0001144204-13-001011.txt : 20130107 0001144204-13-001011.hdr.sgml : 20130107 20130107141915 ACCESSION NUMBER: 0001144204-13-001011 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 56 CONFORMED PERIOD OF REPORT: 20120930 FILED AS OF DATE: 20130107 DATE AS OF CHANGE: 20130107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLUE SPHERE CORP. CENTRAL INDEX KEY: 0001419582 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 980550257 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-147716 FILM NUMBER: 13514757 BUSINESS ADDRESS: STREET 1: 35 ASUTA STREET, PO BOX 857 CITY: EVEN YEHUDA STATE: L3 ZIP: 40500 BUSINESS PHONE: 972-9-8917438 MAIL ADDRESS: STREET 1: 35 ASUTA STREET, PO BOX 857 CITY: EVEN YEHUDA STATE: L3 ZIP: 40500 FORMER COMPANY: FORMER CONFORMED NAME: Blue Sphere Corp DATE OF NAME CHANGE: 20100219 FORMER COMPANY: FORMER CONFORMED NAME: Jin Jie Corp. DATE OF NAME CHANGE: 20071128 10-K 1 v330956_10k.htm FORM 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x FORM 10-K

ANNUAL REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2012

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT

For the transition period from _________ to ________

Commission File No. 333-147716

Blue Sphere Corp.

(FORMERLY JIN JIE CORP.)

(Exact name of registrant as specified in its charter)

Nevada		98-0550257
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

35 Asuta Street, Even Yehuda, Israel 40500

(Address of principal executive offices) (zip code)

972-9-8917438

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(g) of the Exchange Act of 1934: Common

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act of 1934. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant filed such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨		Accelerated filer	¨
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

As at September 30, 2012, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $1,334,455.

State the number of shares outstanding of each of the issuer’s classes of common equity as of the latest practicable date: As at December 26, 2012, there were 281,324,803 shares of common stock, par value $0.001 per share issued and outstanding.

TABLE OF CONTENTS

PART I

Item 1.	Business	3
Item 1A.	Risk Factors	11
Item 1B.	Unresolved Staff Comments	11
Item 2.	Properties	11
Item 3.	Legal Proceedings	11
Item 4.	Submission of Matters to a Vote of Security Holders	11

PART II

Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
Item 6.	Selected Financial Data	12
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 8.	Financial Statements and Supplementary Data	15
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	33
Item 9A.	Controls and Procedures	33
Item 9B.	Other Information	34

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	34
Item 11.	Executive Compensation	35
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	38
Item 13.	Certain Relationships and Related Transactions, and Director Independence	39
Item 14.	Principal Accounting Fees and Services	39

PART IV

Item 15.	Exhibits and Financial Statement Schedules	39

Our financial statements are stated in United States dollars (“U.S. $”, “$” or “USD”) and are prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”). In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars.

As used in this report, the terms “we”, “us”, “our”, “Blue Sphere” or the “Company” mean Blue Sphere Corp. and its wholly-owned subsidiaries, Eastern Sphere, Ltd. and Blue Sphere USA, Inc., unless the context otherwise requires.

Forward Looking Statements

This report contains forward-looking statements. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors including, without limitation, (i) uncertainties regarding our ability to obtain adequate financing on a timely basis including financing for specific projects, (ii) the financial and operating performance of our projects after commissioning, (iii) uncertainties regarding the market for and value of carbon credits including carbon credits associated with industrial gases, (iv) political and governmental risks associated with the countries in which we operate, (v) unanticipated delays associated with project implementation including designing, constructing and equipping projects, as well as delays in obtaining required government permits and approvals, (vi) the development stage of our business and (vii) our lack of operating history. Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

PART I

Item 1. Business

Overview

We are a project integrator in the clean energy production and waste to energy markets. We aspire to become a key player in these global markets, working with enterprises with clean energy, waste to energy and related by-product potential to generate clean energy, soil amendments, compost and other by-products. We believe that these markets have tremendous potential insofar as there is an endless supply of waste that can be used to generate power and valuable by-products. Not only is there an endless supply of waste, but in most, if not all cases, disposing of such waste in most parts of the world today is a costly problem that requires an environmentally-damaging solution, such as landfilling. We offer a cost-effective, environmentally-safe alternative. Additionally, the demand for energy in virtually every country in the world is increasing every year and governments everywhere are welcoming and supporting such clean energy and waste to energy initiatives.

Our business is presently primarily focused on the United States, Africa and China. We seek to generate revenue through sales of:

Energy

Tipping fees

carbon credits

energy efficiency technology

project development services

compost

soil amendments

other by-products

As a project integrator, we are partnering with owners of biomass waste, landfills, livestock and other animal farms, agricultural enterprises, liquid waste treatment plants and other high volume producers of organic material to produce clean energy.

Our comprehensive service solution consists of:

managing the entire process of producing clean energy based on a BOO model (Build, Own and Operate)

selecting the most suitable technology for the project

arranging project financing (debt and equity)

arranging feedstock supply

devising and implementing ways for the project to become more energy efficient

obtaining eligibility for and receive carbon credits, renewable energy credits and other ecologically-related benefits

constructing and equipping the project on a turnkey basis

managing the project for the duration of its revenue-producing life

We are currently focusing on seven projects for which we have signed, definitive agreements to own and implement such projects and which are in various stages of development:

United States

Concord, NC Waste to Energy Anaerobic Digester 5.2 MW Plant

Johnston, RI Waste to Energy Anaerobic Digester 3.2 MW Plant

Ghana

Oti Sanitary Landfill Waste to Energy 1 MW Plant

Sofokrom Sanitary Landfill Waste to Energy 1 MW Plant

Oblogo/Mallam Landfill Waste to Energy 500 KW Plant

Ablekuma Landfill Waste to Energy 250 KW Plant

Accra General Landfill Waste to Energy 1 MW Plant

Please see Exhibits 10.12 and 10.13 for full copies of the Orbit agreements. Each of these projects are dependent upon, and will require, an infusion of significant capital, a portion of which, subject to our obtaining additional financing, we anticipate being required to contribute directly. We anticipate a lead-time of at least six to twelve months from funding before any project becomes operational. We anticipate receipt of revenue from sales of electricity and other by-products as soon as such projects become operational.

In respect of our Concord and Johnston waste to energy projects in the United States, we have a 10% ownership interest in each project until such time as our financial partner in the project recoups 100% of its investment. After that, our ownership interest in these projects will be 50%.

We have a 20% ownership interest in our Oti Sanitary Landfill project in Ghana until such time as our partner in the project recoups 140% of its investment. After that, our ownership interest in the Oti project will be 50%.

Our ownership interest in our other projects will vary depending on a variety of factors. In some cases, e.g., in respect of our Concord and Johnston projects, we will be required to pay a certain percentage of our profits to third-parties.

In addition, we are engaged in discussions relating to a range of clean energy projects in the United States, Europe and Asia focusing mainly on waste to energy projects.

Our preferred mode of operation when we identify a project with potential is to sign a term sheet or other form of preliminary agreement, conduct due diligence and arrange financing and, if necessary, technology, equipment, procurement and construction party, feedstock supplies and off-takers and, if the result of due diligence is positive and we are successful in arranging financing, to sign a final, definitive project agreement.

Corporate History

We were incorporated in Nevada in July 2007 under the name Jin Jie Corp. Prior to the second quarter of fiscal 2010 we were engaged in the business of developing and promoting automotive internet websites. That business generated no revenue and accumulated a deficit of approximately $64,000. During the second quarter of 2010, we changed our business model to our current business. In connection with such change, we took the following actions: (i) effective February 17, 2010, we changed our name to our current name by merging into our company a wholly-owned subsidiary formed for that purpose; (ii) effective February 17, 2010, we effected a 35-for-1 forward split of our authorized, issued, and outstanding common stock, increasing our authorized common stock from 50,000,000 shares to 1,750,000,000 shares and increasing our outstanding common stock from 1,900,000 shares to 66,500,000 shares; (iii) effective February 26, 2010, certain former shareholders of our company sold an aggregate of 34,800,000 shares of our common stock held by them, representing approximately 38% of our then outstanding stock, to new investors for an aggregate purchase price of $34,800; and, (iv) effective March 3, 2010, we entered into employment agreements with Shlomo Palas, our CEO, and Eliezer Weinberg, our then non-executive chairman of the board. Mssrs. Palas and Weinberg were each granted two-year time-vested stock options to purchase 8,321,917 shares of common stock, representing 9% of our then outstanding shares, at an exercise price of $.001 per share. As at the date of this annual report, Mr. Palas owns 20,121,917 shares of common stock of the Company.

On March 3, 2010, Mssrs. Palas and Weinberg were elected as members of our board of directors, with Mr. Weinberg being elected as non-executive Chairman. In April and May 2010, the remaining management and board members of our company prior to the change of business resigned. On October 25, 2010, we appointed Mark Radom as our Chief Carbon Officer. Mr. Radom serves in this capacity on a full-time basis and also acts as our general counsel. Mr. Radom is receives a monthly salary of U.S. $7,000 and is entitled to receive five percent of the net profits of any project he introduces to the Company and two percent of the net profits of any other project the Company implements. On August 23, 2011, Mr. Radom received 4,500,000 shares of common stock of the Company. In January 2012 Mr. Radom received another 500,000 shares of common stock of the Company. In November 2012, Mr. Radom received an additional 4,000,000 shares of common stock of the Company. As at the date of this annual report, Mr. Radom owns 9,000,000 shares of common stock of the Company, none of which are subject to any forfeiture.

On July 28, 2011, we appointed Roy Amizur our Executive Vice-President. Mr. Amizur. At such time, Mr. Amizur received 12,500,000 shares of common stock of the Company. If Mr. Amizur resigns from the Company prior to July 25, 2013, he will forfeit a pro rata portion of his shares back to the Company (the amount subject to forfeiture being equal to the number of days, which Mr. Amizur did not serve as Executive Vice-President out of the two year term of his management services agreement. In August 2011, Mr. Amizur received 1,075,000 shares of common stock as a bonus, which are not subject to any forfeiture. In November 2012, Mr. Amizur received an additional 5,000,000 shares of common stock, which are not subject to any forfeiture. As at the date of this annual report. Mr. Amizur owns 18,575,000 shares of common stock of the Company. As of July 2012, we agreed to start paying Mr. Amizur a monthly salary of U.S. $10,000.

On January 9, 2012, we appointed Shlomo Zakai as our new chief financial officer on a non-exclusive basis. Mr. Zakai is entitled to receive NIS 220 per hour for the work he performs for the Company. We have four persons providing us services on a full-time basis –our non-executive chairman, our chief executive officer, our executive vice-president and our chief carbon officer. We have three part-time employees – our chief financial officer, an office manager and a book-keeper. We have an advisory agreement with our non-executive chairman, a service agreement with our chief executive officer and executive vice-president and a consulting agreement with our chief carbon officer. We have no other employment or similar agreements with any of our employees.

In February 2012, our then non-executive chairman, Eliezer Weinberg, resigned from the board of directors. He no longer has any role in the Company. In his place, we appointed Joshua Shoham non-executive director and chairman of the board. Mr. Shoham received 4,000,000 shares of stock, which are subject to pro-rata forfeiture in the event that Mr. Shoham does not serve his full term of two years as director. In November 2012, Mr. Shoham received an additional 5,000,000 shares of common stock, which are not subject to any forfeiture. As at the date of this annual report, Mr. Shoham owns 9,000,000 shares of common stock of the Company. As of July 2012, we agreed to pay Mr. Shoham $10,000 per month plus VAT.

Since September 30, 2011, we have signed the following securities purchase agreements with Asher Enterprises, Inc., a Delaware corporation with a head office in New York (“Asher”), pursuant to which Asher has purchased an aggregate amount of U.S. $235,500 of our 8% convertible notes (collectively, the “Asher Notes”):

$32,500 in aggregate principal amount on November 11, 2011

$32,500 in aggregate principal amount on January 26, 2012

$53,000 in aggregate principal amount on March 26, 2012

$32,500 in aggregate principal amount on May 7, 2012

$32,500 in aggregate principal amount on September 13, 2012

$32,500 in aggregate principal amount on November 6, 2012

The Asher Notes are convertible into shares of common stock of the Company from time to time, and at any time, beginning after their respective issue dates and ending, absent any condition of default, on their respective maturity dates, which, in each case, are eight months after their issue dates. The conversion price is a substantial discount to the applicable market price. The Company has the right to prepay the Asher Notes under the certain conditions for 180 days following their issue date.

On December 14, 2011, we filed a registration statement on Form S-1 with the Securities Exchange Commission to register the resale of approximately 12.8 million shares of common stock Blue Sphere may issue to Centurion Private Equity, LLC (“Centurion”) pursuant to the terms of its $20 million equity line of credit (“Equity Facility”) opened in August 2011 with Centurion. We do not intend to take any action to cause this registration statement to become effective at any time.

On January 31, 2012, we lent an Israeli company, CTG Clean Technology Group Limited (the “Borrower”), U.S. $30,000 at an annual rate of interest of eight percent (8%). The purpose of this loan was to provide the borrower capital to continue its operations while we considered acquiring such company. On February 8, 2012, we received the cash to make such loan to the Borrower from a Cyprus company. The Borrower pledged the revenues from its Angolan waste-water project toward the repayment of the principal and interest of this loan. To-date, we have not received any payment whatsoever. However, we are in negotiations with CTG with respect to repayment of such loan together with accrued and unpaid interest. As of the date hereof, we are no longer considering any acquisition or transaction with the Borrower other than repayment of the loan.

On February 21, 2012, the Company executed a promissory note (the “Promissory Note”) pursuant to which it borrowed $30,000 from Jean-Marc Karouby, M.D., an individual residing in France (referred to herein as the “French Lender”). Part of the consideration for the Promissory Note was the issuance of 2,800,000 shares of common stock of the Company. In connection with such issuance of shares, the Company also granted to the French Lender piggy-back registration rights.

On July 1, 2012, we signed a placement agreement with Fidelity Venture Capital Limited (“Fidelity”) pursuant to which Fidelity undertook to raise U.S. $1,000,000 in notes convertible into shares of common stock or more senior equity securities of the Company (if any) for a period of three and one half years at prices ranging from USD 0.02 cents to USD 0.10 cents per share or a discount of 20% of the then market price of the Company’s shares depending on when any such conversion is consummated (the “Fidelity Notes”). The Fidelity Notes will bear annual interest of 6.5% to be paid semi-annually in arrears. The Company has committed to pay off the outstanding principal of the Fidelity Notes by paying to the holders of such Fidelity Notes 7% of gross income and making certain pre-payments of the principal during the term of the notes. Each holder of Fidelity Notes are to receive shares of common stock of the Company worth USD 0.70 cents for each dollar it invested in the Fidelity Notes (the “Incentive Shares”). The Company has pledged the income from its projects to such holders as security to pay the Fidelity Notes in full. Fidelity will receive nine percent of the gross proceeds it raises for us. To-date, the Company has received an aggregate amount of U.S. $50,000 (less commissions) from sales of Fidelity Notes. In September 2012, the Company entered into a written investment agreement with another investor introduced to it by Fidelity for an aggregate amount of $150,000. Such investor never transferred any cash to the Company, however, which the Company deems to be a material breach of such agreement, rendering it null and void. Even if such investor subsequently decides to invest, the Company is no longer willing to accept any investment from such investor on the terms of such agreement.

On September 4, 2012, September 25, 2012 and October 14, 2012, we signed securities purchase agreements with a Belize corporation, with offices in Lichtenstein (“Belize Corp.”), pursuant to which Belize Corp. agreed to purchase an aggregate of $70,000 of our 7% convertible notes due in each case three months after their respective issue dates (the “Belize Notes”). The Belize Notes are convertible into shares of the Company at a discount to the applicable market price on the date of conversion. The Company has the right to prepay the Belize Notes under certain conditions for 90 days following their issue date.

In November 5, 2012 we entered into an agreement with a non-US investor to sell 30,000,000 shares of common stock at December 25, 2012 for an aggregated amount of $70,000, which we received.

On December 20 2012, we entered into an agreement with a non-US investor to sell 35,000,000 shares of common stock at a price of $0.00286 per share for $100,000, which we received and to purchase another 17,500,000 shares of common stock for $50,000 in January 2013 and another 17,500,000 shares of common stock for $50,000 in February 2013. Additionally, we (i) are obligated to issue such investor 10,000,000 shares of common stock in February 2013 at no additional cost and (ii) issue to such investor an option to purchase 7,500,000 shares of common stock for one year for 0.02 per share and to purchase 7,500,000 shares of common stock for two years at a price per share of $0.04.

Strategy

Our primary focus is providing tailored solutions internationally to produce clean energy out of waste. In this connection, we expect to generate revenue through sales of (i) thermal and electrical energy, (ii) energy efficiency technologies, (iii) project development services and (iv) by-products and from the receipt of tipping fees for accepting waste.

We offer potential project partners (e.g., owners of biomass waste, landfills, dairies, liquid waste treatment plants and farms) a turnkey or build, own and operate (BOO) project implementation in producing renewable energy and valuable by-products, such as soil amendments and compost. We will execute the process needed to make the project produce clean energy, and/or become more energy efficient, choose the most suitable technology, arrange for the financing, arrange for feedstock supplies and power and other by-product offtakers, oversee construction of the project, obtain eligibility for and sell greenhouse gas reduction credits and manage the project for its 20-25 year life.

We are currently focused on the United States, Africa and China. We have signed projects in the United States and Africa and a pipeline of projects in the United States, Africa and China. We are also in various stages of pursuing opportunities in Europe and elsewhere in Asia.

A component of the clean energy business in general and the waste to energy business in particular is greenhouse gas (“GHG”) offset credits. Thus far, each of our projects has the potential to generate revenue through the sale of such credits. Outside the United States, the Company’s GHG reduction activities operate under the rubric originally created by the Kyoto Protocol and implemented through the United Nations, the EU, and many national governments. Within the United States, the Company’s GHG reduction regime is based on the compliance market in California and the various corporations and voluntary buyers who have a specific objective to support climate change mitigation by buying carbon credits.

Another component of the clean energy and waste to energy business in the United States is renewable energy credits (“RECs”). A REC represents a MW/hr or Kw/hr of clean energy. Many states, including North Carolina and Rhode Island, the sites of our two US projects, require that their utilities prove that a portion of the energy they sell is produced from clean or renewable sources. A REC is used to demonstrate that the relevant unit of energy has a clean/renewable source. As such, utilities purchase RECs from producers of clean/renewable energy.

In respect of our African projects, we have signed an agreement with Vattenfall Energy Trading Netherlands N.V., a subsidiary of the Sweden’s national utility company, to purchase all carbon credits we will receive from our African waste to energy projects through 2020. In respect of our United States waste to energy projects, we are in negotiations with various companies to sell our credits for use in the California compliance market. In China, there is a domestic carbon credit market that we expect to provide a source of buyers for carbon credits from waste to energy projects that we will implement in the future.

In fact, from 2010 to the end of 2011, we were primarily focused on implementing carbon credit projects in the developing world under the auspices of the Kyoto Protocol. In this connection, we commenced our landfill projects in Ghana (as described more fully below) in 2011. However and despite starting what we hope is a promising set of landfill gas-to-energy projects in Africa, in the last quarter of 2011, we realized that we were positioned for a much greater opportunity: waste-to-energy.

Our model in respect of waste-to-energy is to build, own and operate. We first select projects with signed, long-term agreements with waste producers or waste haulers in respect of the feedstock, with national governments or electricity corporations in respect of the energy output and with private entities in respect of other project by-products (such as renewable energy credits, heat, compost and fertilizer), in each case, prior to initiation of such projects.

Our role is to integrate all activities and components that make up a project, providing a turnkey, one-stop shop solution and do everything needed to make our projects successful. We will work with and outsource key components of such projects to the Engineering Procurement Construction (“EPC”)/technology providers and other project participants that provide the best and most economical solution for each individual project. This will provide us the flexibility and freedom to tailor the best solution for each project. We will stay involved in managing and financing all aspects of the relevant project for its lifetime or until the project is sold, when that proves to be the best financial decision. This assures all of the involved parties - including waste producers, financing parties and EPC/technology providers and customers - that there is long-term overall continuity and responsibility for each project as a whole.

We are therefore now focusing most of our efforts and resources toward waste-to-energy projects. As described more fully below, we have signed definitive agreements in respect of two projects in the United States (North Carolina and Rhode Island), we have a binding option on eight more similar projects across the United States and are in the process of developing a pipeline of dozens more of such projects in the United States, China, Africa and elsewhere. There is a virtually endless supply of waste suitable for such projects and the demand for renewable energy in general and from such projects in particular is growing every year and exceeds the amount of renewable energy available to satisfy such demand.

Aiming to be distinctive in the “clean, green” market, Blue Sphere’s specific intentions are to:

provide a one-stop, turn-key/build own and operate/transfer solution that is unique in the market today;

identify and obtain the rights to lucrative projects without incurring material expense;

deliver seamless and professional project implementation through a combination of its own expertise and the use of third-party experts with a track-record of success;

be open to the use of any mature and well-known technology and, thus, be able to tailor make cost-efficient and effective solutions for each project;

leverage its management’s more than 30 years of experience in successful implementation of large and complex projects in the developing world;

build local and international teams to support each project;

obtain political, property, non-performance and insolvency insurance for its projects; and

to receive almost all of its revenues in dollars, euros and renminbi whether operating in the United States, Europe, China or other parts of the developing world.

Material Features of our Concessions (i.e., Rights to Perform Our Projects)

Although we can offer no assurances going forward, to-date, we have structured each of our projects as a binding option in our favor with our counter-parties granting us rights to implement and participate in such projects subject to: (i) our ability to obtain suitable financing and (ii) our right to suspend performance and/or terminate such agreements, in each case, without prejudice, if at any time, in our reasonable judgement, continuing performance of our obligations becomes economically unattractive.

We will own, manage and are responsible for the day-to-day operations and success of each of our projects. To the extent we will outsource any aspect of our projects, it will be under our control and supervision.

We have also negotiated control over the revenue streams in, all of our projects for their entire revenue earning life. Clean energy generation and sales are capable of continuing indefinitely – so long as there is a source of waste. Accordingly, we anticipate exercising control over and participating in such projects for so long as it remains profitable or beneficial for us to do so.

Competition

There are a number of other companies operating in the clean energy and waste to energy space. Such companies range from other project developers to service or equipment providers, buyers and/or investors. In contradistinction to the standard market approach in this space (i.e., being solely a project developer, service or equipment provider or a buyer or investor), and as referred to above, we seek to provide a one-stop shop, turn-key solution to project owners. In short, our business model is to initiate, finance, develop, bring the most appropriate technology and EPC party and manage all aspects of project implementation and sales of the project’s clean energy and by-products starting from identifying the opportunity and ending with terminating the project’s operations if and when its revenue-earning life is over. We believe that this one-stop shop approach is attractive to project owners and will differentiate us in a positive manner from our competition. In this connection, in August 2012, we signed a joint venture (“JV”) agreement with Biogas Nord AG (“BGN”), which is one of Germany’s largest anaerobic digestion (“AD”) companies with almost 400 AD installations in operation throughout the world, including the United States. Pursuant to our JV, we will jointly implement waste to energy projects in the United States where we contribute our business development skills and BGN contributes its know-how and financing. We believe that such JV enhances our one-stop shop capability and further distinguishes us from our competition.

Government Approval

Each of the projects we have signed to-date requires the approval of the relevant governments. In the United States, the standard required environmental permits relate to solid waste composting and air quality. We have prepared applications for the requisite US approvals and expect to submit such applications in the first calendar quarter of 2013. We understand that, while there is no official time limit in which these permits are to be issued, they typically take between two – six months. There are also construction and building permits. We are in the process of preparing construction and building permit applications, which, together with the environmental permits, we intend to submit to the relevant authorities in the first quarter of 2013.

In Ghana, a positive environmental impact assessment (“EIA”) is required for any project in the waste sphere. To generate energy, we will also need a license from the Ghanaian energy commission. We have completed an EIA for and received provisional approval for our first Ghanaian project. We applied for and received final government approvals in respect of all of our Ghanaian projects in December 2012..

Effect of Existing or Probable Government Regulations on Our Business

Our projects are located in jurisdictions in which there are no government regulations materially affecting our business. Other than the possibility that, in order to comply with air regulations in Rhode Island, we may be required to install NOx destruction equipment on the generators we expect to use in our Rhode Island project, we are not aware of any probable or proposed governmental regulations that, if enacted, will have a material impact on our business. If we are required to install such equipment, the cost will not be material to the Rhode Island project’s economic performance. Whether or not we are required to install such equipment will depend on an assessment to be made as part of the permitting project to ascertain expected levels of NOx emissions from the operation of the generators at the Johnston site. We will know the outcome of this assessment in 2013.

Costs and Effects of Compliance with Environmental Laws

We are aware of no costs or effects of compliance with environmental laws with respect to our business except for our Ghanaian projects and United States projects. Each Ghanaian project requires the performance of an EIA in order to receive government approval. We have performed an EIA in respect of our Oti Sanitary Landfill project, which was approved by the Ghanaian government in September 2012. We expect to perform an EIA for each of our Ghanaian projects as part of the preparation of materials we will submit to the United Nations in order to receive carbon credits. Each EIA will cost approximately $10,000. Each of our existing waste to energy projects in Concord, North Carolina and Johnston, Rhode Island will require two permits: (i) solid waste composting operation and (ii) air permit. The preparations of the applications to obtain such approvals will cost us an aggregate of approximately U.S. $60,000. The actual approvals themselves will cost approximately U.S. $20,000.

Business Development during Fiscal 2012

In October 2011, we signed a cooperation agreement with Pacific Portland Capital (“PPC”) pursuant to which PPC will source dairy farm projects at its own expense for us in the United States and elsewhere and assist us in implementing and operating such projects in exchange for an ownership stake in such projects (the size of which will depend on the extent to which PPC participates in the implementation and operation of such projects).

In November 2011, we signed a project agreement with the Takoradi-Sekondi Metropolitan Assembly and the J. Stanley Owusu Group (the largest Ghanaian waste delivery company and landfill operator) to implement a landfill gas extraction project at the Sofokrom Sanitary Landfill in Takoradi, Ghana under the rubric of the CDM of the Kyoto Protocol (“KP”). This project has renewable energy, compost and by-product potential and is eligible to receive carbon credits under the CDM of the KP.

We performed a pump test in January 2012 at our Oti Landfill site in Kumasi, Ghana, the results of which were satisfactory to us and our partner in the project, B Pure Environmental Group Ltd.

On January 18, 2012, Puresphere Limited, our joint venture with BPure (in which our stake is 50%), signed an emissions reduction purchase agreement (“ERPA”) with Vattenfall Energy Trading Netherlands N.V., a subsidiary of Vattenfall AB, a Swedish company and one of Europe’s biggest power producers (“Vattenfall”), in respect of up to nine emissions reduction projects in Ghana and Nigeria. Subject to the terms of this agreement, Vattenfall is obligated to purchase through 2020 the certified emissions reductions (“CERs”) to be received in respect of up to nine landfill sites at a discount to the market price on the date of delivery. Vattenfall has an option to purchase such CERs beyond 2020 in its discretion. Vattenfall has also committed to finance the costs of registering such landfill sites with the Executive Board (“EB”) of the Clean Development Mechanism (“CDM”) of the Kyoto Protocol in order to receive CERs. If the price per CER on the date of the first delivery thereof is less than Euro 8, then we will be obligated to reimburse Vattenfall certain of such registration costs.

Based on the results of the pump test and the execution of an ERPA with Vattenfall, we intend to proceed with the registration of the project with the EB of the CDM of the Kyoto Protocol and the required field work to install gas capture and power generation equipment. However, in the third quarter of 2012, we decided to wait until the feed-in tariff (the “FIT”) for landfill gas electricity is formally published before commencing construction of the project. We expect it to be published in the first quarter of 2013.

On April 2, 2012, we signed, through our 50%-owned subsidiary, Puresphere Ltd., a validation agreement with the Japan Consulting Institute (the “Validator”) in respect of our Oti Sanitary Landfill CDM Project and our African Landfill Programme of Activities. On April 24, 2012, we submitted a final programme of activities design document (“PoADD”) to the Validator in respect of the Oti Sanitary Landfill CDM Project. On April 28, 2012, the Validator uploaded the PoADD onto the applicable web site of the United Nations for the 30-day global stakeholder consultation. The Validator visited the site in June of 2012 and submited its validation report and request to register the project to the Executive Board of the CDM on December 24, 2012. The deadline for such submission is December 31, 2012.

On May 2, 2012, we signed a CPA confirmation with Vattenfall in respect of the Sofokrom Sanitary Landfill CDM Project in Takoradi, Ghana.

BPure is financing all of the foregoing activities (except those financed by Vattenfall pursuant to the ERPA) in accordance with and pursuant to the terms of joint venture with BPure.

We also commenced in March 2012 negotiations with General Electric in respect of the purchase, installation and operation of a generator-set at the Oti Landfill CDM Project for the purpose of electricity generation. In June 2012, we commenced negotiations with the Electricity Company of Ghana to enter into a long-term power purchase agreement for the sale of the electricity we intend to produce at the Oti site.

On June 14, 2012, we conducted an on-site feasibility study at the Sofokrom landfill in Takoradi, Ghana. The results of such study suggest that the Sofokrom site will become a viable CDM landfill gas-to-energy project when another 4-9 meters of waste is dumped on top of the existing cell so that it reaches a height of 10-15 meters (at the moment, it is only 6 meters high). This can take 2-4 years depending on waste dumping practices. As such, we are considering our options in terms of when to implement a project at this site or to find another site in Ghana or elsewhere in Africa to implement our second site in our African Landfill Programme of Activities.

On May 7, 2012, we signed a term sheet in respect of two biomass waste-to-energy projects in the United States: (i) one in Johnston, Rhode Island and (ii) one in Concord, North Carolina. The feedstock for the Johnston, Rhode Island project is expected to be 50,000 tons of organic food waste annually, which is expected to produce enough biogas to power a 3.2 MW generator. The feedstock for the Concord, North Carolina plant is expected to be 80,000 tons of organic food waste annually, which is expected to produce enough biogas to power a 5.2 MW generator.

On October 19, 2012, we signed a definitive project agreement in respect of both the North Carolina and Rhode Island sites pursuant to which we will receive full ownership of each of the entities that owns the rights to implement the respective projects. Owning the rights to implement a project means having (i) a signed power purchase agreement with the local utility, (ii) a signed feedstock agreement in respect of the quantity of feedstock that is sufficient to generate the site’s maximum power capacity, (iii) a valid and binding land lease or purchase agreement, (iv) valid and binding offer of debt finance, (v) all applicable permits, (vi) a valid offer to purchase the project’s applicable federal and state tax credits and (vii) anything else required to implement the given project. We are currently closing the open items above with a view toward commencing project construction at both sites in January 2013. There are no assurances that we will close the open items in a timely manner or at all. If we do implement such projects (whether in whole or in part), we will have an option on implementing other projects to be introduced to us by the original developer of the North Carolina and Rhode Island sites and who has a pipeline of eight additional waste to energy projects in the United States.

On November 1, 2012, our JV company with BGN signed a term sheet with an Israeli fund to finance the equity portion of our North Carolina and Rhode Island projects. Pursuant to such term sheet, we have also granted such fund an option to finance the next U.S. $10,000,000 in similar projects and a right of first refusal to finance the following U.S. $5,000,000 in similar projects, in each case, under different conditions.

To-date, we have both signed and binding power purchase agreements (“PPAs”) for both our North Carolina and Rhode Island sites. Our PPA for the North Carolina Project is for 15 years and is with a subsidiary of Duke Energy. Our PPA for the Rhode Island project is also for 15 years with an option to extend for 6 years and is with Narragansett Electric Company.

We have also signed feedstock agreements to deliver a minimum of 250 tons of organic waste per day to our North Carolina site and 150 tons of organic waste per day to our Rhode Island site with Skip Shapiro Enterprises, LLC and a signed letter of intent to deliver 250 tons of organic waste per day to our North Carolina site with Waste Connections Inc. In parallel, we are working with other suppliers of organic waste to locate other sources of organic feedstock so that we have multiple suppliers for amounts of feedstock in excess of our requirements for each of our sites.

We have also engaged Brown Gibbons & Lang, a reputable tax credit and debt financing arranger to secure for us a buyer for our federal investment tax credits for both projects and our North Carolina state tax credit of $2,500,000. In this connection, we received a term sheet in December 2012 from a tax credit buyer to buy both the federal investment tax credits and the North Carolina State tax credit, which we will generate from our US projects for over $11,000,000 in cash.

Pursuant to our JV with BGN, we will engage BGN to be the EPC for both the North Carolina and Rhode Island projects. The EPC contracts are under negotiation with BGN. One component of these contracts, however, is that BGN will provide a performance guarantee for each project that will be backed by a reputable, US insurance company.

Agreements in respect of the other components of these projects are in various stages of negotiation.

We are also continuing our efforts and initiatives to identify and secure the rights to implement biomass waste-to-energy projects at dairy farms in the United States and are in the initial stages of negotiations with several sites.

There can be no assurances that we will implement any biomass waste-to-energy project of any nature in the United States.

Item 1A. Risk Factors

As a small reporting company, we are not required to provide the information required by this item.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 2. Properties

Our principal executive office is located at 35 Asuta St. Even Yehuda, Israel 40500, for which we pay the operating expenses but do not pay any rent. We intend to obtain additional working space for and to be located near our projects as and when the level of activity of such projects warrants such action. Until such time, we believe that our property is adequate for our current and immediately foreseeable operating needs.

Item 3. Legal Proceedings

As of September 30, 2012, we were not a party to any legal proceedings of any kind.

Item 4. (Removed and Reserved)

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Recent Sales of Unregistered Securities

In November 5, 2012 we entered into an agreement with a non-US investor to sell 30,000,000 shares of common stock at December 25, 2012 for an aggregated amount of $70,000, which we received.

On November 6, 2012, we issued a note in an aggregate principal amount of $32,500 to Asher. The outstanding principal amount and interest are convertible into shares of common stock of the Company.

Market Information

Our common stock is quoted on the OTC Bulletin Board under the symbol “BLSP”. The following quotations, which were obtained from siliconinvestor.com, reflect the high and low bids for our common stock for the periods indicated, based on inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. The first day on which our common stock traded under BLSP was March 16, 2010. Prior thereto, the name of our company was Jin Jie Corp. and its common stock traded under the symbol JIJE.

The high and low bid prices of our common stock for the periods indicated below are as follows:

OTC Bulletin Board ⁽¹⁾

Quarter Ended	High		Low
September 30, 2012	$	0.012	$	0.004
June 30, 2012	$	0.0299	$	0.0033
March 31, 2012	$	0.06	$	0.02
December 31, 2011	$	0.015	$	0.04
September 30, 2011	$	0.09	$	0.06
June 30, 2011	$	0.22	$	0.17
March 31, 2011	$	0.31	$	0.23
December 31, 2010	$	0.46	$	0.45
September 30, 2010	$	0.47	$	0.28
June 30, 2010	$	1.15	$	0.25
March 31, 2010	$	1.23	$	1.11

December 31, 2009	no trades in our stock
September 30, 2009	no trades in our stock
June 30, 2009	no trades in our stock
March 31, 2009	no trades in our stock
December 31, 2008	no trades in our stock

⁽¹⁾	Over-the-counter market quotations reflect inter-dealer prices without retail mark-up, mark-down or commission, and may not represent actual transactions.

Our common stock is issued in registered form. Nevada Agency and Transfer Company 50 West Liberty, Suite 880, Reno, Nevada (telephone 775 322 0626 and facsimile: 775 322 5623) is the registrar and transfer agent for our common stock.

Holders

On September 30, 2012, the stockholders’ list of our common stock showed 136 registered stockholders and 184,695,507 shares outstanding. On September 28, 2012, the last trading day of our fiscal year, the last reported sale price of our common stock on the National Association of Securities Dealers OTC Bulletin Board was $0.01 per share.

Dividends

We declared no dividends in the fiscal year ended September 30, 2012 and we do not intend to pay any cash dividends in the foreseeable future. Although there are no restrictions that limit our ability to pay dividends on our Common Stock, we intend to retain future earnings for use in our operations and the expansion of our business.

Item 6. Selected Financial Data

As a small reporting company, we are not required to provide the information required by this item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

Summary of Current Operations

Bluesphere has current and potential operations in renewable energy generation.

Clean Energy Generation

We are currently focusing on seven projects for which we have signed, definitive agreements to own and implement such projects and which are in various stages of development:

United States

North Carolina Waste to Energy Anaerobic Digester 5.2 MW Plant

Rhode Island Waste to Energy Anaerobic Digester 3.2 MW Plant

Ghana

Oti Sanitary Landfill Waste to Energy 1 MW Plant

Sofokrom Sanitary Landfill Waste to Energy 1 MW Plant

Oblogo/Mallam Landfill Waste to Energy 500 KW Plant

Ablekuma Landfill Waste to Energy 250 KW Plant

Accra General Landfill Waste to Energy 1 MW Plant

Two of our seven projects are organic food waste to energy with compost as a by-product. The remaining five projects are landfill gas to energy projects. We are responsible for investing 100% of the project cost and managing the implementation and operation of each project. Our North Carolina project is expected to cost U.S. $25,000,000 and our Rhode Island project is expected to cost U.S. 17,000,0000. Each of the landfill gas projects is expected to cost between $1,500,000 to $2,000,000 for the landfill and/or compost components and another $1,500,000 to $2,000,000 for renewable energy generation. We expect to have more precise estimates after we conduct more detailed engineering studies of such projects.

In exchange for paying 100% of and managing each project’s implementation and operation, we and our financial partners will own 100% of each project and participate in revenue receipt from each project for so long as it produces revenue. Clean energy projects produce revenue for so long as power is generated and sold, which can continue indefinitely so long as there is a reliable source of waste to generate such power. We expect to receive adequate waste volumes for power generation for each of our projects for an indefinite period of time. In the case of our US projects, we have signed feedstock supply agreements for five year terms. In the case of our African projects, we have signed agreements to receive all applicable municipal waste for a minimum term of 21 years. We will seek to extend such waste supplies when the respective initial delivery terms are close to expiring.

In all but one of our African landfills, we have structured our project rights such that we will receive all revenue until we have been fully reimbursed for our investment and then we share the net profits with the other project participants in various proportions as time goes on. In the one landfill project exception in Ghana, we will receive 89.5% of the revenue until full reimbursement after which we will share the net profits with the other project participants in an increasing amount as time goes on. In any case, once there is project revenue, which should start from sales of power within six months to a year or commencing construction, all future expenses relating to our projects will be paid for out of project revenue.

We estimate the following average annual revenue (from sales of power, compost and carbon credits and tipping fees, as applicable) for the Company for each of our projects:

North Carolina – U.S. $1,100,000

Rhode Island – U.S. $820,000

Oti Sanitary Landfill – U.S. $1,000,000

Sofokrom Landfill – U.S. $600,000

Oblogo/Mallam Landfill – $400,000

Ablekuma – U.S. $250,000

Accra General – U.S. $1,000,000

We estimate that the first carbon credit and electricity sale revenue for the African landfill projects will commence in 2014.

Based on recent progress across all signed projects, we expect to implement and commission our first projects in North Carolina and Rhode Island in 2013. We are waiting for the feed-in-tariff (“FIT”) for electricity to be officially announced in Ghana before proceeding with implmentation of our Ghanaian projects. The Ghanian FIT is expected to be announced at in the first quarter of 2013. In such case, and depending on the time of the year the FIT is formally announced, we may or may not succeed to commision the first of our Ghanaian projects in 2013.

Results of Operations

Revenue

We have recorded no revenue since inception.

General and administrative expenses

General and administrative expenses for the year ended September 30, 2012 were $3,604,000 as compared to $16,671,000 for the year ended September 30, 2010. The decrease is primarily attributable to the reduction in the expenses related to shares based compensations totalling $2,956,000 in the year ended September 30, 2012 compared to $16,058,000 in the year ended September 30, 2011

Net Loss

As a result of the above, we incurred a net loss of $3,668,000 for the year ended September 30, 2012, as compared to a net loss of $16,676,000 for the year ended September 30, 2011. We anticipate losses in future periods.

Inflation

Our results of operations have not been affected by inflation and management does not expect that inflation risk would cause material impact on its operations in the future.

Seasonality

Our results of operations are not materially affected by seasonality and we do not expect seasonality to cause any material impact on our operations in the near future.

Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any. We base our estimates on historical experience, where applicable, and other relevant factors that we believe are reasonable under the circumstances.

Liquidity

As of September 30, 2012, we had cash of $22,000 compared to $50,000 as of September 30, 2011. As of September 30, 2012, we had working capital deficit of $674,000 compared to $150,000 as of September 30, 2011. Management anticipates that existing cash resources, including the proceeds of the equity placements subsequent to September 30, 2012 described below will not be sufficient to fund our planned operations during the next 12 months. We estimate that, in order to fund our continued existence, we will require $1,000,000 in cash over the next 12 months. This does not include amounts we will have to invest in the implementation of our projects. Assuming we finance each project with 20% equity and 80% debt, we will require approximately $11,000,000 in additional capital to make equity investments in each of our projects. There is no assurance that we will be successful in financing our projects with 20% equity and 80% debt (such amounts could be more or less) and, even if successful, there is no assurance that we will raise such capital at all or in a timely manner.

In addition to requiring capital to fund our corporate activities, the capital needs of our project development activities will be significant and will likely require equity investment on our part. As a result, we are seeking to raise additional funds and any meaningful equity financing will likely result in significant dilution to our existing shareholders. There can be no assurance that additional funds will be available on terms acceptable to us, or at all. These conditions raise substantial doubt about our ability to continue to operate as a going concern. The financial statements contained in this report do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

Capital Resources

As at September 30, 2012, we had no commitments for any capital expenditures. Based on project agreements signed to-date, we anticipate the incurrence of such commitments during the fiscal year ending September 30, 2013. We expect to fund such commitments partly with equity to be contributed by us and partly with debt to be raised from financial institutions. In order to make any equity contribution, we will be forced to raise additional funds in the form of an equity investment in us of from external investors.

Off-Balance Sheet Arrangements

As at September 30, 2012, we had no off-balance sheet arrangements of any nature.

Market Risk and Contingent Liabilities

The Company is seeking to operate largely in the developing world (such as, e.g., countries in Africa, Central Asia and Southeast Asia), making it susceptible to changes in the economic, political, and social conditions therein. The developing world has experienced political, economic and social uncertainty in recent years, including an economic crisis characterized by increased inflation, high domestic interest rates, in some cases, negative economic growth, reduced consumer purchasing power and high unemployment. Currently, many of the countries in the developing world where we have projects have been pursuing economic stabilization policies, including the encouragement of foreign trade and investment and other reforms. In the last year, there was an overall improvement in the world (and, consequently, developing world) economic environment. Nevertheless, no assurance can be given that the countries in which we currently or will operate will continue to pursue these policies, that these policies will be successful if pursued or that these policies will not be significantly altered. In case of a decline in the world economy, political or social problems or a reversal of foreign investment policies, it is likely that any such change will have an adverse effect on the Company's results of operations and financial condition. Additionally, inflation may lead to higher wages and salaries for local employees and increases in the cost of materials, which would adversely affect the Company's profitability.

Risks inherent in foreign operations include nationalization, war, terrorism, and other political risks and risks of increases in foreign taxes or changes in U.S. tax treatment of foreign taxes paid and the imposition of foreign government royalties and fees.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 8. Financial Statements and Supplementary Data

BLUE SPHERE CORP.

(A development stage company)

CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2012

BLUE SPHERE CORP.

(A development stage company)

CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2012

IN U.S. DOLLARS

TABLE OF CONTENTS

	Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	3

CONSOLIDATED FINANCIAL STATEMENTS:
Balance sheets as of September 30, 2012 and 2011	4
Statements of operations for the years ended September 30, 2012 and 2011;
and for the period from July 17, 2007 through September 30, 2012	5
Statements of changes in stockholders' deficit for the period from July 17, 2007 through
September 30, 2012	6
Statements of cash flows for the years ended September 30, 2012 and 2011;
and for the period from July 17, 2007 through September 30, 2012	7
Notes to interim financial statements	8-17

REPORT OF REGISTERED INDEPENDENT AUDITORS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Blue Sphere Corp. (A Development Stage Company)

We have audited the accompanying consolidated balance sheets of Blue Sphere Corp. and its subsidiaries (a development stage company) as of September 30, 2012 and 2011, the related consolidated statements of operations, stockholders' equity, and cash flows for each of the two years in the period ended September 30, 2012 and for the period from May 17, 2007 (date of inception) to September 30, 2012. These financial statements are the responsibility of the Company's Board of Directors and management. Our responsibility is to express an opinion on the financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, based on our audit, such consolidated financial statements present fairly, in all material respects, the financial position of Blue Sphere Corp. and its subsidiaries as of September 30, 2012 and 2011 and the results of their operations, stockholders' equity and their cash flows for each of the two years in the period ended September 30, 2012 and for the period from May 17, 2007 (date of inception) to September 30, 2012, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1a to the financial statements, the Company has incurred recurring losses from operations that raises substantial doubt about its ability to continue as a going concern. Management's plans concerning these matters are also described in Note 1a. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Brightman Almagor Zohar & Co.

Certified Public Accountants

A Member Firm of Deloitte Touche Tohmatsu

Tel Aviv, Israel

December 26, 2012

TEL AVIV - MAIN OFFICE	RAMAT GAN	JERUSALEM	HAIFA	BEER SHEVA	EILAT

1 Azrieli Center	6 Ha'racon st.	12 Sarei Israel St.	5 Ma'aleh Hashichrur st.	Omer Industrial Park,	The city center
Tel Aviv, 67021	Ramat Gan, 52521	Jerusalem, 94390	P.O.B. 5648	Building No.10	P.O.B 583
P.O.B. 16593			Haifa, 31055	P.O.B. 1369	Eilat, 88104
Tel Aviv, 61164				Omer, 84965
Tel: +972 (3) 608 5555	Tel: +972 (3) 755 1500	Tel: +972 (2) 501 8888	Tel: +972 (4) 860 7333	Tel: +972 (8) 690 9500	Tel: +972 (8) 637 5676
Fax: +972 (3) 609 4022	Fax: +972 (3) 575 9955	Fax: +972 (2) 537 4173	Fax: +972 (4) 867 2528	Fax: +972 (8) 690 9600	Fax: +972 (8) 637 1628
info@deloitte.co.il	info-ramatgan@deloitte.co.il	info-jer@deloitte.co.il	info-haifa@deloitte.co.il	info-beersheva@deloitte.co.il	info-eilat@deloitte.co.il

Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.

Member of Deloitte Touche Tohmatsu

BLUE SPHERE CORP.

(A development stage company)

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands except share and per share data)

	September 30,			September 30,
	2012			2011
Assets
CURRENT ASSETS:
Cash and cash equivalents	$	22		$	50
Other current assets		43			17
Total current assets		65			67

PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation		6			9
Total assets	$	71		$	76
Liabilities and Stockholders’ Equity (Deficit)
CURRENT LIABILITIES:
Accounts payables	$	11		$	9
Other accounts payable		482			163
Debentures and notes		246			45
Total current liabilities		739			217

STOCKHOLDERS' DEFICIT:
Common shares of $0.001 par value each:
Authorized: 1,750,000,000 shares at September 30, 2012 and September 30, 2011, Issued and outstanding: 184,695,507 shares and 116,725,297 shares at September 30, 2012 and September 30, 2011, respectively		184			117
Additional paid-in capital		25,744			22,670
Accumulated deficit during the development stage		(26,596	)		(22,928	)
Total Stockholders’ Equity (Deficit)		(668	)		(141	)
Total liabilities and Stockholders’ Equity (Deficit)	$	71		$	76

The accompanying notes are an integral part of the consolidated financial statements.

BLUE SPHERE CORP.

(A development stage company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands except share and per share data)

							Cumulative
							from July 17,
	Year ended						2007 through
	September 30						September 30,
	2012			2011			2012

OPERATING EXPENSES -
General and administrative expenses *	$	3,604		$	16,671		$	26,531
FINANCIAL EXPENSES (INCOME), net		54			5			55
		3,658			16,676			26,586
Other losses		10			-			10
NET LOSS FOR THE PERIOD	$	3,668		$	16,676		$	26,596

Net loss per common share - basic and diluted	$	(0.02	)	$	(0.21	)

Weighted average number of common shares outstanding during the period - basic and diluted		153,662,115			78,311,612

In the years ended September 30, 2012 and 2011 - includes $2,956 thousands and $16,058 thousands, respectively of share-based compensation.

The accompanying notes are an integral part of the consolidated financial statements.

BLUE SPHERE CORP.

(A development stage company)

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

(U.S. dollars in thousands, except share and per share data)

								Accumulated
	Common Stock, $0.00001 Par Value				Additional paid- in			deficit during the development			Total Stockholders'
	Shares		Amount		Capital			stage			Equity (deficit)

COMMON STOCK ISSUED, JULY 17, 2007 (DATE OF INCEPTION)		1,900,000	$	2	$	67		$	-		$	69
CHANGES DURING THE PERIOD FROM JULY 17, 2007 THROUGH DECEMBER 31, 2011 (audited):
Issuance of common stock		471,948		-		198			-			198
Share split of 35:1		64,600,000		65		(65	)		-			-
Common stock issued as direct offering costs		2,000,000		2		995			-			997
Share based compensation		16,025,609		16		16,105			-			16,121
Exercise of Options		8,321,917		8		-			-			8
Share based compensation for services		23,405,823		24		5,370			-			5,394
Net loss for the period		-		-		-			(22,928	)		(22,928	)
BALANCE AT SEPTEMBER 30, 2011 (audited)		116,725,297	$	117	$	22,670		$	(22,928	)	$	(141	)
CHANGES DURING THE YEAR ENDED SEPTEMBER 30, 2012 (audited):
Share based compensation		-		-		2,609			-			2,609
Issuance of common stock		525,000		1		19			-			20
Issuance of common stock in respect of issuance of convertible notes		36,526,376		37		129			-			166
Share based compensation for services		14,275,000		13		333			-			346
Exercise of Options		16,643,834		16		(16	)		-			-
Net loss for the period		-		-		-			(3,668	)		(3,668	)
BALANCE AT SEPTEMBER 30, 2012 (audited)		184,695,507	$	184	$	25,744		$	(26,596	)	$	(668	)

The accompanying notes are an integral part of the consolidated financial statements.

BLUE SPHERE CORP.

(A development stage company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

							For the period
							From July 17,
	Year ended						2007 through
	September 30						September 30,
	2012			2011			2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit (Net loss) for the period	$	(3,668	)	$	(16,676	)	$	(26,596	)
Adjustments required to reconcile net loss to net cash used in operating activities:
Share based compensation expenses		2,609			10,665			18,730
Depreciation		2			-			2
Expenses in respect of Convertible notes		19			-			19
Issuance of shares for services		347			5,394			5,741
Issuance of shares in respect of issuance of Convertible notes		52			-			52
Receivables on account of shares		-			-			-
Increase (decrease) in other current assets		(6	)		7			(23	)
Increase (decrease) in accounts payables		2			(106	)		10
Increase in other account payables		319			160			483
Net cash used in operating activities		(324	)		(556	)		(1,582	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for purchasing of fixed assets		-			(1	)		(9	)
Net cash used in investing activities		-			(1	)		(9	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from options exercise		-			8			8
Loan granted		(30	)		-			(30	)
Loan received		30			-			30
Proceeds from issuance of convertible notes		276			45			321
Proceeds from stock issued for cash		20			199			1,284
Net cash provided by financing activities		296			252			1,613

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(28	)		(305	)		22

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		50			355			-

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	22		$	50		$	22

The accompanying notes are an integral part of the consolidated financial statement

BLUE SPHERE CORP.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES:

Going concern consideration:

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of September 30, 2012, the Company had approximately $22 thousand in cash, a negative working capital of approximately $674 thousand in working capital, a negative stockholders’ equity of approximately $668 thousand and an accumulated deficit of approximately $26,596 thousand. Management anticipates that their business will require substantial additional investments that have not yet been secured. The Company anticipates that the existing cash will not be sufficient to continue its operations through the next 12 months. Management is continuing in the process of fund raising in the private equity markets as the Company will need to finance future activities and general and administrative expenses. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

These financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent on its ability to obtain additional financing as may be required and ultimately to attain profitability

General:

The Company was incorporated in the state of Nevada on July 17, 2007 and was in the business of developing and promoting automotive internet sites. During the second quarter of 2010 the management of the Company decided to change its business focus to that of Greenhouse Gas (GHG) emission reduction as well as a project integrator in the clean energy production and waste to energy markets. The Company seeks to generate revenue through sales of carbon credits, energy generation, project development and sale of byproducts.

The Company offers potential partners (owners of: landfills, coal mines, fertilizer factories, etc) a kind of turnkey operation in dealing with the emission reduction. The Company service consists of: executing the process needed in order to make the project eligible for carbon credits, choosing the most suitable technology to be applied, arranging for the financing, constructing and managing the project for its life. We operate primarily in countries from the former Soviet Union, China and the USA.

During the second quarter of 2012, the Company's 50%-owned subsidiary, Puresphere Ltd, commenced its operations. The results of its operations and balance sheet as of September 30, 2012 have not been material.

On September 13, 2012, the Company, together with Biogas Nord AG, a German public company listed on the Frankfurt Stock Exchange, established Bino Sphere LLC. The Company holds 75% of the rights of Bino Sphere. On October 19, 2012, Bino Sphere signed two definitive project agreements to acquire 100% of Orbit Energy Inc.’s right, title and interest in, to and under two waste to energy projects in the United States. Based on the signed agreement the Company would pay Orbit Energy Inc Development fee in the amount $900 thousand to the acquired North Carolina agreement and $600 thousands for the acquired Road Island agreement, in the event that the Company would succeed with financial closing in each of such projects. The results of Bino Sphere's operations and balance sheet as of September 30, 2012 have not been material.

BLUE SPHERE CORP.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Functional currency:

The currency of the primary economic environment in which the operations of the Company are conducted is the U.S dollar (“$” or “dollar").

Most of the Company’s expenses are incurred in dollars. Most of the Company’s external financing is in dollars. The Company holds most of its cash and cash equivalents in dollars. Thus, the functional currency of the Company is the dollar.

Since the dollar is the primary currency in the economic environment in which the Company operates, monetary accounts maintained in currencies other than the dollar are re-measured using the representative foreign exchange rate at the balance sheet date. Operational accounts and non-monetary balance sheet accounts are measured and recorded at the rate in effect at the date of transaction. The effects of foreign currency re-measurement are reported in current operations (as “financial expenses - net) and have not been material to date.

Principles of consolidation:

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries..

Inter-company balances and transactions have been eliminated upon consolidation.

Cash equivalents:

Cash equivalents are short-term highly liquid investments which include short term bank deposit (up to three months from date of deposit), that are not restricted as to withdrawals or use that are readily convertible to cash with maturities of three months or less as of the date acquired.

Property, plant and equipment:

Property, plant and equipment are stated at cost, less accumulated depreciation. Assets are depreciated using the straight-line method over their estimated useful lives.

Computers, software and electronic equipment are depreciated over three years. Tools and equipment are depreciated over five years. Furniture is depreciated over fourteen years.

Use of estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results may differ from those estimates

Share-base payments:

The Company accounts for awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as expense over the requisite service period, net of estimated forfeitures.

BLUE SPHERE CORP.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loss per share:

Net loss per share, basic and diluted, is computed on the basis of the net loss for the period divided by the weighted average number of common shares outstanding during the period. Diluted net loss per share is based upon the weighted average number of common shares and of common shares equivalents outstanding when dilutive. Common shares equivalents include: (i) outstanding stock options under the Company’s Long-Term Incentive Plan and warrants which are included under the treasury share method when dilutive, and (ii) Common shares to be issued under the assumed conversion of the Company’s outstanding convertible notes, which are included under the if-converted method when dilutive. The computation of diluted net loss per share for the years ended September 30, 2012, and 2011, does not include common share equivalents, since such inclusion would be anti-dilutive.

Deferred income taxes:

Deferred taxes are determined utilizing the asset and liability method based on the estimated future tax effects of differences between the financial accounting and tax bases of assets and liabilities under the applicable tax laws. Deferred tax balances are computed using the tax rates expected to be in effect when those differences reverse. A valuation allowance in respect of deferred tax assets is provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has provided a full valuation allowance with respect to its deferred tax assets.

Comprehensive loss:

The Company has no component of comprehensive income loss other than net loss.

Newly issued accounting pronouncements:

None

BLUE SPHERE CORP.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – DEBENTURES AND NOTES:

On September 16, 2011, the Company signed a securities purchase agreement with Asher Enterprises Inc., a Delaware corporation with a head office in New York (“Asher”), pursuant to which Asher purchased an aggregate amount of U.S. $45,000 of our 8% convertible notes (the “Notes”). The Notes are convertible into shares of common stock of the Company from time to time, and at any time, beginning March 14, 2012 and ending, absent any condition of default, on June 14, 2012, subject to the limitations and conditions set forth in the Notes. The Company has the right to prepay the Notes under the certain conditions for 180 days following the issue date. On each of November 11, 2011 and January 26, 2012, Asher purchased an additional U.S. $32,500 of our 8% convertible notes (for an aggregate total of U.S. $65,000). Such additionally-purchased notes, together with the Notes, are referred to as the “Asher Notes”.

On March 19, 2012 Asher transferred 100% of the Asher Notes to third parties. During April 2012, such third parties converted $110 thousand (i.e., 100% of the principal amount) of the Principal amount of the Asher Notes into 28,893,043 shares of the Company (a conversion price of $0.0039802 per share).

On March 26, 2012, and May 7, 2012 Asher purchased an additional U.S. $53,000 and $32,500, respectively of our 8% convertible notes.

On September 13, 2012 the Company signed on an additional U.S. $32,500, 8% convertible note with Asher. The funds for such note were not received as of the balance sheet date.

On July 1, 2012, the Company signed a placement agreement with Fidelity Venture Capital Limited (“Fidelity”) pursuant to which Fidelity undertook to raise U.S. $1,000,000 in notes convertible into shares of common stock or more senior equity securities of the Company (if any) for a period of three and one half years at prices ranging from USD 0.02 cents to USD 0.10 cents per share or a discount of 20% of the then market price of the Company’s shares depending on when any such conversion is consummated (the “Fidelity Notes”). The Fidelity Notes will bear annual interest of 6.5% to be paid semi-annually in arrears. The Company has committed to pay off the outstanding principal of the Fidelity Notes by paying to the holders of such Fidelity Notes 7% of gross income and making certain pre-payments of the principal during the term of the notes. Each holder of Fidelity Notes are to receive shares of common stock of the Company worth USD 0.70 cents for each dollar it invested in the Fidelity Notes (the “Incentive Shares”). The Company has pledged the income from its projects to such holders as security to pay the Fidelity Notes in full. Fidelity will receive nine percent of the gross proceeds it raises for the Company. To-date, the Company has received an aggregate amount of U.S. $50,000 (less commissions) from sales of Fidelity Notes.

On September 4, 2012 and September 25, 2012, we signed securities purchase agreements with Jelton Finance Corp., a Belize corporation, with offices in Lichtenstein (“Jelton”), pursuant to which Jelton agreed to purchase an aggregate of $45,000 of our 7% convertible notes due in each case three months after their respective issue dates (the “Jelton Notes”). The Jelton Notes are convertible into shares of the Company at a discount to the applicable market price on the date of conversion. The Company has the right to prepay the Jelton Notes under certain conditions for 90 days following their issue date. On October 14, 2012, after the balance sheet date, the Company has signed additional securities purchase agreements with Jelton in the amount of $25,000.

BLUE SPHERE CORP.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – RELATED PARTY TRANSACTIONS:

On March 3, 2010, the Company entered into employment agreements with Eliezer Weinberg the Company Chairman of the Board, Shlomo Palas the Company’s CEO and Shmuel Keshet the Company’s COO for a term of two years. The officers receive monthly remuneration at a gross rate of USD$10,000. The remuneration will increase to a gross monthly rate of USD$15,000 upon the completion of outsourced technical project reports (“PDDs”) for two projects. Each officer was granted stock options to acquire 8,321,917 or nine percent (9%) of common stock in the capital of the Company, exercisable at a par value (see note 7).

On July 28, 2011 the Board granted to Mr. Eliezer Weinberg and to Mr. Shlomo Palas 4,200,000 common shares each for their contributions to the Company.

On July 28, 2011 the company appointed Mr. Roy Amitzur as Executive Vice-President. Mr. Amizur is entitled to receive U.S. $10,000 plus VAT per month after he arranges an investment of no less than $450,000 in the Company and U.S. $15,000 plus VAT per month after he arranges an equity investment in the Company of no less than U.S. $2,000,000. He also received 12,500,000 common shares of the Company. If Mr. Amizur resigns from the Company prior to July 25, 2013, he will forfeit a pro rata portion of his shares back to the Company (the amount subject to forfeiture being equal to the number of days, which Mr. Amizur did not serve as Executive Vice-President out of the two year term of his management services agreement. As of July 2012, we agreed to start paying Mr. Amizur a monthly salary of U.S. $10,000.

Mr. Amizur also received 1,075,000 shares of common stock on August 23, 2011 for his extraordinary contributions to the Company.

The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities that become available.

On August 31, 2011, the Company issued 1,308,325 common shares to Mr. Keshet, the Company's former chief operating officer who resigned from the Company, as compensation for his unpaid salaries. In addition the company agreed to accelerate the vesting of the remaining of his stock options amounted to 8,321,917 common shares.

In February 2012, Company's chairman, Eliezer Weinberg, resigned from the board of directors. In his place, the Board of Directors of the Company appointed Joshua Shoham non-executive director and chairman of the board. Mr. Shoham received 4,000,000 shares of stock, which are subject to pro-rata forfeiture in the event that Mr. Shoham does not serve his full term of two years as director. As of July 2012, the Company agreed to pay Mr. Shoham $10,000 per month plus VAT.

BLUE SPHERE CORP.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – COMMON SHARES:

On November 3, 2011, the Company entered into a consulting agreement with He Mu for business development and project management in China in exchange for 3,000,000 shares of common stock (the "Shares"). The Shares are restricted for thirty-six (36) months following their issuance and are being held in Escrow for the entire thirty-six (36) month restricted period. The escrowed shares are subject to a claw-back provision so that if the agreement is terminated for any reason prior to the completion of 36 months, the amount of 83,333 shares will be returned to the Company for each month of such early termination.

During October 2011, the Company issued 525,000 common shares of the Company to an investor for total consideration of $20 Thousand.

On May 22, 2011, the Company and Bluebird Finance & Projects Ltd ("Bluebird") entered into a financing consulting services agreement according to which Bluebird will assist the Company with evaluating potential projects, review agreements, search for potential financing parties, accompany the Company in financing activities, etc. The agreement shall be valid for a period of 24 months and can be terminated by either party subject to a written notice of 60 days in advance. In consideration for Bluebird services, the Company will pay a monthly retainer fee of 15,000 common shares of the Company. In addition, the Company shall pay Bluebird a success fee of 2% for each executed financing round with a minimum of $50 thousand. During the quarter ended December 31, 2011 the Company issued 75,000 common shares in respect of the above agreement.

On October 11, 2011, the Company and Bluebird signed an amendment for the May 22, 2011 agreement according to it, in order to incentivize Bluebird to expand and enhance its efforts on behalf of the Blue Sphere, the Company shall issue the Bluebird (1) additional 500,000 common shares of the company upon signing of the amendment to the agreement (2) additional 500,000 common shares upon receipt of an investment or debt of at least $5,000 thousands and (3) additional 500,000 common shares upon receipt of an additional investment or debt of at least $5,000 thousands (total amount received of $10,000 thousand). On November 28, 2011 the Company issued to Bluebird 500,000 common shares under the above amendment to the agreement. The shares to be issued under the above amendment would be restricted for a period of 12 months from the date of issuance.

On January 5, 2012, the Company approved the issuance of 1,250,000 common shares of the Company to an investor for total consideration of $35 Thousand. The consideration for the shares has not yet been received to the date of the approval of the financial statements.

On February 1, 2012 the Company approved and granted 1,600,000 common shares of the Company for each of its Chief Executive Officer and the Chairman of the Board. In addition, the Company approved and granted 500,000 common shares of the Company for its Chief Carbon Officer and general counsel.

On February 6, 2012 the Company appointed Mr. Joshua Shoham as a director and issued him 2,000,000 common shares of the Company. The shares are subject to pro-rata forfeiture in the event that Mr. Shoham does not serve his full term of two years as director. In addition, on February 29, 2012 the Company appointed Mr. Shoham as the chairman of the board for a period of two years and granted him with additional 2,000,000 shares.

On February 20, 2012 Chief Executive Officer and the former Chairman of the Board exercised 16,643,834 options granted to them on May 13, 2010 into Company shares. The options exercise price was deducted from Company's debt to Chief Executive Officer and the former Chairman of the Board.

BLUE SPHERE CORP.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – COMMON SHARES: (continue)

On February 20, 2012 the Company approved the grant of 4,000,000 common shares to a consultant of which 2,000,000 shares are subject claw-back provision, according to which in the event that the Company has not closed 6 additional deals within 18 months from the effective date as detailed in the consulting agreement, such shares would be returned to the Company. The shares under such agreement have not yet been issued as of the date of the approval of the financial statements.

On February 21, 2012, the Company executed a promissory note (the “Promissory Note”) pursuant to which it borrowed $30,000 from Jean-Marc Karouby, M.D., an individual residing in France (the “French Lender”). Part of the consideration for the Promissory Note was the issuance of 2,800,000 shares of common stock of the Company. In connection with such issuance of shares, the Company also granted to the French Lender piggy-back registration rights. As a result, such shares may be registered under the S-1.

The maturity date of the Promissory Note is November 20, 2012. Under the terms of the Promissory Note, interest accrues on the basis of a 270-day year at a rate of 18% per annum or at a higher rate of 24% per annum if such higher rate is permissible under Nevada law. The Promissory Note is governed under the laws of Nevada. The default rate of interest under the Promissory Note is 35% per annum, and a default shall be declared upon a declaration by the Company of bankruptcy under Chapter 7 or Chapter 11 under the applicable federal United States bankruptcy laws or upon the failure to make payments when due on or before 10 days after an applicable due date. Monthly interest payments of $600 are due on or before the 20th of each month while the Promissory Note remains outstanding. In addition to payment of the default interest rate and principal, upon a default the Company shall also issue to the French Lender additional shares of its common stock equal to 150% of the value of the principal and interest due converted at the applicable trading price for the Company’s shares at the time of default. Cash payments due under the Promissory Note have been personally guaranteed by Shlomo Palas, the Company’s Chief Executive Officer.

On June 1, 2012 the Company issued to a consultant 1,000,000 shares. Such shares are restricted from transfer for a period of 12 months from the dates of its issuance.

During April 2012, third parties converted $110 thousand of the Principal amount of the Asher Notes into 28,893,043 shares of the Company (a conversion price of $0.0039802 per share) (see further information above).

On July 17, 2012 the Company issued to Fidelity 2,333,333 shares of the Company on account of the placement agreement with Fidelity.

On August 30, 2012 the Company issued to Jelton 2,500,000 shares of the Company on account of the security purchase agreement with Jelton.

BLUE SPHERE CORP.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 – STOCK OPTIONS:

The 2010 share option plan was established On March 3, 2010.

Options to Directors and Employees:

On March 3, 2010, the Board of Directors of the Company granted of 24,965,751 options to three officers of the Company, exercisable for two years at exercise prices of $0.001 per share, to be vested by the end of each three month from the date of employment agreement signed on May 14, 2010.

The fair value of the stock options grants was estimated using the Black-Schooled option valuation model that used the following assumptions:

	%
Dividend yield		0
Risk-free interest rate		3.75	%
Expected term (years)		2
Volatility		177	%

The fair value of the options granted above using the Black-Scholes model is $0.75 per option.

The following table presents the Company’s stock option activity for employees and directors of the Company for the years ended September 30, 2010 through 2012:

	Number of Options and options		Weighted Average Exercise Price
Outstanding at September 30, 2010		24,965,751		0.001
Granted		-		-
Exercised		8,321,917		0.001
Forfeited or expired		-		-
Outstanding at September 30,2011		16,643,834		0.001
Granted		-		-
Exercised		16,643,834		0.001
Forfeited or expired		-		-
Outstanding at September 30,2012		-		-
Number of options exercisable at September 30, 2012		-
Number of options exercisable at September 30, 2011		13,176,369

Costs incurred in respect of stock based compensation for employees and directors, for the year ended September 30, 2012 and September 30, 2011 were $ 2,956 and $16,058thousand respectively.

As of September 30, 2012 there were no outstanding option and warrants.

BLUE SPHERE CORP.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – INCOME TAXES:

US resident companies are taxed on their worldwide income for corporate income tax purposes at a statutory rate of 35%. No further taxes are payable on this profit unless that profit is distributed. If certain conditions are met, income derived from foreign subsidiaries is tax exempt in the US under applicable tax treaties to avoid double taxation.

The income of the company's Israeli subsidiaries is taxed through 2009 at the rate of 26%. The corporate tax rates for 2010 and thereafter are as follows: 2010 - 25%, in the 2011 tax year – 24% and in the 2012 tax year and thereafter the applicable Companies Tax rate will be 25%.

The Company accounts for income taxes using the liability method, which requires the determination of deferred tax assets and liabilities based on the differences between the financial and tax bases of assets and liabilities using enacted tax rates in effect for the year in which differences are expected to reverse. Deferred tax assets are adjusted by a valuation allowance, if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Deferred income taxes reflect the net effects of temporary differences between the amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The breakdown of the deferred tax asset as of September 30 2012, 2011 and 2010 is as follows:

	2012			2011			2010
	U.S dollars in thousands
Deferred tax assets:
Net operating loss carry-forward	$	1,357		$	386		$	225
Valuation allowance		(1,357	)		(386	)		(225	)
	$	0		$	0		$	0

A valuation allowance is provided when it is more likely than not that some portion of the deferred tax asset will not be realized. Management has determined, based on its recurring net losses, lack of a commercially viable product and limitations under current tax rules, that a full valuation allowance is appropriate.

	U.S dollars in thousands
Valuation allowance, September 30, 2011	$	386
Increase		971
Valuation allowance, September 30, 2012	$	1,357

Carry forward losses of the Israeli subsidiary are approximately $971 thousand at September 30, 2012.

BLUE SPHERE CORP.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – NET LOSS PER SHARE DATA:

The shares issuable upon the exercise of options, and conversion of convertible notes and warrants, which have been excluded from the diluted per share amounts because their effect would have been anti-dilutive, include the following:

	September 30, 2012		September 30, 2011
Options:
Weighted average number, in thousands		-		16,644
Weighted average exercise price	$	-	$	0.001

NOTE 7 – OTHER LOSS:

On January 31, 2012, the Comapny lent an Israeli company, CTG Clean Technology Group Limited (the “Borrower”), U.S. $30,000 at an annual rate of interest of eight percent (8%). The purpose of this loan was to provide the borrower capital to continue its operations while the Company considered acquiring such company. On February 8, 2012, the Company received the cash to make such loan to the Borrower from a Cyprus company (JLS Investment Holding). The Borrower pledged the revenues from its Angolan waste-water project toward the repayment of the principal and interest of this loan. Management are in negotiations with CTG with respect to repayment of such loan together with accrued and unpaid interest, however, to-date, we have not received any payment whatsoever from the borrower. During the year ended September 30, 2012 the Company wrote-off $10,000 of such loan.

NOTE 8 – SUBSEQUENT EVENTS:

In November 5, 2012 the Company entered into an agreement with a non-US investor to sell 30,000,000 shares of common stock at December 25, 2012 for an aggregated amount of $70,000.

On December 20 2012, the Company entered into an agreement with a non-US investor to sell 35,000,000 shares of common stock at a price of $0.00286 per share for $100,000 and to purchase another 17,500,000 shares of common stock for $50,000 in January 2013 and another 17,500,000 shares of common stock for $50,000 in February 2013. Additionally, the Company (i) obligated to issue such investor 10,000,000 shares of common stock in February 2013 at no additional cost and (ii) issue to such investor an option to purchase 7,500,000 shares of common stock for one year for 0.02 per share and to purchase 7,500,000 shares of common stock for two years at a price per share of $0.04

On November 5, the Board of Directors of the Company approved the issuance of 6,000,000 shares of the Company to its Chief Executive officer, 5,000,000 shares to the Chairman of the Board, 5,000,000 shares to the Executive Vice-President and 4,000,000 shares to the Chief Carbon Officer and general counsel of the Company.

During October and November 2012, holders of $85.5 thousands of principal amount of Asher convertible notes converted their notes into 67,379,296 shares of the Company's common stock. The share issued to such holders does not represent 100% of the principal amount of such shares.

On November 6, 2012 Asher purchased an additional U.S. $32,500 of our 8% convertible notes.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, including our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2012. Based on such review, our chief executive officer and chief financial officer have determined that in light of their conclusion with respect to the effectiveness of our internal control over our financial reporting as of such date, we had in place effective controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure, and is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.

Our management, under the supervision of our chief executive officer and chief financial officer, is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act of 1934. The Company’s internal control over financial reporting is defined as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes policies and procedures that:

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions;

provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of our internal control over financial reporting as of September 30, 20101 based on the framework for Internal Control-Integrated Framework set forth by The Committee of Sponsoring Organizations of the Treadway Commission. Management’s evaluation concluded that there were no material weaknesses with respect to segregation of duties that may not provide reasonable assurance regarding the reliability of internal control over financial reporting and may not prevent or detect misstatements.

Based on this evaluation, our management concluded that the Company’s internal controls over financial reporting were effective as at September 30, 2012.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Commission that permit us to provide only management’s report in this Annual report.

There were no changes in our internal controls over financial reporting identified with the evaluation thereof that occurred during the year ended September 30, 2012, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

Item 9B. Other Information

Not applicable.

Part III

Item 10. Directors, Executive Officers and Corporate Governance

Joshua Shoham – Chairman of the Board

Mr. Shoham has extensive experience in senior executive management and in international business development in the USA, Europe and China. He held several General Manager positions, e.g. the General Manager of the Israeli subsidiary of International Paper (a Fortune 100 Company), and was co-founder of several high-tech startups (e.g. Infowrap Systems). Mr. Shoham was also a strategic market development consultant responsible for a range of transactions in the Israeli and Chinese traditional and high-tech industries, e.g. initiating a joint venture between Saifun Semiconductors and Infineon, which resulted in Infineon becoming an equity partner in Saifun and Saifun going public on NASDAQ. He has served for six years as a Board of Directors Member in Bio-Cell (TASE: BCEL), which reversed merged its activities into Protalix Biotherapeutics (AMEX: PLX; TASE: PLX). Mr. Shoham holds an MBA and a B.A. in Economics, both from the Hebrew University of Jerusalem, and an LL.B degree from the Faculty of Law of Tel-Aviv University.

Shlomo Palas – Chief Executive Officer and Director

Mr. Palas became our chief executive officer and director on March 3, 2010. Mr. Palas is a highly experienced entrepreneur who has held executive positions at a number of leading Israeli firms. He was a senior consultant with Mitzuv, a leading management consulting firm. For the past four years, Mr. Palas has specialized in the renewable and clean tech industries. He has gained significant experience in renewable and clean tech manufacturing, off-take contracts with leading petrol companies, legal/financial structuring, and fundraising for these industries. He has also developed a large network in private and government sectors in many cities across China. Mr. Palas served as chief executive officer of Becco Biofuels China Ltd., which was a company active in the biofuel industry. Mr. Palas participated in the establishment of the largest commercial algae farm in China together with one of China’s largest electrical utilities.

Roy Amizur – Executive Vice President
Mr. Amizur is an expert in clean technology and renewable energy production, especially in respect of water and water treatment, and has started-up, developed, managed and operated a number of companies in this space, including, but not limited to, Clean Technologies Group Ltd., Bio Pure Technology Ltd. and Aquarius Technologies Inc. Mr. Amitzur has significant experience in implementing BOT and turn-key projects in water technologies and water and waste water execution around the world.

Shlomo Zakai – Chief Financial Officer

Mr. Zakai is an expert in finances with many years of experience with U.S. public companies. He established his own accounting firm in 2004, providing a range of services to publicly traded companies as well as private companies, and he has served as controller and Chief Financial Officer of a number of private companies. Mr. Zakai serves as the internal auditor of several Israeli traded companies and oversees Sarbanes-Oxley compliance in several U.S. and Israelis traded companies. He has worked as an accountant for nine years in the hi-tech department of Kost, Forer, Gabbay & Kasierer, an independent registered public accounting firm and a member firm of Ernst & Young Global, where he last served as a senior manager and worked with companies publicly traded on NASDAQ and in Israel. Mr. Zakai is a CPA (Certified Public Accountant) and holds a B.A. in Accounting from the College of Management in Rishom Le'Zion.

Mark Radom – Chief Carbon Officer and General Counsel

Mr. Radom became our chief carbon officer on October 25, 2010. Mr. Radom has extensive experience in the carbon and renewable energy sector. He was legal counsel for a number of carbon and ecological project developers and was responsible for structuring joint ventures and advising on developing projects through the CDM/JI registration cycle and emission reduction purchase agreements. He advised aviation companies on the inclusion of aviation in the third phase of the EU ETS and was an executive of a European-based developer and integrator of carbon and ecological projects. Mr. Radom has experience in identifying and implementing promising industrial gas (N2O and SF6), methane (landfill, compost, coal mine, waste water and associated gas), fuel switch (from diesel to natural gas) and a range of renewable energy projects (wind, solar and biogas to energy). Mr. Radom has assisted in the preparation of project design documents and has prepared complex projects for validation. Prior to this, he worked on Wall Street and in the City of London as a US securities and capital markets lawyer where he represented sovereigns, global investment banks and fortune 500 companies across a broad range of capital raising and corporate transactions. He is a graduate of Duke University and Brooklyn Law School. Mr. Radom is admitted to practice law in New York and New Jersey and speaks fluent Russian.

	Position Held	Date First Elected or Appointed
Joshua Shoham	Chairman of the Board	February 4, 2012
Shlomo Palas	Chief Executive Officer	March 3, 2010
Roy Amizur	Executive Vice President	July 28, 2011
Shlomo Zakai	Chief Financial Officer	January 2, 2012
Mark Radom	Chief Carbon Officer	October 25, 2010

Mr. Palas is contractually obligated to devote no less than 75% of his time toward the development of the Company. In practice, Mr. Palas is devoting substantially more than 75% of his time to Bluesphere.

Significant Employees

We do not currently have any other significant employees aside from the named executive officers (as defined under the caption “Executive Compensation” in Item 10 of this report).

Family Relationships

Not applicable.

Involvement in Certain Legal Proceedings

Our directors, executive officers and control persons have not been involved in any of the following events during the past ten years:

(1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

(2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3) being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and

(4) being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Committees

The company does not currently have a standing audit, nominating or compensation committee of the board of directors, or any committee performing similar functions. The company's board of directors currently performs the functions of audit, nominating and compensation committees.

Item 11. Executive Compensation

The table set forth below summarizes the annual and long-term compensation for services payable to our executive officers during the fiscal years ended September 30, 2011 and 2012:

Summary Compensation

SUMMARY COMPENSATION TABLE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012

Name and Principal
Position

Salary ($)

Bonus

Stock Awards ($)

Option Awards ($)

Non-Equity
Incentive Plan
Compensation

Non-Qualified
Deferred
Compensation
Earnings

All Other
Compensation

Shlomi Palas, CEO and Diector

120,000

Nil

48,000

Nil

168,000

Eli Weinberg, Chairman of the Board(1)

78,322

Nil

48,000

Nil

126,322

Alex Werber, Acting CFO(2)

8,395

Nil

8,395

Shlomo Zakai, Acting CFO(2)

14,493

Nil

14,493

Roy Amizur, Executive Vice President

Nil

Mark Radom, Chief Carbon Officer

84,000

Nil

15,000

Nil

99,000

Joshua Shoham, Chairman of the Board(1)

Nil

99,479

Nil

99,479

On January 9, 2012, we appointed Shlomo Zakai as our new chief financial officer on a non-exclusive basis.

On February 2012, Mr. Weinberg resigned from the Board of Director. In his place, we appointed Joshua Shoham non-executive director and chairman of the board. Mr. Shoham received 4,000,000 shares of stock, which are subject to pro-rata forfeiture in the event that Mr. Shoham does not serve his full term of two years as director.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

Name

Number of
Securities
Underlying
Unexercised
Options
#

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
#

Option
Exercise
Price
$

Option
Expiration
Date

Number of
Shares of
Stock That
Have Not
Vested

Market
Value of
Shares of
Stock
That Have
Not
Vested

Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares or
Other
Rights That
Have Not
Vested

Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Shares or
Other
Rights
That Have
Not Vested

Exercisable

Unexercisable

Shlomi Palas, CEO and director

Nil

0.001

Nil

Eli Weinberg, director

Nil

0.001

Nil

SUMMARY COMPENSATION TABLE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011

Name and Principal
Position

Salary ($)

Bonus

Stock Awards ($)

Option Awards ($)

Non-Equity
Incentive Plan
Compensation

Non-Qualified
Deferred
Compensation
Earnings

All Other
Compensation

Shlomi Palas, CEO and Diector

120,000

Nil

693,000

3,117,020

Nil

3,930,020

Eli Weinberg, Chairman of the Board

120,000

Nil

693,000

3,117,020

Nil

3,930,020

Alex Werber, Acting CFO(1)

19,000

Nil

19,000

Shmuel Keshet, COO(2)

40,000

Nil

178,960

4,415,778

Nil

4,634,738

Roy Amizur, Executive Vice President(3)

Nil

374,824

Nil

374,824

Mark Radom, Chief Carbon Officer

89,500

Nil

65,096

Nil

154,596

Amit Zilbershtein, CFO (non-active)

Nil

Alex Werber formally left the Company in July 2011, but subsequently agreed to act as CFO through this annual report insofar as Mr. Werber was more familiar with the Company than Amit Zilbershtein, the new CFO.

Through August 31, 2011, when Mr. Keshet terminated his service as COO with the Company.

Roy Amizur is entitled to receive U.S. $10,000 plus VAT per month after he arranges the investment of at least U.S. $450,000 in the Company and U.S. $15,000 plus VAT after he arranges the investment of U.S. $2,000,000 in equity in the Company.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

Name

Number of
Securities
Underlying
Unexercised
Options
#

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
#

Option
Exercise
Price
$

Option
Expiration
Date

Number of
Shares of
Stock That
Have Not
Vested

Market
Value of
Shares of
Stock
That Have
Not
Vested

Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares or
Other
Rights That
Have Not
Vested

Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Shares or
Other
Rights
That Have
Not Vested

Exercisable

Unexercisable

Shlomi Palas, CEO and director

19,764,553

5,201,198

Nil

0.001

May 13, 2012

Nil

Eli Weinberg, director

19,764,553

5,201,198

Nil

0.001

May 13, 2012

Nil

Shmuel Keshet,
COO

Nil

0.001

Nil

Pension, Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers.

On March 3, 2010, the Board of Directors authorized the adoption of a global share and option plan for the company (the “Global Share and Option Plan”).

Option/ SAR Grants

The Company made no option grants in 2012.

Aggregated Option/ SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/ SAR Values

The Company made no option grants in 2012.

Long-Term Incentive Plan

There were no awards made to the executive officers in 2012.

Directors’ Compensation

The directors currently receive no compensation for acting as directors.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Principal Stockholders

The following table sets forth, as of September 30, 2012, certain information with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of our common stock and by each of our current directors and executive officers. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.

	Amount		Percentage
	of Common		of
	Shares		Class (3)
Name and Address of Beneficial Owner 5% Shareholders
Rachmani, Amir NO 19 Shamai St Jerusalem 91020 Israel (1)		20,000,000		10.6	%
Directors and Executive Officers (2)
Josh Shoham		9,000,000		4.7	%
Shlomo Palas		20,121,917		10.6	%
Roy Amizur		18,575,000		9.5	%
Mark Radom		9,000,000		4.7	%
All Directors and Executive Officers as a Group (4 Persons)					%

(1) Amir Rachmani holds shares on behalf of 17 unaffiliated investors.

(2) Each of our directors and executive officers may be reached at 35 Asuta Street, Even Yehuda, Israel 40500.

(3) Based on 184,695,507 shares of common stock outstanding as at September 30, 2012. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

Equity Compensation Plan Information

Other than the Global Share Incentive Plan (2010), we have not established any global equity compensation plans.

Changes in Control

We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change of control of our company.

Item 13. Certain Relationships, Related Transactions and Director Independence

There were no related party transactions, other than salaries and fees paid to officers of the Company.

Item 14. Principal Accounting Fees and Services

The following is a summary of the fees billed to the Company by the auditors for professional services rendered to our company for the fiscal year ended September 30, 2012:

	2012
Audit Fees	$
Audit Related Fees		40,000
Total Fees		40,000

The Company does not have an audit committee and, as such, has not reviewed, considered or otherwise approved any such fees.

Item 15. Exhibits, Financial Statement Schedules

No.	Description
3.1	Articles of Incorporation
3.2	Articles of Merger
3.3	Certificate of Change
10.1	Carbon Credit Project Contract Acquisition Agreement
10.2	Termination Agreement
10.3	Global Share Incentive Plan (2010)
10.4	Josh Shoham Advisory Agreement
10.5	Shomo Palas Employment Agreement
10.6	JLS Management Services Agreement
10.7	Mark Radom Consulting Agreement
10.8	Mark Radom Amendment Agreement
10.9	Emissions Purchase Reduction Agreement
10.10	Orbit Term Sheet
10.11	Orbit Energy Charlotte Transfer Agreement
10.12	Orbit Energy Rhode Island Transfer Agreement
10.13	Orbit Energy Definitive Agreement Escrow Agreement
10.14	$32,500 Note to Asher Capital dated November 11, 2011
10.15	$32,500 Note to Asher Capital dated January 26, 2012
10.16	$53,000 Note to Asher Capital dated March 26, 2012
10.17	$32,500 Note to Asher Capital dated May 7, 2012
10.18	$32,500 Note to Asher Capital dated September 13, 2012
10.19	$32,500 Note to Asher Capital dated November 6, 2012
10.20	$20,000 Note to Jelton Finance dated September 4, 2012
10.21	$25,000 Note to Jelton Finance dated September 25, 2012
10.22	$25,000 Note to Jelton Finance dated October 14, 2012
10.23	Orbit Equity Binding Term Sheet
10.24	$70,000 Securities Purchase Agreement dated November 2012
31.1	Rule 13a–14(a)/15d–14(a) Certifications (ii) Rule 13a–14/15d–14 Certification Chief Executive Officer
31.2	Rule 13a–14(a)/15d–14(a) Certifications (ii) Rule 13a–14/15d–14 Certification Chief Financial Officer
32.1	Section 1350 Certification Chief Executive Officer
32.2	Section 1350 Certification Chief Financial Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BLUE SPHERE CORP.

By:	/s/ Shlomi Palas
	President, Chief Executive Officer, Secretary and Director
	(Principal Executive Officer)
	Date: January 7, 2013

By:	/s/ Shlomo Zakai
	Chief Financial Officer and Treasurer
	(Principal Accounting Officer and Principal Financial Officer)
	Date: January 7, 2013

EX-3.1 2 v330956_ex3-1.htm EXHIBIT 3.1

STATE OF NEVADA

ROSS MILLER

Secretary of State

SCOTT W. ANDERSON

Deputy Secretary

for Commercial Recordings

OFFICE OF THE

SECRETARY OF STATE

Certified Copy

July 28, 2011

Job Number:	C20110728-2024
Reference Number:	00003188131-75
Expedite:
Through Date:

The undersigned filing officer hereby certifies that the attached copies are true and exact copies of all requested statements and related subsequent documentation filed with the Secretary of State's Office, Commercial Recordings Division listed on the attached report.

Document Number(s)	Description	Number of Pages
20070491982-22	Articles of Incorporation	1 Pages/1 Copies
20100089610-77	Stock Split	1 Pages/1 Copies

Certified By: Chris Thomann

Certificate Number: C20110728-2024

You may verify this certificate

online at http://www.nvsos.gov/

Respectfully,

ROSS MILLER

Secretary of State

Commercial Recording Division

202 N. Carson Street

Carson City, Nevada 89701-4069

Telephone (775) 684-5708

Fax (775) 684-7138

ROSS MILLER

Secretary of Slate

204 North Carson Street, Suite 1

Carson City, Nevada 89701-4520

(775) 684 5708

Website: www.nvsos.gov

	Filed in the office of	Document Number 20100089610-77
	Ross Miller	Filing Date and Time 02/11/2010 11:00 AM
Certificate of Change Pursuant	Secretary of State State of Nevada	Entity Number E0515782007-5
to NRS 78.209

USe BLACK INK ONLY - DO NOT HIGHLIGHT

ABOVE SPACE IS FOR OFFICE USE ONLY

Certificate of Change filed Pursuant to NRS 78.209

For Nevada Profit Corporations

1. Name of corporation:

Jin Jie Corp.

2. The board of directors have adopted a resolution pursuant to NRS 78.209 and have obtained any required approval of the stockholders.

3. The current number of authorized shares and the par value, if any, of each class or series, if any, of shares before the change:

50,000,000 shares of common stock at $0.001 par value

4. The number of authorized shares and the par value, if any, of each class or series, if any, of shares after the change:

1,750,000,000 shares of common stock at $0.001 par value

5. The number of shares of each affected class or series, if any, to be issued after the change in exchange for each issued share of the same class or series:

35 new shares of common stock will be issued for every one old share of common stock

6. The provisions, if any, for the issuance of fractional shares, or for the payment of money or the issuance of scrip to stockholders otherwise entitled to a fraction of a share and the percentage of outstanding shares affected thereby:

No fractional shares will be issued, fractional shares will be rounded up to the next whole number.

Effective date of filing: (optional)

February 17, 2010

Signature: (required)

(must not be later than 90 days after the certificate is filed)

X			President
Signature of Officer			Title

IMPORTANT: Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.

	Nevada Secretary of State Stock Split
This form must be accompanied by appropriate fees.	Revised: 3-8-09

EX-3.2 3 v330956_ex3-2.htm EXHIBIT 3.2

	ROSS MILLER
	Secretary of State
	204 North Carson Street, Suite 1
	Carson City, Nevada 89701-4520
	(775) 684 5708
	Website: www.nvsos.gov

	Filed in the office of	Document Number
		20100089973-59
		Filing Date and Time
	Ross Miller	02/11/2010 11:00 AM
Articles of Merger	Secretary of State	Entity Number
(PURSUANT TO NRS 92A.200)	State of Nevada	E0515782007-5
Page 1

USE BLACK INK ONLY - DO NOT HIGHLIGHT

ABOVE SPACE IS FOR OFFICE USE ONLY

Articles of Merger

(Pursuant to NRS Chapter 92A - excluding 92A.200(4b))

Name and jurisdiction of organization of each constituent entitiy (NRS 92A.200). If there are more than four merging entities, check box ¨ and attach an 81/2“X 11” blank sheet containing the required information for each additional entity.

Blue Sphere Corporation

Name of merging entity
Nevada		Corporation
Jurisdiction		Entity type*
Jin Jie Corp.

Name of merging entity
Nevada		Corporation
Jurisdiction		Entity type*

Name of merging entity

Jurisdiction		Entity type*

Name of merging entity

Jurisdiction		Entity type*
and,
Jin Jie Corp.

Name of surving entity
Nevada		Corporation
Jurisdiction		Entity type*

I hereby certify that the within instrument is

a true and correct copy of the instrument of

which it purports to be a true copy.

Given under my hand and seal of office [Illegible]

9^th day of March A.D., 2010

A history public in and for the [Illegible]

* Corporation, non-profit corporation, limted parntership, limted-liablity company or business trust.

Filling Fee: $350.00

This form must be accompanied by appropriate fees.	Nevada Secretary of State 92A Merger Page 1
	Revised: 10-16-09

	ROSS MILLER
	Secretary of State
	204 North Carson Street, Suite 1
	Carson City, Nevada 89701-4520
	(775) 684 5708
	Website: www.nvsos.gov



Articles of Merger
(PURSUANT TO NRS 92A.200)
Page 2

USE BLACK INK ONLY - DO NOT HIGHLIGHT

ABOVE SPACE IS FOR OFFICE USE ONLY

Forwarding address where copies of process may be sent by the Secretary of State of Nevada (If a foreign entity is the survivor in the merger - NRS 92A.1 90):

	Attn:

	c/o:

(Choose one)

The undersigned declares that a plan of merger has been adopted by each constituent entity (NRS 92A.200).

The undersigned declares that a plan of merger has been adopted by the parent domestic entity (NRS 92A. 180)

Owner’s approval (NRS 92A.200) (options a, b, or c must be used, as applicable, for each entity) (if there are more than four merging entities, check box £ and attach an 8 1/2” x 11” blank sheet containing the required information for each additional entity):

(a)

Owner’s approval was not required from

Blue Sphere Corporation

Name of merging entity, If applicable

Jin Jie Corp.

Name of merging entity, If applicable

and, or;

Jin Jie Corp.

Name of surviving entity, If applicable

This form must be accompanied by appropriate fees.	Nevada Secretary of State 92A Merger Page 2
	Revised: 10-16-09

	ROSS MILLER
	Secretary of State
	204 North Carson Street, Suite 1
	Carson City, Nevada 89701-4520
	(775) 684 5708
	Website: www.nvsos.gov



Articles of Merger
(PURSUANT TO NRS 92A.200)
Page 3

USE BLACK INK ONLY - DO NOT HIGHLIGHT

ABOVE SPACE IS FOR OFFICE USE ONLY

(b)

The plan was approved by the required consent of the owners of *:

Blue Sphere Corporation

Name of merging entity, if applicable

Jin Jie Corp.

Name of merging entity, if applicable

and, or;

Jin Jie Corp.

Name of surviving entity, if applicable

* Unless otherwise provided in the certificate of trust of governing instrument of a business trust, a merger must be approved by all the trustees and beneficial owners of each business trust that is a constituent entity in the merger.

This form must be accompanied by appropriate fees.	Nevada Secretary of State 92A Merger Page 3
	Revised: 10-16-09

	ROSS MILLER
	Secretary of State
	204 North Carson Street, Suite 1
	Carson City, Nevada 89701-4520
	(775) 684 5708
	Website: www.nvsos.gov



Articles of Merger
(PURSUANT TO NRS 92A.200)
Page 4

USE BLACK INK ONLY - DO NOT HIGHLIGHT

ABOVE SPACE IS FOR OFFICE USE ONLY

	(c)	Approval of plan of merger for Nevada non-profit corporation (NRS 92A-160):

		The plan of merger has been approved by the directors of the corporation and by each public officer or other person whose approval of the plan of merger is required by the articles of incorporation of the domestic corporation.

Name of merging entity, if applicable

and, or;

Name of surviving entity, if applicable

This form must be accompanied by appropriate fees.	Nevada Secretary of State 92A Merger Page 4
	Revised: 10-16-09

	ROSS MILLER
	Secretary of State
	204 North Carson Street, Suite 1
	Carson City, Nevada 89701-4520
	(775) 684 5708
	Website: www.nvsos.gov



Articles of Merger
(PURSUANT TO NRS 92A.200)
Page 5

USE BLACK INK ONLY - DO NOT HIGHLIGHT

ABOVE SPACE IS FOR OFFICE USE ONLY

Amendments, If any, to the articles or certificate of the surviving entity. Provide article numbers, if available. (NRS 92A.200)*:

		Article I of the Articles of Incorporation of Jin Jie Corp. shall be amended to state that the name of the corporation is “Blue Sphere Corporation”

Location of Plan of Merger (check a or b):

(a) The entire plan of merger is attached:

or,

(b) The entire plan of merger is on file at the registered office of the surviving corporation, limited-liability company or business trust, or at the records office address if a limited partnership, or other place of business of the surviving entity (NRS 92A.200).

Effective date (optional)**:

February 17, 2010

* Amended and restated articles may be attached as an exhibit or integrated into the articles of merger. Please entitle them “Restated” or “Amended and Restated,” accordingly. The form to accompany restated articles prescribed by the secretary of state must accompany the amended and/or restated articles. Pursuant to NRS 92A.180 (merger of subsidiary into parent – Nevada parent owning 90% or more of subsidiary), the articles of merger may not contain amendments to the constituent documents of the surviving entity except that the name of the surviving entity may be changed.

** A merger takes effect upon filing the articles of merger or upon a later date as specified in the articles, which must not be more than 90 days after the articles are filed (NRS 92A. 240).

This form must be accompanied by appropriate fees.	Nevada Secretary of State 92A Merger Page 5
	Revised: 10-16-09

SCHEDULE A

To the Agreement end Plan of Merger between

Blue Sphere and Jin Jie

Articles of Merger

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT dated as of February 3, 2010.

BETWEEN:

BLUE SPHERE CORPORATION, a Nevada corporation, having its office at 409 - 4th Floor, Tsui King House, Choi Lung Estate, Kowloon, Hong Kong

(“Blue Sphere”)

AND:

JIN JIE CORP-, a Nevada corporation, having its office at 409 - 4th Floor, Tsui King House, Choi Lung Estate, Kowloon, Hong Kong

(“Jin Jie”)

WHEREAS:

A. Blue Sphere is the wholly-owned subsidiary of Jin Jie;

B. The boards of directors of Blue Sphere and Jin Jie deem it advisable and in the best interests of their respective companies and shareholders that Blue Sphere be merged with and into Jin Jie, with Jin Jie remaining as the surviving corporation under the name “Blue Sphere Corporation”;

C. The board of directors of Blue Sphere has approved the plan of merger embodied in this Agreement; and

D. The board of directors of Jin Jie has approved the plan of merger embodied in this Agreement.

THEREFORE, in consideration of the mutual agreements and covenants set forth herein, the parties hereto do hereby agree to merge on the terms and conditions herein provided, as follows:

THE MERGER

1.1

The Merger

Upon the terms and subject to the conditions hereof, on the Effective Date (as hereinafter defined), Blue Sphere shall be merged with and into Jin Jie in accordance with the applicable laws of the State of Nevada (the “Merger”). The separate existence of Blue Sphere shall cease, and Jin Jie shall be the surviving corporation under the name “Blue Sphere Corporarion” (the “Surviving Corporation”) and shall be governed by the laws of the State of Nevada.

1.2

Effective Date

The Merger shall become effective on the date and at the time (the “Effective Date”) that:

(a)

the Articles of Merger, in substantially the form annexed hereto as Schedule A, that the parties hereto intend to deliver to the Secretary of State of the State of Nevada, are accepted and declared effective by the Secretary of State of the State of Nevada; and

(b)

after satisfaction of the requirements of the laws of the State of Nevada.

1.3

Articles of Incorporation

On the Effective Date, the Articles of Incorporation of Jin Jie, as in effect immediately prior to the Effective Date, shall continue in full force and effect as the Articles of Incorporation of the Surviving Corporation except that Article 1 of the Articles of Incorporation of Jin Jie, as the Surviving Corporation, shall be amended to state that the name of the corporation is “Blue Sphere Corporation”.

1.4

Bylaws

On the Effective Date, the Bylaws of Blue Sphere, as in effect immediately prior to the Effective Date, shall continue in full force and effect as the bylaws of the Surviving Corporation.

1.5

Directors and Officer

The directors and officers of Jin Jie immediately prior to the Effective Date shall be the directors and officers of the Surviving Corporation, until their successors shall have been duly elected and qualified or until otherwise provided by law, the Articles of Incorporation of the Surviving Corporation or the Bylaws of the Surviving Corporation.

CONVERSION OF SHARES

2.1

Common Stock of Jin Jie

Upon the Effective Date, by virtue of the Merger and without any action on the part of any holder thereof, each share of common stock of Jin Jie, par value of $0.001 per share, issued and outstanding immediately prior to the Effective Date shall be changed and converted into one fully paid and non-assessable share of the common stock of the Surviving Corporation, par value of $0.001 per share (the “Survivor Stock”).

2.2

Common Stock of Blue Sphere

Upon the Effective Date, by virtue of the Merger and without any action on the part of the holder thereof, each share of common stock of Blue Sphere, par value of $0.01 per share, issued and outstanding immediately prior to the Effective Date shall be cancelled.

2.3

Exchange of Certificates

Each person who becomes entitled to receive any Survivor Stock by virtue of the Merger shall be entitled to receive from the Surviving Corporation a certificate or certificates representing the number of Survivor Stock to which such person is entitled as provided herein.

EFFECT OF THE MERGER

3.1

Rights, Privileges, etc.

On the Effective Date of the Merger, the Surviving Corporation, without further act, deed or other transfer, shall retain or succeed to, as the case may be, and possess and be vested with all the rights, privileges, immunities, powers, franchises and authority, of a public as well as of a private nature, of Blue Sphere and Jin Jie; all property of every description and every interest therein, and all debts and other obligations of or belonging to or due to each of Blue Sphere and Jin Jie on whatever account shall thereafter be taken and deemed to be held by or transferred to, as the case may be, or invested in the Surviving Corporation without further act or deed, title to any real estate, or any interest therein vested in Blue Sphere or Jin Jie, shall not revert or in any way be impaired by reason of this merger; and all of the rights of creditors of Blue Sphere and Jin Jie shall be preserved unimpaired, and all liens upon the property of Blue Sphere or Jin Jie shall be preserved unimpaired, and all debts, liabilities, obligations and duties of the respective corporations shall thenceforth remain with or be attached to, as the case may be, the Surviving Corporation and may be enforced against it to the same extent as if all of said debts, liabilities, obligations and duties had been incurred or contracted by it.

3.2

FURTHER ASSURANCES

From time to time, as and when required by the Surviving Corporation or by its successors and assigns, there shall be executed and delivered on behalf of Blue Sphere such deeds and other instruments, and there shall be taken or caused to be taken by it such further other action, as shall be appropriate or necessary in order to vest or perfect in or to confirm of record or otherwise in the Surviving Corporation the title to and possession of all the property, interest, assets, rights, privileges, immunities, powers, franchises and authority of Blue Sphere and otherwise to carry out the purposes of this Agreement, and the officers and directors of the Surviving Corporation are fully authorized in the name and on behalf of Blue Sphere or otherwise to take any and all such action and to execute and deliver any and all such deeds and other instruments.

GENERAL

4.1

Abandonment

Notwithstanding any approval of the Merger or this Agreement by the shareholders of Blue Sphere of Jin Jie or both, this Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Times, by mutual written agreement of Blue Sphere and Jin Jie.

4.2

Amendment

At any time prior to the Effective Date, this Agreement may be amended or modified in writing by the board of directors of both Blue Sphere and Jin Jie.

4.3

Governing Law

This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Nevada.

4.4

Counterparts

In order to facilitate the filling and recording of this Agreement, the same may be executed in any number of counterparts, each of which shall be deemed to be an original.

4.5

Electronic Means

Delivery of an executed copy of this Agreement by electronic facismile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the date hereof.

IN WITNESS WHEREOF, the parties hereto have entered into and Agreement as of the date see forth above.

BLUE SPHERE CORPORATION

Per:
	Authorized Signatory

JIN JIE CORP.

Per:
	Authorized Signatory

EX-3.3 4 v330956_ex3-3.htm EXHIBIT 3.3

A here by certify that the within instrument is

a true and correct copy of the instrument of

which it purports to be a true copy.

Given under my hand and seal of office this

9^th day of March A.D., 2010

A history public in and for the [Illegible]

	ROSS MILLER
	Secretary of State
	204 North Carson Street, Suite 1
	Carson City, Neveda 89701-4520
	(775) 684 5708
	Website: www.nvsos.gov

	Filed in the office of	Document Number
		20100089610-77
		Filing Date and Time
Certificate of Change Pursuant	Ross Miller	02/11/2010 11:00 Am
to NRS 78.209	Secretary of State	Entity Number
	State of Nevada	E0515782007-5

USE BLACK INK ONLY - DO NOT HIGHLIGHT

ABOVE SPACE IS FOR OFFICE USE ONLY

Ceritificate of Change filed Pursuant to NRS 78.209

For Nevada Profit Corporations

1. Name of corporation:

Jin Jie Corp.

2. The board of directors have adopted a resolution pursuant to NRS 78.209 and have obtained any required approval of the stockholders.

3. The current number of authorized shares and the par value, if any, of each class or series, If any, of shares before the change:

50,000,000 shares of common stock at $0.001 par value

4. The number of authorized shares and the par value, if any, each class or series, if any, of shares after the change:

1,750,000,000 shares of common stock at $0.001 par value

5. The number of shares of each affected class or series, if any, to be issued after the change in exchange for each issued share of the same class or series:

35 new shares of common stock will be issued for every one old share of common stock

6. The provisions, If any, for the Issuance of fractional shares, or for the payment of money or the issuance of scrip to stockholders otherwise entitled to a fraction of a share and the percentage of outstanding shares affected thereby:

No fractional shares will be issued, fractional shares will be rounded to the next whole number.

7. Effective date of filing: (optional)	February 17, 2010
	(must not be later than 90 days after the certificate is filed)

8. Signature: (required)

		President
Signature of Officer		Title

IMPORTANT: Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.

This form must be accompanied by appropriate fees.	Nevada Secretary of State Stock
	Revised: 3-5-09

EX-10.1 5 v330956_ex10-1.htm EXHIBIT 10.1

JIN JIE CORP.

409 - 4th Floor, Tsui King House

Choi Hung Estate
Hong Kong

January 14, 2010

Shlomo Palas ( I.D. 057313579 )

17 Etrog St.

Rosh Hayyn

Israel 48570 (“Palas”)

Samuel Keshet ( I.D. 030164529 )

19, Reuven St.

Zichron Ya’akov

Israel 30900 (“Keshet”)

Eliezer Weinberg ( I.D. 065137408 )

6, Hayarkon St.

Haifa

Israel 34465 (“Weinberg”)

(Palas, Keshet and Weinberg together are called the “Principals”)

Green Biofuels Holdings Ltd. an Israel company,

17 Hactrog Street

Rosh Hayin, Israel (“GBH”)

Cally Kai Lai Lai (“Lai”) and Wei Xiang Zeng (“Zeng”)

409 - 4th Floor, Tsui King House

Choi Hung Estate

Hong Kong

Dear Sirs:

RE: Carbon Credit Project Contract Acquisition

This letter sets out our agreement (“Agreement”) reached among Jin Jie Corp. (“JJC”), with Palas, Keshet, Weinberg and GBH as Vendors (the “Vendors ") regarding the transfer and sale by GBH of all of the interest and rights to the assets and business of the GBH Carbon Credit Project, including know-how, trademarks, patents, agreements and all other assets (the "the GBH Carbon Credit Project Assets") to JJC, a company traded on the non-NASDAQ Over the Counter Bulletin Board, upon the terms and conditions set forth in this Agreement. At the time of this Agreement, the assets of the GBH Carbon Credit Project includes advanced stages of agreements for the turn key development of carbon reduction and carbon credit creation projects. Any contracts of GBH regarding the GBH Carbon Credit Project will be assigned to JJC at the closing, at no additional cost and will be deemed to have been acquired by JJC pursuant to this Agreement.

Acquisition

GBH hereby agrees to transfer to JJC all the GBH Carbon Credit Project Assets on the terms and subject to the conditions set out in this Agreement. The transaction will include assumption of any responsibilities of GBH related to the GBH Carbon Credit Project under signed agreements. The business and contracts of the GBH Carbon Credit Project will be referred to as the "GBH Business".

The Vendor will transfer the GBH Carbon Credit Project Assets directly to JJC or an operating subsidiary of JJC.

Consideration

In payment for the sale and transfer of the GBH Carbon Credit Project Assets to JJC, JJC will assume and carry out all GBH's responsibilities under the agreements for carbon reduction. The Principals may lend funds to GBH in order to commence certain of the said agreements and the parties acknowledge that JCC will use Financing (defined below) proceeds to repay same. The Principals will keep accurate records of the loans and expenditures made with loan proceeds to qualify for reimbursement.

Share Sales and JJC restructuring

Lai and Zeng are each the holders of 500,000 restricted shares of JJC. There are a total of 1,900,000 common shares and no preferred shares outstanding in the capital of JJC. JJC will split its common stock thirty five (35) for one such that Lai and Zeng will hold 35,000,000 common shares of restricted stock. Total JJC stock outstanding prior to the Financing will be 66,500,000 common shares. JJC will also change its name to Blue Sphere Corporation.

Lai and Zeng together will sell for a price of $0.001 per share to each of the Principals 5,584,000 common shares. Such shares will be fully vested and transferred on Closing.

Lai and Zeng together will sell for a price of $0.001 per share to each of Zetta Services Ltd. of BVI and Ehud Barzily Holding and Investments Ltd. of Israel ( together, the "Facilitators") 1,675,000 common shares. Such shares will be fully vested and transferred on Closing.

The total common share fully diluted position of JJC after transfer of the Lai and Zeng Shares as above and the Financing (described below) will be such that the Principals and Facilitators will have 20,102,000 out of 67,000,000 shares, or just over 30% of JJC, including the Financing initial shares will be newly issued restricted securities. Shares issued on exercise of the Financing warrants and later equity fundraisings will be in addition to the 67,000,000 shares. Lai and Zeng will cancel such of their shares as may be necessary to reach the 67,000,000 share capitalization indicated here.

The Principals and the Facilitators acknowledge that the Lai and Zeng shares will be restricted as to sale under US securities laws and will carry a restrictive legend indicating such restrictions. In addition, the Principals and the Facilitators agree that the Lai and Zeng shares transferred to them will be held in escrow by JJC's attorneys and may not be sold, encumbered or released to the Principals or the Facilitators for two years after Closing. At the end of the two year period the escrowed shares will be unconditionally released from escrow to their owners. However, if during the escrow period there is an offer from an arm's length third party to purchase or merge with the entire company, the Principals' and the Facilitators' shares will be released from escrow to tender to the offer for the company.

EquityFinancing

JJC will arrange for JJC to complete a financing prior to or upon Closing of $500,000 (the "Financing") comprising units priced at $0.50 per unit, each unit consisting of one share and one share purchase warrant. Each warrant will be exercisable at a price of $0.75 for five years.

The Financing net proceeds will be used in part to repay the Principal's loan, and for advance of the GBH Business and for working capital after Closing.

10.

Within the next four to six months after Closing, JJC will raise an additional $500,000 either through exercise of Financing warrants or otherwise at market rates, which proceeds are to be used in the GBH Business.

Closing

11.

Closing of the transactions contemplated herein (the "Closing") will occur on or before February 10, 2010 or on such other date as the parties may agree, at such place and time as determined by JJC, acting reasonably.

Due Diligence

12.

JJC and the Vendors will each have the right, by the closing date, to conduct due diligence on the others in connection with the transactions contemplated hereunder. Each of JJC and the Vendors and their respective accountants, legal counsel and other representatives will have full access during normal business hours to the management, properties, books, records, contracts, commitments and other documents of the others and their subsidiaries in connection with the transactions contemplated herein.

Standstill Agreement

13.

The Vendors agree that they will not for a period ending the earlier of Closing or February 10, 2010, negotiate with any party other than JJC as to the disposition or development or joint venture of the GBH Carbon Credit Project Assets. The parties may extend the term of this clause by mutual agreement.

Representations

14.

The Vendors represent and warrant to JJC that:

(a)

GBH will on or before Closing use its best efforts to transfer or cause to be transferred the GBH Carbon Credit Project Assets to JJC free and clear of any charges, encumbrances, liens or claims;

(b)

the GBH Carbon Credit Project has property rights and interest in the GBH Carbon Credit Project Assets and holds interests in all aspects of the GBH Carbon Credit Project Assets, and to the best of the Vendors knowledge, the GBH Carbon Credit Project Assets do not infringe upon the intellectual rights of any other party.

14A.

JJC represents and warrants to the Vendors that:

(a)

On Closing JJC will be without liabilities other than legal fees accrued for the purpose of this transaction and accounting fees for required filings with the SEC in the maximum amount of $40,000, for which there will be sufficient funds in its treasury. There will be no claims or litigation outstanding against JJC;

(b)

JJC should hold harmless and indemnify the Vendors for any future claims, if any, related to the period prior to the closing;

(c)

JJC has filed all reports (other than Form 8-K reports) required under the Securities Exchange Act of 1934 for the preceding 12 months (or for a shorter period that JJC was required to file such reports and materials); and

(d)

By 4 business days after Closing, JJC will file "Form 10 information" with the SEC reflecting its status as an entity that is no longer an issuer described in Rule 144(i)(1).

Closing Conditions

15.

This Agreement and the Closing hereof is subject to the following:

(c)

the Financing being closed or funds being held in escrow pending the Closing;

(d)

JJC will have no liabilities other than those described in clause14A(a), and will be up to date in its filings with the SEC;

(e)

The GBH Carbon Credit Project Assets will be assigned and delivered to JJC, with consent from the contracting partner;

(f)

The Principals may appoint 2 representatives to the board of directors of JJC to take effect after Closing from a total of three directors.

(g)

JJC having entered into employment agreements with each of the Principals on terms satisfactory to JJC and the respective Principals whereby the Principals will expend no less than 75% of their full time and energy on the GBH Business;

(h)

each of the Principals having agreed not to compete with the GBH Business while employed and for a period of one year after they terminate employment with JCC; and

(i)

no material adverse change will have occurred to the GBH Business or to JJC business

(j)

JCC shall be liable and fully indemnify the Vendors for any claim whatsoever resulting from the filing of the 8-K with the SEC or any related report thereto. .

Pre and Post Closing Covenants

16.

JJC and the Vendors hereby covenant to the other as follows:

(k)

until Closing the Vendors will conduct the GBH Business in the ordinary and normal course; and

(l)

the Vendors acknowledge that JJC will be required to provide substantial disclosure about the GBH Business and its management to the SEC and they agree to fully co-operate to provide in a timely manner such information and disclosure about the GBH Carbon Credit Project Assets and the GBH Business as JJC's legal counsel and auditors may request.

Binding Agreement

17.

This Agreement is intended to be binding.

General

18.

All dollar references are United States dollars.

19.

JJC will pay the legal costs of the transaction for the acquisition of the GBH Carbon Credit Project Assets, and the costs to the Vendors of their complying with the terms of this Agreement, including without limitation their own lawyers for review of documents.

Our signatures below indicate our intention to be legally bound to the above terms.

JIN JIE CORP.

Per:
Authorized Signatory

Global Biofuels Holding Ltd.

Per:
Authorized Signatory


Shlomo Palas			Shmuel Keshet


Eliezer Weinberg			Cally Kai Lai Lai


Wei Xiang Zeng

EX-10.2 6 v330956_ex10-2.htm EXHIBIT 10.2

TERMINATION AGREEMENT

THIS TERMINATION AGREEMENT dated as of the 12th day of February, 2010.

AMONG:
	Shlomo Palas ( I.D. 057313579 )
	17 Etrog St.
	Rosh Hayyn
	Israel 48570

	Samuel Keshet ( I.D. 030164529 )
	19, Reuven St.
	Zichron Ya'akov
	Israel 30900

	Eliezer Weinberg ( I.D. 065137408 )
	6, Hayarkon St.
	Haifa
	Israel 34465

	(Shlomo Palas, Samuel Keshet and Eliezer Weinberg together the “Principals”)

AND:

	Jin Jie Corp.
	409 - 4th Floor, Tsui King House
	Choi Hung Estate
	Hong Kong

	(“JJC”)

AND:

	Green Biofuels Holdings Ltd. an Israeli company,
	17 Hactrog Street Rosh Hayin, Israel

	(“GBH”)

AND:

	Cally Kai Lai Lai
	409 - 4th Floor, Tsui King House
	Choi Hung Estate Hong Kong

	(“Lai”)

AND:

	Wei Xiang Zeng
	409 - 4th Floor, Tsui King House
	Choi Hung Estate Hong Kong

	(“Zeng”)

WHEREAS:

The Principals, JJC, GBH, Lai and Zeng entered into a letter agreement dated January 13, 2010 (the “Letter Agreement”), regarding, among other things, the transfer and sale by GBH of all of the interest and rights to the assets and business of the GBH Carbon Credit Project, including know-how, trademarks, patents, agreements and all other assets (the "the GBH Carbon Credit Project Assets") to JJC;

The Principals, JJC, GBH, Lai and Zeng wish to mutually terminate the Letter Agreement and abandon the GBH Carbon Credit Project Assets acquisition; and

The Parties wish to enter into this termination agreement to confirm the termination of the Letter Agreement and to release each other from any and all obligations and liabilities pursuant to the Letter Agreement.

THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the premises and of the mutual covenants and agreements herein set forth, the parties covenant and agree as follows:

1. Termination of Letter Agreement. The Letter Agreement is hereby terminated and the GHB Carbon Credit Project Assets acquisition is hereby abandoned effective as of the date hereof.

2. Mutual Releases. Each of the parties hereto (the “Parties”) does hereby release the other from all liabilities and legal obligations of whatsoever kind and howsoever arising which either of them may now have or at any time hereafter can, shall or may have in any way resulting or arising from any cause, matter or thing existing up to the present time in connection with the Letter Agreement.

3. Final Termination Agreement. This Agreement and the other agreements to which this termination agreement refers, together with all exhibits, schedules and annexes attached to any of them, constitute the final, entire agreement among the parties and supersedes any prior oral or written and all contemporaneous oral proposals, commitments, promises, agreements or understandings between the parties with respect to the termination of the Letter Agreement and mutual release of the parties.

4. Further Assurances. The Parties will execute such further assurances and other documents and instruments and do such further and other things as may be necessary to implement and carry out the intent of this Agreement.

5. Successors and Assigns. This Agreement will enure to the benefit of and be binding upon the parties and their respective successors and assigns, as applicable.

6. Governing Law. This Agreement and the application or interpretation hereof will be governed exclusively by its terms and by the laws of the State of Nevada.

7. Counterparts. This Agreement may be executed in one or more counterparts all of which together will constitute one and the same instrument.

8 Electronic Means. Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the date set forth above.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written.

JIN JIE CORP.

Per:
	Authorized Signatory

GREEN BIOFUELS HOLDINGS LTD.

Per:
	Authorized Signatory


SHLOMO PALAS		SHMUEL KESHET


ELIEZER WEINBERG		CALLY KAI LAI LAI


WEI XIANG ZENG

EX-10.3 7 v330956_ex10-3.htm EXHIBIT 10.3

Blue Sphere Corp.

Global Share Incentive Plan (2010)

1. Name And Purpose.

1.1 This plan, which has been adopted by the Board of Directors of the Company, Blue Sphere Corp., as amended from time to time, shall be known as the Blue Sphere Corp. Global Share Incentive Plan (2010) (the “Plan”).

1.2 The purposes of the Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Service Providers of the Company and its affiliates and subsidiaries, if any, and to promote the Company's business by providing such individuals with opportunities to receive Awards pursuant to the Plan and to strengthen the sense of common interest between such individuals and the Company's Stockholders.

1.3 Awards granted under the Plan to Service Providers in various jurisdictions may be subject to specific terms and conditions for such grants may be set forth in one or more separate appendix to the Plan, as may be approved by the Board of Directors of the Company from time to time.

2. Definitions

“Administrator” shall mean the Board of Directors or a Committee.

“Appendix” shall mean any appendix to the Plan adopted by the Board of Directors containing country-specific or other special terms relating to Awards including additional terms with respect to grants of restricted stock and other equity-based Awards.

“Award” shall mean a grant of Options or allotment of Shares or other equity-based award hereunder. All Awards shall be confirmed by an Award Agreement, and subject to the terms and conditions of such Award Agreement.

“Award Agreement” shall mean a written instrument setting forth the terms applicable to a particular Award.

“Board of Directors” shall mean the board of directors of the Company.

“Cause” shall have the meaning ascribed to such term or a similar term as set forth in the Participant’s employment agreement or the agreement governing the provision of services by a non-employee Service Provider, or, in the absence of such a definition: (i) conviction (or plea of nolo contendere) of any felony or crime involving moral turpitude or affecting the Company; (ii) repeated and unreasonable refusal to carry out a reasonable and lawful directive of the Company or of Participant’s supervisor which involves the business of the Company or its affiliates and was capable of being lawfully performed; (iii) fraud or embezzlement of funds of the Company or its affiliates; (iv) any breach by a director of his / her fiduciary duties or duties of care towards the Company; and (v) any disclosure of confidential information of the Company or breach of any obligation not to compete with the Company or not to violate a restrictive covenant.

“Committee” shall mean a compensation committee or other committee as may be appointed and maintained by the Board of Directors, in its discretion, to administer the Plan, to the extent permissible under applicable law, as amended from time to time.

“Company” shall mean Blue Sphere Corp., a Nevada Corporation, and its successors and assigns.

“Consultant” means any entity or individual who (either directly or, in the case of an individual, through his or her employer) is an advisor or consultant to the Company or its subsidiary or affiliate.

“Corporate Charter” shall mean the Certificate of Incorporation and By-laws of the Company, and any subsequent amendments or replacements thereto.

“Disability” shall have the meaning ascribed to such term or a similar term in the Participant's employment agreement (where applicable), or in the absence of such a definition, the inability of the Participant, in the opinion of a qualified physician acceptable to the Company, to perform the major duties of the Participant’s position with the Company because of the sickness or injury of the Participant for a consecutive period of 90 days.

“Fair Market Value” shall mean, as of any date, the value of Shares, determined as follows:

(i) If the Shares are listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq Small Cap Market, the Fair Market Value of a Share of common stock of the Company shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the common stock) on the last market trading day prior to the day of determination, as reported in the Wall Street Journal or such other source as the Board deems reliable.

(ii) In the absence of such markets for the Shares, the Fair Market Value shall be determined in good faith by the Board.

“IPO” shall mean an initial offering of the Company’s Shares to the public in an underwritten offering under an applicable registration statement.

“Options” shall mean options to purchase Shares awarded under the Plan.

“Participant” shall mean a recipient of an Award hereunder who executes an Award Agreement.

“Restricted Stock” means an Award of Shares under this Plan that is subject to the terms and conditions of Section 7.

“Service Provider” shall mean an employee, director, office holder or Consultant of the Company or its subsidiary or affiliate.

“Shares” shall mean shares of common stock, par value US$ 0.0001 per share, of the Company.

“Transaction” shall have the meaning set forth in Section 10.2.

3. Administration of the Plan.

3.1 The Plan will be administered by the Administrator. If the Administrator is a Committee, such Committee will consist of such number of members of the board of directors of the Company (not less than two in number), as may be determined from time to time by the Board of Directors. The Board of Directors shall appoint such members of the Committee, may from time to time remove members from, or add members to, the Committee, and shall fill vacancies in the Committee however caused.

2 of 11

3.2 The Committee, if appointed, shall select one of its members as its Chairman and shall hold its meetings at such times and places as it shall determine. Actions at a meeting of the Committee at which a majority of its members are present or acts approved in writing by all members of the Committee shall be the valid acts of the Committee. The Committee shall appoint a secretary, who shall keep records of its meetings and shall make such rules and regulations for the conduct of its business and the implementation of the Plan, as it shall deem advisable, subject to the directives of the Board of Directors and in accordance with applicable law.

3.3 Subject to the general terms and conditions of the Plan, and in particular Section 3.4 below, the Administrator shall have full authority in its discretion, from time to time and at any time, to determine (i) eligible Participants, (ii) the number of Options or Shares to be covered by each Award, (iii) the time or times at which the Award shall be granted, (iv) the vesting schedule and other terms and conditions applying to Awards, (v) the form(s) of written agreements applying to Awards, and (vi) any other matter which is necessary or desirable for, or incidental to, the administration of the Plan and the granting of Awards. The Board of Directors may, in its sole discretion, delegate some or all of the powers listed above to the Committee, to the extent permitted by applicable law, its Corporate Charter or other applicable law, rules and regulations.

3.4 No member of the Board of Directors or of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Award granted hereunder. Subject to the Company’s decision and to all approvals legally required, each member of the Board or the Committee shall be indemnified and held harmless by the Company against any cost or expense (including counsel fees) reasonably incurred by him or her, or any liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the Plan unless arising out of such member’s own willful misconduct or bad faith, to the fullest extent permitted by applicable law. Such indemnification shall be in addition to any rights of indemnification the member may have as a director or otherwise under the Company’s Corporate Charter, any agreement, any vote of stockholders or disinterested directors, insurance policy or otherwise.

3.5 The interpretation and construction by the Administrator of any provision of the Plan or of any Option hereunder shall be final and conclusive. In the event that the Board appoints a Committee, the interpretation and construction by the Committee of any provision of the Plan or of any Option hereunder shall be conclusive unless otherwise determined by the Board of Directors. To avoid doubt, the Board of Directors may at any time exercise any powers of the Administrator, notwithstanding the fact that a Committee has been appointed.

3.6 The Administrator shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan and perform all acts, including the delegation of its responsibilities (to the extent permitted by applicable law and applicable stock exchange rules), as it shall, from time to time, deem advisable; to construe and interpret the terms and provisions of the Plan and any Award issued under the Plan (and any agreements relating thereto); and to otherwise supervise the administration of the Plan. The Administrator may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any agreement relating thereto in the manner and to the extent it shall deem necessary to effectuate the purpose and intent of the Plan. Notwithstanding the foregoing, no action of the Administrator under this Section ‎3.6 not otherwise provided for herein or in an Award Agreement shall reduce the vested rights of any Participant without the Participant’s consent.

3.7 Without limiting the generality of the foregoing, the Administrator may adopt special appendices and/or guidelines and provisions for persons who are residing in or employed in, or subject to, the taxes of, any domestic or foreign jurisdictions, to comply with applicable laws, regulations, or accounting, listing or other rules with respect to such domestic or foreign jurisdictions.

3 of 11

Eligible Participants.

4.1 No Award may be granted pursuant to the Plan to any person serving as a member of the Committee or to any other Director of the Company at the time of the grant, unless such grant is approved in the manner prescribed for the approval of compensation of directors under applicable law.

4.2 Subject to the limitation set forth in Section ‎4.1 above and any restriction imposed by applicable law, Awards may be granted to any Service Provider of the Company, whether or not a director of the Company or its affiliates. The grant of an Award to a Participant hereunder shall neither entitle such Participant to receive an additional Award or participate in other incentive plans of the Company, nor disqualify such Participant from receiving any additional Award or participating in other incentive plans of the Company.

Reserved Shares.

The Company shall determine the number of Shares reserved hereunder from time to time, and such number may be increased or decreased by the Company from time to time. Any Shares under the Plan, in respect of which the right hereunder of a Participant to purchase the same shall for any reason terminate, expire or otherwise cease to exist, shall again be available for grant as Awards under the Plan. Any Shares that remain unissued and are not subject to Awards at the termination of the Plan shall cease to be reserved for purposes of the Plan. Until termination of the Plan the Company shall at all times reserve a sufficient number of Shares to meet the requirements of the Plan.

Award Agreement.

6.1 The Board of Directors in its discretion may award to Participants Awards available under the Plan. The terms of the Award will be set forth in the Award Agreement. The date of grant of each Award shall be the date specified by the Board of Directors at the time such award is made, or in the absence of such specification, the date of approval of the award by the Board of Directors.

6.2 The Award Agreement shall state, inter alia, the number of Options or Shares or equity-based units covered thereby, the type of Option or Share-based or other grant awarded, any special terms applying to such Award (if any), including the terms of any country-specific or other applicable Appendix, as determined by the Board of Directors.

Restricted Stock and Other Equity-Based Awards.

7.1 Eligibility. Restricted Stock may be issued to all Participants either alone or in addition to other Awards granted under the Plan. The Administrator shall determine the eligible Participants to whom, and the time or times at which, grants of Restricted Stock will be made, the number of shares to be awarded, the purchase price (if any) to be paid by the Participant (subject to Section 7.2), the time or times at which such Awards may be subject to forfeiture (if any), the vesting schedule (if any) and rights to acceleration thereof, and all other terms and conditions of the Awards. The Administrator may condition the grant or vesting of Restricted Stock upon the attainment of specified performance targets or such other factors as the Administrator may determine, in its sole discretion. Unless otherwise determined by the Administrator , the Participant shall not be permitted to sell or transfer shares of Restricted Stock awarded under this Plan during a period set by the Administrator (if any) (the “Restriction Period”) commencing with the date of such Award, as set forth in the applicable Award agreement.

7.2 Terms. A Participant selected to receive Restricted Stock shall not have any rights with respect to such Award, unless and until such Participant has delivered a fully executed copy of the Award Agreement evidencing the Award to the Company and has otherwise complied with the applicable terms and conditions of such Award. The purchase price of Restricted Stock shall be determined by the Administrator, but shall not be less than as permitted under applicable law. Awards of Restricted Stock must be accepted within a period of 60 days (or such shorter period as the Administrator may specify at grant) after the grant date, by executing an Award Agreement and by paying whatever price (if any) the Administrator has designated thereunder.

4 of 11

7.3 Legend. Each Participant receiving Restricted Stock shall be issued a share certificate in respect of such shares of Restricted Stock, unless the Administrator elects to use another system, such as book entries by the transfer agent, as evidencing ownership of Restricted Stock. Such certificate shall be registered in the name of such Participant, and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following form (as well as other legend required by the Administrator pursuant to Section 19.3 below):

“The anticipation, alienation, attachment, sale, transfer, assignment, pledge, encumbrance or charge of the shares represented hereby are subject to the terms and conditions (including forfeiture) of the Blue Sphere Corp. Global Incentive Plan (2009), and an Award Agreement entered into between the registered owner and the Company dated ____________. Copies of such Plan and Award agreement are on file at Blue Sphere Corp.”

7.4 Custody. The Administrator may require that any share certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed, and that, as a condition of any Restricted Stock Award, the Participant shall have delivered a duly signed share transfer deed, endorsed in blank, relating to the Shares covered by such Award.

7.5 Rights as Stockholder. Except as provided in this Section and Section 7.4 above and as otherwise determined by the Administrator and set forth in the Award Agreement, the Participant shall have, with respect to the shares of Restricted Stock, all of the rights of a holder of Shares including, without limitation, the right to receive any dividends, the right to vote such shares and, subject to and conditioned upon the full vesting of shares of Restricted Stock, the right to tender such shares. Notwithstanding the foregoing, the payment of dividends shall be deferred until, and conditioned upon, the expiration of the applicable Restriction Period, unless the Administrator, in its sole discretion, specifies otherwise at the time of the Award.

7.6 Lapse of Restrictions. If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock subject to such Restriction Period, the certificates for such shares shall be delivered to the Participant. All legends shall be removed from said certificates at the time of delivery to the Participant except as otherwise required by applicable law. Notwithstanding the foregoing, actual certificates shall not be issued to the extent that book entry recordkeeping is used.

7.7 Other Equity-Based Awards. Other equity-based awards (including, without limitation, restricted stock units and performance share awards) may be granted either alone or in addition to or other Awards granted under the Plan to all eligible Participants pursuant to such terms and conditions as the Administrator may determine, including without limitation, in one or more appendix adopted by the administrator and appended to this Plan.

Exercise of Options.

8.1 Options shall be exercisable pursuant to the terms under which they were awarded and subject to the terms and conditions of the Plan and any applicable Appendix, as specified in the Award Agreement.

8.2 The exercise price for each share to be issued upon exercise of an Option shall be such price as is determined by the Board in its discretion, provided that the price per Share is not less than the par value of each Share.

5 of 11

8.3 An Option, or any part thereof, shall be exercisable by the Participant's signing and returning to the Company at its principal office (and to the Trustee, where applicable), a “Notice of Exercise” in such form and substance as may be prescribed by the Board of Directors from time to time, together with full payment for the Shares underlying such Option.

8.4 Each payment for Shares under an Option shall be in respect of a whole number of Shares, shall be effected in cash or by check payable to the order of the Company, or such other method of payment acceptable to the Company as determined by the Administrator, and shall be accompanied by a notice stating the number of Shares being paid for thereby.

8.5 Until the Shares are issued (as evidenced by the appropriate entry in the share register of the Company or of a duly authorized transfer agent of the Company) a Participant shall have no right to vote or right to receive dividends or any other rights as a shareholder shall exist with respect to such Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right the record date for which is prior to the date the Shares are issued, except as provided in Section ‎9 of the Plan.

8.6 To the extent permitted by law, if the Share is traded on a national securities exchange, The Nasdaq Share Market or quoted on a national quotation system sponsored by the National Association of Securities Dealers or otherwise publicly traded or quoted, payment for the Shares underlying an Option may be made all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company in payment of the exercise price (or the relevant portion thereof, as applicable) and any withholding taxes, or on such other terms and conditions as may be acceptable to the Administrator. No Shares shall be issued until payment has been made or provided for, as provided herein.

Termination of Relationship as Service Provider.

9.1 Effect of Termination; Exercise after Termination. Unless otherwise determined by the Administrator, if a Participant ceases to be a Service Provider, such Participant may exercise any outstanding Options within such period of time as is specified in the Award Agreement or the Plan to the extent that the Options are vested on the date of termination (but in no event later than the expiration of the term of the Option as set forth in the Option Agreement). If, on the date of termination, any Options are unvested, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Participant does not exercise the vested Options within the time specified in the Award Agreement or the Plan, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

In the absence of a provision specifying otherwise in the relevant Award Agreement, then:

(a) in the event that the Participant ceases to be a Service Provider for any reason other than termination for Cause, or as a result of the Participant’s death or Disability: (i) the vested Options shall remain exercisable until the earlier of: (i) a period of three (3) months from the Date of Termination; or (ii) expiration of the term of the Option as set forth in Section 13; and (ii) all Restricted Stock still subject to restriction under the applicable Restriction Period, as set forth in the Award Agreement, shall be forfeited;

(b) in the event that the Participant ceases to be a Service Provider as a result of the Participant’s death or Disability: (i) the vested Options shall remain exercisable until the earlier of: (i) a period of one (1) year from the Date of Termination; or (ii) expiration of the term of the Option as set forth in Section ‎13; and (ii) all Restricted Stock still subject to restriction under the applicable Restriction Period, as set forth in the Award Agreement, shall be forfeited;

(c) in the event that the Participant ceases to be a Service Provider for Cause, (i) all Options will terminate immediately upon the date of such termination for Cause, such that the unvested portion of the Options will not vest, and the vested portion of the Options will no longer be exercisable; and (ii) all Restricted Stock still subject to restriction under the applicable Restriction Period as of the Date of Termination, as set forth in the Award Agreement, shall be forfeited.

6 of 11

9.2 Date of Termination. For purposes of the Plan and any Option or Option Agreement, and unless otherwise set forth in the relevant Award Agreement, the “Date of Termination” (whether for Cause or otherwise) shall be the effective date of termination of the Participant's employment or engagement as a Service Provider.

9.3 Leave of Absence. Unless the Administrator provides otherwise, vesting of Awards granted hereunder shall be suspended during any unpaid leave of absence.

9.4 Change of Status. A Service Provider shall not cease to be considered as such in the case of any (a) leave of absence approved by the Company, or (b) transfers between locations of the Company or between the Company, and its parent, subsidiary, affiliate, or any successor thereof; or (c) changes in status (employee to director, employee to consultant, etc.) provided that such change does not affect the specific terms applying to the Service Provider’s Award.

10.

Adjustments.

Upon the occurrence of any of the following described events, a Participant's rights to purchase Shares under the Plan shall be adjusted as hereinafter provided:

10.1 Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Options or other Award have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option or other Award, as well as the price per Share covered by each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a share split, reverse share split, share dividend, combination or reclassification of the Shares, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company. The conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Option or other Award.

10.2 Merger, Acquisition, or Asset Sale.

(a) In the event of (i) a merger or consolidation of the Company with or into another corporation resulting in such other corporation being the surviving entity or the direct or indirect parent of the Company or resulting in the Company being the surviving entity and any other person or entity owning fifty percent (50%) or more of the outstanding voting power of the Company's securities by virtue of the transaction, (ii) an acquisition of all or substantially all of the shares of the Company, or (iii) the sale of all or substantially all of the assets of the Company (each such event, a “Transaction”), the unexercised or restricted portion of each outstanding Award shall be assumed or an equivalent Award or right substituted, by the successor corporation or an affiliate of the successor corporation, as shall be determined by such entity, subject to the subsequent sentence in this Section ‎10.2‎(a) and the remaining terms of the Plan. In the event that the successor corporation or a parent or subsidiary of the successor corporation does not provide for such an assumption or substitution of Options, the Administrator may determine, at its sole discretion, that all or a portion of the outstanding and unvested Options shall become exercisable in full on a date no later than ten (10) days prior to the date of consummation of the Transaction, provided that unless otherwise determined by the Administrator, the exercise of all Options that otherwise would not have been exercisable in the absence of a Transaction, shall be contingent upon the actual consummation of the Transaction.

7 of 11

(b) For the purposes of this Section ‎10.2, an Option shall be considered assumed or substituted if, following a Transaction, the option confers the right to purchase or receive, for each Share subject to the Option immediately prior to the Transaction, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Shares of the Company for each Share held on the effective date of the Transaction (and if holders were offered a choice of consideration, the type of consideration determined by the Administrator, at its sole discretion); provided, however, that if the consideration received in the Transaction is not solely common stock or ordinary shares (or the equivalent) of the successor corporation or its direct or indirect parent, the Administrator may, with the consent of the successor corporation, provide for the per share consideration to be received upon the exercise of the Option to be solely common stock or ordinary shares (or the equivalent) of the successor corporation or its direct or indirect parent equal in fair market value to the per share consideration received by holders of Shares in the Transaction, as determined by the Administrator.

(c) In the event that the Board of Directors determines in good faith that, in the context of a Transaction, certain Options have no monetary value and thus do not entitle the holders of such Options to any consideration under the terms of the Transaction, the Board of Directors may determine that such Options shall terminate effective as of the effective date of the Transaction.

(d) It is the intention that the Administrator’s authority to make determinations, adjustments and clarifications in connection with the treatment of Awards shall be interpreted as widely as possible, to allow the Administrator maximal power and flexibility to interpret and implement the provisions of the Plan in the event of Transaction, provided that the Administrator shall determine in good faith that a Participant’s rights are not thereby adversely affected without the Participant’s express written consent. Without derogating from the generality of the foregoing, the Administrator shall have the authority, at its sole discretion, to determine that the treatment of Options, whether vested or unvested, in a Transaction may differ among individual Participants or groups of Participants, provided that the overall economic impact of the different approaches determined by the Administrator shall be substantively equivalent as of the date of the closing of the Transaction.

11.

Non-Transferability of Options and Shares.

11.1 No Option may be transferred other than by will or by the laws of descent and distribution, and during the Participant's lifetime an Option may be exercised only by such Participant.

11.2 Restricted Stock may not be assigned, transferred, pledged or mortgaged, other than by will or laws of descent and distribution, prior to the date on which the date on which any applicable restriction, performance or deferred period lapses. Shares for which full payment has not been made, may not be assigned, transferred, pledged or mortgaged, other than by will or laws of descent and distribution. For avoidance of doubt, the foregoing shall not be deemed to restrict the transfer of an Participant's rights in respect of Options or Shares purchasable pursuant to the exercise thereof upon the death of such Participant to such Participant’s estate or other successors by operation of law or will, whose rights therein shall be governed by Section 9.1(a) hereof, and as may otherwise be determined by the Administrator. Further restrictions on the transfer of Shares are set forth below in Section 21 below.

12.

Term and Amendment of the Plan.

12.1 The Plan shall expire on the date which is ten (10) years from the date of its adoption by the Board of Directors (except as to Options outstanding on that date).

8 of 11

12.2 Notwithstanding any other provision of the Plan, the Board (or a duly authorized Committee thereof) may at any time, and from time to time, amend, in whole or in part, any or all of the provisions of the Plan (including any amendment deemed necessary to ensure that the Company may comply with any regulatory requirement), or suspend or terminate it entirely, retroactively or otherwise; provided, however, that, except (x) to correct obvious drafting errors or as otherwise required by law or (y) as specifically provided herein, the rights of a Participant with respect to Awards granted prior to such amendment, suspension or termination, may not be reduced without the consent of such Participant. The Administrator may amend the terms of any Award theretofore granted, prospectively or retroactively, but except (x) to correct obvious drafting errors or as otherwise required by law or applicable accounting rules, or (y) as specifically provided herein, no such amendment or other action by the Committee shall reduce the rights of any Participant with respect to Awards without the Participant’s consent.

13.

Term of Option.

Unless otherwise explicitly provided in an Award Agreement, if any Option, or any part thereof, has not been exercised and the Shares covered thereby not paid for within ten (10) years after the date on which the Option was granted, as set forth in the Award Agreement (or any other period set forth in the instrument granting such Option pursuant to Section 6), such Option, or such part thereof, and the right to acquire such Shares shall terminate, all interests and rights of the Participant in and to the same shall expire, and, in the event that in connection therewith any Shares are held in trust as aforesaid, such trust shall expire.

14.

Continuance of Engagement.

Neither the Plan nor any offer of Shares or Options to a Participant shall impose any obligation on the Company or a related company thereof, to continue the employment or engagement of any Participant as a Service Provider, and nothing in the Plan or in any Option granted pursuant thereto shall confer upon any Participant any right to continue to serve as a Service Provider of the Company or a related company thereof or restrict the right of the Company or a related company thereof to terminate such employment or engagement at any time.

15.

Governing Law.

The Plan and all instruments issued thereunder or in connection therewith, shall be governed by, and interpreted in accordance with, the laws of the State of Delaware.

16.

Application of Funds.

The proceeds received by the Company from the sale of Shares pursuant to Options granted under the Plan will be used for general corporate purposes of the Company or any related company thereof.

17.

Taxes.

17.1 Any tax consequences arising from the grant, or vesting or exercise of any Award, from the payment for Shares covered thereby, or from any other event or act (of the Company, and/or its affiliates, or the Participant), hereunder, shall be borne solely by the Participant. The Company and/or its affiliates shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, the Participant shall agree to indemnify the Company and/or its affiliates and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Participant. The Company or any of its affiliates may make such provisions and take such steps as it may deem necessary or appropriate for the withholding of all taxes required by law to be withheld with respect to Awards granted under the Plan and the exercise thereof, including, but not limited, to (i) deducting the amount so required to be withheld from any other amount (or Shares issuable) then or thereafter to be provided to the Participant, including by deducting any such amount from a Participant’s salary or other amounts payable to the Participant, to the maximum extent permitted under law and/or (ii) requiring the Participant to pay to the Company or any of its affiliates the amount so required to be withheld as a condition of the issuance, delivery, distribution or release of any Shares and/or (iii) by causing the exercise and sale of any Options or Shares held by on behalf of the Participant to cover such liability, up to the amount required to satisfy minimum statutory withholding requirements. In addition, the Participant will be required to pay any amount due in excess of the tax withheld and transferred to the tax authorities, pursuant to applicable tax laws, regulations and rules.

9 of 11

17.2 The receipt of an Award and/or the acquisition of Shares issued upon the exercise of the Options may result in tax consequences. The description of tax consequences set forth in the Plan or any Appendix hereto does not purport to be complete, up to date or to take into account any special circumstances relating to a Participant.

17.3 THE PARTICIPANT IS ADVISED TO CONSULT WITH A TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF RECEIVING OR EXERCISING ANY AWARD IN LIGHT OF HIS OR HER PARTICULAR CIRCUMSTANCES.

18.

Market Stand-Off

If so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration of the offering of any securities of the Company under the securities laws of any jurisdiction, the Participant shall not sell or otherwise transfer any Shares or other securities of the Company during a 180-day period or such other period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company (the “Market Standoff Period”) following the effective date of registration statement of the Company filed under such securities laws. The Company may require the Participant to execute a form of undertaking to this effect or impose stop transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period.

19.

Conditions Upon Issuance of Shares.

19.1 Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option or with respect to any other Award unless the exercise of such Option or grant of such Award and the issuance and delivery of such Shares shall comply with applicable laws and shall be further subject to the approval of counsel for the Company with respect to such compliance. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

19.2 Investment Representations. As a condition to the exercise of an Option or receipt of an Award, the Board may require the person exercising such Option or receiving such Award to represent and warrant at the time of any such exercise or the time of receipt of the Award that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares, and make other representations as may be required under applicable securities laws if, in the opinion of counsel for the Company, such representations are required, all in form and content specified by the Board.

19.3 Legend. The Administrator may require each person receiving Shares pursuant to an Award granted under the Plan to represent to and agree with the Company in writing that the Participant is acquiring the shares without a view to distribution thereof and such other securities law related representations as the Administrator shall request. In addition to any legend required by the Plan, the certificates for such shares may include any legend which the Administrator deems appropriate to reflect any applicable restrictions on transfer. All certificates for Shares delivered under the Plan shall be subject to such stock transfer orders and other restrictions as the Administrator may deem advisable under the rules, regulations and other requirements of any relevant securities authority, any stock exchange upon which the Shares are then listed or any national securities association system upon whose system the Shares are then quoted, any applicable securities law, and any applicable corporate law, and the Administrator may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

10 of 11

20.

Proxy

The Company, at its sole discretion, may require that as a condition of grant of an Award or of exercise of an Option, the Participant be required to grant an irrevocable proxy to any appropriate person designated by the Company, to vote all Shares obtained by the Participant pursuant to an Award at all general meetings of Company, and to sign all written resolutions, waivers, consents etc. of the shareholders of the Company on behalf of the Participant, including the right to waive on behalf of the Participant all minimum notice requirements for meetings of shareholders of the Company. Such proxy shall remain in effect until the consummation of an IPO, and shall be irrevocable as the rights of third parties, including investors in the Company, depend upon such proxy. The proxy shall be personal to the Participant and shall not survive the transfer of the Participant’s Shares to a third-party transferee; provided, however, that upon a transfer of the Participant’s Shares to such a transferee (subject to the terms and conditions of the Plan concerning any such transfer), the transferee may be required to grant an irrevocable proxy to such appropriate person as the Company, in giving its approval to the transfer, so requires. The proxy may be contained in the Award Agreement of each Participant or otherwise as the Committee determines. If contained in the Award Agreement, no further document shall be required to implement such proxy, and the signature of the Participant on the Award Agreement shall indicate approval of the proxy thereby granted. The holder of the proxy shall be indemnified and held harmless by the Company against any cost or expense (including counsel fees) reasonably incurred by him/her, or any liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the voting of the proxy unless arising out of his/her own fraud, bad faith or gross negligence, to the extent permitted by applicable law. Such indemnification shall be in addition to any rights of indemnification the holder of the proxy may have as a director, officer or otherwise under the Company's Certificate of Incorporation, by laws or any agreement, any vote of shareholders or directors, insurance policy or otherwise.

21.

Additional Restrictions on Transfers of Shares.

[Until such time as the Shares are registered for trade to the public, a Participant shall not be permitted to transfer, sell, assign, pledge, hypothecate, or otherwise encumber or dispose of in any way (for the purposes of this Section 21, a “Transfer”) to one or more third parties pursuant to an understanding with such third parties any Shares, except as otherwise provided in this Plan, the applicable Award Agreement or as required under applicable law.

22.

Miscellaneous.

Whenever applicable in the Plan, the singular and the plural, and the masculine, feminine and neuter shall be freely interchangeable, as the context requires. The Section headings or titles shall not in any way control the construction of the language herein, such headings or titles having been inserted solely for the purpose of simplified reference. Words such as “herein”, “hereof”, “hereto”, “hereinafter”, “hereby”, and “hereinabove” when used in the Plan refer to the Plan as a whole, including any applicable Appendices, unless otherwise required by context.

* * *

11 of 11

EX-10.4 8 v330956_ex10-4.htm EXHIBIT 10.4

ADVISORY AGREEMENT

THIS AGREEMENT made this 1st day of July, 2012 (the “Effective Date”).

BETWEEN:

Blue Sphere Corporation, a Nevada company with a business office in Even Yehuda, Assuta Street, Israel.

(the “Company”)

AND:

Joshua Shoham from 18 Amir Gilboa Street Tel Aviv, Israel.

(the “Advisor”)

WHEREAS:

A. The Company has proposed the Advisor to serve as the Strategic and Business Advisor of the Company while maintaining his role of Chairman of the Board of Director and Director with Eastern Sphere Ltd., an Israeli fully owned subsidiary of the Company

B. The Advisor and the Company wish to formally record the terms and conditions upon which the Advisor will be hired by the Company and, each of the Company and the Advisor, have agreed to the terms and conditions set forth in this Agreement, as evidenced by their execution hereof; and

NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

Article 1
CONTRACT FOR SERVICES

1.1

Engagement of Advisor. The Company hereby agrees to hire the Advisor in accordance with the terms and provisions hereof.

(i) Term. Unless terminated earlier in accordance with the provisions hereof, this Agreement will commence on the date of execution hereof (the “Commencement Date”) and will continue for a period of Five (5) years from the Commencement Date (the “Term”).

(b)

Service. The Advisor agrees to faithfully, honestly and diligently serve the Company and to devote the time, attention efforts to further the business and interests of the Company and utilize his professional skills and care during the Term.

1.2

The Company acknowledges that the advisory services given by the Advisor are not on an exclusive basis and that the Advisor has other business activities.

1.3

Duties:

(a)

The advisory services plans will be prepared jointly by the Chief Executive Officer of the Company and the Advisor from time to time.

(b)

The Advisor will assist the Company in the process of taking strategic decisions, in business development, in the preparation of annual budgets, in project's appraisal, in financial analyses and in deals' structuring. The Company will work in full transparency with the Advisor in order to facilitate his work as Strategic and Business Advisor and will disclose to him all information, data, agreements that are substantial to the Company's business and/or necessary for the Advisor's successful work.

Article 2
COMPENSATION

2.1

Remuneration.

(a)

For services rendered by the Advisor during the Term, the Advisor will be paid a monthly remuneration, payable within 10 days after the end of each month against an invoice, of US$10,000 + VAT (the “Fee”). Subsequently, the Fee will increase to a gross monthly rate of USD $15,000 + VAT. The Fee will be paid in NIS translated pursuant to the official representative rate of exchange of the US$ as published by the Bank of Israel on the payment date. The Advisor acknowledges that presently the Company doesn't have sufficient funds to pay for the advisory services and agrees that his fees will be registered in the Company's books as a loan given to the Company by the Advisor. Advisory fees will be accumulated in the Company's books as loan. Advisory fees will be paid by the Company when it will have the funds to do so, at the same time and priority as debts that will be paid to employees of the Company. The Advisor will have the option, at any time, to convert the above mentioned accumulated debt, or part of it into shares of the Company at the average traded price of the 10 days prior to the date of the request by the Advisor to exercise this option. This option will survive the Term of this agreement.

(b)

In addition to the professional fees, the Company will grant Advisor additional compensation in the form of cash or shares in cases of extraordinary contribution by you to the benefit of the Company.

(c)

The Advisor’s position with the Company requires a special degree of personal trust, and the Company is not able to supervise the number of working hours of the Advisor; therefore the Advisor will not be entitled to any additional remuneration whatsoever for his work with the exception of that specifically set out in this Agreement.

2.2

Incentive Plans. The Advisor will be entitled to participate in any bonus plan or incentive compensation plans for its employees, adopted by the Company.

2.3

Expenses. The Advisor will be reimbursed by the Company for all reasonable business expenses incurred by the Advisor and pre-approved by the Company in connection with his duties. This includes, but not only, payments of expenses incurred when traveling abroad, per diem payments for travel abroad according to the rules set forth by the Israeli Tax Authorities and others.

Article 3
Insurance and Benefits

3.1

Liability Insurance Indemnification. The Company will insure the Advisor (including his heirs, executors and administrators) with coverage under a standard directors' and officers' liability insurance policy at the Company's expense.

Article 4
CONFIDENTIALITY AND NON-COMPETITION

4.1

Maintenance of Confidential Information.

(a)

The Advisor acknowledges that, in the course of advisory hereunder, the Advisor will, either directly or indirectly, have access to and be entrusted with Confidential Information (whether oral, written or by inspection) relating to the Company or its respective affiliates, associates or customers.

(b)

The Advisor acknowledges that the Company’s Confidential Information constitutes a proprietary right, which the Company is entitled to protect. Accordingly, the Advisor covenants and agrees that, as long as he works for the Company, the Advisor will keep in strict confidence the Company’s Confidential Information and will not, without prior written consent of the Company, disclose, use or otherwise disseminate the Company’s Confidential Information, directly or indirectly, to any third party.

(c)

The Advisor agrees that, upon termination of his services for the Company, he will immediately surrender to the Company all Company Confidential Information then in his possession or under his control.

4.2

Exceptions. The general prohibition contained in Section 4.1 against the unauthorized disclosure, use or dissemination of the Company’s Confidential Information will not apply in respect of any Company Confidential Information that:

(a)

is available to the public generally;

(b)

becomes part of the public domain through no fault of the Advisor;

(c)

is already in the lawful possession of the Advisor at the time of receipt of the Company’s Confidential Information; or

(d)

is compelled by applicable law to be disclosed, provided that the Advisor gives the Company prompt written notice of such requirement prior to such disclosure and provides assistance at the request and expense of the Company, in obtaining an order protecting the Company’s Confidential Information from public disclosure.

4.3

Non Competition. The Advisor agrees and undertakes that he will not, so long as this agreement is in force, become financially interested in or be employed by business or venture that competes directly with the Company’s business.

4.4

No Solicitation.

(a)

“Customer”: For the purposes of this Agreement, “Customer” means any Person who is, at any time during the Term of this agreement, a customer of the Company.

(b)

The Advisor covenants and undertakes that he will not, at any time during the Term of this Agreement for any reason, directly or indirectly, in any way:

(i) solicit, hire or engage the services of any employee of the Company or its affiliates or persuade or attempt to persuade any such individual to terminate his employment or relationship with the Company or any of its Affiliates;

(ii) persuade or attempt to persuade any Customer to restrict, limit or discontinue purchasing or retaining the services provided by the Company or any of its affiliates to any such Customer or to reduce the amount of business which any such Customer has customarily done, or contemplates doing, with the Company or any of its affiliates in respect of the Company’s business, or to solicit or take away, or attempt to solicit or take away, from the Company or any of its affiliates any of its Customers in respect of the Company’s business.

Article 5
termination

This agreement may be terminated for Cause by any of the parties with a prior notice of 12 months. Cause is defined as the Advisor conviction of, or plea of guilty to any crime involving dishonesty, fraud or moral turpitude. During the notice period, both parties to this Agreement will fulfil their duties and obligations under this Agreement. It is agreed that, in the event of termination of this agreement, neither the Company, nor the Advisor will be entitled to any notice, or payment in excess of that specified in this Article 5.

Article 6
Mutual Representations

6.1

The Advisor represents and warrants to the Company that the execution and delivery of this Agreement and the fulfillment of the terms hereof

(a)

will not constitute a default under or conflict with any agreement or other instrument to which he is a party or by which he is bound, and

(b)

do not require the consent of any person or entity.

6.2

The Company represents and warrants to the Advisor that this Agreement has been duly authorized, executed and delivered by the Company and that the fulfillment of the terms hereof

(a)

will not constitute a default under or conflict with any agreement of other instrument to which it is a party or by which it is bound, and

(b)

do not require the consent of any person of entity.

6.3

Each party hereto warrants and represents to the other that this Agreement constitutes the valid and binding obligation of such party enforceable against such party in accordance with its terms subject to applicable bankruptcy, insolvency, moratorium and similar laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity (regardless if enforcement is sought in proceeding in equity or at law).

Article 7
notices

7.1

Notices. All notices required or allowed to be given under this Agreement must be made either personally by delivery to or by facsimile transmission to the address as hereinafter set forth or to such other address as may be designated from time to time by such party in writing:

(a)

in the case of the Company, to:

Blue Sphere Corporation

35 Assuta Street, Even Yehuda, Israel

(b)

and in the case of the Advisor, to the Advisors’s last residence address known to the Company.

7.2

Change of Address. Any party may, from time to time, change its address for service hereunder by written notice to the other party in the manner aforesaid.

Article 8
GENERAL

8.1

Further Assurances. Each party hereto will promptly and duly execute and deliver to the other party such further documents and assurances and take such further action as such other party may from time to time reasonably request in order to more effectively carry out the intent and purpose of this Agreement and to establish and protect the rights and remedies created or intended to be created hereby.

8.2

Waiver. No provision hereof will be deemed waived and no breach excused, unless such waiver or consent excusing the breach is made in writing and signed by the party to be charged with such waiver or consent. A waiver by a party of any provision of this Agreement will not be construed as a waiver of a further breach of the same provision.

8.3

Amendments in Writing. No amendment, modification or rescission of this Agreement will be effective unless set forth in writing and signed by the parties hereto.

8.4

Assignment. Except as herein expressly provided, the respective rights and obligations of the Advisor and the Company under this Agreement will not be assignable by either party without the written consent of the other party and will, subject to the foregoing, enure to the benefit of and be binding upon the Advisor and the Company and their permitted successors or assigns. Nothing herein expressed or implied is intended to confer on any person other than the parties hereto any rights, remedies, obligations or liabilities under or by reason of this Agreement.

8.5

The Company acknowledges and agrees that the Advisor may submit to the Company invoices from a company that employs him in lieu of invoices on his name. The Advisor confirms that any such invoice will replace his own invoice and he agrees that his fees will be paid by the Company to third parties provided that it is done as per his instructions to the Company.

8.6

Severability. In the event that any provision contained in this Agreement is declared invalid, illegal or unenforceable by a court or other lawful authority of competent jurisdiction, such provision will be deemed not to affect or impair the validity or enforceability of any other provision of this Agreement, which will continue to have full force and effect.

8.7

Headings. The headings in this Agreement are inserted for convenience of reference only and will not affect the construction or interpretation of this Agreement.

8.8

Number and Gender. Wherever the singular or masculine or neuter is used in this Agreement, the same will be construed as meaning the plural or feminine or a body politic or corporate and vice versa where the context so requires.

8.9

Time. Time is of the essence in this Agreement.

8.10

Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the State of Israel applicable therein, and each of the parties hereto expressly attorns to the jurisdiction of the courts of the State of Israel. The sole and exclusive place of jurisdiction in any matter arising out of or in connection with this Agreement will be the applicable Tel-Aviv court.

IN WITNESS WHEREOF

the parties hereto have executed this Agreement effective as of the date and year first above written.

Per:
	Blue Sphere Corporation	Joshua Shoham

Name:	Shlomo Palas

Title:	Chief Executive Officer

EX-10.5 9 v330956_ex10-5.htm EXHIBIT 10.5

EMPLOYMENT AGREEMENT

THIS AGREEMENT made this 29th day of February, 2012 (the “Effective Date”).

BETWEEN:

Blue Sphere Corporation, a Nevada company with a business office in Even Yehuda, Israel,

(the “Company”)

AND:

Shlomo Palas, an individual currently residing at Rosh Ha’ayin, Israel.

(the “Executive”)

WHEREAS:

A. The Company has engaged the Executive to serve in the role of Chief Executive Officer of the Company on March 3^rd, 2010 for a term of 2 years ("Previous Agreement");

B. The above Previous Agreement is expiring on March 3^rd, 2012.

C. The Company and the Executive wish to extend the Previous Agreement subject to updated terms and conditions as set forth in this Agreement ("Agreement")

NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

Article 1
CONTRACT FOR SERVICES

1.1

Engagement of Executive. The Company hereby agrees to employ the Executive in accordance with the terms and provisions hereof.

(i)

Term. Unless terminated earlier in accordance with the provisions hereof, the term of employment under this Agreement will commence on the date of execution hereof (the “Commencement Date”) and will continue for an indefinite period of time (the “Term”).

1.2

Service. The Executive agrees to faithfully, honestly and diligently serve the Company and to devote the Executive’s time, attention and best efforts to further the business and interests of the Company during the Term. The Company acknowledges that the Executive is engaged in other business activities that commenced prior to this agreement and the Executive declares that these other activities will not be an obstacle to the commitments he is undertaking under this agreement.

1.3

Duties. The Executive’s services hereunder will be provided on the basis of the following terms and conditions:

(a)

Reporting directly to the Board of Directors of the Company, the Executive will serve as the Chief Executive Officer of the Company;

(b)

The Executive will be responsible for setting the overall corporate direction for the Company, including establishing and maintaining budgets for the Company and ensuring that the Company has adequate capital for its operations, marketing and general corporate activities, all subject to any applicable law and to instructions provided by the Board of Directors of the Company from time to time;

The Executive will plan and direct the organization's activities to achieve stated/agreed targets and standards for financial and trading performance, quality, culture and legislative adherence. He will recruit, select and develop executive team members and direct functions and performance via the executive team.

(c)

The Executive will play a leading role in fundraising activities

(d)

The Executive will faithfully, honestly and diligently serve the Company and cooperate with the Company and utilize maximum professional skill and care to ensure that all services rendered hereunder are to the satisfaction of the Company, acting reasonably, and the Executive will provide any other services not specifically mentioned herein, but which by reason of the Executive’s capability, the Executive knows or ought to know to be necessary to ensure that the best interests of the Company are maintained.

(e)

The Executive will assume, obey, implement and execute such duties, directions, responsibilities, procedures, policies and lawful orders as may be determined or given from time to time by the Company.

(f)

The Executive will report the results of his duties hereunder to the Company as it may request from time to time.

Article 2
COMPENSATION

2.1

Remuneration.

(a)

For services rendered by the Executive during the Term, the Executive will be paid a monthly remuneration, payable within 10 days after the end of each month against an invoice, at a gross monthly rate of US$10,000 + VAT (the “Fee”). Subsequently, the Fee will increase to a gross monthly rate of USD $15,000 + VAT, when the Company will have reasonable financial capabilities to increase these fees. The Fee will be paid in NIS translated pursuant to the official representative rate of exchange of the US$ as published by the Bank of Israel on the payment date. Any deductions required to be made by the Company and submitted to relevant tax or other authorities will be deducted at source. Payments may be made through an Israeli Subsidiary.

(b)

The Executive’s position with the Company is included among the positions of management or those requiring a special degree of personal trust, and the Company is not able to supervise the number of working hours of the Executive; therefore the provisions of the Israel Hours of Work and Rest Law - 1951, will not apply to the Executive and he will not be entitled to any additional remuneration whatsoever for his work with the exception of that specifically set out in this Agreement.

2.2

Incentive Plans

2.3

A. The Executive will be entitled to participate in any bonus plan or incentive compensation plans for its employees, adopted by the Company.

B. In an event of a merger or acquisition by a third party of substantially all the Company, or in an event of completed transaction effecting a merger, consolidation, reorganization, restructuring; purchase of substantially all of another entity or such entity's assets, business properties or securities; or purchase by the Company of such other entity's business unit, which transaction creates the result that the Company's shareholders immediately prior to such transaction do not own a majority of the shares in either the Company or any surviving entity immediately after the transaction (but does not include a transaction which is normally considered a pure financing, being issuance of shares for cash) or other “exit event” for other shareholders of the Company (each such event an “Exit”), in which Exit the Executive will be entitled to exercise any Stock Options in his possession (if any) and join with customary rights of “tag-along” and shall be entitled to sell the entirety of his common shares at the Exit price per share of the selling shareholders in such Exit.

2.4

Expenses. The Executive will be reimbursed by the Company for all reasonable business expenses incurred by the Executive and pre-approved by the board in connection with his duties within previously approved budgets upon submission of a monthly statement of expenses. This includes, but not only, payments of expenses incurred when traveling abroad, per diem payments for travel abroad according to the rules set forth by the Israeli Tax Authorities and others.

2.5

Vacation; Recreation Pay. The Executive will be entitled to cumulative paid vacations of twenty (20) days per year. In addition, the Executive will be entitled to sick leave according to applicable law, but will not be entitled to Recreation Pay. The Executive will not be entitled to any other benefits whatsoever.

2.6

Annual Review. The compensation payable and the method of payment to the Executive under this Article 2 will be reviewed after 1 year from the date of this agreement by the Board of the Company.

Article 3
Insurance and Benefits

3.1

Article 4
CONFIDENTIALITY AND NON-COMPETITION

4.1

Maintenance of Confidential Information.

(a)

“Confidential Information”: For the purposes of this Agreement, “Confidential Information” shall include all information of a confidential nature, that has been or will be disclosed to the Executive by the Company or any person or entity on its behalf, and includes, without limitation, any and all developments, trade secrets, inventions, innovations, techniques, processes, formulas, drawings, designs, products, systems, creations, improvements, documentation, data, specifications, technical reports, customer lists, supplier lists, distributor lists, distribution channels and methods, retailer lists, reseller lists, employee information, financial information, sales or marketing plans, competitive analysis reports and any other thing or information whatsoever, whether copyrightable or uncopyrightable or patentable or unpatentable.

(b)

The Executive acknowledges that, in the course of employment hereunder, the Executive will, either directly or indirectly, have access to and be entrusted with Confidential Information (whether oral, written or by inspection) relating to the Company or its respective affiliates, associates or customers.

(c)

The Executive acknowledges that the Company’s Confidential Information constitutes a proprietary right, which the Company is entitled to protect. Accordingly, the Executive covenants and agrees that, during the Term and for a period of two years thereafter, the Executive will keep in strict confidence the Company’s Confidential Information and will not, without prior written consent of the Company, disclose, use or otherwise disseminate the Company’s Confidential Information, directly or indirectly, to any third party.

(d)

The Executive agrees that, upon termination of his services for the Company, he will immediately surrender to the Company all Company Confidential Information then in his possession or under his control.

4.2

Exceptions. The general prohibition contained in Section ‎4.1 against the unauthorized disclosure, use or dissemination of the Company’s Confidential Information will not apply in respect of any Company Confidential Information that:

(a)

is available to the public generally;

(b)

becomes part of the public domain through no fault of the Executive;

(c)

is already in the lawful possession of the Executive at the time of receipt of the Company’s Confidential Information; or

(d)

is compelled by applicable law to be disclosed, provided that the Executive gives the Company prompt written notice of such requirement prior to such disclosure and provides assistance at the request and expense of the Company, in obtaining an order protecting the Company’s Confidential Information from public disclosure.

4.3

Fiduciary Obligation. The Executive declares that the Executive’s relationship to the Company is that of fiduciary, and the Executive agrees to act towards the Company and otherwise behave as a fiduciary of the Company.

4.4

Non Competition. The Executive agrees and undertakes that he will not, so long as he is employed by the Company and for a period of 12 months following termination of his employment for whatever reason, directly or indirectly, as owner, partner, joint venture, stockholder, employee, broker, agent, principal, corporate officer, director, licensor or in any other capacity whatever engage in, become financially interested in, be employed by, or have any connection with any business or venture that competes with the Company’s business, including any business which, when this Agreement terminates, the Company contemplates in good faith to be materially engaged in within 12 months thereafter, provided that the Company has taken demonstrable actions to promote such engagement or that the Company’s Board of Directors has adopted a resolution authorizing such actions prior to the date of termination; provided, however, that Executive may own securities of any corporation which is engaged in such business and is publicly owned and traded but in an amount not to exceed at any one time one percent (1%) of any class of stock or securities of such company, so long as he has no active role in the publicly owned and traded company as director, employee, consultant or otherwise.

4.5

No Solicitation.

(a)

“Customer”: For the purposes of this Agreement, “Customer” means any Person who is, at any time during the Term and for a period of 12 months following termination of the Executive’s employment for any reason, a customer of the Company or any of its affiliates that the Executive knew or ought reasonably to have known was a customer of the Company or any of its affiliates, or any Person with whom contact is made during such period for the purpose of persuading such Person to become a customer of the Company or any of its affiliates, provided that the Executive knew or ought reasonably to have known such contact was made.

(b)

“Person”: For the purposes of this Agreement, “Person” means an individual, corporation, partnership, trustee, trust, unincorporated association, organization, syndicate, joint venture, limited liability company, executor, administrator or other legal or personal representative, government entity or any other entity recognized by law.

(c)

The Executive covenants and undertakes that he will not, at any time during the Term and for a period of 12 months following termination of his employment for any reason, directly or indirectly, in any way:

(i)

solicit, hire or engage the services of any employee or consultant the Company or its affiliates or persuade or attempt to persuade any such individual to terminate his employment or relationship with the Company or any of its Affiliates;

(ii)

persuade or attempt to persuade any Customer to restrict, limit or discontinue purchasing or retaining the services provided by the Company or any of its affiliates to any such Customer or to reduce the amount of business which any such Customer has customarily done, or contemplates doing, with the Company or any of its affiliates in respect of the Company’s business, or to solicit or take away, or attempt to solicit or take away, from the Company or any of its affiliates any of its Customers in respect of the Company’s business.

4.6

Remedies. The parties to this Agreement recognize that any violation or threatened violation by the Executive of any of the provisions contained in this ‎Article 4 will result in immediate and irreparable damage to the Company and that the Company could not adequately be compensated for such damage by monetary award alone. Accordingly, the Executive agrees that, in the event of any such violation or threatened violation, the Company will, in addition to any other remedies available to the Company at law or in equity, be entitled as a matter of right to apply to such relief by way of restraining order, temporary or permanent injunction and to such other relief as any court of competent jurisdiction may deem just and proper.

4.7

Reasonable Restrictions. The Executive agrees that all restrictions in this ‎Article 4 are reasonable and valid in order to protect the business and proprietary interests of the Company, both as to the duration of time and any geographic limitation therein provided, based on the present business, plans and prospects of the Company and that compliance with the provisions of this Agreement will be unduly burdensome on him or deprive him of a means of livelihood.

Article 5
termination

5.1

Definitions

(a)

“Cause”: For the purposes of this Agreement, “Cause” means that the Executive has:

(i)

committed an intentional act of fraud, embezzlement or theft in connection with the Executive’s duties or in the course of the Executive’s employment with the Company;

(ii)

intentionally and wrongfully damaged property of the Company, or any of its respective affiliates, associates or customers;

(iii)

intentionally or wrongfully disclosed any of the Confidential Information;

(iv)

made material personal benefit at the expense of the Company without the prior written consent of the management of the Company;

(v)

accepted shares or options or any other gifts or benefits from a vendor without the prior written consent of the management of the Company;

(vi)

fundamentally breached any of the Executive’s material covenants contained in this Agreement; or

(vii)

willfully and persistently, without reasonable justification, failed or refused to follow the lawful and proper directives of the Company specifying in reasonable detail the alleged failure or refusal and after a reasonable opportunity for the Executive to cure the alleged failure or refusal.

(b)

“Terminated For No Cause”. For the purposes of this Agreement, “Terminated For No Cause” means any event of termination that is not a result of the events described in clause 5.1(a) above.

(c)

“Intentional”: For the purposes of this Agreement, an act or omission on the part of the Executive will not be deemed “intentional,” if it was due to an error in judgment or negligence, but will be deemed “intentional” if done by the Executive not in good faith and without reasonable belief that the act or omission was in the best interests of the Company, or its respective affiliates, associates or customers.

(d)

“Disability”: For the purposes of this Agreement, "Disability" will mean any physical or mental illness or injury as a result of which the Executive remains absent from work for a period of six (6) successive months, or an aggregate of six (6) months in any twelve (12) month period. Disability will occur upon the end of such six-month period.

5.2 Termination For Cause or Disability. This Agreement may be terminated at any time by the Company without notice, for Cause or in the event of the Disability of Executive.

5.3 Termination For No Cause. This agreement may be Terminated For No Cause by any of the parties with a prior notice of 6 months.

5.4 Severance for Termination With Cause. If the Company terminates the Executive’s employment for Cause, then the Company will not be obligated to pay the Executive any severance payments or provide any notice whatsoever to the Executive.

5.5 Limitation of Damages. It is agreed that, in the event of termination of employment, neither the Company, nor the Executive will be entitled to any notice, or payment in excess of that specified in this Article 5.

5.6 Return of Materials. Within three (3) days of any termination of employment hereunder, or upon any request by the Company at any time, the Executive will return or cause to be returned any and all Confidential Information and other assets of the Company (including all originals and copies thereof), which “assets” include, without limitation, hardware, software, keys, security cards and backup tapes that were provided to the Executive either for the purpose of performing the employment services hereunder or for any other reason. The Executive acknowledges that the Company’s Confidential Information and the assets are proprietary to the Company, and the Executive agrees to return them to the Company in the same condition as the Executive received such Confidential Information and assets.

5.7 Effect of Termination. Sections 4, 5.5 and 8.11 hereto will remain in full force and effect after termination of this Agreement, for any reason whatsoever

Article 6
Mutual Representations

6.1

The Executive represents and warrants to the Company that the execution and delivery of this Agreement and the fulfillment of the terms hereof

(a)

will not constitute a default under or conflict with any agreement or other instrument to which he is a party or by which he is bound, and

(b)

do not require the consent of any person or entity.

6.2

The Company represents and warrants to Executive that this Agreement has been duly authorized, executed and delivered by the Company and that the fulfillment of the terms hereof

(a)

will not constitute a default under or conflict with any agreement of other instrument to which it is a party or by which it is bound, and

(b)

do not require the consent of any person of entity.

6.3

Article 7
notices

7.1

(a)

in the case of the Company, to:

Blue Sphere Corporation

35 Assuta Street

Even Yehuda, Israel

(b)

and in the case of the Executive, to the Executive’s last residence address known to the Company.

7.2

Change of Address. Any party may, from time to time, change its address for service hereunder by written notice to the other party in the manner aforesaid.

Article 8
GENERAL

8.1

Entire Agreement. As of from the date hereof, any and all previous agreements, written or oral between the parties hereto or on their behalf relating to the employment of the Executive by the Company are null and void. The parties hereto agree that they have expressed herein their entire understanding and agreement concerning the subject matter of this Agreement and it is expressly agreed that no implied covenant, condition, term or reservation or prior representation or warranty will be read into this Agreement relating to or concerning the subject matter hereof or any matter or operation provided for herein.

8.2

Personal Agreement. The provisions of this Agreement are in lieu of the provisions of any collective bargaining agreement, and therefore, no collective bargaining agreement will apply with respect to the relationship between the parties hereto (subject to the applicable provisions of law).

8.3

8.4

8.5

Amendments in Writing. No amendment, modification or rescission of this Agreement will be effective unless set forth in writing and signed by the parties hereto.

8.6

Assignment. Except as herein expressly provided, the respective rights and obligations of the Executive and the Company under this Agreement will not be assignable by either party without the written consent of the other party and will, subject to the foregoing, enure to the benefit of and be binding upon the Executive and the Company and their permitted successors or assigns. Nothing herein expressed or implied is intended to confer on any person other than the parties hereto any rights, remedies, obligations or liabilities under or by reason of this Agreement.

8.7

8.8

Headings. The headings in this Agreement are inserted for convenience of reference only and will not affect the construction or interpretation of this Agreement.

8.9

8.10

Time. Time is of the essence in this Agreement.

8.11

8.12

Enurement. This Agreement is intended to bind and enure to the benefit of the Company, its successors and assigns, and the Executive and the personal legal representatives of the Executive.

IN WITNESS WHEREOF the parties hereto have executed this Agreement effective as of the date and year first above written.

Per:	/s/ Joshua Shoham	/s/ Shlomo Palas
	Blue Sphere Corporation	Shlomo Palas

Name:	Joshua Shoham

Title:

EX-10.6 10 v330956_ex10-6.htm EXHIBIT 10.6

Management Services Agreement

THIS AGREEMENT made this 25^th day of July, 2011 (the “Effective Date”).

BETWEEN:

Blue Sphere Corporation, a company incorporated in Nevada, USA (the “Company”)

AND:

JLS, a company incorporated in Cyprus with a business office in Florinis 7, Nicosia, Cyprus

("JLS")

AND

Roy Amitzur, an individual with residence in Bratislava, Slovakia (the "Executive")

All together: "The Parties"

WHEREAS:

A. The Company has agreed to engage JLS to provide management services to the Company: and

B. JLS and the Company wish to formally record the terms and conditions upon which JSL will render management services to the Company; and

C. JLS has agreed to assign the Executive, who is engaged with JLS, and the Executive has agreed, to provide management services to the Company and to devote at least 75% of the Executive's time for the management services to the Company; and

D. The company declares that its business is in the field of GHG emission reduction and in renewable energy with projects world wide.

E. The Executive declares that he has significant experience in business general management, funds raising and project financing ; and

F. JLS, the Executive and the Company has agreed that the Executive will not be entitled to any compensation of any kind from the Company and that any compensation for the services rendered by the Executive will be paid only to JLS;

NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the promises and the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

Article 1
CONTRACT FOR SERVICES

1.1

Engagement of Executive. The Company hereby agrees to engage JLS and the Executive in accordance with the terms and provisions hereof.

(a). Term. Unless terminated earlier in accordance with the provisions hereof, the term of engagement under this Agreement will commence on the Effective Date and will continue for a period of two (2) years from the Effective Date (the “Term”). The Company may terminate this Agreement by giving 30 days written notice to JLS and/or the Executive if it has not entered into agreements with investors that have supplied to the Company equity financing for the total amount of at least $1,000,000 on or before July 15, 2012 or after a mutually pre-agreed extended period of 6 months from the effective date if JLS and the Executive requests such extension ("The Condition"). For the avoidance of doubt, the above mentioned target financing of $ 1 million referred to in The Condition means equity financing of $1 million directly to the Company and not to any of its projects or subsidiaries.

(b). Service. The Executive agrees to faithfully; honestly and diligently serve the Company and to devote most of his time, attention and best efforts to further the business and interests of the Company during the Term. It is agreed that the Executive will devote at least 75% of his time to the Company

1.2

Duties. The Executive’s services hereunder will be provided on the basis of the following terms and conditions:

(a)

Reporting directly to the Chief Executive Officer of the Company, the Executive will serve as Executive Vice President of the Company;

(b)

It is agreed that as first priority, the Executive will focus on funds raising and on marketing the Company in the financial communities. The Executive will plan, develop and implement funds raising strategy for the short term and the long term so as to enable meet performance plans within agreed budgets and timescales given by the CEO. He will establish and maintain appropriate systems and tools for follow up, monitor, update and extend the Company's involvement and reputation within the financial capital markets. He will report on opportunities, development plans and achievements within agreed formats and timescales. The Executive will manage and control funds raising expenditure within agreed budgets. He will contribute to the evaluation of strategy, development and performance of the Company in co-operation with the executive team.

(c). After achieving The Condition and other targets in the financial markets as defined jointly by the Executive and the management of the Company, the Executive will devote more of his time in general management tasks as part of the leading team of the Company, primarily marketing tasks and participation in projects management.

Article 2
COMPENSATION

2.1

Remuneration.

(a)

For services rendered by the Executive during the Term, JLS will be paid a monthly fee, payable within 10 days after the end of each month against an invoice, at a gross monthly rate of US$10,000 + VAT when applicable (the “Fee”). It is agreed that JLS will be entitled to fees only after the Company has raised an aggregate amount of at least $450,000 . Subsequently, the Fee will increase to a gross monthly rate of USD $15,000 + VAT (when applicable) after the Company has raised an aggregate equity investment against its shares of $2,000,000. Payments may be made through the Israeli subsidiary of the Company.

(b)

The Executive agrees that only JLS will be entitled to the full compensation for his services rendered to the Company, being it in cash or in shares or in any other way, and this compensation will be paid only to JLS and that he will not have any claim whatsoever to the Company on compensation for the services rendered provided that full payment therefore is actually made to JLS and that he is fully compensated by JLS for any service that he will render to the Company.

(c)

The Executive’s position with the Company is included among the positions of management or those requiring a special degree of personal trust, and the Company is not able to supervise the number of working hours of the Executive; and he and JLS will not be entitled to any additional remuneration whatsoever for his work with the exception of that specifically set out in the Agreement between the Company and JLS.

(d)

JLS and the Executive take full responsibility on any tax liabilities that they might have as a result of the rendering of services to the Company. JLS and the Executive hereby undertakes responsibility on any claim against the Company for any tax liabilities that may arise.

2.2

Shares' Allocation.

(a)

“JLS Shares”: For the purposes of this Agreement, “JLS Shares” means nine point nine (9.9%) percent of the common shares in the capital of the Company as of the Effective Date to vest in accordance with this paragraph 2.2.

(b)

As of the Commencement Date, the Company will issue to JLS Company's shares ("JLS Shares"), exercisable at a price of $0.001 per share. JLS Shares may not be sold for two years after the Effective Date and will be trusted in escrow for two years from the Effective Date. The Company undertakes to make all filings and to take all steps, in the same manner as it will act for the first investors that will join the Company as new shareholders as from the Effective Date, to ensure that all the JLS shares will be freely tradable and to ensure they will remain freely tradable after the escrow period.

(c)

The total amount of JLS Shares granted to JLS as per Section 2(a) above and any additional shares that may be granted to JLS after the Effective Date will be vested in equal parts, on a quarterly basis commencing the Effective Date and ending 24 months thereafter, a total of 8 quarters.

(d)

In case that the Executive will resign from the Company, JLS will receive only the JLS Shares that have vested on the effective date of resignation. In case that the Executive will cease to be Executive of the Company due to termination by the Company for reason of not meeting The Condition by July 15, 2012, 50% of the JLS Shares will be vested and if the termination occurs after the 6 month agreed extension without the Condition being met, 75% of the JLS shares will be vested . In the event that the Condition is met by July 15, 2012 or any agreed extension, all JLS Shares will automatically be vested, In the event that the engagement of the Executive is terminated for Cause (defined below), none of the JLS Shares will be vested. In the event of termination of the Agreement by JLS and the Executive or termination of the Agreement by the Company except for Cause, all vested shares according to this Section 2.2 will be released from escrow at termination date and freely tradable. All JLS Shares not vested will be returned to the Company.

(e)

It is agreed that It is JLS and the Executive responsibility to pay any tax liabilities that may arise as a result of granting JLS Shares by the Company, and it is agreed that the Company will not be liable to any of the Executive's personal tax liabilities that may occur due to JLS Shares allocation nor to any corporate tax liabilities due to JLS Shares allocation.

2.3

Incentive Plans JLS and the Executive will be entitled to participate at similar terms as the other executives of the Company in bonus plans or incentive compensation plans for its employees, adopted by the Company or any of its subsidiaries.

2.4

Expenses. The Executive will be reimbursed by the Company for all reasonable business expenses incurred by the Executive and pre-approved by the CEO in connection with his duties within previously approved budgets upon submission of a monthly statement of expenses. This includes, but not only, payments of expenses incurred when traveling abroad, per diem payments for travel abroad.

2.5

Liability Insurance Indemnification. The Company will insure the Executive (including his heirs, executors and administrators) with coverage under a standard directors' and officers' liability insurance policy at the Company's expense with a run-off period of seven (7) years following termination of his engagement and will provide the Executive with a customary officer indemnification agreement.

Article 3
CONFIDENTIALITY AND NON-COMPETITION

3.1

Maintenance of Confidential Information.

(a)

“Confidential Information”: For the purposes of this Agreement, “Confidential Information” shall include all information of a confidential nature, that has been or will be disclosed to JLS and/or the Executive by the Company or any person or entity on their behalf, and includes, without limitation, any and all developments, trade secrets, inventions, innovations, techniques, processes, formulas, drawings, designs, products, systems, creations, improvements, documentation, data, specifications, technical reports, customer lists, supplier lists, distributor lists, distribution channels and methods, retailer lists, reseller lists, employee information, financial information, sales or marketing plans, competitive analysis reports and any other thing or information whatsoever, whether copyrightable or non copyrightable or patentable or non patentable.

(b)

JLS and the Executive acknowledge that, in the course of services rendering hereunder, JLS and/or the Executive will, either directly or indirectly, have access to and be entrusted with Confidential Information (whether oral, written or by inspection) relating to the Company or its respective affiliates, associates or customers.

(c)

JLS and the Executive acknowledge that the Company’s Confidential Information constitutes a proprietary right, which the Company is entitled to protect. Accordingly, JLS and the Executive covenant and agree that, during the Term and for a period of two years thereafter, JLS and the Executive will keep in strict confidence the Company’s Confidential Information and will not, without prior written consent of the Company, disclose, use or otherwise disseminate the Company’s Confidential Information, directly or indirectly, to any third party.

(d)

JLS and the Executive agree that, upon termination of the services for the Company, they will immediately surrender to the Company all Company Confidential Information then in their possession or under their control.

3.2

(a)

is available to the public generally;

(b)

becomes part of the public domain through no fault of the Executive;

(c)

is already in the lawful possession of the Executive at the time of receipt of the Company’s Confidential Information; or

(d)

is compelled by applicable law to be disclosed, provided that the Executive and/or JLS give the Company prompt written notice of such requirement prior to such disclosure and provides assistance at the request and expense of the Company, in obtaining an order protecting the Company’s Confidential Information from public disclosure.

3.3

Fiduciary Obligation. JLS and the Executive declare that their relationship to the Company is that of fiduciary, and they agree to act towards the Company and otherwise behave as fiduciary of the Company.

3.4

Non Competition. JLS and the Executive agree and undertake that they will not, so long as they render services to the Company and for a period of 12 months following termination of services render for whatever reason, directly or indirectly, as owner, partner, joint venture, stockholder, employee, broker, agent, principal, corporate officer, director, licensor or in any other capacity whatever engage in, become financially interested in, be employed by, or have any connection with any business or venture that competes with the Company’s business, including any business which, when this Agreement terminates, the Company contemplates in good faith to be materially engaged in within 12 months thereafter, provided that the Company has taken demonstrable actions to promote such engagement or that the Company’s Board of Directors has adopted a resolution authorizing such actions prior to the date of termination; provided, however, that JLS and the Executive may own securities of any corporation which is engaged in such business and is publicly owned and traded but in an amount not to exceed at any one time one percent (3%) of any class of stock or securities of such company, so long as he has no active role in the publicly owned and traded company as director, employee, consultant or otherwise. The above will not apply to the Executive in his capacity as a director, President and shareholder of CTG Clean Technology Group Ltd. and its daughter companies.

3.5

No Solicitation.

(a)

(b)

(c)

JLS and the Executive covenant and undertake that they will not, at any time during the Term and for a period of 12 months following termination of this agreement for any reason, directly or indirectly, in any way:

(i)

(ii)

persuade or attempt to persuade any Customer to restrict, limit or discontinue purchasing or retaining the services provided by the Company or any of its affiliates to any such Customer or to reduce the amount of business which any such Customer has customarily done, with the Company or any of its affiliates in respect of the Company’s business, or to solicit or take away, or attempt to solicit or take away, from the Company or any of its affiliates any of its Customers in respect of the Company’s business.

3.6

Remedies. The parties to this Agreement recognize that any violation or threatened violation by JLS and/or the Executive of any of the provisions contained in this ‎Article 4 will result in immediate and irreparable damage to the Company and that the Company could not adequately be compensated for such damage by monetary award alone. Accordingly, JLS and the Executive agree that, in the event of any such violation or threatened violation, the Company will, in addition to any other remedies available to the Company at law or in equity, be entitled as a matter of right to apply to such relief by way of restraining order, temporary or permanent injunction and to such other relief as any court of competent jurisdiction may deem just and proper.

3.7

Reasonable Restrictions. JLS and the Executive agree that all restrictions in this ‎Article 4 are reasonable and valid in order to protect the business and proprietary interests of the Company, both as to the duration of time and any geographic limitation therein provided, based on the present business, plans and prospects of the Company and that compliance with the provisions of this Agreement will be unduly burdensome on him or deprive him of a means of livelihood.

Article 4
termination

4.1

Definitions

(a)

“Cause”: For the purposes of this Agreement, “Cause” means that JLS and/or the Executive have:

(i)

committed an intentional act of fraud, embezzlement or theft in connection with the Executive’s duties or in the course of the Executive’s work with the Company;

(ii)

intentionally and wrongfully damaged property of the Company, or any of its respective affiliates, associates or customers;

(iii)

intentionally or wrongfully disclosed any of the Confidential Information;

(iv)

made material personal benefit at the expense of the Company in breach of his fiduciary duty to the Company without the prior written consent of the CEO ;

(v)

accepted shares or options or any other gifts or benefits from a vendor without the prior written consent of the CEO;

(vi)

fundamentally breached any of the JLS or Executive’s material covenants contained in this Agreement and after a reasonable opportunity for JLS or the Executive to cure the alleged breach; or

(vii)

persistently, without reasonable justification, failed or refused to follow the lawful and proper directives of the Company and after a reasonable opportunity for JLS or the Executive to cure the alleged failure or refusal.

(b)

(c)

“Intentional”: For the purposes of this Agreement, an act or omission on the part of JLS or the Executive will not be deemed “intentional,” if it was due to an error in judgment or negligence, but will be deemed “intentional” if done by JLS or the Executive not in good faith and without reasonable belief that the act or omission was in the best interests of the Company, or its respective affiliates, associates or customers.

(d)

4.2 Termination For Cause or Disability. This Agreement may be terminated at any time by the Company without notice, for Cause or in the event of the Disability of the Executive.

4.3 Termination For No Cause. This agreement may be Terminated For No Cause by any of the parties with a prior notice of 3 months. During the notice period, both parties to this Agreement will fulfil their duties and obligations under this Agreement.

4.4 Severance for Termination With Cause. If the Company terminates the Executive’s services rendering for Cause, then the Company will not be obligated to pay the Executive or JLS any severance payments or provide any notice whatsoever to the JLS or the Executive.

4.5 Limitation of Damages. It is agreed that, in the event of termination of services, neither the Company, nor JLS nor the Executive will be entitled to any notice, or payment in excess of that specified in this Article 5.

4.6 Return of Materials. Within three (3) days of any termination of services hereunder, or upon any request by the Company at any time, JLS and the Executive will return or cause to be returned any and all Confidential Information and other assets of the Company (including all originals and copies thereof), which “assets” include, without limitation, hardware, software, keys, security cards and backup tapes that were provided to JLS or the Executive either for the purpose of performing the services hereunder or for any other reason. JLS and the Executive acknowledge that the Company’s Confidential Information and the assets are proprietary to the Company, and JLS and the Executive agree to return them to the Company in the same condition as JLS or the Executive received such Confidential Information and assets.

4.7 Effect of Termination. Sections 2.2, 3, 4.5 and 8.11 hereto will remain in full force and effect after termination of this Agreement, for any reason whatsoever

Article 5
Mutual Representations

5.1

JLS and the Executive represent and warrant to the Company that the execution and delivery of this Agreement and the fulfillment of the terms hereof

(a)

will not constitute a default under or conflict with any agreement or other instrument to which he is a party or by which he is bound, and

(b)

do not require the consent of any person or entity.

5.2

The Company represents and warrants that this Agreement has been duly authorized, executed and delivered by the Company and that the fulfillment of the terms hereof

(a)

will not constitute a default under or conflict with any agreement of other instrument to which it is a party or by which it is bound, and

(b)

do not require the consent of any person of entity.

5.3

Article 6
notices

6.1

(a)

in the case of the Company, to:

Blue Sphere Corporation

35 Asuta St. Even Yehuda,

P.O.B 857, Israel 40500

(b) in the case of JLS, to Florinis 7, Greg Tower, 6^th floor, 1065, Nicosia, Cyprus.

6.2

Change of Address. Any party may, from time to time, change its address for service hereunder by written notice to the other party in the manner aforesaid.

Article 7
GENERAL

7.1

Entire Agreement. As of from the date hereof, any and all previous agreements, written or oral between the parties hereto or on their behalf relating to the contracting of JLS or the Executive by the Company are null and void. The parties hereto agree that they have expressed herein their entire understanding and agreement concerning the subject matter of this Agreement and it is expressly agreed that no implied covenant, condition, term or reservation or prior representation or warranty will be read into this Agreement relating to or concerning the subject matter hereof or any matter or operation provided for herein.

7.2

7.3

7.4

7.5

Amendments in Writing. No amendment, modification or rescission of this Agreement will be effective unless set forth in writing and signed by the parties hereto.

7.6

Assignment. Except as herein expressly provided, the respective rights and obligations of JLS, the Executive and the Company under this Agreement will not be assignable by either party without the written consent of the other party and will, subject to the foregoing, enure to the benefit of and be binding upon JLS, the Executive and the Company and their permitted successors or assigns. Nothing herein expressed or implied is intended to confer on any person other than the parties hereto any rights, remedies, obligations or liabilities under or by reason of this Agreement.

7.7

7.8

Headings. The headings in this Agreement are inserted for convenience of reference only and will not affect the construction or interpretation of this Agreement.

7.9

7.10

Time. Time is of the essence in this Agreement.

Governing Law. This Agreement shall be interpreted and performed in accordance with the laws of the State of New York and the parties agree, notwithstanding the principles of conflicts of law, that the internal laws of the State of New York shall govern and control the validity, interpretation, performance, and enforcement of this Agreement

7.11

Enurement. This Agreement is intended to bind and enure to the benefit of the Company, its successors and assigns, JLS and the Executive and the personal legal representatives of JLS and the Executive.

IN WITNESS WHEREOF the parties hereto have executed this Agreement effective as of the date and year first above written.

Per:			Per:
Blue Sphere Corporation			JLS

Name:			Name:

Title:


Per:
The Executive

Name: Roy Amitzur

EX-10.7 11 v330956_ex10-7.htm EXHIBIT 10.7

BS AND MR PROJECT MANAGEMENT AND BUSINESS DEVELOPMENT AGREEMENT

THIS AGREEMENT (this “Agreement”) is dated 22 February 2010 and is entered into by and between Blue Sphere Corporation, a corporation organised under the laws of Nevada (together with its affiliates, “BS”), and Mark Radom, an individual residing in Israel (“MR”). Reference is made to the MPV and Blue Sphere Corporation Assignment and Conveyance Agreement dated of even date herewith between BS and Carbon MPV Limited (the “AC Agreement”). Capitalised terms used but not defined herein have the meanings assigned to such terms in the AC Agreement.

Whereas, Carbon MPV Limited has assigned and conveyed to BS its right, title and interest in, to and under the Potential Projects pursuant to the AC Agreement; and

Whereas, BS desires to retain MR as an independent contractor to perform project management services with respect to such Projects and to identify and source new Projects and MR accepts and agrees to such retention;

Now, therefore, in consideration of the mutual premises and covenants contained herein, and subject to the terms and conditions hereof, and intending to be legally bound, the parties hereto agree as follows:

1. Project Management Services and Business Development

1.1

On the terms and subject to the conditions of this Agreement, BS hereby enlists and retains MR as an independent contractor to perform (or procure the performance of) all work (or part of it, as requested by BS) necessary or desirable with respect to Projects that are assigned and conveyed to BS in such a manner as to ensure a smooth and successful implementation and to expedite and optimize registration and receipt of carbon credits and receipt of other revenues therefrom; among other things, such services will include selecting third-party services, goods and technology providers, overseeing the registration process, overseeing the project implementation and managing the relationship between and respective performance by of all participating parties and the generation of new business relating to carbon credit and ecological projects (the “Services”). MR will have the right to use its reasonable discretion in making decisions regarding the performance of the Services subject to a pre-agreed action plan and to prior consultation with BS, whose decision in its sole discretion in such matters will be final. MR will report to BS on a day to day ongoing basis on work performed and on any event that may affect its business. The reporting method will be defined by the parties at a later stage.

1.2

Respecting the generation of new business relating to carbon credit and ecological projects, BS and MR will use their best efforts to develop guidelines and/or criteria, which MR will follow in incurring any expense toward developing new business.

1.3

MR acknowledges and agrees that the generation of new business relating to carbon credit and ecological projects is performed for behalf of BS for compensation and consequently all new potential projects or project leads of any nature generated by MR shall be the sole exclusive property of BS and all information related thereto shall be considered to be the Confidential Information (as defined below) of BS.

1.4

In exchange for the provision of such management and business development services, BS agrees to cover and pay for 100% of the reasonable costs and expenses to be incurred by MR in the course of providing such services according to a pre-agreed budget and procedure to be agreed by the parties in writing. While it is envisioned that such costs will primarily consist of travel, accommodation, telecommunication and office expenses, the parties acknowledge and agree that other costs of an unknown nature may arise in the course of managing the Projects. In addition to covering 100% of such costs and expenses incurred by MR acting pursuant to the agreed procedures of the parties as shall be established, subject to the following sentence, BS will pay MR US$7,000 per month (the “Advance Payment”) in accordance with instructions to be provided by MR and agreed upon by BS and continuing until the earlier of (i) this Agreement is terminated in accordance with its terms or (ii) until the date on which income from carbon credits is generated. It is agreed that, in the event that the U.S. dollar falls in value as of the date hereof against the Israeli shekel by 10% or more, the Advance Payment amount (i.e., U.S. $7,000 per month) shall be adjusted upward to compensate MR for the exchange rate change. Any amounts constituting the Advance Payment paid to MR pursuant to this Section 1.4 shall be deducted from the first (and if necessary subsequent) cash to be paid to MR pursuant to Section 1.2 of the AC Agreement. For the avoidance of doubt, it is agreed that BS will continue to pay 100% of the reasonable costs and expenses to be incurred pursuant to this Agreement pursuant to the pre-approved budget and as long as the expenses are made according to BS procedures for so long as this Agreement is in force.

1.5

The Fee is inclusive of all applicable Taxes. “Taxes” are defined as - all taxes applicable to the transaction contemplated hereunder or resulting therefrom, including, without derogating from the generality of the above, income taxes, profit taxes, withholding taxes and any other compulsory payment applicable under any applicable law. In addition, BS shall have the right to deduct or withhold from any fee to be paid, any such taxes, charges or levies, in respect of which such deduction or withholding is required to be made according to any applicable law or jurisdiction.

1.6

BS will include MR in a future grant of options to employees and will be considered a senior manager for the purpose of such grant. .

1.7

MR agrees that it will keep confidential and not disclose to (and require its representatives or any parties it works with in connection with any transaction to keep confidential and not disclose to) any other person any information that it receives that is designated as confidential as well as information derived therefrom (“Confidential Information”) unless authorised to do so by the BS or required to do so by law. MR acknowledges and agrees that the generation of new business relating to carbon credit and ecological projects is performed for behalf of BS for compensation and consequently all new potential projects or project leads of any nature generated by MR shall be the sole exclusive property of BS and all information related thereto shall be considered to be the Confidential Information (as defined below) of BS. MR further agrees to refrain from taking any action (and to cause its representatives or any parties it works with in connection with any transaction to refrain from taking any action) using the Confidential Information that will have the effect or the potential effect of circumventing or pre-empting, to any degree, the disclosing party’s full and unfettered use of and benefit from its Confidential Information. MR shall only put any of such Confidential Information to its own use after receiving proper, explicit and prior authorization from BS, in writing, to do so. It is hereby agreed that (i) the identity of any financier or investor providing finance for any transaction contemplated hereby is Confidential Information and (ii) MR shall not make any use whatsoever of the contacts brought by BS, including its clients, government officials, facilitators or any parties using these connections unless it has BS’s consent thereto.

2. Covenants

2.1

Each party shall render assistance in handling applications for approvals, permits and licenses and similar formalities necessary for the establishment and operation of their legal and commercial relationship.

2.2

Each party agrees to execute, on request, all other documents and instruments as the other Party shall reasonably request, and to take any actions, which are reasonably required or desirable to carry out obligations imposed under, and effect the purposes of, this Agreement.

2.3

Each party agrees to use its reasonable commercial efforts to accomplish the purpose of this Agreement and to comply with all applicable laws and regulations.

2.4

MR represents and warrants that he has no outstanding agreement or obligation that is in conflict with any of the provisions of this Agreement or the rendering of the Services, or that would preclude him from complying with the provisions hereof and that he will not enter into any agreement or undertake any obligation which will create such a conflict of interests. Furthermore, MR hereby expressly certifies and represents that in performing the Services to BS he is not in breach of any obligation towards any third party.

3. Entry into Force and Term

Subject to the following sentence, this Agreement shall enter into force from the date hereof and will terminate on the earlier of (i) 25 years from the date on which this Agreement enters into force or (ii) the Kyoto Protocol, as amended or extended, terminates or (iii) 15 April 2010 unless MPV delivers by such time to BS at least two signed Project agreements and two signed project memoranda of understanding.

After 15 April 2010, BS may terminate this Agreement on 90 days’ written notice to MR for any reason or no reason at all. After 1 March 2011, MR may terminate this Agreement on 90 days’ written notice to BS for any reason or no reason at all. Either party may terminate by written notice to the other party if the other party materially breaches this Agreement and fails to cure such breach within fourteen (14) calendar days of receiving written notice thereof. Any and all rights to accrued benefits or obligations to be performed after such time shall survive any termination hereof.

4. Miscellaneous

No provision of this Agreement may be amended, modified or waived only in writing signed by MR or a duly authorized officer of BS. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all previous agreements and understandings, written or oral, between the parties or their affiliates or agents with respect to the subject matter hereof. The headings in this Agreement are for convenience of reference only, and shall not alter or affect the meaning of any provision. Each party acknowledges that it has not relied upon any representation of the other party, except for any representation made by such party under the express terms of this Agreement, in entering into and undertaking the obligations imposed by this Agreement. This Agreement shall be construed, interpreted and enforced in accordance with the substantive laws of Israel. The parties agree that any action brought to resolve any controversy arising under or relating to this Agreement shall be subject to the non-exclusive jurisdiction of the courts of Israel and any court which may hear appeals from those courts in relation to any disputes arising out of or in connection with this Agreement. No Party shall be liable under this Agreement, for consequential, indirect, special, or punitive damages.

5. Transfer to Affiliate

BS acknowledges that MR may open a new company and that, once opened and registered, BS agrees that MR may transfer and convey all of his rights, obligations, title and interest in, to and under this Agreement to such company without the need for any further action or consent on the part of BS (it being understood that such company will formally acknowledge such transfer and conveyance for its own internal purposes).

6. Severability

Should any part of this Agreement be rendered or declared invalid by a court or arbitrator of competent jurisdiction, such invalidation of such part or portion of this Agreement will not invalidate the remaining portions thereof and they shall remain in full force and effect. It is further agreed that if part of this Agreement is determined to be invalid, either party may open negotiations solely with respect to a substitute for such part within two (2) weeks after such determination has been made.

7 Independent Contractor

7.1 The relationship between BS and MR, or any on its behalf, is that of independent contractor. Neither MR nor any on its behalf shall be deemed to be the agents, partners or employees of BS. Neither Party shall have the right, power or authority to bind the other Party, enter into an agreement, grant a promise, provide warranties, guarantees or commitments, transact any business in the other Party's name or in its behalf or incur any liability for or on behalf of the other Party, and each Party shall remain an independent contractor and responsible for its own actions.

7.2 All employees, representatives, subcontractors or any person engaged, by MR subject to the terms hereof, will be deemed under the complete control of MR and notwithstanding anything to the contrary, this Agreement will not be interpreted as creating any contractual relationship, including employment relationship, between any such employee, representative or subcontractor or any such other person and BS. MR shall be solely responsible for the safety of its own employees, representatives or subcontractors or any such other person, at all times during the performance of the Services.

7.3 In the event that MR, or any on its behalf, shall claim, and a competent court determines pursuant to such claim, the existence of an employment relation between BS and MR or any on its behalf, despite the Parties' explicit intention as reflected in this Agreement, and consequently resolves that MR, or any on its behalf, is an employee of BS and therefore is entitled to further payments or benefits, then MR agrees to indemnify BS and hold BS harmless from any liability, damages or costs (including reasonable attorney's fees) incurred by BS as a result of such claim.

7.4 MR hereby warrants and represents that it is aware that BS has entered into this Agreement in reliance on MR's status as an independent contractor, as set forth in Section 7.1 .

7.5 MR shall not be entitled to exclusivity in the provision of the Services and BS shall be entitled at its sole discretion to request any other entity to provide the Services.

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

	Mark Radom



	Blue Sphere Corporation



	By:
	Title: CEO

EX-10.8 12 v330956_ex10-8.htm EXHIBIT 10.8

AMENDMENT NO. 1 TO THE MPV AND BS ASSIGMENT AND CONVEYANCE AGREEMENT

THIS AMENDMENT (this “Amendment”) is dated 19 October 2010 and is entered into by and between Blue Sphere Corporation, a corporation organised under the laws of Nevada (together with its affiliates, “BS”), and Carbon MPV Limited, a limited company organised under the laws of Cyprus, “MPV”).

Whereas, BS and MPV entered into a certain agreement assigning the rights to perform the carbon credit projects listed in Annex A thereto on 24 February 2010 (the “Assignment Agreement”);

Whereas, BS and MPV desire to amend such Assignment Agreement in order to provide for the financing of such carbon credit projects;

Amendment of the Assignment Agreement

1.1

The parties agree that notwithstanding anything else to the contrary in the Assignment Agreement and subject to Section 1.2 below, MPV shall receive from projects or transactions that it or its affiliates introduce to BS 5% of the net profits of BS therefrom and from all other projects or transactions 2.5% of the net profits of BS, in each case, as and when such profits are realised and for so long as such profits are received and/or realised. In the event of a sale of BS or the relevant project or transaction, MPV shall receive 3% of the proceeds therefrom.

1.2

MPV shall receive 7.5% of BS’s net profits in respect of those projects in which MPV’s maximum share was marked as 7.5% in the Assignment Agreement,

1.3

Clauses 1.2 and 1.4 in the Assignment Agreement are null and void.

1.4

Section 4 of the Assignment Agreement shall survive any termination thereof or hereof.

1.5

All other terms of the Assignment Agreement are hereby ratified and accepted by both BS and MPV and remain in full force and effect.

Miscellaneous

2.1 No provision of this Agreement may be amended, modified or waived only in writing signed by a duly authorized officer of MPV and BS.

2.2 This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all previous agreements and understandings, written or oral, between the parties or their affiliates or agents with respect to the subject matter hereof.

2.3 This Agreement shall be construed, interpreted and enforced in accordance with the substantive laws of Israel. The parties agree that any action brought to resolve any controversy arising under or relating to this Agreement shall be subject to the non-exclusive jurisdiction of the courts of Tel Aviv, Israel and any court which may hear appeals from those courts in relation to any disputes arising out of or in connection with this Agreement.

2.4 No Party shall be liable under this Agreement, for consequential, indirect, special, or punitive damages.

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

	Carbon MPV Limited

	By: Mark Radom

	Title:



	Blue Sphere Corporation


	By: Shlomi Palas
	Title: CEO

EX-10.10 13 v330956_ex10-10.htm EXHIBIT 10.10

CDM Emission Reductions

Purchase Agreement

by and between

Puresphere Ltd.

and

Vattenfall Energy Trading Netherlands N.V.

dated

16 January 2012

TABLE OF CONTENTS

ARTICLE I

DEFINITIONS; INTERPRETATION; HEADINGS; SCHEDULES

Section 1.01	Definitions	5
Section 1.02	Interpretation; Headings; Schedules	11

ARTICLE II

CONDITIONS PRECEDENT

Section 2.01	Conditions Precedent	12
Section 2.02	Waiver	13
Section 2.03	Date for fulfilling conditions	13
Section 2.04	Progress report	13

ARTICLE III

PURCHASE AND SALE AND INCLUSION OF ADDITIONAL CPAs

Section 3.01	Purchase and Sale of Certified Emission Reductions	13
Section 3.02	Eligibility and Equivalent Rate	13
Section 3.03	Purchase and Sale of Non-Eligible ERs	13
Section 3.04	Delivery Amount	14
Section 3.05	Delivery to a Third Party	14
Section 3.06	Inclusion of additional CPAs	14
		14
ARTICLE IV

PRICE AND PAYMENT

Section 4.01	Unit Price	15
Section 4.02	Payment	15
Section 4.03	Form of Payment	15
Section 4.04	Costs and Payment for Project costs	15
Section 4.05	Taxes	16

ARTICLE V

VALIDATION AND REGISTRATION; BASELINE

Section 5.01	Validation by the Designated Operational Entity	16
Section 5.02	Validation and Registration	16
Section 5.03	Baseline	17

ARTICLE VI

MONITORING PLAN

Section 6.01	Monitoring Plan	17
Section 6.02	Monitoring Report	17
Section 6.03	Amendments to Monitoring Plan	18

ARTICLE VII

INITIAL VERIFICATION, VERIFICATION AND CERTIFICATION

Section 7.01	General Requirements	18
Section 7.02	Designated Operational Entity	18
Section 7.03	Initial Verification	18
Section 7.04	Verification and Certification	18

ARTICLE VIII

PROJECT OPERATION AND MANAGEMENT

Section 8.01	Project Operation and Management	18

ARTICLE IX

CERTIFIED EMISSION REDUCTIONS

Section 9.01	Authorisation	19
Section 9.02	General Communication	19
Section 9.03	Establishment of Account	19
Section 9.04	Delivery of CERs	19
Section 9.05	Transfer of Legal Title	19

ARTICLE X

REPRESENTATIONS AND WARRANTIES

Section 10.01	Seller Representations
Section 10.02	Buyer Representations	20
		21
ARTICLE XI

FAILURE TO GENERATE OR TRANSFER THE DELIVERY AMOUNT

Section 11.01	Production Failure or Transfer Failure	21

ARTICLE XII

RIGHTS IN THE EVENT OF GROSS NEGLIGENCE, FRAUD OR WILFUL MISCONDUCT

Section 12.01	Rights in the Event of Gross Negligence, Fraud or Wilful Misconduct	22

ARTICLE XIII

EVENTS OF DEFAULT

Section 13.01	Events of Default	22

ARTICLE XIV

TERMINATION

Section 14.01	Suspension on Default	23
Section 14.02	Termination on Default	23
Section 14.03	Non-Default Termination	23
Section 14.04	Cost on default and on Non-Default Termination	24
Section 14.05	Automatic Termination	24

ARTICLE XV

MISCELLANEOUS PROVISIONS

Section 15.01	Amendments to the Agreement	24
Section 15.02	Confidentiality	24
Section 15.03	Notices	25
Section 15.04	Evidence of Authority	25
Section 15.05	Assignment	25
Section 15.06	Survival of Provisions	25
Section 15.07	Execution in counterparts; Language	25
Section 15.08	Entire Agreement	25
Section 15.09	Severability	26
Section 15.10	Governing Law	26
Section 15.11	Arbitration	26
Section 15.12	Waiver of Sovereign immunity	26
		26
SCHEDULES

Schedule 1	Description of the Project	27
Schedule 2	Costs and Expenses	28
Schedule 3	Key Commercial Terms	29

EMISSION REDUCTIONS PURCHASE AGREEMENT

Puresphere Ltd. a company incorporated under the laws of Israel, with its registered address at c/o BPure, Ltd., 114 Yigal Alon St., Tel Aviv, Israel 67892 (the “Seller")

and

Vattenfall Energy Trading Netherlands N.V., a company with limited liability incorporated under the laws of the Netherlands, with its registered address at Spaklerweg 20, 1096 BA Amsterdam, the Netherlands, (the "Buyer")

WHEREAS:

The Host Country has ratified the United Nations Framework Convention on Climate Change (the "UNFCCC") and has approved the Protocol that was adopted at the Third Conference of the Parties to the UNFCCC in Kyoto, Japan on December 11, 1997 (the "Kyoto Protocol").

The Seller intends to carry out the Project, as described in Schedule 1 and the Programme of Activities Design Document, which is expected to result in reduction in greenhouse gas emissions that are additional to any that would occur in the absence of the Project.

The Seller wishes to sell, and the Buyer wishes to purchase, upon the terms and conditions of this Emission Reductions Purchase Agreement (this "Agreement"), Certified Emission Reductions generated by the Project.

The Parties hereby agree as follows:

ARTICLE I

Definitions; Interpretation; Headings; Schedules

Section 1.01 Definitions

Unless the context otherwise requires, the following capitalised terms shall have the following meanings wherever used in this Agreement and its preamble:

“Adaptation Share of Proceeds” means the deduction of 2% of the certified emission reductions (CERs) generated by the project each year used to fund measures in developing country Parties to the Protocol that will assist them in adapting to the adverse effects of climate change as set by the COP in 17/CP.7 or any other deduction that in the future will replace the Adaptation Share of Proceeds.

“Administration Share of Proceeds” means a charge of:

(i) USD 0.10 per CER for the first 15,000 tonnes of CO2 equivalent for which issuance is requested in a given year;

(ii) USD 0.20 per CER for any amount in excess of 15,000 tonnes of CO2 equivalent for which issuance is requested in a given year (7/CMP.1, paragraph 37) or any other charge that in the future will replace the Administration Share of Proceeds.

“Advance Payment” means a payment, which the Buyer will make to cover certain costs and expenses, in accordance with Section 4.04 (b) in conjunction with Schedule 2.

"Bankruptcy Proceedings" means, in relation to any person:

(a)

the making of an assignment or arrangement for the benefit of creditors;

(b)

the filing of a petition or commencement of proceedings under any bankruptcy or similar law, or having such a petition filed against such person, which petition is not dismissed for a period of 30 days;

(c)

the levy of an attachment for execution against the whole or any material part of its assets;

(d)

such person becoming (or is, or could be, deemed by law or a court to be) insolvent or unable to pay its debts; or

(e)

such person stops, suspends or threatens to stop or suspend payment of all or a material part of its indebtedness or begins negotiations or takes any other step with a view to the deferral, rescheduling or other readjustment of all or a material part of its indebtedness.

"Baseline" means the scenario that reasonably represents the anthropogenic emissions by sources of GHGs that would occur in the absence of the Project as described in the International Rules.

"Baseline Study" means a written report of the Baseline prepared as part of the Programme of Activities Design Document.

"Buyer's Account" means an account established or nominated by the Buyer in the CDM Registry or a National Registry, as notified in writing by the Buyer to the Seller from time to time, to which CERs are to be Delivered and includes any other registry or account under any International Rules or other international or national regimes as the Buyer may direct as notified in writing by the Buyer to the Seller from time to time as specified in Schedule 3.

“Buyer’s Replacement Costs” means the liquidated damages payable by Seller pursuant to Section 3.05 or Section 12.01 and shall be calculated in accordance with Section 3.05 (c).

“Business Day” means a day on which the banks in the capital city of the Host Country, in Israel and The Netherlands are open for general business.

"Carbon Dioxide Equivalent" or "CO2e" means the base reference for the determination of global warming potential of Greenhouse Gases in units of carbon dioxide.

“CDM Executive Board” means the executive board of the Clean Development Mechanism that is constituted under Article 12, paragraph 4 of the Kyoto Protocol.

“CDM Programme Activity” or “CPA” means individual project units that can be added to

a registered PoA under the CDM.

"Certification" and "Certified" each means the written assurance by the Designated Operational Entity that, during a specified time period, the Project has achieved the GHG Reductions as reported in the Verification Report.

"Certification Report" means a report submitted by the Designated Operational Entity to the CDM Executive Board containing the Designated Operational Entity's Certification.

"Certified Emission Reduction" or "CER" is a unit, allowance or other right eligible for compliance purposes under the EU-ETS issued pursuant to the CDM and / or the International Rules which is equal to one tonne CO2e, together with all rights, title and interest in, and other associated benefits arising or occurring in relation to such CER which term, for the avoidance of doubt shall include Contract CERs.

"Clean Development Mechanism" or "CDM" means the mechanism referred to in Article 12 of the Kyoto Protocol.

"Commissioning" or "Commissioned" means the satisfactory completion of the Project by the Seller in accordance with such procedures and tests as from time to time constitute usual and prudent industry standards and practices to demonstrate to the reasonable satisfaction of the Buyer that the Project is capable of commercial operation and of generating GHG Reductions for the purpose of, inter alia, this Agreement.

"Consents" means any consent, authorisation, registration, filing, license, permit, approval, agreement, authority or exemption from, by or with a competent authority, required for the construction, maintenance and operation of the Project.

"Contract CERs" has the meaning given to it in Schedule 3.

“Coordinating” or “Managing Entity” or “CME” means the key private or public entity responsible for the operational and management arrangements of a PoA in the CDM, for the drafting of PoA documents and for the monitoring of emission reductions.

"COP/MOP" means the Conference of the Parties to the UNFCCC serving as the Meeting of the Parties to the Kyoto Protocol.

"Crediting Period" means the period in which GHG Reductions from the Baseline are Verified and Certified by a Designated Operational Entity for the purpose of Issuance of CERs and which shall commence after the first Emission Reductions are generated by the Project.

“Delivery or Delivered” means the completed delivery of the applicable number of CERs to be forwarded by the Seller to the Buyer’s Account under this Agreement and in accordance with the International Rules.

"Delivery Amount" means all of the CERs generated by the Project in each Year. An estimation of the volume to be Delivered per Year is stipulated in Schedule 3.

"Delivery Date" means each Delivery Date as specified in Schedule 3 of the Agreement.