Exhibit 10.4


 


PRIVATE PLACEMENT SHARES PURCHASE
AGREEMENT


 


THIS PRIVATE PLACEMENT
SHARES PURCHASE AGREEMENT, dated as of April [ ], 2021 (as it may from time to time be amended, this “Agreement”),
is entered into by and between ION Acquisition Corp 3 Ltd., a Cayman Islands exempted company (the “Company”),
and ION Holdings 3, LP, a Cayman Islands exempted limited partnership, acting by its sole general partner, ION Acquisition Corp GP Ltd.,
a company incorporated in the State of Israel (the “Purchaser”).


 


WHEREAS, the Company
intends to consummate an initial public offering (the “Public Offering”) of the Company’s Class A Ordinary
Shares, par value $0.0001 per share (an “Ordinary Share”), as set forth in the Company’s Registration
Statement on Form S-1, filed with the U.S. Securities and Exchange Commission (No. 333-255072) (the “Registration Statement”),
under the Securities Act of 1933, as amended (the “Securities Act”).


 


WHEREAS, the Purchaser
has agreed to purchase an aggregate of 750,000 shares (or 825,000 shares in the aggregate if the over- allotment option in connection
with the Public Offering is exercised in full) (the “Private Placement Shares”), for a purchase price of $10.00
per Private Placement Share or an aggregate purchase price of $7,500,000 (or $8,250,000 if the underwriters’ over-allotment option
is exercised in full).


 


NOW THEREFORE, in
consideration of the mutual promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:


 


AGREEMENT


 


Section 1. Authorization, Purchase
and Sale; Terms of the Private Placement Shares.


 


A. Authorization
of the Private Placement Shares. The Company has duly authorized the issuance and sale of the Private Placement Shares to the Purchaser.


 


B. Purchase
and Sale of the Private Placement Shares.


 


(i) On
the date of the consummation of the Public Offering or on such earlier time and date as may be mutually agreed by the Purchaser and the
Company (the “Initial Closing Date”), the Company shall issue and sell to the Purchaser, and the Purchaser shall
purchase from the Company, an aggregate of 750,000 (Private Placement Shares at a price of $10.00 per share for an aggregate purchase
price of $7,500,000 (the “Purchase Price”), which shall be paid by wire transfer of immediately available funds
to the Company on the date the Registration Statement is declared effective, in accordance with the Company’s wiring instructions,
including to the trust account (the “Trust Account”), at a financial institution to be chosen by the Company,
maintained by Continental Stock Transfer & Trust Company, acting as trustee. On the Initial Closing Date, upon the payment by the
Purchaser of the Purchase Price, the Company, at its option, shall deliver a certificate evidencing the Private Placement Shares purchased
by the Purchaser on such date duly registered in the Purchaser’s name to the Purchaser, or effect such delivery in book-entry form.


 


(ii) On the
date of the consummation of the closing of the over-allotment option in connection with the Public Offering or on such earlier time and
date as may be mutually agreed by the Purchaser and the Company (each such date, an “Over-allotment Closing Date”,
and each Over- allotment Closing Date (if any) and the Initial Closing Date being sometimes referred to herein as a “Closing
Date”), the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company, up to an
aggregate of 75,000 additional Private Placement Shares at a price of $10.00 per share for an aggregate purchase price of up to $750,000
(if the over-allotment option in connection with the Public Offering is exercised in full) (the “Over-allotment Purchase
Price”). The Purchaser shall pay the Over-allotment Purchase Price by wire transfer of immediately available funds to the
Company or the Trust Account (as set forth in the wire instructions), at least one business day prior to the Over-allotment Closing Date
in accordance with the Company’s wiring instructions. On the Over-allotment Closing Date, upon the payment by the Purchaser of
the Over-allotment Purchase Price, the Company shall, at its option, deliver a certificate evidencing the Private Placement Shares purchased
by the Purchaser on such date duly registered in the Purchaser’s name to the Purchaser, or effect such delivery in book-entry form.


 






     


     


    

 





C. Terms
of the Private Placement Shares.


 


(i) On
or prior to the Initial Closing Date, the Company and the Purchaser shall enter into a registration rights agreement (the “Registration
Rights Agreement”) pursuant to which the Company will grant certain registration rights to the Purchaser relating to the
Private Placement Shares.


 


Section 2. Representations
and Warranties of the Company. As a material inducement to the Purchaser to enter into this Agreement and purchase the Private Placement
Shares, the Company hereby represents and warrants to the Purchaser (which representations and warranties shall survive each Closing Date)
that:


 


A. Incorporation
and Corporate Power. The Company is an exempted company duly incorporated, validly existing and in good standing under the laws of
the Cayman Islands and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably be expected
to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company possesses all requisite
corporate power and authority necessary to carry out the transactions contemplated by this Agreement.


 


B. Authorization;
No Breach.


 


(i) The
execution, delivery and performance of this Agreement has been duly authorized by the Company as of each Closing Date. This Agreement
constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms.


 


(ii) The
execution and delivery by the Company of this Agreement, the issuance and sale of the Private Placement Shares, and the fulfillment of,
and compliance with, the respective terms hereof and thereof by the Company, do not and will not as of the Closing Date (a) conflict with
or result in a breach of the terms, conditions or provisions of, (b) constitute a default under, (c) result in the creation of any lien,
security interest, charge or encumbrance upon the Company’s equity or assets under, (d) result in a violation of or (e) require
any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative
or governmental body or agency pursuant to the Amended and Restated Memorandum and Articles of Association of the Company in effect on
the date hereof or as may be amended prior to completion of the contemplated Public Offering, or any material law, statute, rule or regulation
to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject, except for any filings required
after the date hereof under federal or state securities laws.


 


C. Title to Securities.
Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Amended and Restated Memorandum and Articles of Association
of the Company, and upon registration in the Company’s register of members, the Private Placement Shares will be duly and validly
issued as fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof, and upon registration
in the Company’s register of members, the Purchaser will have good title to the Private Placement Shares, free and clear of all
liens, claims and encumbrances of any kind, other than (i) transfer restrictions hereunder and under the other agreements contemplated
hereby, (ii) transfer restrictions under federal and state securities laws, and (iii) liens, claims or encumbrances imposed due to the
actions of the Purchaser.


 




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C. Governmental
Consents. Assuming the accuracy of the representations and warranties made by the Purchaser in this Agreement, no consent, approval
or authorization of, or declaration to or filing with, any governmental authority is required in connection with the execution, delivery
and performance by the Company of this Agreement or the consummation by the Company of any other transactions contemplated hereby, except
for applicable requirements of the Securities Act.


 


Section 3. Representations
and Warranties of the Purchaser. As a material inducement to the Company to enter into this Agreement and issue and sell the Private
Placement Shares to the Purchaser, the Purchaser hereby represents and warrants to the Company (which representations and warranties shall
survive each Closing Date) that:


 


A. Organization
and Requisite Authority. The Purchaser possesses all requisite power and authority necessary to carry out the transactions contemplated
by this Agreement.


 


B. Authorization;
No Breach.


 


(i) This
Agreement constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’
rights and to general equitable principles (whether considered in a proceeding in equity or law).


 


(ii) The
execution and delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchaser
does not and shall not as of each Closing Date (a) conflict with or result in a breach by the Purchaser of the terms, conditions or provisions
of, (b) constitute a default under (c) result in the creation of any lien, security interest, charge or encumbrance upon the Purchaser’s
equity or assets under, (d) result in a violation of or (e) require any authorization, consent, approval, exemption or other action by
or notice or declaration to, or filing with, any court or administrative or governmental body or agency pursuant to the Purchaser’s
organizational documents in effect on the date hereof or as may be amended prior to completion of the contemplated Public Offering, or
any material law, statute, rule or regulation to which the Purchaser is subject, or any agreement, instrument, order, judgment or decree
to which the Purchaser is subject, except for any filings required after the date hereof under federal or state securities laws.


 


C. Investment
Representations.


 


(i) The
Purchaser is acquiring the Private Placement Shares (the “Securities”) for the Purchaser’s own account,
for investment purposes only and not with a view towards, or for resale in connection with, any public sale or distribution thereof.


 


(ii) The
Purchaser is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation D, and the Purchaser has not
experienced a disqualifying event as enumerated pursuant to Rule 506(d) of Regulation D under the Securities Act. The Purchaser did not
decide to enter into this Agreement as a result of any general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D under the Securities Act.


 


(iii) The
Purchaser understands that the Securities are being offered and will be sold to it in reliance on specific exemptions from the registration
requirements of the United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and
the Purchaser’s compliance with, the representations and warranties of the Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire such Securities.


 


 



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(iv) The
Purchaser has been furnished with all materials relating to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities which have been requested by the Purchaser. The Purchaser has been afforded the opportunity to
ask questions of the executive officers and directors of the Company. The Purchaser understands that its investment in the Securities
involves a high degree of risk and it has sought such accounting, legal and tax advice as it has considered necessary to make an informed
investment decision with respect to the acquisition of the Securities.


 


(v) The
Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made
any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities by the Purchaser
nor have such authorities passed upon or endorsed the merits of the offering of the Securities.


 


(vi) The
Purchaser understands that: (a) the Securities have not been and are not being registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered thereunder or (2) sold in reliance
on an exemption therefrom; and (b) except as specifically set forth in the Registration Rights Agreement, neither the Company nor
any other person is under any obligation to register the Securities under the Securities Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder. While the Purchaser understands that Rule 144 is not available for the resale
of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been
at any time previously a shell company, the Purchaser understands that Rule 144 includes an exception to this prohibition if the following
conditions are met: (i) the issuer of the securities that was formerly a shell company has ceased to be a shell company; (ii) the
issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”); (iii) the issuer of the securities has filed all Exchange Act reports and material
required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such
reports and materials), other than Form 8-K reports; and (iv) at least one year has elapsed from the time that the issuer filed current
Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.


 


(vii) The
Purchaser has such knowledge and experience in financial and business matters, knows of the high degree of risk associated with investments
in the securities of companies in the development stage such as the Company, is capable of evaluating the merits and risks of an investment
in the Securities and is able to bear the economic risk of an investment in the Securities in the amount contemplated hereunder for an
indefinite period of time. The Purchaser has adequate means of providing for its current financial needs and contingencies and will have
no current or anticipated future needs for liquidity which would be jeopardized by the investment in the Securities. The Purchaser can
afford a complete loss of its investment in the Securities.


 


(viii) The
Purchaser understands that the Private Placement Shares shall bear the legend set forth in Exhibit A hereto and be subject to appropriate
“stop transfer restrictions”.


 


Section 4. Conditions
of the Purchaser’s Obligations. The obligation of the Purchaser to purchase and pay for the Private Placement Shares is subject
to the fulfillment, on or before each Closing Date, of each of the following conditions:


 


A. Representations
and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct at and as of such
Closing Date as though then made.


 


B. Performance.
The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required
to be performed or complied with by it on or before such Closing Date.


 


C. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement.


 


D. Registration
Rights Agreement. The Company shall have entered into the Registration Rights Agreement on terms satisfactory to the Purchaser.


 




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Section 5. Conditions
of the Company’s Obligations. The obligations of the Company to the Purchaser under this Agreement are subject to the fulfillment,
on or before each Closing Date, of each of the following conditions:


 


A. Representations
and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct at and as of
such Closing Date as though then made.


 


B. Performance.
The Purchaser shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required
to be performed or complied with by the Purchaser on or before such Closing Date.


 


C. Corporate
Consents. The Company shall have obtained the consent of its Board of Directors authorizing the execution, delivery and performance
of this Agreement and the issuance and sale of the Private Placement Shares hereunder.


 


D. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement.


 


Section 6. Termination.
This Agreement may be terminated at any time after December 31, 2021 upon the election by either the Company or the Purchaser upon
written notice to the other party if the closing of the Public Offering does not occur prior to such date.


 


Section 7. Survival
of Representations and Warranties. All of the representations and warranties contained herein shall survive each Closing Date.


 


Section 8. Definitions.
Terms used but not otherwise defined in this Agreement shall have the meaning assigned to such terms in the Registration Statement.


 


Section 9. Miscellaneous.


 


A. Successors
and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether so expressed
or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this Agreement, other than assignments
by the Purchaser to affiliates thereof (including, without limitation one or more of its members).


 


B. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.


 


C. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the same agreement. Signatures to this Agreement transmitted
electronically shall be valid and effective to bind the party so signing.


 


D. Descriptive
Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute
a substantive part of this Agreement. The use of the word “including” in this Agreement shall be by way of example rather
than by limitation.


 


E. Governing
Law. This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed
in accordance with the internal laws of the State of New York.


 


F. Amendments.
This Agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed by all
parties hereto.


 


[Signature
Page Follows]


 




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IN WITNESS WHEREOF,
the parties hereto have executed this Agreement to be effective as of the date first set forth above.


 


	 	COMPANY:
	 	ION ACQUISITION CORP 3 LTD.


 


	 	By:	   
	 	 	Name:  Anthony  Reich
	 	 	Title:    Chief Financial Officer


 


[Signature Page to Private
Placement Shares Purchase Agreement (Sponsor)]


 






     


     


    

 





	 	PURCHASER:
	 	ION HOLDINGS 3, LP
	 	By its General Partner
	 	ION ACQUISITION CORP GP LTD.


 


	 	By:	 
	 	 	Name:  Anthony  Reich 
	 	 	Title:    Chief Financial Officer


 


[Signature Page to Private Placement
Shares Purchase Agreement (Sponsor)]


 




     


     


    

 


EXHIBIT A


 


LEGEND


 


THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, SUBJECT TO ANY ADDITIONAL LIMITATIONS ON TRANSFER DESCRIBED IN THE LETTER AGREEMENT
BY AND AMONG ION ACQUISITION CORP 3 LTD. (THE “COMPANY”), ION HOLDINGS 3, LP AND THE OTHER SIGNATORIES THERETO, THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE THAT IS THIRTY (30) DAYS AFTER THE DATE UPON WHICH THE
COMPANY COMPLETES ITS INITIAL BUSINESS COMBINATION (AS DEFINED IN SECTION 11 OF THE LETTER AGREEMENT REFERRED TO HEREIN) EXCEPT TO A PERMITTED
TRANSFEREE (AS DESCRIBED IN SECTION 7 OF THE LETTER AGREEMENT) WHO AGREES IN WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.


 


SECURITIES EVIDENCED BY THIS CERTIFICATE
SHALL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.