Exhibit 10.1


 





Cooperation
Agreement


 


This
Cooperation Agreement (the “Agreement”)
is made and entered into as of August 3, 2016 (the “Effective Date”), by and
between (i) Israel Railways Ltd., a governmental company fully owned by the State of Israel with offices at Central Tel-Aviv Israel
Railways Station, Mailbox 18085, Israel (the “IR”), and (ii) Rail Vision Ltd.,
a private company incorporated under the laws of the State of Israel with offices at 28 Haarava St., Harutzim 6091700, Israel
(the “Company”). Each of the Company and IR shall be referred to as a “Party”,
and jointly, the “Parties”. 


 


WHEREAS,
the Company is the developer and proprietary owner of certain intellectual property rights which may be exploited in connection
with the development of an optical safety system (the “System”); and 


 


WHEREAS,
IR has certain facilities, infrastructure and know-how, as well as world-wide reputation and business relations, which may be
used in connection with the development of the System, and, subject to the successful completion of the development, marketing
and sale of the System; and 


 


WHEREAS,
IR and the Company desire to cooperate in the conduct of a joint project for the development, marketing, distribution and sale
of the System (the “Cooperation” or the “Project”),
all in accordance with the terms and conditions of this Agreement. 


 


NOW
THEREFORE, in consideration of the mutual promises contained herein, and intending to be legally bound, the parties hereto
hereby declare and agree as follows:


 


		1.	Definitions.
                                         As used in this Agreement, the following terms shall have the meanings set forth below:






 


“Abandonment
Notice” shall have the meaning ascribed to it in section 6.7.





 


“Abandoned
Patent Right” shall have the meaning ascribed to it in section 6.7.


 


“Affiliate”
will mean, with respect to a party, any person, organization or entity controlling, controlled by or under common control with,
such party. For purposes of this definition only, “control” of another person, organization or entity shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the activities, management or policies of
such person, organization or entity, whether through the ownership of voting securities, by contract or otherwise. Without limiting
the foregoing, control shall be presumed to exist when a person, organization or entity (i) owns or directly controls fifty percent
(50%) or more of the outstanding voting stock or other ownership interest of the other organization or entity, or (ii) possesses,
directly or indirectly the power to elect or appoint fifty percent (50%) or more of the members of the governing body of the organization
or other entity.





 


“Background
Intellectual Property” shall mean such proprietary know-how and intellectual property developed and/or owned by the Company
prior to the Effective Date, as set forth under Exhibit A attached hereto, which may be exploited in connection
with the development of the System and conduct of the Work Plan (as defined below), and any rights derived therefrom, including,
inter alia, patent, patent applications, trade names and logos, trade secrets, documented know-how, designs, production, diagrams,
computer programs and their source, plans and designs for plans, skills, methods and all inventions, discoveries, processes, developments
and improvements whether in written form or otherwise.


 






     


     


    




 


“Change
of Control” shall mean (i) a merger or acquisition of the Company with or into, any other entity or person, other than
transactions in which shareholders of the Company (and/or their Affiliates) immediately prior to the transaction hold in the aggregate,
more than 50% of the securities or assets of the surviving company or the right to appoint or elect at least fifty percent (50%)
of the members of the governing body of the surviving company; (ii) any transaction or series of related transactions pursuant
to which persons or entities (who were not, prior to such transaction, shareholders of the Company (and/or their Affiliates))
acquire more than fifty percent (50%) of the issued and outstanding shares of the Company or the right to appoint or elect at
least fifty percent (50%) of the directors of the Company, provided that the sale of equity by the Company for the primary purpose
of raising capital shall not be treated as a Change of Control event; or (iii) any transaction or series of related transactions
pursuant to which persons or entities acquire all or substantially all of the Company’s assets and/or technology (including by
way of grant of exclusive license which has the legal meaning of actual transfer, provided that any other grant of a License shall
not be considered a Change of Control).





 


“Company’s
Cost” shall have the meaning ascribed to it in Section 5.2.





 


“Company
Indemnified Party” shall have the meaning ascribed to it in Section 9.2.





 


“Confidential
Information” shall have the meaning ascribed to it in Section 7.2.





 


“Cooperation”
shall have the meaning ascribed to it in the recitals hereof.





 


“Disclosing
Party” shall have the meaning ascribed to it in Section 7.2.





 


“Exit
Consideration” shall mean the total actual consideration (cash, securities or other property (valued as provided below))
which the Company and/or its shareholders and/or either of their Affiliates shall receive for the sale of securities and/or assets
of the Company within the framework of an IPO or Change of Control (including without limitation, any consideration which the
Company and/or its shareholders and/or either of their Affiliates shall receive following the consummation of such IPO or Change
of Control, such as, by way of example, funds released from escrow, additional earn-out payments, milestones payments and other
similar payments). Where any portion of the Exit Consideration consists of securities or property other than cash, the payment
shall be made in the same form of such consideration and if not possible, as confirmed in writing by IR, then the payment shall
be made in cash based on the fair market value of such consideration or other property, as shall be determined by the Parties
in good faith.





 


“Exit
Payment” shall have the meaning ascribed to it in Section 3.3.





 


“Finder
Payment” shall have the meaning ascribed to it in Section 3.1.





 


“Introduced
Party” shall mean any person, if (i) an exchange of information or a meeting has taken place between the Company and/or
IR and such person during the term of this Agreement, and (ii) if a binding agreement was executed between the Company and such
party, provided however, that the contact with such person was first initiated by IR and approved in advance by the Company.


 






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“IPO”
shall mean an initial public offering or registration for trade of the Company’s shares pursuant to a registration statement
under the U.S. Securities Act of 1933, as amended, or pursuant to a prospectus under the Israel Securities Law 1968, or equivalent
laws of another jurisdiction, provided however, that an IPO consummated by the Company through merger of the Company into
a public “shell” company, reflecting an Insignificant Value for such “shell” company solely for purposes
of having a favorable corporate structure for further fundraising, shall be excluded from the “IPO” definition for
the purposes hereunder. “Insignificant Value” shall mean: (i) a value of less than US$500,000 for the shell company;
and (ii) where the shareholders of the Company immediately prior to the merger shall hold more than 80% of the surviving entity
following such merger.





 


“IR
Indemnified Party” shall have the meaning ascribed to in section 9.1.





 


“IR
Intellectual Property” shall mean any proprietary know-how and intellectual property rights developed and/or owned by
IR prior and following the Effective Date, and any rights related thereto, including, inter alia patent, patent applications,
trade names and logos, trade secrets, documented know-how, designs, production, diagrams, computer programs and their source,
plans and designs for plans, skills, methods and all discoveries, processes, developments and improvements, provided however
that raw data collected during the testing of the System in accordance with the provisions hereof and conclusions of image
processing are specifically excluded and shall be considered as Project Intellectual Property.


 


“IR
License” shall have the meaning ascribed to it in section 6.3.





 


“IR
Option” shall have the meaning ascribed to it in section 3.5.





 


“License”
shall mean any right granted, license given, or agreement entered into, by the Company and/or its Affiliates, as applicable, to
or with any other person or entity, under or with respect to or permitting any use of any of the Project Intellectual Property,
or any part thereof, or otherwise permitting the development, manufacture, marketing, distribution and/or sale of Products and/or
Related Products (regardless of whether such grant of rights, license given or agreement entered into is referred to or is described
as a license or as an agreement with respect to the development and/or manufacture and/or sale and/or distribution and/or marketing
of Products and/or Related Products), in each case, within the field of the railway industry (for the avoidance of any doubt,
including without limitation, any train/other vehicle driving/moving on a railway/track.





 


“Licensee”
shall mean a person or entity granted a License in accordance with this Agreement.


 


“Losses”
shall have the meaning ascribed to it in Section 9.1.





 






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“Net
Sales” will mean the gross amount billed or invoiced by or on behalf of the Company and/or its Affiliates (in each case,
the “Invoicing Entity”) which has been actually received by the applicable Invoicing Entity or has become due
and payable on sales of, and/or granting any right (including license) to, the Products and/or the Related Products, as applicable,
less the following: (i) any custom, storage and maintenance expenses incurred by the Company in connection with such Products,
and/or the Related Products, as applicable; (ii) solely in respect of the Finder Payment, the costs of hardware and material bought
from a third party, (iii) value added tax and any other sales tax or levies imposed on such sale, if applicable; (iv) credits,
allowances, discounts, or refunds actually granted upon claims or returns; and (v) any payments made between the Company and its
Affiliate solely in the framework of arm’s length transactions, provided that: (a) any transfers of Products and/or Related Products
between the Invoicing Entity and an Affiliate of the Invoicing Entity shall not be counted for the purpose of calculation of “Net
Sales”, provided that a subsequent sale to a third party shall be counted for the purpose of calculation of “Net Sale”
where applicable, (b) in the event that the Invoicing Entity receives non-monetary consideration for any Products and/or Related
Products or in the case of transactions not at arm’s length with a non-Affiliate of the Invoicing Entity, Net Sales shall
be calculated based on the fair market value of such consideration or transaction, assuming an arm’s length transaction
made in the ordinary course of business, (c) License: the grant of a License by the Company or any of its Affiliates or any Licensee,
in case of transactions (including without limitation establishment of joint-ventures or similar transactions) not at arm’s
length shall be subject to the prior written approval of IR.





 


“Product”
shall mean the System or any other product, process or service that comprises, contains or incorporates the Project Intellectual
Property (in whole or in part).





 


“Project”
shall have the meaning ascribed to in the recitals hereof.





 


“Project
Intellectual Property” shall mean any proprietary know-how and intellectual property rights that concern railway safety
and which were developed, invented and/or conceived by the Company and/or in its behalf following the Effective Date as part of
the Cooperation, including without limitation pursuant to the performance of the Work Plan, and any rights related thereto, including
inter alia patent, patent applications, trade names and logos, trade secrets, documented know-how, designs, production, diagrams,
computer programs and their source, plans and designs for plans, skills, methods and all discoveries, processes, developments
and improvements.





 


“Quarterly
Payments” shall have the meaning ascribed to it in Section 3.2.





 


“Receiving
Party” shall have the meaning ascribed to it in Section 7.2.





 


“Related
Products” shall mean products, consumables and services, in each case, related to the field of railway safety, that
are not Products and which are related to, or required for, the exploitation of the Project Intellectual Property, and which are
intended for use in conjunction with the Project Intellectual Property.





 


“Regulatory
Requirement” shall mean a requirement or, as applicable, request, pursuant to applicable law, order, judgment, decree
or any rule, regulation, legal process or request (including, without limitation, by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or similar process) or by any government, court, administrative or regulatory agency or commission
or other governmental or regulatory authority or any self-regulatory body.





 


“Royalties
Payment” shall have the meaning ascribed to it in Section 3.2.





 


“System”
shall have the meaning ascribed to in the recitals hereof.


 






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“Target
Field” shall mean the research, development, marketing, distribution and sale of the System for the railway industry.





 


“Work
Plan” shall have the meaning ascribed to in Section 2.1.





 


		2.	Cooperation
                                         and Performance






 


		2.1.	The Parties hereby engage in a non-exclusive cooperation
for the development, marketing and sale of the System, in accordance with such specifications and budget, and such time lines,
as set forth under the detailed work plan attached hereto as Exhibit B (the “Work Plan”); all
subject to the terms and conditions set forth herein.






 


		2.2.	The
                                         Company shall perform its duties and undertakings set forth under the Work Plan in order
                                         to facilitate the development, marketing, distribution and sale of the System.






 


		2.3.	IR
                                         shall use its best commercial efforts in order to provide the Company with logistic services
                                         including access to the IR facilities, experts, labs, equipment and infrastructure, as
                                         well as certain relevant data, as set forth in the Work Plan, at no cost to the Company
                                         (except as set forth hereunder).






 


		2.4.	Upon
                                         and subject to the successful development of the System by the Company in accordance
                                         with the Work Plan, IR shall cooperate with the Company and contribute its world-wide
                                         reputation and business relations in connection with the marketing and sales efforts
                                         of the System by the Company, all, as set forth in the Work Plan unless otherwise agreed
                                         in writing between the parties.






 


		2.5.	Each
                                         Party agrees and undertakes to perform such acts and/or provide such services, as applicable,
                                         within the timeframe set forth in this Agreement and the exhibits and schedules hereto,
                                         as set forth herein.






 


		3.	Consideration.
                                         The Company hereby agrees to pay IR the following payments in consideration for the Cooperation
                                         and the services granted by IR to the Company hereunder:






 


		3.1.	Commencing
                                         as of the Effective Date, and until the earlier of (i) the consummation of an IPO, or
                                         (ii) the consummation of a Change of Control, a finders’ fee commission, payable on a
                                         quarterly basis, at a fixed rate equal to ten percent (10%) of the Net Sales derived
                                         from Introduced Parties (the “Finder Payment”).






 


		3.2.	Commencing
                                         as of the Effective Date, and until the earlier of (i) the consummation of an IPO, or
                                         (ii) the consummation of a Change of Control, royalties, payable on a quarterly basis,
                                         at a fixed rate of two and one-half of percent (2.5%) of the Net Sales excluding Net
                                         Sales subject to Finder Payment (the “Royalties Payment”, and together
                                         with the Finder Payment, the “Quarterly Payments”). It is agreed and
                                         acknowledged that, to the extent requested by a third party investor in the Company,
                                         IR shall be willing to discuss and negotiate revisions to the this Royalties Payment
                                         mechanism. The Quarterly Payments shall be due and payable within 45 days following the
                                         last day of each calendar quarter following the Effective Date.



 






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		3.3.	commencing
                                         as of the Effective Date and upon the earlier to occur of consummation of an IPO or a
                                         Change of Control, the Company shall pay to IR one and one-half of percent (1.5%) of
                                         the Exit Consideration payable in connection with such IPO or a Change of Control (the
                                         “Exit Payment. The Exit Payment shall be due and payable upon and subject
                                         to the consummation of the IPO or Change of Control, as the case may be.






 


		3.4.	Any
                                         and all payments hereunder shall be made in wire transfer to IR bank account as shall
                                         be designated by it, against invoice to be issued by IR, plus applicable VAT in accordance
                                         with applicable law.






 


		3.5.	Commencing
                                         as of the Effective Date and until the earlier to occur of consummation of an IPO or
                                         a Change of Control event, IR shall have the right, but not the obligation, to acquire
                                         shares of the most preferable class of shares of the Company as may be from time to time,
                                         in such amount constituting two and one-quarter of one percent (2.25%) of the Company’s
                                         issued and outstanding share capital as of the date of exercise, and in consideration
                                         for such price per share equal to the par value thereof, provided that the applicable
                                         regulatory approvals for the purchase of such shares were obtained by IR at such time,
                                         all as set forth in the attached form of warrant (the “Warrant” and
                                         the “IR Option”, respectively). Upon exercise of the IR Option, IR
                                         shall be entitled to receive the same rights as the holders of such class of shares into
                                         which the IR Options shall be exercised in accordance with the then in effect articles
                                         of association and shareholders agreements, if applicable, of the Company. Upon execution
                                         hereof the Company shall grant IR a duly signed Warrant. To the extent IR shall exercise
                                         the IR Option in accordance with the terms hereof, , then the Company’s current
                                         shareholders (as of execution hereof) shall have a right of first refusal with respect
                                         to any sale of the securities of the Company held by IR as a result of the exercise of
                                         the IR Option other than with respect to sale or other disposal of such securities to
                                         any Affiliate of IR or any other “Permitted Transferee” (as such term shall
                                         be defined under the Company’s then in effect Articles of Association). It is hereby
                                         agreed and acknowledged, that in the event of a merger or any other transaction pursuant
                                         to which the Company is not the surviving entity however shareholders of the Company
                                         immediately prior to the transaction hold in the aggregate, more than 50% of the securities
                                         or assets of the surviving company or the right to appoint or elect at least fifty percent
                                         (50%) of the members of the governing body of the surviving company, then such surviving
                                         entity shall grant IR a warrant for the purchase of shares of such surviving entity,
                                         under the same terms and conditions set forth under the Warrant, mutatis mutandis, pursuant
                                         to a warrant form acceptable to IR in its sole discretion.






 


		3.6.	For
                                         the avoidance of doubt, it is hereby clarified that any termination of this Agreement
                                         for any reason whatsoever other than termination by the Company due to a material breach
                                         by IR of Sections 6.2 and 7 hereof, which IR has failed to cure within the Cure Period
                                         (such breach, if not cured within the Cure Period, an “IR’s Material Breach”),
                                         shall not affect the obligation of the Company to make payments of Royalties Payment,
                                         Exit Consideration and Finder Payment, to the extent applicable, unless determined otherwise
                                         by a competent court, in a final non-appealable judgment. The term “Cure Period”
                                         shall mean ninety (90) days after the receipt by IR of written notice from the Company
                                         with respect to the alleged breach by IR, provided, however, that if the default
                                         cannot by its nature be cured within the ninety (90) day period or cannot after diligent
                                         attempts by IR be cured within such ninety (90) day period and such default is likely
                                         to be cured within a reasonable time, then IR shall have an additional sixty (60) day
                                         period to attempt to cure such breach.



 






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		3.7.	Commencing
                                         following the earlier of: (A) the first commercial sale of a Product and/or a Related
                                         Product, or (B) the execution of a License agreement, the Company shall submit to IR
                                         (i) no later than forty five (45) days after the end of each calendar quarter quarterly
                                         reports detailing (x) the calculation of Net Sales and accordingly the aggregate amounts
                                         of the Quarterly Payments due to IR for such calendar quarter, and (y) any bad debts
                                         the Company collected and which were recognized as such and written off as expenses under
                                         the Company’s latest financial statements (the “Bad Debts”),
                                         all such reports being certified by an authorized officer of the Company and in form
                                         reasonably acceptable to IR, and (ii) no later than ninety (90) days after the end of
                                         each calendar year, an annual report detailing the calculation of Net Sales and accordingly
                                         the aggregate amounts of the Quarterly Payments due to IR for such calendar year, all
                                         such reports being certified by an authorized officer of the Company and by an independent
                                         auditor of the Company and in form reasonably acceptable to IR. To the extent any Bad
                                         Debts are registered and recognized under the quarterly reports submitted to IR with
                                         respect to a certain calendar quarter, in accordance with the terms hereof, the Company
                                         shall have a right to set-off the amount of such Bad Debts from the Quarterly Payments
                                         payable to IR in respect of the next calendar quarter.






 


		3.8.	The
                                         Company shall maintain, and shall cause its Affiliates and Licensees to maintain, complete
                                         and accurate records of any payment and consideration received (or entitled to receive)
                                         or paid by it in connection with Product and Related Product sales/licenses, which records
                                         shall contain information to reasonably permit IR to confirm the accuracy of any payments
                                         made (or to be made), and shall retain such records relating to a given calendar year
                                         for three (3) years after the conclusion of that calendar year, during such time IR shall
                                         have the right, to cause a certified independent accountant to inspect such records during
                                         normal business hours, with a three (3) days’ prior notice, and to require the Company
                                         to cause such audit of its Licensees, for the purpose of verifying the Royalty Payments
                                         and Finder Payments. In the event that any audit performed under this Section 3.8 reveals
                                         an underpayment in any calendar year, then Company shall reimburse IR for the full amount
                                         of such underpayment within fourteen (14) days. In the event that any underpayment is
                                         detected, and it is in excess of five percent (5%) in any calendar year, the Company
                                         shall in addition (i) bear the reasonable cost of the applicable audit, and (ii) pay
                                         interest at the annual rate of (five) 5% per each such underpayment until the full payment
                                         thereof to IR.






 


		3.9.	Any
                                         and all taxes and liabilities applicable from time to time in connection with the Quarterly
                                         Payments and the Exit Payment will be borne solely by IR and the Company shall be entitled
                                         to make any mandatory deductions. In the event that pursuant to any law or regulation,
                                         tax is required to be withheld at source from any payment or any other consideration
                                         made to IR, the Company shall withhold said tax at the rate set forth in the certification
                                         issued by the appropriate taxing authority or at the rate determined by said law or regulation.






 


		4.	Company’s
Undertakings






 


		4.1.	The
                                         Company shall facilitate the research, development, marketing, distribution and sale
                                         of the System in accordance with the instructions and the provisions of the then current
                                         Work Plan.






 


		4.2.	The
                                         Company shall obtain, at the Company’s sole responsibility, the required resources for
                                         the purpose of development of the System and the successful completion of the Work Plan,
                                         provided that IR shall bear the cost and expenses directly related to the services and
                                         other deliverables to be provided by IR in accordance with the provisions of the Work
                                         Plan. It is agreed and acknowledged that to the extent it may be necessary, the Company
                                         shall consider applying to the Chief Scientist of Ministry of Transportation in applications
                                         to obtain grant in order to fund the Project.



 






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		4.3.	The
                                         Company shall use its commercial best efforts in order to promote and encourage the marketing
                                         and sale of the Products and the Related Products in accordance with the provisions hereof;
                                         and accordingly, shall retain sufficient and professional manpower, and shall use sufficient
                                         resources financial and others.






 


		4.4.	The
                                         Company agrees to communicate the restrictions contained in this Agreement to all persons
                                         under its employment, direction or control, who are involved in the development, marketing,
                                         distribution and sale of the Products.






 


		4.5.	The
                                         Company undertakes to maintain throughout the term hereof any applicable permits, licenses
                                         and approvals in force, to comply with their terms, to pay all fees and payments due
                                         thereunder, to renew them upon any expiration, and to promptly notify IR upon learning
                                         of any requirement for additional or new permits, licenses or approvals or any termination
                                         of existing permits, licenses or approvals or the receipt of any warning of such termination.
                                         Without derogating from IR’s rights hereunder, the Company shall immediately cease sale
                                         of any Product and/or Related Product, as applicable, in the event that such sale may
                                         constitute a breach of any applicable Legal Requirement.






 


		4.6.	The
                                         Company shall provide IR with a prompt notice at least 7 business days prior to the consummation
                                         of an IPO or Change of Control.






 


		4.7.	The
                                         Company shall keep its business insured for risks and in amounts standard for companies
                                         in its industry. 






 


		4.8.	The
                                         Company agrees and undertakes to employ, sufficient staff, at an adequate professional
                                         level, adequate premises, equipment and tools to enable it to fulfill its undertakings
                                         and obligations hereunder for the success of the Cooperation.






 


		4.9.	Without
                                         derogating from any other provisions hereof, the Company hereby undertakes that to the
                                         extent it and/or any of its Affiliates (including subsidiaries) at the relevant time,
                                         shall, either directly or indirectly incorporate, constitute a part of, or otherwise
                                         engage with any other entity (such as subsidiaries, joint ventures, partnerships or any
                                         other corporations) engaging in the development, research, manufacturing, marketing or
                                         sale of the Products and/or Related Products (the “Related Entities”),
                                         then all of the Company’s obligations and undertakings under this Agreement shall
                                         apply to such Related Entities mutatis mutandis, including without limitation
                                         the obligation to pay IR the Quarterly Payments and the Exit Payment, and the engagement
                                         of the Company and/or any of its Affiliates with any Related Entity shall be subject
                                         to such Related Entity’s prior written consent to the terms hereof.






 






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		4.10.	License.



 


		4.10.1.	The
                                         Company may grant Licenses under any commercial terms as it may deem to see fit, provided
                                         that if any such License shall not include an arms-length royalty based component to
                                         be paid by the licensee thereof or any of its sub-licensees, in each case, to the Company,
                                         then such License shall be limited in scope and territory, in advance, and shall only
                                         be granted pursuant to written agreements, which shall be in compliance with the terms
                                         and conditions of this Agreement..






 


		4.10.2.	The
                                         Company shall provide IR with the fully executed copies of each License, promptly after
                                         its execution, as well as any information requested by IR concerning such License, including
                                         without limitation, regarding the income or any other consideration the Company is entitled
                                         to under such License solely for the purpose of verifying the Company’s and its Licensees’
                                         compliance with their obligations and enforcing IR’s rights under this Agreement.
                                         Nothing in the foregoing shall be construed to limit the Company from freely negotiating
                                         any and all terms and conditions of licenses to third parties provided that the rights
                                         of IR and the Company’s ability to perform its obligations under this Agreement
                                         shall not be effected thereby in any manner whatsoever.



 


		5.	IR
                                         Rights






 


		5.1.	During
                                         the term of this Agreement and thereafter, until exercise or expiration of the IR Option
                                         in accordance with the provisions hereof, IR shall have the right, but not the obligation,
                                         to appoint one non-voting observer to the Board of Directors of the Company. The Company
                                         undertakes to incorporate appropriate provisions with respect to IR’s right to
                                         appoint the Observer in its Articles of Association.






 


		5.2.	IR
                                         shall be entitled to purchase any and all of the Company’s products, licenses and services,
                                         including without limitation the System and/or Products and/or Related Products, for
                                         use by IR or anyone acting on its behalf, at a price equal to the lower of: (i) an amount
                                         equal to (a) the costs, expenses and liabilities incurred by the Company in selling or
                                         providing the Company’s product, licenses and/or services to IR (the “Company’s
                                         Cost”), plus (b) such % of the Company’s Cost, as shall be mutually determined
                                         in good faith by the Parties, or (ii) the lowest price paid to the Company or any of
                                         its Affiliates or anyone acting on each of their behalf for such product/service/license,
                                         as the case may be, by a third party. It is hereby agreed that any sales of Products
                                         and/or Related Products, as applicable, to IR shall be excluded for the purpose of calculation
                                         of the Royalties Payment.






 


		6.	Intellectual
                                         Property Rights






 


		6.1.	As
                                         between the parties, all rights in the IR Intellectual Property, and all rights, title
                                         and interest therein or relating thereto, shall vest exclusively with IR and the Company
                                         is not being granted any right thereto and shall not seek to exploit or use any of the
                                         rights, title and interest related to the IR Intellectual Property.






 


		6.2.	As
                                         between the parties, all rights in the Background Intellectual Property and the Project
                                         Intellectual Property shall vest exclusively with the Company and IR is not being granted
                                         hereunder any right thereto and shall not seek to exploit or use any of the aforesaid
                                         rights, title and interest therein or relating thereto, except and subject to the IR
                                         License granted herein. For the avoidance of any doubt, the Company shall be responsible
                                         for the preparation, filing, prosecution, protection and maintenance of all patents and
                                         patent applications constituting part of the Background Intellectual Property and the
                                         Project Intellectual Property at the Company’s sole cost.



 






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		6.3.	The
                                         Company hereby grants to IR, commencing and effective as of the Effective Date, a non-exclusive,
                                         non-transferable and non-assignable (other than to third party contractors or service
                                         providers, in each case, providing services to IR, and in connection thereof), irrevocable,
                                         perpetual, royalty-free license, to use and exploit the Project Intellectual Property,
                                         solely outside the Target Field and for its own use only (the “IR License”).
                                         The IR License shall survive any termination of this Agreement other than due to IR’s
                                         Material Breach. Upon written demand from IR and at the IR’s own cost, and subject to
                                         the terms and conditions hereof, the Company shall forthwith execute any documents reasonably
                                         necessary for filing, registering, and recording of, and perfecting and defending the
                                         IR License at any appropriate governmental offices or other competent authorities.






 


		6.4.	As
                                         between the Parties, IR shall own any and all improvements, enhancements or modifications
                                         to the Project Intellectual Property made by or on behalf of IR following the Effective
                                         Date and outside of the Cooperation. For the avoidance of any doubt, the provisions of
                                         this Sections 6.4 shall apply, mutatis mutandis, with respect to any assignee
                                         of IR.



 


		6.5.	The
                                         Company shall take commercially reasonable actions to protect the Project Intellectual
                                         Property from infringement and unauthorized use when, from its own knowledge or upon
                                         notice from IR, the Company becomes aware of the reasonable probability that such infringement
                                         or unauthorized use exists.






 


		6.6.	Without
                                         derogating from the Company’s obligations to protect the Project Intellectual Property,
                                         in the event of any infringement by a third party of the Project Intellectual Property
                                         which the Company does not pursue against using all reasonable measures, then IR shall
                                         be entitled (but not obligated) to prosecute such infringement and for such purpose to
                                         request the Company to cooperate in such proceedings (including without limitations lending
                                         its name to the extent necessary) and provide reasonable assistance, and the Company
                                         will do so subject to IR covering all related expenses incurred to the Company as a direct
                                         result of such proceedings, provided however that any return of such expenses
                                         by IR to the Company shall be subject to the Company’s representations and warranties
                                         under this Agreement being true and correct. The Company shall promptly notify in writing
                                         to IR of any claim by any third party regarding the deemed infringement or breach by
                                         the sale and/or use of any Product and/or Related Product and/or any intellectual property
                                         rights of any third party, or of the provisions of any applicable law or any Regulatory
                                         Requirement.






 


		6.7.	The
                                         Company may elect not to pay for, or to cease paying for the filing, prosecution or maintenance
                                         of any of the Background Intellectual Property and/or the Project Intellectual Property
                                         (an “Abandoned Patent Right”) in any country. In such event and subject
                                         to the below, the Company shall provide IR with prompt written notice of such election,
                                         specifying the relevant Abandoned Patent Right (an “Abandonment Notice”).
                                         In such event IR shall be entitled, but not obliged, to continue the preparation, filing,
                                         protection, prosecution, and maintenance of any Abandoned Patent Right at its own expense,
                                         by providing a written request to that effect to the Company within 30 days following
                                         receipt of such Abandonment Notice by IR, in which event the Company shall transfer and
                                         assign to IR the Abandoned Patent Right for no additional consideration whatsoever (the
                                         “IR Abandoned Patent Right”). Despite of the above, the IR Abandoned
                                         Patent Right shall be subject and secondary to any valid security interest in the Background
                                         Intellectual Property and/or the Project Intellectual Property granted by the Company
                                         in good faith to any financial institution providing financing to the Company, or any
                                         venture capital/privet equity investor investing in the Company’s equity or any
                                         other Company’s securities of any class or kind.



 






    10


    


    




 


		6.8.	Except
                                         as specifically provided herein, neither Party obtains or acquires any right, title,
                                         ownership or interest in the other Party’s software, technology, any applicable patents,
                                         copyrights or trade secrets, trade name or other intellectual property rights.



 


		7.	Confidentiality



 


		7.1.	Each
Party undertakes at all times during the term hereof and thereafter to:



  


		7.1.1.	keep
all Confidential Information received by it from the other Party in strict confidence, handle at such standard of protection which
is not lesser that the standard used by such Party with respect to its own Confidential Information and accordingly not to disclose
any such Confidential Information to any other person or entity, except for each Party’s employees and consultants bound
by confidentiality undertakings on a “need to know” basis, at each Party’s responsibility;






 


		7.1.2.	not
                                         use any Confidential Information for any purposes other than for the purpose of carrying
                                         out its rights and obligations under this Agreement;






 


		7.2.	For
                                         purposes of this Agreement, “Confidential Information” means all proprietary
                                         information and any other information which deems confidential by its nature, including
                                         commercial, business and technical information communicated by either Party (the “Disclosing
                                         Party”) to the other Party (the “Receiving Party”), in the
                                         framework of this Agreement, including without limitation the IR Intellectual Property,
                                         the Background Intellectual Property and the Project Intellectual Property, whether such
                                         information is delivered in written or other form, or orally conveyed in connection with
                                         this Agreement.



  


		7.3.	The
                                         provisions of Section 7.1 shall not apply to any Confidential Information which: (i)
                                         is public knowledge at the date of this Agreement or thereafter becomes public knowledge
                                         through no fault of the Receiving Party, (ii) is lawfully received by the Receiving Party
                                         from a third party who either has the right to disclose it, or is under no obligation
                                         of confidentiality to the Disclosing Party, or (iii) is independently developed by the
                                         Receiving Party, without the use, directly or indirectly, of any Confidential Information
                                         of the Disclosing Party. The burden of proof that any disclosure falls within any of
                                         the aforesaid exclusions shall be on the Receiving Party.



 


		7.4.	The
                                         Receiving Party may disclose Confidential Information of the Disclosing Party to the
                                         extent required by law, regulation, Regulatory Requirement or order of a court of competent
                                         jurisdiction, provided that any such disclosure shall be subject to all applicable
                                         governmental or judicial protection available for like material and reasonable advance
                                         notice is given to the Disclosing Party.






 






    11


    


    




 


		7.5.	Upon
                                         expiration or termination of this Agreement for any reason whatsoever, each Party shall
                                         return to the other Party all Confidential Information of such Party, including all copies
                                         thereof, in the possession or under the control of it or any of its respective personnel,
                                         or, at the Party’s option, destroy all such Confidential Information and confirm in writing
                                         to the other Party that such destruction have been carried out.






 


		7.6.	The
                                         provisions of this Section 7 are material and shall survive the termination of this Agreement.






 


		8.	Representations
                                         and Warranties 



 


		8.1.	IR’s
Representations.IR hereby represents and warrants to the Company as follows:






 


		8.1.1.	IR
                                         has all requisite power and authority to execute and deliver this Agreement and each
                                         other instrument and agreement to be executed and delivered by it hereunder, to perform
                                         its obligations hereunder and thereunder and to consummate the transactions contemplated
                                         hereby and thereby. Such execution and delivery by IR has been duly and validly authorized
                                         and approved by all required action of IR. This Agreement and each such other instrument
                                         and agreement constitutes the legal, valid and binding obligation of IR, enforceable
                                         against IR in accordance with its terms, except as such enforcement may be limited by
                                         applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
                                         the rights of creditors generally and by the availability of the remedy of specific performance.






 


		8.1.2.	The
                                         execution and delivery by IR of this Agreement and each other instrument and agreement
                                         to be executed and delivered by it hereunder and performance by IR of its obligations
                                         hereunder and thereunder, do not and will not, with or without the giving of notice or
                                         the lapse of time or both (i) violate, conflict with or result in a breach of or default
                                         by IR under any provision of its organizational documents or of any agreement or undertaking
                                         to which IR is a party or is bound, (ii) to the knowledge of IR, contravene any law or
                                         judgment applicable to IR or any of the IR Intellectual Property.






 


		8.2.	Company’s
                                         Representations. The Company hereby represents and warrants to IR, as follows:



 


		8.2.1.	The
                                         Company is a private company and has all requisite power and authority to execute and
                                         deliver this Agreement and each other instrument and agreement to be executed and delivered
                                         by it hereunder, to perform its obligations hereunder and thereunder and to consummate
                                         the transactions contemplated hereby and thereby. Such execution and delivery has been
                                         duly and validly authorized and approved by all required action of the Company. This
                                         Agreement and each such other instrument and agreement has been duly and validly executed
                                         and delivered by the Company and constitutes the legal, valid and binding obligation
                                         of the Company, enforceable against the Company in accordance with its terms, except
                                         as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
                                         moratorium or similar laws affecting the rights of creditors generally and by the availability
                                         of the remedy of specific performance.



 






    12


    


    




 


		8.2.2.	The
                                         execution and delivery by the Company of this Agreement and each other instrument and
                                         agreement to be executed and delivered by it hereunder, and performance by the Company
                                         of its obligations hereunder and thereunder, do not and will not, with or without the
                                         giving of notice or the lapse of time or both (i) violate, conflict with or result in
                                         a breach of or default by the Company under any provision of its organizational documents
                                         or of any agreement of undertaking to which the Company is a party or by which it or
                                         any of the Background Intellectual Property and/or Project Intellectual Property is bound,
                                         (ii) to the knowledge of the Company, contravene any law or judgment applicable to the
                                         Company or any of the Background Intellectual Property or the Project Intellectual Property.






 


		8.2.3.	The
                                         Company possesses all the rights, title and interests in the Background Intellectual
                                         Property and has not granted any rights in respect thereof to any person or entity which
                                         adversely affect the rights granted thereby hereunder. To the Company’s knowledge, no
                                         third party claims to possess, enjoy or has the right to any existing rights of whatsoever
                                         nature in and to the Background Intellectual Property. To the Company’s knowledge, the
                                         execution and implementation of this Agreement does not infringe the rights of any third
                                         party, and it is not aware of any third party rights of whatever nature which might be
                                         construed as conflicting with the use of the Background Intellectual Property as provided
                                         herein. The Company has not received notice of any claims, liens, attachments, judgments
                                         relating to the Background Intellectual Property incorporated herein.






 


		8.2.4.	The
                                         Company has the expertise, knowledge and the financials resources, required in order
                                         to comply with its obligations and undertaking set forth in this Agreement.






 


		8.3.	NO
IMPLIED WARRANTIES. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH HEREIN, EACH PARTY DISCLAIMS ALL OTHER
REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.



 


		9.	Indemnification



 


		9.1.	The
                                         Company will indemnify, defend and hold harmless IR and each of its Affiliates, officers,
                                         directors, employees, members, agents, successors, transferees and assigns (each of the
                                         foregoing, an “IR Indemnified Party”) from and against any and all direct
                                         damages, liabilities, losses, costs and reasonable out-of-pocket costs and expenses (including,
                                         but not limited to, reasonable attorneys’ fees) (collectively, “Losses”)
                                         to the extent such Losses are arising directly out of: (i) any breach by the Company
                                         of its representations, warranties and/or undertakings hereunder, (ii) any claim, action
                                         or allegation brought against IR by any third party, for breach of the Background Intellectual
                                         Property and/or Project Intellectual Property arising directly from the use of any Product
                                         and/or any Related Products, as applicable, and (iii) any claim, action or allegation
                                         brought against IR by any third party based upon, resulting from or arising out of any
                                         of the activities of the Company related to this Agreement.






 



    13


    


    




 


		9.2.	IR
                                         will indemnify, defend and hold harmless the Company and each of its Affiliates, officers,
                                         directors, employees, members, agents, successors, transferees and assigns (each of the
                                         foregoing, an “Company Indemnified Party”) from and against any and
                                         all Losses to the extent such Losses are arising directly out of: (i) any breach by IR
                                         of its representations, warranties and/or undertakings hereunder, and (ii) any claim,
                                         action or allegation brought against the Company by any third party based upon, resulting
                                         from or arising out of any of the activities of IR related to this Agreement, except
                                         where such claim, action or allegation brought against the Company is based upon or deriving
                                         from the breach of any of the Company’s expressed representations hereunder related to
                                         Background Intellectual Property, in which case the Losses associated therewith shall
                                         be the liability the Company



 


		9.3.	Regardless
                                         of whether any remedy fails of its essential purpose, in no event shall either party
                                         be liable toward the other for any special, indirect, consequential, or punitive damages,
                                         including, but not limited to, any lost profits, lost time, lost savings, lost data,
                                         lost fees, or expenses of any kind arising from the commercialization and sale of the
                                         System and/or the Products and/or Related Products, the use of the Background Intellectual
                                         Property and/or Project Intellectual Property and/or IR Intellectual Property in any
                                         manner however caused, and on any theory of liability.






 


		9.4.	Neither
                                         Party shall be entitled to the above indemnity, unless, if any claim, suit, action or
                                         other proceeding to which the indemnity set forth above applies is brought by a third
                                         Party against such Party, it shall give the other Party prompt notice of same, and both
                                         Parties shall coordinate and cooperate in the defense of such claim, suit, action or
                                         other proceeding. If either Party seeks such indemnity from the other Party, then neither
                                         Party shall adjust, settle or compromise any claim, suit, action or other proceeding
                                         brought against it to which the indemnity set forth herein applies without the prior
                                         written consent of the other Party which consent shall not be unreasonably withheld;
                                         provided however, that the Party from which the other Party is seeking for indemnification,
                                         shall be entitled to lead the defense, adjust, settle or compromise any such claim, suit,
                                         action or other proceeding without the prior written consent of the other Party, if such
                                         adjustment, settlement or compromise is monetary only and in an amount which is fully
                                         covered by the indemnification under Sections 9.1 and 9.2 above, as the case may be.






 


		10.	Term
                                         and Termination



 


		10.1.	This
                                         Agreement shall commence as of the Effective Date and shall continue in full force and
                                         effect until terminated in accordance with the provisions herein below.






 


		10.2.	Either
                                         Party may terminate the Agreement following the first anniversary of the Effective Date
                                         upon 60 days’ prior written notice given to the other Party.






 


		10.3.	Each
                                         Party shall have the right to terminate this Agreement at any time in the event that
                                         (i) the other Party commits a material breach of any material provision of this Agreement
                                         and fails to cure such breach within thirty (30) days of receiving a written notice of
                                         such breach from the non-breaching Party, (ii) a petition is filed by or against the
                                         other Party for voluntary or involuntary bankruptcy or pursuant to any other insolvency
                                         law, or the other Party makes or seeks to make a general assignment for the benefit of
                                         its creditors or applies for or consents to the appointment of a trustee, receiver or
                                         custodian for it or a substantial part of its property, in each case without further
                                         action on the part of the terminating party.






 






    14


    


    




 


		10.4.	IR
                                         may terminate this Agreement upon 30 days’ prior written notice given to the Company
                                         in the event of Change of Control.









 


		10.5.	If
                                         this Agreement is terminated as a result of a material breach, the right of the non-breaching
                                         Party to terminate shall be in addition to, and not in lieu of, any equitable or legal
                                         remedies available to such Party.



 


		10.6.	Upon
                                         the termination of this Agreement for any reason whatsoever, neither Party shall have
                                         any further obligation to the other, except for obligations that by their terms and nature
                                         are to be performed after termination of this Agreement and for any obligations or liabilities
                                         arising prior to or in connection with such termination.



 


		11.	General
                                         Provisions



 


		11.1.	None
                                         of the Parties to this Agreement may assign or transfer any of its rights or obligations
                                         under this Agreement without acquiring the other Party’s prior written consent, except
                                         that IR may assign or transfer any of its rights or obligations under this Agreement
                                         to an affiliated entity, provided that nothing in such assignment or transfer shall adversely
                                         affect any of the Company’s rights under this Agreement.






 


		11.2.	Any
                                         notice or other communication required or authorized under this Agreement to be given
                                         by any Party to the other Party may be personally delivered, mailed, transmitted by telex,
                                         facsimile, email, or other electronic means to the address below, however such notice
                                         shall operate and be deemed to have been served upon its actual receipt by the other
                                         Party:



 





	 	If
    to the IR:	Israel
    Railways Ltd
	 	 	Central
    Tel-Aviv Israel Railways Station, Mailbox 18085, Israel
	 	 	Attn:  Keren
    Aslan 
	 	 	Email:
    KERENAS@rail.co.il
	 	 	 
	 	With
    a copy which shall not constitute notice, to:
	 	 
	 	 	Raved,
    Magriso, Benkel& Co.
	 	 	37
    Shaul Hamelech Boulevard
	 	 	Attn:  Einat
    Weidberg, adv.
	 	 	Fax:  +972-3-6060266
	 	 	Email:
    einat_w@rmblaw.co.il



 





	 	If
    to the Company: 
	 	 
	 	 	Rail Vision Ltd
	 	 	10
    Ha-kharoshet st, Kefar Saba, 4464009
	 	 	Attn.
    Mr. Elen Katz, CEO
	 	 	Fax:
    +972-9-9578200
	 	 	elen@railvision.co.il





 






    15


    


    
















 





	 	With a copy which shall not constitute notice, to: 
	 	 	 
	 	 	Heskia – Hacmun Law Firm
	 	 	6 Kaufman Street, Tel Aviv 6801298
	 	 	Attn:  Adv. Amos Hacmun
	 	 	Fax: 03-6081123
	 	 	Email: main@hh-law.co.il







 


		11.3.	This
                                         Agreement constitutes the entire agreement between Parties pertaining to the subject
                                         matter hereof and supersedes all prior representations, warranties, conditions, agreements,
                                         and understandings, whether oral or written, express or implied, relating to this Agreement.






 


		11.4.	Any
                                         term of this Agreement may be amended or terminated only with the written consent of
                                         both IR and the Company.



 


		11.5.	This
                                         Agreement may be executed in two or more counterparts each of which shall be deemed an
                                         original but all of which constitute one and the same instrument.



 


		11.6.	No
                                         Supplement, modification, or waiver of this Agreement shall be effective unless it is
                                         provided or approved by the Parties in writing.



 


		11.7.	This
                                         Agreement shall be interpreted, construed and enforced in all respects in accordance
                                         with the laws of the State of Israel. Each Party irrevocably consents and submits to
                                         the exclusive jurisdiction of the competent courts located in Tel Aviv- Jaffa District,
                                         Israel in connection with any action to enforce the provisions of this Agreement, to
                                         recover damages or other relief for breach or default under this Agreement, or otherwise
                                         arising under or by reason of this Agreement.






 


		11.8.	If
                                         any provision of this Agreement is declared by a court of competent jurisdiction to be
                                         invalid for any reason, such invalidity shall not affect the remaining provisions.






 


		11.9.	No
                                         failure on the part of either IR or the Company to exercise any power, right, privilege
                                         or remedy under this Agreement, and no delay on the part of the either Party in exercising
                                         any power, right, privilege or remedy under this Agreement, shall operate as a waiver
                                         of such power, right, privilege or remedy.






 


		11.10.	Words
                                         herein denoting the singular number only shall include the plural and vice versa.






 


		11.11.	The
                                         headings and section numbers in this Agreement are inserted for convenience only and
                                         shall not affect the construction thereof.






 


[Signatures
Page Follows]


 






    16


    


    






 


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


 





	ISRAEL
    RAILWAYS LTD	RAIL
    VISION LTD
	 	 
	Name:
    Keren Aslan	Name:
    Elen Katz
	 	 
	Title:
    Deputy GM Economics & Finance	Title:  CEO
	 	 
	Date:
    August 3, 2016	Date:  August
    3, 2016
	 	 
	Signature:
    /s/ Keren Aslan	Signature:
    /s/ Elen Katz







 






    17


    


    

 





Exhibit
A


 


Background
Intellectual Property


 





IP status 3.8.2016



    Exhibit A-1


    


    



Rail - Vision Patent Status Country Pearl Cohen  Ref Title Applicant Name Priority  Date Application No Filing Date Status Comments /  Next  action China P - 77066 - CN SYSTEM AND METHOD  FOR OBSTACLE  IDENTIFICATION AND  AVOIDANCE Associate advised  the applicationwill be filed as  owned by the inventors July  31 ,  2013   30 - Jul - 14 Pending assiment of patent to  be tranferred to Rail  vision European Patent  Office P - 77066 - EP SYSTEM AND METHOD  FOR OBSTACLE  IDENTIFICATION AND  AVOIDANCE Filed owned by the inventors July  31 ,  2013 EP 14833039.2 30 - Jul - 14 Pending assiment of patent to  be tranferred to Rail  vision Japan P - 77066 - JP SYSTEM AND METHOD  FOR OBSTACLE  IDENTIFICATION AND  AVOIDANCE Ownership was assigned from Rail  Safe to the inventors and  registered July  31 ,  2013    30 - Jul - 14 Pending assiment of patent to  be tranferred to Rail  vision United States P - 77066 - US SYSTEM AND METHOD  FOR UTILIZING AN  INFRA - RED SENSOR BY A  MOVING TRAIN Ownership by the inventors was  filed.  A clerical issue is now in the  process of rectifying July  31 ,  2013  31 - Jan - 16 Pending assiment of patent to  be tranferred to Rail  vision United States P - 79746 - USP SYSTEM AND METHOD  FOR DETECTION OF  DEFECTS IN AN ELECTRIC  CONDUCTOR SYSTEM OF  A TRAIN Rail Safe R. S. ( 2015 )  Ltd 31 - Jan - 16  31 - Jan - 16 Pending assiment of patent to  be  tranferred to Rail  vision



    Exhibit A-2


    


    



Additional IP


• Image enhancement and decision machine algorithms • Physics and optics • System design & production • Durable design • Integration & mounting • Patents to be applied: • VIS sensor dynamic range enhancement • Curves tracking concept • Signs  identifications • Catenary and Pantograph inspection




 






    Exhibit A-3


    


    

 


Exhibit
B


 


Work
Plan


 


	To: Israel Railways Ltd. (“IR”)	3.8.16




 


From: Rail-Vision Ltd. (“Rail Vision”)


 


Subject: First Year Joint Project
Activities


 


		1.	Reference is hereby made to the Cooperation
                                         Agreement by and between IR and Rail Vision, dated as of the date hereof (the “Cooperation
                                         Agreement”).



 


		2.	Capitalized terms used but not otherwise
                                         defined herein shall have the meanings ascribed to such terms in the Cooperation Agreement.



 


		3.	General - IR and Rail-Vision are
                                         partners in the conduct of the Project as specified in the Cooperation Agreement. This
                                         work plan set the specifications, budget and time lines of the non-exclusive cooperation
                                         between the parties for the development, marketing and sale of the System.



 


		4.	IR shall fully support the activities
                                         in terms of engineering, locomotive\train trip/ride hours, operational support teams
                                         such as drivers, operators and so on, all according to the provisions of the Cooperation
                                         Agreement and of this Work Plan.



 


		5.	The stated activities are an elaboration
                                         of the cooperation stated in the Cooperation Agreement Rail-Vision and IR.



 


		6.	The activities:



 


Table 1 - Main Developemnt
Activities WIth IR (up to β site)


 


	#	Main
    activity 	Sub-activity	IR
    required support	Required
    items
	1	interfaces
    definitions	Mechanical
    considerations for footage recording 	IR
    engineers shall support and approve the design. Escorting the installation process in the locomotive. 	Target
    locomotive and interfaces to be specified 
	2	Electrical
    considerations for power supply	IR
    cabling engineers support and design approval 	 
	3	Electrical
    considerations for display	Included
    above	 
	4	Jigs
    and fixtures design for preliminary recording	IR
    engineers will approve the design.	If
    required
	5	fairing
    considerations	IR
    engineers shall transfer the relevant information to Rail-Vision	 



 



    Exhibit B-1


    


    

 


	#	Main
    activity 	Sub-activity	IR
    required support	Required
    items
	6	 	Using
    the train driving simulation system For purposes of study, preparation of an outline of future accidents	 IR
    shall allow accessibility to available simulators if any 	 
	7	 	Phase
    Outcome	50 hours of train voyage footage
        and interface definition and design

         

         
	 
	8	Preliminary
    sensor	Sensor
    specifications	IR
    Purchase coordinator	Based
    on COTS
	10	Sensor
    integration with system components	 	 
	11	Demo
    pre- installation	Included
    above	IR
    approval
	12	Preliminary
    installation	escorting
    system installation	For
    footage recording
	13	Data
    recording trip	100
    hours of train voyage include  Installation and uninstallation	Includes
    an installation team
	14	Phase
    Outcome	 	sensor
    definition and PT production
	15	Final
    sensor	IR
    to provide dynamic data of installation input interface	IR
    engineers to provide previous information regarding dynamic behavior 2 hrs. of review with Rail-Vision	IR
    don’t have any dynamic behavior info.
	16	Final sensor

         
	Dynamic
    data acceleration recording experiment	5
    hrs. of installation escorted by IR representatives for installation support & approval	To
    be conducted on all types of locomotives and different train loads according the ability and operational limitation of IR
    – to be defined mutually
	17	Mechanical
    spec retrieving from the dynamic data	 	 
	18	fairing
    design	 	 
	19	Phase
    Outcome	Final
    sensor spec	 
	20	Algorithm
    approval	First
    PT trip for detection and recording	100
    hours of train voyage Includes Installation and uninstallation	 
	21	Algorithm approval	Algo
    investigation and updates	 	 
	22	 	2nd
    PT trip for detection and recording	100
    hours of train voyage Includes Installation and uninstallation	 



 



    Exhibit B-2


    


    

 





	#	Main activity	Sub-activity	IR required support	Required items
	23	 	Algo investigation and updates	 	 
	24	3rd  PT trip for detection and recording	100 hours of train voyage Includes Installation and uninstallation	 
	25	Algo investigation and updates	 	 
	26	4rd Trip to detect embedded targets on Rails (real-mode simulation)	100 hours of train voyage Includes Installation and uninstallation	 
	27	Additional trips for Algo verification & validation	200 hours of train voyage Includes Installation and uninstallation	 
	28	Phase Outcome	TB Defined	All engine hours should be based on the operational schedule of IR and its operational considerations- shall be mutual agreed
	 	Marketing	IR shall act to connect Rail-Vision to other rail operators and rolling stock manufactures to promote the marketing of the systems and products that shall be jointly developed	 	 
	29	
        Marketing 

         
	Introduction to a few potential customers	IR marketing efforts with potential customers	At least TBD potential customers
	30	Assistance in the preparation of the product portfolio in terms of interfaces	 	 
	31	Pilot system	Pilot option to install the system for a period of 3-6 months.	Final System is installed for a long period on an active line.	Operator report is necessary for system improvement
	32	ETCS	ETCS introduction and overview to Rail-Vision team	Meeting with ETCS expert	 







 



    Exhibit B-3


    


    

 


		7.	Schedule 



 


		a.	Detailed development plan shall be set between the
parties in 2 weeks after an agreement is signed between parties (IR and Rail-Vision).



 


		b.	IR obligations and undertakings hereof, including IR
obligations specified in the table above, are subject to IR operational and schedule constraints and limitations, including without
limitation with respect to rolling stock, operational schedule, availability of personnel, etc. It shall be clear that all engine
hours shall be based on the regular operational schedule unless specifically agreed differently in writing.



 


		c.	ETCS development plan shall be parallel to sensor plan.
One activity will not be a condition for the other. In addition, from the nature of the ETCS a longer term treatment shall be
required.



 


		d.	IR shall support Rail-Vision with all activities beyond
the one-year plan in terms of field experiments, marketing and technical consultancy.



 


		8.	Rail-Vision will provide final elements
                                         analysis of the device before installation.



 


		9.	Rail-Vision will coordinate the installation
                                         and uninstallation of the devices with IR coordinator and shall perform the work at IR
                                         garages according to and subject to IR operational and schedule constraints, regulations
                                         and instructions.



 


		10.	Rail-Vision will make sure that
                                         there is no electro-magnetic interruption (EMI) and the device and the train systems
                                         are “living together”.



 


		11.	Before
                                         final approval of the commercial product, Rail-Vision will provide IR with
                                         all the required approvals and permits according to international train’s standards and
                                         known institutions. 



 



    Exhibit B-4


    


    




 


Date:
August 3, 2016


To:
____________________


 


WARRANT


 


To
purchase Shares of


 


Rail
Vision Ltd


 


This
is to certify that Israel Railways Ltd or any assignee or transferee in accordance with the provisions hereof (the “Holder”)
is entitled to purchase, subject to the provisions of this Warrant, from Rail Vision Ltd (the “Company”), during
the Warrant Period (as defined below), up to such number of fully paid and non-assessable Shares (as defined below), as specified
below.


 


Any
capitalized term not specifically defined herein shall have such meaning as is ascribed to it in that certain Cooperation Agreement
by and between the Holder and the Company, dated as of August 3, 2016 (the “Cooperation Agreement”).


 


The
Shares underlying this Warrant shall have the same rights, preferences and privileges attached to the Shares of the Company as
set forth in the Company’s Articles of Association as in effect upon exercise hereof (the “Articles”), as may
be amended from time to time.


 


		1.	Type/Series
                                         of Shares
	 	 	 
	 	 	Shares
of the most preferable class of shares of the Company upon exercise hereof (the “Shares”).



  


		2.	Number
                                         of Shares Available for Purchase
	 	 	 
	 	 	This
Warrant may be exercised to purchase up to such amount of Shares constituting two and one-quarter of one percent (2.25%) of the
Company’s issued and outstanding share capital as of the date of exercise (subject to adjustments as provided in Section
‎10 below) (the “Warrant Shares”).



  


		3.	Exercise
                                         Price
	 	 	 
	 	 	The
exercise price for each Warrant Share purchasable hereunder (subject to adjustments as provided in Section 10 below) shall be
equal to the par value of such Warrant Share (the “Exercise Price”).



  


		4.	Warrant
                                         Period
	 	 	 
	 	 	This
Warrant may be exercised in whole or in part, on one or more occasions, until the earlier to occur of consummation of an IPO or
a Change of Control, including by way of cashless exercise (the “Warrant Period”).



  


		5.	Exercise
                                         of Warrant



 


		5.1.	Exercise
                                         for Cash
	 	 	 
	 	 	This
Warrant shall be exercised by presentation and surrender hereof to the Company at the principal office of the Company, accompanied
by: (i) a written notice of exercise in the form attached hereto as Exhibit A (the “Exercise Notice”);
and (ii) payment to the Company equal to the Exercise Price multiplied by the number of Warrant Shares specified in the Exercise
Notice (the “Consideration”).



  






    1


    


    

 


		5.2.	Cashless
                                         Exercise



 


		5.2.1.	In
                                         this Section 5.2, the term below shall bear the meaning set opposite it:



 


		5.2.1.1.	“Fair
                                         Market Value” – one of the following (as applicable): (i) If applicable,
                                         the average of the closing bid and asked prices of a Warrant Share (or of any securities
                                         to which the Warrant Shares have been converted to in accordance with the Company’s
                                         organizational documents and applicable law) as quoted in the over-the-counter market
                                         summary or the closing price quoted on any exchange on which the Warrant Share (or any
                                         securities to which the Warrant Shares have been converted to in accordance with the
                                         Company’s organizational documents and applicable law) is listed, whichever is
                                         applicable, as published in the Wall Street Journal for the ten (10) trading days immediately
                                         prior to but not including the date of determination of fair market value; (ii) If the
                                         exercise date is immediately prior to or on the closing of a Change of Control event,
                                         then the fair market value of one (1) Warrant Share (or of any securities to which the
                                         Warrant Share have been converted to in accordance with the Company’s governing documents
                                         and applicable law) in which shareholders of the Company receive cash payment, then the
                                         price at which any such shares are purchased within the framework of such transaction;
                                         (iii) If the exercise date is the date of the closing of an IPO, then the public offering
                                         price (before deduction of underwriters’ discount or commissions in such offering); or
                                         (iv) In any other case, as determined in good faith by the Board of Directors of the
                                         Company; provided that the Holder shall be entitled to demand that the valuation be established
                                         by independent auditors who are an internationally recognized auditing firm.



 


		5.2.2.	On
                                         any exercise of this Warrant, in lieu of payment to the Company as set forth in Section
                                         ‎5.1 above, and without the payment of the Exercise Price, the Holder may convert
                                         this Warrant in whole or in part, into the number of Warrant Shares calculated pursuant
                                         to the following formula, by surrendering this Warrant to the Company at the principal
                                         office of the Company, accompanied by the Exercise Notice, specifying the number of Warrant
                                         Shares into which the Holder desires to convert this Warrant, provided however,
                                         that upon the consummation of an IPO or a Change of Control event, in which the fair
                                         market value of one Warrant Share as determined in accordance with Section 5.2.1.2
                                         above would be greater than the Exercise Price in effect on such date immediately prior
                                         to such IPO or Change of Control event, and Holder has not exercised this Warrant pursuant
                                         to Section 2 above as to all Warrant Shares, then this Warrant shall automatically be
                                         deemed to be cashless exercised, as to all Warrant Shares exercisable at such time, effective
                                         immediately prior to and contingent upon the consummation of such IPO or Change of Control
                                         event. 



 





	 	  X=	Y(A-B)	 
	 	A	 




   






    2


    


    

 





	 	Where:



  


	 	X	=	The
    number of Warrant Shares to be issued to the Holder;
	 	Y	=	the
    number of Warrant Shares to which the Holder is entitled upon exercise of this Warrant (as adjusted to the date of such calculation
    in accordance with the provisions of Section 10 below but excluding Warrant Shares already issued under this Warrant);
	 	A	=	the
    Fair Market Value of one Warrant Share; and
	 	B	=	the
    Exercise Price (as adjusted in accordance with the provisions of Section 10 below).


 


		5.2.3.	Upon
                                         completion of the calculation, if X is a negative number then X shall be deemed to be
                                         0 (zero). 



 


		5.2.4.	The
                                         Company shall notify the Holder in writing at least thirty (30) days prior to the closing
                                         of a Change of Control event or an IPO, include in such notice the terms of such event
                                         or transaction, and provide the Holder with any updates and changes to the terms thereof
                                         promptly in writing.



 


		6.	Delivery
                                         to Holder
	 	 	 
	 	 	As
soon as practicable after the exercise of this Warrant in whole or in part, and in any event no later than thirty (30) days thereafter,
the Company at its expense will cause to be issued in the name of, and delivered to, the Holder:



  


		6.1.	A
                                         certificate or certificates for the number of Warrant Shares to which such Holder shall
                                         be entitled; and



 


		6.2.	If
                                         this Warrant is exercised in part only, the Company shall, upon surrender of this Warrant
                                         for cancellation, execute and deliver a new warrant evidencing the rights of the Holder
                                         to purchase the balance of the Warrant Shares purchasable hereunder.



 


	 	Notwithstanding
the foregoing, upon receipt by the Company of this Warrant and the applicable duly executed Exercise Notice (and the aggregate
Exercise Price, if applicable), together with any other documents and/or approvals that may be required by law, the Holder shall
be deemed to be the holder of record of the Warrant Shares issuable upon such exercise, notwithstanding that the share transfer
books of the Company shall then be closed or that certificates representing such shares shall not then be actually delivered to
the Holder.



  


		7.	Reservation
                                         of Shares: Preservation of Rights of Holder
	 	 	 
	 	 	The
                                         Company hereby agrees that at all times, as long as this Warrant is exercisable, it will
                                         maintain and reserve, free from preemptive or similar rights, such number of authorized
                                         but un-issued Warrant Shares so that this Warrant may be exercised without additional
                                         authorization of Warrant Shares after giving effect to all other options, warrants, convertible
                                         securities and other rights to acquire shares of the Company as may be from time to time.
                                         The Company further agrees that it will not, by charter amendment or through reorganization,
                                         recapitalization, voluntary liquidation, consolidation, merger, dissolution, winding
                                         up or transfer or sale of assets, issue or sale of securities, or by any other voluntary
                                         act (collectively, “Non Performance Events”), avoid or seek to avoid
                                         the observance or performance of any of the covenants, stipulations or conditions to
                                         be observed or performed hereunder by the Company, but will at all times in good faith
                                         assist in the carrying out of all provisions hereof and in taking of all such actions
                                         and making all such adjustments as may be necessary or appropriate in order to fulfill
                                         the provisions hereof and will not enter into any of such Non Performance Events unless
                                         prior written notice was sent to the Holder at least forty five (45) days prior to the
                                         occurrence thereof.



  






    3


    


    

 


		8.	Representations
                                         of the Company
	 	 	 
	 	 	The
Company hereby represents and warrants to the Holder that as of the date hereof:



  


		8.1.	This
                                         Warrant has been duly authorized and executed by the Company and is a valid and binding
                                         obligation of the Company enforceable in accordance with its terms.



 


		8.2.	The
                                         Warrant Shares and any Ordinary Shares issuable upon conversion thereof are duly authorized
                                         and reserved for issuance by the Company and, when issued in accordance with the terms
                                         hereof, will be validly issued, fully paid and nonassessable and not subject to any preemptive
                                         rights or other rights of third parties.



 


		8.3.	The
                                         execution and delivery of this Warrant are not, and the issuance of the Warrant Shares
                                         upon exercise of this Warrant in accordance with the terms hereof or the issuance of
                                         any Ordinary Shares upon conversion of such Warrant Shares, will not be, inconsistent
                                         with the Articles and any other Company’s governing documents, do not and will not contravene
                                         any law, governmental rule or regulation, judgment or order applicable to the Company,
                                         and do not and will not conflict with or contravene any provision of, or constitute a
                                         default under, any indenture, mortgage, contract or other instrument of which the Company
                                         is a party or by which it is bound or require the consent or approval of, the giving
                                         of notice to, the registration with or the taking of any action in respect of or by,
                                         any government authority or agency or other person, other than those consents or approvals
                                         that shall have been obtained prior to the execution hereof or which by their nature
                                         are within the responsibility of the Holder.



 


		9.	Replacement
                                         of Warrant
	 	 	 
	 	 	On
receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant
and, in the case of loss, theft, or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance
to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall
execute and deliver, in lieu of this Warrant, a new warrant of like tenor, date and amount.



 


		10.	Fractional
                                         Shares
	 	 	 
	 	 	No
fractional shares will be issued in connection with any exercise of this Warrant, and the number of shares issuable hereunder
shall be rounded to the nearest whole number with half shares being rounded up.



 


		11.	Conditional
                                         Exercise.
	 	 	 
	 	 	Exercise
in connection with an IPO or a Change of Control event could be made conditional upon the closing of the respective transaction.
In the event that the respective transaction does not result in consideration to the Holder of cash or freely tradable securities,
the Company shall use its best efforts to assist the Holder in any manner requested thereby prior to closing of the respective
transaction.



 


		12.	Notice
                                         of Certain Events
	 	 	 
	 	 	If
at any time during the Warrant Period, there is a basis for the expiration of the Warrant Period according to its terms, then,
the Company shall deliver to the Holder prior written notice thereof, including the date on which (a) a record shall be taken
in connection with such event (if applicable); and (b) the consummation date of such event. Such written notice shall be delivered
to the Holder at least thirty (30) days prior to the consummation of the applicable event and not less than thirty (30) days prior
to the record date in respect thereto.



 


		13.	Rights
                                         of the Holder
	 	 	 
	 	 	The
Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, prior to the exercise of this Warrant,
except for the rights expressly set forth herein.



 






    4


    


    

 


		14.	Notices
	 	 	 
	 	 	Any
notice or other communication hereunder shall be in writing and shall be effective and deemed to have been given upon delivery,
if personally delivered, upon transmission if sent by e-mail or facsimile and confirmed by a machine printout or seven (7) business
days after deposit if deposited in the mail for mailing by certified mail and addressed to the addresses of the Company and the
Holder specified in the Cooperation Agreement.



 


		15.	Assignment
	 	 	 
	 	 	Any
assignment of this Warrant (in whole or in part) or any of the Holder’s rights or duties under this Warrant (in whole or in part)
shall be made in accordance with the terms and conditions applying to the transfer of shares of the same class as the Warrant
Shares under the Articles, provided however, that IR may assign or transfer any of its rights or duties under this Warrant
to an affiliated entity. Upon such assignment, the assignee(s) shall be deemed a Holder for the purposes hereof.



 


		16.	Tax
	 	 	 
	 	 	Holder
                                         shall bear full responsibility for all tax obligations and consequences relating to the
                                         transfer or exercise of this Warrant or sale of the Shares issuable upon the exercise
                                         of this Warrant, which by their nature apply to holders of warrants. In the event that
                                         the Company is required under applicable law to withhold any tax as a result of the exercise
                                         of this Warrant and/or the issuance of the Warrant Shares, the Company will be entitled
                                         to withhold such taxes in accordance with applicable law; provided, however, that
                                         if Holder provides the Company with a valid certificate of exemption from tax withholding
                                         or a determination applying a reduced withholding tax rate or any other instructions
                                         regarding the payment of withholding taxes issued by the Israel Tax Authority, then such
                                         withholding (if any) shall be made only in accordance with the provisions of such certificate.
                                         In the event that the Company is required under Israeli law to withhold taxes in connection
                                         with the exercise of this Warrant and/or the issuance of the Warrant Shares in accordance
                                         with the provisions hereof, the Company shall be entitled to (i) deduct such amounts
                                         actually paid by the Company to the Israeli Tax Authority from any cash consideration
                                         payable to the Holder as a result of such exercise and/or issuance, as the case may be,
                                         or (ii) absent of such sufficient cash consideration, the Holder shall reimburse the
                                         Company for such shortfall of cash amount actually withheld by the Company and paid to
                                         the applicable Israeli tax authority; in each case provided that: (i) prior to making
                                         any tax withholding payment, the Company shall advise Holder in writing of such proposed
                                         payment in order to allow Holder to present to the Company a valid certificate of exemption
                                         from tax withholding or a determination applying a reduced withholding tax rate or any
                                         other instructions regarding the payment of withholding taxes issued by the Israel Tax
                                         Authority, (ii) in connection with the tax withheld by the Company, if any, the Company
                                         will furnish Holder with proof reasonably satisfactory to Holder indicating that the
                                         Company has made all such withholding tax payments, and (iii) the Company will cooperate
                                         with Holder in connection with any information and documentation reasonably required
                                         by Holder in connection with credits, exemptions, rebates, or other benefits to be obtained
                                         by Holder in connection with such withholding payments made by the Company, which credits,
                                         exemptions, rebates, or other benefits shall be property of the Holder.



 


		17.	Amendments
                                         and Waivers
	 	 	 
	 	 	Any
term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular
instance and either retroactively or prospectively), with the written consent of the Company and the Holder.



 


		18.	Governing
                                         Law; Jurisdiction
	 	 	 
	 	 	This
Warrant shall be deemed to be a contract made under the laws of the State of Israel, and for all purposes shall be construed in
accordance with the laws of said state, without regard to principles of conflict of laws. Any dispute arising under or in relation
to this Warrant shall be resolved exclusively in the competent court for Tel Aviv-Jaffa district, and each of the parties hereby
irrevocably submits to the exclusive jurisdiction of such court.



 


		19.	Captions
	 	 	 
	 	 	The
section and subsection headings of this warrant are inserted for convenience only and shall not constitute a part of this Warrant
in construing or interpreting any provision hereof.



 





	Rail Vision Ltd	 
	 	 	 
	By:	/s/ Elen Katz	 
	Title:	CEO	 



 




    5


    


    

 


Exhibit
A


 


NOTICE
OF EXERCISE


 


To:Rail
Vision Ltd.


 


		1.	The
                                         undersigned hereby elects to purchase _________ Shares (as such term is defined in the
                                         attached Warrant) of Rail Vision Ltd., pursuant to the terms of the attached Warrant,
                                         and [IN CASE OF EXERCISE FOR CASH: tenders herewith payment of the purchase price of
                                         $____________ for such Shares in full / IN CASE OF CASHLESS EXERCISE: elects pursuant
                                         to Section ‎5.2 of the Warrant to effect a Cashless Exercise]. 



 


		2.	Please
                                         issue a certificate representing said Shares in the name of the undersigned, at the following
                                         address:



 





	 	 	 
	 	 	 
	 	 	 



  


		3.	Please
                                         issue a new Warrant for the unexercised portion of the attached Warrant (if any) in the
                                         name of the undersigned.



 





	 	 	 
	 	 	 


 





	 	 	 	 
	 	(Date)	 	(Print
Name of Holder)
	 	 	 	 
	 	 	 	                     
	 	 	 	(Signature)








 


	 	Name:	                                
	 	Title:	 
	 	Telephone: