Document:

Securities Purchase Agreement - BC 240111

SECURITIES PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT
(“Agreement”) is made as of the 24 day of January, 2011 by and among Pimi Agro Cleantech, Inc., a Delaware corporation
(the “Company”), and the investors set forth in Annex I attached hereto (each an "Investor" and
collectively the “Investors”).

Recitals

A.

The Company and the Investors are executing
and delivering this Agreement in reliance upon the exemption from securities registration afforded by the provisions of Regulation D
(“Regulation D”), as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the Securities
Act of 1933, as amended; and

B.

The Investors wish to purchase from the
Company, and the Company wishes to sell and issue to the Investors, upon the terms and conditions stated in this Agreement, (i) up
to an aggregate of 625,000 shares (the “Shares”), and (ii) warrants to purchase up to an aggregate of 625,000 shares of
the Company’s common stock (the “Common Stock “), at an exercise price of $0.80 per share exercisable until December
31, 2012 in the form attached hereto as Exhibit A (the “Warrants”); and

In consideration of the mutual promises made
herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

1.

Definitions.  In addition to
those terms defined above and elsewhere in this Agreement, for the purposes of this Agreement, the following terms shall have the
meanings set forth below:

“Affiliate” means, with
respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is controlled by,
or is under common control with, such Person.

“Business Day” means a day,
other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

“Company’s Knowledge”
means the actual knowledge of the executive officers (as defined in Rule 405 under the 1933 Act) of the Company, after due inquiry.

“Control” (including the
terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or
indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.

“Investors
Representative” means Mr. Schahar Dvash.

“Material Adverse Effect”
means a material adverse effect on (i) the assets, liabilities, results of operations, condition (financial or otherwise), business,
or prospects of the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform its obligations
under the Transaction Documents.

“Person” means an
individual, corporation, partnership, Limited Liability Company, trust, business trust, association, Joint Stock Company, joint
venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.

“Purchase Price” means
Eighty Cents ($0.80).

“SEC” means the United
States Securities and Exchange Commission.

“Securities” means the
Shares, the Warrants and the Warrant Shares.

“Subsidiary” of any Person
means another Person, an amount of the voting securities, other voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.

“Transaction Documents”
means this Agreement and the Warrant.

“Warrant Shares” means the
shares of Common Stock issuable upon the exercise of the Warrants.

“1933 Act” means the
Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

“1934 Act” means the
Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

2.

Purchase and Sale of the Shares and
Warrants.  Subject to the terms and conditions of this Agreement, following the Closing Date, the Company shall sell and
issue to the Investors, up to 625,000 Shares, together with Warrants to purchase 625,000 Shares for an aggregate purchase price of
up to $500,000 (the “Purchase Price”). The Purchase Price will be paid in US Dollars or in NIS calculated according to the
Representative Rate of the US Dollar published by the Bank of Israel known at the time of the payment. 

2.1 

Allocation of Purchase Price. The
Purchase Price shall be payable by the Investors pursuant to the following installments (collectively, the “Installments”
or “Installment Payments”):

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a.

$50,000 shall be payable upon the signing
of this Agreement (the “First Installment”); 

b.

$50,000.00 shall be payable on or before
February 15, 2011 (the “Second Installment”); 

c.

$50,000 shall be payable on or before
March 15, 2011 (the “Third Installment”); 

d.

$250,000 shall be payable on or before
April 15, 2011 (the “Fourth Installment”); and

e.

$100,000 shall be payable on or before May
15, 2011 (the “Fifth Installment”), which  shall be paid by a check dated May 15, 2011, and which will be delivered
to the Company together with, and at the time of, the Fourth Installment.

The Installment Payments and the Shares and
Warrants to be issued pursuant to such Installment Payments shall be allocated among the Investors according to their respective
percentages set forth in Annex I attached hereto.

Each Investor's obligation, to make any
investment under this Agreement shall be several and not joint, except for the obligation to make the First Installment which shall
be joint and several. In the event that any of the Investors shall elect not to participate, in whole or in part in any of the
Installments, the remaining Investors shall have the right to invest such part of said Installment in his stead (the "Replacing
Investor(s)"), and the relevant part of Shares and Warrant shall be issued to the Replacing Investor(s) accordingly. For the
avoidance of doubt, the aforementioned reallocation of the Installments among the Investors shall not affect any of their rights
that are subject to the aggregate Installments made by them. 

Each Installment Payment shall be transferred to a trust
account held by the Advocate Eitan Shmueli the Company legal Counsel and shall be released to the Company against delivery to the
Investors of duly executed Share Certificates and Warrants relating the such Installment Payment.

 

2.2

Limitations on Investment. In the
event the Investors fail to make timely Installment Payments pursuant to Section 2.1 above, (with five business days grace period)
the Investors shall loose their rights to any subsequent installment investments under this Agreement. By way of example and for
purposes of clarity, in the event the Investors timely complete the First Installment but fail to make the Second Installment of the
Purchase Price on or prior to February 15, 2011 (with five business days grace period), the Investors shall loose their rights to
any further Installments pursuant to the terms of this Agreement. By way of additional example, in the event the Investors timely
complete the First Installment and the Second Installment, but fail to make the Third Installment on or prior to March 15, 2011
(with five business days grace period), the Investors shall loose their rights to any further investments in
the Company pursuant to the terms of this Agreement.

For the avoidance of doubt, the Investors do not undertake and
are not obliged to make any Installment Payments, except for the First Installment, and any failure to make such Installment
Payments shall not constitute a breach by the Investors.

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2.3

Right of First Refusal for Additional
Investment During 2011.  If at any time from the Closing Date and until December 31, 2011 (the “Right of First Refusal
Period”), the Company will decide to raise additional funds from third parties (except from its current shareholders) by
selling  its securities, and provided that the Investors have made all the Installment Payments pursuant to Section 2.1 above,
the Company shall send written notice (the “Offer”) to the Investors, and shall afford the Investors the right to
 invest the required additional funds, or any part thereof, in the Company at the same terms as under this Securities Purchase
Agreement (i.e. a price per share of $0.80 and 100% warrant coverage at the price of $0.80 until December 31, 2013) (the "Right
of First Refusal"). If the Investors have not responded in writing to the Company within 10 days with
respect to a particular Offer, and/or have not signed a definitive agreement for an additional investment within 20 days from the
date of such Offer, the Company may proceed to raise capital from any third party upon any terms negotiated with such party.
 For purposes of clarity, the Investors' Right of First Refusal shall apply to each and any fund raising by the Company until
the end of the Right of First Refusal Period, but shall be limited to an aggregate amount of $500,000 to be invested by the
Investors under this Right of First Refusal from time to time. 

 

3.

Closing.  Upon confirmation that
the other conditions to closing specified herein have been satisfied or duly waived by the Investors, the Company shall deliver to
the Investors, the Shares and Warrants, registered in the name of the Investors, and the Investors shall cause the Purchase Price to
be delivered to the Company as instructed in writing by the Company, in an amount representing the Purchase Price for the Shares and
Warrants so purchased (the “Closing Date”). The closing of the purchase and sale of the Shares and Warrants shall take
place at the offices of Sadot & Co. at 12 Abba Hillel St. Ramat-Gan or at such other location and on such other date as the
Company and the Investors shall mutually agree.

Notwithstanding the above, upon the transfer of each
Installment Payment the Company shall take all necessary corporate actions in order to execute Share Certificates and Warrants
relating to such Installment Payment The Share certificate shall be delivered to the Investors within five (5) business days from
each Closing purchased under the relevant closing.    

4.

Representations and Warranties of the
Company.  The Company hereby represents and warrants to the Investors that, except as set forth in the schedules delivered
herewith (collectively, the “Disclosure Schedules”):

4.1 

Organization, Good Standing and
Qualification.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business as now conducted and
to own its properties.  

4.2

Authorization.  The Company has
full power and authority and, has taken all requisite action on the part of the Company, its officers, directors and stockholders
necessary for (i) the authorization, execution and delivery of the Transaction Documents, (ii) authorization of the performance of
all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for issuance) and
delivery of the Securities.

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4.3

Valid Issuance.  The Shares,
and upon the due exercise of the Warrants, the Warrant Shares, and any additional shares to be issued to the Investors pursuant to
this Agreement, will be validly issued, fully paid and non-assessable free and clear of all encumbrances and restrictions, except
for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those
created by the Investors.  The Company has reserved a sufficient number of shares of Common Stock for issuance upon the
exercise of the Warrants, free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the
Transaction Documents or imposed by applicable securities laws and except for those created by the Investors.

4.4

Ownership of Shares. A complete and
correct list of the security holders of the Company (including, for the avoidance of doubt, all of the outstanding options, warrants
and other rights to purchase shares of the Company's share capital) immediately prior to and immediately following the Closing is
set forth in Schedule 4.4 attached hereto. Except as otherwise set forth in Schedule 4.4, the individuals and entities
identified in Schedule 4.4 as the shareholders of the Company are the holders of record and the beneficial owners, of all of
the issued and outstanding share capital of the Company and of all rights thereto, options to purchase, proxies, voting trust and
other voting agreements, calls or commitments of every kind, and, except as set forth in Schedule 4.4, none of the said
individuals or entities owns any other stock, options or other rights to subscribe for, purchase or
acquire any share capital of the Company from the Company.

4.5

Intellectual Property.

(i) General. The Company (directly
or through its Subsidiaries) owns or has the right to use pursuant to written license, sublicense, agreement, or permission, free
and clear of any lien, third party rights and royalties, all patents, trademarks, service marks, trade names, mask works, and
copyrights and all trade secrets, including know-how, inventions, designs, processes, computer programs, algorithms, firmware and
technical data, concepts, techniques, methods, systems, drawings, photographs, models, prototypes, research materials, formulas,
development or experimental work, work in progress, cost data, marketing plans, product plans, financial information, forecasts,
personnel information and customer or supplier lists currently used and/or necessary for the operation of the businesses of the
Company and its Subsidiaries as presently conducted (collectively: “Intellectual Property”). Each item of
Intellectual Property owned or used by the Company or its Subsidiaries immediately prior to the Closing hereunder will be owned or
available for use by the Company and its Subsidiaries on substantially the same terms and conditions immediately subsequent to the
Closing hereunder. No other Intellectual Property of any kind required by the Company or its Subsidiaries to conduct their business,
as currently conducted and as proposed to be conducted, is owned by a third party or would require the payment of any fee or
royalty.

(ii) No Infringement. Neither the
Company or its Subsidiaries have interfered with, infringed upon, misappropriated, or otherwise come into conflict with any
intellectual property rights of any third party nor will the conducting by it of its business, or use of the Intellectual Property,
as presently conducted and as proposed to be conducted interfere, infringe upon, misappropriate or otherwise come into conflict with
any intellectual property 

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rights of any third party;
 (ii) neither the Company or its Subsidiaries have ever received any charge, complaint, claim, demand, or notice, alleging any
such interference, infringement, misappropriation, or violation (including any claim that the Company or its Subsidiaries must
license or refrain from using any intellectual property rights of any third party) and there is no basis for such; and (iii) to the
best of the Company’s knowledge, no third party has interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property of the Company or its Subsidiaries.

(iii)
 Ownership of Intellectual Property. All of the Intellectual Property
embodied in the Company's technology (or of its Subsidiaries), developed by or for the Company or its Subsidiaries and/or currently
being developed by or for the Company or its Subsidiaries - is owned, or permitted to be used indefinitely, solely and exclusively
by the Company or its Subsidiaries. Without derogating from the aforegoing the Company's Intellectual Property (or of its
Subsidiaries) includes, inter alia, patents related to eco-friendly solutions for pre and post harvest treatments of all food
commodities. Each of the employees of the Company and its Subsidiaries and other persons who, either alone or in concert with
others, developed, invented, discovered, derived, programmed or designed the Intellectual Property, have entered into
written agreements with the Company or its Subsidiaries assigning to the Company or its Subsidiaries all rights in any and all
Intellectual Property relating to the business of the Company or its Subsidiaries as developed in the course of their employment by
or provision of services to the Company or its Subsidiaries.

(iv) Protection of IP Rights and Trade
Secrets. The Company or its Subsidiaries take such action to maintain and protect each item of Intellectual Property that it
owns or uses which actions are reasonable and customary in the industry in which the Company and its Subsidiaries operate. All the
confidential information is being (and has been) continuously maintained in confidence by the Company and its Subsidiaries by taking
reasonable precautions to protect and prevent its disclosure to unauthorized parties. The Company and its Subsidiaries have complied
in all material respects with the requirements of, and has filed all material documentation required in dealing with, all Patent and
Trademark Offices and any other patent registry agency in which its patent applications were filed, all patents (if any) and patent
applications are in effect, and there is no claim which renders the inventions of the Company and
its Subsidiaries referred to in the patents, patent applications and related documentation (if any) invalid in any manner.

4.6

Consents.  The
 execution, delivery and performance by the Company of the Transaction Documents, and the offer, issuance and sale of the Securities
require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than
filings that have been made pursuant to applicable state securities laws, and post-sale filings pursuant to applicable state and
federal securities laws which the Company undertakes to file within the applicable time periods. Subject to the accuracy of the
representations and warranties of the Investors set forth in Section 5 hereof, the Company has taken all action necessary to exempt
the allocation to the Investors from U.S. registration requirements (i) the issuance and sale of the Securities, and (ii) the
issuance of the Warrant Shares upon due exercise of the Warrants.

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4.7

Use of Proceeds.  The net
proceeds of the sale of the Shares and the Warrants hereunder shall be used by the Company for working capital and general corporate
purposes.

4.8

Financial Statements. The financial
statements contained in the most recent SEC Filings (the "Financial Statements"): (i) have been prepared in
accordance with US generally accepted accounting principles (“US GAAP”) applied on a consistent basis, (ii) are in
accordance with the books and records of the Company and its Subsidiaries, and (iii) are true and correct in all material respects
and present fairly the financial condition of the Company and its Subsidiaries at the date or dates therein indicated and the
results of its operations and cash flows for the periods therein specified. All proper and necessary books of account and accounting
records have been maintained by the Company and its Subsidiaries and are in their possession. Except as set forth in the Financial
Statements, the Company and its Subsidiaries have no known or unknown liabilities, contingent or otherwise, other
than: (i) liabilities incurred in the ordinary course of business subsequent to the period ended on the date of the Financial
Statements, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under
US GAAP to be reflected in the Financial Statements, which, in both cases, individually or in the aggregate, are not material to the
financial condition or operating results of the Company or its Subsidiaries. The Company and its Subsidiaries maintain a standard
system of accounting established and administered in accordance with US GAAP.

4.9

No Material Adverse Change.
 Since the date of the Financial Statements, and except as identified and described in the SEC Filings, there has not been:

(i)

any change in the consolidated assets,
liabilities, financial condition or operating results of the Company from that reflected in the financial statements included in the
Company’s most recent quarterly Report on Form 10-Q, except for changes in the ordinary course of business which have not and
could not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate;

(ii)

any declaration or payment of any dividend,
or any authorization or payment of any distribution, on any of the capital stock of the Company, or any redemption or repurchase of
any securities of the Company;

(iii)

any material damage, destruction or loss,
whether or not covered by insurance to any assets or properties of the Company or its Subsidiaries;

(iv)

any waiver, not in the ordinary course of
business, by the Company or any Subsidiary of a material right or of a material debt owed to them;

(v)

any satisfaction or discharge of any lien,
claim or encumbrance or payment of any obligation by the Company or a Subsidiary, except in the ordinary course of business and
which is not material to the assets, properties, financial condition, operating results or business of the Company and its
Subsidiaries taken as a whole (as such business is presently conducted and as it is proposed to be conducted);

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(vi)

any change or amendment to the Company's
Certificate of Incorporation or by-laws, or material change to any material contract or arrangement by which the Company or any
Subsidiary is bound or to which any of their respective assets or properties is subject;

(vii)

any material labor difficulties or labor
union organizing activities with respect to employees of the Company or any Subsidiary;

(viii)

any material transaction entered into by
the Company or a Subsidiary other than in the ordinary course of business; 

(ix)

the loss of the services of any key
employee, or material change in the composition or duties of the senior management of the Company or any Subsidiary; or

(x)

any other event or condition of any
character that has had or could reasonably be expected to have a Material Adverse Effect.

4.10

SEC Filings. At the time of filing
thereof, the SEC Filings complied as to form in all material respects with the requirements of the 1934 Act and did not contain any
untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading.

4.11

No Conflict, Breach, Violation or
Default.  The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of
the Securities will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a
default under (i) the Company’s Certificate of Incorporation or the Company’s Bylaws, both as in effect on the date hereof
(true and complete copies of which have been made available to the Investors through the EDGAR system), or (ii)(a) any statute,
rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the
Company, any Subsidiary or any of their respective assets or properties, or (b) any agreement or instrument to which the Company or
any Subsidiary is a party or by which the Company or a Subsidiary is bound or to which any of their respective assets
or properties is subject.

4.12

Litigation. 
Neither the Company or its Subsidiaries are: (i) subject to any outstanding injunction, judgment,
order, decree, writ, stipulation, ruling, or charge of any court or any governmental agency or any arbitrator; or (ii) a party or is
threatened to be made a party to any action, suit, proceeding, hearing, complaint, charge or investigation of, in, or before any
court or quasi-judicial or administrative agency of any state, municipal, or foreign jurisdiction or before any arbitrator or other
method of settling disputes or disagreements. The Company and its Subsidiaries do not know, anticipate, or have any basis to believe
that any such action, suit, proceeding, hearing, complaint, charge or investigation may be brought or threatened against the Company
or its Subsidiaries and the Company and its Subsidiaries do not intend to initiate any such action,
suit, proceeding, hearing, complaint, charge or investigation. Without derogating from any of the foregoing, there is no action,
suit, proceeding, or investigation pending or 

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currently threatened involving the
prior employment of any of the employees of the Company or its Subsidiaries, their use in connection with the business of the
Company and its Subsidiaries of any information or techniques allegedly proprietary to any of their former employers, or their
obligations under any agreement with prior employers.

4.13

Compliance with the Law and Other
Instruments. To the best of their knowledge, the Company and its Subsidiaries have conducted their business in all material
respects in accordance with all applicable laws of the countries in which they have conducted their business and there is no
violation or default with respect to any law or judgment of any court or any governmental agency which could have a material adverse
effect upon the assets or business of the Company and its Subsidiaries.  To the best of the knowledge of the Company and its
Subsidiaries, there is no existing law, rule, regulation or order which would prohibit or restrict the Company or its Subsidiaries
from, or otherwise materially adversely affect the Company or its Subsidiaries in conducting their business in any jurisdiction in
which it is now conducting business or, in which they currently propose to conduct business.

4.14

Permits. The Company and its
Subsidiaries have all franchises, permits, licenses, and any similar authority necessary for the conduct of their business as now
being conducted and as proposed to be conducted, the lack of which could adversely affect the business, properties, prospects or
financial condition of the Company and its Subsidiaries. The Company and its Subsidiaries are not in material default under any of
such franchises, permits, licenses, or other similar authority.

4.15

Related-Party Transactions.

Except as set forth in Schedule 4.15, none of the Company’s shareholders (owning in excess
of ten (10%) percent of the Company’s currently outstanding common stock), officers or directors (i) own, directly or
indirectly, any debt, equity or other interest or investment in any corporation, association or other entity which is a competitor,
lessor, lessee, customer, supplier or advertiser of the Company or its Subsidiaries; (ii) has been involved in any business
arrangement or relationship with the Company or its Subsidiaries, which is material to the Company, the Subsidiaries or their
business; (iii) owes any amount to, or is owed any amount by the Company or its Subsidiaries;(iv) has any interest in or owns any
property or right,
including Intellectual Property, material to the Company or its Subsidiaries in the conduct of their business as presently conducted
and as proposed to be conducted; (v) has lent or advanced any money to, or borrowed any money from, or guaranteed or otherwise
become liable for any indebtedness or other obligations of the Company or its Subsidiaries; (vi) is a party to any contract, lease,
agreement, arrangement or commitment, material to the Company or its Subsidiaries in their business as presently conducted and as
proposed to be conducted; or (vii) received from or furnished to the Company or its Subsidiaries any goods or services (with or
without consideration), material to the Company or its Subsidiaries in the conduct of its  business, since its
 incorporation.

4.16

Employees. The Company and its
Subsidiaries have complied in all material respects with all legal requirements relating to employment, wages, hours, benefits,
pensions, the payment of social security and similar taxes. The Company and its Subsidiaries are not liable for the payment of any
damages, taxes, fines, penalties, or other amounts, however designated, for failure to comply with any of the foregoing legal
requirements. No officer or key 

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employee, nor any group of key
employees, intends to terminate their employment with the Company or its Subsidiaries, nor does the Company or its Subsidiaries have
a present intention to terminate the employment of any of the foregoing. The severance pay to the employees of the Company and its
Subsidiaries is fully funded or provided for in the Financial Statements. All liabilities of the Company and its Subsidiaries in
connection with its employees (excluding illness pay) were adequately accrued in the Financial Statements. None of the employees of
the Subsidiaries or its Subsidiaries is obligated under any contract (including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with the
use of such employee's best efforts to promote the interests of the Company and its Subsidiaries, or that
would conflict with the business of the Company or its Subsidiaries.

4.17

Tax Matters. (a) Other than as
disclosed in the Financial Statements, as of September 30, 2010, the Company and its Subsidiaries have no liability of any nature,
accrued or contingent for taxes or any penalties, interest, and additions to taxes, other than liabilities for which full provision
has been made in the Financial Statements for September 30, 2010. The Financial Statements for September 30, 2010 make full
provisions for all taxation for which the Company and its Subsidiaries were then or thereafter became or may hereafter become liable
or accountable in respect of or by reference to any income, profit, receipt, gain, transaction, agreement, distribution or event
which was earned, accrued, received, or realized, entered into, paid, made or accrued on or before the date of the Financial
Statements. The Company and its Subsidiaries have paid or fully provided in their books of account for all taxation for
which it has or may hereafter become liable or accountable in the period from the date of its incorporation; (b) the Company and its
Subsidiaries have at all times and within the requisite time limits, fully and accurately observed, performed and complied with all
obligations and conditions imposed on them, or to which any claim deduction, allowance or relief made, claimed by or afforded to it
was made subject under any legislation relating to taxation; (c) the Company and its Subsidiaries are not aware of any circumstances
which will or may, whether by lapse of time or the issue of any notice of assessment or otherwise, give rise to any dispute with any
relevant taxation authority in relation to its liability or accountability for taxation, any claim made by them, any relief,
deduction, or allowance afforded to them, or in relation to the status or character of the Company or its Subsidiaries under or for
the purpose of any provision of any legislation relating to taxation; (d) the Company and its
Subsidiaries have never had any tax deficiency proposed or assessed against it and has not executed any waiver of any statute of
limitations on the assessment or collection of any tax or governmental charge; (e) none of the income tax returns of the Company or
its Subsidiaries have ever been audited by governmental authorities. Since the date of the Financial Statements, the Company and its
Subsidiaries have not incurred any taxes, assessments or governmental charges other than in the ordinary course of business; (f) the
Company and its Subsidiaries have withheld or collected from each payment made to each of its employees, the amount of all taxes
required to be withheld or collected therefrom, and has paid the same to the proper tax receiving officers or authorized
depositories.

4.18

No Directed Selling Efforts or General
Solicitation.  Neither the Company nor any Person acting on its behalf has conducted any general solicitation or general
advertising (as those terms are used in Regulation D) in connection with the offer or sale of any of the Securities.

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4.19

No Integrated Offering.
 Neither the Company nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would adversely
affect reliance by the Company on Section 4(2) for the exemption from registration for the transactions contemplated hereby or would
require registration of the Securities under the 1933 Act.

4.20

Private Placement.  The offer
and sale of the Securities to the Investors as contemplated hereby is exempt from the registration requirements of the 1933 Act.

5.

Representations and Warranties of the
Investors.  Each Investor hereby, severally and not jointly, represents and warrants to the Company that:

5.1

Requisite Power.  The Investor
has all requisite power and authority to invest in the Securities pursuant to this Agreement.

5.2

Authorization.  The execution,
delivery and performance by the Investor of the Transaction Documents to which the Investor is a party have been duly authorized and
will each constitute the valid and legally binding obligation of the Investor, enforceable against the Investor in accordance with
their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability, relating to or affecting creditors’ rights generally.

5.3

Purchase Entirely for Own Account.
 The Securities to be received by the Investor hereunder will be acquired for the Investor’s own account, not as nominee
or agent, and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and the Investor has
no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933 Act
 without prejudice, however, to the Investor's right at all times to sell or otherwise dispose of all or any part of such Securities
in compliance with applicable federal and state securities laws. Nothing contained herein shall be deemed a representation or
warranty by the Investor to hold the Securities for any period of time.
The Investor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged in a business that would require
it to be so registered.

5.4

Investment Experience.  The
Investor acknowledges that it can bear the economic risk and complete loss of his investment in the Securities and has such
knowledge and experience in financial or business matters that he is capable of evaluating the merits and risks of the investment
contemplated hereby.

5.5

Disclosure of Information.  The
Investor has had an opportunity to receive all information related to the Company requested by him and to ask questions of and
receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Securities.
 The Investor acknowledges receipt of copies of the SEC Filings.  Neither such inquiries nor any other due diligence
investigation conducted by the Investor shall 

-11-

modify, amend or affect such
Investor’s right to rely on the Company’s representations and warranties contained in this Agreement.

5.6

Restricted Securities.  The
Investor understands that the Securities are characterized as “restricted securities” under the U.S. federal securities
laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws
and applicable regulations such securities may be resold without registration under the 1933 Act only in certain limited
circumstances.

5.7

Legends.  It is understood
that, except as provided below, certificates evidencing the Securities may bear the following or any similar legend:

(a)

“The securities represented hereby may
not be transferred unless (i) such securities have been registered for sale pursuant to the Securities Act of 1933, as amended, (ii)
such securities may be sold pursuant to Rule 144(k), or (iii) the Company has received an opinion of counsel reasonably satisfactory
to it that such transfer may lawfully be made without registration under the Securities Act of 1933 or qualification under
applicable state securities laws.”

(b)

If required by the authorities of any state
in connection with the issuance of sale of the Securities, the legend required by such state authority.

5.8

Accredited Investors.  Each
Investor is an accredited Investor as defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act.

5.9

No General Solicitation.  The
Investor did not learn of the investment in the Securities as a result of any public advertising or general solicitation.

6.  Conditions to Closing.

6.1

Conditions to the Investors’
Obligations. The obligation of the Investors to purchase the Shares and Warrants at Closing is subject to the fulfillment to the
Investors’ satisfaction, on or prior to the Closing Date, of the following conditions, any of which may be waived by the
Investors:

(a)

The representations and warranties made by
the Company in Section 4 hereof qualified as to materiality shall be true and correct at all times prior to and on the Closing Date,
except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation
or warranty shall be true and correct as of such earlier date, and, the representations and warranties made by the Company in
Section 4 hereof not qualified as to materiality shall be true and correct in all material respects at all times prior to and on the
Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such
representation or warranty shall be true and correct in all material respects as of such earlier date.  The Company shall have
performed in all 

-12-

material respects all obligations
and conditions herein required to be performed or observed by it on or prior to the Closing Date.

(b)

The Company shall have obtained any and all
consents, permits, approvals, registrations and waivers necessary or appropriate for consummation of the purchase and sale of the
Securities, and the consummation of the other transactions contemplated by the Transaction Documents, all of which shall be in full
force and effect.

(c)

No judgment, writ, order, injunction, award
or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any
governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental
authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction Documents.

(d)

The Company shall have delivered to the
Investors a legal opinion of its U.S. legal counsel, in a form satisfactory to the Investors, confirming the validity of the
transaction contemplated under this Agreement, including, inter alia, with respect to the gradual issuance of shares
according to the Installment Payments made by the Investors. 

6.2

Conditions to Obligations of the Company
. The Company's obligation to sell and issue the Shares and the Warrants at the Closing Date is subject to the fulfillment to
the satisfaction of the Company, on or prior to the Closing Date, of the following conditions, any of which may be waived by the
Company:

(a)

The representations and warranties made by
the Investors in Section 5 hereof (the “Investment Representations”), shall be true and correct in all material respects
when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had
been made on and as of said date.  The Investors shall have performed in all material respects all obligations and conditions
herein required to be performed or observed by them on or prior to the Closing Date.

(c)

The Investors shall have delivered the
First Installment of the Purchase Price to the Company in the form of a bank check or money order of good and lawful money. 

7.

Covenants and Agreements of the Company
.

7.1

No Conflicting Agreements.  The
Company will not take any action, enter into any agreement or make any commitment that would conflict or interfere in any material
respect with the Company’s obligations to the Investors under the Transaction Documents.

7.2

Compliance with Laws.  The
Company will comply in all material respects with all applicable laws, rules, regulations, orders and decrees of all governmental
authorities.

-13-

7.3

Removal of Legends.  Upon Rule
144 becoming available the Company shall, upon an Investors’ written request, promptly cause certificates evidencing the
Investors’ Securities to be replaced with certificates which do not bear such restrictive legends, and Warrant Shares
subsequently issued upon due exercise of the Warrants shall not bear such restrictive legends provided the provisions of above are
satisfied with respect to such Warrant Shares.   

8.

Other Company Limitations. Following payment of the First Installment
the Company shall not pay, directly or indirectly, any management fee and/or consulting fee (“Affiliate Shareholder Fees”)
(except for fees in connection with actual employment by the Company or consulting to the Company) to any of its shareholders and/or
their family members, associates or assigns. The aforesaid restriction shall remain in force so long as the Investors duly make the
Installment Payments, and upon completion of the Installment Payments the restriction shall remain in force for so long the
Investors hold collectively (for this purpose together with any Affiliates of the Investors) at least Five Percent (5%) of the then
outstanding common stock of the Company. For purposes of clarity, the above restriction shall not apply to payment of reasonable
remuneration and/or salaries or consulting fee to the Company's directors, officers and/or shareholders who are actually employed by
the Company or give services to the Company or consulting to the company. 

9.

Investors’ Board of Director Rights. 

9.1

Board Observer.
 
Following payment of the First Installment, the Investors Representative shall have the right to nominate an individual who shall be
permitted to attend and observe (the "Observer") meetings of the Company’s Board of Directors (the “Board”)
. The Investors Representative's right to appoint the Observer
shall remain in effect so long as the Investors duly make the Installment Payments, and upon completion of the Installment Payments
the right to appoint the Observer shall further remain in effect for so long the Investors hold collectively (for this purpose
together with any Affiliates of the Investors) at least Five Percent (5%) of the then outstanding common stock of the Company
. Except as set forth herein, the Observer shall not have, nor be afforded, any rights or
privileges of a duly elected Board member.  Notwithstanding the aforementioned, the Observer shall be afforded
 an opportunity (i) to receive prior
notice of any scheduled Board meetings, (ii) to receive information disseminated to the Board prior to any Board meetings, and (iii)
to participate in any discussions held at Board meetings (which shall be duly recorded in the Company’s minutes). The Observer
shall be subject to any rules and regulations of a person holding material, non-public information of the Company.

9.2

Nomination of a Board Member.
Notwithstanding anything to the contrary in this Agreement, in the event (i) the Investors make an aggregate investment in the
Company exceeding the Purchase Price (i.e. in excess of $500,000) on or prior to December 31, 2011, and (ii) the Investors
beneficially hold (for this purpose together with any Affiliates of the Investors) at least Ten percent (10%) of the Company’s
outstanding Common Stock on or prior to December 31, 2011, then the Investors Representative shall have the right to appoint one (1)
director to the Company’s Board of Directors (the “Board Candidate”). The Board shall have the right to object to the
appointment of the proposed Board Candidate solely on the ground that 

-14-

such proposed Board Candidate does
not have the required experience to serve as a member of the Board.

10.

Survival and Indemnification.

10.1  Survival.  The
representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the transactions
contemplated by this Agreement.

10.2  Indemnification.  The
Company agrees to indemnify and hold harmless the Investors and their Affiliates and their respective directors, officers, employees
and agents from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable
attorney fees and disbursements and other expenses incurred in connection with investigating, preparing or defending any action,
claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) to which such
Person may become subject as a result of any breach of representation, warranty, covenant or agreement made by or to be performed on
the part of the Company under the Transaction Documents, and will reimburse any such Person for all such amounts as they are
incurred by such Person.

10.3  Conduct of Indemnification
Proceedings.  Promptly after receipt by any Person (the “Indemnified Person”) of notice of
any demand, claim or circumstances which would or might give rise to a claim or the commencement of any action, proceeding or
investigation in respect of which indemnity may be sought pursuant to Section 8.2, such Indemnified Person shall promptly notify the
Company in writing and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to
such Indemnified Person, and shall assume the payment of all fees and expenses; provided, however, that the
failure of any Indemnified Person so to notify the Company shall not relieve the Company of its obligations hereunder except to the
extent that the Company is materially prejudiced by such failure to notify.  In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless: (i) the Company and the Indemnified Person shall have mutually agreed to the retention of such
counsel; or (ii) in the reasonable judgment of counsel to such Indemnified Person representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between them.  The Company shall not be liable for any
settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled
with such consent, or if there be a final judgment for the plaintiff, the Company shall indemnify and hold harmless such Indemnified
Person from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment.  Without
the prior written consent of the Indemnified Person, which consent shall not be unreasonably
withheld, the Company shall not effect any settlement of any pending or threatened proceeding in respect of which any Indemnified
Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such
settlement includes an unconditional release of such Indemnified Person from all liability arising out of such proceeding.

11.

Miscellaneous.

-15-

11.1

Successors and Assigns.  This
Agreement may not be assigned by a party hereto without the prior written consent of the Company or the Investors, as applicable,
provided, however, that each Investor may assign its rights and delegate its duties hereunder in whole or in part to an Affiliate or
to a third party acquiring some or all of its Securities in a private transaction without the prior written consent of the Company,
after notice duly given by such Investor to the Company.  The provisions of this Agreement shall inure to the benefit of and be
binding upon the respective permitted successors and assigns of the parties.  Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in
this Agreement.

11.2

Counterparts; Faxes.  This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.  This Agreement may also be executed via facsimile, which shall be deemed an original.

11.3

Titles and Subtitles.  The
titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting
this Agreement.

11.4

Notices.  Unless otherwise
provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given as
hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by
telex or telecopier, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by
mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after
such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized overnight air
courier, then such notice shall be deemed given one business day after delivery to such carrier.  All notices shall be
addressed to the party to be notified at the address as follows, or at such other address as such party may
designate by ten days’ advance written notice to the other party:

If to the Company:

Mr. Youval Saly

269 South Beverly Drive suite 1091

Beverly Hills California 90212

With a copy to:

SHIBOLETH LLP

1 Penn Plaza

New York, New York 10119 

Attention:  Jonathan R. Shechter,
Esq.

Fax:  (212) 244-4111

-16-

If to the Investors:

[___________________ ]

Attention:  [__________]

Fax:

[_____________]

Any notices or instructions to be given by or to the Investors
with respect to Investors rights under this Agreement, shall be given by or to (as applicable) the Investors Representative,
including, without limitation, any notice with respect to the appointment of the Observer and the Board Candidate. 

11.5

Expenses.  The parties hereto
shall pay their own costs and expenses in connection herewith.  In the event that legal proceedings are commenced by any party
to this Agreement against another party to this Agreement in connection with this Agreement or the other Transaction Documents, the
party or parties which do not prevail in such proceedings shall severally, but not jointly, pay their pro rata share of the
reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses incurred by the prevailing party in such
proceedings.

Any expenses to be borne by the Investors shall be allocated
among them on a pro-rata basis according to their respective percentages set forth in Annex I.

11.6

Amendments and Waivers.  Any
term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investors. Any
amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Securities purchased under
this Agreement at the time outstanding, each future holder of all such Securities, and the Company.

11.7

Publicity.  Except as set forth
below, no public release or announcement concerning the transactions contemplated hereby shall be issued by the Company or the
Investors without the prior consent of the Company (in the case of a release or announcement by the Investors) or the Investors (in
the case of a release or announcement by the Company) (which consents shall not be unreasonably withheld), except as such release or
announcement may be required by law or the applicable rules or regulations of any securities exchange or securities market, in which
case the Company or the Investors, as the case may be, shall allow the Investors or the Company, as applicable, to the extent
reasonably practicable in the circumstances, reasonable time to comment on such release or announcement in advance of such issuance.
 By 8:30 a.m. (New York City time) on the trading day immediately following the Closing Date, the
Company shall issue a press release disclosing the consummation of the transactions contemplated by this Agreement.  No later
than the third trading day following the Closing Date, the Company will file a Current Report on Form 8-K attaching the press
release described in the foregoing sentence as well as copies of the Transaction Documents.  In addition, the Company will make
such other filings and notices in the manner and time required by the SEC.  Notwithstanding the foregoing, the Company shall
not publicly disclose the name of any Investor, or include the name of any Investor in any filing with the SEC (other than the 

-17-

Registration Statement and any
exhibits to filings made in respect of this transaction in accordance with periodic filing requirements under the 1934 Act) or any
regulatory agency or Nasdaq, without the prior written consent of such Investor, except to the extent such disclosure is required by
law or trading market regulations, in which case the Company shall provide such Investor with prior notice of such disclosure.

11.8

Severability.  Any provision of
this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were
written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent
permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.

11.9

Entire Agreement.  This
Agreement, including the Exhibits and the Disclosure Schedules, and the other Transaction Documents constitute the entire agreement
among the parties hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to the subject matter hereof and thereof.

11.10

Further Assurances.  The
parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be
required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

11.11

Governing Law; Consent to Jurisdiction;
Waiver of Jury Trial.  This Agreement shall be governed by, and construed in accordance with, the internal laws of the
State of New York without regard to the choice of law principles thereof.  Each of the parties hereto irrevocably submits to
the exclusive jurisdiction of the courts of the State of New York and the United States District Courts for the purpose of any suit,
action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby.  Service
of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this Agreement.  Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue
in such court.  Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.  EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN
ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

[signature page follows]

-18-

IN WITNESS WHEREOF, the parties have
executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

The Company:

		
	 
	
PIMI AGRO CLEANTECH, INC.

 

By:       __________________

Name:  Youval Saly

Title:     Chief Executive Officer

 

-19-

The Investors:

1.

Shachar Dvash Israeli ID 5623117-8

Of 49 Tagor Neve Avivim Tel-Aviv

By: ______________________

Aggregate Purchase Price:  $150,000

Number of Warrants:  187,500

2.

Shabtai Shabtai Israeli ID 53240990 of 22
Shoham St. Neve Monoson Yehud. (or a company under the joint control of Mr. Shabtai and Mr. Arama). 

By: ______________________

Aggregate Purchase Price:  $175,000

Number of Warrants:  218,750

3.

Moshe Arama Israeli ID 54765037 of 14
Shderot Michael Neeman, Tel-Aviv (or a company under the joint control of Mr. Shabtai and Mr. Arama).

By: ______________________

Aggregate Purchase Price:  $175,000

Number of Warrants:  218,750

-20-

ANNEX I

		

	
NAME

	
RESPECTIVE PERCENTAGES

	
Shachar Dvash

	
30%

	
Shabtai Shabtai

	
35%

	
Moshe Arama

	
35%

-21-_

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Warrant Certificate No. [__]

COMMON STOCK PURCHASE WARRANT

To Purchase [____________] Shares of Common Stock of

PIMI AGRO CLEANTECH, INC.

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _________________ (the “Holder”), is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to the close of business on December 31, 2012 (the “Termination Date”) but not thereafter, to subscribe for and purchase from PIMI AGRO CLEANTECH, INC., a Delaware corporation (the “Company”), up to 625,000 shares (the “Warrant Shares”) of Common Stock, par value $0.80 per share, of the Company (the “Common Stock”).  The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).  

Section 1.

Recitals. 

a)

On January 24, 2011 the Company entered into a Securities Purchase Agreement with Holder, pursuant to which Holder agreed to invest an aggregate of $500,000 in the Company, payable in Five (5) monthly payments. As of the Initial Exercise Date, Holder has invested $_________ under the Securities Purchase Agreement.

b)

The Company is issuing this Warrant in furtherance of the Investment Agreement and as further incentive to Holder to increase its investment in the Company.

Section 2.

Exercise.

a)

Exercise of Warrant.  Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy of the Notice of Exercise form annexed hereto (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of such Holder appearing on the books of the Company); and, within three (3) Trading Days of the date said Notice of Exercise is delivered to the Company, the Company shall have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company.  Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases.  The Company shall deliver any objection to any Notice of Exercise within two (2) Trading Days of receipt of such notice.  THE HOLDER AND ANY ASSIGNEE, BY ACCEPTANCE OF THIS WARRANT, ACKNOWLEDGE AND AGREE THAT, BY REASON OF
THE PROVISIONS OF THIS PARAGRAPH, FOLLOWING THE PURCHASE OF A PORTION OF THE WARRANT SHARES HEREUNDER, THE NUMBER OF WARRANT SHARES AVAILABLE FOR PURCHASE HEREUNDER AT ANY GIVEN TIME MAY BE LESS THAN THE AMOUNT STATED ON THE FACE HEREOF.

b)

Exercise Price.  The exercise price per share of the Common Stock under this Warrant shall be $0.80 (the “Exercise Price”).

c)

Mechanics of Exercise. 

i.

Authorization of Warrant Shares.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).  

ii.

Delivery of Certificates Upon Exercise. Certificates for Warrant Shares purchased hereunder shall be delivered by the transfer agent of the Company to the Holder by delivery to the address specified 

by the Holder in the Notice of Exercise, within five (5) Trading Days from the delivery to the Company of the Notice of Exercise form, surrender of this Warrant (if required) and payment of the aggregate Exercise Price as set forth above (“Warrant Share Delivery Date”).  This Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the Company.  The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, have been paid.  

iii.

Delivery of New Warrants Upon Exercise.  If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

iv.

Rescission Rights.  If the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant Shares pursuant to this Section 2 by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

v.

Obligation Absolute. The Corporation’s obligations to issue and deliver the certificates representing the Warrant Shares upon exercise of the Warrant in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by the Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to the Holder in connection with the issuance of such certificates representing the Warrant Shares.  The Corporation shall issue the certificates representing the Warrant Shares upon a properly noticed exercise. 

vi.

No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall round up to the next whole share.

vii.

Charges, Taxes and Expenses.  Issuance of certificates for Warrant Shares shall be made without charge to the Holder or other incidental expense in respect of the issuance of such certificate, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder; the assignment shall be subject to Section 4 below, and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

viii.

Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

Section 3.

Certain Adjustments.

a)

Stock Dividends and Splits.  If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), provided that this clause (i) subdivides outstanding shares of Common Stock into a larger number of shares, (ii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iii) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

b)

Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company effects any merger or consolidation of the Company with or into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the 

Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder, (a) upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event or (b) if the Company is acquired in an all cash transaction, cash equal to the value of this Warrant as determined in accordance with the Black-Scholes option pricing formula.  For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 3(b) and insuring that this Warrant (or
any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

c)

Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least ten (10) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (X) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (Y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such 

reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  The Holder is entitled to exercise this Warrant during the ten (10) day period commencing on the date of such notice to the effective date of the event triggering such notice.

Section 4.

Transfer of Warrant.

a)

Transferability.  Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  A Warrant, if properly assigned, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.  

b)

New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice.

c)

Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

d)

Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such transfer (i) that the Holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that such transfer may be made without registration under the Securities Act and under applicable state securities or blue sky laws, (ii) that the holder or transferee execute and deliver to the Company an investment letter in form and substance 

acceptable to the Company and (iii) that the transferee be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the Securities Act or a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.

Section 5.

Transfer of Securities.

a)

This Warrant and the Warrant Shares and any shares of capital stock received in respect thereof, whether by reason of a stock split or share reclassification thereof, a stock dividend thereon, or otherwise, shall not be transferable except upon compliance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”) and applicable state securities laws with respect to the transfer of such securities.  The Holder, by acceptance of this Warrant, agrees to be bound by the provisions of Section 4 hereof and to indemnify and hold harmless the Company against any loss or liability arising from the disposition of this Warrant or the Warrant Shares issuable upon exercise hereof or any interest in either thereof in violation of the provisions of this Warrant.

b)

Each certificate for the Warrant Shares and any shares of capital stock received in respect thereof, whether by reason of a stock split or share reclassification thereof, a stock dividend thereon or otherwise, and each certificate for any such securities issued to subsequent transferees of any such certificate shall (unless otherwise permitted by the provisions hereof) be stamped or otherwise imprinted with a legend in substantially the following form:

“NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW AND NEITHER MAY BE SOLD OR OTHERWISE TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (II) THE COMPANY SHALL HAVE RECEIVED A WRITTEN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER SUCH SECURITIES ACT AND SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER.”

Section 6.

Miscellaneous.

a)

No Rights as Shareholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2.  

b)

Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock 

certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

c)

Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

d)

Authorized Shares.  The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed, if applicable.  

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

e)

Jurisdiction. All questions concerning the construction, validity, enforcement, venue, jurisdiction, and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

f)

Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.

g)

Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date.  If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

h)

Notices.  Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

i)

Limitation of Liability.  No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

j)

Remedies.  Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

k)

Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by any such Holder or holder of Warrant Shares.

l)

Amendment.  This Warrant may be modified or amended or the provisions hereof waived only with the written consent of the Company and the Holder.

m)

Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

n)

Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

********************

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized.

Dated:  January __, 2011

 

	
	PIMI AGRO CLEANTECH, INC.

	By:__________________________________________

     Name: Youval Saly  

     Title:  Chief Executive Officer 

	 

NOTICE OF EXERCISE

TO:

PIMI AGRO CLEANTECH, INC. (THE “COMPANY”)

(1)

The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant, and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2)

Payment will be made in lawful money of the United States.

(3)

Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:

_______________________________

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

_______________________________

_______________________________

_______________________________

(4)  Accredited Investor.  The undersigned certifies that it is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity: ______________________________________________________________

Signature of Authorized Signatory of Investing Entity: ______________________________________

Name of Authorized Signatory: __________________________________________________________

Title of Authorized Signatory: ___________________________________________________________

Date: _____________________________________________________________________________

ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information. 

Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, _________ shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to _________________________________whose address
 is ___________________________________________________________________
__________________________________________________________________________________________________________________.

Dated:  ______________, _______

Holder’s Signature:

_____________________________

Holder’s Address:

_____________________________

_____________________________

Signature Guaranteed:  ___________________________________________

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company.  Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

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