Scinai Immunotherapeutics Ltd F-1/A, filed Dec 14, 2022
Scinai Immunotherapeutics Ltd. (SCNI)
As filed with the United States Securities and Exchange Commission on December 14, 2022.
Registration No. 333-267648
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No 2 to
FORM
F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BiondVax Pharmaceuticals Ltd.
(Exact name of registrant as specified in its charter)
| Israel | 2836 | Not Applicable | ||
| (State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
Jerusalem BioPark, 2nd Floor
Hadassah Ein Kerem Campus
Jerusalem, Israel
Tel: +972-8-930-2529
Fax: +972-8-930-2531
(Address and telephone number of Registrant’s principal executive offices)
Puglisi
& Associates
850 Library Avenue, Suite 204
Newark, Delaware 19711
+1 (302) 738-6680
(Name, address and telephone number of agent for service)
Copies of all communications, including communications sent to agent for service, should be sent to:
| Perry Wildes Gross Law Firm 1 Azrieli Center, Round Tower Tel Aviv 6701101, Israel Tel: +972-3-607-4464 |
Lawrence Metelitsa Steven A. Lipstein Lucosky Brookman LLP 101 Wood Avenue South Woodbridge, New Jersey 08830 Tel: 732 395 4400 |
Darrin M. Ocasio Sichenzia Ross Ference LLP 1185 Avenue of the Americas 31st Floor New York, NY 10036 Tel: 212 930 9700 |
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box: ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act.
Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
This Amendment is filed solely to file Exhibits 1.1, 3.1, 4.4, 4.5, 4.6, 5.1, 10.14 and 23.2 and to reflect such filings in the Index to Exhibits. No change is made to the preliminary prospectus constituting Part I of the Registration Statement or Items 6, 7, or 9 of Part II of the Registration Statement.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 6. Indemnification of Directors and Officers.
Under the Companies Law, a company may not exculpate an office holder from liability for a breach of the fiduciary duty. An Israeli company may exculpate an office holder in advance from liability to the company, in whole or in part, for damages caused to the company as a result of a breach of duty of care but only if a provision authorizing such exculpation is included in its articles of association. Our articles of association include such a provision. The company may not exculpate in advance a director from liability arising due to the breach of his or her duty of care in the event of a prohibited dividend or distribution to shareholders.
Under the Companies Law and the Israeli Securities Law, 5728-1968 (the “Securities Law”) a company may indemnify an office holder in respect of the following liabilities, payments and expenses incurred for acts performed by him or her as an office holder, either in advance of an event or following an event, provided its articles of association include a provision authorizing such indemnification:
| ● | a monetary liability incurred by or imposed on the office holder in favor of another person pursuant to a court judgment, including pursuant to a settlement confirmed as judgment or arbitrator’s decision approved by a competent court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned foreseen events and amount or criteria; |
| ● | reasonable litigation expenses, including reasonable attorneys’ fees, which were incurred by the office holder as a result of an investigation or proceeding filed against the office holder by an authority authorized to conduct such investigation or proceeding, provided that such investigation or proceeding was either (i) concluded without the filing of an indictment against such office holder and without the imposition on him of any monetary obligation in lieu of a criminal proceeding; (ii) concluded without the filing of an indictment against the office holder but with the imposition of a monetary obligation on the office holder in lieu of criminal proceedings for an offense that does not require proof of criminal intent; or (iii) in connection with a monetary sanction; |
| ● | a monetary liability imposed on the office holder in favor of a payment for a breach offended at an Administrative Procedure (as defined below) as set forth in Section 52(54)(a)(1)(a) to the Securities Law; |
| ● | expenses expended by the office holder with respect to an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees; |
| ● | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or which were imposed on the office holder by a court (i) in a proceeding instituted against him or her by the company, on its behalf, or by a third party, (ii) in connection with criminal indictment of which the office holder was acquitted, or (iii) in a criminal indictment which the office holder was convicted of an offense that does not require proof of criminal intent; and |
| ● | any other obligation or expense in respect of which it is permitted or will be permitted under applicable law to indemnify an office holder, including, without limitation, matters referenced in Section 56H(b)(1) of the Securities Law. |
An “Administrative Procedure” is defined as a procedure pursuant to chapters H3 (Monetary Sanction by the Israeli Securities Authority), H4 (Administrative Enforcement Procedures of the Administrative Enforcement Committee) or I1 (Arrangement to prevent Procedures or Interruption of procedures subject to conditions) to the Securities Law.
Under the Companies Law and the Securities Law, a company may insure an office holder against the following liabilities incurred for acts performed by him or her as an office holder if and to the extent provided in the company’s articles of association:
| ● | a breach of the fiduciary duty to the company, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm the company; |
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| ● | a breach of duty of care to the company or to a third party, to the extent such a breach arises out of the negligent conduct of the office holder; |
| ● | a monetary liability imposed on the office holder in favor of a third party; |
| ● | a monetary liability imposed on the office holder in favor of an injured party at an Administrative Procedure pursuant to Section 52(54)(a)(1)(a) of the Securities Law; and |
| ● | expenses incurred by an office holder in connection with an Administrative Procedure, including reasonable litigation expenses and reasonable attorneys’ fees. |
Under the Companies Law, a company may not indemnify, exculpate or insure an office holder against any of the following:
| ● | a breach of the fiduciary duty, except for indemnification and insurance for a breach of the fiduciary duty to the company to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
| ● | a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder; |
| ● | an act or omission committed with intent to derive illegal personal benefit; or |
| ● | a fine or forfeit levied against the office holder. |
Under the Companies Law, exculpation, indemnification and insurance of office holders must be approved by the compensation committee and the board of directors and, with respect to directors or controlling shareholders, their relatives and third parties in which controlling shareholders have a personal interest, also by the shareholders.
Our articles of association permit us to exculpate, indemnify and insure our office holders to the fullest extent permitted or to be permitted by law. Our office holders are currently covered by a directors’ and officers’ liability insurance policy. As of the date of this registration statement, no claims for directors’ and officers’ liability insurance have been filed under this policy and we are not aware of any pending or threatened litigation or proceeding involving any of our office holders, including our directors, in which indemnification is sought.
We have entered into agreements with each of our directors and executive officers exculpating them, to the fullest extent permitted by law and our articles of association, and undertaking to indemnify them to the fullest extent permitted by law and our articles of association. This indemnification is limited to events determined as foreseeable by the board of directors based on our activities, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances.
The maximum indemnification amount set forth in such agreements is limited to an amount which shall not exceed 25% of our net assets based on our most recently audited or reviewed financial statements prior to actual payment of the indemnification amount. Such maximum amount is in addition to any amount paid (if paid) under insurance and/or by a third-party pursuant to an indemnification arrangement. However, in the opinion of the SEC, indemnification of office holders for liabilities arising under the Securities Act is against public policy and therefore unenforceable.
ITEM 7. Recent Sales of Unregistered Securities.
On December 22, 2021, the Company signed a definitive exclusive license agreement with MPG and UMG for the development and commercialization of innovative Covid-19 NanoAbs. Pursuant to the agreement, on February 2, 2022, the Company issued 150,000 ADSs to MPG, in reliance on the exemption from registration under Regulation S under the under the Securities Act of the 1933, as amended, regarding sales by an issuer in offshore transactions.
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ITEM 8. Exhibits and Financial Statement Schedules.
(a) Exhibits
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| * | Filed herewith. | |
| ** | Previously filed. | |
| + | Certain confidential portions of this exhibit have been redacted from the publicly filed document because such portions are (i) not material and (ii) would be competitively harmful if publicly disclosed. |
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ITEM 9. Undertakings.
| (a) | The undersigned Registrant hereby undertakes: |
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| i. | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
| ii. | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. |
| iii. | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (4) | To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. |
| (5) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell securities to such purchaser: |
| i. | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; | |
| ii. | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; | |
| iii. | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and | |
| iv. | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
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(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 6 hereof, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
c) The undersigned registrant hereby undertakes:
| (1) | That for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
| (2) | That for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
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Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it complies with all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Jerusalem, Israel on December 14, 2022.
| BIONDVAX PHARMACEUTICALS LTD. | ||
| By: | /s/ Amir Reichman | |
| Name: | Amir Reichman | |
| Title: | Chief Executive Officer | |
Pursuant to the requirements of the Securities Act, this registration statement has been signed below by the following persons on the dates and in the capacities indicated.
| Signature | Title | |||
| /s/ Mark Germain | Chairman of the Board of Directors | December 14,2022 | ||
| Mark Germain | ||||
| /s/ Amir Reichman | Chief Executive Officer and Director | December 14,2022 | ||
| Amir Reichman | (Principal Executive Officer and Director) | |||
| /s/ Uri Ben Or | Chief Financial Officer | December 14,2022 | ||
| Uri Ben Or | (Principal Financial Officer and Principal Accounting Officer) | |||
| * | Director | December 14,2022 | ||
| Avner Rotman | ||||
| * | Director | December 14,2022 | ||
| Yael Margolin | ||||
| * | Director | December 14,2022 | ||
| George H. Lowell | ||||
| * | Director | December 14,2022 | ||
| Morris Laster | ||||
| * | Director | December 14,2022 | ||
| Adi Raviv | ||||
| * | Director | December 14,2022 | ||
| Samuel Moed | ||||
| * | Director | December 14,2022 | ||
| Jay Green |
| *By: | /s/ Amir Reichman | |
| Amir Reichman | ||
| Attorney-in-fact |
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Signature of Authorized U.S. Representative of the Registrant
Pursuant to the requirements of the Securities Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of BiondVax Pharmaceuticals Ltd. has signed this Registration Statement on December 14, 2022.
| By: | /s/ Donald J. Puglisi | |
| Name: | Donald J. Puglisi | |
| Title: | Managing Director |
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Exhibit 1.1
[*] UNITS
BIONDVAX PHARMACEUTICALS, LTD.
UNDERWRITING AGREEMENT
December [*], 2022
Aegis Capital Corp.
810 Seventh Avenue
New York, New York 10019
Ladies and Gentlemen:
The undersigned, BiondVax Pharmaceuticals, Ltd., a company incorporated under the laws of Israel (collectively with its Subsidiaries (as defined below), if any, the “Company”), hereby confirms its agreement (this “Agreement”) with Aegis Capital Corp. (the “Underwriter”) on the terms and conditions set forth herein. The Underlying Shares (as defined below) are to be deposited pursuant to a deposit agreement, as amended, dated May 11, 2015 (the “Deposit Agreement”), among the Company, The Bank of New York Mellon, as depositary (the “Depositary”), and holders and beneficial holders from time to time of the ADRs (as defined below) issued by the Depositary and evidencing the ADSs (as defined below). Each ADS represents 400 Ordinary Shares (as defined below) deposited pursuant to the Deposit Agreement.
The Closing Units are to be offered to the public at the public offering price set forth herein.
It is further understood that you will act as the Underwriter in the offering and sale of the Closing Units (as defined below) and, if any, the Option Securities (as defined below) in accordance with this Agreement.
ARTICLE I.
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:
“Action” shall have the meaning ascribed to such term in Section 3.1(l).
“ADRs” means the American Depositary Receipts issued by the Depositary and evidencing the ADSs.
“ADS Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b).
“ADSs” means the American Depositary Shares of the Company, each ADS representing 40 Ordinary Shares.
“Affiliate” means with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with such Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Applicable Time” means [*], Eastern time, on the date of this Agreement.
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day other than Saturday and Sunday or other day on which commercial banks in the City of New York or Israel are authorized or required by law to remain closed; provided, however, for clarification, commercials banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home,” “shelter in place,” “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as electronic funds transfer systems (including for wire transfers) of commercial banks in the City of New York or Israel generally are open for use by customers on such day.
“Closing” means the closing of the purchase and sale of the Firm Shares pursuant to Section 2.1.
“Closing Date” means the hour and the date on the Trading Day on which all conditions precedent to (i) the Underwriter’s obligations to pay the Closing Purchase Price and (ii) the Company’s obligations to deliver the Firm Shares, in each case, have been satisfied or waived, but in no event later than 11:15 a.m. (New York City time) on the second (2nd) Trading Day following the date hereof or at such earlier time as shall be agreed upon by the Underwriter and the Company.
“Closing Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b), which aggregate purchase price shall be net of the underwriting discounts and commissions.
“Closing Shares” shall have the meaning ascribed to such term in Section 2.1(a)
“Closing Pre-funded Unit” shall have the meaning ascribed to such term in Section 2.1(a)
“Closing Units” shall have the meaning ascribed to such term in Section 2.1(a)
“Commission” means the United States Securities and Exchange Commission.
“Company Auditor” means Kost Forer Gabbay & Kasierer, a Member of Ernst & Young Global.
“Deposit Agreement” means the deposit agreement, as amended, dated May 11, 2015, among the Company, The Bank of New York Mellon as Depositary and the owners and holders of ADSs from time to time, as such agreement may be amended or supplemented.
“Depositary” means The Bank of New York Mellon, as depositary under the Deposit Agreement.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Execution Date” shall mean the date on which the parties execute and enter into this Agreement.
“Exempt Issuance” means, provided that such securities are issued as “restricted securities” (as defined in Rule 144) (other than in the case of clause (a) below for securities registered under a Registration Statement on Form S-8) and carry no registration rights that require or permit the filing of any registration statement in connection therewith within 90 days following the Closing Date and are sold or issued at an effective price per Ordinary Share or ADS equal to or greater than the public offering price of the Shares (other than in the case of clause (e) below), the issuance of (a) Ordinary Shares or options to employees, service providers, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose by the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company and the filing of a Registration Statement on Form S-8 related thereto, (b) securities upon the exercise or exchange of or conversion of any Shares issued hereunder and/or other securities exercisable or exchangeable for or convertible into Ordinary Shares issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (d) the execution of, and issuance of Company securities pursuant to, the GEM Facility (for the avoidance of doubt, during the Stand-Still Period, the Company shall not issue a Draw Down Notice as defined in the GEM Facility) and (e) the issuance to Max Planck Society (“MPG”) or one of its affiliates of ADSs pursuant to the License Agreement, dated December 11, 2021, between the Company and MPG.
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“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
“FINRA” means the Financial Industry Regulatory Authority.
“Firm Shares” shall have the meaning ascribed to such term in Section 2.1(a)(i).
“GEM Facility” means the Purchase Agreement to be entered into between the Company and GEM Yield Bahamas Limited or an affiliate for a share subscription facility with a total commitment of up to $50.0 million and related warrant.
“IFRS” shall have the meaning ascribed to such term in Section 3.1(j).
“Indebtedness” means (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with IFRS.
“Israeli Counsel” means Gross & Co. Law Firm, with offices located at One Azrieli Center, Round Building Tel Aviv 6701101, Israel.
“Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up Agreements” shall mean the lock-up agreements that delivered on the date hereof by each of the Company’s executive officers and directors in the form of Exhibit D attached hereto.
“Material Adverse Effect” means (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document.
“Offering” means the offering and sale of the Shares as set forth herein.
“Option Closing” means the closing of the purchase and sale of the Option Shares pursuant to Section 2.2.
“Option Closing Date” shall have the meaning ascribed to such term in Section 2.2(c).
“Option Closing Purchase Price” shall have the meaning ascribed to such term in Section 2.2(b), which aggregate purchase price shall be net of the underwriting discounts and commissions.
“Option Shares” shall have the meaning ascribed to such term in Section 2.2(a).
“Option Pre-funded Warrants” shall have the meaning ascribed to such term in Section 2.2(a).
“Ordinary Shares” means the ordinary shares of the Company, no par value per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
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“Ordinary Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Ordinary Shares or ADSs, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Ordinary Shares.
“Over-Allotment Option” shall have the meaning ascribed to such term in Section 2.2(a).
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Pre-funded Warrant” shall have the meaning ascribed to such term in Section 2.1(a).
“Preliminary Prospectus” shall have the meaning ascribed to such term in Section 3.1(g).
“Pricing Disclosure Package” means any free writing prospectus issued at or prior to the Applicable Time, the Pricing Prospectus and the information included on Schedule 2-A hereto, all considered together.
“Pricing Prospectus” shall have the meaning ascribed to such term in Section 3.1(g).
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“Prospectus” shall have the meaning ascribed to such term in Section 3.1(g).
“Public Offering Price per Closing Common Unit” shall be the price set forth on Schedule 2-A hereto.
“Registration Statement” shall have the meaning ascribed to such term in Section 3.1(g).
“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(f).
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 462(b) Registration Statement” means any registration statement prepared by the Company registering additional Shares, which was filed with the Commission on or prior to the date hereof and became automatically effective pursuant to Rule 462(b) promulgated by the Commission pursuant to the Securities Act.
“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(j).
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“SRF” means Sichenzia Ross Ference LLP, with offices located at 1185 Avenue of the Americas, New York, New York 10036.
“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
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“Trading Day” means a day on which the principal Trading Market in the United States is open for trading.
“Trading Market” means any of the following markets or exchanges on which the ADSs are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
“Transaction Documents” means this Agreement, the Lock-Up Agreements, and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“U.S. Company Counsel” means Lucosky Brookman LLP, with offices located at 101 Wood Avenue South, 5th Floor Woodbridge, NJ 08830.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing.
(a) Upon the terms and subject to the conditions set forth herein, the Company agrees to sell in the aggregate of [*] units (each, a “Closing Unit”) s and the Underwriter agrees to purchase, at the Closing, the number of Closing Units set forth opposite the name of the Underwriter on Schedule I hereof with each Closing Unit consisting of either :
(A) (i) one American Depositary Share (“ADSs”), each representing four hundred (400) Ordinary Shares of the Company and two (2) warrants, in substantially in the forms of Exhibits A and B hereto, respectively, each to purchase one ADS, at an exercise price of $[●] per whole ADS (the -Exchangeable Warrant” and the “Non-Exchangeable Warrant,” respectively, and collectively, the “Warrants”), (each, a “Closing Common Unit”); or
(B) one pre-funded warrant substantially in the form of Exhibit C hereto (each, a “Pre-funded Warrant”) to purchase one ADS at an exercise price of $0.001 until such time as the Pre-funded Warrant is exercised in full subject to adjustment as provided in the Pre-funded Warrant, and two Warrants (each, a “Closing Pre-funded Unit”).
The ADSs referred to in this Paragraph are hereinafter referred to as the “Closing Shares”; the Warrants referred to in this Paragraph are hereinafter referred to as the “Closing Warrants”; and the Pre-funded Warrants referred to in this Paragraph are hereinafter referred to as the “Closing Pre-funded Warrants.” No Closing Common Units will be certificated, and the Closing Shares and the Closing Warrants comprising the Closing Common Units will be separated immediately upon issuance. No Closing Pre-funded Units will be certificated, and the Closing Pre-funded Warrants and the Closing Warrants comprising the Closing Pre-funded Units will be separated immediately upon issuance. At the option of the Underwriter, the Company agrees, subject to the terms and conditions herein, to issue and sell additional Option Securities (as defined herein). The Closing Units and the Option Securities are herein referred to collectively as the “Securities”. The respective number of Closing Units and Option Securities to be purchased by the Underwriter is set forth opposite its name in Schedule I hereto.
(b) The purchase price per Closing Common Unit shall be as set forth on Schedule 2-A (representing 93.0% of the Public Offering Price per Closing Common Unit) (“Common Unit Purchase Price”), which purchase price will be allocated as $[●] per Closing Share and $[*] per Closing Warrant, and the purchase price per Closing Pre-funded Unit shall be as set forth on Schedule 2-A (representing 93.0% of the Public Offering Price per Closing Common Unit minus $0.001), which purchase price will be allocated as $[●] per Closing Pre-funded Warrant and $[●] per Closing Warrant. The Closing Common Units are to be offered to the public at the Public Offering Price per Closing Common Unit and the Closing Pre-funded Units are to be offered to the public at the Public Offering Price per Closing Common Unit less $0.001 (being the per share exercise price of a Pre-funded Warrant).
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(c) On the Closing Date, the Company shall deliver the items required pursuant to Section 2.3 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.3 and 2.4, the Underwriter shall make payment for the Closing Units (the “Closing Units Payment”) by wire transfer in immediately available funds to the account(s) specified by the Company to the Underwriter on the Closing Date. The Closing shall occur at the offices of SRF or at such other place on the same or such other date and time, as the Underwriter and the Company may agree upon in writing. The Closing Units Payment shall be made against delivery of the Closing Units to be purchased on the Closing Date to the Underwriter for its account, with any transfer taxes, stamp duties and other similar taxes payable in connection with the sale of the Closing Units duly paid by the Company.
2.2 Over-Allotment Option.
(a) For the purposes of covering any over-allotments, the Underwriter is hereby granted an option (the “Over-Allotment Option”) to purchase, in the aggregate, up to [*] additional ADSs and/or Pre-funded Warrants in the aggregate equal to 15.0% of the Closing Units purchased in the offering from the Company (the “Option Shares” or “Option Pre-funded Warrants,” as applicable) and/or up to [*] additional Non-Exchangeable Warrants (“Option Non-Exchangeable Warrants”) and/or up to [*] Exchangeable Warrants (“Option Exchangeable Warrants,” and together with the Option Non-Exchangeable Warrants, ,the “Option Warrants”), equal to 15.0% of the losing Units purchased in the offering form the Company.
(b) In connection with an exercise of the Over-Allotment Option, the purchase price to be paid per Option Share shall be equal to the price per Closing Common Unit (less $[*] allocated to the Non-Exchangeable Warrant and $[*] allocated to the Exchangeable Warrant) set forth in Section 2.1(b) hereof, the purchase price to be paid per Option Pre-Funded Warrant shall be equal to the price per Closing Common Unit (less $[*] allocated to the Non-Exchangeable Warrant and $[*] allocated to the Exchangeable Warrant) set forth in Section 2.1(b) hereof and the purchase price to be paid per Option Warrant shall be equal to $[*] per Option Warrant.. The Over-allotment Option is, at the Underwriter’s sole discretion, for Option Shares and/or Option Pre-Funded Warrants and/or Option Non-Exchangeable Warrants and or Option Exchangeable Warrants, , in any combination thereof, up to the total amounts of each set forth in Section 2.2(a) above (each, an “Option Security” and collectively, the “Option Securities”). The Closing Units and the Option Securities are collectively referred to as the “Securities.” The Securities and the Ordinary ADSs issuable upon exercise of the Pre-Funded Warrants and the Warrants (the “Underlying Shares”), are collectively referred to as the “Public Securities.” The Public Securities shall be issued directly by the Company and shall have the rights and privileges described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(c) The Over-Allotment Option granted pursuant to this Section 2.2 may be exercised by the Underwriter as to all (at any time) or any part (from time to time) of the Option Securities within forty-five (45) days after the Execution Date. The Underwriter will not be under any obligation to purchase any Option Securities prior to the exercise of the Over-Allotment Option by the Underwriter. The Over-Allotment Option granted hereby may be exercised by the giving of oral notice to the Company from the Underwriter, which must be confirmed in writing by overnight mail or facsimile or other electronic transmission setting forth the number of Option Securities to be purchased and the date and time for delivery of and payment for such Option Securities (each, an “Option Closing Date”), which will not be later than two (2) full Business Days after the date of the notice or such other time as shall be agreed upon by the Company and the Underwriter but in no event later than [*], 2023 at the offices of SRF or at such other place (including remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Underwriter. If such delivery and payment for the Option Securities does not occur on the Closing Date, each Option Closing Date will be as set forth in the notice. Upon exercise of the Over-Allotment Option, the Company will become obligated to convey to the Underwriter, and, subject to the terms and conditions set forth herein, the Underwriter will become obligated to purchase, the number of Option Securities specified in such notice. The Underwriter may cancel the Over-Allotment Option at any time prior to the expiration of the Over-Allotment Option by written notice to the Company.
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2.3 Deliveries. The Company shall deliver or cause to be delivered to the Underwriter the following:
(i) At the Closing Date, the Closing Units and, as to each Option Closing Date, if any, the applicable Option Securities, which shall be delivered via The Depository Trust Company Deposit or Withdrawal at Custodian system for the accounts of the Underwriter;
(ii) At the Closing Date, legal opinions of Israeli Counsel and U.S. Company Counsel addressed to the Underwriter, including, without limitation, a negative assurance letter from Israeli Counsel and U.S. Company Counsel addressed to the Underwriter, substantially in form and substance reasonably satisfactory to the Underwriter, and as to the Closing Date and at each Option Closing Date, if any, a bring-down opinion from Israeli Counsel and U.S. Company Counsel in form and substance reasonably satisfactory to the Underwriter;
(iii) Contemporaneously herewith, a certificate, addressed to the Underwriter and in form and substance satisfactory in all respects to the Underwriter, from the chief financial officer of the Company, dated as of the date of this Agreement, a comfort letter addressed to the Underwriter and in form and substance satisfactory in all respects to the Underwriter from the Auditor, dated as of the Closing Date and a bring-down letter addressed to the Underwriter and in form and substance satisfactory in all respects to the Underwriter, dated as of each Option Closing Date, if any, from the Auditor
(iv) On the Closing Date and on each Option Closing Date, the duly executed and delivered certificate of the chief executive office or chief financial officer of the Company, substantially in the form and substance reasonably satisfactory to the Underwriter;
(v) On the Closing Date and on each Option Closing Date, the duly executed and delivered a certificate of the secretary or assistant secretary of the Company, substantially in the form and substance reasonably satisfactory to the Underwriter;
(vi) Contemporaneously herewith, the duly executed and delivered Lock-Up Agreements;
(vii) At the Closing Date, legal opinions of Sichenzia Ross Ference LLP addressed to the Underwriter, including, without limitation, a negative assurance letter from Sichenzia Ross Ference LLP addressed to the Underwriter, substantially in form and substance reasonably satisfactory to the Underwriter, and at each Option Closing Date, if any, a bring-down opinion from Sichenzia Ross Ference LLP in form and substance reasonably satisfactory to the Underwriter; and
(viii) On the Closing Date, duly executed copies of the Warrants.
2.4 Closing Conditions. The obligations of the Underwriter hereunder in connection with the Closing and each Option Closing Date are subject to the following conditions being met:
(i) the accuracy in all material respects when made and on the date in question (other than representations and warranties of the Company already qualified by materiality, which shall be true and correct in all respects) of the representations and warranties of the Company contained herein (unless as of a specific date therein);
(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the date in question shall have been performed;
(iii) the delivery by the Company of the items set forth in Section 2.3 of this Agreement;
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(iv) the Registration Statement shall be effective on the date of this Agreement and at each of the Closing Date and each Option Closing Date, if any, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or shall be pending or contemplated by the Commission and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of the Underwriter;
(v) by the Execution Date, the Underwrites shall have received correspondence from FINRA that it will raise no objection as to the amount of compensation allowable or payable to the Underwriter as described in the Registration Statement;
(vi) the Depositary shall have furnished or caused to be furnished to the Underwriter a certificate reasonably satisfactory to the Underwriter of one of its authorized officers with respect to the deposit with it of the Firm Shares and Option Shares, as applicable, the issuance of the ADRs evidencing the Ordinary Shares delivered in the form of the ADSs, the execution, issuance, countersignature and delivery of the ADRs evidencing the Ordinary Shares delivered in the form of such ADSs pursuant to the Deposit Agreement and such other customary matters related thereto as the Underwriter may reasonably request;
(vii) the Closing Shares and/or the Option Shares (as applicable) and the Underlying Shares have been approved for listing on the Trading Market, if applicable; and
(viii) prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have been no material adverse change or development involving a prospective material adverse change in the condition or prospects or the business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the SEC Reports; (ii) no action suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any Affiliate of the Company before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding would materially adversely or would reasonably be expected to materially adversely affect the business, operations, prospects or financial condition or income of the Company, except as set forth in the Registration Statement and Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the SEC Reports and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the rules and regulations thereunder and shall conform in all material respects to the requirements of the Securities Act and the rules and regulations thereunder, and none of the SEC Reports nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. The Company represents and warrants to the Underwriter as of the Execution Date, as of the Closing Date and as of each Option Closing Date, if any, as follows:
(a) Subsidiaries. All of the direct and indirect Subsidiaries of the Company, if any, are set forth or in the SEC Reports incorporated by reference in the Registration Statement. The Company owns, directly or indirectly, the capital stock or other equity interests of each Subsidiary, if any, free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each consolidated Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
(b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business described in the SEC Reports. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be expected to result in a Material Adverse Effect and to the Company’s knowledge, no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
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(c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s shareholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which the Company is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(d) Authorization of Deposit Agreement. The Deposit Agreement has been duly authorized by the Company, and assuming due authorization, execution and delivery by the Depositary, constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally or general equitable principles. Upon the issuance, sale and payment for the ADSs in accordance with the terms hereof and the due issuance by the Depositary of the ADSs against the deposit of the Ordinary Shares in respect thereof in accordance with the provisions of the Deposit Agreement, such Shares and ADSs will be duly and validly issued, and the persons in whose names the ADSs are registered will be entitled to the rights specified in the Deposit Agreement; and the Deposit Agreement and the ADRs conform in all material respects to the descriptions thereof contained in the Registration Statement and the Prospectus; and the Deposit Agreement and the ADSs conform in all material respects to the descriptions thereof contained in the Registration Statement and the Prospectus. There has been no change in the Company’s agreement with the Depositary in connection with any pre-release of the Company’s ADSs and no such change is currently contemplated.
(e) No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Shares and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected (including, without limitation, those promulgated by the Food and Drug Administration of the U.S. Department of Health and Human Services (the “FDA”), the European Medicines Agency (“EMA”), the Institutional Review Board in Israel (the “IRB”), the Israel Innovation Authority of the Israeli Ministry of Economy and Industry, the Investment Center of the Israeli Ministry of Economy and Industry, the Israeli Antitrust Authority, the Israel Securities Authority or by any foreign, federal, state or local regulatory authority performing functions similar to those performed above); except in the case of each of clauses (ii) and (iii), such as would not have or reasonably be expected to result in a Material Adverse Effect.
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(f) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filing with the Commission of the Prospectus, (ii) any required filing with FINRA, (iii) such filings as are required to be made under applicable state securities laws, and (iv) notice to the Israel Innovation Authority (collectively, the “Required Approvals”).
(g) Registration Statements. The Company has filed with the Commission a registration statement, and an amendment or amendments thereto, on Form F-1 (File No. 333-267648 which registration statement was declared effective on December [*], 2022, for the registration of the sale of the Public Securities under the Securities Act, and the rules and regulations of the Commission promulgated thereunder. Such registration statement, including amendments thereto (including post effective amendments thereto) and all documents and information deemed to be a part of the Registration Statement through incorporation by reference or otherwise at the time of effectiveness thereof (the “Effective Time”), the exhibits and any schedules thereto at the Effective Time or thereafter during the period of effectiveness and the documents and information otherwise deemed to be a part thereof or included therein by the Securities Act or otherwise pursuant to the Rules and Regulations at the Effective Time or thereafter during the period of effectiveness, is herein called the “Registration Statement.” If the Company has filed or files an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the term Registration Statement shall include such Rule 462 Registration Statement. Any preliminary prospectus included in the Registration Statement or filed with the Commission pursuant to Rule 424(a) under the Securities Act is hereinafter called a “Preliminary Prospectus.” The Preliminary Prospectus relating to the Public Securities that was included in the Registration Statement immediately prior to the pricing of the offering contemplated hereby is hereinafter called the “Pricing Prospectus.”
The Company is filing with the Commission pursuant to Rule 424 under the Securities Act a final prospectus covering the Securities, which includes the information permitted to be omitted therefrom at the Effective Time by Rule 430A under the Securities Act. Such final prospectus, as so filed, is hereinafter called the “Final Prospectus.” Each of the Final Prospectus, the Pricing Prospectus and any preliminary prospectus in the form in which they were included in the Registration Statement or filed with the Commission pursuant to Rule 424 under the Securities Act is hereinafter called a “Prospectus.” Reference made herein to any Preliminary Prospectus, the Pricing Prospectus or to the Prospectus shall be deemed to refer to and include any documents incorporated by reference therein.
Any reference in this Agreement to the Registration Statement, the Preliminary Prospectus, the Pricing Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated or deemed incorporated by reference therein (the “Incorporated Documents”) pursuant to Item 5 of Form F-1 which were filed under the Exchange Act, and the rules and regulations of the Commission promulgated thereunder, on or before the date of this Agreement, or the issue date of the Preliminary Prospectus, the Pricing Prospectus or the Prospectus, as the case may be; and any reference in this Agreement to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Preliminary Prospectus, the Pricing Prospectus or the Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement, or the issue date of the Preliminary Prospectus, the Pricing Prospectus or the Prospectus, as the case may be, deemed to be incorporated therein by reference. All references in this Agreement to financial statements and schedules and any other information which is “contained,” “included,” “described,” “referenced,” “set forth” or “stated” in the Registration Statement, the Preliminary Prospectus, the Pricing Prospectus or the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and any other information which is or is deemed to be incorporated by reference in the Registration Statement, the Preliminary Prospectus, the Pricing Prospectus or the Prospectus, as the case may be.
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The Company will not, without the prior consent of the Underwriter, prepare, use or refer to, any free writing prospectus. For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act.
A registration statement on Form F-6 (No. 333-203333) covering the registration of the ADSs under the Securities Act has also been filed with the Commission and became effective on May 11, 2015.
(h) Authorization of Securities. The Securities to be sold by the Company under this Agreement and the Underlying Shares have been duly authorized for issuance and sale to Aegis pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth herein for the Securities (and, in the case of the Underlying Securities, exercise of the Pre-funded Warrants and Warrants, as the case may be, and payment of the exercise price thereunder), will be validly issued, fully paid and non-assessable; no holder of the Securities or the Underlying Shares will be subject to personal liability by reason of being such a holder; and the issuance and sale of the Securities and the Underlying Shares to be sold by the Company under this Agreement are not subject to any preemptive rights, rights of first refusal or other similar rights of any securityholder of the Company or any other person. The Securities, ADS, all outstanding warrants and convertible securities and the Company’s articles of association and other organizational documents conform in all material respects to the respective statements relating thereto contained in the Registration Statement, the General Disclosure Package and the Prospectus.
(i) Capitalization. The capitalization of the Company, at the dates indicated therein, is as set forth in the Registration Statement. Except as disclosed in the Registration Statement, the Company has not issued any equity since June 30, 2022, other than pursuant to the exercise of employee stock options, vesting of restricted share units or grant of equity awards under the Company’s share option plans, the issuance of Ordinary Shares to employees pursuant to the Company’s employee stock purchase plans, pursuant to the conversion and/or exercise of Ordinary Share Equivalents. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Shares or as set forth in the Registration Statement or the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any ADSs or Ordinary Shares, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional Ordinary Shares or Ordinary Share Equivalents. The issuance and sale of the Shares will not obligate the Company to issue ADSs or Ordinary Shares or other securities to any Person (other than the Underwriter). There are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. All of the outstanding securities of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. The authorized shares of the Company conform in all material respects to all statements relating thereto contained in the Registration Statement and the Prospectus. The offers and sales of the Company’s securities were at all relevant times either registered under the Securities Act and the applicable state securities or Blue Sky laws or, based in part on representations and warranties of the purchasers, exempt from such registration requirements. No further approval or authorization of any shareholder, the Board of Directors or others is required for the issuance and sale of the Shares. There are no shareholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s shareholders.
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(j) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standard Board, applied on a consistent basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by IFRS, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments. The agreements and documents described in the SEC Reports conform in all material respects to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the rules and regulations thereunder to be described in the SEC Reports or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the SEC Reports, or (ii) is material to the Company’s business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefore may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the best of the Company’s knowledge, any other party is in default thereunder and, to the best of the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the best of the Company’s knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses, including, without limitation, those relating to environmental laws and regulations, except for such violations that would not reasonably be expected to result in a Material Adverse Effect.
(k) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i) there has been no event, occurrence or development that has had or that would reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) that are material to the Company other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to IFRS or disclosed in the SEC Reports, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans, and (vi) except as disclosed in the Registration Statement, no officer or director of the Company has resigned from any position with the Company. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Shares contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made. Unless otherwise disclosed in the SEC Reports filed prior to the date hereof, the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.
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(l) Litigation. Except as disclosed in the Registration Statement, there is no action, suit, inquiry, notice of violation or proceeding pending or, to the knowledge of the Company, investigation pending, or action, suit, inquiry, notice of violation, proceeding or investigation threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor to the knowledge of the Company after inquiry, any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty, which would, if there were an unfavorable decision rendered, have or reasonably be expected to result in, a Material Adverse Effect. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of the Registration Statement.
(m) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company or its Subsidiaries, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all Israeli and all applicable U.S. federal, state and local laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.
(n) Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as would not have or reasonably be expected to result in a Material Adverse Effect.
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(o) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits would not have or reasonably be expected to result in a Material Adverse Effect (each, a “Material Permit”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit. The disclosures in the Registration Statement concerning the effects of Federal, State, local and all foreign regulation on the Company’s business as currently contemplated are correct in all material respects.
(p) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to, or have valid and marketable rights to lease or otherwise use, all real property and all personal property that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens that do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made in accordance with IFRS, and the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance in all material respects.
(q) Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to do so could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Except as provided in writing to the Underwriter, neither the Company nor any Subsidiary has received written notice that any of the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a notice (written or otherwise) of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights, other than would not reasonably result in a Material Adverse Effect. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.
(r) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
(s) Transactions With Affiliates and Employees. Except as set forth or incorporated by reference in the Registration Statement, none of the officers or directors of the Company or any Subsidiary and to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from, any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, shareholder, member or partner, in each case in excess of $120,000 or for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.
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(t) [RESERVED]
(u) Certain Fees. Except as set forth in the Prospectus, no brokerage or finder’s fees or commissions are or will be payable by the Company, any Subsidiary or Affiliate of the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. To the Company’s knowledge and except as set forth in the Registration Statement, there are no other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any of its shareholders that may affect the Underwriter’s compensation, as determined by FINRA. Except as set forth in the Registration Statement, the Company has not made any direct or indirect payments (in cash, securities or otherwise) in connection with the Offering to: (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve months prior to the Execution Date, other than the prior payments to the Underwriter in connection with the Company’s public offering of securities in December 2021. Except as set forth in the Registration Statement, none of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.
(v) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Firm Shares will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.
(w) Registration Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.
(x) Listing and Maintenance Requirements. The ADSs and the Ordinary Shares underlying the ADSs are registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the ADSs and the Ordinary Shares underlying the ADSs under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.
(y) Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable as a result of the Underwriter and the Company fulfilling their obligations or exercising their rights under the Transaction Documents.
(z) Disclosure; 10b-5. Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the requirements of the Securities Act and the regulations of the Commission thereunder. Each Preliminary Prospectus and the Prospectus, at the time each was filed with the Commission, complied in all material respects with the requirements of the Securities Act and the regulations of the Commission thereunder. Each Preliminary Prospectus delivered to the Underwriter for use in connection with this Offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
Neither the Registration Statement nor any amendment thereto, at the Effective Time, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
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The Pricing Disclosure Package, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), did not, does not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each free writing prospectus hereto does not conflict with the information contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, and each such free writing prospectus, as supplemented by and taken together with the Pricing Prospectus as of the Applicable Time, did not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b), at the Closing Date or at any Option Closing Date, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The documents incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and none of such documents contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
(aa) No Integrated Offering. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Shares to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.
(bb) Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Firm Shares hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The Registration Statement sets forth as of the date indicated therein hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
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(cc) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all material United States federal, state and local income and all Israeli and foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all material taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. The term “taxes” mean all federal, state, local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest and any penalties, additions to tax, or additional amounts with respect thereto. The term “returns” means all returns, declarations, reports, statements, and other documents required to be filed in respect to taxes.
(dd) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the FCPA and Chapter 9 of Israel’s Criminal Law 1996, as amended. The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects with the FCPA and Chapter 9 of Israel’s Criminal Law 1996, as amended.
(ee) Accountants. To the knowledge and belief of the Company, the Company Auditor is an independent registered public accounting firm as required by the Exchange Act. The Company Auditor shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2021. The Company Auditor has not, during the periods covered by the financial statements incorporated by reference in the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.
(ff) FDA. As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have, or reasonably be expected to result in, a Material Adverse Effect. There is no pending, completed or, to the Company’s knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have, or reasonably be expected to result in, a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed by the Company.
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(gg) Each option granted by the Company under the Company’s share option plans was granted (i) in accordance with the terms of the Company’s share option plan and (ii) with an exercise price at least equal to the fair market value of the Ordinary Shares on the date such option would be considered granted under IFRS and applicable law other than which would not result in a Material Adverse Effect. No option granted under the Company’s share option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, options prior to, or otherwise knowingly coordinate the grant of options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(hh) Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.
(ii) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Underwriter’s reasonable request.
(jj) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(kk) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, and applicable money laundering statutes and applicable rules and regulations thereunder, and the Israeli Prohibition on Money Laundering Law, 5760-2000, and applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(ll) D&O Questionnaires. To the Company’s knowledge, all information contained in the questionnaires completed by each of the Company’s directors and executive officers prior to the Offering and in the Lock-Up Agreement provided to the Underwriter is true and correct in all material respects and the Company has not become aware of any information which would cause the information disclosed in such questionnaires become inaccurate and incorrect.
(mm) FINRA Affiliation. No executive officer, director or, to the Company’s knowledge, any beneficial owner of 10% or more of the Company’s outstanding Ordinary Shares or Ordinary Share Equivalents has any direct or indirect affiliation or association with any FINRA member (as determined in accordance with the rules and regulations of FINRA) that is participating in the Offering. The Company will advise the Underwriter and SRF if it learns that any officer, director or owner of 10% or more of the Company’s outstanding Ordinary Shares or Ordinary Share Equivalents is or becomes an affiliate or associated person of a FINRA member firm.
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(nn) Officers’ Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Underwriter or SRF shall be deemed a representation and warranty by the Company to the Underwriter as to the matters covered thereby.
(oo) Board of Directors. The Board of Directors is comprised of the persons set forth in the SEC Reports incorporated by reference into the Registration Statement. The qualifications of the persons serving as board members and the overall composition of the Board of Directors comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder applicable to the Company, the Israeli Companies Law, 5759-1999, as amended and the rules promulgated thereunder, the Israeli Securities Law (as defined below) and the rules of the Trading Market. At least one member of the Board of Directors qualifies as a “financial expert” as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and the rules of the Trading Market.
3.2 Representations and Warranties of the Company Relating to Israeli Legal Matters. The Company represents, warrants and covenants to the Underwriter, as of the Applicable Time (as defined below), as of the Execution Date, as of the Closing Date and as of each Option Closing Date, if any, as follows:
(a) The Company has not engaged in any form of solicitation, advertising or any other action constituting an offer under the Israeli Securities Law 5728-1968, as amended, and the regulations promulgated thereunder (collectively, the “Israeli Securities Law”) in connection with the transactions contemplated hereby which would require the Company to publish a prospectus in the State of Israel under the laws of the State of Israel.
(b) Except as set forth in the Registration Statement, the Company has no outstanding funding or grants from the Israeli Innovation Authority. There are no proceedings that have been instituted in the State of Israel for the dissolution of the Company or any Subsidiary.
(c) [Reserved].
(d) Neither the Company nor any of its properties or assets has any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution or otherwise) under the laws of the State of Israel.
(e) Subject to the conditions, exceptions and qualifications set forth in the Registration Statement and the Prospectus, a final and conclusive judgment against the Company for a definitive sum of money entered by any court in the United States may be enforced by an Israeli court.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Amendments to Registration Statement. The Company has delivered, or will as promptly as practicable deliver, to the Underwriter complete conformed copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof, and conformed copies of the Registration Statement (without exhibits) and the Prospectus, as amended or supplemented, in such quantities and at such places as the Underwriter reasonably requests. Neither the Company nor any of its directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Shares other than the Preliminary Prospectus, the Registration Statement, and copies of the documents incorporated by reference therein, and any Permitted Free Writing Prospectus (as defined below). The Company shall not file any such amendment or supplement to which the Underwriter shall reasonably object in writing.
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4.2 Federal Securities Laws.
(a) Compliance. During the time when a Prospectus is required to be delivered under the Securities Act, the Company will use its best efforts to comply with all requirements imposed upon it by the Securities Act and the rules and regulations thereunder and the Exchange Act and the rules and regulations thereunder, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Shares in accordance with the provisions hereof and the Prospectus. If at any time when a Prospectus relating to the Shares is required to be delivered under the Securities Act, any event shall have occurred as a result of which, in the opinion of counsel for the Company or counsel for the Underwriter, the Prospectus, as then amended or supplemented, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Securities Act, the Company will notify the Underwriter promptly and prepare and file with the Commission, subject to Section 4.1 hereof, an appropriate amendment or supplement in accordance with Section 10 of the Securities Act.
(b) Filing of Prospectus. The Company will file the Prospectus (in form and substance satisfactory to the Underwriter) with the Commission pursuant to the requirements of Rule 424.
(c) Exchange Act Registration. For a period of three years from the Closing Date, the Company will use its best efforts to maintain the registration of the ADSs under the Exchange Act. For a period of three years from the Closing Date, the Company will not deregister the ADSs under the Exchange Act without the prior written consent of the Underwriter, which consent shall not unreasonably be withheld.
(d) Free Writing Prospectuses. The Company represents and agrees that it has not made and will not make any offer relating to the Shares that would constitute an issuer free writing prospectus, as defined in Rule 433 of the rules and regulations under the Securities Act, without the prior written consent of the Underwriter. Any such free writing prospectus consented to by the Underwriter is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus” as defined in rule and regulations under the Securities Act, and has complied and will comply with the applicable requirements of Rule 433 of the Securities Act, including timely Commission filing where required, legending and record keeping.
4.3 Delivery to the Underwriter of Prospectuses. The Company will deliver to the Underwriter, without charge, from time to time during the period when the Prospectus is required to be delivered under the Securities Act or the Exchange Act such number of copies of each Prospectus as the Underwriter may reasonably request and, as soon as the Registration Statement becomes effective, upon reasonable request by the Underwriter, deliver to the Underwriter two original executed Registration Statements including exhibits, and all post-effective amendments thereto and copies of all exhibits filed therewith or incorporated therein by reference and all original executed consents of certified experts.
4.4 Effectiveness and Events Requiring Notice to the Underwriter. The Company will use its best efforts to cause the Registration Statement to remain effective with a current prospectus, and will promptly notify the Underwriter and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the Shares for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement or Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission; and (vi) of the happening of any event during the period described in this Section 4.4 that, in the judgment of the Company, makes any statement of a material fact made in the Registration Statement or the Prospectus untrue or that requires the making of any changes in the Registration Statement or the Prospectus in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification at any time, the Company will make every reasonable effort to obtain promptly the lifting of such order.
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4.5 Reports to the Underwriter.
(a) Periodic Reports, etc. For a period of one (1) year from the Execution Date, upon request, and to the extent not filed with the Commission or public company reporting service, the Company will furnish or make available to the Underwriter copies of such financial statements and other periodic and special reports as the Company from time to time furnishes generally to holders of any class of its securities and also promptly furnish or make available to the Underwriter: (i) a copy of each periodic report the Company shall be required to file with the Commission; (ii) a copy of every press release and every news item and article with respect to the Company or its affairs which was released by the Company; (iii) a copy of each Form 6-K prepared and filed by the Company; (iv) a copy of each registration statement filed by the Company under the Securities Act; and (v) such additional documents and information with respect to the Company and the affairs of any future Subsidiaries of the Company as the Underwriter may from time to time reasonably request; provided that the Underwriter shall sign, if requested by the Company, a Regulation FD compliant confidentiality agreement which is reasonably acceptable to the Underwriter in connection with the Underwriter’s receipt of such information. Documents filed with the Commission pursuant to its EDGAR system shall be deemed to have been delivered to the Underwriter pursuant to this Section.
(b) Depositary. For a period of one (1) year from the Execution Date, the Company shall retain the Depositary or a depositary reasonably acceptable to the Underwriter.
(c) General Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and each Option Closing Date, if any, to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the securities to be sold in the Offering (including the Option Securities) with the Commission; (b) all FINRA Public Offering Filing System fees associated with the review of the Offering by FINRA; (c) all fees and expenses relating to the listing of such Closing Securities and Option Securities on the Trading Market, to the extent applicable, and such other stock exchanges as the Company and the Underwriter together determine; (d) all fees, expenses and disbursements relating to the registration or qualification of such securities under the “blue sky” securities laws of such states and other foreign jurisdictions as the Underwriter may reasonably designate the costs, if any, of all mailing and printing of the underwriting documents (including, without limitation, this Agreement, any Blue Sky Surveys and, if appropriate, any Selected Dealers’ Agreement, Underwriter’s Questionnaire and Power of Attorney), Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Underwriter may reasonably deem necessary; (e) all fees, expenses and disbursements relating to the registration, qualification or exemption of the Firm Shares and Option Shares under the securities laws of such foreign jurisdictions as the Underwriter may reasonably designate; (f) the costs of preparing, printing and delivering the securities and the Offering documents; (f) fees and expenses of the Depositary for the securities (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company); (g) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Underwriter; (h) the fees and expenses of the Company’s accountants; and (j) a maximum of $75,000 for reasonable legal fees and disbursements for Underwriter’s counsel. The Underwriter may also deduct from the net proceeds of the Offering payable to the Company on the Closing Date, or each Option Closing Date, if any, the expenses set forth herein to be paid by the Company to the Underwriter.
4.6 Application of Net Proceeds. The Company will apply the net proceeds from the Offering received by it in a manner consistent with the application described under the caption “Use of Proceeds” in the Prospectus.
4.7 Delivery of Earnings Statements to Security Holders. The Company will make generally available to its security holders as soon as practicable, but not later than the first day of the fifteenth full calendar month following the Execution Date, an earnings statement (which need not be certified by independent public or independent certified public accountants unless required by the Securities Act or the Rules and Regulations under the Securities Act, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities Act) covering a period of at least twelve consecutive months beginning after the Execution Date, provided that filings of the Company’s reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (including the exhibits thereto and documents incorporated by reference therein), after the Execution Date shall be deemed to constitute delivery.
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4.8 Stabilization. Neither the Company, nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Underwriter) has taken or will take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.
4.9 Internal Controls. For a period of one (1) year commencing on the Execution Date, the Company will maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with IFRS and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
4.10 Accountants. The Company shall continue to retain a nationally recognized independent certified public accounting firm for a period of at least one year after the Execution Date. The Underwriter acknowledges that the Company Auditor is acceptable to the Underwriter.
4.11 FINRA. The Company shall advise the Underwriter (who shall make an appropriate filing with FINRA) if it is aware that any 10% or greater shareholder of the Company becomes an affiliate or associated person of a FINRA member firm.
4.12 No Fiduciary Duties. The Company acknowledges and agrees that the Underwriter’s responsibility to the Company is solely contractual and commercial in nature, based on arms-length negotiations and that neither the Underwriter nor its Affiliates or any selected dealer shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its Affiliates in connection with the Offering and the other transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to the contrary, the Company acknowledges that the Underwriter may have financial interests in the success of the Offering that are not limited to the difference between the price to the public and the purchase price paid to the Company by the Underwriter for the shares and the Underwriter has no obligation to disclose, or account to the Company for, any of such additional financial interests. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriter with respect to any breach or alleged breach of fiduciary duty.
4.13 Board Composition and Board Designations. For a period of one (1) year commencing on the Execution Date, the Company shall use all reasonable efforts to ensure that: (i) the qualifications of the persons serving as board members and the overall composition of the Board of Directors comply with the Sarbanes Oxley Act of 2002 that are applicable to the Company and the rules promulgated thereunder and with the listing requirements of the Trading Market applicable to the Company.
4.14 Securities Laws Disclosure; Publicity. At the request of the Underwriter, at the time requested by the Underwriter, the Company shall issue a press release disclosing the material terms of the Offering prior to Closing Date. The Company and the Underwriter shall consult with each other in issuing any other press releases with respect to the Offering, and neither the Company nor the Underwriter shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of such Underwriter, or without the prior consent of such Underwriter, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.
4.15 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that the Underwriter of the Shares is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that the Underwriter of Shares could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving securities.
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4.16 Reservation of Ordinary Shares. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of Ordinary Shares for the purpose of enabling the Company to issue Option Shares pursuant to the Over-Allotment Option.
4.17 Listing of ADSs. The Company hereby agrees to use best efforts to maintain the listing or quotation of the ADSs on the Nasdaq Capital Market. The Company further agrees, if the Company applies to have the ADSs traded on any other Trading Market, it will then include in such application all of the ADSs, and will take such other action as is necessary to cause all of the ADSs to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing and trading of its ADSs on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market.
4.18 Right of First Refusal. The Company agrees that if, for the period ending six (6) months from the Closing Date, the Company or any of its Subsidiaries: (a) decides to finance or refinance any indebtedness and proposes to enter into an agreement with a third-party to serve as sole book-runner, sole manager, sole placement agent or sole agent, the Underwriter (or any affiliate designated by the Underwriter) shall have the right to act as such sole book-runner, sole manager, sole placement agent or sole agent with respect to such financing or refinancing; or (b) decides to raise funds by means of a public offering (including at-the-market facility) or a private placement or any other capital raising financing of equity, equity-linked or debt securities (other than the GEM Facility and any warrants issued pursuant thereto) and proposes to enter into an agreement with a third-party to serve as sole book-runner, sole manager, sole placement agent or sole agent, the Underwriter (or any affiliate designated by the Underwriter) shall have the right to act as such sole book-running manager, sole underwriter or sole placement agent for such financing. If the Underwriter or one of its affiliates decides to accept such engagement, the agreement governing such engagement (each a “Subsequent Transaction Agreement”) will contain, among other things, provisions for customary fees for transactions of similar size and nature, and the provisions of this Agreement, including indemnification, which are appropriate to such transaction. Notwithstanding the foregoing, the decision to accept the Company’s engagement under this Section 4.18 shall be made by the Underwriter or one of its affiliates, by a written notice to the Company, within ten (10) days of the receipt of the Company’s notification of its financing needs.
4.18 Subsequent Equity Sales. For a period of ninety (90) days after the Closing Date (the “Stand-Still Period”),
(a) the Company shall not, without prior written consent of the Underwriter, offer, sell, issue, or otherwise transfer or dispose of, directly or indirectly, any ADS, Ordinary Shares or Ordinary Share Equivalents;
(b) the Company will not file or caused to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company, other than a Registration Statement on Form S-8 relating to securities issuable under an equity incentive plan; and
(c) the Company will not enter any agreement relating to, or announce the intention to effect, any of the transactions or filings prohibited by Section 4.18(a) or Section 4.18(b).
Notwithstanding the foregoing, this Section 4.18 shall not apply in respect of an Exempt Issuance.
4.19 Deposit of Shares. The Company agrees, prior to the Closing Date and each Option Closing Date, to deposit Underlying Shares with the Depositary in accordance with the provisions of the Deposit Agreement and otherwise to comply with the Deposit Agreement so that ADRs evidencing the applicable Shares will be issued by the Depositary against receipt of such Shares and delivered to the Underwriter at such Closing Date or Option Closing Date.
4.20 Payment of Expenses Pursuant to Deposit Agreement and ADRs. The Company hereby agrees to pay on behalf of the Underwriter or any purchaser of Shares, or to reimburse the Underwriter or any such purchasers for, all fees and expenses incurred by such parties pursuant to the Deposit Agreement with respect to the deposit of the Ordinary Shares and the delivery of ADSs representing such deposited Ordinary Shares.
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ARTICLE V.
[RESERVED]
ARTICLE VI.
INDEMNIFICATION
6.1 Indemnification of the Underwriter. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless the Underwriter, and each dealer selected by the Underwriter that participates in the offer and sale of the Shares (each a “Selected Dealer”) and each of their respective directors, officers and employees and each Person, if any, who controls such Underwriter or any Selected Dealer (“Controlling Person”) within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between such Underwriter and the Company or between such Underwriter and any third party or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in (i) any Preliminary Prospectus, if any, the Registration Statement or the Prospectus (as from time to time each may be amended and supplemented); (ii) any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the Offering, including any “road show” or investor presentations made to investors by the Company (whether in person or electronically); or (iii) any application or other document or written communication (in this Article VI, collectively called “application”) executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Shares under the securities laws thereof or filed with the Commission, any state securities commission or agency, Trading Market or any securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon and in conformity with written information furnished to the Company with respect to the applicable Underwriter by or on behalf of such Underwriter expressly for use in any Preliminary Prospectus, if any, the Registration Statement or Prospectus, or any amendment or supplement thereto, or in any application, as the case may be. With respect to any untrue statement or omission or alleged untrue statement or omission made in the Preliminary Prospectus, if any, the indemnity agreement contained in this Section 6.1 shall not inure to the benefit of the Underwriter to the extent that any loss, liability, claim, damage or expense of the Underwriter results from the fact that a copy of the Prospectus was not given or sent to the Person asserting any such loss, liability, claim or damage at or prior to the written confirmation of sale of the Shares to such Person as required by the Securities Act and the rules and regulations thereunder, and if the untrue statement or omission has been corrected in the Prospectus, unless such failure to deliver the Prospectus was a result of non-compliance by the Company with its obligations under this Agreement. The Company agrees promptly to notify the Underwriter of the commencement of any litigation or proceedings against the Company or any of its officers, directors or Controlling Persons in connection with the issue and sale of the Shares or in connection with the Registration Statement or Prospectus.
6.2 Procedure. If any action is brought against the Underwriter, a Selected Dealer or a Controlling Person in respect of which indemnity may be sought against the Company pursuant to Section 6.1, the Underwriter, such Selected Dealer or Controlling Person, as the case may be, shall promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the reasonable approval of the Underwriter or such Selected Dealer, as the case may be) and payment of actual expenses. The Underwriter, such Selected Dealer or Controlling Person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Underwriter, such Selected Dealer or Controlling Person unless (i) the employment of such counsel at the expense of the Company shall have been authorized in writing by the Company in connection with the defense of such action, or (ii) the Company shall not have employed counsel to have charge of the defense of such action, or (iii) such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events the reasonable fees and expenses of not more than one additional firm of attorneys selected by the Underwriter (in addition to local counsel), Selected Dealer and/or Controlling Person shall be borne by the Company. Notwithstanding anything to the contrary contained herein, if the Underwriter, Selected Dealer or Controlling Person shall assume the defense of such action as provided above, the Company shall have the right to approve the terms of any settlement of such action which approval shall not be unreasonably withheld.
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6.3 Indemnification of the Company. The Underwriter agrees to indemnify and hold harmless the Company, its directors, officers and employees and agents who control the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to the Underwriter, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions made in any Preliminary Prospectus, if any, the Registration Statement or Prospectus or any amendment or supplement thereto or in any application, in reliance upon, and in strict conformity with, written information furnished to the Company with respect to the Underwriter by or on behalf of the Underwriter expressly for use in such Preliminary Prospectus, if any, the Registration Statement or Prospectus or any amendment or supplement thereto or in any such application. In case any action shall be brought against the Company or any other Person so indemnified based on any Preliminary Prospectus, if any, the Registration Statement or Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity may be sought against the Underwriter, the Underwriter shall have the rights and duties given to the Company, and the Company and each other Person so indemnified shall have the rights and duties given to the Underwriter by the provisions of this Article VI. Notwithstanding the provisions of this Section 6.3, no Underwriter shall be required to indemnify the Company for any amount in excess of the underwriting discounts and commissions applicable to the Shares purchased by the Underwriter.
6.4 Contribution.
(a) Contribution Rights. In order to provide for just and equitable contribution under the Securities Act in any case in which (i) any Person entitled to indemnification under this Article VI makes a claim for indemnification pursuant hereto but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Article VI provides for indemnification in such case, or (ii) contribution under the Securities Act, the Exchange Act or otherwise may be required on the part of any such Person in circumstances for which indemnification is provided under this Article VI, then, and in each such case, the Company and the Underwriter shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and the Underwriter, as incurred, in such proportions that the Underwriter is responsible for that portion represented by the percentage that the underwriting discount appearing on the cover page of the Prospectus bears to the initial offering price appearing thereon and the Company is responsible for the balance; provided, that, no Person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each director, officer and employee of the Underwriter or the Company, as applicable, and each Person, if any, who controls the Underwriter or the Company, as applicable, within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as the Underwriter or the Company, as applicable. Notwithstanding the provisions of this Section 6.4, no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions applicable to the Shares purchased by the Underwriter.
(b) Contribution Procedure. Within fifteen days after receipt by any party to this Agreement (or its representative) of notice of the commencement of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another party (“contributing party”), notify the contributing party of the commencement thereof, but the failure to so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party or its representative of the commencement thereof within the aforesaid fifteen days, the contributing party will be entitled to participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution without the written consent of such contributing party. The contribution provisions contained in this Section 6.4 are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act or otherwise available.
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ARTICLE VII.
MISCELLANEOUS
7.1 Termination.
(a) Termination Right. The Underwriter shall have the right to terminate this Agreement at any time prior to the Closing Date or any Option Closing Date, if any, (i) if any domestic or international event or act or occurrence has materially disrupted, or in its opinion will in the immediate future materially disrupt, general securities markets in the United States; or (ii) if trading on any Trading Market shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government authority having jurisdiction, or (iii) if the United States shall have become involved in a new war or an increase in major hostilities, or (iv) if a banking moratorium has been declared by a New York State or federal authority, or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets, or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in the Underwriter’s opinion, make it inadvisable to proceed with the delivery of the Shares, or (vii) if the Company is in material breach of any of its representations, warranties or covenants hereunder, or (viii) if the Underwriter shall have become aware after the date hereof of such a material adverse change in the conditions or prospects of the Company, or such adverse material change in general market conditions as in the Underwriter’s judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Shares or to enforce contracts made by the Underwriter for the sale of the Shares.
(b) Expenses. In the event this Agreement shall be terminated pursuant to Section 7.1(a), within the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriter its actual and accountable out of pocket expenses related to the transactions contemplated herein then due and payable, including the fees and disbursements of SRF up to $25,000 (provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement).
(c) Indemnification. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Article VI shall not be in any way effected by such election or termination or failure to carry out the terms of this Agreement or any part hereof.
7.2 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, and the Prospectus contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules..
7.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.
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7.4 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Underwriter. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
7.5 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
7.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
7.7 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings arising out of this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not subject to personal jurisdiction, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company or the Underwriter under Article VI, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
7.8 Survival. The representations and warranties contained herein shall survive the Closing and the Option Closing, if any, and the delivery of the Shares.
7.9 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
7.10 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
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7.11 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Underwriter and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
7.12 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
7.13 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and Ordinary Shares in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Ordinary Shares that occur after the date of this Agreement.
7.14 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE FOREVER ANY RIGHT TO TRIAL BY JURY.
(Signature Pages Follow)
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If the foregoing correctly sets forth the understanding between the Underwriter and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among the Company and the sole Underwriter in accordance with its terms.
| Very truly yours, | |
| BIONDVAX PHARMACEUTICALS, LTD. |
| By: | /s/ | |
| Name: Amir Reichman | ||
| Title: Chief Executive Officer |
| By: | /s/ | |
| Name: Mark Germain | ||
| Title: Chairman of the Board |
Accepted on the date first above written.
AEGIS CAPITAL CORP.
As the sole Underwriter
| By: | /s/ | |
| Name: Robert J. Eide | ||
| Title: C.E.O |
Address for Notice:
BiondVax Pharmaceuticals, Ltd.
Jerusalem BioPark, 2nd Floor
Hadassah Ein Kerem Campus
Jerusalem, Israel
Attention: Mark Germin
E-mail:
With a copy (for informational purposes only) to:
Gross & Co. Law Firm
One Azrieli Center, Round Building
Tel Aviv 6701101, Israel
Attention: Perry Wildes
Email:
And to:
Lucosky Brookman LLP
101 Wood Avenue South,
5th Floor Woodbridge,
NJ 08830
Attention: Lawrence Metelitsa
Email:
If to the Underwriter:
Address for Notice:
810 Seventh Avenue, 18th Floor
New York, New York 10019
Attention: Global Equity Markets
Email:
Copy to:
Sichenzia Ross Ference LLP
1185 Avenue of the Americas
New York, New York 10036
Attention: Greg Sichenzia, Esq.
Email:
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SCHEDULE I
Schedule of Sole Underwriter
| Sole Underwriter | Total Number of Closing Units to be Purchased | Closing Purchase Price | |||||
| Aegis Capital Corp. | Closing Common Units | [*] | [*] | ||||
| Closing Pre-funded Units | [*] | [*] | |||||
| Total: | [*] | [*] | |||||
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SCHEDULE 2-A
Pricing Information
Number of Closing Units: [*]
Number of Closing Common Units: [*]
Number of Closing Pre-Funded Units: [*]
Number of Option Securities: up to [*]
Public Offering Price per Closing Common Unit: $[*]
Public Offering Price per Closing Pre-funded Unit: $[*]
Exercise Price per Pre-funded Warrant:
Exercise Price per Warrant per ADS:
Underwriting Discount per Closing Common Unit: $[*]
Underwriting Discount per Closing Pre-funded Unit: $[*]
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EXHIBIT A
EXCHANGEABLE PURCHASE WARRANT
TO PURCHASE ORDINARY SHARES REPRESENTED BY AMERICAN DEPOSITARY SHARES
EXHIBIT B
NON-EXCHANGEABLE PURCHASE WARRANT
TO PURCHASE ORDINARY SHARES REPRESENTED BY AMERICAN DEPOSITARY SHARES
EXHIBIT C
PRE-FUNDED WARRANT
TO PURCHASE ORDINARY SHARES REPRESENTED BY AMERICAN DEPOSITARY SHARES
Exhibit 3.1
COMPANIES LAW, 5759 – 1999
LIMITED SHARES COMPANY
Articles of Association
of
BIONDVAX PHARMACEUTICALS LTD.
| 1. | In these articles, except where the written content requires a different interpretation: |
“Law” As defined in the Interpretation Law, 5741 – 1981;
“The Company” The abovementioned Company;
“The Law” or the “Companies Law” The Companies Law, 5759 – 1999, as it shall be from time to time;
“Administrative Enforcement Proceeding” An administrative enforcement proceeding in accordance with the provisions of any law, including the Improvement of Enforcement Proceedings Law and the Securities Law, including an administrative petition or appeal in connection with the aforementioned proceeding;
“Securities Law” The Securities Law, 5728 – 1968, as it is updated from time to time;
“The Office” or the “Registered Office” The Company’s office, the address of which is registered with the Registrar, as it shall be from time to time;
“The Ordinance” or the “Companies Ordinance” The Companies Ordinance (new version), 5743 – 1983, as it is updated from time to time, and the regulations subject thereto;
“Ordinary Majority” An ordinary majority of the total votes of shareholders attending a general meeting or class meetings, as the case may be, who are entitled to vote and have voted therein, without taking into account the abstaining votes;
“Year” or “Month” According to the Gregorian calendar;
“Corporation” A company, partnership, cooperative society, association, and any other incorporated or unincorporated body of persons;
“These Articles of Association” or the “Articles of Association”” The Articles of Association drafted in this document, as they may change from time to time;
| 1.1. | Any term in these Articles of Association not defined in the abovementioned article shall bear the meaning prescribed thereto in the Companies Law, unless the aforesaid constitutes a contradiction to the written subject or its content; words stated in the singular shall be construed as well in the plural, and vice versa, words stated in the male gender shall be construed in the female gender as well. |
| 1.2. | The headings in these Articles of Association are for convenience purposes only and shall not be used to construe these Articles of Association. |
| 1.3. | Anywhere in the Articles of Association where it is determined that its provisions shall be subject to the provisions of the Ordinance and/or subject to the provisions of the Companies Law and/or subject to the provisions of any law, this means the provisions of the Ordinance and/or the provisions of the Companies Law and/or the provisions of any law, which may not be subjected to conditions, unless the context requires otherwise. |
| 1.4. | The provisions which may be subject to conditions in the Companies Law shall apply to the Company wherever it is not stated to the contrary in these Articles of Association and as long as there is no contradiction between them and the provisions of these Articles of Association. |
COMPANY NAME
| 2. | The Company’s name is as follows: |
| 2.1. | In Hebrew - ביונדווקס פרצמבטיקה בע”מ |
| 2.2. | In English – BiondVax Pharmaceuticals Ltd. |
LIMITATION OF LIABILITY
| 3. | The liability of the shareholders is limited to repayment to the Company of the par value of the shares they own, if said sum has not yet been paid to the Company. In the event that the Company allots shares for consideration lower than their par value as stated in section 304 to the Law (the “Reduced Consideration”), the liability of each shareholder shall be limited to the repayment of the Reduced Consideration sum for each share allotted thereto as aforementioned. |
COMPANY’S OBJECTIVES
| 4. | The objectives of the Company are to engage in any lawful activity in the field of biotechnology. |
BUSINESS
| 5. | The Company may, at any time, engage in any branch or type of by which it is authorized, explicitly or implicitly, to engage subject to Article 4 above. In addition the Company may cease from engaging in such businesses, whether it has begun said branch or type of business, or otherwise. |
DONATIONS
| 6. | The Company may donate reasonable amounts to worthy causes, even if said donation is not within the framework of the Company’s business considerations. The Board of Directors is authorized to determine, subject to its discretion, the sums of the donations, the purposes for which they are executed, the identity of the receiver of the donation, and any other condition in connection therewith. |
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REGISTERED OFFICE
| 7. | The Company’s registered office will be at the address determined by the Board of Directors, as it changes from time to time. |
The Articles of Association
| 8. | The Company may amend these Articles of Association upon a resolution passed by the General Meeting with a majority of at least 75% of the voting rights at the meeting. |
| 9. | A resolution passed by the General Meeting with the required majority to amend the Articles of Association, as stated in article 8 above, which amends any of the provisions of these Articles of Association, will be deemed a resolution to amend these Articles of Association, even if this was not explicitly stated in the resolution. |
| 10. | Subject to the provisions of the Companies Law, amendments to these Articles of Association will be valid as of the date of passing the resolution in this matter by the Company or on a later date determined in the resolution. |
REGISTERED SHARE CAPITAL
| 11. | The Company’s registered share capital is 20,000,000,000 Ordinary Shares, no par value (the “Shares” or the “Ordinary Shares”). |
Each Ordinary Share grants its owner the following rights:
| a) | Receiving an invitation and participation in the Company’s General Meetings and voting thereat; |
| b) | One vote at the General Meeting votes; |
| c) | Participation in the distributed profit of the Company pro rata to the sum paid on account of the share’s par value; |
| d) | In the event of distribution of surpluses of the Company’s assets (after payment of its debt) to the shareholders as part of dissolution or capital recovery in any form – participation in the distribution of the surplus pro rata to the sum paid on account of the share’s par value. |
THE SHARES
| 12. | Each Ordinary Share in the Company’s equity bears equal rights, for all intents and purposes, compared to any other Ordinary Share, including the right to a dividend, bonus shares, and participation in the distribution of surplus Company assets during dissolution, pro rata to the par value of each share, without taking into account any premium paid therefor, and all subject to the provisions of these Articles of Association. |
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| 13. | Each of the Ordinary Shares entitles its owner to the right to participate in the Company’s General Meeting and to one vote. |
| 14. |
| 14.1. |
| 14.1.1. | A Company shareholder is anyone registered as a shareholder in the shareholders ledger, and anyone who owns a share registered with a stock exchange member and the same share is included among the shares registered in the Company’s shareholders ledger in the name of the registration company. |
| 14.1.2. | A shareholder who is a trustee will be registered in the shareholders ledger while stating his trusteeship, and he shall be deemed for the purpose of the Companies Law a shareholder. Without derogating from the aforementioned, the Company will recognize the trustee, as aforesaid, as the shareholder, for all intents and purposes, and will not recognize any other person, including the beneficiary, as having any right whatsoever in the share. |
| 14.2. | Without derogating from the abovementioned, and subject to the provisions of these Articles of Association, apart from Company shareholders, as stated in Article 14.1 above, no person shall be recognized by the Company as having any right whatsoever in a share and the Company will not be bound by and will not acknowledge any benefit subject to equity laws or fiduciary relations or chose in action, future or partial in any share or benefit whatsoever in a share fraction or any other right pertaining to a share except only the right of a shareholder as stated in article 14.1 above, in an entire share, and all, except if an authorized court has instructed to the contrary. |
SHARE CERTIFICATES
| 15. | The certificates attesting to the proprietary right in the shares shall bear the Company seal and the signatures of one director jointly with the Company CEO or jointly with the Company secretary or the signatures of any two people appointed for this purpose by the Board of Directors. |
The Board of Directors may decide that a signature or signatures as abovementioned shall be done in any mechanical way, as determined by the Board of Directors.
| 16. | Except in the event that the terms of issue of shares determine otherwise: |
| 16.1. | Each registered shareholder is entitled to receive from the Company, as per his request, within a period of two months after the allotment or registration of transfer, as the case may be, one certificate attesting to his ownership in the shares registered in his name, or, with the Company’s consent, a number of aforesaid certificates. |
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| 16.2. | The registration company is entitled to receive from the Company, as per its request, within a period of two months after the allotment or registration of transfer, as the case may be, one certificate attesting to the number of shares and class of shares registered in its name in the shareholder ledger. |
| 17. | Subject to the provisions of the Companies Law, each certificate shall specify the amount of shares for which it was issued, their serial numbers and par value. |
| 18. | A certificate referring to a share registered to two persons or more, shall be delivered to anyone whose name appears first in the shareholder ledger, with regard to the same share, unless all registered owners of the same share, instruct the Company in writing to deliver it to another registered owner. |
| 19. | In the event that a share certificate is destroyed, damaged, lost, or impaired, the Board of Directors may order the cancellation thereof and issue a new certificate in lieu thereof, provided that the share certificate was delivered to the Company and destroyed thereby, or it was proven to the satisfaction of the Board of Directors that the certificate was lost or destroyed and the Company received guarantees to the Board of Directors’ satisfaction for any damage which may occur thereto. For each share certificate issued subject to this article a reasonable sum shall be paid therefor as determined by the Board of Directors from time to time. |
PAYMENTS FOR SHARES
| 20. | All of the shares in the Company’s issued capital will be fully paid-up shares. |
FORFEITURE OF SHARES
| 21. | Without derogating from article 20 above, the Board of Directors may forfeit a share allotted by the Company and sell it, if the consideration payable by the shareholder, all or some, was not paid to the Company, and the provisions of the Companies Law in this matter shall apply. |
TRANSFER AND DELIVERY OF SHARES
| 22. | Any transfer of shares registered in the name of the registration company shall be performed through the registration company. Any transfer of shares registered in the shareholder ledger in the name of a registered shareholder, including a transfer by the registration company or thereto, shall be done in writing, provided that the deed of transfer is signed by hand only, by the transferor or the transferee, themselves or by proxy, and by witnesses to the signing, and delivered to the registered office or any other place determined for this purpose by the Board of Directors. Subject to the provisions of the Companies Law, transfer of shares will not be registered in the shareholder ledger, except after a transfer deed as abovementioned is delivered to the Company; the transferor will continue to be considered the owner of the transferred shares until the transferee is registered in the shareholder ledger as the owner of the transferred shares. |
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| 23. | The share transfer deed will be in writing, in the format acceptable in Israel or in any other format approved by the Board of Directors. If the transferor or transferee are a corporation, confirmation will be provided by an attorney or accountant or another person the identity of whom is acceptable to the Board of Directors, regarding the authority of those signing on behalf of the corporation to execute or receive the transfer, as the case may be. |
| 24. | The Company may close the shareholder ledger for a duration determined by the Board of Directors provided that it does not exceed, in total, thirty days each year. While the ledger is closed, no transfer of shares will be registered in the ledger. Without derogating from the aforementioned, the Board of Directors may determine an effective date for the question of entitlement to vote at the General Meeting, or receive a dividend payment or allotment of any rights whatsoever or for any other legal purpose. |
| 25. | Subject to the provisions of these Articles of Association or the terms of issue of shares of any class, the shares will be transferable without requiring the approval of the Board of Directors. |
| 26. | Each transfer deed will be submitted to the office or any other place determined by the Board of Directors, for the purpose of registration, together with the share certificate about to be transferred, if such was issued, and any other proof required by the Board of Directors regarding the proprietary right of the transferor or his right to transfer the shares. The deeds of transfer registered will remain in the Company’s possession however any deed of transfer which the Board of Directors refuses to register will be returned to the submitter, as per his request. |
| 27. | If the Board of Directors refuses to approve a transfer of shares due to failure to fulfill any of the terms specified in article 26 above, it shall notify the transferor of this no later than one month from the date of receiving the deed of transfer. |
| 28. | The Company will be entitled to charge payment for the registration of the transfer, at a sum determined by the Board of Directors, from time to time, and which will be reasonable under the circumstances. |
| 29. |
| 29.1. | Subject to the provisions of the Companies Law and the provisions of these Articles of Association, if it is proven to the Company to the Board of Directors’ satisfaction and by means determined thereby, that the legal requirements were upheld to endorse a right in the shares registered in the ledger in the name of a registered shareholder, the Company will recognize the endorsee, and him alone, as the owner of the right in the aforementioned shares. |
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| 29.2. | Notwithstanding the abovementioned, in the event of death of one or more of the joint owners of shares registered in their name in the ledger, the Company will recognize the remaining registered owners, and them alone, as having a proprietary right in those shares |
| 30. |
| 30.1. | Subject to the provisions of these Articles of Association, the Company will change the registration of ownership in shares in the shareholders ledger if the Company receives a court order to amend the ledger or if it was proven to the Company, to the Board of Directors’ satisfaction and by methods determined thereby, that the legal requirements were upheld to endorse the right in the shares, and the Company will not recognize any other right of a person in the shares, prior to proving his right as abovementioned. |
| 30.2. | Without derogating from the abovementioned, the Board of Directors may refuse to perform the registration or may delay it, as it would be entitled to do, had the registered owner himself transferred the share prior to the endorsement of the right. |
| 31. | Subject to the provisions of the Companies Law and the provisions of these Articles of Association, a person who becomes entitled to a share as stated in article 29 above, will be entitled to perform a transfer of the shares as the registered owner of the shares would have been entitled to himself prior to the endorsement of the right. |
| 32. | The Company may destroy the share transfer deeds after seven years have passed from the date of registration in the ledger; in addition the Company may destroy revoked share certificates, after seven years have passed from their date of revocation, and a prima facie presumption shall apply that all of the transfer deeds and certificates destroyed, as aforementioned, were fully valid and that the transfers, revocations, and registrations, as the case may be, were duly executed. |
CHANGES IN CAPITAL
| 33. | Subject to the provisions of any law, the Company may, with a resolution passed at the General Meeting by ordinary majority, increase the Company’s registered share capital, with types of shares, as it shall determine. |
| 34. | Subject to the provisions of the Companies Law, the Company may, with a resolution passed at the General Meeting by ordinary majority: |
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| 34.1. | Consolidate its shares, all or some, and divide them into shares of par values greater than the par value of its existing shares. |
| 34.2. | Divide its shares, all or some, by secondary division, into shares of par values smaller than the par value of its existing shares. |
| 34.3. | Reduce the Company’s capital and any capital redemption reserve fund. |
In order to execute any resolution as abovementioned, the Board of Directors may settle, subject to its discretion, any difficult arising therefrom.
| 35. | Without derogating from the generality of the Board of Directors’ authority, as abovementioned, if as a result of the consolidation or division, as abovementioned, the shareholders will remain with share fractions, the Board of Directors may subject to its discretion act as follows: |
| 35.1. | Determine that the share fractions that do not entitle their owners to a whole share, will be sold by the Company and the consideration of the sale will be paid to those entitled, subject to the conditions and in the manner determined. |
| 35.2. | Allot to each shareholder which the consolidation and/or division leave in their hands a share fraction, shares of the type of shares existing in the Company capital prior to the consolidation and/or division, of such a number so that their consolidation with the fraction creates one whole share, and an allotment as aforementioned will be deemed in effect near before the consolidation or division, as the case may be. |
| 35.3. | Determine the manner in which the sums owed for the shares allotted as stated in article 35.2 will be redeemed, including the manner in which the sums can be redeemed on account of bonus shares. |
| 35.4. | Determine that the owners of share fractions will not be entitled to receive a whole share for a share fraction. |
| 35.5. | Determine that shareholders will not be entitled to receive a whole share for a fraction of a whole share at a certain par value or less and will be entitled to receive a whole share for a fraction of a whole share the par value of which is higher than the aforementioned par value. |
| 36. | The Company may, with a resolution passed by the General Meeting by ordinary majority, revoke registered share capital that has not yet been allotted, provided that there is no undertaking by the Company, including a contingent undertaking, to allot the shares. |
CHANGE OF RIGHTS
| 37. | At any time in which the share capital is divided into different classes, the Company will be entitled by ordinary resolution passed at the General Meeting by ordinary majority, except if the terms of issue of the same class of shares stipulate otherwise, to revoke, convert, expand, add, reduce, amend, or change in any other way the rights of a class of the Company shares, provided that consent was granted thereto in writing by all shareholders of the same class or that the resolution was passed at a General Meeting of the shareholders of the same class by ordinary majority, or in the event that the terms of issue of a certain class of Company shares stipulate otherwise, as was stipulated in the terms of issue of the same class. |
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| 38. | The provisions set in the Articles of Association regarding General Meetings shall apply, mutatis mutandis, to any class meeting provided that a legal quorum at a class meeting is created when at the opening of the meeting, at least two shareholders owning at least twenty five percent of the number of shares issued of the same class are in attendance, themselves or by proxy. However if no such legal quorum is created, the class meeting will be deferred to another date and at the deferred meeting any number of participants will constitute a legal quorum, regardless of the number of shares they own. |
| 39. | The rights of the shareholders or the owners of a class of shares, issued whether as ordinary rights or preferred rights or other extraordinary rights, shall not be considered as if they were converted, reduced, derogated, or changed in any other manner by the creation or issue of additional shares of any type whatsoever, whether at an equal level or a different or preferred level thereto, and they will not be considered as if they were converted, reduced, derogated, or changed in any other way, by changing the rights attached to shares of any other class whatsoever, and all, unless otherwise explicitly stipulated in the terms of issue of the same shares. |
ISSUE OF SHARES AND OTHER SECURITIES
| 40. | The Board of Directors may issues shares and other securities, convertible or exercisable into shares, up to the limit of the Company’s registered share capital; in this matter convertible securities that are convertible or exercisable into shares shall be considered as if they were converted or exercised on the date of the issue. Without derogating from the generality of the aforementioned, the Board of Directors will be entitled to issue the shares and other securities, as abovementioned, grant choice rights to purchase them including options or to grant them in another way, and all to the people determined thereby and on the dates, at the prices and subject to the terms determined thereby, and to determine any other instruction related thereto, including provisions regarding the methods of distributing the shares and securities issued by the Company, among their buyers, including in the event of oversubscription, and all subject to the discretion of the Board of Directors. |
| 41. | Without derogating from the generality of the aforementioned, and subject to the provisions of the Companies Law and the Articles of Association, the Board of Directors may determine that the consideration for the shares will be paid in cash or with assets in kind, and thus including with securities or any other manner, subject to its discretion, or that the shares will be allotted as bonus shares or that the shares will be allotted for consideration equal to their par value or higher therefrom, whether in unit or in series, and all subject to the conditions and on the dates determined by the Board of Directors, subject to its discretion. |
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| 42. | In a resolution to increase the Company’s registered capital the General Meeting may determine that the new shares included in the sum with which the registered share capital is increased as aforementioned (hereinafter referred to as the “New Shares”), or any part thereof, will be first offered, for their par value or a premium, to all of the shareholders holding shares at that time, at a proportionate rate to the par value of their shares in the Company or determine other provisions regarding the issue and allotment of the New Shares. However, if the General Meeting did not determine as aforementioned in a resolution to increase the Company’s registered share capital, the Board of Directors may offer them, as stated in article 40 above. |
| 43. | The Board of Directors may decide to pay commission or underwriting fees to any person, upon signing or agreement to sign or obtaining signatures or guaranteeing signatures for shares, or debentures or other Company securities. In addition the Board of Directors is entitled, in any event of issuing securities of the Company, to decide to pay brokerage fees, and all, in cash, in Company shares, or other securities issued by the Company, or in any other way, or partly in one way and partly in another way, all subject to the provisions of any law. |
REDEEMABLE SECURITIES
| 44. | Subject to the provisions of any law, the Company may issue redeemable securities subject to the terms and in the manner determined by the Board of Directors, subject to its discretion. |
REGISTRIES
| 45. |
| 45.1. | The Company will keep a shareholder ledger and register therein the names of the shareholders and other details required subject to the Companies Law, near after the issue of any shares of the Company. Subject to the provisions of the Law, upon his registration in the ledger the registered shareholder will be deemed the owner of the shares registered in his name, and thus even if share certificates for said shares were not issued. |
| 45.2. | The Company will keep a ledger of material shareholders, as is required subject to the Companies Law. |
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| 46. | The Company may keep an additional shareholders ledger outside of Israel subject to the conditions determined for this matter in the Companies Law. |
| 47. | The Company will keep a ledger of the holders of debentures and securities convertible into Company shares, and all of the provisions of the Articles of Association in connection with shares shall apply to said convertible securities, with regard to registration in the ledger, issue of certificates, replacement of certificates, transfer and endorsement, mutatis mutandis as the case may be, and all subject to the terms of the allotment of the securities. |
GENERAL MEETING
| 48. | The Company’s decisions in the following matters shall be approved at the General Meeting: |
| 48.1. | Articles of Association amendments; |
| 48.2. | Exercising the Board of Directors’ authority by the General Meeting, if the Board of Directors is unable to exercise its authorities and the exercise of an authority of its authorities is vital for the orderly management of the Company, as stated in section 52(a) to the Companies Law; |
| 48.3. | Appointing the Company’s auditor and termination of his employment; |
| 48.4. | Appointing the Company directors and their dismissal; |
| 48.5. | Approving actions and transactions that require the approval of the General Meeting subject to the provisions in sections 255 and 268 to 275 to the Companies Law; |
| 48.6. | Increasing the registered share capital and decreasing it in accordance with the provisions of sections 286 and 287 to the Companies Law as well as changes in capital as specified in article 34 above; |
| 48.7. | Subject to the provisions of section 320(a1) to the Companies Law, merger as stated in section 320(a) to the Companies Law; |
| 48.8. | Any resolution which must be passed according to the Articles of Association by a resolution of the General Meeting. |
| 48.9. | Authorizing the chairperson of the Board of Directors or his relative to fulfill the duty of CEO or exercise his authorities and authorizing the CEO or his relative to fulfill the duty of chairperson of the Board of Directors or exercise his authorities, as stated in section 121(c) to the Companies Law. |
| 49. | The Company will hold an annual General Meeting each year and no later than fifteen months after the last annual General Meeting, on the date and at the place determined by the Board of Directors. |
| 50. | The agenda of the annual General Meeting will include the following subjects: |
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| 50.1. | Discussion regarding the Company financial statements and the Board of Directors report regarding the state of the Company’s affairs, submitted to the General Meeting; |
| 50.2. | Appointing directors and determining their salary; |
| 50.3. | Appointing the auditor; |
| 50.4. | Board of Directors report regarding the salary of the auditor for auditing activity and for additional services, if any; |
| 50.5. | In addition to the abovementioned, any other subject put on the agenda as stated in article 53 below may be included on the agenda of the annual General Meeting. |
A General Meeting as abovementioned will be referred to as an “annual meeting” and any other meeting will be referred to as an “extraordinary meeting”.
| 51. | The Company Board of Directors will convene an extraordinary meeting subject to its discretion, and upon the demand of any of the following: |
| 51.1. | Two directors or a quarter of the serving directors. |
| 51.2. | A shareholder, one or more, who holds at least five percent of the issued capital and one percent of the Company’s voting rights, or a shareholder, one or more, than has at least five percent of the voting rights in the Company. |
If the Board of Directors is required to summon an extraordinary meeting, as abovementioned, it will summon it within twenty one days from the date the demand was submitted thereto, for the date determined in the notice regarding the extraordinary meeting, as stated in article 55.1 below, provided that the date on which it is convened is no later than thirty five days from the date of publishing the notice, all subject to the Companies Law.
| 52. | If the Board of Directors failed to summon an extraordinary meeting demanded subject to article 51 above, the demander may, and when concerning shareholders – even some of those who have more than half of their voting rights, convene the meeting himself, provided that it is not held after three months have passed from the date on which the aforementioned demand was submitted, and it will be convened, as much as possible, in the same manner in which meetings are convened by the Board of Directors. |
| 53. |
| 53.1. | The agenda of a General Meeting will be determined by the Board of Directors and will include as well subjects for which the convening of an extraordinary meeting was demanded subject to article 51 above and a subject requested as stated in article 53.2 below. |
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| 53.2. | A shareholder, one or more, with at least one percent of the voting rights at the General Meeting, may request that the Board of Directors include a subject on the agenda of a future General Meeting, provided that the subject is appropriate for discussion at a General Meeting. |
| 53.3. | A request as specified in article 53.2 above will be submitted to the Company in writing at least seven days prior to the delivery of notice regarding the convening of a General Meeting, and the draft of the resolution proposed by the shareholder will be attached thereto. |
| 54. |
| 54.1. | A notice regarding a General Meeting will be published in at least two daily newspapers, with wide circulation, published in the Hebrew language; subject to the provisions of the Companies Law, the notice will be published at least 21 days prior to the convening of the General Meeting. |
| 54.2. | Apart from the notice regarding a General Meeting as stated in article 54.1 above, the Company will not deliver notice regarding a General Meeting, both to the registered and non-registered shareholders, subject to the provisions of the Law. |
| 55. |
| 55.1. | The notice regarding the General Meeting will specify the location, date and time of the convening of the meeting and it will include the agenda as well as a summary of the proposed resolutions and any other specification required by law. |
| 55.2. | In its decision to summon a meeting, the Board of Directors may determine the manner of specification of the subjects on the agenda of the meeting, which will be delivered to the shareholders entitled to participate in the meeting, and all subject to the discretion of the Board of Directors and subject to the provisions of the Companies Law. |
| 55.3. | Without derogating from the authority of the Board of Directors as stated in this article 55 above and without derogating from the generality of the provisions of the Articles of Association regarding transfer of authorities by the Board of Directors, the Board of Directors will be entitled to transfer its authorities as stated in this article 55 above to the Board of Directors committee and/or Company officer, whether for the purpose of a certain General Meeting or for a period. |
| 56. | A bona fide fault in the convening of the General Meeting or the convening thereof, including a fault arising from the failure to comply with an instruction or the conditions of the law or the Articles of Association, including with regard to the manner of convening or managing the General Meeting, will not invalidate any resolution passed at the General |
Meeting and will not derogate from the discussions held therein, subject to the provisions of any law.
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DELIBERATIONS AT THE GENERAL MEETING
| 57. | A deliberation at the General Meeting shall not be started unless a legal quorum is present upon opening the meeting. A legal quorum will be created with the attendance, themselves or by proxy, of shareholder/s holding, alone or accumulatively, at least 10% of the Company’s voting rights (or, for so long as the Company does not qualify as a foreign private issuer under the rules of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and only for so long as required by the Nasdaq Stock Market, at least 33-1/3% of the Company’s outstanding ordinary shares) within half an hour from the time set for opening the meeting, unless otherwise stipulated in the Articles of Association. |
| 58. | If a legal quorum is not in attendance at the General Meeting after half an hour from the time set for the opening of the meeting, the meeting will be deferred for one week, to the same date, same time and same location, without the requirement of notifying the shareholders of this, or another date is such was stated in the a notice regarding the meeting, or to a different date, hour and location, as shall be determined by the Board of Directors in a notice to the shareholders. |
| 59. | A deferred meeting will be held with any number of participants (unless the Company does not qualify as a foreign private issuer under the rules of the Exchange Act). |
| 60. | The chairperson of the Board of Directors, or, in the absence thereof, any director appointed for this purpose by the Board of Directors, will head each General Meeting of the Company. In the absence of a chairperson, as stated or if at any meeting whatsoever none of them are present fifteen minutes after the time set for the opening of the meeting or if they refuse to serve as chairperson of the meeting, the present directors, by a majority of votes among them, may choose a chairperson among them or among the Company officers attending the meeting, and if they fail to do so – the present shareholders themselves or by proxy will choose one of the present directors or officers to head the meeting. If no directors or officers are present or if the directors or officers all refuse to head the meeting, they will choose one of the shareholders or the proxy of an aforementioned shareholder to head the meeting. |
| 61. | The Company will take minutes of the proceeding at the General Meeting which will include the following details: |
| 61.1. | The names of the shareholders participating at the General Meeting and the number of shares held thereby; |
| 61.2. | The matters deliberated at the General Meeting and the passed resolutions. |
| 62. | Minutes signed by the chairperson of the General Meeting constitutes prima facie evidence to its contents. |
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VOTING AND PASSING RESOLUTIONS AT THE GENERAL MEETINGS
| 63. | A shareholder who wishes to vote at the General Meeting, will prove to the Company his ownership of a share, as required subject to the Companies Law. Without derogating from the aforementioned, the Board of Directors may determine provisions and procedures for proving the ownership of Company shares. |
| 64. | A shareholder may vote at a General Meeting or class meeting, himself or by proxy, all subject to the provisions of the Articles of Association and subject to the provisions of the Companies Law. A proxy at a vote does not have to be a Company shareholder. |
| 65. | Subject to the provisions of any law, in the event of joint ownership in a share, each of them may vote at any meeting, whether himself or by proxy, with regard to such share, as if he were the sole person entitled thereto. If more than one of the joint owners of a share attend the meeting, themselves or by proxy, the one whose name is listed first in the shareholder ledger with regard to the share, or in the approval of the Tel Aviv Stock Exchange member regarding his ownership of the share (“Ownership Confirmation”), or in another document determined by the Board of Directors for this purpose, shall vote, as the case may be. A number of legal guardians or a number of estate executers of a deceased registered shareholder shall be considered for the purpose of this section as joint owners of these shares. |
| 66. | Any person entitled to a share subject to article 29 above may vote subject thereto at any General Meeting in the same manner as if he were the registered owner of those shares provided that he proves to the Board of Directors’ satisfaction his right to the share at least forty-eight hours prior to the date of the General Meeting or the deferred meeting, as the case may be, where he intends to vote, unless the Company has previously recognized his right to vote subject to those shares at such meeting. |
| 67. | The document appointing a proxy for a vote (“Letter of Proxy”) will be drafted in writing and signed by the appointer, and if the appointer is a corporation, the Letter of Proxy will be drafted in writing and signed in the manner obligating the corporation; the Board of Directors may demand that the Company receive prior to the convening of the meeting, confirmation in writing, to the Board of Directors’ satisfaction, regarding the signatories’ authority to obligate the corporation. In addition the Board of Directors is entitled to determine instructions and procedures in connection therewith. |
The Letter of Proxy or an appropriate copy thereof, to the Board of Directors’ satisfaction, will be deposited at the registered office or another place or places, in Israel or abroad – as shall be determined by the Board of Directors from time to time, in general or with regard to a special case – at least forty-eight hours prior to the beginning of the meeting or the deferred meeting, as the case may be, when the proxy intends to vote based on said Letter of Proxy. Notwithstanding the abovementioned, the chairperson of the meeting may, subject to his discretion, receive a Letter of Proxy as aforementioned, even after the aforesaid date, if he deemed this appropriate, subject to his discretion. If no Letter of Proxy was received as stated in this section above, it will be invalid at that meeting.
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| 68. | A proxy at a vote may participate in the deliberations at the General Meeting and be chosen as chairperson of the meeting as the appointing shareholder would have been entitled provided that nothing to the contrary was stated in the Letter of Proxy. |
| 68.1. | The Letter of Proxy appointing a proxy to participate in a vote will be in the form acceptable in Israel or any other form approved by the Board of Directors. |
| 68.2. | The Letter of Proxy will note the class and number of shares for which it was granted, If no number of shares for which it was granted are stated in the Letter of Proxy or if it states a number of shares higher than the number of shares registered to the name of the shareholder or stated in the Ownership Confirmation, as the case may be, the Letter of Proxy will be deemed as given for the shares of the shareholder. |
| 68.3. | If the Letter of Proxy is given for a number of shares lower than the number of shares registered to the name of the shareholder or stated in the Ownership Confirmation, as the case may be, the shareholder will be deemed as if he avoided attending the vote for the balance of his shares and the Letter of Proxy will be valid for the number of shares stated therein. |
| 69. | Without derogating from the provisions of the Articles of Association regarding appointment of a proxy to a vote, a shareholder holding more than one share will be entitled to appoint more than one proxy, subject to these instructions: |
| 69.1. | Each Letter of Proxy will note the class on number of shares for which it was granted. |
| 69.2. | If the total number of shares of any class stated in the Letter of Proxy given by one shareholder exceeds the number of shares of the same class registered in his name or stated in the Ownership Confirmation, as the case may be, all Letters of Proxy granted by the same shareholder shall be null and void. |
| 70. | A shareholder or proxy at a vote may vote subject to some of the shares he owns or for which he serves as a proxy, and may vote subject to some of the shares in one manner and subject to some of them in another manner. |
| 71. | A vote subject to a Letter of Proxy will be valid even if there was a flaw in the Letter of Proxy and even if prior to the vote the appointer died or was declared incompetent or if the Letter of Proxy was revoked or the share for which the Letter of Proxy was granted was transferred, unless prior to the meeting notice was received at the office, in writing, regarding the flaw, death, incompetency, revocation, or transfer, as the case may be. Notwithstanding the abovementioned, the meeting chairperson may, subject to his discretion, accept notice as aforementioned even during the meeting, if he decides that this is appropriate, subject to his discretion. |
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| 72. | A Letter of Proxy will be valid as well with regard to any deferred meeting of a meeting to which the Letter of Proxy refers, provided that nothing to the contrary was stated in the Letter of Proxy. |
| 73. | Each of the Ordinary Shares entitles its owner to the right to participate in the Company’s General Meetings and to one vote. |
| 74. | A resolution put up for a vote at a General Meeting will be decided by a vote of the number of votes; the vote will be performed in the manner determined by the chairperson of the meeting. In the event of a dispute regarding whether to accept any vote or disqualify it the chairperson of the meeting will resolve the matter and his bona fide decision will be final and decisive. |
| 75. | The announcement of the chairperson that the resolution at the General Meeting was passed or rejected, whether unanimously or by any majority and a note stated in this matter in the minutes of the meeting will constitute prima facie evidence to that which was stated therein, and there will be no further necessity to prove the number of votes (or their relative portion) given for or against the resolution. |
| 76. | Subject to the provisions of the Companies Law or the provisions of the Articles of Association regarding another majority, the resolutions of the General Meeting will be passed by ordinary majority. In the event that the number of votes for and against are equal, the chairperson of the meeting will not have and additional or decisive vote. |
| 77. | The chairperson of the General Meeting may, with the consent of a meeting that has a legal quorum, defer it or defer the deliberation or defer passing a resolution in a certain subject which is on that day’s agenda, to another date and place determined, and he must do so subject to the meeting’s demand. At a deferred meeting as aforementioned, no subject shall be discussed except that which was on the agenda and for which no resolution was made at the meeting where the deferral was decided upon. If the General Meeting is deferred to a date that exceeds twenty-one days, notices and invitations to the deferred meeting will be given as stated in articles 54 and 55 above. If the General Meeting is deferred without changing its agenda, to a date that does not exceed 21 days, notices and invitations regarding the new date will be given as soon as possible, and no later than 72 hours before the General Meeting; the notices and invitations as aforementioned shall be given subject to sections 54 and 55, mutatis mutandis. |
77a.Subject to the provisions of the Companies Law and its regulations, votes at a General Meeting in the subjects mentioned below can be performed as well by means of a voting ballot: (a) appointment and dismissal of directors; (b) approval of actions or transactions that require the General Meeting’s approval subject to the provisions of sections 255 and 268 to 275 to the Companies Law; (c) approval of a merger subject to section 320 to the Companies Law; (date) subjects determined by the Minister in the regulations instated or that will be instated subject to section 89 to the Companies Law.
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THE BOARD OF DIRECTORS
| 78. | The number of directors, including any external directors required by Israeli law, shall be no less than three and no more than eleven. |
| 79. | The directors will be appointed at the annual meeting. The directors, excluding the external directors, shall be classified into three groups (A, B and C) as nearly equal in number as practicable. Subject to the foregoing, the duration of their service, except for the external directors, shall be as follows: |
One-third of the directors will belong to group A, and the duration of their service shall be from the time of their appointment until the third annual meeting held after the date of their appointment.
One-third of the directors will be appointed to group B, and the duration of their service shall be from the time of their appointment until the third annual meeting held after the date of their appointment.
One-third of the directors will be appointed to group C, and the duration of their service shall be from the time of their appointment until the third annual meeting held after the date of their appointment.
At each annual meeting, the three-year duration of service of one group of directors shall expire, and the directors of such group will stand for election. Each of the directors or the successors elected to replace the directors of a group whose term shall have expired at such annual meeting shall be elected to hold office until the third annual meeting held after the date of his or her election and until his or her respective successor is elected. If no directors are appointed at the annual meeting, the directors appointed at the previous annual meeting will continue their service. Directors whose service period has ended may be appointed again.
Directors may be elected for a term of less than three years in order to enable that the three groups of directors have as equal number of directors as possible as provided in this Article 79.
| 80. | Apart from anyone who served as director until the date of the annual meeting, no director shall be appointed at the annual meeting, unless the Board of Directors recommended the appointment thereof, or if a Company shareholder wishing to suggest him had submitted to the office, no later than seven days from the date of publishing the notice regarding the meeting, a document in writing signed by the shareholder, announcing the intention of same shareholder to suggest that this candidate be appointed as director, while the written consent of the candidate to serve as director is attached to the document. |
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| 81. | The Board of Directors may, from time to time, appoint an additional director or directors to the Company, whether for the purpose of filling the position of a director vacated for any reason whatsoever or as an additional director or directors, provided that the total amount of directors does not exceed the maximum number stated in article 78 above. The office of a director that was appointed by the Board to fill any vacancy shall only be for the remaining period of time during which the director whose service has ended was filled would have held office, or in case of a vacancy due to the number of directors serving being less than the maximum number stated in article 78 above, the Board shall determine at the time of appointment the class pursuant to Article 79 above, to which the additional director shall be assigned |
| 82. | The shareholders may, at an extraordinary meeting, appoint an additional director or directors to the Company, whether for the purpose of filling a position that was vacated for any reason whatsoever or as an additional director or directors. Directors appointed as abovementioned to fill a vacated position, except for external directors, will finish their service in accordance with the group to which the director whose position was vacated belonged, subject to the provisions of article 79 above. |
| 83. | Article revoked. |
| 84. | Notwithstanding the abovementioned, the Company Board of Directors and General Meeting may at any time, upon a resolution with a majority of at least 75% of the voting rights at the Board of Directors or General Meeting, as the case may be, remove from office any director, except for an external director, prior to the end of his service period, provided that the director is granted the reasonable opportunity to present his case before the General Meeting. In addition any General Meeting, with an ordinary majority resolution, may appoint in lieu of the director removed from office as abovementioned another person as director. A director appointed as abovementioned will serve in his position only for the period of service which the director whom he had replaced would have served. |
| 85. | Article revoked. |
| 86. | If the position of a director is vacated, the Board of Directors shall be entitled to continue to act with regard to any matter as long as the number of directors is no less than the minimum number of directors stated in article 78 above. If the number of directors is less than this number, the Board of Directors will not be entitled to act except for the purpose of convening a General Meeting in order to appoint additional director, however not for any other purpose. |
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| 87. | A director may resign by delivering notice to the Board of Directors, to the chairperson of the Board of Directors or the office, as is required subject to the Companies Law, and his resignation shall take effect on the date on which the notice was delivered, unless the notice states a later date. The director will disclose the reasons for his resignation. |
| 88. | Subject to the provisions of the Companies Law, the Company may pay the directors compensation for fulfilling their duty as directors. |
| 89. |
| 89.1. | A director is entitled to appoint a substitute and thus subject to approving him as alternate director by the Board of Directors (hereinafter referred to as the “Alternate Director”). Notwithstanding the abovementioned, anyone unsuitable to be appointed as director shall not be appointed and shall not serve as Alternate Director, and as well anyone serving as Company director or as Alternate Director for a Company director or as the representative of a corporation. |
| 89.2. | The Alternate Director is equal to the director for whom he serves as a substitute, and he will be entitled to attend the meetings of the Board of Directors and/or Board of Directors committees, participate and vote therein, same as the eligibility of the appointing director. |
| 89.3. | A director who had appointed an Alternate Director may, subject to the provisions of the law, revoke the appointment at any time. In addition, the position of Alternate Director will be vacated whenever the position of the director who had appointed the Alternate Director is vacated in any manner whatsoever. |
| 89.4. | Any appointment or revocation of the appointment of Alternate Director, as abovementioned, will be done by written notice delivered to the Alternate Director and to the Company, and shall take effect after the delivery of the letter of appointment, as abovementioned or on the date stated in the letter of appointment, according to the later date. |
| 89.5. | Subject to the provisions of the Companies Law, the Company may pay to the Alternate Director compensation for his participation in Board of Directors meetings. |
EXTERNAL DIRECTORS
| 90. | The Company will have at least two external directors, and the provisions of the Companies Law in this matter shall apply. |
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BOARD OF DIRECTORS AUTHORITY AND FUNCTIONS
| 91. | The Board of Directors will have all authorities and powers vested therein subject to the Company Articles of Association, the Companies Law and any law. |
| 92. | Without derogating from the provisions of these Articles of Association, the Board of Directors will outline the Company’s policy and oversee the performance of the CEO’s duties and actions, including – |
| 92.1. | Determine the Company’s action plans, the principles for financing them and their order of priority; |
| 92.2. | Examine the Company’s financial situation and determine its approved line of credit; |
| 92.3. | Determine the organizational structure and the remuneration policy; |
| 92.4. | Entitled to determine the issue of a series of debentures; |
| 92.5. | Responsible for preparing and approving the financial statements, as stated in section 171 to the Companies Law; |
| 92.6. | Report to the annual meeting regarding the state of the Company’s affairs and its business results, as stated in section 173 to the Companies Law; |
| 92.7. | Appoint and dismiss the CEO; |
| 92.8. | Decide regarding actions and transactions that require its approval subject to the Company Articles of Association or the provisions of sections 255 and 268 to 275 to the Companies Law; |
| 92.9. | May allot shares and securities convertible into shares up to the limit of the Company’s registered share capital; |
| 92.10. | May decide to distribute a dividend or bonus shares, as the case may be; |
| 92.11. | May decide upon an acquisition as this term is defined in section 1 to the Companies Law, from all of the Company’s shareholders or part of them or any of them, subject to its discretion; |
| 92.12. | Offer an opinion regarding a special tender offer, as stated in section 329 to the Companies Law; |
| 92.13. | Determine the minimum required number of directors on the Board of Directors, who must have accounting and financial expertise, as this is defined in section 240 to the Companies Law; the Board of Directors will determine the aforementioned minimum number based, inter alia, on the Company’s nature, size, scope of the Company’s activity and the complexity thereof, and subject to the number of directors stipulated in the Articles of Association subject to section 219 to the Companies Law. |
The Board of Directors’ authorities subject to this section may not be delegated to the CEO, expect as specified in the Companies Law.
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| 93. | A power of the Company, not granted by law or the Company’s Articles of Association to another organ, may be executed by the Board of Directors. |
| 94. |
| 94.1. | The Board of Directors may resolve that the authorities vested in the CEO will be transferred to its authority, all in connection with a specific matter, or a specific timeframe, which shall not exceed the timeframe required under the circumstances. |
| 94.2. | Without derogating from the aforementioned, the Board of Directors may instruct the CEO on how to act with regard to a specific matter. If the CEO fails to comply with the instruction, the Board of Directors may exercise the required authority in order to execute the instruction in lieu thereof. |
| 94.3. | If the CEO is barred from exercising his authorities, the Board of Directors may exercise them in lieu thereof. |
| 95. | Subject to the provisions of the Companies Law, the Board of Directors may delegate from its authorities to the CEO, a Company officer or another person. Delegating an authority of the Board of Directors may be for a certain matter or for a certain timeframe, all subject to the Board of Directors’ discretion. |
RECEIVING CREDIT AND GRANTING GUARANTEES AND COLLATERAL
| 96. | Without derogating from any authority vested in the Board of Directors subject to these Articles of Association, the Board of Directors may, from time to time, subject to its discretion, resolve upon: |
| 96.1. | Receiving credit by the Company at any sum and securing its discharge, in the manner it deems fit; |
| 96.2. | Granting guarantees, collateral, and warranties of any kind; |
| 96.3. | Issuing a series of debentures, including capital notes or bonds, and including debentures, capital notes or bonds convertible or exercisable into shares, and to determine their terms, and pledge its property, all or some, whether in the present or in the future, whether by a floating or fixed charge. Debentures, capital notes, bonds, or other guarantees, as abovementioned, may be issued at a discount, with a premium or in any other manner, whether with deferred rights and/or special rights and/or privileges and/or other rights, all as determined by the Board of Directors subject to its discretion. |
| 97. | The abovementioned in article 96 does not negate the authority of the CEO or anyone authorized thereby for this purpose, to decide upon accepting credit by the Company, within the framework of the credit line and the guarantees determined by the Board of Directors. |
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BOARD OF DIRECTORS COMMITTEES
| 98. |
| (a) | Subject to the Companies Law, the Board of Directors may, as it deems fit, create Board of Directors committees, consisting of two members or more, and delegate from its authorities thereto. Notwithstanding the abovementioned, the Board of Directors may not delegate from its authorities to a Board of Directors committee with regard to the following subjects: |
| (1) | Determining general policy for the Company; |
| (2) | Distribution, unless pertaining to the purchase of Company shares in accordance with a framework outlined in advance by the Board of Directors; |
| (3) | Determining the position of the Board of Directors in a matter that requires the approval of the General Meeting or granting an opinion as stated in section 329 to the Companies Law; |
| (4) | Appointing directors, if the Board of Directors is entitled to appoint them; |
| (5) | Issue or allotment of shares or securities convertible into shares or exercisable into shares, or a series of debentures, except for that which is specified in section 288(b) to the Companies Law; |
| (6) | Approving financial statements; |
| (7) | Board of Directors approval for transactions and actions that require the Board of Directors’ approval subject to sections 255 and 268 to 275 to the Companies Law. |
| (b) | The Board of Directors may create committees for the subjects specified in subsections (a) (1) – (7) above, for recommendation only. |
| (c) | There shall be no person on a Board of Directors committee to which the Board of Directors has delegated authorities who is not a Board of Directors member. |
| (d) | Those who are not Board of Directors members may serve on a Board of Directors committee where its sole function is to advise or offer a recommendation to the Board of Directors. |
| 99. | A resolution passed or action taken on a Board of Directors committee subject to the authority delegated thereto from the authorities of the Board of Directors, constitutes a resolution passed or action taken by the Board of Directors, unless otherwise explicitly determined by the Board of Directors with regard to a certain matter or certain committee. The Board of Directors may from time to time extend, reduce or revoke the delegation of powers to a Board of Directors committee, however a reduction or revocation of powers as aforementioned shall not derogate from the validity of a committee’s resolution which the Company acted pursuant thereto towards another person, where it was unaware of the revocation thereof. |
| 100. |
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| 100.1. | The legal quorum for opening a meeting of a Board of Directors committee will be two committee members serving on the date of the meeting, or their substitutes, as long as the Board of Directors had not determined otherwise. |
| 100.2. | The provisions included in these Articles of Association regarding the actions of the Board of Directors shall apply, mutatis mutandis, to the Board of Directors committees as well, as long as no replacement provisions were given in this matter by the Board of Directors, and all subject to the provisions of the Companies Law. |
| 100.3. | The Board of Directors committee will regularly report to the Board of Directors regarding its resolutions or recommendations. |
| 101. |
| 101.1. | The Board of Directors will appoint among its members an audit committee. The number of members of the audit committee shall be no less than three and all of the external directors shall be its members. The following will not be members of the audit committee: the chairperson of the Board of Directors, any director employed by the Company or who routinely provides services thereto, and the Company’s controlling shareholder or his relative. |
| 101.2. | The functions of the audit committee will be as prescribed by the Companies Law including any other function instructed by the Board of Directors. |
FUNCTIONS OF THE BOARD OF DIRECTORS
| 102. | Subject to the provisions of the Company Articles of Association, the Board of Directors may convene to execute its duties, defer its meetings and regulate its actions and deliberations as it deems fit. |
| 103. | The Board of Directors will appoint one of its members to serve as the chairperson of the Board of Directors and it may appoint more than one Board of Directors chairperson (each of them shall be hereinafter referred to as the “Board of Directors Chairperson”). In addition, the Board of Directors may remove the Board of Directors Chairperson from office and appoint another in lieu thereof. The Board of Directors may appoint from among its members one or more as the vice chairperson of the Board of Directors, who will serve as his replacement when absent. The Board of Directors may determine the timeframe for the Board of Directors Chairperson and his vice chairpersons’ service. If such period is not determined as aforesaid, the Board of Directors Chairperson and vice chairpersons will serve as long as they serve as directors. |
| 104. | The Board of Directors Chairperson will head the Board of Directors meetings and manage them. If the Board of Directors Chairperson is absent from a Board of Directors meeting, following a notice he had delivered in advance, or if he does not appear at the Board of Directors meeting within 15 minutes from the time scheduled for holding the meeting, then the vice chairperson (if such was appointed) shall head the meeting. If both the Board of Directors Chairperson and the vice chairperson are absent from the meeting the attending Board of Directors members will choose one of those among them to be the chairperson of the meeting. |
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| 105. | The Board of Directors will convene for its meeting according to the Company’s needs and at least once every three months. |
| 106. | The Board of Directors Chairperson may convene the Board of Directors at any time, and determine the place and time for holding the Board of Directors meeting. |
| 107. | Without derogating from the aforementioned, the Board of Directors Chairperson is obligated to convene the Board of Directors upon the occurrence of each of the following: |
| 107.1. | Receiving a demand to convene the Board of Directors from at least two directors, in order to deliberate the subject specified in their demand; |
| 107.2. | Receiving notice or a report from the CEO which require the Board of Directors’ action; |
| 107.3. | Receiving notice from the auditor regarding material flaws in the Company’s auditing; |
| 107.4. | Receiving notice from a director regarding the Company which prima facie contains an illegality or disruption of the regular course of business. |
Upon receiving notice or a report as abovementioned, the Board of Directors Chairperson will convene the Board of Directors, immediately, and no later than 14 days after the date of the demand, the notice or the report, as the case may be.
| 108. |
| 108.1. | Early notice regarding the convening of the Board of Directors will be given to all members of the Board of Directors a reasonable time before the date of the meeting. |
| 108.2. | Notwithstanding the abovementioned, the Board of Directors may, with the consent of all of the directors, convene a meeting without notice. |
| 109. | The agenda of the Board of Directors meetings will be determined by the Board of Directors Chairperson, and it will include: |
| 109.1. | Subjects determined by the Board of Directors Chairperson; |
| 109.2. | Subjects determined as stated in article 107 above; |
| 109.3. | Any subject which a director or the CEO requested that the Board of Directors Chairperson, a reasonable time before convening the Board of Directors meeting, include on the agenda (hereinafter referred to as the “Agenda”). |
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| 110. | The notice regarding the convening of the Board of Directors will state the time and location of the meeting as well as a reasonable specification of the matters that will be discussed at the meeting, according to the Agenda. |
| 111. | Notice regarding a Board of Directors meeting will be delivered to the address of the director given in advance to the Company, unless the director requests that the notice be delivered elsewhere. |
| 112. | The legal quorum for opening a Board of Directors meeting is half of the Board of Directors members serving at the time of the meeting, themselves or their proxies, or three members, according to the lower number. |
| 113. |
| 113.1. | At a Board of Directors vote each director will have one vote. Board of Directors resolutions will be passed by a majority of votes of the directors attending the meeting and voting therein, without taking into account the abstaining votes. The Board of Directors Chairperson will not have an additional or deciding vote. |
| 113.2. | If the opinions are tied, the proposed resolution on which the Board of Directors members have voted will be deemed to have been rejected. |
| 114. | The Board of Directors may hold meetings with the use of any means of communication provided that each of the participating directors can hear each other simultaneously. The Board of Directors may regulate the manner and methods of holding a meeting through the use of means of communication. |
| 115. | The Board of Directors may pass resolutions even without convening in practice, provided that all of the directors entitled to participate in the deliberation and vote in the subject of the resolution have agreed not to convene for a meeting regarding said subject. The resolutions passed subject to this section, including the resolution not to convene, will be signed by the Board of Directors Chairperson and will be valid, for all intents and purposes, as if passed in a duly convened and conducted Board of Directors meeting. |
MINUTES
| 116. | The Board of Directors will ensure that minutes will be recorded of the proceedings at the Board of Directors meetings; the minutes will be recorded in books designated for this purpose, and will include, inter alia, the following details: |
| 116.1. | The names of the participating directors and other persons in attendance at each Board of Directors meeting; |
| 116.2. | The matters discussed at the Board of Directors meetings and the resolution that were passed. The minutes will be signed by the Board of Directors Chairperson or the chairperson of the meeting, as the case may be; approved and signed minutes, as aforementioned, will serve as prima facie evidence to its content. |
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| 117. | The provisions of article 116 above, shall apply as well to the meetings of each Board of Directors committee and the passing of Board of Directors resolutions without convening, as stated in article 115 above. |
THE CEO
| 118. | The Board of Directors may, from time to time, appoint a CEO to the Company, and it may appoint more than one CEO (each of them hereinafter referred to as the “CEO”). In addition, the Board of Directors is entitled to dismiss the CEO or replace him, as it deems fit, subject to the provisions of aby contract between the CEO and the Company. |
| 119. | The CEO is not required to be a Company shareholder or a director. |
| 120. | The CEO is responsible for the regular management of the Company affairs, within the framework of the policy determined by the Board of Directors and subject to its instructions. |
| 121. | The CEO will have all administrative and executive powers not granted by law or by these Articles of Association or subject thereto to a different organ of the Company except for powers as aforementioned transferred therefrom to the Board of Directors, subject to the provisions of article 94.1 above, if transferred; the CEO will be subject to the Board of Directors’ supervision. |
| 122. | Subject to the provisions of the Companies Law and the provisions of these Articles of Association, the Board of Directors may, from time to time, deliver and grant to the CEO powers vested in the Board of Directors subject to these Articles of Association, as it deems fit, and it may grant from these powers for such period, purposes, and subject to the same conditions and with the same restrictions as the Board of Directors shall deem fit, and the Board of Directors may grant these powers, both without waiving its own powers in the matter and instead or in lieu thereof, all or some, and it may from time to time cancel, revoke and amend these powers, all or some. |
| 123. | The CEO may, with the Board of Directors’ approval, delegate its powers, to another or to others, subordinate thereto; such approval may be given whether as a general approval or ad hoc. |
| 124. | Without derogating form the provisions of the Companies Law or any law, the CEO will submit to the Board of Directors reports in the subject, on the dates and at the scope determined by the Board of Directors, whether in a specific resolution or as part of the Board of Directors protocols. |
| 125. | The CEO’s fee may be paid by paying a salary or commission fees or profit participation or by granting securities or the right to purchase securities, or in any other way. |
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VALIDITY OF ACTIONS AND APPROVAL OF TRANSACTIONS
| 126. | Subject to the provisions of any law, all actions taken by the Board of Directors or a Board of Directors committee or any person acting as director or as member of a Board of Directors committee or by the CEO, as the case may be – will be valid even if at a later time any flaw is discovered in the appointment of the Board of Directors, the Board of Directors committee, the director, committee member or CEO, as the case may be, or if any of the aforementioned officers was barred from serving in his position. |
| 127. |
| 127.1. | A position at any other corporation, including a corporation which the Company is an interested party therein or which is a shareholder in the Company, will not disqualify the officer from being an officer of the Company. In addition, no officer shall be disqualified from being an officer of the Company due to his entering into an agreement or the entering into an agreement of any corporation as abovementioned, with the Company in any matter whatsoever and by any means whatsoever. |
| 127.2. | Subject to the provisions of the Companies Law, the fact that a person is an officer of the Company shall not disqualify him and/or his relative and/or another corporation which he is an interested party therein from executing transactions with the Company in which the officer has a personal interest in any way. |
| 127.3. | Subject to the provisions of the Companies Law, an officer will be entitled to participate and vote in deliberations regarding the approval of transactions or actions in which he has a personal interest. |
| 128. | Subject to the provisions of the Companies Law, a transaction between the Company and its officer or controlling shareholder or a transaction between the Company and another person in which a Company officer or its controlling shareholder have a personal interest therein, and which are not extraordinary transactions, shall be approved as follows: |
| 128.1. | An agreement as abovementioned, in a transaction that is not extraordinary, will be approved by the Board of Directors, unless it was determined by the Board of Directors that the agreement will be approved by the audit committee, whether in a specific resolution or as part of the Board of Directors proceedings, whether by general authorization or authorization for a specific type of transaction, or whether by authorization for a specific transaction. |
| 128.2. | Approval of transactions which are not extraordinary as abovementioned can be done by granting general approval for a certain type of transactions or by approving a certain transaction. |
| 129. | Subject to the provisions of the Companies Law, general notice given to the Board of Directors by an officer or controlling shareholder of the Company, regarding his personal interest in a certain entity, while specifying his personal interest, shall constitute disclosure of the officer or controlling shareholder to the Company regarding his aforesaid personal interest, for the purpose of any agreement with an entity as abovementioned, in a transaction that is not extraordinary. |
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SIGNING ON BEHALF OF THE COMPANY
| 130. | Subject to the provisions of the Companies Law and the provisions of these Articles of Association, the Board of Directors may authorize any person to act and sign on behalf of the Company, whether alone or jointly with another person, whether as a general matter or for specific matters. |
| 131. | The Company will have a seal bearing the Company name. Signing a document will not bind the Company unless those authorized to sign on behalf of the Company have signed it together with the Company seal or its printed name. |
APPOINTING A LEGAL REPRESENTATIVE
| 132. | Subject to the provisions of the Companies Law, the Board of Directors may, at any time, grant Power of Attorney to any person to be the Company’s legal representative for such purposes and with such powers and discretion, for the period and subject to the terms, all as the Board of Directors shall deem fit. |
The Board of Directors is entitled to grant to said person, inter alia, the power to transfer to another, fully or partially, the powers, authorizations and discretion granted thereto.
EXEMPTION, INDEMNITY AND INSURANCE
| 133. | Subject to the provisions of the Companies Law, the Company may exempt its officer from his liability, all or some, due to damage following the breach of his duty of care towards the Company. |
| 134. | Subject to the provisions of the Companies Law, the Company may enter into a contract to insure the liability of its officer, due to the liability imposed thereon following an action which he performed while serving as its officer, in each of the following: |
| 134.1. | Breach of his duty of care towards the Company or towards another person; |
| 134.2. | Breach of his fiduciary duty towards the Company, provided that the officer acted bona fide and he had reasonable grounds to assume that the action will not harm the Company’s interests; |
| 134.3. | A monetary obligation imposed thereon in favor of another person; |
| 134.4. | Another action permitted to be insured by the Companies Law; |
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| 134.5. | Expenses paid by the officer or which he was ordered to pay, in connection with an administrative enforcement proceeding held in his case, including reasonable litigation expenses, and including legal fees; |
| 134.6. | Payment to the person injured by the breach as stated in section 52ND to the Securities Law, as it was amended in the Improvement of Enforcement Proceedings Law (hereinafter referred to as the “Payment to the Person Injured by the Breach”); |
| 134.7. | Any other event for which it is permitted and/or will be permitted to insure the liability of an officer. |
| 135. | Subject to the provisions of the Companies Law – |
| 135.1. | The Company may grant an undertaking in advance to indemnify its officer, due to liability or an expense imposed thereon or which he will pay due to an action which he performed as a result of him being its officer, in each of the following (hereinafter referred to as the “Indemnity Undertaking”) – |
| (a) | As specified in article 136.1 below, and provided that the Indemnity Undertaking is limited to events which in the opinion of the Board of Directors are expected in light of the Company’s activity de facto at the time of granting the Indemnity Undertaking and to a sum or standard which the Board of Directors determined to be reasonable under the circumstances, and that the Indemnity Undertaking states the events which in the Board of Directors’ opinion are expected in light of the Company’s activity de facto at the time of granting the undertaking and the sum or standard which the Board of Directors deemed reasonable under the circumstances. The indemnity sum will be limited only to sums not covered by the insurance and which were not paid de facto. |
| (b) | As specified in articles 136.2 or 136.3 or 136.4 or 136.5 below. The indemnity sum will be limited only to sums not covered by the insurance and not paid de facto. |
| 135.2. | Without derogating from the content of article 135.1 above, the Company may indemnify its officer retroactively, due to liability or an expense as specified in article 136 below, imposed thereon as a result of on action which he performed as a Company officer. The indemnity sum will be limited only to sums not covered by the insurance and not paid de facto. |
| 136. | An Indemnity Undertaking or indemnity, as stated in article above, may be given due to liability or an expense as specified in subsections 136.1 to 136.6 below, imposed on the officer due to an action which he performed as a Company officer, as follows: |
| 136.1. | Monetary obligation imposed thereon in favor of another person pursuant to a legal judgment, including a judgment rendered by settlement or an arbitration award approved by the court. |
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| 136.2. | Reasonable litigation expenses, including legal fees, paid by the officer due to an investigation or proceeding held against him by an entity authorized to hold an investigation or proceeding, and which ended without an indictment thereagainst and without imposing a monetary obligation thereupon as an alternative for a criminal proceeding, or which ended without an indictment thereagainst but with the imposing of a monetary obligation thereupon as an alternative to a criminal proceeding in an offense that does not require proving mens rea; in this section – “proceeding ending without an indictment in a matter in which a criminal investigation was held” – meaning the closing of the case subject to section 62 to the Rules of Criminal Procedure [combined version], 5742 – 1982 (in this subsection – “Criminal Procedure Law”) or a stay of proceedings by the Attorney General subject to section 231 to the Criminal Procedure Law. |
“Monetary obligation as an alternative to a criminal proceeding” – monetary obligation imposed by law as an alternative to the criminal process, including an administrative fine subject to the Administrative Offenses Law, 5745- 1985, a fine for an offense determined as a fineable offense subject to the Criminal Procedure Law, financial sanction or forfeit.
| 136.3. | Reasonable litigation expenses, including legal fees, which the officer paid or was ordered to pay by the court, in a process submitted thereagainst by the Company or on its behalf or by another person, or in a criminal indictment from which he was acquitted, or in a criminal indictment where he was convicted of an offense that does not require proof of mens rea. |
| 136.4. | Expenses paid by the officer or which he was ordered to pay, in connection with an administrative enforcement proceeding held in his case, including reasonable litigation expenses, and thus including legal fees. |
| 136.5. | Payment to the Person Injured by the Breach. |
| 136.6. | Any liability or other expense for which it is permitted and/or will be permitted to indemnify the officer. |
| 137. | Subject to the provisions of the Companies Law – |
| 137.1. | The Company is entitled to grant an undertaking in advance to indemnify any person including a Company officer, who serves or has served the Company or as per its request as a director in another company which the Company has shares therein, directly or indirectly, or which the Company has any interest whatsoever therein (hereinafter referred to as the “Director in Another Company”), subject to the provisions of article 135 above, which shall apply mutatis mutandis. |
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| 137.2. | Without derogating from article 137.1 above, the Company may indemnify the Director in Another Company retroactively, due to liability or expense as specified in article 136 above, imposed thereon due to an action he performed pursuant to his being a Director in Another Company. |
| 138. | Subject to the provisions of the Companies Law, the Company may grant an undertaking in advance to indemnify an employee or clerk of the Company who is not a Company officer or indemnify him retroactively for any monetary liability imposed thereon in favor of another person due to an action performed bona fide within his capacity as Company employee or clerk. |
| 139. | Subject to the provisions of the Companies Law, the provisions of the Company’s Articles of Association do not limit the Company, in any manner whatsoever, with regard to its entering into an insurance contract, or with regard to the granting of exemption or indemnity: |
| 139.1. | In connection with a Company officer or Director in Another Company, if the insurance, exemption or indemnity are not prohibited subject to any law. |
| 139.2. | In connection with a person who is not a Company officer or Director in Another Company, including however without derogating from the generality of the aforementioned, employees, contractors or consultants. |
DIVIDENDS, FUNDS AND CAPITALIZATION OF FUNDS AND PROFITS
| 140. | The Board of Directors may, prior to deciding upon dividend distribution, as stated in article 142 below, to contribute out of the profits any sums, subject to its discretion, to a general or reserve fund for the distribution of a dividend, bonus shares, or any other purpose, as the Board of Directors shall determine subject to its discretion. |
| 141. | Until utilizing the aforementioned funds, the Board of Directors may invest the sums contributed as aforementioned and the monies of the funds, in any investment whatsoever, to manage these investments, change them or make any other use thereof, and it is entitled to divide the reserve fund into special funds, and use any fund or part thereof for the purpose of the Company’s business, without holding it separate from the rest of the Company’s assets, all subject to the Board of Directors’ discretion and the terms it shall determine. |
| 142. | Subject to the provisions of the Companies Law, the Board of Directors may pass a resolution regarding the distribution of a dividend. The Board of Directors deciding upon the distribution of a dividend may decide that the dividend will be paid, all or some, in cash or by distribution of assets in kind, and thus including securities or by any other means, as it deems fit. |
| 143. |
| 143.1. |
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| (a) | Subject to the provisions of the Companies Law, the Board of Directors may decide upon the allotment of bonus shares, and turn into share capital some of the Company profits, as this is construed in section 302(b) to the Companies Law, from share premium or any other source included in its equity, stated in its most recent financial statements, at the sum determined by the Board of Directors and which shall be no less than the par value of the bonus shares. |
| (b) | The Board of Directors deciding upon the allotment of bonus shares, will determine whether they will be of one class only for all shareholders without taking into account the classes of shares held thereby or that each shareholder as aforementioned will be distributed bonus shares of the same class for all classes of shares held thereby. |
| (c) | Bonus shares allotted subject to this section will be deemed fully paid-up. |
| 143.2. | The Board of Directors deciding upon the allotment of bonus shares may decide that the Company will transfer to a special fund designated for the future distribution of bonus shares, such an amount which the conversion thereof into share capital will suffice in order to allot to anyone who at the time will have, for any reason whatsoever, the right to purchase Company shares (including a right which can only be activated on a later date), bonus shares which would have been owed thereto, had he exercised the right to purchase the shares prior to the effective date for the right to receive bonus shares (in this section the “Effective Date”). If after the Effective Date the owner of the aforementioned right will exercise his right to purchase the shares or part thereof the Company will allot thereto bonus shares of par value and which have been owed thereto had he exercised prior to the Effective Date the right to purchase the shares which he had purchased de facto, and thus by converting into share capital the proper amount out of the aforementioned special fund. The bonus shares will entitle their owners to participate in the dividend distribution in cash or the bonus shares as of the Effective Date determined by the Board of Directors. For the purpose of determining the amount that should be transferred to the aforementioned special fund, any amount transferred to this fund due to previous distributions of bonus shares shall be deemed as if it were already capitalized and that shares entitling the owners of the right to purchase shares, to bonus shares, were already allotted therefrom. |
| 144. | Subject to the rights attached to the classes of shares issued by the Company and the provisions of the Articles of Association, a dividend or bonus shares will be distributed to the shareholders pro rata to the par value of each share, without taking into account any premium paid therefor. |
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| 145. | In order to implement a resolution regarding the distribution of a dividend or allotment of bonus shares the Board of Directors may: |
| 145.1. | Settle as it deems fit any difficulty arising in connection therewith and take any action it chooses in order to overcome such difficulty. |
| 145.2. | Decide that fractions or fractions at a sum lower than a certain sum determined by the Board of Directors, will not be taken into account in order to adjust the right of shareholders or sell share fractions and pay the (net) consideration to those entitled. |
| 145.3. | Authorize to sign on behalf of the shareholders any contract or other document required in order to validate the allotment and/or distribution, and especially, authorize to sign and submit for registration a document as stated in section 291 to the Companies Law. |
| 145.4. | Determine the value of certain assets for distribution and decide that payments in cash will be paid to the shareholders based on the determined value. |
| 145.5. | Grant cash or certain assets to trustees in favor of those entitled thereto, as the Board of Directors deems advantageous. |
| 145.6. | Make any arrangement or other settlement required in the Board of Directors’ opinion in order to enable the allotment, or distribution, as the case may be. |
| 146. | Dividend or other benefits due to shares shall not bear interest. |
| 147. | The Board of Directors may withhold any dividend or bonus share or other benefits due to a share which the consideration determined therefor, all or some, was not paid to the Company, and collect any sum as aforementioned or consideration received from the sale of any bonus share or other benefit, on account of the debts or undertakings due to the aforementioned share, thus, whether the aforesaid share is exclusively owned by the indebted shareholder or jointly with other shareholders. |
| 148. | The Board of Directors may withhold any dividend or bonus share or other benefits due to a share for which a person is entitled to be registered as its owner in the ledger or is entitled to transfer it, subject to articles 29 or 31 above, as the case may be, until the same person is registered as the owner of the share or until he duly transfers it, as the case may be. |
| 149. | The Board of Directors may determine, from time to time, the methods of payment of the dividends or allotment of bonus shares or their transfer to those entitled thereto and as well the instructions, procedures, and arrangements in connection therewith, both with regard to the registered shareholders and as well with regard to the non-registered shareholders. Without derogating from the generality of the aforementioned, the Board of Directors may determine as follows: |
| 149.1. |
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| (a) | Subject to the content of subsection (b) below, a dividend or monies distributed to registered shareholders will be paid to a registered shareholder by mailing a check to his address, as it is registered in the shareholder ledger, or in the event of joint registered owners of a share, to the person whose name appears first in the shareholder ledger with respect to said share. Any delivery of a check as aforementioned will be done at the risk of the registered shareholder; without derogating from the aforementioned, the Board of Directors may determine that a dividend sum lower than a certain sum determined by the Board of Directors will not be delivered by check as abovementioned and the provisions of subsection (b) below shall apply in connection therewith. |
| (b) | The Board of Directors may determine that the payment of a dividend or monies distributed to registered shareholders shall be done at the office or any other place determined by the Board of Directors. |
| (c) | A dividend the payment of which was not demanded within a period of seven (7) years from the date on which its distribution was decided upon, the person entitled thereto will be deemed to have waived it and it will return to the ownership of the Company. |
| 149.2. | A dividend distributed to non-registered shareholders will be transferred to the aforementioned shareholders through the Registration Company or by any other means determined by the Board of Directors. |
| 150. | If two or more are registered in the ledger as the joint owners of a share, each of them is entitled to provide a valid receipt against any dividend, share or other security, or other monies or benefits owing on account of the share. |
COMPANY DOCUMENTS
| 151. |
| 151.1. | The shareholders will have the right to review the Company documents specified in section 184 to the Companies Law, upon the fulfillment of the conditions determined for this purpose. |
| 151.2. | Without derogating from the content of article 151.1 above, the Board of Directors may, subject to its discretion, decide to grant a reviewing right of the Company documents, or any part thereof, including to the shareholders, all or some, as it deems fit, subject to its discretion. |
| 151.3. | The shareholders will not have the right to review the Company documents or part thereof, unless such right was awarded thereto by law or subject to these Articles of Association or if they were permitted to do so by the Board of Directors, as stated in article 151.2 above. |
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| 152. | Subject to the provisions of any law, any book, ledger or other registry which the Company must keep, subject to any law or these Articles of Association, will be kept using technical, mechanical, or other means, as shall be decided by the Board of Directors. |
FINANCIAL STATEMENTS
| 153. | The Company’s financial statements will be approved by the Board of Directors, signed on its behalf by anyone authorized to do so by the Board of Directors, and presented before the annual meeting. |
AUDITOR
| 154. | The auditor or auditors will be appointed at each annual meeting, and serve until the end of the following annual meeting. |
| 155. |
| 155.1. | If an auditor is appointed to the Company, the Board of Directors will determine his fee for the auditing activity, subject to the discretion of the Board of Directors. |
| 155.2. | The fee of the auditor for additional services to the Company which are not auditing activities, will be determined by the Board of Directors, subject to its discretion. |
The Board of Directors will report to the annual meeting the terms of the agreement with the auditor for additional services including payments and undertakings of the Company towards the auditor; for the purpose of this article, an “auditor” – including a partner, employee or relative of the auditor and including a corporation controlled thereby.
THE INTERNAL AUDITOR
155a.
| (a) | The Company Board of Directors will appoint an internal auditor for the Company, subject to the suggestion of the audit committee. |
| (b) | The organizational supervisor of the internal auditor will be the chairperson of the Board of Directors. |
| (c) | The internal auditor will submit to the Board of Directors for its approval, or, subject to the Board of Directors’ determination from time to time, to the audit committee, a proposal for an annual or periodic work plan, and the Board of Directors or audit committee, as the case may be, will approve it with the changes they deem fit. |
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| (d) | The internal auditor will act in accordance with the provisions of the Companies Law. |
NOTICES
| 156. | Providing notices or delivering documents to the shareholders and the Registration Company, subject to the provisions of the Law or subject to the Articles of Association, will be done in one of the ways mentioned below in this chapter. |
| 157. | Notice regarding a General Meeting will be delivered as stated in article 54 above. |
| 158. |
| 158.1. | Without derogating from the aforementioned, the Company may deliver notice or a document to a shareholder, by delivering it in person or by facsimile or by post or by e-mail; delivery by post shall be done in accordance with the address of the shareholder registered in the ledger, or if no such address is registered, in accordance with the address given to the Company thereby for the purpose of delivering notices thereto. A notice delivered by facsimile transmission will be sent to the shareholder in accordance with the facsimile number given thereby to the Company. A notice delivering by e-mail will be sent to the shareholder in accordance with the e-mail address given thereby to the Company. |
| a. | A notice or document delivered personally to a shareholder will be deemed delivered on the date they were delivered thereto. |
| b. | A notice or document delivered by post will be deemed duly delivered if submitted to a post office bearing the correct address and duly stamped. The delivery will be deemed as if performed at the time when the letter would have been regularly delivered by the postal service, and no more than two days from the date on which the letter containing the aforesaid notice was delivered to the post office. |
| c. | A notice sent by facsimile or e-mail will be deemed delivered twenty four hours after their transmission. |
| 159. | Without derogating from the abovementioned, the Company may deliver a notice to the shareholders by publishing the notice once in two daily newspapers published in Israel, in the Hebrew language, both in addition and in lieu of delivering the notice as stated in article 158 above. The date of publication in the newspaper shall be deemed the date on which the notice was received by the shareholders. |
| 160. | The Company may announce the delivery of a document at the office or any other place determined by the Board of Directors or by any other means, including through the internet. |
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| 161. | The Company is entitled to deliver notice or a document to joint owners of a share by sending them to the shareholder whose name is mentioned first in the shareholder ledger, with regard to that share. |
| 162. | Delivery of notice or a document to one of the family members living with the person for whom they are designated will be deemed personal delivery to the same person. |
| 163. | Any person who received the right to any share, by law, by transfer or by any other means, any notice with regard to that share, duly delivered to the person from whom the right to the same share originated, prior to the registration of his details in the ledger shall obligate him. |
| 164. | Any document or notice delivered to a Company shareholder, in accordance with the provisions of the Articles of Association, will be deemed duly delivered despite the event of death, insolvency or dissolution of the same shareholder or endorsement of the right to his shares, by law (whether if the Company was aware of this or otherwise), as long as no one was registered in lieu thereof as shareholder, and delivery or shipment as aforementioned will be deemed for any purpose as sufficient with regard to any person interested in the same shares and/or entitled thereto subject to the endorsement of the right, by law, whether jointly with the same shareholder or as a result thereof or in lieu thereof. |
| 165. | Subject to the provisions of any law, a shareholder, director or any other person, entitled to receive notice subject to the Articles of Association or by law, may waive the right to receive it, whether in advance or in retrospect, whether for a specific event or in general, and once he does so this will be considered as if the notice was duly delivered, and any proceeding or action for which notice should have been given will be deemed valid and in force. |
| 166. | Written confirmation signed by a director or by the Company secretary regarding the delivery of a document or notice by any of the method specified in the Articles of Association, will be deemed decisive proof regarding any detail included therein. |
| 167. | Whenever early notice of a number of days must be granted or when a notice is valid during a certain period, the date of delivery will be included among the count of the number of days or the period, except if otherwise determined. If notice is given in more than one of the methods specified above, it will be deemed delivered on the earliest date for which it would be deemed delivered, as abovementioned. |
MERGER
| 168. | The approval of a merger as stated in section 327 to the Companies Law requires an ordinary majority at the General Meeting or a class meeting, as the case may be, and all subject to the provisions of any law. |
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LIQUIDATION
| 169. | Subject to the provisions of any law, the liquidator may, whether by voluntary liquidation or otherwise, subject to the resolution of a General Meeting passed by ordinary majority, to distribute in kind among the shareholders the surplus of assets, all or some, and as well the liquidator may subject to the resolution of the General Meeting passed by ordinary majority, to deposit any part of the assets surplus with trustees who will hold it in trust on behalf of the shareholders, as the liquidator shall deem fit. For the purpose of distributing the assets in kind, the liquidator may determine the proper value of the assets intended for distribution and determine how the distribution will be performed among the shareholders while taking into consideration the rights attached to the various classes of the Company shares which they own. |
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Exhibit 4.4
PREFUNDED WARRANT
TO PURCHASE ORDINARY SHARES REPRESENTED BY AMERICAN DEPOSITARY SHARES
BIONDVAX PHARMACEUTICALS LTD.
| Warrant Shares: _______ | Initial Exercise Date: [_______], 20__ | |
| Issue Date: December [___], 2022 |
THIS PREFUNDED WARRANT TO PURCHASE ORDINARY SHARES REPRESENTED BY AMERICAN DEPOSITARY SHARES (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) until this Warrant is exercised in full (the “Termination Date”) but not thereafter, to subscribe for and purchase from BiondVax Pharmaceuticals Ltd., a company limited by shares organized under the laws of the State of Israel (the “Company”), up to ______ ordinary shares, no par value (as subject to adjustment hereunder, the “Warrant Shares”) represented by [●] American Depositary Share (“ADSs”), each ADS representing four hundred (400) ordinary shares, as subject to adjustment hereunder (the ADSs issuable hereunder, the “Warrant ADSs”). The purchase price of one ADS under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Underwriting Agreement (the “Underwriting Agreement”), dated December [●], 2022, between the Company and Aegis Capital Corp. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the ADS are then listed or quoted on a Trading Market (other than OTCQB or OTCQX), the bid price of the ADS for the time in question (or the nearest preceding date) on the Trading Market on which the ADS are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the ADS are then quoted on OTCQB or OTCQX, the volume weighted average price of the ADS for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the ADSs are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the ADSs are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the ADSs so reported, or (d) in all other cases, the fair market value of a share of ADSs as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
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“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“Trading Day” means a day on which the ADSs are traded on a Trading Market.
“Trading Market” means any of the following markets or exchanges on which the ADSs are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the ADSs are then listed or quoted on a Trading Market (other than OTCQB or OTCQX), the daily volume weighted average price of the ADSs for such date (or the nearest preceding date) on the Trading Market on which the ADSs are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the ADS are then quoted on OTCQB or OTCQX, the volume weighted average price of the ADSs for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the ADSs are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the ADSs are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the ADSs so reported, or (d) in all other cases, the fair market value of a share of ADSs as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
Section 2. Exercise.
a Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant ADS available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant ADSs available hereunder shall have the effect of lowering the outstanding number of Warrant ADS purchasable hereunder in an amount equal to the applicable number of Warrant ADSs purchased. The Holder and the Company shall maintain records showing the number of Warrant ADSs purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant ADSs hereunder, the number of Warrant ADS available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
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b Exercise Price. The aggregate exercise price per ADS under this Warrant, except for a nominal exercise price of $0.001 per ADS, was pre-funded to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise price of $0.001 per ADS) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination Date. The remaining unpaid exercise price per ADS under this Warrant shall be $0.001, subject to adjustment hereunder (the “Exercise Price”).
c Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant ADSs to the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant ADSs equal to the quotient obtained by dividing [(A-B) * (X)] by (A), where:
| (A) = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the ADSs on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
| (B) = | the Exercise Price of this Warrant, as adjusted hereunder; and |
| (X) = | the number of Warrant ADSs that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant ADSs are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant ADSs shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c).
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| d | Mechanics of Exercise. |
| i | Delivery of Warrant ADSs Upon Exercise. The Company shall cause its registrar to deposit the Warrant Shares subject to such exercise with the Depositary and instruct the Depositary to credit the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (such date, the “Warrant ADS Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant ADSs with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant ADSs, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant ADS Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant ADSs subject to such exercise (based on the VWAP of the ADS on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant ADS Delivery Date) for each Trading Day after such Warrant ADS Delivery Date until such Warrant ADSs are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the ADS as in effect on the date of delivery of the Notice of Exercise. |
| ii | Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant ADSs, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant ADSs called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant. |
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| iii | Rescission Rights. If the Company fails to cause the Depositary to transmit to the Holder the Warrant ADSs pursuant to Section 2(d)(i) by the Warrant ADS Delivery Date, then the Holder will have the right to rescind such exercise. |
iv Compensation for Buy-In on Failure to Timely Deliver Warrant ADSs Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Depositary to transmit to the Holder the Warrant ADSs in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant ADS Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, ADSs to deliver in satisfaction of a sale by the Holder of the Warrant ADSs which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the ADS so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant ADSs that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant ADSs for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of ADSs that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases ADSs having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrant ADSs with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver ADSs upon exercise of the Warrant as required pursuant to the terms hereof.
v No Fractional ADSs or Scrip. No fractional ADSs or scrip representing fractional ADSs shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
| vi | Charges, Taxes and Expenses. Issuance of Warrant ADSs shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant ADSs, all of which taxes and expenses shall be paid by the Company, and such Warrant ADSs shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant ADSs are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Depositary fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant ADSs. The Company shall pay all applicable fees and expenses of the Depositary in connection with the issuance of the Warrants ADSs hereunder. |
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vii Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
e Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Ordinary Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Ordinary Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Ordinary Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Ordinary Share Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding Ordinary Shares, a Holder may rely on the number of outstanding Ordinary Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Depositary setting forth the number of Ordinary Shares outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of Ordinary Shares then outstanding. In any case, the number of outstanding Ordinary Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding Ordinary Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
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Section 3. Certain Adjustments.
a Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Ordinary Shares or any other equity or equity equivalent securities payable in Ordinary Shares (which, for avoidance of doubt, shall not include any Ordinary Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Ordinary Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Ordinary Shares into a smaller number of shares, or (iv) issues by reclassification of Ordinary Shares any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Ordinary Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Ordinary Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b Reserved.
c Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Ordinary Share Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Ordinary Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Ordinary Shares as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Ordinary Shares, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Ordinary Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.
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e Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Ordinary Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Ordinary Shares or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Ordinary Shares or any compulsory share exchange pursuant to which the Ordinary Shares is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding Ordinary Shares or 50% or more of the voting power of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant ADS that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of Ordinary Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Ordinary Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one ADS in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of ADSs are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Ordinary Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Ordinary Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(e) regardless of (i) whether the Company has sufficient authorized Ordinary Shares for the issuance of Warrant ADSs and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date.
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f Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of ADSs deemed to be issued and outstanding as of a given date shall be the sum of the number of ADSs (excluding treasury shares, if any) issued and outstanding.
g Notice to Holder.
i Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the ADSs, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary Shares, (C) the Company shall authorize the granting to all holders of the Ordinary Share rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the ADSs, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Ordinary Shares are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Ordinary Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Ordinary Shares of record shall be entitled to exchange their Ordinary Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 6-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
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Section 4. Transfer of Warrant.
a Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a No Rights as Shareholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant ADSs on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.
b Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
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c Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
d Authorized Shares.
The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Ordinary Shares a sufficient number of shares to provide for the issuance of the Warrant ADSs and underlying Ordinary Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant ADSs may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Ordinary Shares and ADSs may be listed. The Company covenants that all Warrant ADSs which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant ADSs in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant ADSs above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant ADSs upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant ADSs for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
e Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
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f Restrictions. The Holder acknowledges that the Warrant ADSs acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, care of Puglisi& Associates, 850 Library Avenue, Suite 204, Newark, Delaware 19711, or such other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 6-K.
i Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant ADSs, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Ordinary Share or ADSs or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
j Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
k Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant ADSs.
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l Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holder, on the other hand.
m Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| Biondvax Pharmaceuticals Ltd. | ||
| By: | ||
| Name: | ||
| Title: | ||
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NOTICE OF EXERCISE
| TO: | Biondvax Pharmaceuticals Ltd. |
(1 The undersigned hereby elects to purchase ________ Warrant ADSs of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2 Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] if permitted, the cancellation of such number of Warrant ADSs as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant ADSs purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3 Please issue said Warrant ADSs in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares ADSs be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE OF HOLDER]
Name of Investing Entity: ________________________________________________________________________________________________
Signature of Authorized Signatory of Investing Entity: _____________________________________________________
Name of Authorized Signatory: _______________________________________________________________________
Title of Authorized Signatory: ________________________________________________________________________
Date: ___________________________________________________________________________________________
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: |
_____________________________________ |
| (Please Print) | |
| Address: | _____________________________________ |
Phone Number:
Email Address: |
(Please Print)
_____________________________________
_____________________________________ |
| Dated: _______________ __, ______________________ | |
| Holder’s Signature: _____________________________ | |
| Holder’s Address: ______________________________ |
Exhibit 4.5
PURCHASE WARRANT
TO PURCHASE ORDINARY SHARES REPRESENTED BY AMERICAN DEPOSITARY SHARES
BIONDVAX PHARMACEUTICALS LTD.
| Warrant Shares: _______ | Initial Exercise Date: [_______], 20__ | |
| Issue Date: December [___], 2022 |
THIS WARRANT TO PURCHASE ORDINARY SHARES REPRESENTED BY AMERICAN DEPOSITARY SHARES (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on December [ ], 2023 (the “Termination Date”) but not thereafter, to subscribe for and purchase from BiondVax Pharmaceuticals Ltd., a company limited by shares organized under the laws of the State of Israel (the “Company”), up to ______ ordinary shares, no par value (as subject to adjustment hereunder, the “Warrant Shares”) represented by [●] American Depositary Share (“ADSs”), each ADS representing four hundred (400) ordinary shares, as subject to adjustment hereunder (the ADSs issuable hereunder, the “Warrant ADSs”). The purchase price of one ADS under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Underwriting Agreement (the “Underwriting Agreement”), dated December [●], 2022, between the Company and Aegis Capital Corp.. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the ADS are then listed or quoted on a Trading Market (other than OTCQB or OTCQX), the bid price of the ADS for the time in question (or the nearest preceding date) on the Trading Market on which the ADS are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the ADS are then quoted on OTCQB or OTCQX, the volume weighted average price of the ADS for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the ADSs are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the ADSs are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the ADSs so reported, or (d) in all other cases, the fair market value of a share of ADSs as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“Trading Day” means a day on which the ADSs are traded on a Trading Market.
“Trading Market” means any of the following markets or exchanges on which the ADSs are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the ADSs are then listed or quoted on a Trading Market (other than OTCQB or OTCQX), the daily volume weighted average price of the ADSs for such date (or the nearest preceding date) on the Trading Market on which the ADSs are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the ADS are then quoted on OTCQB or OTCQX, the volume weighted average price of the ADSs for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the ADSs are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the ADSs are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the ADSs so reported, or (d) in all other cases, the fair market value of a share of ADSs as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
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Section 2. Exercise.
a Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant ADS available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant ADSs available hereunder shall have the effect of lowering the outstanding number of Warrant ADS purchasable hereunder in an amount equal to the applicable number of Warrant ADSs purchased. The Holder and the Company shall maintain records showing the number of Warrant ADSs purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant ADSs hereunder, the number of Warrant ADS available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b Exercise Price. The exercise price per ADS under this Warrant shall be $_____, subject to adjustment hereunder (the “Exercise Price”).
c Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant ADSs to the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant ADSs equal to the quotient obtained by dividing [(A-B) * (X)] by (A), where:
(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the ADSs on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;
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(B) = the Exercise Price of this Warrant, as adjusted hereunder; and
(X) = the number of Warrant ADSs that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.
If Warrant ADSs are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant ADSs shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c).
Notwithstanding anything to the contrary herein but subject to Section 2(f) below, the Holder may also effect an “alternative cashless exercise” on or before the sixty (60) day anniversary of the Initial Exercise Date. In such event, the aggregate number of Warrant ADS issuable in such alternative cashless exercise pursuant to any given Notice of Exercise electing to effect an alternative cashless exercise shall equal the product of (x) the aggregate number of Warrant ADS that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise and (y) 0.50.
d Mechanics of Exercise.
i Delivery of Warrant ADSs Upon Exercise. The Company shall cause its registrar to deposit the Warrant Shares subject to such exercise with the Depositary and instruct the Depositary to credit the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (such date, the “Warrant ADS Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant ADSs with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant ADSs, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant ADS Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant ADSs subject to such exercise (based on the VWAP of the ADS on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant ADS Delivery Date) for each Trading Day after such Warrant ADS Delivery Date until such Warrant ADSs are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the ADS as in effect on the date of delivery of the Notice of Exercise.
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ii Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant ADSs, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant ADSs called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii Rescission Rights. If the Company fails to cause the Depositary to transmit to the Holder the Warrant ADSs pursuant to Section 2(d)(i) by the Warrant ADS Delivery Date, then the Holder will have the right to rescind such exercise.
iv Compensation for Buy-In on Failure to Timely Deliver Warrant ADSs Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Depositary to transmit to the Holder the Warrant ADSs in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant ADS Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, ADSs to deliver in satisfaction of a sale by the Holder of the Warrant ADSs which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the ADS so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant ADSs that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant ADSs for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of ADSs that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases ADSs having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrant ADSs with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver ADSs upon exercise of the Warrant as required pursuant to the terms hereof.
v No Fractional ADSs or Scrip. No fractional ADSs or scrip representing fractional ADSs shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
vi Charges, Taxes and Expenses. Issuance of Warrant ADSs shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant ADSs, all of which taxes and expenses shall be paid by the Company, and such Warrant ADSs shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant ADSs are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Depositary fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant ADSs. The Company shall pay all applicable fees and expenses of the Depositary in connection with the issuance of the Warrants ADSs hereunder.
vii Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
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e Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Ordinary Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Ordinary Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Ordinary Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Ordinary Share Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding Ordinary Shares, a Holder may rely on the number of outstanding Ordinary Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Depositary setting forth the number of Ordinary Shares outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of Ordinary Shares then outstanding. In any case, the number of outstanding Ordinary Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding Ordinary Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
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f Call Provision. Subject to the provisions of Section 2(e) and this Section 2(f), if, after the sixtieth day (60th) following the Initial Exercise Date, (i) the VWAP for each of 20 consecutive Trading Days (the “Measurement Period,” which 20 consecutive Trading Day period shall not have commenced until after the Initial Exercise Date) exceeds $____2 (subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends, rights offerings and the like after the Initial Exercise Date) and (ii) the Holder is not in possession of any information that constitutes, or might constitute, material non-public information which was provided by the Company, any of its Subsidiaries, or any of their officers, directors, employees, agents or Affiliates, then the Company may, within 2 Trading Day of the end of such Measurement Period, call for cancellation of all or any portion of this Warrant for which a Notice of Exercise has not yet been delivered (such right, a “Call”) for no consideration. To exercise this right, the Company must deliver to the Holder an irrevocable written notice (a “Call Notice”), indicating therein the portion of unexercised portion of this Warrant to which such notice applies. If the conditions set forth below for such Call are satisfied from the period from the date of the Call Notice through and including the Call Date (as defined below), then any portion of this Warrant subject to such Call Notice for which a Notice of Exercise shall not have been received by the Call Date will be cancelled at 6:30 p.m. (New York City time) on the tenth Trading Day after the date the Call Notice is received by the Holder (such date and time, the “Call Date”). Any unexercised portion of this Warrant to which the Call Notice does not pertain will be unaffected by such Call Notice. In furtherance thereof, the Company covenants and agrees that it will honor all Notices of Exercise with respect to Warrant Shares subject to a Call Notice that are tendered through 6:30 p.m. (New York City time) on the Call Date. The parties agree that any Notice of Exercise delivered following a Call Notice which calls less than all of the Warrants shall first reduce to zero the number of Warrant ADSs subject to such Call Notice prior to reducing the remaining Warrant ADSs available for purchase under this Warrant. For example, if (A) this Warrant then permits the Holder to acquire 100 Warrant ADSs, (B) a Call Notice pertains to 75 Warrant Shares, and (C) prior to 6:30 p.m. (New York City time) on the Call Date the Holder tenders a Notice of Exercise in respect of 50 Warrant ADSs, then (x) on the Call Date the right under this Warrant to acquire 25 Warrant ADSs will be automatically cancelled, (y) the Company, in the time and manner required under this Warrant, will have issued and delivered to the Holder 50 Warrant ADSs in respect of the exercises following receipt of the Call Notice, and (z) the Holder may, until the Termination Date, exercise this Warrant for 25 Warrant ADSs (subject to adjustment as herein provided and subject to subsequent Call Notices). Subject again to the provisions of this Section 2(f), the Company may deliver subsequent Call Notices for any portion of this Warrant for which the Holder shall not have delivered a Notice of Exercise. Notwithstanding anything to the contrary set forth in this Warrant, the Company may not deliver a Call Notice or require the cancellation of this Warrant (and any such Call Notice shall be void), unless, from the beginning of the Measurement Period through the Call Date, (1) the Company shall have honored in accordance with the terms of this Warrant all Notices of Exercise delivered by 6:30 p.m. (New York City time) on the Call Date, and (2) a registration statement shall be effective as to all Warrant ADSs and the prospectus thereunder available for use by the Company for the sale of all such Warrant ADSs to the Holder, and (3) the ADSs shall be listed or quoted for trading on the Trading Market, and (4) there is a sufficient number of authorized Ordinary Shares for issuance of all Warrant ADSs, and (5) the issuance of all Warrant ADSs subject to a Call Notice shall not cause a breach of any provision of Section 2(e) herein. The Company’s right to call the Warrants under this Section 2(f) shall be exercised ratably among the Holders based on each Holder’s initial purchase of Warrants.
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Section 3. Certain Adjustments.
a Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Ordinary Shares or any other equity or equity equivalent securities payable in Ordinary Shares (which, for avoidance of doubt, shall not include any Ordinary Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Ordinary Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Ordinary Shares into a smaller number of shares, or (iv) issues by reclassification of Ordinary Shares any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Ordinary Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Ordinary Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b Reserved.
c Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants or issues any Ordinary Share Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Ordinary Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Ordinary Shares as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Ordinary Shares, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Ordinary Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.
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e Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Ordinary Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Ordinary Shares or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Ordinary Shares or any compulsory share exchange pursuant to which the Ordinary Shares is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding Ordinary Shares or 50% or more of the voting power of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant ADS that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of Ordinary Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Ordinary Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one ADS in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of ADSs are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Ordinary Shares of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Ordinary Shares are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further, that if holders of Ordinary Shares of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Ordinary Shares will be deemed to have received ordinary shares of the Successor Entity (which Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of (1) the 30 day volatility, (2) the 100 day volatility or (3) the 365 day volatility, each of clauses (1)-(3) as obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the highest VWAP during the period beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration) within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Ordinary Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Ordinary Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(e) regardless of (i) whether the Company has sufficient authorized Ordinary Shares for the issuance of Warrant ADSs and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date.
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f Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of ADSs deemed to be issued and outstanding as of a given date shall be the sum of the number of ADSs (excluding treasury shares, if any) issued and outstanding.
g Notice to Holder.
i Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the ADSs, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary Shares, (C) the Company shall authorize the granting to all holders of the Ordinary Share rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the ADSs, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Ordinary Shares are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Ordinary Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Ordinary Shares of record shall be entitled to exchange their Ordinary Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 6-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
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Section 4. Transfer of Warrant.
a Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a No Rights as Shareholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant ADSs on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.
b Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
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c Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
d Authorized Shares.
The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Ordinary Shares a sufficient number of shares to provide for the issuance of the Warrant ADSs and underlying Ordinary Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant ADSs may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Ordinary Shares and ADSs may be listed. The Company covenants that all Warrant ADSs which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant ADSs in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant ADSs above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant ADSs upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant ADSs for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
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e Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
f Restrictions. The Holder acknowledges that the Warrant ADSs acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, care of Puglisi& Associates, 850 Library Avenue, Suite 204, Newark, Delaware 19711, or such other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 6-K.
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i Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant ADSs, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Ordinary Share or ADSs or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
j Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
k Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant ADSs.
l Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holder, on the other hand.
m Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| Biondvax Pharmaceuticals Ltd. | |||
| By: | |||
| Name: | |||
| Title: | |||
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NOTICE OF EXERCISE
TO: Biondvax Pharmaceuticals Ltd.
(1 The undersigned hereby elects to purchase ________ Warrant ADSs of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2 Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] if permitted, the cancellation of such number of Warrant ADSs as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant ADSs purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3 Please issue said Warrant ADSs in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares ADSs be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE OF HOLDER]
Name of Investing Entity: ________________________________________________________________________
Signature of Authorized Signatory of Investing Entity: _________________________________________________
Name of Authorized Signatory: ___________________________________________________________________
Title of Authorized Signatory: ____________________________________________________________________
Date: ________________________________________________________________________________________
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: | ______________________________________ |
| (Please Print) | |
| Address: | ______________________________________ |
| (Please Print) | |
| Phone Number: | ______________________________________ |
| Email Address: | ______________________________________ |
| Dated: _______________ __, ______ | |
| Holder’s Signature: ____________________ | |
| Holder’s Address: ______________________ |
Exhibit 4.6
PURCHASE WARRANT
TO PURCHASE ORDINARY SHARES REPRESENTED BY AMERICAN DEPOSITARY SHARES
BIONDVAX PHARMACEUTICALS LTD.
| Warrant Shares: _______ | Initial Exercise Date: [_______], 20__ |
| Issue Date: December [___], 2022 |
THIS WARRANT TO PURCHASE ORDINARY SHARES REPRESENTED BY AMERICAN DEPOSITARY SHARES (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on December [ ], 2025 (the “Termination Date”) but not thereafter, to subscribe for and purchase from BiondVax Pharmaceuticals Ltd., a company limited by shares organized under the laws of the State of Israel (the “Company”), up to ______ ordinary shares, no par value (as subject to adjustment hereunder, the “Warrant Shares”) represented by [●] American Depositary Share (“ADSs”), each ADS representing four hundred (400) ordinary shares, as subject to adjustment hereunder (the ADSs issuable hereunder, the “Warrant ADSs”). The purchase price of one ADS under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Underwriting Agreement (the “Underwriting Agreement”), dated December [●], 2022, between the Company and Aegis Capital Corp. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the ADS are then listed or quoted on a Trading Market (other than OTCQB or OTCQX), the bid price of the ADS for the time in question (or the nearest preceding date) on the Trading Market on which the ADS are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the ADS are then quoted on OTCQB or OTCQX, the volume weighted average price of the ADS for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the ADSs are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the ADSs are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the ADSs so reported, or (d) in all other cases, the fair market value of a share of ADSs as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
| 1 | Insert the date that is the 3rd year anniversary of the Initial Exercise Date, provided that, if such date is not a Trading Day, insert the immediately following Trading Day. |
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“Trading Day” means a day on which the ADSs are traded on a Trading Market.
“Trading Market” means any of the following markets or exchanges on which the ADSs are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the ADSs are then listed or quoted on a Trading Market (other than OTCQB or OTCQX), the daily volume weighted average price of the ADSs for such date (or the nearest preceding date) on the Trading Market on which the ADSs are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the ADS are then quoted on OTCQB or OTCQX, the volume weighted average price of the ADSs for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the ADSs are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the ADSs are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the ADSs so reported, or (d) in all other cases, the fair market value of a share of ADSs as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
Section 2. Exercise.
a Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant ADS available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant ADSs available hereunder shall have the effect of lowering the outstanding number of Warrant ADS purchasable hereunder in an amount equal to the applicable number of Warrant ADSs purchased. The Holder and the Company shall maintain records showing the number of Warrant ADSs purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant ADSs hereunder, the number of Warrant ADS available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
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b Exercise Price. The exercise price per ADS under this Warrant shall be $_____, subject to adjustment hereunder (the “Exercise Price”).
c Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant ADSs to the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant ADSs equal to the quotient obtained by dividing [(A-B) * (X)] by (A), where:
| (A) | = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the ADSs on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
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| (B) | = | the Exercise Price of this Warrant, as adjusted hereunder; and |
| (X) | = | the number of Warrant ADSs that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant ADSs are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant ADSs shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c).
d Mechanics of Exercise.
| i | Delivery of Warrant ADSs Upon Exercise. The Company shall cause its registrar to deposit the Warrant Shares subject to such exercise with the Depositary and instruct the Depositary to credit the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (such date, the “Warrant ADS Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant ADSs with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant ADSs, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant ADS Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant ADSs subject to such exercise (based on the VWAP of the ADS on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant ADS Delivery Date) for each Trading Day after such Warrant ADS Delivery Date until such Warrant ADSs are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the ADS as in effect on the date of delivery of the Notice of Exercise. |
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| ii | Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant ADSs, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant ADSs called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant. |
| iii | Rescission Rights. If the Company fails to cause the Depositary to transmit to the Holder the Warrant ADSs pursuant to Section 2(d)(i) by the Warrant ADS Delivery Date, then the Holder will have the right to rescind such exercise. |
| iv | Compensation for Buy-In on Failure to Timely Deliver Warrant ADSs Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Depositary to transmit to the Holder the Warrant ADSs in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant ADS Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, ADSs to deliver in satisfaction of a sale by the Holder of the Warrant ADSs which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the ADS so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant ADSs that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant ADSs for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of ADSs that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases ADSs having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrant ADSs with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver ADSs upon exercise of the Warrant as required pursuant to the terms hereof. |
| v | No Fractional ADSs or Scrip. No fractional ADSs or scrip representing fractional ADSs shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share. |
| vi | Charges, Taxes and Expenses. Issuance of Warrant ADSs shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant ADSs, all of which taxes and expenses shall be paid by the Company, and such Warrant ADSs shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant ADSs are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Depositary fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant ADSs. The Company shall pay all applicable fees and expenses of the Depositary in connection with the issuance of the Warrants ADSs hereunder. |
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| vii | Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof. |
e Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Ordinary Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Ordinary Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Ordinary Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Ordinary Share Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding Ordinary Shares, a Holder may rely on the number of outstanding Ordinary Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Depositary setting forth the number of Ordinary Shares outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of Ordinary Shares then outstanding. In any case, the number of outstanding Ordinary Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding Ordinary Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
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f Call Provision. Subject to the provisions of Section 2(e) and this Section 2(f), if, after the Initial Exercise Date, (i) the VWAP for each of 20 consecutive Trading Days (the “Measurement Period,” which 20 consecutive Trading Day period shall not have commenced until after the Initial Exercise Date) exceeds $____2 (subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends, rights offerings and the like after the Initial Exercise Date) and (ii) the Holder is not in possession of any information that constitutes, or might constitute, material non-public information which was provided by the Company, any of its Subsidiaries, or any of their officers, directors, employees, agents or Affiliates, then the Company may, within 2 Trading Day of the end of such Measurement Period, call for cancellation of all or any portion of this Warrant for which a Notice of Exercise has not yet been delivered (such right, a “Call”) for no consideration. To exercise this right, the Company must deliver to the Holder an irrevocable written notice (a “Call Notice”), indicating therein the portion of unexercised portion of this Warrant to which such notice applies. If the conditions set forth below for such Call are satisfied from the period from the date of the Call Notice through and including the Call Date (as defined below), then any portion of this Warrant subject to such Call Notice for which a Notice of Exercise shall not have been received by the Call Date will be cancelled at 6:30 p.m. (New York City time) on the tenth Trading Day after the date the Call Notice is received by the Holder (such date and time, the “Call Date”). Any unexercised portion of this Warrant to which the Call Notice does not pertain will be unaffected by such Call Notice. In furtherance thereof, the Company covenants and agrees that it will honor all Notices of Exercise with respect to Warrant Shares subject to a Call Notice that are tendered through 6:30 p.m. (New York City time) on the Call Date. The parties agree that any Notice of Exercise delivered following a Call Notice which calls less than all of the Warrants shall first reduce to zero the number of Warrant ADSs subject to such Call Notice prior to reducing the remaining Warrant ADSs available for purchase under this Warrant. For example, if (A) this Warrant then permits the Holder to acquire 100 Warrant ADSs, (B) a Call Notice pertains to 75 Warrant Shares, and (C) prior to 6:30 p.m. (New York City time) on the Call Date the Holder tenders a Notice of Exercise in respect of 50 Warrant ADSs, then (x) on the Call Date the right under this Warrant to acquire 25 Warrant ADSs will be automatically cancelled, (y) the Company, in the time and manner required under this Warrant, will have issued and delivered to the Holder 50 Warrant ADSs in respect of the exercises following receipt of the Call Notice, and (z) the Holder may, until the Termination Date, exercise this Warrant for 25 Warrant ADSs (subject to adjustment as herein provided and subject to subsequent Call Notices). Subject again to the provisions of this Section 2(f), the Company may deliver subsequent Call Notices for any portion of this Warrant for which the Holder shall not have delivered a Notice of Exercise. Notwithstanding anything to the contrary set forth in this Warrant, the Company may not deliver a Call Notice or require the cancellation of this Warrant (and any such Call Notice shall be void), unless, from the beginning of the Measurement Period through the Call Date, (1) the Company shall have honored in accordance with the terms of this Warrant all Notices of Exercise delivered by 6:30 p.m. (New York City time) on the Call Date, and (2) a registration statement shall be effective as to all Warrant ADSs and the prospectus thereunder available for use by the Company for the sale of all such Warrant ADSs to the Holder, and (3) the ADSs shall be listed or quoted for trading on the Trading Market, and (4) there is a sufficient number of authorized Ordinary Shares for issuance of all Warrant ADSs, and (5) the issuance of all Warrant ADSs subject to a Call Notice shall not cause a breach of any provision of Section 2(e) herein. The Company’s right to call the Warrants under this Section 2(f) shall be exercised ratably among the Holders based on each Holder’s initial purchase of Warrants.
Section 3. Certain Adjustments.
a Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Ordinary Shares or any other equity or equity equivalent securities payable in Ordinary Shares (which, for avoidance of doubt, shall not include any Ordinary Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Ordinary Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Ordinary Shares into a smaller number of shares, or (iv) issues by reclassification of Ordinary Shares any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Ordinary Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Ordinary Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
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b Reserved.
c Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Ordinary Share Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Ordinary Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Ordinary Shares as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Ordinary Shares, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Ordinary Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.
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e Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Ordinary Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Ordinary Shares or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Ordinary Shares or any compulsory share exchange pursuant to which the Ordinary Shares is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding Ordinary Shares or 50% or more of the voting power of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant ADS that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of Ordinary Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Ordinary Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one ADS in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of ADSs are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company's control, including not approved by the Company's Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Ordinary Shares of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Ordinary Shares are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further, that if holders of Ordinary Shares of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Ordinary Shares will be deemed to have received ordinary shares of the Successor Entity (which Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of (1) the 30 day volatility, (2) the 100 day volatility or (3) the 365 day volatility, each of clauses (1)-(3) as obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the highest VWAP during the period beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration) within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Ordinary Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Ordinary Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(e) regardless of (i) whether the Company has sufficient authorized Ordinary Shares for the issuance of Warrant ADSs and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date.
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f Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of ADSs deemed to be issued and outstanding as of a given date shall be the sum of the number of ADSs (excluding treasury shares, if any) issued and outstanding.
g Notice to Holder.
i Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the ADSs, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary Shares, (C) the Company shall authorize the granting to all holders of the Ordinary Share rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the ADSs, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Ordinary Shares are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Ordinary Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Ordinary Shares of record shall be entitled to exchange their Ordinary Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 6-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
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Section 4. Transfer of Warrant.
a Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a No Rights as Shareholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant ADSs on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.
b Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
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d Authorized Shares.
The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Ordinary Shares a sufficient number of shares to provide for the issuance of the Warrant ADSs and underlying Ordinary Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant ADSs may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Ordinary Shares and ADSs may be listed. The Company covenants that all Warrant ADSs which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant ADSs in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant ADSs above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant ADSs upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant ADSs for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
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e Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
f Restrictions. The Holder acknowledges that the Warrant ADSs acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, care of Puglisi& Associates, 850 Library Avenue, Suite 204, Newark, Delaware 19711, or such other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 6-K.
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i Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant ADSs, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Ordinary Share or ADSs or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
j Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
k Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant ADSs.
l Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holder, on the other hand.
m Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
14
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| Biondvax Pharmaceuticals Ltd. | ||
| By: | ||
| Name: | ||
| Title: | ||
15
NOTICE OF EXERCISE
TO: Biondvax Pharmaceuticals Ltd.
(1 The undersigned hereby elects to purchase ________ Warrant ADSs of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2 Payment shall take the form of (check applicable box):
☐ in lawful money of the United States; or
☐ if permitted, the cancellation of such number of Warrant ADSs as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant ADSs purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3 Please issue said Warrant ADSs in the name of the undersigned or in such other name as is specified below:
_____________________________________
The Warrant Shares ADSs be delivered to the following DWAC Account Number:
_____________________________________
_____________________________________
_____________________________________
[SIGNATURE OF HOLDER]
Name of Investing Entity: _________________________________________________________________
Signature of Authorized Signatory of Investing Entity: ___________________________________________
Name of Authorized Signatory: _____________________________________________________________
Title of Authorized Signatory: ______________________________________________________________
Date: __________________________________________________________________________________
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: | ______________________________________ | |
| (Please Print) | ||
| Address: | ______________________________________ | |
| (Please Print) | ||
| Phone Number: | ______________________________________ | |
| Email Address: | ______________________________________ | |
| Dated: _______________ __, ______ | ||
| Holder’s Signature:____________________ | ||
| Holder’s Address:_____________________ |
Exhibit 5.1
December 13, 2022
BiondVax Pharmaceuticals Ltd.
Jerusalem BioPark
Hadassah Ein Kerem Campus, 2nd floor
Jerusalem 9112001, Israel
Re: BiondVax Pharmaceuticals Ltd.
Ladies and Gentlemen:
We have acted as Israeli counsel to BiondVax Pharmaceuticals Ltd., (the “Company”), an Israeli company, in connection with (i) the issuance and sale of an aggregate of (i) up to 913,242 American Depositary Shares (“Sold ADSs”), each representing four-hundred (400) ordinary shares, no par value, of the Company (the “Ordinary Shares”), (ii) pre-funded warrants to acquire up to 913,242 ADSs in the aggregate (the “Pre-Funded Warrants”) and (iii) warrants to acquire 1,826,484 ADSs in the aggregate (together with the Pre-Funded Warrants, the "Warrants") pursuant to the terms of an Underwriting Agreement (the “Underwriting Agreement”) to be executed by and between the Company and Aegis Capital Corp..(the “Underwriter”). This opinion is rendered pursuant to Item 8(a) of Form F-1 of the Unites States Securities and Exchange Commission (the “ Commission ”) and Item 601(b)(5) and 601(b)(23) of the SEC’s Regulation S-K under the United States Securities Act of 1933, as amended (the “ Securities Act ”).
In connection with this opinion, we have examined and relied upon the the registration statement on Form F-1/A (File No. 333-267648), filed by the Company with the SEC and to which this opinion is attached as an exhibit (the “ Registration Statement ”), the Company’s Amended and Restated Articles of Association, and such statutes, regulations, corporate records, documents, certificates and such other instruments that we have deemed relevant and necessary for the basis of our opinions hereinafter expressed. In such examination, we have assumed: (i) the authenticity of original documents and the genuineness of all signatures; (ii) the conformity to the originals of all documents submitted to us as copies; (iii) the truth, accuracy and completeness of the information, representations and warranties contained in the corporate records, documents, certificates and instruments we have reviewed; (iv) the due execution and delivery of all documents where due execution and delivery are a prerequisite to the effectiveness thereof; and (v) the legal capacity of all natural persons.
We are members of the Israel Bar and we express no opinion as to any matter relating to the laws of any jurisdiction other than the laws of the State of Israel and have not, for the purpose of giving this opinion, made any investigation of the laws of any jurisdiction other than the State of Israel.
On the basis of the foregoing, and in reliance thereon, we are of the opinion that the (i) Ordinary Shares underlying the Sold ADSs to be sold to the Underwriters as described in the Registration Statement have been duly authorized and upon delivery of the Sold ADSs and payment therefor in accordance with the Underwriting Agreement, will be, validly issued, fully paid and non-assessable and (ii) Ordinary Shares issuable upon exercise of the Warrants, upon payment for the Warrants in accordance with the Underwriting Agreement, have been duly authorized and when such Ordinary Shares are issued and delivered by the Company upon exercise of the Warrants against receipt of the exercise price therefor in accordance with the terms of the Warrants, will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name wherever it appears in the Registration Statement.
In giving such consent, we do not believe that we are “experts” within the meaning of such term as used in the Securities Act, or the rules and regulations of the Commission issued thereunder with respect to any part of the Registration Statement, including this opinion as an exhibit or otherwise.
|
Very truly yours,
| |
|
/s/ Gross & Co.
Gross & Co. |
Exhibit 10.14
| C L I F F O R D | CLIFFORD CHANCE LLP |
| CHANCE |
Contract numbers (FI No.): 88205
91305
Serapis No.: 2015-0572
AMENDMENT AGREEMENT
DATED 9 AUGUST 2022 FOR
EUROPEAN INVESTMENT BANK
AND
BIONDVAX PHARMACEUTICALS LTD
RELATING TO A FINANCE CONTRACT
ORIGINALLY DATED 19 JUNE 2017 AND AS
AMENDED FROM TIME TO TIME
CONTENTS
| Clause Page | |||
| 1. | Definitions and Interpretation | 1 | |
| 2. | Representations | 2 | |
| 3. | Amendments | 2 | |
| 4. | Continuity and Further Assurance | 2 | |
| 5. | Costs and Expenses | 3 | |
| 6. | Miscellaneous | 3 | |
| Schedule 1 Conditions Precedent | 4 | ||
| Schedule 2 Amendments to the Original Finance Contract | 5 | ||
THIS AGREEMENT is 9 August 2022 and made between:
| (1) | THE EUROPEAN INVESTMENT BANK having its seat at 100 boulevard Konrad Adenauer, L-2950 Luxembourg (the “Bank”); and |
| (2) | BIONDVAX PHARMACEUTICALS LTD., a company incorporated in Israel with company registration number 51-343610-5, having its registered office at Jerusalem BioPark, 2nd Floor, Hadassah Ein Kerem Campus, Jerusalem, Israel (the “Borrower”). |
WHEREAS:
| (A) | The Bank made a credit available to the Borrower pursuant to the Original Finance Contract (as defined below). |
| (B) | The Borrower has notified the Bank that it wishes to, amongst other things, amend certain prepayment provisions in the Original Finance Contract and add interest capitalisation provisions thereto. The parties hereto have agreed to amend the Original Finance Contract as set out below. |
IT IS AGREED as follows:
| 1. | DEFINITIONS AND INTERPRETATION |
| 1.1 | Definitions |
In this Agreement:
“Amended Finance Contract” means the Original Finance Contract, as amended by this Agreement.
“Amended Security Agreement” means the Original Security Agreement, as amended by the Security Amendment Agreement.
“Effective Date” means the date on which the Bank confirms to the Borrower that it has received each of the documents and other evidence listed in Schedule 1 (Conditions Precedent) in a form and substance satisfactory to the Bank.
“Original Finance Contract” means the finance contract originally dated 19 June 2017 between the Bank and the Borrower, as amended and restated on 24 June 2019 and further amended on 11 January 2021.
“Original Security Agreement” means the security agreement originally dated 22 May 2018 between the Bank and the Borrower, as amended on 24 June 2019.
“Security Amendment Agreement” means the amendment agreement in relation to the Original Security Agreement, dated on or about the date of this Agreement.
| 1.2 | Incorporation of defined terms |
| (a) | Unless a contrary indication appears, a term defined in the Original Finance Contract has the same meaning in this Agreement. |
| (b) | The principles of construction set out in the Original Finance Contract shall have effect as if set out in this Agreement. |
- 1 -
| 1.3 | Clauses |
In this Agreement any reference to a “Clause” or a “Schedule” is, unless the context otherwise requires, a reference to a Clause in or a Schedule to this Agreement.
| 1.4 | Third party rights |
A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
| 1.5 | Designation |
In accordance with the Original Finance Contract, each of the Bank and the Borrower designates this Agreement as a Finance Document.
| 2. | REPRESENTATIONS |
The Repeating Representations are deemed to be made by the Borrower (by reference to the facts and circumstances then existing) on:
| (a) | the date of this Agreement; and |
| (b) | the Effective Date, |
and references to “this Agreement” in the Repeating Representations should be construed as references to this Agreement and to the Original Finance Contract and on the Effective Date, to the Amended Finance Contract.
| 3. | AMENDMENTS |
With effect from the Effective Date the Original Finance Contract shall be amended as set out in Schedule 2 (Amendments to the Original Finance Contract).
| 4. | CONTINUITY AND FURTHER ASSURANCE |
| 4.1 | Continuing obligations |
The provisions of the Original Finance Contract and the other Finance Documents shall, save as amended by this Agreement or the Security Amendment Agreement (as applicable), continue in full force and effect.
| 4.2 | Confirmation of Security |
For the avoidance of doubt, the Borrower confirms for the benefit of the Bank that the Security created by it pursuant to the Amended Security Agreement to which it is a party shall: (a) remain in full force and effect notwithstanding the amendments referred to in Clause 3 (Amendments) above; and (b) continue to secure its relevant obligations under the Finance Documents as amended (including, but not limited to, under the Amended Finance Contract).
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| 4.3 | Further assurance |
The Borrower, shall, at the request of the Bank and at the Borrower’s own expense, do all such acts and things necessary or desirable to give effect to the amendments effected or to be effected pursuant to this Agreement.
| 5. | COSTS AND EXPENSES |
The Borrower shall promptly on demand pay the Bank the amount of all charges, costs and expenses (including but not limited to legal fees) reasonably incurred by it in connection with the negotiation, preparation, printing and execution of this Agreement, the Security Amendment Agreement and any other documents referred to in this Agreement.
| 6. | MISCELLANEOUS |
| 6.1 | Incorporation of terms |
The provisions of article 10 (Law and Jurisdiction, Miscellaneous) and article 11 (Final Clauses) of the Original Finance Contract shall be incorporated into this Agreement as if set out in full in this Agreement and as if references in those clauses to “this Agreement” are references to this Agreement.
| 6.2 | Counterparts |
This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
This Agreement has been entered into on the date stated at the beginning of this Agreement.
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SCHEDULE 1 CONDITIONS
PRECEDENT
| 1.1 | The duly executed Amended Security Agreement, together with a corresponding Form No. 10 in the form required for filing with the Israeli Registrar of Companies. |
| 1.2 | Confirmation, together with evidence of such confirmation in form and substance satisfactory to the Bank, of the due filing and registration of the Amended Security Agreement with the Israeli Registrar of Companies, within 21 days of its execution. |
| 1.3 | A copy of the constitutional documents of the Borrower or a certificate of an authorised signatory of the Borrower certifying that the constitutional documents previously delivered to the Bank for the purposes of the Original Finance Contract have not been amended and remain in full force and effect. |
| 1.4 | A copy of a resolution of the board of directors of the Borrower: |
| (a) | approving the terms of, and the transactions contemplated by, this Agreement and the Security Amendment Agreement and resolving that it execute this Agreement and the Security Amendment Agreement; |
| (b) | authorising a specified person or persons to execute this Agreement and the Security Amendment Agreement on its behalf; and |
| (c) | confirming that all authorisations and corporate approvals have been obtained as required under the Israeli Companies Law, including in particular under Chapter 3 and Chapter 5 of the Israeli Companies Law. |
| 1.5 | A specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above. |
| 1.6 | A certificate of an authorised signatory of the Borrower certifying that each copy document relating to it specified in this Schedule 1 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement. |
| 1.7 | A certificate from the Borrower (signed by a director) confirming that the amount to be borrowed, guaranteed or secured, as appropriate, of the Credit would not cause any limit to be exceeded for borrowing, guaranteeing, securing or other similar limit, which is binding on the Borrower. |
| 1.8 | Evidence of payment of: |
| (a) | all the fees and expenses as required under the Finance Documents; |
| (b) | any amendment fee payable to the Bank by the Borrower in connection with the preparation, negotiation and execution of this Agreement; and |
| (c) | USD 900,000 (nine hundred thousand US Dollars) as an upfront payment to the Bank from the Borrower to be made within 5 (five) Business Days from the date of this Agreement, and in any case on or prior to the Effective Date. |
| 1.9 | A copy of any other document, authorisation, opinion or assurance which the Bank has notified the Borrower is necessary or desirable in connection with the entry into and performance of, and the transactions contemplated by, the Finance Documents (as amended) or the validity and enforceability of the same. |
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SCHEDULE 2
AMENDMENTS TO THE ORIGINAL FINANCE CONTRACT
PIK Interest
| 1. | The following new definitions shall be added to article 1.2 (Definitions) as follows: “PIK Interest” has the meaning given to that term in Article 4.3 (PIK Interest). “PIK Margin” means seven per cent. (7%) per annum. |
| 2. | Article 4.2 (Interest on overdue sums) shall be deleted in its entirety and replaced with the following: |
| 4.2 | Interest on overdue sums |
Without prejudice to Article 9 (Events of Default), if the Borrower fails to pay any amount payable by it under the Contract on its due date, interest shall accrue on any such overdue amount from the due date to the date of actual payment at an annual rate equal to the higher of: (a) the applicable PIK Margin plus 2% (200 basis points); or (b) EURIBOR plus 2% (200 basis points), and shall be payable in accordance with the demand of the Bank. For the purpose of determining EURIBOR in relation to this Article 4.2, the relevant periods within the meaning of Schedule B shall be successive periods of one month commencing on the due date.
If the overdue sum is in a currency other than the currency of the Loan, the relevant interbank rate that is generally retained by the Bank for transactions in that currency plus 2% (200 basis points) shall apply, calculated in accordance with the market practice for such rate.
| 3. | The following new article 4.3 (PIK Interest) shall be added: |
| 4.3 | PIK Interest |
| 4.3.1 | Interest (“PIK Interest”) shall accrue on the outstanding balance of any Tranche at a rate equal to the PIK Margin from (and including) 1 January 2022. |
| 4.3.2 | PIK Interest shall be calculated on the basis of Article 6.1 (Day count convention). Such interest shall be capitalised annually on 1 January and added to the outstanding principal amount of the Loan. Any such accrued interest shall, after being so capitalised, be treated as part of the principal amount of that Loan, shall bear all interest in accordance with this Article 4.3 and shall be payable on the Maturity Date of such Tranche or, where a Tranche is prepaid, on the Prepayment Date. |
| 4. | Article 5.2.3 {Prepayment mechanics) shall be deleted in its entirety and replaced with the following: |
| 5.2.3 | Prepayment mechanics |
Upon presentation by the Borrower to the Bank of a Prepayment Request, the Bank shall issue a Prepayment Notice to the Borrower, not later than 15 fifteen) days prior to the Prepayment Date. The Prepayment Notice shall specify the Prepayment Amount, the accrued interest due thereon, the Prepayment Indemnity payable and the deadline by which the Borrower may accept the Prepayment Notice. The Borrower must accept the Prepayment Notice no later than such deadline as a condition to prepayment.
The Borrower shall make a prepayment in accordance with the Prepayment Notice and shall accompany the prepayment by the payment of accrued interest under article 4.3 (PIK Interest) and the Prepayment Indemnity, as specified in the Prepayment Notice, and shall identify the Contract Number in the prepayment transfer.
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| 5. | Article 6.1 (Day Count Convention) shall be deleted in its entirety and replaced with the following: |
6.1 Day count convention
Any amount due under this Contract and calculated in respect of a fraction of a year shall be determined based on, in respect of interest and indemnities due under a Tranche and the PIK Interest, a year of three hundred and sixty (360) days and a month of thirty (30) days.
| 6. | Article 6.2.2 shall be deleted in its entirety and replaced with the following: |
6.2.2 Each sum payable by the Borrower under this Contract shall be paid to the following account:
| Bank: City: | European Investment Bank | |
| Account number: | Luxembourg | |
| LU92 9980 0000 0000 0001 | ||
| SWIFT Code/BIC: | BEILL ULLXXX | |
| Remark: | /RTor direct via TARGET2 (DVT), |
or such other account notified by the Bank to the Borrower.
Repayment
| 7. | The following new definition “Equity Sale Proceeds” shall be added to article 1.2 (Definitions) as follows: |
“Equity Sale Proceeds” means the aggregate cash proceeds received by the Borrower in connection with any and all issuance, sale or other disposition to a thirdparty/ies of any of the equity interests, options, warrants or other rights to acquire similar interests in the Borrower (excluding cash proceeds from the exercise of options or warrants issued to directors, officers, employees or consultants of the Borrower pursuant to an equity plan), after deducting:
| (a) | any reasonable and documented expenses which are incurred by the Borrower to such third party purchasers or otherwise in connection with the offering, including, without limitation, underwriter’s fees, placement agent fees, finders fees and expenses and other out-of-pocket third party costs such as fees to the Borrower’s legal advisers, accountants and transfer agent; and |
| (b) | any Tax incurred and required to be paid by the Borrower in connection with such issuance, sale or other disposition, as reasonably determined by the Borrower. |
| 8. | The definition of “Maturity Date” under article 1.2 (Definitions) shall be deleted in its entirety and replaced with the following: |
“Maturity Date” means, in respect of each Tranche, 31 December 2027.
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| 9. | Article 5.1 (Normal repayment) shall be deleted in its entirety and replaced with the following: |
| 5.1 | Normal repayment |
| 5.1.1 | The Borrower shall repay each Tranche, together with all other amounts outstanding under this Contract in relation to that Tranche (other than Variable Remuneration, which will continue to be payable in accordance with Article 4.1), in a single instalment on the Maturity Date (which, for the avoidance of doubt, will result in all Tranches having the same maturity and being effectively merged into a single outstanding amount). |
For the avoidance of doubt, no Prepayment Indemnity shall be payable in respect of normal repayments under this Article 5.1.
| 5.1.3 | The Borrower shall apply ten per cent. (10%) of all Equity Sale Proceeds raised on or after the Effective Date in repayment of the Loan in accordance with this Contract. The Borrower shall notify the EIB in writing of any expected Equity Sale Proceeds, specifying the date on which it intends to pay to the EIB ten per cent. (10%) of such Equity Sale Proceeds as required under this Article (such date to fall no less than ten (10) Business Days from the date of such notification and not more than fourteen (14) Business Days from the date on which the Equity Sale Proceeds are credited to the Borrower’s bank account). |
Prepayment Indemnity
| 10. | The definition of “Prepayment Indemnity” under article 1.2 (Definitions) shall be deleted in its entirety and replaced with the following: |
“Prepayment Indemnity” means in respect of any Prepayment Amount, an amount to be paid in addition to such Prepayment Amount and equal to the greater of:
(a) the amount, as determined by the Bank, required in order for the Bank to realise an internal rate of return on the relevant Prepayment Amount of twenty percent. (20%), as calculated from (and including) 1 January 2022 up to the relevant Prepayment Date; and
(b) the Prepayment Amount.
Variable Remuneration
| 11. | The definition of “Net Sales” under article 1.2 (Definitions) shall be deleted in its entirety and replaced with the following: |
“Net Sales” means the total amount paid or payable to the Borrower or the Partner for any commercial sale of product or service made by the Borrower or the Partner (as applicable), across all indications and in all countries, provided that, with respect to sales which are not at arms-length and either are not in the ordinary course of business or according to then current market conditions for such a sale, this definition shall mean the total amount that would have been due in an arms-length sale made in the ordinary course of business and according to the then current market conditions for such sale, in all cases after deduction of:
| (a) | excises, customs, duties and sales taxes (including value added taxes), or other similar governmental charges to the extent applicable to such sale and included in the invoice in respect of such sale; |
| (b) | normal and customary trade, cash and quantity discounts, rebates, chargebacks, free samples, credits or allowances, if any, actually granted or imposed on account of such sale, or on account ofprice adjustments, including retroactive price adjustments or reductions imposed by public authorities, recalls, refunds, rejections or returns in respect of such sale; |
| (c) | bad debts, provided that they are recorded as such in the books of the Borrower or the Partner (as relevant) in accordance with acceptable accounting principles and practices; and |
| (d) | normal and customary transportation and delivery charges actually incurred, including shipping insurance, to the extent that such items are separately itemised in the invoice. |
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| 12. | Article 4.1 (Variable Remuneration) shall be deleted in its entirety and replaced with the following: |
4.1 Variable Remuneration
The Bank and the Borrower agree that in consideration of the Bank making the Credit available to the Borrower in accordance with this Contract, the Borrower shall pay to the Bank each year (starting with the Financial Year in which the cumulative Net Sales for that and all previous Financial Years exceed EUR 5,000,000 (five million Euros)), on the Payment Date falling after the publication of the Annual Financial Statements, an amount equal to three per cent. (3%) of any Annual Vaccine Revenues as reported in the relevant Annual Financial Statements (the “Variable Remuneration”), provided that aggregate Variable Remuneration payable hereunder in one or more Financial Years shall not exceed an amount equal to the greater of:
| 4.1.1 | an amount enabling the Bank to realise a Cash-on-Cash Multiple of 2.8; and |
| 4.1.2 | an amount enabling the Bank to realise an internal rate of return on the Loan of twenty per cent. (20%), which is to be calculated from (and including) 1 January 2022 up to the relevant Payment Date, |
and provided that the obligation on the Borrower to pay Variable Remuneration to the Bank will cease to apply if:
| (i) | the Borrower prepays the Loan in full by payment of the Prepayment Amount together with a Prepayment Indemnity in accordance with Article 5; or |
| (ii) | following payment of amounts due on the Maturity Date in accordance with this Contract, the Borrower pays and discharges all of its outstanding liabilities under or in connection with this Contract, together with a payment of a Prepayment Indemnity in respect of such liabilities. |
For the avoidance of doubt, if after a period of thirteen (13) Financial Years of the Borrower commencing with the Financial Year in which the Borrower is first required to pay Variable Remuneration to the Bank, the Variable Remuneration received by the Bank has not led to the Bank having reached a Cash-on-Cash Multiple of 2.8, the Variable Remuneration will continue to be due until the Cash-on-Cash Multiple of 2.8 has been reached.
Notices
| 13. | Article 11.1 (Notices to either party) shall be deleted in its entirety and replaced with the following: |
11.1 Addresses
The address and electronic mail address (and the department for whose attention the communication is to be made) of each Party for any communication to be made or document to be delivered under or in connection with this Contract is:
| For the Bank | Attention: OPS/ENPST/3-GC&IF | |
| 100 boulevard Konrad | ||
| Adenauer L-2950 | ||
| Luxembourg | ||
| Email address: innovfinidff@eib.org | ||
| For the Borrower | Attention: Department/Division | |
BiondVax Pharmaceuticals Ltd 14 Einstein Street 4th Floor, Weizmann Science Park, Ness-Ziona, 74036, Israel | ||
| Email address: Info@biondvax.com |
The Bank and the Borrower shall promptly notify the other Party in writing of any change in their respective communication details.
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| 14. | Article 11.2 (Form of notice) shall be deleted in its entirety and replaced with the following: |
| 11.2 | Form of notice |
| 11.2.1 | Any notice or other communication given under this Contract must be in writing and, unless otherwise stated, may be made by letter or electronic mail. |
| 11.2.2 | Notices and other communications for which fixed periods are laid down in this Contract or which themselves fix periods binding on the addressee, may be made by hand delivery, registered letter or by electronic mail. Such notices and communications shall be deemed to have been received by the other Party: |
| (a) | on the date of delivery in relation to a hand-delivered or registered letter; or |
| (b) | in the case of any electronic mail only when such electronic mail is actually received in readable form and only if it is addressed in such a manner as the other Party shall specify for this purpose. |
| 11.2.3 | Any notice provided by the Borrower to the Bank by electronic mail shall: |
| (a) | mention the Contract Number in the subject line; and |
| (b) | be in the form of a non-editable electronic image (pdf, tif or other common non editable file format agreed between the Parties) of the notice signed by an Authorised Signatory with individual representation right or by two or more Authorised Signatories with joint representation right of the Borrower as appropriate, attached to the electronic mail. |
| 11.2.4 | Notices issued by the Borrower pursuant to any provision of this Contract shall, where required by the Bank, be delivered to the Bank together with satisfactory evidence of the authority of the person or persons authorised to sign such notice on behalf of the Borrower and the authenticated specimen signature of such person or persons. |
| 11.2.5 | Without affecting the validity of electronic mail notices or communication made in accordance with this Article 11 (Final Clauses), the following notices, communications and documents shall also be sent by registered letter to the relevant Party at the latest on the immediately following Business Day: (a) Disbursement Acceptance; |
| (b) | any notices and communication in respect of the deferment, cancellation and suspension of a disbursement of any Tranche, Prepayment Request, Prepayment Notice, Event of Default or any demand for prepayment; and |
| (c) | any other notice, communication or document required by the Bank. |
| 11.2.6 | The Parties agree that any above communication (including via electronic mail) is an accepted form of communication, shall constitute admissible evidence in court and shall have the same evidential value as an agreement under hand. |
EURIBOR
| 15. | Schedule B (Definition of EURIBOR) shall be deleted in its entirety and replaced with the following: |
“EURIBOR” means:
| (a) | in respect of a relevant period of less than one month, the Screen Rate (as defined below) for a term of one month; |
| (b) | in respect of a relevant period of one or more months for which a Screen Rate is available, the applicable Screen Rate for a term for the corresponding number of months; and |
| (c) | in respect of a relevant period of more than one month for which a Screen Rate is not available, the rate resulting from a linear interpolation by reference to two Screen Rates, one of which is applicable for a period next shorter and the other for a period next longer than the length of the relevant period, |
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(the period for which the rate is taken or from which the rates are interpolated being the “Representative Period”).
For the purposes of paragraphs (a) to (c) above:
| (i) | “available” means the rates, for given maturities, that are calculated and published by Global Rate Set Systems Ltd (GRSS), or such other service provider selected by the European Money Markets Institute (EA4MI), or any successor to that function of EA4MI, as determined by the Bank; and |
| (ii) | “Screen Rate” means the rate of interest for deposits in EUR for the relevant period as published at 11:00 a.m., Brussels time, or at a later time acceptable to the Bank on the day (the “Reset Date”) which falls 2 (two) Relevant Business Days prior to the first day of the relevant period, on Reuters page EURIBOR 01 or its successor page or, failing which, by any other means ofpublication chosen for this purpose by the Bank. |
If such Screen Rate is not so published, the Bank shall request the principal offices of four major banks in the euro-zone, selected by the Bank, to quote the rate at which EUR deposits in a comparable amount are offered by each of them, as at approximately 11:00 a.m., Brussels time on the Reset Date to prime banks in the euro-zone interbank market for a period equal to the Representative Period. If at least 2 (two) quotations are provided, the rate for that Reset Date will be the arithmetic mean of the quotations. If no sufficient quotations are provided as requested, the rate for that Reset Date will be the arithmetic mean of the rates quoted by major banks in the euro-zone, selected by the Bank, at approximately 11:00 a.m., Brussels time, on the day which falls 2 (two) Relevant Business Days after the Reset Date, for loans in EUR in a comparable amount to leading European banks for a period equal to the Representative Period. The Bank shall inform the Borrower without delay of the quotations received by the Bank.
All percentages resulting from any calculations referred to in this Schedule will be rounded, if necessary, to the nearest one thousandth of a percentage point, with halves being rounded up.
If any of the foregoing provisions becomes inconsistent with provisions adopted under the aegis of EA4MI (or any successor to that function of EA4MI as determined by the Bank) in respect of EURIBOR, the Bank may by notice to the Borrower amend the provision to bring it into line with such other provisions.
If the Screen Rate becomes permanently unavailable, the EURIBOR replacement rate will be the rate (inclusive of any spreads or adjustments) formally recommended by (i) the working group on euro risk-free rates established by the European Central Bank (ECB), the Financial Services and Markets Authority (FSMA), the European Securities and Markets Authority (ESMA) and the European Commission, or (ii) the European Money Market Institute, as the administrator of EURIBOR, or (Hi) the competent authority responsible under Regulation (EU) 2016/1011 for supervising the European Money Market Institute, as the administrator of the EURIBOR, or (iv) the national competent authorities designated under Regulation (EU) 2016/1011, or (v) the European Central Bank.
If no Screen Rate and/or the EURIBOR replacement rate is available as provided above, EURIBOR shall be the rate (expressed as a percentage rate per annum) which is determined by the Bank to be the all-inclusive cost to the Bank for the funding of the relevant Tranche based upon the then applicable internally generated Bank reference rate or an alternative rate determination method reasonably determined by the Bank.
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SIGNATURES
For and on behalf of
EUROPEAN INVESTMENT BANK
| /s/ Maria-Teresa MASSAAD | /s/ Oksana VLASENKO | |
Name: Maria-Teresa MASSAAD Title: Head of Division |
Name: Oksana VLASENKO Title: Investment Officer |
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For and on behalf of
BIONDVAX PHARMACEUTICALS LTD.
| /s/ Amir Reichman | |
Name: Amir Reichman Title: Chief Executive Officer |
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