuant to a Registration
Statement, during the continuation of any of the foregoing events (each of the events described in the immediately preceding clauses
(i) through (v), inclusive, a “Material Outside Event”).


 






    	- 21 -



    	 



    

 


Section 6.08   Consolidation.
If an Advance Notice has been delivered to the Investor, then the Company shall not effect any consolidation of the Company with
or into, or a transfer of all or substantially all the assets of the Company to another entity before the transaction contemplated
in such Advance Notice has been closed in accordance with Section 2.02 hereof.


 


Section 6.09   Issuance
of the Company’s Ordinary Shares. The sale of the Ordinary Shares hereunder shall be made in accordance with the provisions
and requirements of Regulation D and any applicable state securities law.


 


Section 6.10   Market
Activities.   The Company will not, directly or indirectly, take any action designed to cause or result in, or that constitutes
or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company under
Regulation M of the Exchange Act.


 


Section 6.11   Opinion
of Counsel Concerning Resales. Provided that the Investor’s resale of Ordinary Shares received pursuant to this Agreement
may be freely sold by the Investor either pursuant to an effective Registration Statement, in accordance with Rule 144, or otherwise,
the Company shall obtain for the Investor, at the Company’s expense, any and all opinions of counsel which may be required
by the Company’s transfer agent to issue such shares free of restrictive legends, or to remove legends from such shares.


 


Section 6.12   Expenses.
The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay all
expenses incident to the performance of its obligations hereunder, including but not limited to (i) the preparation, printing and
filing of the Registration Statement and each amendment and supplement thereto, of each prospectus and of each amendment and supplement
thereto; (ii) the preparation, issuance and delivery of any Shares issued pursuant to this Agreement, (iii) all fees and disbursements
of the Company’s counsel, accountants and other advisors, (iv) the qualification of the Shares under securities laws in accordance
with the provisions of this Agreement, including filing fees in connection therewith, (v) the printing and delivery of copies of
any prospectus and any amendments or supplements thereto, (vi) the fees and expenses incurred in connection with the listing or
qualification of the Shares for trading on the Principal Market, or (vii) filing fees of the SEC and the Principal Market.


 






    	- 22 -



    	 



    

 


Section 6.13   Sales.
Without the written consent of the Investor, the Company will not, directly or indirectly, offer to sell, sell, contract to sell,
grant any option to sell or otherwise dispose of any Ordinary Shares (other than the Shares offered pursuant to the provisions
of this Agreement, the issuance of shares upon the exercise of outstanding options or warrants , and/or the issuance of shares
under publicly disclosed equity compensation plans of the Company) or securities convertible into or exchangeable for Ordinary
Shares, warrants or any rights to purchase or acquire, Ordinary Shares (other than the issuance of stock options and other equity
award under publicly disclosed equity compensation plans of the Company) during the period beginning on the 5th Trading Day immediately
prior to an Advance Notice Date and ending on the 5th Trading Day immediately following the corresponding Advance Date.


 


Section 6.14   Current
Report. Upon the Effective Date, the Company shall not, and the Company shall cause each its Subsidiary and each of its and
their respective officers, directors, employees and agents not to, provide the Investor with any material, non-public information
regarding the Company or any of its Subsidiaries without the express prior written consent of the Investor (which may be granted
or withheld in the Investor’s sole discretion). Notwithstanding anything contained in this Agreement to the contrary, the
Company expressly agrees that it shall publicly disclose, no later than four (4) Business Days following the Effective Date, any
information communicated to the Investor by or, to the knowledge of the Company, on behalf of the Company in connection with the
transactions contemplated herein, which, following the Effective Date would, if not so disclosed, constitute material, non-public
information regarding the Company or its Subsidiary.


 


Section 6.15   Black-out
Periods. Notwithstanding any other provision of this Agreement, the Company shall not deliver an Advance Notice during any
Company black-out periods or during any other period in which the Company is, or could be deemed to be, in possession of material
non-public information.


 


Section 6.16   Use of
Proceeds. The Company will use the proceeds from the sale of the Ordinary Shares hereunder for working capital and other general
corporate purposes or, if different, in a manner consistent with the application thereof described in the Registration Statement.


 


Article VII.

Conditions for Advance and Conditions to Closing


 


Section 7.01   Conditions
Precedent to the Right of the Company to Deliver an Advance Notice. The right of the Company to deliver an Advance Notice and
the obligations of the Investor hereunder with respect to an Advance is subject to the satisfaction by the Company, on each Advance
Notice Date and Advance Date (a “Condition Satisfaction Date”), of each of the following conditions:


 


		(a)	Accuracy of the Company’s Representations and Warranties. The representations and
warranties of the Company shall be true and correct in all material respects.



 


		(b)	Registration of the Ordinary Shares with the SEC. There is an effective Registration Statement
pursuant to which the Investor is permitted to utilize the prospectus thereunder to resell all of the Ordinary Shares issuable
pursuant to such Advance Notice. The Company shall have filed with the SEC all reports, notices and other documents required under
the Exchange Act and applicable SEC regulations during the twelve-month period immediately preceding the applicable Condition Satisfaction
Date.



 






    	- 23 -



    	 



    

 


		(c)	Authority. The Company shall have obtained all permits and qualifications required by any
applicable state for the offer and sale of the Ordinary Shares, or shall have the availability of exemptions therefrom. The sale
and issuance of the Ordinary Shares shall be legally permitted by all laws and regulations to which the Company is subject.



 


		(d)	No Material Outside Event. No Material Outside Event shall have occurred and be continuing.



 


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



 


		(f)	No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that
prohibits or directly and adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have
been commenced that may have a Material Adverse Effect.



 


		(g)	No Suspension of Trading in or Delisting of Ordinary Shares. The Ordinary Shares is quoted
trading on a Principal Market and all of the shares issuable pursuant to such Advance Notice will be listed or quoted for trading
on such Principal Market and the Company believes, in good faith, that trading of the Ordinary Shares on a Principal Market will
continue uninterrupted for the foreseeable future. The issuance of Ordinary Shares with respect to the applicable Advance Notice
will not violate the shareholder approval requirements of the Principal Market. The Company shall not have received any notice
threatening the continued quotation of the Ordinary Shares on the Principal Market.



 


		(h)	Authorized. There shall be a sufficient number of authorized but unissued and otherwise
unreserved Ordinary Shares for the issuance of all of the shares issuable pursuant to such Advance Notice.



 


		(i)	Executed Advance Notice. The Investor shall have received the Advance Notice executed by
an officer of the Company and the representations contained in such Advance Notice shall be true and correct as of the applicable
Condition Satisfaction Date.



 


		(j)	Consecutive Advance Notices. Except with respect to the first Advance Notice, the Company
shall have delivered all Shares relating to all prior Advances.



 






    	- 24 -



    	 



    

 


		(k)	Waiver of SPA Provisions. The Company’s shareholders shall have waived any limitations
in the Securities Purchase Agreement, dated November 27, 2014, by and among the Company and the shareholders party thereto that
would prohibit the consummation of the transactions contemplated hereby.



 


		(l)	Effective Date. At least 15 Trading Days have elapsed since the Effective Date.



 


Article VIII.

Non-Disclosure of Non-Public Information


 


The Company covenants and
agrees that it shall refrain from disclosing, and shall cause its officers, directors, employees and agents to refrain from disclosing,
any material non-public information (as determined under the Securities Act, the Exchange Act, or the rules and regulations of
the SEC) to the Investor without also disseminating such information to the public, unless prior to disclosure of such information
the Company identifies such information as being material non-public information and provides the Investor with the opportunity
to accept or refuse to accept such material non-public information for review. Unless specifically agreed to in writing, in no
event shall the Investor have a duty of confidentially, or be deemed to have agreed to maintain information in confidence, with
respect to (i) any information disclosed in violation of this provision or (ii) the delivery of any Advance Notices.


 


Article IX.

Non Exclusive Agreement


 


Notwithstanding anything
contained herein, this Agreement and the rights awarded to the Investor hereunder are non-exclusive, and, subject to the provisions
in Section 6.13, the Company may, at any time throughout the term of this Agreement and thereafter, issue and allot, or undertake
to issue and allot, any shares and/or securities and/or convertible notes, bonds, debentures, options to acquire shares or other
securities and/or other facilities which may be converted into or replaced by Ordinary Shares or other securities of the Company,
and to extend, renew and/or recycle any bonds and/or debentures, and/or grant any rights with respect to its existing and/or future
share capital.


 


Article X.

Choice of Law/Jurisdiction


 


This Agreement shall be
governed by and interpreted in accordance with the laws of the State of New York without regard to the principles of conflict of
laws. The parties further agree that any action between them shall be heard in New York County, New York, and expressly consent
to the jurisdiction and venue of the Supreme Court of New York, sitting in New York County, New York and the United States District
Court of the Southern District of New York, sitting in New York, New York, for the adjudication of any civil action asserted pursuant
to this paragraph.


 


Article XI. Assignment;
Termination


 


Section 11.01   Assignment.
Neither this Agreement nor any rights of the parties hereto may be assigned to any other Person.


 






    	- 25 -



    	 



    

 


Section 11.02   Termination.


 


		(a)	Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically on
the earliest of (i) the first day of the month next following the 36-month anniversary of the Effective Date or (ii) the date
on which the Investor shall have made payment of Advances pursuant to this Agreement in the aggregate amount of the Commitment
Amount.



 


		(b)	The Company may terminate this Agreement effective upon fifteen Trading Days’ prior written
notice to the Investor; provided that (i) the Initial Closing has occurred, (ii) there are no outstanding Advance Notices, the
Ordinary Shares under which have yet to be issued, and (iii) the Company has paid all amounts owed to the Investor pursuant to
this Agreement. This Agreement may be terminated at any time by the mutual written consent of the parties, effective as of the
date of such mutual written consent unless otherwise provided in such written consent.



 


		(c)	Nothing in this ‎Section 11.02 shall be deemed to release the Company or the Investor from
any liability for any breach under this Agreement, or to impair the rights of the Company and the Investor to compel specific performance
by the other party of its obligations under this Agreement. The indemnification provisions contained in ‎Article V shall survive
termination hereunder.



 


Article XII. Notices


 


Any notices, consents,
waivers, or other communications required or permitted to be given under the terms of this Agreement must be in writing and will
be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile or e-mail
if sent on a business day, or, if not sent on a business day, on the immediately following business day, provided a copy is mailed
by U.S. certified mail, return receipt requested or overnight carrier; (iii) 7 days after being sent by U.S. or Israeli certified
mail, return receipt requested, or (iv) 1 day after deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications, except for Advance
Notices which shall be delivered in accordance with hereof, shall be:


 


	If to the Company, to:	 
	 	PV Nano Cell Ltd.

8 Hamasger St.

PO Box 236

Migdal Ha-Emek

2310102, Israel
	 	Telephone:   
	 	Email:



 






    	- 26 -



    	 



    

 


	
        

        With a copy to (which shall not

        Constitute notice or delivery of process)
to:
	 
	 	 
	 	
        Greenberg Traurig, P.A.

333 Avenue of the Americas

Miami, FL 33131

	 	Telephone:
	 	Email:
	 	Attention:  Robert L. Grossman, Esq.
	 	 
	If to the Investor(s):	YA Global Master SPV Ltd.
	 	1012 Springfield Avenue
	 	Mountainside, NJ 07092
	 	Attention:   Mark Angelo
	 	Portfolio Manager
	 	Telephone:  (201) 985-8300
	 	
        Email:  mangelo@yorkvilleadvisors.com

	 	 
	
        With a Copy (which shall not

        Constitute notice or delivery of process)
to:
	 
	 	
        David Gonzalez, Esq.

        1012 Springfield Avenue

	 	Mountainside, NJ 07092
	 	Telephone:  (201) 985-8300
	 	Email:  legal@yorkvilleadvisors.com


 


Either may change its information contained
in this Article XII by delivering notice to the other party as set forth herein.


 


Article XIII. Miscellaneous


 


Section 13.01   Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party. Facsimile or other
electronically scanned and delivered signatures, including by e-mail attachment, shall be deemed originals for all purposes of
this Agreement.


 






    	- 27 -



    	 



    

 


Section 13.02   Entire
Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Investor, the Company,
their respective affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement,
and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein
and therein and, except as specifically set forth herein or therein, neither the Company nor the Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than
by an instrument in writing signed by the party to be charged with enforcement.


 


Section 13.03   Reporting
Entity for the Ordinary Shares. The reporting entity relied upon for the determination of the trading price or trading volume
of the Ordinary Shares on any given Trading Day for the purposes of this Agreement shall be Bloomberg, L.P. or any successor thereto.
The written mutual consent of the Investor and the Company shall be required to employ any other reporting entity.


 


Section 13.04   Structuring
and Due Diligence Fee. Each of the parties shall pay its own fees and expenses (including the fees of any attorneys, accountants,
appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby, except
that the Company shall pay to YA Global II SPV, LLC, a wholly owned subsidiary of the Investor (the “Subsidiary Fund”),
a structuring and due diligence fee of $15,000, of which $5,000 shall be paid within 5 Trading Days of the date hereof and $10,000
shall be paid within 5 Trading Days after the Effective Date, in each case by wire transfer to an account designated in writing
by the Investor on the date hereof.


 


Section 13.05   Commitment
Fee. The Company shall pay a commitment fee in the amount of $150,000 (the “Commitment Fee”) to the Subsidiary
Fund, which shall be paid by the issuance to the Subsidiary Fund of 100,000 Common Shares (the “Commitment Fee Shares),
which shares shall be issued within 5 Trading Days after the Effective Date.  


 


Section 13.06   Brokerage.
Each of the parties hereto represents that it has had no dealings in connection with this transaction with any finder or broker
who will demand payment of any fee or commission from the other party. The Company on the one hand, and the Investor, on the other
hand, agree to indemnify the other against and hold the other harmless from any and all liabilities to any person claiming brokerage
commissions or finder’s fees on account of services purported to have been rendered on behalf of the indemnifying party in
connection with this Agreement or the transactions contemplated hereby.


 


Section 13.07   No Sales
or Transfers Absent Registration or Applicable Exemption. The Investor covenants to the Company that it will not sell or otherwise
transfer any Shares unless (i) a Registration Statement with respect to such Shares shall have been declared effective by
the SEC and shall continue to be effective at the time of any such sale or transfer or (ii) in the opinion of counsel reasonably
acceptable to the Company, there is an applicable exemption from registration under the Securities Act with respect to each such
sale or transfer.


 


[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK]


 












    	- 28 -



    	 



    

 


IN WITNESS WHEREOF,
the parties hereto have caused this Standby Equity Distribution Agreement to be executed by the undersigned, thereunto duly authorized,
as of the date first set forth above.


 





	 	COMPANY:
	 	PV Nano Cell Ltd. 
	 	 	 	 
	 	By:	/S/ Dr. Fernando
    de la Vega
	 	Name:	Dr. Fernando de la Vega
	 	Title:	CEO
	 	 	 	 
	 	INVESTOR:
	 	YA Global Master SPV Ltd.
	 	 	 	 
	 	By:	Yorkville Advisors Global, LP
	 	Its:	Investment Manager
	 	 	 	 
	 		By:	Yorkville Advisors Global, LLC
	 		Its:	
        General Partner

	 	 	 	 
	 		By:	/S/ David Gonzales
	 		Name:	David Gonzales
	 		Title:	
        Managing
        Partner

        General Counsel








 






    	- 29 -



    	 



    

 





EXHIBIT A

ADVANCE NOTICE


 


PV NANO CELL LTD.


 


Dated: ______________


 


The undersigned, _______________________
hereby certifies, with respect to the sale of Ordinary Shares of PV NANO CELL LTD. (the “Company”) issuable
in connection with this Advance Notice, delivered pursuant to that certain Standby Equity Distribution Agreement, dated as of _______,
2015 (the “Agreement”), as follows:


 


1.    The undersigned is
the duly elected ______________ of the Company.


 


2.    There are no fundamental
changes to the information set forth in the Registration Statement which would require the Company to file a post-effective amendment
to the Registration Statement.


 


3.     The Company has
performed in all material respects all covenants and agreements to be performed by the Company and has complied in all material
respects with all obligations and conditions contained in this Agreement on or prior to the Advance Notice Date, and shall continue
to perform in all material respects all covenants and agreements to be performed by the Company through the applicable Advance
Date. All conditions to the delivery of this Advance Notice are satisfied as of the date hereof.


 


4.    The undersigned hereby
represents, warrants and covenants that it has made all filings (“SEC Filings”) required to be made by it pursuant
to applicable securities laws (including, without limitation, all filings required under the Securities Exchange Act of 1934).
All SEC Filings have been reviewed and approved for release by the Company’s attorneys and, if containing financial information,
the Company’s independent certified public accountants. None of the SEC Filings contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.


 


5.    The Advance requested
is _____________________.


 


6.    The Minimum Acceptable
Price with respect to this Advance Notice is _________ (80% of the last closing price of the Ordinary Shares on the Principal Market
at the time of delivery of this Advance Notice.


 


7.    9.99% of the outstanding
Ordinary Shares of the Company as of the date hereof is ___________.


 


The undersigned has executed
this Advance Notice as of the date first set forth above.


 


	 	PV NANO CELL LTD.
	 	 	 
	 	By:	 




 





Please deliver this Advance Notice by email
with a follow up phone call to:


Email: Trading@yorkvilleadvisors.com


Attention: Trading Department
and Compliance Officer


Confirmation Telephone Number:
(201) 985-8300.





 



    	 



    	 



    

 


EXHIBIT B


FORM OF WARRANT


 


 


 


 


 









    	 



    	 



    

 


EXHIBIT
C


FORM OF SETTLEMENT DOCUMENT


 


VIA EMAIL


 


PV NANO CELL LTD.


Attn: 


Email:


 


	 	Below please find the settlement information with respect to the Advance Notice dated:	 
	 	 	 
	1.	(a) Amount of Advance Notice:	 $
	 	 
	(b) Amount of Advance Notice (after taking into account any adjustments pursuant to Section 2.01):	 $
	 	 	 
	2.	Market Price:	 $ 
	 	 	 
	3.	Purchase Price (Market Price X  95%) per share:	 $ 
	 	 	 
	4.	Number of Shares due to Investor:	 



 


Please issue the number of Shares due to the Investor to the account of the Investor as follows:


 


Investor’s
DTC participant #:


 


ACCOUNT NAME: 


ACCOUNT NUMBER:


ADDRESS:


CITY:


COUNTRY:


Contact
person:


Number and/or
email: 


 


Sincerely, 


 


YA GLOBAL MASTER SPV, LTD.


 


	Approved By PV NANO CELL LTD.:	 
	 	 
		 
	Name:	 










 






    	 



    	 



    

 


EXHIBIT D


PLAN OF DISTRIBUTION


 


The Selling Stockholder
and any of its pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their Ordinary Shares
on the OTCQB or any other stock exchange, market or trading facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. The Selling Stockholder may use any one or more of the following methods when
selling shares:


 


		·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;



 


		·	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;



 


		·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;



 


		·	an exchange distribution in accordance with the rules of the applicable exchange;



 


		·	privately negotiated transactions;



 


		·	broker-dealers may agree with the Selling Stockholder to sell a specified number of such shares at a stipulated price per share;



 


		·	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;



 


		·	a combination of any such methods of sale; or



 


		·	any other method permitted pursuant to applicable law.



 


The Selling Stockholder
may also sell shares under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), if
available, rather than under this prospectus.


 


The Selling Stockholder
is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act.


 


Broker-dealers engaged
by the Selling Stockholder may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholder (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction
not in excess of a customary brokerage commission in compliance with FINRA Rule 2121.


 






    	 



    	 



    

 


The Selling Stockholder
is an, and any broker-dealers or agents that are involved in selling the shares may be deemed to be, “underwriters”
within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. The Selling Stockholder has informed the Company that it does not have any written or oral agreement
or understanding, directly or indirectly, with any person to distribute the Ordinary Shares. In no event shall any broker-dealer
receive fees, commissions and markups which, in the aggregate, would exceed eight percent (8%).


 


Because the Selling Stockholder
is an “underwriter” within the meaning of the Securities Act, it is subject to the prospectus delivery requirements
of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. There is no underwriter
(other than the Selling Stockholder) or coordinating broker acting in connection with the proposed sale of the resale shares by
the Selling Stockholder.


 


We have agreed to keep
this prospectus effective until the earlier of (i) the date on which the shares may be resold by the Selling Stockholders without
registration and without regard to any volume limitations by reason of Rule 144 under the Securities Act or any other rule of similar
effect or (ii) all of the shares have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule
of similar effect. The resale shares will be sold only through registered or licensed brokers or dealers if required under applicable
state securities laws. In addition, in certain states, the resale shares may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied
with.


 


Expenses, Indemnification


 


We will not receive any
of the proceeds from the sale of the Ordinary Shares sold by the Selling Stockholder and will bear all expenses related to the
registration of this offering, but will not pay for any commissions, fees or discounts, if any, relating to the sale of the Ordinary
Shares sold by the Selling Stockholder. We have agreed to indemnify the Selling Stockholder against certain losses, claims, damages
and liabilities, including liabilities under the Securities Act.


 


Supplements


 


In the event
of a material change in the plan of distribution disclosed in this prospectus, the Selling Stockholder will not be able to effect
transactions in the shares pursuant to this prospectus until such time as a post-effective amendment to the registration statement
is filed with, and declared effective by, the SEC.


 



    	 



    	 



    

 


Regulation M


 


We have informed the Selling
Stockholder that it is required to comply with Regulation M promulgated under the Securities Exchange Act of 1934 with respect
to any purchase or sale of our Ordinary Shares. In general, Rule 102 under Regulation M prohibits any person connected with a distribution
of our Ordinary Shares from directly or indirectly bidding for, or purchasing for any account in which it has a beneficial interest,
any of the shares or any right to purchase the shares, for a period of one business day before and after completion of its participation
in the distribution.



 


During any distribution
period, Regulation M prohibits the Selling Stockholder and any other persons engaged in the distribution from engaging in any stabilizing
bid or purchasing our Ordinary Shares except for the purpose of preventing or retarding a decline in the open market price of the
Ordinary Shares. None of these persons may affect any stabilizing transaction to facilitate any offering at the market.


 


We have also advised the
Selling Stockholders that they should be aware that the anti-manipulation provisions of Regulation M under the Exchange Act will
apply to purchases and sales of Ordinary Shares by the Selling Stockholder, and that there are restrictions on market-making activities
by persons engaged in the distribution of the shares. Under Regulation M, the Selling Stockholder or its agents may not bid for,
purchase, or attempt to induce any person to bid for or purchase, shares of our Ordinary Shares while the Selling Stockholder is
distributing shares covered by this prospectus. Regulation M may prohibit the Selling Stockholder from covering short sales by
purchasing shares while the distribution is taking place, despite any contractual rights to do so under the Agreement. We have
advised the Selling Stockholders that they should consult with their own legal counsel to ensure compliance with Regulation M.


 






    	 



    	 



    

 


EXHIBIT
E


FORM OF OPINION


 


1.    The Company is a
corporation validly existing and in good standing under the laws of the State of Israel, with corporate power and authority to
own, lease and operate its properties and to conduct its business as described in the Company’s public filings, including
reports filed or furnished by the Company under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”),
and the rules and regulations of the Commission thereunder (the “Public Filings”) and to enter into and perform
its obligations under the Standby Equity Distribution Agreement.


 


2.    The Company has the requisite corporate
power and authority to enter into and perform its obligations under the Standby Equity Distribution Agreement and to issue the
Ordinary Shares in accordance with its terms. The execution and delivery of the Standby Equity Distribution Agreement by the Company
and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary corporate action,
and no further consent or authorization of the Company or its Board of Directors or stockholders is required. The Standby Equity
Distribution Agreement has been duly executed and delivered.


 


3.    The Ordinary Shares issuable under
the Standby Equity Distribution Agreement are duly authorized and, upon issuance in accordance with the terms of the Standby Equity
Distribution Agreement against payment therefore in accordance with the terms thereof, will be duly and validly issued, fully paid
and nonassessable, free of any liens, encumbrances and preemptive or similar rights, in each case arising under the Company’s
Articles of Incorporation or By-laws or, to my knowledge, in any agreement filed by the Company as an exhibit to the Company’s
Public Filings (other than inchoate liens existing as a result of statute and restrictions on transfer arising under applicable
securities laws).


 


4.    The execution, delivery and performance
of the Standby Equity Distribution Agreement by the Company and the consummation by the Company of the transactions contemplated
thereby (other than performance by the Company of its obligations under the indemnification sections of such agreements, which
are not subject to this opinion) will not (i) result in a violation of the Company’s Articles of Incorporation or Bylaws;
(ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement or indenture filed by the
Company as an exhibit to the Company's Public Filings; or (iii) to my knowledge, result in a violation of any federal or Nevada
law, rule or regulation, order, judgment or decree applicable to the Company or by which any property or asset of the Company is
bound or affected.


 


5.    To
my knowledge and other then as set forth in the Public Filings, there are no legal or governmental proceedings pending to which
the Company is a party or of which any property or assets of the Company is subject which is required to be disclosed in any Public
Filings.