SuperCom Ltd F-1/A, filed Aug 1, 2023
SuperCom Ltd (SPCB)
F-1/A
2023-08-01
View Original
Added on
October 19, 2026
As filed with the Securities and Exchange Commission on July 31, 2023
Registration No. 333-273291
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM F-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
SUPERCOM LTD.
(Exact name of Registrant as specified in its charter)
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Israel
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3674
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Not Applicable
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(State or other jurisdiction of
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(Primary Standard Industrial
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(I.R.S. Employer
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incorporation or organization)
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Classification Code Number)
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Identification Number)
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3 Rothschild Street
Tel Aviv, 6688106, Israel
+972-9-8890850 (phone); +972-9-8890820 (fax)
Tel Aviv, 6688106, Israel
+972-9-8890850 (phone); +972-9-8890820 (fax)
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
SuperCom, Inc.
160 Franklin Street, Suite 310
Oakland, CA 94607
(510) 505-2600 (phone)
(510) 505-2601 (fax)
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Sasha Ablovatskiy, Esq.
Jonathan Shechter, Esq.
Foley Shechter Ablovatskiy LLP
1180 Avenue of the Americas, 8th Fl.
New York, New York 10036
Telephone: (212) 335-0466
Foley Shechter Ablovatskiy LLP
1180 Avenue of the Americas, 8th Fl.
New York, New York 10036
Telephone: (212) 335-0466
Approximate date of commencement of proposed sale to the public: From time to time 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 of 1933, 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 of 1933, 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 of 1933, 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 of 1933, 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 of 1933.
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 or until the Registration Statement shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange
Commission is effective. This preliminary prospectus is not an offer to sell these securities, nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS, SUBJECT TO COMPLETION, DATED JULY 31, 2023
SUPERCOM LTD.
Up to 8,000,000 Units
consisting of
8,000,000 Ordinary Shares or 8,000,000 Pre-Funded Warrants to Purchase 8,000,000 Ordinary Shares
and 8,000,000 Warrants to Purchase 8,000,000 Ordinary Shares
Up to 8,000,000 Ordinary Shares Underlying the Pre-Funded Warrants
Up to 8,000,000 Ordinary Shares Underlying the Warrants
We are offering on a best efforts basis up to 8,000,000 units (the “Units”), each consisting of one ordinary share of SuperCom Ltd., a company organized under the laws of the State of Israel (the
“Company,” “we,” “us” or “our”), with a par value NIS 2.5 per share (the “ordinary shares”), along with one warrant to subscribe for one ordinary share (the “Warrants”) at an assumed public offering price of $1.00 per Unit, equal to the closing
price of the ordinary shares on The Nasdaq Capital Market (“Nasdaq”) on July 28, 2023.
The actual public offering price per Unit will be determined between us, the Placement Agent (as defined below) and the investors in the offering, and may be at a discount to the
current market price of the ordinary shares (provided that, in any event, the price per Unit shall not less than the nominal value of such share, being NIS 2.5 per share as of the date hereof). Therefore, the assumed public offering price used
throughout this prospectus may not be indicative of the final public offering price.
Each Warrant will be immediately exercisable for one ordinary share at an exercise price of $______ per Unit (which shall be equal to ______% of the public offering price of each
ordinary share sold in this offering, and in any event, not less than the nominal value of such share, being NIS 2.5 per share as of the date hereof) and expire five years after the issuance date. We are also registering the ordinary shares
issuable from time to time upon exercise of the Warrants.
We are also offering to each purchaser of Units that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% of outstanding ordinary shares immediately
following the consummation of this offering the opportunity to acquire one pre-funded warrant (in lieu of one ordinary share) (the “Pre-Funded Warrants”) and one Warrant. A holder of Pre-Funded Warrants will not have the right to exercise any
portion of its Pre-Funded Warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the holder, such limit may be increased to up to 9.99%) of the number of ordinary shares outstanding
immediately after giving effect to such exercise. Each Pre-Funded Warrant will be exercisable for one ordinary share. The pre-funded exercise price for each Pre-Funded Warrant included in each Unit will be equal to the price per Unit including one
ordinary share, minus $0.00001, and the remaining non pre-funded exercise price of each Pre-Funded Warrant will equal $0.00001 per ordinary share. The Pre-Funded Warrants will be immediately exercisable (subject to the beneficial ownership cap) and
may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. For each Unit including a Pre-Funded Warrant that is issued (without regard to any limitation on exercise set forth therein), the number of Units including an
ordinary share we are offering will be decreased on a one-for-one basis. The ordinary shares and Pre-Funded Warrants, if any, can each be subscribed for and/ or acquired (as applicable) in this offering only with the accompanying Warrant as part of
a Unit, but the components of the Units will immediately separate upon issuance. See “Description of Securities” in this prospectus for more information.
Our ordinary shares are listed on The NASDAQ Capital Market under the symbol “SPCB.” On July 28, 2023, the last reported sale price of our ordinary shares
on The Nasdaq Capital Market was $1.00 per share.
There is no established trading market for the Pre-Funded Warrants or the Warrants, and we do not expect an active trading market to develop. We do not
intend to list the Pre-Funded Warrants or the Warrants on any securities exchange or other trading market. Without an active trading market, the liquidity of these securities will be limited.
You should read this prospectus, together with additional information described under the headings “Incorporation of Certain Documents by Reference” and “Where You Can Find
Additional Information,” carefully before you invest in any of our securities.
Investing in our securities involves a high degree of risk. Before buying any of our securities, you should carefully read “Risk Factors” on page 7 of this
prospectus, and under similar headings in the other documents that are incorporated by reference into this prospectus.
You should rely only on the information contained in this prospectus or any prospectus supplement or amendment hereto. We have not
authorized anyone to provide you with different information.
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Per Unit(1)
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Total
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Public Offering Price
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$
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$
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Placement Agent fees(2)(3)
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$
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$
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Proceeds, before expenses, to us
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$
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$
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(1)
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Units consist of one ordinary share or Pre-Funded Warrant and one Warrant.
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(2)
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The Placement Agent fee shall equal 7% of the public offering price of the securities sold by us in this offering. Does not include certain out-of-pocket expenses
of the Placement Agent that are reimbursable by us.
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(3)
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We shall also reimburse the Placement Agent for certain offering related expenses in addition to the placement agent fees described above. See “Plan of
Distribution” for a description of compensation payable to the Placement Agent.
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We have engaged Maxim Group LLC (the “Placement Agent”) as our exclusive Placement Agent to use its reasonable best efforts to solicit offers to purchase our securities in this offering. The
Placement Agent has no obligation to purchase any of the securities from us or to arrange for the purchase or sale of any specific number or dollar amount of the securities. There is no arrangement for funds to be received in escrow, trust or
similar arrangement. There is no minimum offering requirement as a condition of closing of this offering. We will bear all costs associated with the offering.
We expect that the offering will end two trading days after we first enter into a securities purchase agreement relating to the offering, the ordinary shares will settle delivery
versus payment (“DVP”)/receipt versus payment (“RVP”) and the Warrants and Pre-Funded Warrants will be issued in certificated form. Accordingly, we and the Placement Agent have not made any arrangements to place investor funds in an escrow account
or trust account since the Placement Agent will not receive investor funds in connection with the sale and/or issuance (as applicable) of the securities offered hereunder.
We have agreed to pay the Placement Agent the placement agent fee set forth in the table above and to provide certain other compensation to the Placement Agent. See “Plan of Distribution” beginning on page 24 of this prospectus for more information regarding these arrangements.
We expect to deliver the ordinary shares and Warrants, or Pre-Funded Warrants and Warrants, constituting the Units, against payment in New York, New York on or about _______, 2023.
Neither the Securities and Exchange Commission, the Israeli Securities Authority nor any state securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is _______, 2023
Maxim Group LLC
TABLE OF CONTENTS
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Description
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Page
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1
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2
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5
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7
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9
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10
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10
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11
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12
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15
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28
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29
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30
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You should rely only on the information contained in or incorporated by reference into this prospectus. Neither we nor the Selling Stockholder have authorized, and no underwriter
is expected to authorize, anyone to provide you with information that is different. This prospectus is not an offer to sell or solicitation of an offer to buy these securities in any circumstances under which the offer or solicitation is unlawful.
The Selling Stockholder is offering to sell, and seeking offers to buy, our securities only in jurisdictions where offers and sales are permitted. You should not assume that the information we have included in this prospectus is accurate as of any
date other than the date of this prospectus, or that any information we have incorporated by reference is accurate as of any date other than the date of the document incorporated by reference, regardless of the time of delivery of this prospectus
or of any of our securities. Our business, financial condition, results of operations, and prospects may have changed since that date.
We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to the registration statement of which this prospectus
is a part were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties thereto, and should not be deemed to be a representation, warranty or covenant to you.
Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
The SuperCom design, logo and the mark “SuperCom” are the property of SuperCom. This prospectus contains additional trade names, trademarks and service marks of ours and of other
companies. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.
In this prospectus, unless the context suggests otherwise, references to “SuperCom,” the “Company,” “we,” “us” and “our” refer to SuperCom Ltd., a company organized under the
laws of the State of Israel.
i
This prospectus, including the information incorporated by reference into this prospectus, contains, and any prospectus supplement may include forward-looking statements within
the meaning of Private Securities Litigation Reform Act of 1995. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms including “anticipates,” “believes,” “intends,”
“estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “could,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current
views with respect to future events and are based on assumptions and subject to risks and uncertainties. Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include,
but are not limited to:
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if we are unable to manage our revenue growth, our business, financial results and stock price could suffer;
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our dependence on orders from large customers for a substantial portion of our revenues;
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the impact of other companies and technologies that compete with us within our industry;
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any acquisitions that we have completed, or may complete in the future, may not perform as planned and could disrupt our business and harm our financial condition and operations;
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our ability to generate sufficient cash from operations and potential need to obtain additional financing or reduce our level of expenditure;
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changing technology, requirements, standards and products in the market of our products;
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our ability to enter into contracts with governments, as well as state and local governmental agencies and municipalities;
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our dependence on third-party representatives, resellers and distributors could result in marketing and distribution delays;
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if our technology and solutions cease to be adopted and used by government and public and private organizations;
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our ability to develop and sustain our position as a provider of e-Gov, IoT and Connectivity, and Cyber Security, solutions and services and earn high margins from our technology;
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our operating results may be adversely affected by unfavorable economic and market conditions and the uncertain geopolitical environment;
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our efforts to expand our international operations and maintain or increase our future international sales;
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our exposure to risks in operating in foreign markets;
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fluctuation in our financial and operating results;
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our reliance on third party technologies and components for the development of some of our products;
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delays in deliveries from our suppliers, defects in goods or components supplied by our vendors, or delays in projects that are performed by our subcontractors;
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significant differences between forecasted demands and actual orders received;
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breaches of network or information technology security, natural disasters or terrorist attacks;
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ability by third parties to obtain access to our proprietary information or could independently develop similar technologies;
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assertion by third parties that we are infringing their intellectual property rights, and IP litigation;
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our reliance on the services of certain of our executive officers and key personnel;
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our ability to attract, hire and retain qualified technical personnel;
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our products being subject to government regulation of radio frequency technology;
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war, terrorism, other acts of violence or natural or man-made disasters, including a global pandemic;
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the impact of the political and security situation in Israel and in the U.S. on our business;
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impact of inflation and currency fluctuations;
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impact of the obligation of our management or key personnel to perform military service in Israel;
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our ability to enforce covenants not-to-compete under current Israeli law; and
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our company being subject to claims for remuneration or royalties for assigned service invention rights by our employees.
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We caution you to carefully consider these risks and not to place undue reliance on our forward-looking statements. Forward-looking statements should not be read as a guarantee
of future performance or results, and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are
made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from what is expressed in or suggested by the
forward-looking statements.
Forward-looking statements speak only as of the date they are made. Unless we are required to do so under U.S. federal securities laws or other applicable laws, we do not assume
an obligation to or intend to update or revise any forward-looking statements. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking
statements. We caution you not to give undue weight to such projections, assumptions and estimates.
1
This summary provides an overview of selected information contained elsewhere or incorporated by reference in this prospectus and does not contain all
of the information you should consider before investing in our securities. You should carefully read this prospectus and the registration statement of which this prospectus is a part in their entirety before investing in our securities,
including the information discussed under “Risk Factors” and our financial statements and notes thereto that are incorporated by reference in this prospectus. Unless otherwise indicated herein, the terms “SuperCom,” the “Company,” “we,” “us”
“our” refer to SuperCom Ltd.
Our Company
Founded in 1988, we are a global provider of traditional and digital identity solutions, advanced IoT and connectivity solutions, and cyber security products and solutions,
to governments and private and public organizations throughout the world.
We are comprised of three main Strategic Business Units (SBU): e-Gov, IoT and Connectivity, and Cyber Security:
e-Gov
Through our proprietary e-Government platforms and innovative solutions for traditional and biometrics enrollment, personalization, issuance and border control services, we
have helped governments and national agencies design and issue secured multi-identification, or Multi-ID, documents and robust digital identity solutions to their citizens, visitors and Lands.
We have focused on expanding our activities in the traditional identification, or ID, and electronic identification, or e-Gov, market, including the design, development and
marketing of identification technologies and solutions to governments in Europe, Asia, America and Africa using our e-Government platforms. Our activities include: (i) utilizing paper secured by different levels of security patterns (UV,
holograms, etc.); and (ii) electronic identification secured by biometric data, principally in connection with the issuance of national Multi-ID documents (IDs, passports, driver’s licenses, vehicle permits, and visas, Secure Land
Certificated) border control applications and Land Information System (LIS).
IoT and Connectivity
Our IoT products and solutions reliably identify, track and monitor people or objects in real time, enabling our customers to detect unauthorized movement of people,
vehicles and other monitored objects. We provide all-in-one field proven IoT suite, accompanied with services specifically tailored to meet the requirements of an IoT solutions. Our proprietary IoT suite of hybrid hardware, connectivity and
software components are the foundation of these solutions and services. Our IoT division has primarily focused on growing the following markets: (i) public safety; (ii) healthcare and homecare; (iii) Smart Cities; (iv) Smart Campus and (iv)
transportation.
During 2006, we identified the growing electronic tracking and monitoring vertical markets for public safety, real time healthcare and homecare, and transportation
management. We have developed the PureRF Hybrid suit of wrist devices, connectivity, and controlling software, from 2012 we have developed the next generation IoT suite of devices, connectivity and Monitoring software; the PureSecurity Hybrid
Suite of wrist band, tags, beacons, PureCom, Pure Monitors, PureTrack and other components.
On January 1, 2016 we acquired Leaders in Community Alternatives, Inc., or LCA. LCA is a California based, private criminal justice organization, providing community-based
services and electronic monitoring programs to government agencies in the U.S. for more than 25 years. LCA offers a broad range of competitive solutions for governmental institutions across the U.S. in addressing realignment strategies and
plans.
Connectivity
In 2016, as part of our strategy to enhance and broaden our IoT connectivity products and solutions offerings for public safety, enterprises,
hospitality and smart cities markets, on May 18, 2016, we acquired Alvarion Technologies Ltd., or Alvarion. Alvarion designs solutions for carrier wi-fi, enterprise connectivity, smart city, smart hospitality, connected campuses and connected
events that are both complete and heterogeneous to ensure ease-of-use and optimize operational efficiency. Carriers, local governments and hospitality sectors worldwide deploy Alvarion’s intelligent wi-fi networks to enhance productivity and
performance, as well as its legacy backhaul services and products.
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Cyber Security
During 2015, we identified the cyber security market as a very fast growing market where we believe that SuperCom has major advantages due to synergic technologies and
shared customer base to our e-Gov, IoT and connectivity SBUs. In 2015, we acquired Prevision Ltd., or Prevision, a company with a strong presence in the market and a broad range of competitive and well-known cyber security services. During
the first quarter of 2016, we acquired Safend Ltd, or Safend, an international provider of cutting edge endpoint data protection guarding against corporate data loss and theft through content discovery and inspection, encryption
methodologies, and comprehensive device and port control. Safend maps sensitive information and controls data flow through email, web, external devices and additional channels.
Both acquisitions significantly expanded the breadth of our cyber security capabilities globally, while providing us with outstanding market and technological experts and
over 3,000 customers in the United States, Europe, and Asia, and more than three million software license seats deployed by multinational enterprises, government agencies and small to mid-size companies around the globe, together with leading
data and cyber security platforms and technologies.
Statements made in this Registration Statement on Form F-1 (this “Registration Statement”) concerning the contents of any contract, agreement or other document are
summaries of such contracts, agreements or documents and are not complete descriptions of all their terms. If we filed any of these documents as an exhibit to this Registration Statement or to any previous filing with SEC, you may read the
document itself for a complete recitation of its terms.
In this Registration Statement, unless otherwise specified or unless the context otherwise requires, all references to “$” or “dollars” are to U.S. dollars and all references to “NIS” are to
New Israeli Shekels. Except as otherwise indicated, the financial statements of and information regarding SuperCom are presented in U.S. dollars in accordance with generally acceptable accounting principles in the United States (“U.S.
GAAP”). The representative rate exchange rate between the NIS and the dollar as published by the Bank of Israel and effective on July 28, 2023, was NIS 3.714 per $1.00.
Recent Developments
Results for the Six Months Ended June 30, 2023 (unaudited)
Set forth below are certain unaudited financial results as of June 30, 2023 and for the six-month periods ended June 30, 2023 and 2022, which in the opinion of our
management, includes all adjustments necessary to present fairly our results of operations and financial condition at the date and for the periods presented. Our historical results are not necessarily indicative of the results of operations
that you should expect for the year ending December 31, 2023 or any other period. We maintain our consolidated financial statements in accordance with U.S. GAAP.
This financial information should be read in conjunction with our financial results as of June 30, 2023 and for the six-month periods ended June 30, 2023 and 2022,
which have been made publicly available by us in our press release, dated July 31, 2023, including the notes thereto and the notes below.
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For the Six-Month Period
Ended June 30, |
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2023
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2022
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(U.S. dollars in thousands, except for per share data)
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Consolidated income statements data:
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Revenues
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14,124
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6,264
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Cost of revenues
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(10,276
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(3,648
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Gross profit
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3,848
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2,616
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Operating expenses:
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Research and development
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1,662
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1,792
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Selling and marketing
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1,128
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1,463
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General and administrative
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2,374
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2,488
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Other expense (Income)
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405
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Total operating expenses
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5,569
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5,743
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Operating loss
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(1,721
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(3,127
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Financial expenses, net
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869
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2,032
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Loss before income tax
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(2,590
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(5,159
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Income tax expense
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-
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-
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Net loss for the period
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(2,590
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(5,159
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As of June 30, 2023
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Actual
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As Adjusted(1)
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(U.S. dollars in thousands)
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Consolidated balance sheet data:
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Cash, cash equivalents and restricted cash
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1,521
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3,919
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Working capital(2)
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21,196
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21,948
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Total assets
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40,494
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42,584
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Total shareholders’ equity
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3,467
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3,725
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As adjusted amounts give effect to the issuance and sale 8,000,000 Units, at an assumed public offering price of $1.00 per Unit, equal to the closing price of the ordinary shares on Nasdaq on July 28, 2023, after deducting
estimated underwriting discounts and commissions and offering expenses payable by us, as set forth under “Use of Proceeds.” See “Use of Proceeds” and “Capitalization.”
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Working capital is defined as current assets less current liabilities.
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3
Summary of Risks
An investment in our securities involves a high degree of risk. Our business, financial condition or results of operations could be adversely affected by any of these
risks. You should carefully consider the risks described more fully elsewhere in this prospectus and in the information contained or incorporated by reference in this prospectus, including in the section entitled “Risk Factors”, and
include, but are not limited to, the following:
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if we are unable to manage our revenue growth, our business, financial results and stock price could suffer;
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our dependence on orders from large customers for a substantial portion of our revenues;
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the impact of other companies and technologies that compete with us within our industry;
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any acquisitions that we have completed, or may complete in the future, may not perform as planned and could disrupt our business and harm our financial condition and operations;
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our ability to generate sufficient cash from operations and potential need to obtain additional financing or reduce our level of expenditure;
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changing technology, requirements, standards and products in the market of our products;
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our ability to enter into contracts with governments, as well as state and local governmental agencies and municipalities;
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our dependence on third-party representatives, resellers and distributors could result in marketing and distribution delays;
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if our technology and solutions cease to be adopted and used by government and public and private organizations;
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our ability to develop and sustain our position as a provider of e-Gov, IoT and Connectivity, and Cyber Security, solutions and services and earn high margins from our technology;
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our operating results may be adversely affected by unfavorable economic and market conditions and the uncertain geopolitical environment;
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our efforts to expand our international operations and maintain or increase our future international sales;
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our exposure to risks in operating in foreign markets;
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fluctuation in our financial and operating results;
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our reliance on third party technologies and components for the development of some of our products;
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| • |
delays in deliveries from our suppliers, defects in goods or components supplied by our vendors, or delays in projects that are performed by our subcontractors;
|
| • |
significant differences between forecasted demands and actual orders received;
|
| • |
breaches of network or information technology security, natural disasters or terrorist attacks;
|
| • |
ability by third parties to obtain access to our proprietary information or could independently develop similar technologies;
|
| • |
assertion by third parties that we are infringing their intellectual property rights, and IP litigation;
|
| • |
our reliance on the services of certain of our executive officers and key personnel;
|
| • |
our ability to attract, hire and retain qualified technical personnel;
|
| • |
our products being subject to government regulation of radio frequency technology;
|
| • |
war, terrorism, other acts of violence or natural or man-made disasters, including a global pandemic;
|
| • |
the impact of the political and security situation in Israel and in the U.S. on our business;
|
| • |
impact of inflation and currency fluctuations;
|
| • |
impact of the obligation of our management or key personnel to perform military service in Israel;
|
| • |
our ability to enforce covenants not-to-compete under current Israeli law; and
|
| • |
our company being subject to claims for remuneration or royalties for assigned service invention rights by our employees.
|
Corporate Information
SuperCom Ltd. is a company organized under the laws of the State of Israel. Our principal executive offices are located at 3 Rothschild Street, Tel Aviv, Israel and our
telephone number is +972 (9) 889-0850. Our web site address is http://www.supercom.com. The information on our web site does not constitute part of this prospectus. Our agent in the United States is SuperCom, Inc., and is located at 160
Franklin Street, Suite 310, Oakland, CA, 94607.
4
|
Securities offered by us hereunder
|
Up to 8,000,000 Units on a reasonable best efforts basis, each consisting of one ordinary share and one Warrant to purchase one ordinary share, at an assumed public offering price of $1.00 per Unit,
equal to the closing price of the ordinary shares on The Nasdaq Capital Market (“Nasdaq”) on July 28, 2023, along with one Warrant.
We are also offering to each purchaser, with respect to the purchase of Units that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% of our outstanding
ordinary shares immediately following the consummation of this offering, the opportunity to acquire one Pre-Funded Warrant in lieu of one ordinary share. A holder of Pre-Funded Warrants will not have the right to exercise any
portion of its Pre-Funded Warrant if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the holder, such limit may be increased to up to 9.99%) of the number of ordinary
shares outstanding immediately after giving effect to such exercise. Each Pre-Funded Warrant will be exercisable for one ordinary share. The pre-funded exercise price payable per Pre-Funded Warrant will be equal to the price per
ordinary share, minus $0.00001, and the non pre-funded exercise price of each Pre-Funded Warrant will equal $0.00001 per share. The Pre-Funded Warrants will be immediately exercisable (subject to the beneficial ownership cap) and
may be exercised at any time in perpetuity until all of the Pre-Funded Warrants are exercised in full.
The Units will not be certificated or issued in stand-alone form. The ordinary shares and/or Pre-Funded Warrants and the Warrants comprising the Units are immediately separable upon
issuance and will be issued separately in this offering.
|
|
Warrants
|
Each Warrant will have an exercise price of $______ per share (which shall be equal to ______% of the public offering price of each Unit sold in this offering, and in any event, not
less than the nominal value of such share, being $0.00001 per share as at the date hereof), will be exercisable upon issuance and will expire five years from issuance. Each Warrant is exercisable for one ordinary share, subject to
adjustment in the event of stock dividends, stock splits, adjustments, stock combinations, reclassifications, reorganizations or similar events affecting our ordinary shares as described herein. This prospectus also relates to the
offering of the ordinary shares issuable upon exercise of the Warrants. For more information regarding the Warrants, you should carefully read the section titled “Description of Securities” in this prospectus.
|
|
Public offering price
|
$1.00 per Unit (assumed public offering per Unit, equal to the closing price of the ordinary shares on The Nasdaq Capital Market (“Nasdaq”) on July 28, 2023).
|
5
|
Ordinary shares outstanding prior to this offering
|
6,010,054
|
|
Ordinary shares to be outstanding after this offering(1)
|
Up to 14,010,054 shares at an assumed public offering price of $1.00 per Unit, equal to the closing price of our ordinary shares on Nasdaq on July 28, 2023, or pre-funded exercise
price of $0.00001 per Pre-Funded Warrant.
|
|
Use of proceeds
|
We estimate that our net proceeds from the maximum offering amount of the sale of Units in this offering will be approximately $7.4 million, after deducting placement agent fees and
estimated offering expenses payable by us, based on an assumed offering price of $1.00 per Unit, equal to the closing price of the ordinary shares on Nasdaq on July 28, 2023, or pre-funded exercise price of $0.00001 per Pre-Funded
Warrant.
We intend to use the net proceeds of this offering for general corporate purposes. Ultimately, our management will have discretion and flexibility in applying the net proceeds of this
offering. We may use the proceeds of this offering for purposes with which you do not agree. See “Risk Factors ⸺ Risks Relating to This Offering ⸺ Since we have broad discretion in how we use the proceeds from this offering, we may
use the proceeds in ways with which you disagree.” See the section titled “Use of Proceeds” appearing elsewhere in this prospectus for more information.
|
|
Listing
|
Our ordinary shares are listed on Nasdaq under the symbol SPCB.
We do not intend to list the Warrants or Pre-Funded Warrants offered hereunder on any stock exchange. There are no established public trading markets for the Warrants or the
Pre-Funded Warrants, and we do not expect such markets to develop. Without an active trading market, the liquidity of the Warrants and the Pre-Funded Warrants will be limited.
|
|
Risk factors
|
See the section titled “Risk Factors” and other information included in this prospectus for a discussion of factors that you should consider carefully before deciding to invest in our
securities.
|
_______________
| (1) |
The number of ordinary shares to be outstanding after the offering is based on 6,010,054 ordinary shares outstanding as of July 28, 2023, and excludes, as of
that date, the following:
|
| • |
811,050 ordinary shares issuable upon exercise of outstanding stock options at a weighted average exercise price of $3.58 per share;
|
| • |
1,921,625 ordinary shares issuable upon the exercise of outstanding warrants to purchase ordinary shares at an average exercise price of $3.47 per share; and
|
| • |
188,950 ordinary shares reserved for future issuance under our equity incentive plans.
|
Except as otherwise indicated herein, all information in this prospectus assumes the following:
| • |
no exercise of outstanding options or warrants;
|
| • |
no sale of any Pre-Funded Warrants in lieu of ordinary shares in this offering; and
|
| • |
no exercise of any Warrants sold in this offering or any Placement Agent Warrants.
|
6
An investment in our securities involves a high degree of risk. Our business, financial condition or results of operations could be adversely affected by any of these risks. You
should carefully consider the risks described below and in the information contained or incorporated by reference in this prospectus. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties
not presently known to us or that we currently deem immaterial may also affect our operations. Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or
trends in future periods. If any of these risks actually occurs, our business, business prospects, financial condition or results of operations could be seriously harmed. This could cause the trading price of our ordinary shares to decline,
resulting in a loss of all or part of your investment. Please also read carefully the section below entitled “Cautionary Note Regarding Forward-Looking Statements.”
Except as set forth below, there have been no material changes in our risk factors since those published in our Annual Report on Form 20-F filed with the U.S. Securities and
Exchange Commission (the “SEC”) on April 20, 2023.
Risks Related to This Offering
The best efforts structure of this offering may have an adverse effect on our business plan.
The Placement Agent is offering the Units in this offering on a best efforts basis. The Placement Agent is not required to purchase any securities, but will
use their best efforts to sell the securities offered. As a “best efforts” offering, there can be no assurance that the offering contemplated hereby will ultimately be consummated or will result in any proceeds being made available to us. The
success of this offering will impact our ability to use the proceeds to execute our business plan.
Since we have broad discretion in how we use the proceeds from this offering, we may use the proceeds in ways with which you disagree.
We intend to use the net proceeds of this offering for general corporate purposes. Our management will have significant flexibility in applying the net
proceeds of this offering. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used
appropriately. It is possible that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us. The failure of our management to use such funds effectively could have a material adverse effect on our business,
financial condition, prospects, financial condition, operating results and cash flow.
The Warrants and Pre-Funded Warrants are speculative in nature.
The Warrants and Pre-Funded Warrants offered hereby do not confer any rights of share ownership on their holders, such as voting rights or the right to
receive dividends, but rather merely represent the right to acquire ordinary shares at a fixed price. Specifically, commencing on the date of issuance, holders of the Pre-Funded Warrants may acquire the ordinary shares issuable upon exercise of
such warrants at an exercise price of $0.00001 per share and holders of the Warrants may acquire the ordinary shares issuable upon the exercise of such Warrants at a non pre-funded exercise price of $0.00001 per share (not less than the nominal
value of such share, being NIS 2.5 per share as of the date hereof). Moreover, following this offering, the market value of the Warrants and Pre-Funded Warrants is uncertain and there can be no assurance that the market value of the Warrants and
Pre-Funded Warrants will equal or exceed their public offering price.
There is no public market for the Warrants or Pre-Funded Warrants being offered in this offering and we do not expect one to develop.
There is presently no established public trading market for the Warrants or Pre-Funded Warrants being offered in this offering and we do not expect a market
to develop. In addition, we do not intend to apply to list the Warrants or Pre-Funded Warrants on any securities exchange or nationally recognized trading system, including Nasdaq. Without an active market, the liquidity of the Warrants and
Pre-Funded Warrants will be limited.
7
Purchasers in this offering will experience immediate and substantial dilution in the book value of their investment.
The public offering price of the Units will be substantially higher than the pro forma net tangible book value per share of our ordinary shares outstanding immediately following the completion of
this offering. Therefore, if you purchase Units in this offering at an assumed public offering price of $1.00 per Unit, you will experience immediate dilution of $0.14 per share, the difference between the price you pay per Unit and our pro forma
net tangible book value per share as of December 31, 2022, after giving effect to the issuance of the securities in this offering.
In addition, if we issue additional equity securities, employee stock grants vest, or there are any exercises of future stock options, you will experience additional dilution.
188,950 ordinary shares remain available for future issuance to our employees, directors and consultants pursuant to our equity incentive plans, as of June 30, 2023. If our board of directors elects to issue additional restricted stock, stock
options and/or other equity-based awards under our equity incentive plans, our stockholders and investors in this offering may experience additional dilution, which could cause our stock price to fall.
Risks Related to Our Business
Unfavorable outcomes in legal proceedings may adversely affect our business, financial
conditions and results of operations.
Our results may be affected by the outcome of current or future litigation. Unfavorable rulings in our legal proceedings may have a negative impact on us
that may be greater or smaller depending on the nature of the rulings. In addition, from time to time in the future we may be subject to various claims, investigations, legal and administrative cases and proceedings (whether civil or criminal) or
lawsuits by governmental agencies or private parties, including any current litigation, such as SuperCom Ltd. v. Sabby Volatility Warrant Master Fund Ltd. et al and the related counterclaims. If the results of these investigations, proceedings or
suits are unfavorable to us or if we are unable to successfully defend against third party lawsuits, we may be required to pay monetary damages or may be subject to fines, penalties, injunctions or other censure that could have a material adverse
effect on our business, financial condition and results of operations. Even if we adequately address the issues raised by an investigation or proceeding or successfully defend a third-party lawsuit or counterclaim, we may have to devote
significant financial and management resources to address these issues, which could harm our business, financial condition and results of operations.
Risks Related to Our Ordinary Shares
You may experience future dilution as a result of future equity offerings and other issuances of our ordinary shares or other securities.
In addition, this offering and future equity offerings and other issuances of our ordinary shares or other securities may adversely affect the price of our ordinary shares.
In order to raise additional capital, we may in the future offer additional ordinary shares or other securities convertible into, or
exchangeable for our ordinary shares at prices that may not be the same as the price per Unit in this offering. We may not be able to sell shares or other securities in any other
offering at a price per share that is equal to or greater than the price per Unit paid by the investor in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The
price per share at which we sell additional ordinary shares or securities convertible into ordinary shares in future
transactions may be higher or lower than the price per Unit in this offering. You will incur dilution upon exercise of any outstanding stock options, warrants or upon the issuance of ordinary shares under our stock incentive programs. In addition, the sale of the Units in this offering and any future sales of a substantial number of our ordinary shares in the
public market, or the perception that such sales may occur, could adversely affect the price of our ordinary shares. We cannot predict the effect, if any, that market sales of those shares of ordinary shares or the availability of those shares for sale will have on the market price of our ordinary shares.
Our failure to meet the continued listing requirements of Nasdaq could result in a de-listing of our ordinary shares and penny stock
trading.
There can be no assurance that we will be able to continue to meet all of the criteria necessary for Nasdaq to allow us to remain listed. If we fail to satisfy the applicable
continued listing requirement and be in non-compliance after notice and the applicable grace period ends, Nasdaq may commence delisting procedures against our Company (during which we may have additional time of up to six months to appeal and
correct our non-compliance).
If our ordinary shares are ultimately delisted from Nasdaq, our ordinary shares would likely then trade only in the over-the-counter market and the market liquidity of our
ordinary shares could be adversely affected and their market price could decrease. If our ordinary shares were to trade on the over-the-counter market, selling our ordinary shares could be more difficult because smaller quantities of shares would
likely be bought and sold, transactions could be delayed, and we could face significant material adverse consequences, including: a limited availability of market quotations for our securities; reduced liquidity with respect to our securities; a
determination that our shares are a “penny stock,” which will require brokers trading in our securities to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our securities;
a reduced amount of news and analyst coverage for our Company; and a decreased ability to issue additional securities or obtain additional financing in the future. These factors could result in lower prices and larger spreads in the bid and ask
prices for our ordinary shares and would substantially impair our ability to raise additional funds and could result in a loss of institutional investor interest and fewer development opportunities for us.
In addition to the foregoing, if our ordinary shares are ultimately delisted from Nasdaq and they trade on the over-the-counter market, the application of the “penny stock”
rules could adversely affect the market price of our ordinary shares and increase the transaction costs to sell those shares. The SEC has adopted regulations which generally define a “penny stock” as an equity security that has a market price of
less than $5.00 per share, subject to specific exemptions. If our ordinary shares are ultimately delisted from Nasdaq and then trade on the over-the-counter market at a price of less than $5.00 per share, our ordinary shares would be considered a
penny stock. The SEC’s penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the
risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and the salesperson in the transaction, and monthly account
statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that before a transaction in a penny stock occurs, the broker-dealer must make a special written
determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s agreement to the transaction. If applicable in the future, these rules may restrict the ability of brokers-dealers to sell our ordinary shares
and may affect the ability of investors to sell their shares, until our ordinary shares no longer are considered a penny stock.
8
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share
price and trading volume could decline.
The trading market for our ordinary shares will depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any
control over these analysts. There can be no assurance that analysts will cover us or provide favorable coverage. If one or more of the analysts who cover us downgrade our stock or change their opinion of our stock, our share price would likely
decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
Provisions in our corporate charter documents could make an acquisition of our Company, which may be beneficial to our stockholders, more
difficult and may prevent attempts by our stockholders to replace or remove our current management.
Provisions in our corporate charter documents may discourage, delay or prevent a merger, acquisition or other change in control of our Company that stockholders may consider
favorable, including transactions in which you might otherwise receive a premium for your ordinary shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our ordinary shares, thereby
depressing the market price of our ordinary shares. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace
or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Among other things, these provisions provide that:
| • |
the authorized number of directors can be changed only by resolution of our board of directors;
|
| • |
our Articles of Association may be amended or repealed by our stockholders;
|
| • |
our stockholders do not have cumulative voting rights, and therefore our stockholders holding a majority of our ordinary shares outstanding will be able to elect all of our directors;
|
| • |
and our stockholders must comply with advance notice provisions applicable required under the laws of Israel to bring business before or nominate directors for election at a stockholder meeting.
|
Investing in our securities involves a high degree of risk. You should carefully consider the risks described below and all of the information contained or
incorporated by reference in this prospectus. Our business, financial condition, results of operations and prospects could be materially and adversely affected by these risks.
We estimate that our net proceeds from the maximum offering amount of the sale of the Units in this offering will be approximately $7.4 million, after deducting placement agent fees and estimated
offering expenses payable by us, based on an assumed offering price of $1.00 per Unit, equal to the closing price of our ordinary shares on Nasdaq on July 28, 2023, or pre-funded exercise price of $0.00001 per Pre-Funded Warrant, and assuming
no exercise of the Warrants.
We intend to use the net proceeds of this offering for general corporate purposes. Our management will have discretion and flexibility in applying the net proceeds of this
offering. We may use the proceeds of this offering for purposes with which you do not agree. See “Risk Factors ⸺ Risks Relating to the Offering ⸺ Since we have broad discretion in how we use the proceeds from this offering, we may use the proceeds
in ways with which you disagree.” Pending our use of the net proceeds from this offering, we may invest the net proceeds in a variety of capital preservation investments, including short-term, investment grade, interest bearing instruments and U.S.
and other international government securities.
9
Each $0.05 increase in the assumed public offering price of $1.00 per Unit, would increase the net proceeds to us from this offering by approximately $0.44 million, assuming the number of Units
offered by us, as set forth on the cover of this prospectus, remains the same and after deducting placement agent commissions and estimated offering expenses payable by us and assuming no exercise of the Warrants. We may also increase or
decrease the number of Units and Pre-Funded Units that we are offering. An increase (decrease) of 1,000,000 Units offered by us would increase (decrease) the net proceeds to us from this offering by approximately $0.93 million, after deducting
placement agent commissions and estimated offering expenses payable by us and assuming that the public offering price of the Units as set forth on the cover page of this prospectus remains the same and assuming no exercise of the Warrants. The
as adjusted information discussed above is illustrative only and will adjust based on the actual public offering price and other terms of this offering determined at pricing.
We have never declared or paid cash dividends on our ordinary shares. We currently intend to retain all available funds and any future earnings for use in the operation of our
business and do not anticipate paying any cash dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our board of directors and will depend on our financial condition, results of
operations, capital requirements, general business conditions and other factors that our board of directors may deem relevant.
The following table sets forth our capitalization and indebtedness as of December 31, 2022:
| ● |
on an actual basis;
|
| ● |
on an as further adjusted basis, to give effect to (i) the issuance and sale of up to 8,000,000 Units consisting of one ordinary share (or one Pre-Funded Warrant in lieu of one ordinary share) and one Warrant to subscribe for one
ordinary share each at an assumed public offering price of $1.00 per Unit, the last reported sale price of our ordinary shares on the Nasdaq Capital Market on July 28, 2023, at the maximum offering amount (with no additional consideration
payable for the Warrant), and (ii) estimated total expenses of the maximum offering amount, which include registration, filing and listing fees, printing fees and legal and accounting expenses amounting to approximately $80,000 and the
Placement Agent fee of 7% of the public offering price.
|
You should read the following table together with our financial statements and the related notes, and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” incorporated herein by reference to our Annual Report on Form 20-F filed with the SEC on April 20, 2023.
This offering is being conducted on a “best efforts” basis and the table above is illustrative of a maximum offering amount of $8,000,000. There can be no
assurance that the offering contemplated hereby will ultimately be consummated or if it is consummated, there can be no assurance the amount of proceeds being made available to us. See “Risk Factors-Risks
Relating to the Offering- The best efforts structure of this offering may have an adverse effect on our business plan.”
|
|
As of December 31, 2022
|
|||||||
|
(All figures in thousands of U.S. dollars, except for share amounts)
|
Actual (audited)
|
As Adjusted (unaudited) (maximum offering amount)
|
||||||
|
Cash and cash equivalents
|
$
|
4,042
|
$
|
11,442
|
||||
|
Debt
|
||||||||
|
Debt
|
33,500
|
$
|
33,500
|
|||||
|
Non-current operating lease liabilities
|
108
|
108
|
||||||
|
Total debt
|
33,500
|
33,500
|
||||||
|
Equity
|
||||||||
|
Ordinary shares, par value NIS 2.5 per share, 10,000,000 authorized, 4,206,327 issued & outstanding as of December 31, 2022
|
3,057
|
9,121
|
||||||
|
Additional paid in capital
|
103,000
|
104,299
|
||||||
|
Accumulated deficit
|
102,926
|
102,926
|
||||||
|
Total shareholders’ equity
|
3,131
|
10,494
|
||||||
|
Total capitalization
|
$
|
36,631
|
43,994
|
|||||
10
The as adjusted information discussed above is illustrative only and will be determined based on the actual public offering price and other terms of this offering determined at
pricing. The number of ordinary shares to be outstanding after the offering is based on 4,206,327 ordinary shares outstanding as of December 31, 2022. The number of ordinary shares in the table above excludes the following:
| • |
811,050 ordinary shares issuable upon exercise of outstanding stock options at a weighted average exercise price of $3.58 per share;
|
| • |
839,000 ordinary shares issuable upon the exercise of outstanding warrants to purchase ordinary shares at an average exercise price of $4.94 per share; and
|
| • |
188,950 ordinary shares reserved for future issuance under our equity incentive plans; and
|
| • |
no exercise of any Warrants sold in this offering.
|
If you invest in our securities in this offering, your ownership interest will be diluted immediately to the extent of the difference between the public offering price per Unit
and the as adjusted net tangible book value per share of ordinary shares after this offering.
The historical net tangible book value of ordinary shares as of December 31, 2022 was $3.13 or $0.74 per share. Historical net tangible
book per share represents the amount of our total net tangible book value, divided by the number of ordinary shares outstanding as of December 31, 2022.
Dilution to New Investors if the Maximum Offering Amount is sold
As adjusted to give effect to the sale by us of up to 8,000,000 Units, each consisting of one of ordinary share or one Pre-Funded Warrant and one Warrant, offered by this prospectus at the public
offering price of $1.00 per Unit or pre-funded exercise price of $0.00001 per Pre-Funded Warrant, and after deducting the estimated placement agent fees and commissions and estimated offering expenses payable by us, and assuming no exercise of
the Warrants, our adjusted pro forma net tangible book value as of December 31, 2022 would have been approximately $10.49 million, or $0.86 per share. This represents an immediate increase in net tangible book value per share of $0.12 to
existing stockholders and immediate dilution of approximately $0.14 per share to new investors purchasing ordinary shares in this offering. Dilution per share to new investors is determined by subtracting as adjusted pro forma net tangible book
value per share after this offering from the public offering price per Unit paid by new investors.
The following table illustrates this calculation on a per share basis:
|
Public offering price per Unit
|
$
|
1.00
|
||||||
|
Historical net tangible book value per share as of December 31, 2022
|
$
|
3,131
|
||||||
|
Pro forma net tangible book value per share as of December 31, 2022
|
$
|
10,494
|
||||||
|
Increase in net tangible book value per share attributable to new investors in this offering
|
$
|
0.12
|
||||||
|
As-adjusted pro forma net tangible book value per share as of December 31, 2022, after giving effect to this offering
|
$
|
0.86
|
||||||
|
Dilution per share to new investors in this offering
|
$
|
0.14
|
||||||
The number of ordinary shares shown above to be outstanding after this offering is based on the ordinary shares outstanding as of July 28, 2023 and excludes:
| • |
811,050 ordinary shares issuable upon exercise of outstanding stock options at a weighted average exercise price of $3.58 per share;
|
| • |
1,921,625 ordinary shares issuable upon the exercise of outstanding warrants to purchase ordinary shares at an average exercise price of $3.47 per share;
|
| • |
188,950 ordinary shares reserved for future issuance under our equity incentive plans; and
|
| • |
no exercise of any Warrants sold in this offering.
|
11
It also assumes (i) no sale of Pre-Funded Warrants in this offering, which, if sold, would reduce the number of ordinary shares that we are offering on a one-for-one basis and
(ii) no exercise of the Warrants issued in this offering.
This offering is being conducted on a “best efforts” basis and the table above is illustrative of a maximum offering amount of $8,000,000. There can be no assurance that the
offering contemplated hereby will ultimately be consummated or if it is consummated, there can be no assurance the amount of proceeds being made available to us. See “Risk Factors-Risks Relating to the Offering- The best efforts structure of this
offering may have an adverse effect on our business plan.”
The following is a summary of some of the terms of our ordinary shares, based on our Articles of Association. In this section, “Articles of Association” refers to the Articles
of Association of SuperCom in effect as of the date of this prospectus.
Share Capital ⸺ Our authorized share capital consists of 100,000,000 ordinary shares with a par value NIS 2.5 per
share.
As of July 28, 2023, we had 6,010,054 ordinary shares issued and outstanding.
The authorized share capital may be increased or reduced (but not below the number of issued ordinary shares, deferred shares or preferred shares, as applicable) by a
resolution approved by a simple majority of the votes of our shareholders cast at a general meeting (unless otherwise determined by the directors).
Articles of Association ⸺ Our affairs are governed by our Memorandum of Association and the Articles of
Association, the Israeli Companies Law and the laws of Israel.
Issuance of Our Ordinary Shares ⸺ We may issue shares subject to the maximum authorized share capital contained in
our Articles of Association (please see the section titled “Share Capital” above). Our Articles of Association authorize our directors to issue ordinary shares (subject to the maximum authorized but unissued share capital) at any time.
Repurchase of Our Ordinary Shares ⸺ Any share in our Company shall be deemed to be a redeemable share as and from
the time of existence of an agreement or transaction between us and any person pursuant to which we will acquire a share or shares. Any acquisition by us of our shares other than a surrender for nil value shall constitute a redemption. No
resolution (whether special or otherwise) is required to be passed to deem any share in the capital of our Company a redeemable share.
Under Israeli Companies Act, any redemption must be funded out of our distributable reserves or from the proceeds of a fresh issue of shares. Repurchased and redeemed shares
may be cancelled or held as treasury shares.
Form and Transfer of Our Ordinary Shares ⸺ Subject to the Israeli Companies Act, any member may transfer all or any
of his shares (of any class) by an instrument of transfer in the usual common form or in any other form which the Board may from time to time approve.
Liquidation Rights and Dissolution ⸺ On a return of capital on winding-up or otherwise (other than on conversion,
redemption or purchase of ordinary shares), assets available for distribution among the holders of our ordinary shares shall be distributed among the holders thereof on a pro rata basis.
Merger ⸺ A merger of our Company with another company under the Israeli Companies Act must be approved at a general
meeting of shareholders (or their equivalent) of each of the merging companies.
No Appraisal Rights ⸺ Under the Israeli Companies Act, our shareholders are not entitled to appraisal rights other
than in connection with a completed tender offer.
Special Meeting of Shareholders ⸺ Pursuant to our Articles of Association, one or more of our shareholders holding
at least five percent of our issued share capital and at least one percent of our shareholders' voting power, or one or more of our shareholders holding no less than five percent of our issued voting shares may require our board of directors to
convene a special shareholder meeting.
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General Meeting of Shareholders ⸺ General meetings of our shareholders will be held at a time and place as
determined by our board of directors subject to each annual meeting having taken place no later than 15 months after the previous annual meeting, and no later than the end of the applicable calendar year. Shareholder meetings may be held within
or outside Israel.
A copy of the notice of any general meeting shall be given at least twenty-one (21) days before the date of the proposed general meeting to our shareholders.
Voting Rights ⸺ Every shareholder entitled to attend, speak, ask questions and vote at a general meeting may appoint
a proxy or proxies to attend, speak, ask questions and vote on behalf of the shareholder. Quorum is fixed by our Articles of Association, to consist of at least two shareholders present in person or by proxy entitled to exercise more than 33 1/3%
of the voting rights of our issued ordinary shares.
Resolutions put to the vote of a meeting shall be decided on a poll, which shall be taken in such manner as the chairperson of the meeting directs. Subject to the provisions of
our Articles of Association and any rights or restrictions attached to any shares, every shareholder of record present in person or by proxy shall have one vote for each share registered in his or her name.
Where the rights attaching to our shares are set out in our Articles of Association, any changes to these rights will need to be effected by way of a resolution (passed by our
shareholders attending and voting at the general meeting holding majority of all votes properly cast at such general meeting) amending our Articles of Association. Additionally, the rights attaching to a particular class of shares may only be
varied if a special resolution, passed at a separate meeting of the holders of that class, sanctions the variation.
Other matters to be decided upon by the shareholders require a majority vote of shareholders who, being so entitled, attend and vote at the meeting, unless the Israeli
Companies Act or our Articles of Association require a higher majority.
Dividends ⸺ Our board of directors may from time to time pay such dividends
as appear justified by our profits, provided that dividends may only be made out of our distributable reserves and if the dividend will not cause our net assets to fall below the aggregate of its called up share capital and undistributable
reserves (as such terms are calculated in accordance with the Israeli Companies Act). Our board of directors may also recommend a dividend to be approved and declared by our shareholders at a general meeting.
Board of Directors ⸺ Under our Articles of Association, the number of Directors shall be not less than two nor more
than ten.
Directors are eligible to stand for re-election at the relevant annual general meeting. Directors will hold office until the conclusion of the next annual meeting or until
their earlier removal or resignation. However, if no directors are elected at an annual meeting, then the persons who served as directors immediately prior to the annual meeting shall be deemed reelected at the same meeting, and will continue to
serve as directors unless otherwise determined by the annual meeting. There are no share ownership qualifications for directors. Meetings of our board of directors may be convened at such time and place as the directors determine. The quorum may
be fixed by the directors and unless so fixed shall be a majority of the directors in office. The directors are not entitled to appoint alternates. Questions arising at a meeting of our board of directors are required to be decided by a simple
majority of the directors present, with each director entitled to one vote. In the case of a tie vote, the chairperson of the meeting shall not have a second or casting vote. Our board of directors may pass resolutions without a meeting where
such resolution is signed by all the directors.
Amendment of Articles of Association ⸺ Under the Israeli Companies Act, amendments to our Articles of Association
require a special resolution to be passed by not less than majority of those shareholders entitled, attending and voting at the general meeting. Our Articles of Association may not be amended by resolution of directors, but the directors when
issuing preference shares may fix the rights attaching to such shares.
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Outstanding Warrants
On September 6, 2018 and October 26, 2018, through a two-stage closing process, the Company entered into a Senior Secured Credit Facility with affiliates of Fortress Investment
Group LLC (“Fortress”) with an aggregate principal amount of up to $20,000,000 (the "Credit Facility").
In connection with the Credit Facility, the Investor received 2,500 warrants initially and an additional 7,500 warrants for amendments (the “Credit Facility Warrants”). The
Credit Facility Warrants mature 7 years from the date of issuance, were set to be issued at a strike price at a premium to the then current market price.
As of December 31, 2020, the outstanding principal, including accrued interest, of the Credit Facility was $15,625 and the aggregate balance for these Subordinated Debt was
$7,407.
On July 7, 2020, in connection with the Company's private placement consummated on such date, the Company issued 5-year warrants to purchase up to 237,000 of the Company's
ordinary shares with an exercise price of $17 per share to certain institutional investors.
On March 31, 2023, we completed a registered direct offering with a single accredited institutional investor of an aggregate of 485,000 of its ordinary shares and 1,032,615
pre-funded warrants to purchase ordinary shares with an exercise price of $0.00001 per share, and concurrent private placement to such investor of our private 5-years warrants to purchase an aggregate of 1,517,615 of ordinary shares at an
exercise price of $1.66 per share. As of July 28, 2023: (i) 157,000 pre-funded warrants to purchase ordinary shares with an exercise price of $0.00001 per share remain unexercised, and (ii) 5-years warrants to purchase an aggregate of 1,517,615
of ordinary shares at an exercise price of $1.66 per share remain unexercised.
Share Option Plans
In 2003, we adopted the SuperCom Ltd. 2003 Israeli Share Option Plan, a stock option plan under which we now issue stock options, or the Option Plan. The Option Plan is
intended to provide incentives to our employees, officers, directors and/or consultants by providing them with the opportunity to purchase our ordinary shares. The Option Plan is subject to the provisions of the Companies Law, administered by the
audit committee, and is designed: (i) to comply with Section 102 of the Israeli Tax Ordinance or any provision which may amend or replace it and the rules promulgated thereunder and to enable us and grantees thereunder to benefit from Section 102
of the Israeli Tax Ordinance and the Commissioner’s Rules; and (ii) to enable us to grant options and issue shares outside the context of Section 102 of the Israeli Tax Ordinance. Options granted under the Option Plan will become exercisable
ratably over a period of three to five years or immediately in certain circumstances, commencing with the date of grant. The options generally expire no later than 10 years from the date of grant. Any options that are forfeited or canceled before
expiration become available for future grants. As of December 31, 2022, 213,597 options were exercisable and 811,050 options were outstanding.
As a result of an amendment to Section 102 of the Israeli Tax Ordinance as part of the 2003 Israeli tax reform, and pursuant to an election made by us thereunder, capital gains
derived by optionees arising from the sale of shares issued pursuant to the exercise of options granted to them under Section 102 after January 1, 2003 will generally be subject to a flat capital gains tax rate of 25%. However, as a result of
this election, we will no longer be allowed to claim as an expense for tax purposes the amounts credited to such employees as a benefit when the related capital gains tax is payable by them, as we had previously been entitled to do under Section
102.
On June 27, 2007, our Compensation Committee and the board of directors approved a new option plan under which we may grant stock options to our U.S. employees and our
subsidiaries. Under this option plan, we may grant both qualified (for preferential tax treatment) and non-qualified stock options. On August 15, 2007, this option plan was approved by our shareholders at the general shareholders meeting.
In June 2013, the Option plan was extended for another period of 10 years, until December 31, 2023.
As of December 31, 2022, we had outstanding options to purchase 811,050 ordinary shares at a weighted average exercise price of $4.15, of which 213,597 options were
exercisable.
Exchange Listing
Our ordinary shares are currently listed on Nasdaq under the symbol SPCB.
Transfer Agent and Registrar
The registrar and transfer agent in respect of the ordinary shares is American Stock Transfer & Trust Company, LLC.
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We are offering Units, each Unit consisting of one ordinary share and one Warrant to subscribe for one ordinary share each. We are also offering to each purchaser whose purchase
of ordinary shares in this offering would otherwise result in the purchaser, together with its affiliates, beneficially owning more than 4.99% (or, at the election of the holder, 9.99%) of our outstanding ordinary shares immediately following the
consummation of this offering, the opportunity to purchase, if the purchaser so chooses, Units containing Pre-Funded Warrants in lieu of ordinary shares that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% (or, at the
election of the holder, 9.99%) of our outstanding ordinary shares. For each Pre-Funded Warrant issued (without regard to any limitation on exercise set forth therein), the number of ordinary shares we are offering will be decreased on a one-for-one
basis. Because one Warrant is being sold together in this offering with each ordinary share or, in the alternative, each Pre-Funded Warrant to subscribe for one ordinary share, the number of Warrants sold in this offering will not change as a
result of a change in the mix of the ordinary shares and Pre-Funded Warrants sold.
We are also registering the ordinary shares issuable from time to time upon exercise of the Warrants and Pre-Funded Warrants included in the Units offered hereby. Our Units have
no stand-alone rights and will not be certificated or issued as stand-alone securities. The ordinary shares (or Pre-Funded Warrants) and the Warrants comprising our Units are immediately separable and will be issued separately in this offering.
The following summary of certain terms and provisions of the Pre-Funded Warrants and Warrants offered hereby is not complete and is subject to, and qualified in its entirety by
the provisions of the form of Pre-Funded Warrant, and the form of Warrant, which are filed as exhibits to the registration statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions set
forth in the form of Pre-Funded Warrant and the form of Warrant.
Exercisability. The Pre-Funded Warrants are exercisable at any time after their original issuance until they are exercised in full. The Warrants are
exercisable at any time after their original issuance up to the date that is five years after their original issuance. Each of the Warrants and the Pre-Funded Warrants will be exercisable, at the option of each holder, in whole or in part by
delivering to us a duly executed exercise notice and, at any time a registration statement registering the issuance of the ordinary shares underlying the Warrants or Pre-Funded Warrants under the Securities Act of 1933, as amended (the
“Securities Act”), is effective and available for the issuance of such shares, or an exemption from registration under the Securities Act is available for the issuance of such shares, by payment in full in immediately available funds for the
number of ordinary shares subscribed for upon such exercise. If a registration statement registering the issuance of the ordinary shares underlying the Warrants or Pre-Funded Warrants under the Securities Act is not effective or available, the
holder may, in its sole discretion, elect to exercise the Warrant or Pre-Funded Warrant through a cashless exercise, in which case the holder would receive upon such exercise the net number of ordinary shares determined according to the formula
set forth in the Warrant or Pre-Funded Warrant provided a price of $0.00001 per share must be paid in respect of each ordinary share. In addition, a holder may also effect an “alternative cashless exercise” on or after the original issuance
(provided that, in any event, the price per ordinary share shall not less than the nominal value of such share, being $0.00001 per share as at the date hereof). In such event, the aggregate number of ordinary shares issuable in such alternative
cashless exercise shall equal the product of (x) the aggregate number of ordinary shares that would be issuable upon exercise of the Warrant in accordance with the terms of such Warrant if such exercise were by means of a cash exercise rather
than a cashless exercise and (y) ______. No fractional ordinary shares will be issued in connection with the exercise of a Warrant or Pre-Funded Warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to the
fractional amount multiplied by the exercise price.
Exercise Limitation. A holder will not have the right to exercise any portion of the Pre-Funded Warrants or Warrants if the holder
(together with its affiliates) would beneficially own in excess of 4.99% (or, upon election by a holder prior to the issuance of any Warrants, 9.99%) of the number of shares of our ordinary shares outstanding immediately after giving effect to the
exercise, as such percentage ownership is determined in accordance with the terms of the Warrants. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, upon at least 61 days’ prior notice from
the holder to us with respect to any increase in such percentage.
Exercise Price. The non pre-funded exercise price for the Pre-Funded Warrants is $0.00001 per share. The exercise price per whole
ordinary issuable upon exercise of the Warrants is $______ per share (not less than the nominal value of such share, being $0.00001 per share as at the date hereof). The exercise price of the Warrants may also be reduced to any amount and for any
period of time at the sole discretion of our Board of Directors. The exercise price and number of ordinary shares issuable upon exercise will adjust in the event of certain stock dividends and distributions, stock splits, stock combinations,
reclassifications, dilutive issuances or similar events affecting our ordinary shares.
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Transferability. Subject to applicable laws, the Warrants and the Pre-Funded Warrants may be offered for sale, sold, transferred or
assigned without our consent.
Exchange Listing. We do not intend to apply for the listing of the Warrants or Pre-Funded Warrants offered in this offering on any stock
exchange. Without an active trading market, the liquidity of the Warrants and the Pre-Funded Warrants will be limited.
Rights as a Shareholder. Except as otherwise provided in the Warrants or the Pre-Funded Warrants or by virtue of such holder’s ownership
of our ordinary shares, the holder of a Warrant or Pre-Funded Warrant does not have the rights or privileges of a holder of our ordinary shares, including any voting rights, until the holder exercises the Warrant.
Fundamental Transactions. In the event of a fundamental transaction, as described in the Warrants and the Pre-Funded Warrants and
generally including, with certain exceptions, any reorganization, recapitalization or reclassification of our ordinary shares, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or
merger with or into another person, the acquisition of more than 50% of our outstanding ordinary shares, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding ordinary shares, the holders of
the Warrants and the Pre-Funded Warrants will be entitled to receive upon exercise of the Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the Warrants immediately prior to
such fundamental transaction. Additionally, as more fully described in the Warrant, in the event of certain fundamental transactions, the holders of the Warrants will be entitled to receive consideration in an amount equal to the Black Scholes
value of the Warrants on the date of consummation of such transaction.
Waivers and Amendments. The warrants may be modified or amended or the provisions of such warrants waived with our consent and the
consent of the holders of at least a majority of the outstanding warrants.
Governing Law. The Pre-Funded Warrants and the Warrants are governed by New York law.
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The following discussion is a summary of United States federal income tax considerations generally applicable to U.S. Holders (as defined below) of
acquiring, owning and disposing of our Units (each consisting of one ordinary share or Pre-Funded Warrant and one Warrant) (which units or components thereof we sometimes refer to as our “securities” and holders thereof as “security holders”). This
discussion addresses only those security holders that hold their securities as a capital asset within the meaning of Section 1221 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) (generally, property held for investment). Because
the ordinary share or Pre-Funded Warrant and Warrant components of a Unit are generally separable at the option of the holder, the holder of a Unit generally should be treated, for United States federal income tax purposes, as the owner of the
underlying ordinary share or Pre-Funded Warrant and Warrant components. As a result, the discussion below with respect to holders of ordinary shares or Pre-Funded Warrants and Warrants should also apply to holders of Units (as the deemed owners of
the underlying components that constitute the Units).
This discussion is a summary only and does not discuss all aspects of U.S. federal income taxation that may be relevant to holders in light of their
particular circumstances or status including:
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financial institutions or financial services entities;
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broker-dealers;
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taxpayers that are subject to the mark-to-market accounting rules;
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tax-exempt entities;
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governments or agencies or instrumentalities thereof;
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banks, insurance companies, and certain other financial institutions;
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regulated investment companies or real estate investment trusts;
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grantor trusts;
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dealers or traders in securities, commodities or currencies;
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persons subject to the alternative minimum tax;
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expatriates and former citizens or long-term residents of the United States;
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persons that actually or constructively own five percent or more of our voting shares;
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persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation;
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persons that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated or similar transaction;
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persons subject to special tax accounting rules under Section 451(b) of the Code;
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passive foreign investment companies (“PFICs”) and corporations that accumulate earnings to avoid U.S. federal income tax;
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Controlled foreign corporations or U.S. shareholders of controlled foreign corporations, as those terms are defined in Sections 951(b) and 957(a) of the Code, respectively;
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S corporations, partnerships or other entities or arrangements treated as partnerships or other flow-through entities for U.S. federal income tax purposes (and investors therein);
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tax-qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; or
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persons whose functional currency is not the U.S. dollar.
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This discussion is based on provisions of the Code, proposed, temporary and final U.S. Treasury Regulations promulgated under the Code, judicial decisions and published rulings
and administrative interpretations thereof, all as in effect on the date hereof and all of which are subject to differing interpretations or change, which change could apply retroactively and could affect the tax considerations described herein.
This discussion does not address U.S. federal taxes other than those pertaining to U.S. federal income taxation (such as estate or gift taxes, the alternative minimum tax or the
Medicare tax on investment income), nor does it address any aspects of U.S. state or local or non-U.S. taxation.
This discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our securities through such entities. If a partnership (or
any entity or arrangement so characterized for U.S. federal income tax purposes) holds our securities, the tax treatment of such partnership and a person treated as a partner of such partnership will generally depend on the status of the partner
and the activities of the partnership. Partnerships holding our securities and persons that are treated as partners of such partnerships should consult their tax advisors as to the particular U.S. federal income tax consequences of acquiring,
owning and disposing of our securities.
Except where otherwise noted, this discussion assumes that, and we believe that, we are properly treated as a foreign corporation that is not, and will not become, a passive
foreign investment company, or a PFIC, as described below.
THIS SUMMARY IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT PURPORT TO BE A COMPREHENSIVE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL U.S. FEDERAL INCOME TAX
CONSEQUENCES OF ACQUIRING, OWNING AND DISPOSING OF OUR SECURITIES. EACH HOLDER SHOULD CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF ACQUIRING, OWNING AND DISPOSING OF OUR SECURITIES, INCLUDING THE
EFFECTS OF U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX LAWS.
As used herein, a “U.S. Holder” is a beneficial owner of our securities who or that is, for U.S. federal income tax purposes:
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an individual citizen or resident of the United States,
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a corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States or any state thereof or the
District of Columbia,
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an estate whose income is subject to U.S. federal income tax regardless of its source, or
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a trust if (1) a U.S. court can exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in effect
under applicable Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes.
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Allocation of Purchase Price and Characterization of a Unit
No statutory, administrative or judicial authority directly addresses the treatment of a unit or instruments similar to a unit for United States federal income tax purposes, and
therefore, that treatment is not entirely clear. The acquisition of a unit should be treated for United States federal income tax purposes as the acquisition of one of our ordinary shares or Pre-Funded Warrants, as applicable, and one Warrant. We
intend to treat the acquisition of a unit in this manner and, by purchasing a unit, you must adopt such treatment for tax purposes. For United States federal income tax purposes, each holder of a unit must allocate the purchase price paid by such
holder for such unit between the ordinary share or Pre-Funded Warrant, as applicable, and the Warrants based on the relative fair market value of each at the time of issuance. The price allocated to each ordinary share or Pre-Funded Warrant and
Warrants should be the shareholder’s tax basis in such ordinary share or Pre-Funded Warrant and Warrants. Any disposition of a unit should be treated for United States federal income tax purposes as a disposition of the ordinary share or Pre-Funded
Warrant, as applicable, and the Warrants comprising the unit, and the amount realized on the disposition should be allocated between the ordinary share or Pre-Funded Warrant, as applicable, and the Warrants based on their respective relative fair
market values. The separation of the ordinary share or Pre-Funded Warrant and the Warrants constituting a unit should not be a taxable event for United States federal income tax purposes.
The foregoing treatment of the unit and a holder’s purchase price allocation are not binding on the IRS or the courts. Because there are no authorities that directly address
instruments that are similar to the units, no assurance can be given that the IRS or the courts will agree with the characterization described above or the discussion below. Accordingly, each prospective investor is urged to consult its own tax
advisor regarding the tax consequences of an investment in a unit (including alternative characterizations of a unit). The balance of this discussion assumes that the characterization of the units described above is respected for United States
federal income tax purposes.
Income Tax Treatment of Pre-funded Warrants
Although not entirely free from doubt, a Pre-Funded Warrant should be treated as an ordinary share for U.S. federal income tax purposes and a holder of Pre-Funded Warrants
therefore should generally be taxed in the same manner as a holder of an ordinary share, as described below. Accordingly, no gain or loss should be recognized upon the exercise of a Pre-Funded Warrant and, upon exercise, the holding period of a
Pre-Funded Warrant should carry over to the ordinary share received. Similarly, the tax basis of the Pre-Funded Warrant should carry over to the ordinary share received upon exercise, increased by the exercise price of $0.00001 per share. Each
prospective investor is urged to consult its tax advisors regarding the tax risks associated with the acquisition of Pre-Funded Warrants pursuant to this offering (including potential alternative characterizations). The balance of this discussion
generally assumes that the characterization described above is respected for U.S. federal income tax purposes and the discussion below, to the extent it pertains to ordinary shares, is generally intended also to pertain to Pre-Funded Warrants.
U.S. Federal Income Tax Considerations of Owning Ordinary Shares and Warrants
Taxation of Dividends and Other Distributions on Ordinary Shares
Subject to the discussion of the PFIC rules discussed below, if SuperCom makes a distribution of cash or other property to a U.S. Holder of ordinary shares, such distributions
will generally be treated as a dividend for U.S. federal income tax purposes to the extent the distribution is paid out of SuperCom’s current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Such
dividends will be taxable to a corporate U.S. Holder at regular rates and will not be eligible for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received from other domestic corporations.
Distributions in excess of such earnings and profits will generally be applied against and reduce the U.S. Holder’s basis in its ordinary shares (but not below zero) and, to the
extent in excess of such basis, will be treated as gain from the sale or exchange of such ordinary shares.
With respect to non-corporate U.S. Holders, dividends will generally be taxed at preferential long-term capital gains rates only if (i) ordinary shares are readily tradable on an
established securities market in the United States or (ii) if SuperCom is eligible for the benefits of the income tax treaty between the United States and Israel (the “Tax Treaty”), in each case provided that SuperCom is not treated as a PFIC at
the time the dividend was paid or in the previous year and certain other requirements are met. Although the ordinary shares are listed on NASDAQ, there can be no assurances that SuperCom will be or remain eligible for benefits of the Tax Treaty or
that the ordinary shares will be considered readily tradeable on an established securities market in the United States in future years. U.S. Holders should consult their tax advisors regarding the availability of the lower rate for any dividends
paid with respect to our ordinary shares.
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Subject to certain conditions and limitations (including, that any reduction in withholding available to the U.S. holder under the Tax Treaty have been claimed), non-refundable
foreign “covered withholding taxes”, if any, on dividends paid on ordinary shares may be treated as foreign taxes eligible for a credit against a U.S. Holder’s U.S. federal income tax liability under the U.S. foreign tax credit rules. Dividends
paid by SuperCom generally will constitute foreign source income for foreign tax credit limitation purposes. If such dividends are qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of
calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by a fraction, the numerator of which is the reduced rate applicable to qualified dividend income and the denominator of which is the
highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by SuperCom with respect to the
ordinary shares generally will constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general category income.” The rules governing the U.S. foreign tax credit are complex and U.S. Holders should consult
their tax advisors regarding the availability of the U.S. foreign tax credit under their particular circumstances.
A holder of a Pre-Funded Warrant should consult its tax advisor regarding the tax treatment of any distribution with respect to such Pre-Funded Warrant that is held in abeyance
in connection with any applicable Beneficial Ownership Limitation.
Taxation on the Disposition of Securities
Subject to the PFIC rules discussed below, upon a sale or other taxable disposition of our securities, a U.S. Holder will generally recognize capital gain or loss. The amount of
gain or loss recognized will generally be equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition (or, if the ordinary shares, Pre-Funded Warrants or Warrants are held
as part of units at the time of the disposition, the portion of the amount realized on such disposition that is allocated to the ordinary shares, Pre-Funded Warrants or Warrants based upon the then fair market values of the ordinary shares or
Pre-Funded Warrants and Warrants included in the units) and (ii) the U.S. Holder’s adjusted tax basis in its securities. A U.S. Holder’s adjusted tax basis in its ordinary shares or Pre-Funded Warrants and unexercised Warrants generally will equal
the U.S. Holder’s acquisition cost (that is, the portion of the purchase price of a unit allocated to an ordinary share, Pre-Funded Warrant or Warrant, as described above under “—Allocation of Purchase Price and
Characterization of a Unit”) reduced by any prior distributions treated as a return of capital. See “—Exercise, Lapse or Redemption of a Warrant” below for a discussion regarding a U.S. Holder’s
basis in an ordinary share acquired pursuant to the exercise of a Warrant.
Under tax law currently in effect, long-term capital gains recognized by non-corporate U.S. Holders are generally subject to U.S. federal income tax at a reduced rate of tax.
Capital gain or loss will constitute long-term capital gain or loss if the U.S. Holder’s holding period for the ordinary shares or Warrants exceeds one year. The deductibility of capital losses is subject to various limitations.
Any such gain or loss recognized generally will be treated as U.S. source gain or loss. Accordingly, in the event any non-U.S. tax (including “covered withholding tax”) is
imposed upon such sale or other disposition, a U.S. Holder may not be able to utilize foreign tax credits unless such tax meets specific regulatory requirements and such U.S. Holder has foreign source income or gain in the same category from other
sources. Moreover, there are special rules under the Tax Treaty, which may impact a U.S. Holder’s ability to claim a foreign tax credit. U.S. Holders are urged to consult their own tax advisors regarding the ability to claim a foreign tax credit
and the application of the Tax Treaty to such U.S. Holder’s particular circumstances.
Exercise or Lapse of a Warrant
Subject to the PFIC rules discussed below and except as discussed below with respect to the cashless exercise of a Warrant, a U.S. Holder will generally not recognize gain or
loss upon the exercise of a Warrant for cash. An ordinary share subscribed for pursuant to the exercise of a Warrant for cash will generally have a tax basis equal to the U.S. Holder’s tax basis in the Warrant (that is, the portion of the U.S.
Holder’s purchase price for the units that is allocated to the Warrant, as described above under “—Allocation of Purchase Price and Characterization of a Unit”), increased by the amount paid to exercise the
Warrant.
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It is unclear whether a U.S. Holder’s holding period for the ordinary share will commence on the date of exercise of the Warrant or the day following the date of exercise of the
Warrant; in either case, the holding period will not include the period during which the U.S. Holder held the Warrant. If a Warrant is allowed to lapse unexercised, a U.S. Holder will generally recognize a capital loss equal to such holder’s tax
basis in the Warrant.
Because of the absence of authority specifically addressing the treatment of a cashless exercise of Warrants under U.S. federal income tax law, the treatment of such a cashless
exercise is unclear. A cashless exercise may be tax-free, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. Alternatively, a cashless exercise could
be treated as a taxable exchange in which gain or loss would be recognized.
In either tax-free situation, a U.S. Holder’s tax basis in the ordinary shares received would generally equal the U.S. Holder’s tax basis in the Warrants. If a cashless exercise
is not treated as a realization event, it is unclear whether a U.S. Holder’s holding period for the ordinary shares received on exercise will be treated as commencing on the date of exercise of the Warrant or the following day. If a cashless
exercise is treated as a recapitalization, the holding period of the ordinary shares received will include the holding period of the Warrants.
If a cashless exercise is treated as a taxable exchange, a U.S. Holder could be deemed to have surrendered Warrants with an aggregate fair market value equal to the exercise
price for the total number of Warrants to be exercised. In this case, the U.S. Holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the Warrants deemed surrendered and the U.S. Holder’s
tax basis in such Warrants. A U.S. Holder’s tax basis in the ordinary shares received would equal the sum of the U.S. Holder’s initial investment in the Warrants exercised (i.e., the U.S. Holder’s purchase price for the Warrant (or the portion of
such U.S. Holder’s purchase price for units that is allocated to the Warrant) and the exercise price of such Warrants). It is unclear whether a U.S. Holder’s holding period for the ordinary shares would commence on the date of exercise of the
Warrant or the day following the date of exercise of the Warrant.
SuperCom expects a U.S. Holder’s cashless exercise of Warrants to be treated as a recapitalization for U.S. federal income tax purposes. However, there can be no assurance which,
if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should consult their tax advisors regarding the tax consequences of a cashless exercise.
Possible Constructive Distributions
The terms of each Warrant provide for an adjustment to the number of ordinary shares for which the Warrant may be exercised or to the exercise price of the Warrant in certain
events, as discussed under “Description of Securities.” An adjustment which has the effect of preventing dilution generally is not taxable. A U.S. Holder of a Warrant would, however, be treated as receiving
a constructive distribution from us if, for example, the adjustment increases the holder’s proportionate interest in our assets or earnings and profits (for instance, through an increase in the number of ordinary shares that would be obtained upon
exercise of such Warrant) as a result of a distribution of cash or other property such as other securities to the holders of the ordinary shares which is taxable to the U.S. Holders of such shares as described under “-Taxation of Dividends and Other Distributions on Ordinary Shares” above. Such constructive distribution would be subject to tax as described under that section in the same manner as if the U.S. Holder of such Warrant received a
cash distribution from us equal to the fair market value of such increased interest.
Passive Foreign Investment Company Considerations
A foreign (i.e., non-U.S.) corporation will be a PFIC for U.S. federal income tax purposes if at least 75% of its gross income in a taxable year of the foreign corporation,
including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income. Alternatively, a foreign corporation will be a PFIC if at least 50% of its assets in a
taxable year of the foreign corporation, ordinarily determined based on fair market value and averaged quarterly over the year, including its pro rata share of the assets of any corporation in which it is considered to own at least 25% of the
shares by value, are held for the production of, or produce, passive income. Subject to some limited exceptions, cash (whether or not constituting working capital or used to generate interest income) may be treated as a passive asset. Passive
income generally includes dividends, interest, rents and royalties (other than certain rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets.
21
The determination as to whether a non-U.S. corporation is a PFIC is based on the application of complex U.S. federal income tax rules, which are subject to differing
interpretations, the composition of the income, expenses and assets of the non-U.S. corporation from time to time and the nature of the activities performed by its officers and employees. For this reason, while we do not presently expect to be a
PFIC for the current taxable year or the immediate future, there can be no assurance that the composition of our income and assets will not change, or that the IRS will not reach a contrary conclusion. You are urged to consult your tax advisers
regarding the risks associated in investing in a company that may be a PFIC. Further, the PFIC tests must be applied every year, and it is possible that we may become a PFIC in a future taxable year if the nature and extent of our activities were
to change, or if the composition of our income and assets change in any material respect. In addition, our actual PFIC status for any taxable year is not determinable until after the end of such taxable year, and we may not determine our PFIC
status for any future taxable year. Because of these uncertainties, it is possible that we may be a PFIC for the current or any other taxable year.
If SuperCom is determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder and the U.S. Holder did not make a timely
qualified electing fund (“QEF”) election for SuperCom’s first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) ordinary shares, a QEF election along with a deemed sale (or purging) election, or a “mark-to-market”
election, each as described below, such holder generally will be subject to special rules with respect to:
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any gain recognized by the U.S. Holder on the sale or other disposition of its ordinary shares or Warrants; and
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any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in
respect of SuperCom securities during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for such securities).
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Under these rules:
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the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for its securities;
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the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of our first taxable year
in which we are a PFIC, will be taxed as ordinary income;
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the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and
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the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable year of the U.S. Holder.
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In general, if SuperCom is determined to be a PFIC, a U.S. Holder may avoid the PFIC tax consequences described above in respect to its ordinary shares (but not Warrants) by
making a timely QEF election (if eligible to do so) to include in income its pro rata share of SuperCom’s net capital gains (as long-term capital gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or
not distributed, in the first taxable year of the U.S. Holder in which or with which SuperCom’s taxable year ends if SuperCom is treated as a PFIC for that taxable year. A U.S. Holder generally may make a separate election to defer the payment of
taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an interest charge.
A U.S. Holder may not make a QEF election with respect to Warrants. As a result, if a U.S. Holder sells or otherwise disposes of such Warrants (other than upon exercise of such
Warrants), any gain recognized will generally be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above, if is a PFIC at any time during the period the U.S. Holder held the Warrants. If
a U.S. Holder that exercises such Warrants properly makes a QEF election with respect to the newly acquired ordinary shares, the QEF election will apply to the newly acquired ordinary shares, but the adverse tax consequences relating to PFIC
shares, adjusted to take into account the current income inclusions resulting from the QEF election, will continue to apply with respect to such newly acquired ordinary shares (which will generally be deemed to have a holding period for purposes of
the PFIC rules that includes the period the U.S. Holder held the Warrants), unless the U.S. Holder makes a purging election under the PFIC rules. The purging election creates a deemed sale of such shares at their fair market value. The gain
recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, the U.S. Holder will increase the adjusted basis
in the ordinary shares acquired upon the exercise of the Warrants by the gain recognized and will also have a new holding period in such shares for purposes of the PFIC rules.
22
The QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S. Holder generally makes a QEF election by
attaching a completed IRS Form 8621 (Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), including the information provided in a PFIC annual information statement, to a timely filed U.S. federal income tax
return for the tax year to which the election relates. Retroactive QEF elections generally may be made only by filing a protective statement with such return and if certain other conditions are met or with the consent of the IRS. U.S. Holders
should consult their own tax advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances.
In order to comply with the requirements of a QEF election, a U.S. Holder must receive a PFIC annual information statement from SuperCom. If SuperCom determines that it is a PFIC
for any taxable year, it will endeavor to provide to a U.S. Holder upon request such information as the IRS may require, including a PFIC annual information statement, in order to enable the U.S. Holder to make and maintain a QEF election. However,
there is no assurance that SuperCom will have timely knowledge of its status as a PFIC in the future or of the required information to be provided.
If a U.S. Holder has made a QEF election with respect to ordinary shares, and the special tax and interest charge rules do not apply to such shares (because of a timely QEF
election for SuperCom’s first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to hold) such shares or a purge of the PFIC taint pursuant to a purging election, as described above), any gain recognized on the sale of ordinary
shares will generally be taxable as capital gain and no interest charge will be imposed under the PFIC rules. As discussed above, U.S. Holders who make a QEF election with respect to a PFIC are currently taxed on their pro rata shares of such
PFIC’s earnings and profits, whether or not distributed. In such case, a subsequent distribution of such earnings and profits that were previously included in income should generally not be taxable as a dividend to such U.S. Holders. The tax basis
of a U.S. Holder’s shares in a PFIC with respect to which a QEF election has been made will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under the above rules. Similar basis
adjustments apply to property if by reason of holding such property the U.S. Holder is treated under the applicable attribution rules as owning shares in a PFIC with respect to which a QEF election has been made.
As noted above, an initial determination that SuperCom is a PFIC will generally apply for subsequent years to a U.S. Holder who held SuperCom securities while SuperCom was a
PFIC, whether or not SuperCom meets the test for PFIC status in those subsequent years. A U.S. Holder who makes the QEF election discussed above for SuperCom’s first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to hold)
ordinary shares, however, will not be subject to the PFIC tax and interest charge rules discussed above in respect to such shares. In addition, such U.S. Holder will not be subject to the QEF inclusion regime with respect to such shares for any
taxable year of SuperCom that ends within or with a taxable year of the U.S. Holder and in which SuperCom is not a PFIC. On the other hand, if the QEF election is not effective for each of SuperCom’s taxable years in which SuperCom is a PFIC and
the U.S. Holder holds (or is deemed to hold) ordinary shares, the PFIC rules discussed above will continue to apply to such shares unless the holder makes a purging election, as described above, and pays the tax and interest charge with respect to
the gain inherent in such shares attributable to the pre-QEF election period.
Alternatively, if a U.S. Holder, at the close of its taxable year, owns (or is deemed to own) shares in a PFIC that are treated as marketable shares, the U.S. Holder may make a
mark-to-market election with respect to such shares for such taxable year. If the U.S. Holder makes a valid mark-to-market election for the first taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) ordinary shares
in and for which SuperCom is determined to be a PFIC, such holder will generally not be subject to the PFIC rules described above in respect to its ordinary shares as long as such shares continue to be treated as marketable shares. Instead, in
general, the U.S. Holder will include as ordinary income for each year that SuperCom is treated as a PFIC the excess, if any, of the fair market value of its Ordinary Shares at the end of its taxable year over the adjusted basis in its ordinary
shares. The U.S. Holder also will be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of its ordinary shares over the fair market value of its ordinary shares at the end of its taxable year (but only to the
extent of the net amount of previously included income as a result of the mark-to-market election). The U.S. Holder’s basis in its ordinary shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a
sale or other taxable disposition of the ordinary shares in a taxable year in which SuperCom is treated as a PFIC will be treated as ordinary income. Special tax rules may also apply if a U.S. Holder makes a mark-to-market election for a taxable
year after the first taxable year in which the U.S. Holder holds (or is deemed to hold) its ordinary shares and for which SuperCom is treated as a PFIC. Currently, a mark-to-market election may not be made with respect to Warrants.
23
The mark-to-market election is available only for stock that is regularly traded on a national securities exchange that is registered with the SEC, including Nasdaq, or on a
foreign exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. U.S. Holders should consult their own tax advisors regarding the availability and tax
consequences of a mark-to-market election in respect to ordinary shares under their particular circumstances.
If SuperCom is a PFIC and, at any time, has a foreign subsidiary that is classified as a PFIC, U.S. Holders would generally be deemed to own a portion of the shares of such
lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described above if SuperCom receives a distribution from, or disposes of all or part of SuperCom’s interest in, the lower-tier PFIC or the U.S. Holders
otherwise were deemed to have disposed of an interest in the lower-tier PFIC. Upon request, SuperCom will endeavor to cause any lower-tier PFIC to provide to a U.S. Holder the information that may be required to make or maintain a QEF election with
respect to the lower-tier PFIC. However, there is no assurance that SuperCom will have timely knowledge of the status of any such lower-tier PFIC. In addition, SuperCom may not hold a controlling interest in any such lower-tier PFIC and thus there
can be no assurance we will be able to cause the lower-tier PFIC to provide the required information. A mark-to-market election generally would not be available with respect to such lower-tier PFIC. U.S. Holders are urged to consult their own tax
advisors regarding the tax issues raised by lower-tier PFICs.
A U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder, may have to file an IRS Form 8621(whether or not a QEF or
market-to-market election is made) with such U.S. Holder’s U.S. federal income tax return and provide such other information as may be required by the U.S. Treasury Department. The rules dealing with PFICs and with the QEF and mark-to-market
elections are very complex and are affected by various factors in addition to those described above. Accordingly, U.S. Holders of SuperCom securities should consult their own tax advisors concerning the application of the PFIC rules to SuperCom
securities under their particular circumstances.
Information Reporting and Backup Withholding
In general, information reporting requirements will apply to dividends received by U.S. Holders of ordinary shares (including constructive dividends), and the proceeds received
on the disposition of ordinary shares and Warrants effected within the United States (and, in certain cases, outside the United States), in each case, other than U.S. Holders that are exempt recipients (such as corporations). As stated above,
information reporting requirements will also apply to redemptions from U.S. Holders of ordinary shares. Backup withholding (currently at a rate of 24%) may apply to such amounts if the U.S. Holder fails to provide an accurate taxpayer
identification number (generally on an IRS Form W-9 provided to the paying agent or the U.S. Holder’s broker) or is otherwise subject to backup withholding.
Certain U.S. Holders holding specified foreign financial assets with an aggregate value in excess of the applicable dollar threshold are required to report information to the IRS
relating to SuperCom securities, subject to certain exceptions (including an exception for SuperCom securities held in accounts maintained by U.S. financial institutions), by attaching a complete IRS Form 8938, Statement of Specified Foreign
Financial Assets, with their tax return, for each year in which they hold SuperCom securities. In addition to these requirements, U.S. Holders may be required to annually file FinCEN Report 114 (Report of Foreign Bank and Financial Accounts) with
the U.S. Department of Treasury. U.S. Holders should consult their own tax advisors regarding information reporting requirements relating to their ownership of SuperCom securities. Backup withholding is not an additional tax. Any amounts withheld
under the backup withholding rules may be allowed as a refund or credit against a holder’s U.S. federal income tax liability, if any, provided the required information is timely furnished to the IRS.
We are offering up to 8,000,000 Units, based on an assumed public offering price of $1.00 per Unit (equal to the closing price of the ordinary shares on Nasdaq on July 28, 2023), each consisting
of an ordinary share or Pre-Funded Warrant and one Warrant to purchase one ordinary share each, for gross proceeds of up to $8.0 million before deduction of placement agent commissions and offering expenses and assuming that the public offering
price of the Units as set forth on the cover page of this prospectus remains the same and assuming no exercise of the Warrants, in a best-efforts offering. There is no minimum amount of proceeds that is a condition to closing of this offering.
The actual amount of gross proceeds, if any, in this offering could vary substantially from the gross proceeds from the sale of the maximum amount of securities being offered in this prospectus.
24
Pursuant to a placement agency agreement, dated as of ______, 2023, we have engaged Maxim Group LLC to act as our exclusive placement agent (the “Placement Agent”) to solicit offers to purchase the
securities offered by this prospectus. The Placement Agent is not purchasing or selling any securities, nor is it required to arrange for the purchase and sale of any specific number or dollar amount of securities, other than to use its
“reasonable best efforts” to arrange for the sale and/or issuance (as applicable) of the securities by us. Therefore, we may not sell the entire amount of securities being offered. We will enter into a securities purchase agreement directly with
the institutional investors, at the investor’s option, who purchase our securities in this offering. Investors who do not enter into a securities purchase agreement shall rely solely on this prospectus in connection with the purchase of our
securities in this offering. The Placement Agent may engage one or more subagents or selected dealers in connection with this offering.
The placement agency agreement provides that the Placement Agent’s obligations are subject to conditions contained in the placement agency agreement.
We will deliver the securities being issued to the investors upon receipt of investor funds for the purchase and/or subscription for (as applicable) of the securities offered
pursuant to this prospectus. We expect to deliver the securities being offered pursuant to this prospectus on ______, 2023.
Placement Agent Fees, Commissions and Expenses
Upon the closing of this offering, we will pay the Placement Agent a cash transaction fee equal to 7% of the aggregate gross cash proceeds to us from the sale and/or issuance (as
applicable) of the securities in the offering. In addition, we will reimburse the Placement Agent for its out-of-pocket expenses incurred in connection with this offering, including the fees and expenses of the counsel for the Placement Agent, up
to $40,000.
We estimate that the total expenses of the offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding Placement
Agent fees, will be approximately $80,000, all of which are payable by us. This figure includes the Placement Agent’s accountable expenses, including, but not limited to, legal fees for Placement Agent’s legal counsel, that we have agreed to pay at
the closing of the offering up to an aggregate expense reimbursement of $40,000.
The following table shows the public offering price, Placement Agent fees and proceeds, before expenses, to us, assuming the purchase of all the securities we are offering.
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Per Ordinary Share and
Warrant |
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Per Pre-Funded
Warrant and Warrant |
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Total
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Offering Price
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$
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$
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$
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Placement agent fees
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Proceeds before expenses to us
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$
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$
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$
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Indemnification
We have agreed to indemnify the placement agent against certain liabilities, including liabilities under the Securities Act and liabilities arising from
breaches of representations and warranties contained in our engagement letter with the placement agent. We have also agreed to contribute to payments the placement agent may be required to make in respect of such liabilities.
25
Determination of Offering Price and Exercise Price
The actual public offering price of the securities we are offering, and the exercise price of the Warrants and Pre-Funded Warrants included in the Units that we are offering,
were negotiated between us and the investors in the offering based on the trading of the ordinary shares prior to the offering, among other things. Other factors considered in determining the public offering price of the securities we are offering,
as well as the exercise price of the Warrants included in the Units and Pre-Funded Warrants that we are offering include our history and prospects, the stage of development of our business, our business plans for the future and the extent to which
they have been implemented, an assessment of our management, the general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant.
Regulation M
The Placement Agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it and any profit realized on
the resale of the securities sold by it while acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. As an underwriter, the Placement Agent would be required to comply with the requirements of the
Securities Act and the Exchange Act, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of our securities by the Placement Agent acting as
principal. Under these rules and regulations, the Placement Agent (i) may not engage in any stabilization activity in connection with our securities and (ii) may not bid for or purchase any of our securities or attempt to induce any person to
purchase any of our securities, other than as permitted under the Exchange Act, until it has completed its participation in the distribution.
Electronic Distribution
This prospectus in electronic format may be made available on websites or through other online services maintained by the placement agent, or by its
affiliates. Other than this prospectus in electronic format, the information on the placement agent’s website and any information contained in any other website maintained by the placement agent is not part of this prospectus or the registration
statement of which this prospectus forms a part, has not been approved and/or endorsed by us or the placement agent in its capacity as an underwriter, and should not be relied upon by investors.
Certain Relationships
The Placement Agent and its affiliates have and may in the future provide, from time to time, investment banking and financial advisory services to us in the ordinary course of
business, for which they may receive customary fees and commissions.
Selling Restrictions
No action has been taken in any jurisdiction (except in the United States) that would permit a public offering of our ordinary shares, the Units, the Warrants or the
Pre-Funded Warrants, or the possession, circulation or distribution of this prospectus or any other material relating to us or our securities in any jurisdiction where action for that purpose is required. Accordingly, our securities may not be
offered or sold, directly or indirectly, and this prospectus or any other offering material or advertisements in connection with our securities may be distributed or published, in or from any country or jurisdiction, except in compliance with
any applicable rules and regulations of any such country or jurisdiction.
26
Notice to Non-U.S. Investors
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) an offer to the public of any
securities which are the subject of the offering contemplated by this prospectus may not be made in that Relevant Member State except that an offer to the public in that Relevant Member State of any such securities may be made at any time under
the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:
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to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;
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to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual
net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;
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by the underwriter to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive); or
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In any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of these securities shall result in a requirement for the publication by
the issuer or the underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive.
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For the purposes of this provision, the expression an “offer to the public” in relation to any of the securities in any Relevant Member State means the communication in any
form and by any means of sufficient information on the terms of the offer and any such securities to be offered so as to enable an investor to decide to purchase any such securities, as the same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State and the expression” Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.
The representative has represented, warranted and agreed that:
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a.
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it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the
meaning of section 21 of the Financial Services and Markets Act 2000 (the FSMA)) received by it in connection with the issue or sale of any of the securities in circumstances in which section 21(1) of the FSMA does not apply to the
issuer; and
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b.
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it has complied with and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the securities in, from or otherwise involving the
United Kingdom.
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European Economic Area
In particular, this document does not constitute an approved prospectus in accordance with European Commission’s Regulation on Prospectuses no. 809/2004 and no such
prospectus is to be prepared and approved in connection with this offering. Accordingly, in relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (being the Directive of the European
Parliament and of the Council 2003/71/EC and including any relevant implementing measure in each Relevant Member State) (each, a Relevant Member State), with effect from and including the date on which the Prospectus Directive is implemented in
that Relevant Member State (the Relevant Implementation Date) an offer of securities to the public may not be made in that Relevant Member State prior to the publication of a prospectus in relation to such securities which has been approved by
the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive,
except that it may, with effect from and including the Relevant Implementation Date, make an offer of securities to the public in that Relevant Member State at any time:
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to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;
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to any legal entity which has two or more of (1) an average of at least 250 employees during the last
financial year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown in the last annual or consolidated accounts; or
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in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.
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For the purposes of this provision, the expression an “offer of securities to the public” in relation to any of the securities in any Relevant Member State means the
communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe for the securities, as the same may be varied in that
Member State by any measure implementing the Prospectus Directive in that Member State. For these purposes the shares offered hereby are “securities.”
27
Canada
The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are “accredited investors”, as defined in National
Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are “permitted clients”, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any
resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws. Securities legislation in certain provinces or territories of Canada may
provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time
limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these
rights or consult with a legal advisor. Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter
conflicts of interest in connection with this offering.
Listing
Our ordinary shares are currently listed on Nasdaq under the symbol SPCB.
See section captioned “Prospectus Summary ⸺ Recent Developments” above.
The following table sets forth the fees and expenses, other than placement agent fees, payable in connection with the registration of our securities hereunder. All amounts are
estimates except the SEC registration fee and the FINRA filing fee.
|
SEC registration fee
|
$
|
2,204
|
||
|
FINRA filing fee
|
$
|
5,000
|
||
|
Transfer agent fees and expenses
|
$
|
2,000
|
||
|
Printing and mailing expenses
|
$
|
1,000
|
||
|
Legal fees and expenses
|
$
|
60,000
|
||
|
Accounting fees and expenses
|
$
|
6,000
|
||
|
Miscellaneous
|
$
|
3,000
|
||
|
Total
|
$
|
80,204
|
28
The validity of the securities offered by this prospectus and other legal matters concerning this offering relating to Israeli law has been passed upon for us by S. Friedman, Abramson & Co.
Certain legal matters with respect to U.S. federal law and New York law in connection with this offering will be passed upon for us by Foley Shechter Ablovatskiy LLP. Additional legal matters may be passed upon for us or any underwriters, dealers
or agents, by counsel that we will name in the applicable prospectus supplement.
The financial statements incorporated in this prospectus by reference to the Annual Report on Form 20-F for the year ended December 31, 2022 have been so incorporated in reliance
on the report of Yarel + Partners, Certified Public Accountant (Isr.), an independent registered public accounting firm. The financial statements incorporated in this prospectus by reference to the Annual Report on Form 20-F for the year ended
December 31, 2021 have been so incorporated in reliance on the report of Halperin Ilanit, Certified Public Accountant (Isr.), an independent registered public accounting firm.
We have filed with the SEC a registration statement on Form F-1 under the Securities Act with respect to the securities offered by this prospectus. This prospectus, which is part
of the registration statement, omits certain information, exhibits, schedules and undertakings set forth in the registration statement. For further information pertaining to us and the securities offered hereby, reference is made to the
registration statement and the exhibits and schedules to the registration statement. Statements contained in this prospectus as to the contents or provisions of any documents referred to in this prospectus are not necessarily complete, and in each
instance where a copy of the document has been filed as an exhibit to the registration statement, reference is made to the exhibit for a more complete description of the matters involved.
You may read and copy all or any portion of the registration statement without charge at the public reference room of the Securities and Exchange Commission at 100 F Street,
N.E., Washington, D.C. 20549. Copies of the registration statement may be obtained from the Securities and Exchange Commission at prescribed rates from the public reference room of the Securities and Exchange Commission at such address. You may
obtain information regarding the operation of the public reference room by calling 1-800-SEC-0330. In addition, registration statements and certain other filings made with the Securities and Exchange Commission electronically are publicly available
through the Securities and Exchange Commission’s website at www.sec.gov. The registration statement, including all exhibits and amendments to the registration statement, has been filed electronically with the Securities and Exchange Commission. You
may also read all or any portion of the registration statement and certain other filings made with the Securities and Exchange Commission on our website at www.supercom.com. The information contained in, and that can be accessed through, our
website is not incorporated into and is not part of this prospectus.
We are subject to the reporting requirements of the Exchange Act that are applicable to a foreign private issuer. In accordance with the Exchange Act, we file reports, including
Annual Reports on Form 20-F by April 30 of each year. We also furnish to the SEC under cover of Form 6-K material information required to be made public in Israel, filed with and made public by any stock exchange or distributed by us to our
shareholders.
As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders and our officers,
directors and principal shareholders are exempt from the “short-swing profits” reporting and liability provisions contained in Section 16 of the Exchange Act and related Exchange Act rules.
29
We file annual and special reports and other information with the SEC. These filings contain important information which does not appear in this prospectus. The SEC allows us to
“incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to other documents which we have filed or will file with the SEC. We are incorporating by reference in this
prospectus the documents listed below and all amendments or supplements we may file to such documents, as well as any future filings we may make with the SEC on Form 20-F under the Exchange Act before the time that all of the securities offered by
this prospectus have been sold or de-registered:
| • |
our Registration Statement on Form F-3, filed with the SEC on December 1, 2021;
|
| • |
our Annual Report on Form 20-F for the fiscal year ended on December 31, 2022, filed with the SEC on April 20, 2023;
|
| • |
our Report on Form 6-K filed with the SEC on March 31, 2023; and
|
| • |
our Report on Form 6-K filed with the SEC on April 3, 2023.
|
Any statement contained in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained in this prospectus or any other subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes the statement. Any statement so modified or
superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
This prospectus shall also be deemed to incorporate by reference all subsequent annual reports filed on Form 20-F prior to the termination of the offering made by this
prospectus. We may incorporate by reference into this prospectus, any Form 6-K meeting the requirements of Form F-1 which is submitted to the SEC after the date of this prospectus and before the date of termination of this offering. Any such Form
6-K which we intend to so incorporate shall state in such form that it is being incorporated by reference into this prospectus.
We will provide you without charge, upon your written or oral request, a copy of any of the documents incorporated by reference in this prospectus, other than exhibits to such
documents which are not specifically incorporated by reference into such documents. Please direct your written or telephone requests to
SuperCom Ltd.
3 Rothschild Street
Tel-Aviv, Israel
Attn: Ordan Trabelsi, Chief Executive Officer
telephone number +972 (9) 889-0850
You may also obtain information about us by visiting our website at www.supercom.com. Information contained in our website is not part of
this prospectus.
As a foreign private issuer, we are exempt from the rules under Section 14 of the Exchange Act prescribing the furnishing and content of proxy statements and our officers,
directors and principal shareholders are exempt from the reporting and other provisions in Section 16 of the Exchange Act.
We are incorporated under the laws of the State of Israel. Service of process upon us and upon our directors and officers and the Israeli experts named in this prospectus,
substantially all of whom reside outside the United States, may be difficult to obtain within the United States. Furthermore, because substantially all of our assets and substantially all of our directors and officers are located outside the United
States, any judgment obtained in the United States against us or any of our directors and officers may not be collectible within the United States.
It may be difficult to assert U.S. securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on a violation of
U.S. securities laws because Israel is not the most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is
found to be applicable, the content of applicable U.S. law must be proved as a fact which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law.
30
Subject to specified time limitations and legal procedures, Israeli courts may enforce a United States judgment in a civil matter which, subject to certain exceptions, is
non-appealable, including judgments based upon the civil liability provisions of the Securities Act and the Exchange Act and including a monetary or compensatory judgment in a non-civil matter, provided that:
| • |
the judgments are obtained after due process before a court of competent jurisdiction, according to the laws of the state in which the judgment is given and the rules of private international law currently prevailing in Israel;
|
| • |
the prevailing law of the foreign state in which the judgments were rendered allows the enforcement of judgments of Israeli courts (however, the Israeli courts may waive this requirement following a request by the attorney general);
|
| • |
adequate service of process has been effected and the defendant has had a reasonable opportunity to be heard and to present his or her evidence;
|
| • |
the judgments are not contrary to public policy, and the enforcement of the civil liabilities set forth in the judgment does not impair the security or sovereignty of the State of Israel;
|
| • |
the judgments were not obtained by fraud and do not conflict with any other valid judgment in the same matter between the same parties;
|
| • |
an action between the same parties in the same matter is not pending in any Israeli court at the time the lawsuit is instituted in the foreign court; and
|
| • |
the obligations under the judgment are enforceable according to the laws of the State of Israel and according to the law of the foreign state in which the relief was granted.
|
We have irrevocably appointed SuperCom, Inc. as our agent to receive service of process in any action against us in any United States federal or state court arising out of this
offering or any purchase or sale of securities in connection with this offering.
If a foreign judgment is enforced by an Israeli court, it generally will be payable in Israeli currency, which can then be converted into
non-Israeli currency and transferred out of Israel. The usual practice in an action before an Israeli court to recover an amount in a non-Israeli currency is for the Israeli court to issue a judgment for the equivalent amount in Israeli currency at
the rate of exchange in force on the date of the judgment, but the judgment debtor may make payment in foreign currency. Pending collection, the amount of the judgment of an Israeli court stated in Israeli currency ordinarily will be linked to the
Israeli consumer price index plus interest at the annual statutory rate set by Israeli regulations prevailing at the time. Judgment creditors must bear the risk of unfavorable exchange rates.
31
Up to 8,000,000 Units
consisting of
8,000,000 Ordinary Shares or 8,000,000 Pre-Funded Warrants to Purchase 8,000,000 Ordinary Shares and
8,000,000 Warrants to Purchase 8,000,000 Ordinary Shares
Up to 8,000,000 Ordinary Shares Underlying the Pre-Funded Warrants
Up to 8,000,000 Ordinary Shares Underlying the Warrants
SuperCom Ltd.
Preliminary Prospectus
______, 2023
Maxim Group
LLC
PART II – INFORMATION NOT REQUIRED IN PROSPECTUS
Item 6. Indemnification of Directors and Officers.
Exculpation, Insurance and Indemnification of Directors and Officers
Exculpation of Office Holders
Under the Israeli Companies Law (“Companies Law”), an Israeli company may not exculpate an office holder from liability for breach of his duty of loyalty, but may exculpate in
advance an office holder from liability to the company, in whole or in part, for a breach of his duty of care, provided the articles of association of the company allow it to do so. Our Articles of Association allow us to exculpate our office
holders from liability towards us for breach of duty of care to the maximum extent permitted by law.
Office Holder Insurance
Our Articles of Association provide that, subject to the provisions of the Companies Law, we may enter into a contract for the insurance of the liability of any of our office
holders for any act done by him or her by virtue of being an office holder, in respect of any of the following:
| • |
a breach of duty of care towards us or any other person;
|
| • |
a breach of fiduciary obligations towards us, provided that the office holder acted in good faith and had reasonable grounds to assume that his or her act would not be to our detriment;
|
| • |
a financial liability imposed on him or her in favor of another person; or
|
| • |
any other event for which insurance of an office holder is or may be permitted.
|
Indemnification of Office Holders
Our Articles of Association provide that we may indemnify an office holder for the following cases of liability and expenses incurred by him or her as a result of an act done by
him or her by virtue of being an office holder:
| • |
financial liability imposed upon said office holder in favor of another person by virtue of a decision by a court of law, including a decision by way of settlement or a decision in arbitration which has been confirmed by a court of law;
|
| • |
reasonable expenses of the proceedings, including lawyers’ fees, expended by the office holder or imposed on him by the court for:
|
| (1) |
proceedings issued against him by or on behalf of our company or by a third party;
|
| (2) |
criminal proceedings in which the office holder was acquitted;
|
| (3) |
criminal proceedings in which he was convicted in an offense, which did not require proof of criminal intent; or
|
| (4) |
any other liability or expense for which the indemnification of an officer holder is not precluded by law.
|
We have obtained directors’ and officers’ liability insurance for the benefit of our office holders. In addition, we have granted indemnification letters to our office holders.
Limitations on Exculpation, Insurance and Indemnification
The Companies Law provides that a company may not exculpate or indemnify an office holder, or enter into an insurance contract, which would provide coverage for any monetary
liability incurred as a result of any of the following:
| • |
a breach by the office holder of his or her duty of loyalty towards the company unless, with respect to insurance coverage, the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the
company;
|
| • |
a breach by the office holder of his or her duty of care if the breach was done intentionally or recklessly;
|
| • |
any act or omission done with the intent to derive an illegal personal benefit; or
|
| • |
any fine levied against the office holder.
|
II - 1
Required Approvals
In addition, under the Companies Law, any exculpation of, indemnification of, or procurement of insurance coverage for, our office holders must be approved by our audit committee
and our board of directors and, if the beneficiary is a director, an additional approval by our shareholders is required.
Item 7. Recent Sales of Unregistered Securities.
The following information sets forth certain information with respect to all unregistered securities which we have sold during the last three years:
During the fiscal year ended December 31, 2020 and 2021, we issued 238,000 shares and 238,000 warrants to purchase our ordinary shares at an exercise price of $17 per share for
gross proceeds of approximately $3.2 million, which warrants are exercisable until July 2025. During the fiscal year ended December 31, 2022, we issued 568,869 warrants to purchase our ordinary shares at an exercise price of $7 per share, which
warrants are exercisable until 2027.
During the fiscal years ended December 31, 2020, 2021 and 2022, we issued an aggregate of 141,452, 824,063 and 1,650 of our ordinary shares to certain warrants and options
holders, certain of our noteholders, employees, consultants and vendors in exchange of promissory notes principals and cash exercise proceeds in an aggregate amount of approximately $1,356,000, $7,601,000 and 1.
During the fiscal years ended December 31, 2020, 2021 and 2022, we issued an aggregate of 0, 0 and 800,937 options to purchase our ordinary shares to certain of our employees,
consultants and vendors with a weighted average exercise price of $3.25 per share.
On March 31, 2023, we completed a registered direct offering with a single accredited institutional investor of an aggregate of 485,000 of its ordinary shares and 1,032,615
pre-funded warrants to purchase ordinary shares with an exercise price of $0.00001 per share, and concurrent private placement to such investor of our private warrants to purchase an aggregate of 1,517,615 of ordinary shares at an exercise price of
$1.66 per share. The private warrants are immediately exercisable and expire on March 31, 2028. In connection with the closing of these offerings, we agreed that certain existing remaining warrants to purchase up to an aggregate of 564,869 of its
ordinary shares that were previously issued to such investor on July 27, 2022, at an exercise price of $3.08 per ordinary share, were amended so that the amended warrants will have an exercise price of $1.66 per share. These offerings were effected
pursuant to the Securities Purchase Agreement, dated as of March 30, 2023, with such institutional investor.
We claimed exemption from registration under the Securities Act for the sale and issuance of securities in the transactions described above by virtue of Sections 4(a)(2) and/or
Regulation D promulgated thereunder as transactions not involving any public offering. All of the purchasers of unregistered securities for which we relied on Section 4(a)(2) and/or Regulation D represented that they were accredited investors as
defined under the Securities Act. We claimed such exemption on the basis that (i) the purchasers in each case represented that they intended to acquire the securities for investment only and not with a view to the distribution thereof and that they
either received adequate information about the registrant or had access, through employment or other relationships, to such information and (ii) appropriate legends were affixed to the share or warrant certificates issued in such transactions.
II - 2
Item 8. Exhibits and Financial Statement Schedules.
(a) Exhibits
The following exhibits are being filed with this Registration Statement:
________________________
| * |
Filed herewith.
|
| ** |
Previously filed.
|
| † |
Management contract or compensatory plan or arrangement.
|
| (1) |
Filed as Exhibit 1.1 to the Company’s Registration Statement on Form F-1 (Registration No. 333-189910), filed with the SEC on July 3, 2013, and incorporated herein by reference.
|
| (2) |
Filed as Exhibit 2.1 to the Company’s Registration Statement on Form F-1 (Registration No. 333-189810), filed with the SEC on July 3, 2013, and incorporated herein by reference.
|
| (3) |
Filed as Exhibit 4.1 to the Company’s Report on Form 6-K, filed with the SEC on March 31, 2023, and incorporated herein by reference.
|
| (4) |
Filed as Exhibit 4.2 to the Company’s Report on Form 6-K, filed with the SEC on March 31, 2023, and incorporated herein by reference.
|
| (5) |
Filed as Exhibit 4.2(a) to the Company’s Annual Report on Form 20-F, filed with the SEC on May 9, 2012, and incorporated herein by reference.
|
| (6) |
Filed as Exhibit 4.2(b) to the Company’s Annual Report on Form 20-F, filed with the SEC on May 9, 2012, and incorporated herein by reference.
|
| (7) |
Filed as Exhibit 10.1 to the Company’s Registration Statement on Form F-1 (Registration No. 333-189810), filed with the SEC on July 3, 2013, and incorporated herein by reference.
|
| (8) |
Filed as Exhibit 10.1 to the Company’s Report on Form 6-K, filed with the SEC on March 31, 2023, and incorporated herein by reference.
|
| (9) |
Filed as Exhibit 10.2 to the Company’s Report on Form 6-K, filed with the SEC on March 31, 2023, and incorporated herein by reference.
|
| (10) |
Filed as Exhibit 11.1 to the Company’s Annual Report on Form 20-F, filed with the SEC on June 30, 2008, and incorporated herein by reference.
|
| (11) |
Filed as Exhibit 8.1 to the Company’s Annual Report on Form 20-F, filed with the SEC on April 20, 2023, and incorporated herein by reference.
|
(b) Financial Statement Schedules
All schedules have been omitted because either they are not required, are not applicable or the information is otherwise set forth in the financial statements and related notes
thereto.
II - 3
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 (the “Securities Act”);
(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. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective 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;
Provided, however, that Paragraphs (a)(1)(i), (ii), and (iii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained
in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, 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) That, for the purpose of determining liability under the Securities Act to any purchaser: If the registrant is subject to Rule 430C (§230.430C of this chapter), each
prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (§230.430A of this chapter),
shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first
use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5) That, for the purpose of determining liability under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes
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 such 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 (§230.424 of this chapter);
(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.
(b) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final adjudication of such issue.
II - 4
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 Amendment No. 1 to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Tel Aviv, Israel on July 31, 2023.
|
|
SUPERCOM LTD.
|
|
|
|
|
|
By: /s/ Ordan Trabelsi
|
|
|
Name: Ordan Trabelsi
|
|
|
Title: Chief Executive Officer
|
|
|
By: /s/ Arie Trabelsi
|
|
|
Name: Arie Trabelsi
|
|
|
Title: Acting Chief Financial Officer (Acting Principal Accounting Officer)
|
Pursuant to the requirements of the Securities Act, this Amendment No. 1 to the registration statement has been signed below by the following persons on the
dates and in the capacities indicated.
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Ordan Trabelsi
|
|
Chief Executive Officer and
|
|
July 31, 2023
|
|
Ordan Trabelsi
|
|
Director
|
|
|
|
|
|
|
|
|
|
/s/ Arie Trabelsi
|
|
Acting Chief Financial Officer
|
|
July 31, 2023
|
|
Arie Trabelsi
|
|
and Director
|
|
|
|
|
|
|
|
|
|
*/s/ Oren Raoul De Lange
|
|
Director
|
|
July 31, 2023
|
|
Oren Raoul De Lange
|
|
|
|
|
|
|
|
|
|
|
|
*/s/ Shoshana Cohen Shapira
|
|
Director
|
|
July 31, 2023
|
|
Shoshana Cohen Shapira
|
|
|
|
|
|
|
|
|
|
|
|
*/s/ Tal Naftali Shmuel
|
|
Director
|
|
July 31, 2023
|
|
Tal Naftali Shmuel
|
|
|
|
|
| * | /s/ Arie Trabelsi |
||||
| Arie Trabelsi |
|||||
|
Attorney-in-fact
|
|
|
II - 5
Signature of Authorized Representative In the United States
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant’s duly authorized representative has signed this Registration Statement on Form F-1 on this 31st day
of July, 2023.
|
|
SUPERCOM INC.
|
|
|
|
Authorized U.S. Representative
|
|
|
|
|
|
|
|
By: /s/ Ordan Trabelsi
|
|
|
|
Ordan Trabelsi
|
|
II - 6
Exhibit 3.2
THE COMPANIES LAW
ARTICLES OF ASSOCIATION
OF SUPERCOM LTD.
Interpretation
| 1. |
1n these Articles of Association the following terms will have the meanings described below, unless the context requires otherwise:
|
|
"Articles"
|
These Articles of Association, as may be amended from time to time.
|
|
"Audit Committee"
|
The audit committee of the Board of Directors, established according to these Artic1es and
the Law.
|
|
"Board of
Directors"
|
The Company's board of directors.
|
| "Company" |
SUPERCOM LTD.
|
| "Director" |
A membe1• of the Company's Board of Directors.
|
|
"General Meeting"
|
A meeting of the company's Shareholders convened according to these Articles and the Law.
|
|
"lndependent Director"
|
A Director that qualifies as independent in accordance with the rules of the U.S. Securities
and Exchange Commission and of any securities exchange in which the Company has registered its shares on and in accordance with any applicable law or regulation.
|
|
"Law"
|
The Companies Law - 1999, including any regulations and regulatory orders relating thereto
and to the Compa11y, as will be in effect from time to time.
|
|
"Officer"
|
A
Director, General Manager, President, Chief Executive Officer ("CEO"), Deputy General Manager, Assistant
General Manager, and any person holding such office in the Company, even if bearing a different title, and any other manager being directly subordinated to the CEO.
|
|
"Ordinary Majority"
|
An ordinary majority of all votes properly cast at a General Meeting, without taking
into account abstentions.
|
|
"Register"
|
The
register of Shareholders, including branch registers the Company may maintain, kept according to the Law.
|
|
"Secretary"
|
The
Company's corporate secretary, as may be appointed by the Board from time to time.
|
|
"Share Capital"
|
The
Company' s registered share capital, as authorized in these Articles.
|
|
"Shareholder"
|
Any person or entity that is a holder of shares of the Company according to these
Articles and the Law
|
|
"Special Majority"
|
A
majority of at least sixty-six percent (66%) of all votes properly cast at a General Meeting, without taking into account abstentions.
|
|
"Voting Instrument"
|
A written form for Shareholders to use, according to these Articles and the Law, in
voting at General Meetings.
|
|
"Writing"
|
A
handwritten, typewritten, facsimile, print, e-mail or any other legally recognized form of communication that can be read.
|
| 2. |
In these Articles, unless the context otherwise requires,
terms used herein shall have the meanings ascribed to them in the Law. In addition, words importing the singular will include the plural, and vice versa. Words importing the masculine gender will include the feminine, and words importing
persons will include companies, partnerships, associations and all other legal entities. Days, months and years refer to the Gregorian calendar.
|
| 3. |
In the event that an Article is revised or a new Article is added to these
Articles, which contradicts an original Article, the revised or added Article(s) will prevail.
|
| 4. |
Unless the context requires otherwise, wherever it is specified in these
Articles that the provisions thereof are according to or subject to the provisions of the Law and/or any other applicable law, rules or
regulations, the intention is to mandatory legislation provisions only.
|
Public Company
| 5. |
(a) The Company is a public company as defined in the Law.
|
| (b) |
Subject to any limitation or restriction under any law, the transfer of shares in the Company is not restricted.
|
| (c) |
The number of Shareholders is unlimited.
|
| (d) |
The Company may issue any form of its shares or other securities to the public.
|
| 6. |
The liability of each of the Shareholders of the Company is limited to the greater amount
of the two - the Share's nominal value, or the amount, which the Shareholder is called to pay to the Company for the shares, which have been allocated to him but have not yet been paid for by him.
|
Permissible Objects
| 7. |
The Objects of the Company may include any activity permitted by law.
|
| 8. |
The Company may contribute, from time to time, reasonable amounts to worthwhile causes, even if the contribution is not based on profit-oriented business considerations.
|
Name and Registered Office
| 9. |
The name of the Company is: SuperCom Ltd. and in Hebrew: מ"בע סופרקום.
|
| 10. |
The Registered Office of the Company will be at such place as the Board of Directors shall determine from time to time.
|
Share Capital
| 11. |
The authorized Share Capital of the Company is 100,000,000 Ordinary Shares of NIS 2.5 each.
|
Alteration of Share Capital
| 12. |
The Company may from time to time, by a Resolution of Shareholders at a General Meeting, whether or not all the shares then authorized have been issued, and whether or not all the shares then issued have
been called up for payment, increase its authorized Share Capital by the creation of new shares. Such increase shall be in such amount, divided into shares of such nominal amounts, subject to such restrictions and terms and with such rights
and preferences, as the Resolution creating the same shall provide.
|
| 13. |
Unless otherwise provided in the Resolution authorizing the increase of Share Capital, the new shares shall be subject to the same provisions applicable to the shares included in the existing Share Capital
with regard to the payment of calls, lien, forfeiture, transfer, transmission and otherwise.
|
| 14. |
The Company may, by a resolution of the Shareholders at a General Meeting:
|
| (a) |
consolidate and re-divide its Share Capital, fully or partly, into shares of larger nominal (par) value than its existing shares;
|
| (b) |
divide, by sub-division of its existing shares or any of them, into shares of smaller nominal (par) value than is fixed by the Memorandum of Association and these Articles; provided, however, that the
proportion between the amount paid and the amount unpaid on each share which is not fully paid up shall be retained at such sub-division;
|
| (c) |
cancel any shares of its issued or unissued share capital, and decrease the amount of its authorized share capital by the amount of the shares so canceled, subject to any commitment (including a conditional
commitment) given by the Company in respect of such shares and provided that the cancellation of any issued shares shall be equally made on a pro-rata basis with respect to all issued shares of the Company;
|
| (d) |
reduce its Share Capital in any manner, subject to any approval required by law.
The Shareholders may delegate to the Company's Board of Directors, the authority to resolve
with respect to execution of actions set forth in Sections 14(a) and 14(b) above, within a time frame and subject guidelines and limitations approved at a General Meeting.
|
| 15. |
If, as a result of a consolidation or split of shares authorized under these Articles, fractions of a share will stand to the credit of any Shareholder, the Board is authorized, at its discretion, to act as
follows:
|
| (a) |
determine that fractions of shares that do not entitle their owners to a whole share, will be sold by the Company, and that the consideration for such sale be paid to the beneficiaries, on terms the Board
may determine.
|
| (b) |
allot to every Shareholder who holds a fraction of a share resulting from a consolidation and/or a split, shares of the class that existed prior to the consolidation and/or split, in a quantity that, when
consolidated with the fraction, will constitute a whole share, and such allotment will be considered valid immediately prior to the consolidation or split;
|
| (c) |
determine the manner for paying the amounts to be paid for shares allotted in accordance with Sub-Section (b) above, including on account of bonus shares; and/or
|
| (d) |
determine that the owners of fractions of shares will not be entitled to receive a whole share in respect of a share fraction or that they may receive a whole share with a different par value than that of
the fraction of a share.
|
Allotment and Rights of Shares
| 16. |
Subject to these Articles and to the terms of any General Meeting resolution creating new shares, the allotment and issue of shares will be as determined by the Board of Directors, who may in its sole
discretion allot and issue such shares to persons on te1ms and conditions and at such times as determined by the Board of Directors, including the allotment of bonus shares.
|
| 17. |
(a) Each ordinary share will entitle its owner to receive notices of, to attend, and to cast one vote at a General Meeting.
(b) All shares of the Company of the same class shall rank pari passu in respect of dividends,
allotment of bonus shares, distribution of assets or otherwise.
|
| 18. |
(a) The rights granted to Shareholders of any class of shares issued with preferred or other special rights will not, unless specifically provided by the terms of issue of the shares of that class, be
deemed to be modified by the creation or issue of shares of a different class.
(b) Unless
otherwise provided for by the terms of issuance of particular class of shares, the Company may create or change rights, preferences, restrictions and provisions related to one or more of the classes of shares, after receipt of consent in
writing of all Shareholders of the affected class, or a Resolution passed at a General Meeting of such class. These Articles will apply, as applicable, to every such separate General Meeting of a class.
|
| 19. |
The rights applicable to any shares, whether in the original Share Capital or any increased Share Capital, may be changed according to the provisions of these Articles, provided however, that the Company
will not disparately reduce or restrict the existing Shareholders' voting rights through any corporate action or issuance.
|
Repurchase of shares
| 20. |
The Company may, at any time and from time to time, subject to the Law, purchase back or finance the purchase of any shares or other securities issued by the Company, in such manner and under such terms as
the Board of Directors shall determine, whether from any one or more Shareholders. Such purchase shall not be deemed a payment of dividends; and no Shareholder will have the right to require the Company to purchase his shares or to offer to
purchase shares from any other Shareholder.
|
Share Register and Share Certificates
| 21. |
The Company will maintain a Register of Shareholders according to the Law. The Company may maintain the Register of Shareholders or one or two branch Registers of Shareholders, in Israel or another
jurisdiction, which will be considered as part of the Register.
|
| 22. |
The Company will not be bound by or required to recognize any right or interest in any share other than rights or interests of the Shareholder duly registered in the Register or otherwise proven in
accordance with these Articles and the Law.
|
| 23. |
Every person whose name duly appears as a shareholder in the Register or who otherwise establishes proof of ownership in accordance with these Articles and the Law, will have the right without payment to
receive, within two (2) months after allotment or registration of transfer (unless the conditions of allotment or transfer provide for a longer period), a stamped certificate for all the shares registered in his name. The certificate will
specify the number of shares for which it is issued. In case of joint Shareholders the Company will not be required to issue more than one certificate to all the joint Shareholders. Delivery of a certificate to any of the joint Shareholders
will be sufficient delivery to all. Every certificate will be signed by two Directors and countersigned by the Secretary or by other persons nominated by the Board of Directors for that purpose. The Company may withhold the issue of share
certificates for shares not fully paid up.
|
| 24. |
If any share certificate will be defaced, worn out, destroyed or lost, it may be replaced following production of any evidence, provision of any indemnity and payment of any of the Company's out of
pocket expenses as the Board of Directors will require. In case of defacement or wearing out, replacement will require delivery of the old certificate.
|
Share Warrants, Options and Debentures
| 25. |
The Company may issue from time to time share warrants, options on shares, debentures and similar forms of securities. The price, terms and conditions of any such securities will be determined by the Board
of Directors.
|
| 26. |
Subject to the applicable provisions of the Law, the Company may
issue and redeem redeemable preference shares and redeemable warrants. The terms of redemption of, and the rights and obligations attached to such securities, shall be determined by the Board of Directors, either in general or with respect to
a particular issue.
|
Lien on Shares
| 27. |
The Company will have a lien on every share for all amounts
payable by a shareholder in respect of such share, whether or not such payables have matured. However, the Board of Directors may at any time declare any share to be wholly or partly exempt from the provisions of this Article. The Company's
lien, if any, on a share will extend to all dividends payable on that share.
|
| 28. |
The Company may sell any shares on which it has a lien at such
time and in such manner as will be determined by the Board of Directors. However, no sale will be made prior to the lapse of fourteen (14) days from the date of sending a notice in writing to the registered Shareholders, demanding payment
of such sum and giving notice of the Company's intention to sell in default. To give effect to any such sale, the Board of Directors may authorize transfer of the shares sold to the purchaser who will be registered as the holder of the
Shares. The Company will receive the net proceeds of the sale which will be applied in payment of the sum then payable on the lien. The balance of the sale proceeds, if any, will be paid to the person holding the shares immediately prior to the
sale, subject to any lien for sums that were not currently payable for the shares prior to the sale.
|
Calls on Shares; Forfeiture of Shares
| 29. |
The Board of Directors may, at its discretion, from time to time
authorize the amount and manner of the consideration to be given to the Company for shares. The Board may also make calls on Shareholders for any moneys unpaid on their shares. Each Shareholder will be liable to pay the amount of every call
so made on him to the persons and at the times, places and installments specified by the Board. A call may be revoked or postponed as the Board may determine.
|
| 30. |
A call will be considered to have been made, at the time the Board of Directors approves the resolution authorizing such call.
|
| 31. |
The joint shareholders of a share will be jointly and severally liable for the payment of all calls and related installments.
|
| 32. |
The Board of Directors may, at its discretion, authorize receipt
of advances from any shareholder relating to future calls on shares. The Board may authorize interest to be paid as may be agreed with the advancing shareholder.
|
| 33. |
Any sum that, by the terms of a share, is payable upon the share's allotment or at any fixed date, will be considered to be a call duly made and payable on the date fixed for such payment. In case of
non-payment of such sum, the relevant provisions of these Articles will apply as if such sum were a call duly made and notified according to these Articles.
|
| 34. |
The Board of Directors may, upon the issue of shares, differentiate between the Shareholders as to the amount of calls to be paid and the times of payment.
|
| 35. |
If any shareholder fails to pay all or part of any call or installment of a call on or before the day set for such payment, the Board of Directors may serve a notice on such Shareholder. The notice
will require payment of the amount remaining unpaid together with interest, at such rate as the Board will determine, and any expenses that may have accrued by reason of such non-payment. The notice will state a date, not less than fourteen
(14) days from the date of the notice, on or before which such call or installment, and all interest and expenses that have accrued by reason of such non-payment are to be paid. It will also state the place where payment is to be made, and
will state that in the event of non-payment on or before the time and at the place set, the shares for which such call was made will be liable to be forfeited. If the requirements of any such notice are not met, any share for which such
notice has been given may, as long as the payment required by the notice has not been made, be forfeited by a resolution of the Board to that effect. A forfeiture of shares will include all dividends applicable to the shares not actually
paid before the forfeiture, even if the dividend has already been declared.
|
| 36. |
When any shares have been forfeited in accordance with these Articles, notice of forfeiture will be promptly given to the Shareholder or to the person entitled to the shares by transmission, as the case may
be. An entry of such notice having been given and of the date of the forfeiture of the applicable shares will be made in the Register. However, a forfeiture will not be invalid solely due to the failure to give such notice or to make such
entry in the Register.
|
| 37. |
(a) Following a forfeiture, the Board of Directors may, at any time before the forfeited share has been otherwise disposed of, revoke the forfeiture and return the share to the Shareholder on terms
determined by the Board.
(b) Every forfeited share may be sold or re-allotted or otherwise disposed of, to any other
person, on such terms as the Board of Directors may determine.
|
| 38. |
A person whose shares have been forfeited will remain liable to pay to the Company all calls made and not paid on such shares at the time of forfeiture, and interest thereon to date of payment, in the same
manner as if the shares had not been forfeited. Such person will also remain liable to satisfy any claims and demands which the Company might have enforced regarding the shares at the time of forfeiture, without any deduction or allowance for
the value of the shares at the time of forfeiture. However, if the Company chooses to sell the forfeited shares, then the net consideration received by the Company for such shares will be deducted from the amount the person whose shares have
been forfeited is liable to pay the Company.
|
| 39. |
The forfeiture of a share will cause the extinction at the time of forfeiture of all claims and demands against the Company regarding the share, and all other rights and liabilities relating to the share as
between the forfeiting Shareholder and the Company, except as provided by law.
|
| 40. |
A written declaration by a Director that a share has been duly forfeited according to these Articles and stating the date of forfeiture, will be conclusive evidence of the facts stated in the declaration
against any persons claiming to be entitled to the forfeited shares. Such declaration, together with the Company's receipt for the consideration, if any, given for the forfeited shares on their sale or disposition, and a duly signed share
certificate delivered to the purchaser, will confer good title to the shares. Such purchaser will be registered as the holder of the shares.
|
Conversion of Shares into Stock
| 41. |
(a) The Company may, by a Resolution of the Shareholders at a General Meeting, convert any paid-up shares into stock, and may reconvert any stock into paid-up shares of any denomination.
(b) The holders of stock may transfer the same, or any part thereof, in the same manner, and subject to the same regulations, as the shares from which the stock arose might, prior to conversion, have been transferred, or as near
thereto as circumstances admit; but the Board of Directors may from time to time fix the minimum amount of stock transferable, and restrict or forbid the transfer of fractions of that minimum.
(c ) The holders of stock shall, according to the amount of stock held by them, have the
same rights, privileges, and advantages as regards dividends, voting at General Meetings, and other matters as if they held the shares from which the stock arose, but no such privileges or advantage, except participation in the
dividends and profits of the Company, shall be conferred by any such aliquot part of stock as would not, if existing in shares, have conferred that privilege or advantage.
(d) Such of the Articles of the Company, as are applicable to paid-up shares shall apply
to stock, and the words "share" and "Shareholder" therein shall include "stock" and "Stockholder".
|
Transfer of Shares
| 42. |
Transfer of fully paid up shares in the Company shall not
require the approval of the Board of Directors.
|
| 43. |
No transfer of shares shall be registered unless a proper
instrument of transfer has been submitted to the Company, coupled, to the extent applicable, with the certificate for the shares to be transferred, and any other evidence as the Board of Directors may reasonably require of the title of
the transferor. The transferor will be considered to remain the Shareholder until the name of the transferee is entered in the Register for the applicable shares.
|
| 44. |
The instrument of transfer of any share shall be in the usual or customary form or as near thereto as possible, and shall be signed by the transferor and transferee.
|
| 45. |
The Board of Directors may decline to register any transfer of shares, which have not been fully paid up.
|
| 46. |
The transfer books, the Register and registers of debenture-holders may be closed during such time as the Board of Directors deems fit, not exceeding a total of thirty (30) days in each year.
|
| 47. |
The Board of Directors may determine a fee to be charged for
registration of a transfer.
|
Transmission of Shares upon Death, Bankruptcy or Dissolution
| 48. |
The executors and administrators of the deceased sole holder of
a share or, if there are no executors or administrators, such persons, heirs (as evidenced by a probate or such other evidence as the Board of Directors may reasonably deem sufficient) shall be the only persons recognized by the Company as
having any title to the share. In case of a share registered in the name of two or more holders, the Company shall recognize the survivor or survivors as the only persons having any title to or benefit in the share.
|
| 49. |
The receiver or liquidator of a Shareholder in winding-up or
dissolution, or the trustee in bankruptcy, or any official receiver of any bankrupt Shareholder, upon producing such evidence as the Board of Directors may deem sufficient as to his authority to act in such capacity under this Article, may be registered
as a Shareholder in respect of such shares, or may, subject to the regulations as to transfer herein contained, transfer such shares.
|
Borrowing Powers
| 50. |
The Company may from time to time, at its discretion, bon-ow or secure the payment of any sum or sums of money for the purposes of the Company.
|
| 51. |
The Company may raise the funds for or secure the repayment of
such sum or sums in such manner, at such times and upon such terms and conditions as it deems fit and, in particular, by the issue of bonds, perpetual or redeemable debentures, debenture stock, or any mortgages or charges, on the whole or any part of the
property of the Company, both present and future, including its uncalled capital at that time and its called but unpaid capital.
|
Convening of General Meetings
| 52. |
General Meetings will be held at least once in every calendar year at the time and place, and with an agenda, as may be determined by the Board of Directors. Shareholders representing at least ten percent
(10%) of the Company's outstanding share capital and one percent (1%) of the Company's voting power may request the Chairman of the Board to add appropriate items to a General Meeting agenda.
|
| 53. |
Unless otherwise determined by the Board of Directors and subject to the Law and applicable rules and regulations, the business of a General Meeting shall be to receive the financial statements and the Board
of Directors report, to elect Directors, to appoint independent certified accountants, and to transact any other business which according to these Articles, the Law or any applicable rules or regulations, is to be addressed at a General
Meeting. Each annual General Meeting will be called an "Annual Meeting", and any other General Meeting will be called a "Special Meeting".
|
| 54. |
Each Annual Meeting will take place no later than fifteen (15) months after the previous Annual Meeting, and no later than the end of the applicable calendar year. The Board may convene a Special Meeting at
any time it deems necessary.
|
| 55. |
The Board of Directors will convene a Special Meeting on receipt
of a written
request from any of:
|
| (a) |
two (2) Directors or twenty-five percent (25%) of the total number of Directors;
|
| (b) |
one (l) or more Shareholders, holding at least five percent (5%) of the issued Share Capital and at least one percent (1%) of the Shareholders' voting power; or
|
| (c) |
one (1) or more Shareholders holding no less that five percent (5%) of the Company's issued voting shares.
|
| 56. |
A Special Meeting requested under Article 55 above will be
convened within the period specified in the relevant provisions of the Law. If the Board of Directors fails to convene such meeting within such time, then the required Special Meeting may be convened, in the same manner as for other
Special Meetings, by any of the Directors and/or by Shareholders who requested the convening (representing at least one-half of such Shareholders' voting rights), provided it is convened no later than three (3) months after submission of the
written request to the Board.
|
| 57. |
The Board of Directors will set a record date in accordance with the requirements of the Law, for Shareholders entitled to receive notice of and vote at a General Meeting. Subject to the terms of the Law, the date to be determined by the Board, shall not precede the date for which a General Meeting was called by more than forty (40) nor by
less than four (4) days (or any longer or shorter period permitted by Law). The determination of a record date shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may set a new record date for the
adjourned meeting.
|
| 58. |
A written notice of the convening of a General Meeting will be given, at least twenty-one (21) days in advance, or a longer period as may be required under the Law or any other applicable rules and
regulations. The notice will specify the place, date and time of the Meeting, the record date, and other items as specified in the Law. The place of the meeting will be in Israel unless otherwise specified by the Board.
|
| 59. |
(a) The accidental omission to give notice of a General Meeting to, or the non receipt of notice by, any Shareholder entitled thereto, shall not invalidate the proceedings at such meetings.
(b) No
shareholder present, in person or by proxy, at the commencement of a General Meeting shall be entitled to seek the revocation of any proceedings or resolutions adopted at such General Meeting on account of any defect in the notice of such
meeting relating to the time or the place thereof.
|
Proceedings at General Meetings
| 60. |
No business will be transacted at any General Meeting or at any adjourned meeting unless a quorum is present. The quorum at any General Meeting or at any adjourned meeting, will be at least two (2)
Shareholders present in person, by Proxy or by a Voting Instrument and holding or representing at least thirty three and one third percent (33 1/3%) of the issued voting ordinary shares.
|
| 61. |
If within one-half (1/2) hour from the time set for the holding of a General Meeting a quorum is not present, the meeting will be adjourned to the same day, time and place in the next week or as will be
determined in the notice to the Shareholders, or another date and place as shall be determined by the Board of Directors.
|
| 62. |
Except as provided in these Articles, the Law and any other applicable rules and regulations, all business transacted at a General Meeting will be decided by a resolution adopted by a simple majority of the
votes cast at the General Meeting, not taking into account abstentions.
|
| 63. |
The Chairman of the Board of Directors will preside at any
General Meeting as the chairman of the General Meeting, but if there will be no such Chairman, or if at any General Meeting he will not be present or is unwilling to act as Chairman of the General Meeting, the Shareholders present will
choose any Director to act as Chairman of the meeting. If no Director is present, or if all the Directors present
decline to take the chair, the Shareholders present will choose a Shareholder present to be chairman of the meeting. The chairman of any General Meeting shall not be entitled to a second or tie-breaking vote.
|
| 64. |
The chairman of a General Meeting may, with the consent of any General Meeting at which a quorum is present (and will if so directed by the meeting) adjourn the meeting from time to time and from place to
place. No Shareholder will have the right to any other notice of adjournment. However, whenever a General Meeting is adjourned for twenty one (21) days or more, notice of the adjourned General Meeting will be given in the same manner as for
the original General Meeting. No business shall be transacted at any adjourned meeting other than the business which might have been transacted at the meeting as originally called.
|
Voting at General Meetings; Voting Instruments
| 65. |
Shareholders in the Company who are registered in the Register on the date determined by the Board of Directors in its resolution to convene a General Meeting and who are present at the meeting, in person or
by proxy, or deemed to be present by a Voting Instrument, shall be entitled to participate in and vote at the General Meeting.
|
| 66. |
The vote may be by show of hands, by secret ballot, by Voting
Instrument or by any other manner authorized by the Board of Directors consistent with the Law. A Shareholder will have one (1) vote for each share held by him. However, unless otherwise determined by the Board, no Shareholder will
be permitted to vote at a General Meeting or to appoint a Proxy to so vote unless he has paid all calls for payment and all moneys due to the Company from him with respect to his shares.
|
| 67. |
A Proxy present at a General Meeting will have the same rights as a Shareholder with respect to voting at a General Meeting. A Proxy may be granted to any person, whether or not such person is a Shareholder.
|
| 68. |
The vote of the senior of any joint Shareholders, whether in person, by Voting Instrument or by Proxy, will be accepted to the exclusion of the votes of other joint Shareholders. For the purpose of these
Articles, seniority will be determined by the order in which the names appear in the Register.
|
| 69. |
An objection to a Shareholder's or a Proxy's right to vote in a General Meeting must be raised at the applicable meeting or adjourned meeting in which that person was supposed to vote. The chairman of the
meeting will decide whether to accept or reject any objection raised at the proper time regarding the vote of a Shareholder or Proxy, and the chairman of the General Meeting's decision will be final. Every vote not disqualified as provided
above will be valid for all matters at the General Meeting.
|
| 70. |
A Shareholder that is a corporation or other form of legal entity will have the right to appoint a person to be its representative at any General Meeting. The representative so appointed will have the right
to exercise on behalf of the entity he represents all the powers that the entity itself might exercise in connection with the General Meeting.
|
| 71. |
A Shareholder who has been declared legally incompetent or has otherwise been appointed a legal guardian, may, following proof of appointment of a legal guardian or similar representative, vote at a General
Meeting through such guardian or similar representative, whether in person, by Voting Instrument or by Proxy.
|
| 72. |
A vote by Proxy or by Voting Instrument will be considered valid even in the event of the death or declaration of incompetence of the appointee/signatory or the cancellation of the Proxy appointment or
Voting Instrument or expiration of a Proxy appointment or Voting Instrument in accordance with the Law and any other applicable rules and regulations, or the transfer of the shares for which the Proxy appointment or Voting Instrument was
given, unless the Company receives at the Registered Office, prior to a General Meeting, a written notice as specified below. For a Voting Instrument or Proxy appointment that has been provided to the Company for a specific General Meeting to
be considered invalid, a written notice of cancellation of a Voting Instrument or a Proxy appointment must be duly signed by the applicable Shareholder specifying the applicable shares, the name of the Shareholder, legal representative or
successor in interest and nature of the event invalidating the Proxy appointment or Voting Instrument. In the event of voting by a secret ballot or by Voting Instrument, a notice canceling the appointment of a Proxy will be valid if it is
signed by the appointee/signatory or its legal representative or successor in interest and received at the Registered Office no later than one (1) hour before the beginning of the vote.
|
| 73. |
A Shareholder will have the right, to vote by a Voting
Instrument as an alternative to voting in person or by Proxy. In all applicable cases, the Company will send the Voting Instrument to the Shareholders before the applicable General Meeting, no later than the time set for that purpose in the
Law.
|
| 74. |
A Shareholder has the right to vote by a separate Proxy with respect to each share held by him, provided that each Proxy will have a separate letter of appointment containing the serial number of the shares
for which the Proxy is entitled to vote. If a specific share is included in more than one (1) letter of appointment, then no Proxy will have the right to vote such share.
|
| 75. |
An instrument appointing a Proxy, which is not limited in time, will expire twelve (12) months
after the date of its execution. If the appointment is for a limited time period, even exceeding twelve (12) months, the instrument
will be valid for such period as specified in the instrument.
|
| 76. |
(a) A Voting Instrument, instrument of appointment of a Proxy, power of attorney or other instrument relating to voting at a General Meeting, must be in writing.
|
| (b) |
Any instrument of appointment a of proxy, whether for any
specified meeting or otherwise shall, as far as circumstances permit, be in the following form or in any other acceptable form approved by the Board of Directors:
"I, , of , being the
holder of shares of NIS each, hereby appoint Mr. of to vote for me and on my behalf at the General Meeting of the Company to be held on the day of in the year and at any adjourned meeting of such meeting."
IN WITNESS WHEREOF I have set my hand this day of the month of in the year ."
|
| (c) |
The original or a copy of such confirmed instrument will be
delivered to the Registered Office, or to such other place in Israel or abroad as the Board may from time to time designate, at least twenty-four (24) hours before the time set for the applicable original or adjourned General Meeting. Otherwise,
that person will not be entitled to vote that share through the instrument. At the request of the chairman of a General Meeting, written evidence of such authorization, in a reasonably acceptable form and content, satisfactory to the
chairman of the General Meeting, shall be furnished to the chairman of the General Meeting.
|
Role and Composition of The Board of Directors
| 77. |
The Board of Directors will set the policies of the Company and
oversee the execution by the General Manager of his tasks and acts. The Board will have all residual powers not granted under these Articles or by law to any other Company body.
|
| 78. |
The General Meeting may assume powers granted under these
Articles or by Law to the Board of Directors. However, any decision to assume such powers must be adopted by a Special Majority and must specify the matters and time period for which such powers are assumed .
|
| 79. |
The number of Directors may be determined from time to time by
the Board. Unless otherwise determined by the Board, the number of Directors comprising the Board will be at least four (4) and not more than ten (10). The majority of the Directors will be Independent Directors, and at least two (2) of the
Directors shall be External Directors in accordance with the requirements of the Law. A Director is not required to be a Shareholder.
|
| 80. |
The Directors will be entitled to be reimbursed for reasonable expenses incurred by them in performing their services as Directors. The External Directors shall be paid for their services, as prescribed
under the Law and as resolved by the General Meeting.
|
| 81. |
Subject to the provisions of the Law, a Director (or any other Officer) shall not
be disqualified by his holding of such office with the Company from holding any other office or function with the Company (other than the office of an Internal Auditor or Independent Certified Accountant) or from giving services for
consideration to the Company, save that the additional employment of a Director and the terms thereof must be approved, as required by the Law;
nor will a Director (or any other Officer) be disqualified by the holding of such office with the Company from holding any
other office or function or from giving services for consideration to a company in which the Company holds any shares or in which it is interested in any other way.
|
Election, Appointment and Removal of Directors
| 82. |
Directors will be elected annually by the Shareholders at the
Annual Meeting. Directors may be nominated in accordance with rules and regulations that may apply to the Company. Directors will hold office until the conclusion of the next Annual Meeting or until their earlier removal or resignation.
However, if no Directors are elected at an Annual Meeting, then the persons who served as Directors immediately prior to the Annual Meeting shall be deemed reelected at the same meeting, and will continue to serve as Directors unless otherwise
determined by the Annual Meeting. Directors will be eligible for re-election.
|
| 83. |
Notwithstanding Article 82 above:
|
| (a) |
the General Meeting may resolve that a director be elected for a
period longer than by the next Annual Meeting but not longer than the third next Annual Meeting.
|
| (b) |
Shareholders holding a majority of the outstanding share capital of the Company may remove or elect directors by a written notice to the Company.
|
| (c) |
A General Meeting may, remove any Director from his office before the end of his term and can, by a resolution adopted by a simple majority, elect another person in his place.
|
| 84. |
The Chairman of the Board of Directors will be appointed by the
Board from the Directors elected to their office. Such Director will serve as Chairman of the Board of Directors until he ceases to hold the office of Director or until the General Meeting replaces him.
|
| 85. |
The Board of Directors will have the power, from time to time, to appoint
additional Directors if the current number of Directors is less than ten (10) or such other maximum number approved by the Board of Directors. Any Director so appointed will hold office until the conclusion of the next Annual Meeting, unless he
is removed or resigns earlier.
|
| 86. |
Where the office of a Director has been vacated, the remaining
Directors may continue to act, but if their number is reduced below the minimum number specified in these Articles, or if the number of the Directors elected by a General Meeting is lower than the minimum number specified in these Articles, then the Director
or Directors continuing to hold office shall not act except in case of an emergency, or for the purpose of increasing the number of Directors, by way of appointment of additional Directors, or for the purpose of convening a General Meeting
of the Company, but not for any other purpose.
|
| 87. |
Subject to the terms of the Law, a Director will be removed if he:
|
| (a) |
becomes bankrupt or enters into similar status (and if the Director 1s a company, upon its winding-up);
|
| (b) |
dies or is declared legally incompetent;
|
| (c) |
resigns his office by notice in writing given to the Company;
|
| (d) |
is removed by a resolution of a General Meeting; or
|
| (e) |
upon the occurrence of any of the applicable events set forth in
the Law.
|
Substitute Director
| 88. |
(a) A Director may, by notice in writing to the Company and
subject to Sub-Section (b), appoint for a specific meeting a substitute (hereinafter referred to as "Substitute
Director"), revoke the appointment of such Substitute Director and appoint another in his place. Any appointment,
or revocation of appointment of a Substitute Director shall become effective on the date set in the respective notice of appointment or revocation, as the case may be, but not before delivery thereof to the Company.
(b) A person may not act as a Substitute Director if he is not qualified to be appointed a Director or if he currently serves as a Director or Substitute Director.
(c) A Substitute Director shall be entitled to receive notices of the meeting of the Board of Directors for which he has been appointed and to attend and vote at such meeting as if he were a Director, and he
shall have all the rights and be subject to all obligations of the Director for whom he acts as Substitute Director.
(d) The office of a Substitute Director shall ipso facto be vacated at the end of the meeting of the Board of Directors for which he has been so appointed; if he is removed from office in accordance with
Sub-Section (a) hereof; if the office of the Director by whom he has been appointed Substitute Director is vacated for any reason
whatsoever or upon the death of the Substitute Director or upon the occurrence of any of the events referred to in Article 88.
|
External Directors
| 89. |
The Board of Directors will include at least two (2) External Directors or such other number, all as required in order to comply with the qualifications described in the Law.
|
| 90. |
An External Director will be nominated by a majority vote at a General Meeting, provided that:
|
| (a) |
The majority vote at the General Meeting will include at least one- third (1/3) of the total number of the votes of the non-controlling Shareholders voting at the meeting. For the purposes of this
Article, abstentions will not be counted towards the total number of the non-controlling Shareholders; and
|
| (b) |
The total number of non-controlling Shareholders voting against
the resolution appointing the External Director, is not more than one percent (1%) of the total voting rights in the Company.
|
| 91. |
The compensation and indemnification of expenses of External Directors will be determined in accordance with the applicable provisions of the Law.
|
| 92. |
An External Director will be appointed for a period of three (3) years. The term of his office may be extended by a resolution of the General Meeting for an additional three (3) years. An External
Director may be removed from his office only in accordance with the applicable provisions of the Law.
|
Board of Directors Meetings
| 93. |
The Board of Directors may convene, adjourn and otherwise regulate its meetings, as it deems fit; provided, however, that the Board will meet at least once in every three (3) months period. Unless otherwise
determined by the Board, the quorum for a Board meeting will be not less than thirty percent (30%) of the then number of Directors but in any event not less then two directors.
|
| 94. |
No business shall be transacted at a meeting of the Board of
Directors unless the requisite quorum is present at the commencement of the meeting, and no resolution shall be adopted unless the requisite quorum is present when the resolution is voted upon.
|
| 95. |
Issues arising at any Board of Directors' meeting will be
decided by a majority of votes cast at the meeting. In case of a tie, the Chairman will not have a second or casting vote.
|
| 96. |
Each Director will receive at least 3 (three) days prior notice
of a Board meeting. Such notice may be given by any means of communication as determined by the Chairmen or the Secretary, including, among others, telephone, facsimile or e-mail. Such notice will include the time and location of the
meeting and a reasonable description of the meeting's agenda. Notwithstanding anything to the contrary herein, failure to deliver notice to a Director of any such meeting in the manner required hereby may be waived (in advance or
retroactively) by such Director, and a meeting shall be deemed to have been duly convened notwithstanding such defective notice of such failure or defect. Without derogating from the foregoing, no Director present at the commencement of a
meeting of the Board of Directors shall be entitled to seek the revocation of any proceedings or resolutions adopted at such meeting on account of any defect in the notice of such meeting relating to the time or the place thereof.
|
| 97. |
At the request of any Director, the Secretary will summon a meeting of the Board of Directors.
|
| 98. |
The Chairman of the Board of Directors shall take the chair at all meetings of the Board of Directors, but if there is no Chairman, or if at any meeting he is not present within fifteen (15) minutes of the
time appointed for the meeting, or if he is unwilling to take the chair at the meeting, the Directors present shall choose on Director to serve as the Chairman of such meeting.
|
| 99. |
A meeting of the Board of Directors at which a quorum is present shall be competent to exercise all the authorities, powers and discretions by or under the Law and the Articles of the Company at that time
vested in or exercisable by the Board of Directors.
|
| 100. |
Directors may participate in a Board meeting or Board committee meeting by means of a telephone conference or other communications media, provided that all participating Directors can hear each other
simultaneously. Participation by such means will be considered as presence in person at a meeting.
|
| 101. |
All acts done at any meeting of the Board of Directors, or of a
Committee of the Board of Directors, or by any person acting as a Director shall, notwithstanding that it may afterwards be discovered that there was some defect in the appointment of such Directors or members of a Committee of the Board of
Directors or persons acting as aforesaid or any of them, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be Director or a member of such Committee of the Board
of Directors.
|
| 102. |
A resolution in writing signed by all of the Directors or to which all of the Directors have agreed in writing or by telephone or facsimile, shall be as valid and effective for all purposes as if passed at a
meeting of the Board of Directors duly convened and held, and for the purpose of this Article "Director" shall include, if duly appointed therefore, a Substitute Director.
|
| 103. |
Minutes in writing signed by the Chairman will serve as evidence of a resolution passed at a duly convened meeting of the Board of Directors.
|
Committees of the Board of Directors
| 104. |
Subject to the applicable provisions of the Law regarding
matters that the Board may not delegate to a committee, the Board of Directors may delegate any of its powers to committees consisting of at least three (3) Directors, provided that each such committee shall include at least one (1)
External Director. The Board of Directors may from time to time revoke such delegation or alter the composition of any such committee. Any committee so formed will exercise its powers in accordance with any directions given to it by the Board.
|
| 105. |
A Board committee may elect a chairman. If no such
chairman is elected, or if at any meeting the chairman is not present within fifteen (15) minutes after the time appointed for holding the meeting, the committee members present may choose a committee member to be chairman of the meeting. Unless otherwise
specifically directed by the Board of Directors, the meetings and proceedings of any committee will be governed by the applicable provisions in these Articles regulating the meetings and proceedings of the Board.
|
| 106. |
A committee may meet and adjourn as its members may determine. Issues arising at any meeting will be determined by a majority of votes of the members present. In case of a tie the chairman of the committee
will not have a second or tie breaking vote.
|
| 107. |
The Board of Directors will appoint an Audit Committee. The composition, responsibilities and authorities of the Audit committee shall be in accordance with the Law and with the applicable rules and
regulations the Company is subject to.
|
Local Management
| 108. |
The Board of Directors may from time to time, provide for the
management and transaction of the affairs of the Company in any specified locality, whether in Israel or abroad, in such manner as it deems fit, and the provisions contained in the next following Article shall be without prejudice to the
general powers vested by these Articles on the Board of Directors.
|
| 109. |
The Board of Directors may from time to time, and at any time,
establish any local board or agency for managing any of the affairs of the Company in any such specified locality, and may appoint any person to be a member of such local board, or any manager or agent, and may fix their remuneration. Subject to the
provisions of the Law, the Board of Directors may from time to time, and at any time, delegate to any person so appointed any of the powers,
authorities and discretions at that time vested in the Board of Directors, on such terms and subject to such conditions as the Board of Directors deems fit, and the Board of Directors may at any time remove any person so appointed and may
revoke or vary any such delegation.
|
General Manager
| 110. |
The Board of Directors shall from time to time appoint one or more persons, whether or not Directors as Chief Executive Officer or Officers, General Manager or Managers, or President of the Company, either
for a fixed or an unlimited term, and from time to time (subject to any provisions of the Law and of any contract between any such person and the Company) remove or dismiss him or them from office and appoint another or others in his or their
stead.
|
| 111. |
The remuneration of a General Manager, Chief Executive Officer and President, shall from time to time (subject to the provisions of the Law and any contract between him and the Company) be determined by the
Board of Directors, and may be subject to a recommendation of the majority of the Independent Directors, or of a compensation committee comprised solely of Independent Directors.
|
| 112. |
The General Manager shall be responsible for the day-to-day management of the Company's affairs within the framework of the Company's policy set by the Board of Directors and subject to its directions; he
shall have all management and execution powers not vested by the Law or these Articles in any other Organ, and he will be subject to the supervision of the Board of Directors. Subject to the provisions of the Law, the Board of Directors may
from time to time, and at any time, entrust to and confer upon the General Manager such powers exercisable under the Articles by the Board of Directors as it may deem fit, and may confer such powers for such time, and to be exercised for such
objects and purposes, and upon such terms and conditions, and with such restrictions, as it deems expedient; and it may confer such powers, either collaterally with, or to the exclusion of, and in substitution for, all or any of the powers of
the Board of Directors in that behalf; and may from time to time revoke, withdraw, alter, or vary all or any of such powers.
|
Dividends and Reserves
| 113. |
The Board of Directors may from time to time declare and cause the Company to pay to the Shareholders such interim or final dividend as the Board of Directors deems appropriate considering the profits of the
Company and in compliance with the provisions of the Law. The Board may set the dividend record date (which date may be on or after the date of declaration) and the time for payment.
|
| 114. |
No dividend shall be paid otherwise than out of the profits of the Company.
|
| 115. |
No dividend shall be paid other than in compliance with the provisions of the Law; and no dividend shall carry interest as against the Company.
|
| 116. |
The Board of Directors may, before declaring any dividend, set
aside, out of the profits of the Company, such sums as it deems appropriate, as a reserve fund to meet contingencies, or for equalization of dividends, or for special dividends, or for repairing, improving and maintaining any of the
property of the Company, or for such other purposes as the Board of Directors shall in its absolute discretion deem conducive to the interests of the Company; and may invest such sum(s) so set aside in such investments as it may deem fit,
and from time to time vary such investments, and dispose of all or any part thereof for the benefit of the Company, and may divide the reserve fund into such special funds as it deems fit, and use the reserve fund or any part thereof in the
business of the Company, and that without being bound to keep the same separate from the other asset of the Company.
|
| 117. |
Subject to special rights of Shareholders and subject to the provisions of these Articles, dividends, whether in cash or in bonus shares, shall be paid or distributed, as the case may be, to Shareholders pro
rata to the amount paid up or credited as paid up on account of the of their shares, without taking into consideration any premium paid thereon; but the amount paid up on account of a share prior to call being made thereon or prior to the due
date for payment thereof, and on which the Company is paying interest, shall not, for purposes of this Article, be deemed to be an amount paid up on account of a share. Notwithstanding the above, and to the extent that the rights attached to
the shares or the terms of issue thereof otherwise provide, the Board of Directors may determine that any amount paid on a share during the period in respect of which the dividend has been declared shall entitle the holder of such share only
to a proportionate amount of the dividend having regard to the date of the payment of the said amount of capital.
|
| 118. |
Unless otherwise directed by the Board of Directors or by a General Meeting, any dividend may be paid by check or bank transfer to the registered address of the Shareholder; or in case of joint Shareholders,
to the one of them first named in the Register regarding the joint holding. The receipt of the person whose name on the record date appears on the Register as the owner of any share, or in the case of joint Shareholders, of any one of such
joint Shareholders, will be sufficient evidence of all payments made for such share. All dividends unclaimed after having been declared may be invested or otherwise used as directed by the Board for the benefit of the Company until claimed.
Upon the lapse of seven (7) years from the declaration of such dividends, the Company will have no obligation to pay the unclaimed dividend. No unclaimed dividend or interest will bear interest from the Company.
|
| 119. |
Without derogation from the provisions of Section 113, upon the recommendation of the Board of Directors approved by a resolution at a General Meeting, any General Meeting may resolve that any moneys,
investments, or other assets forming part of the undivided profits of the Company standing to the credit of the reserve fund, or to
the credit of the reserve fund for the redemption of capital or in the hands of the Company and available for distribution of dividends, or representing premiums received on the issue of shares and standing to the credit of the share
premium account, be capitalized and distributed among such of the Shareholders as would be entitled to receive the same if distributed by way of dividend and in the same proportion and on the same basis ; and that all or any part of such capitalized fund be applied
on behalf of such Shareholders in paying up in full, either at par or at such premiums as the resolution may provide, any unissued shares or debentures of the Company, which shall be distributed accordingly and shall be accepted by such
Shareholders in full satisfaction of their rights in the said capitalized sum.
|
| 120. |
Without derogation from the provisions of Section 113, a General
Meeting may resolve that a dividend be paid, in whole or in part, in cash and/or by the distribution of specific assets and,
in particular, by distribution of paid-up shares, paid-up debentures, or debenture stock of any other company, or in any one or
more combinations of such ways.
|
| 121. |
In order to give effect to any resolution regarding the
distribution of shares or debentures by way of capitalization of profits as aforesaid, the Board of Directors may:
|
| (a) |
settle, in such manner as it deems fit, any difficulty arising
with regard to the distribution and take any steps it deems fit to overcome such difficulty;
|
| (b) |
issue certificates for fractions of shares or resolve that fractions of lesser amount than that decided upon by the Board of Directors will not be taken into account for the purpose of adjusting the rights
of the shareholders, or sell fractions of shares and pay the net consideration to the persons entitled thereto;
|
| (c) |
sign on the shareholders' behalf any contract or other document
that may be required in order to give effect to the distribution, and in particular it may sign and submit for registration a contract as mentioned in section 291 of the Law;
|
| (d) |
make any arrangement or other settlement required, in the board
of directors' opinion, to facilitate the distribution.
|
| 122. |
The Board of Directors may deduct from any dividend or other
amount to be paid in respect of shares held by any Shareholder, whether alone or together with another Shareholder, any sum or sums due from him and payable by him, alone or together with any other person, to the Company on account of calls or the like.
|
| 123. |
If several persons are registered as joint holders of any share, any one of them
may give valid receipts for any dividends payable on the share.
|
Minutes
| 124. |
The Board of Directors shall cause minutes to be duly entered in books provided for that purpose:
|
| (a) |
of the names of the Directors present at each meeting of the Board of Directors and of any Committee of the Board of Directors;
|
| (b) |
of the names of the Shareholders present at each General Meeting;
|
| (c) |
of all directions given by the Board of Directors to any Committee of the Board of Directors;
|
| (d) |
of the proceedings and resolutions of General Meetings and of meetings of the Board of Directors and Committees of the Board of Directors.
|
| 125. |
Any minutes, as aforesaid, of a meeting of the Board of Directors,
which is confirmed and signed by the chairman of the meeting or by the Chairman of the Board of Directors, and any minutes of a meeting of a Committee of the Board of Directors or of a General Meeting, if signed by the chairman of such
meeting, shall be accepted as prima facie evidence of the matters therein recorded.
|
Stamp and rights of signature
| 126. |
The Company shall have a stamp, and the Board of Directors shall
provide for the safe custody of such stamp.
|
| 127. |
The Board of Directors shall be entitled to authorize any person(s) (even if such person(s) is/are not Director(s) of the Company) to act and sign on behalf of the Company, and the acts and signatures of
such person or persons on behalf of the Company shall bind the Company insofar as such person or persons acted and signed within the scope of his or their authority.
|
The Secretary, officers and Attorneys
| 128. |
Unless otherwise determined by the Board of Directors, the
Chairman of the Board of Directors, the President or any committee or officer authorized by the Board of Directors may from time to time appoint a Secretary for the Company, as well as other officers, personnel, agents and employees, to
permanent, temporary or special positions, and the General Manager may determine and/or modify their titles, powers, duties, remuneration, salaries and bonuses. The Chairman of the Board of Directors, the President, or any committee or
officer authorized by the Board of Directors may from time to time, in its discretion, revoke such appointments, modify their scope, or suspend the service of any one or more of such persons.
|
| 129. |
The Board of Directors may from time to time, and at any time, by power of attorney, appoint any
company, firm or person or body of persons, whether nominated directly or indirectly by the Board of Directors, to be the Company's Attorney or Attorneys for such purposes and with such powers, authorities and discretions (not exceeding those
vested in or exercisable by the General Manager under the Law or these Articles), and for such period and subject to such conditions as it deems fit, and any such power of attorney may contain such provisions for the protection and
convenience of persons dealing with any such Attorney as the General Manager may deem fit, and may also authorize any such Attorney to delegate all or any of the powers, authorities and discretions vested in him.
|
Accounts
| 130. |
The Board of Directors will cause the Company's books of
accounts to be kept in accordance with legal requirements. A Shareholder who is not a Director shall not have any right of inspecting any account or book or document of the Company except as conferred upon him by Law or authorized by the
Board of Directors or by the General Meeting.
|
| 131. |
The Company will issue financial statements as required by the
Law and other applicable rules and regulations. The issued financial statements will be available for inspection by the Board of Directors and Shareholders at the Registered Office during regular office hours.
|
Independent Certified Accountants
| 132. |
The Company will appoint Independent Certified Accountants at a
General Meeting. The Independent Certified Accountants will hold office until the end of the next Annual Meeting. However, the Shareholders at a General Meeting may remove the Independent Certified Accountants or extend the term of appointment for
up to three (3) years. The independency, certification and registration of the Independent Certified Accountant shall be in accordance with the Law and applicable rules and regulations.
|
| 133. |
The fee of the Independent Certified Accountants will be set and approved by the Board of Directors.
|
Internal Auditor
| 134. |
(a) The Board of Directors, subject to the recommendation of the
Audit Committee, will appoint an Internal Auditor for the Company. The Internal Auditor will report to the General Manager.
(b) The Internal
Auditor may only be removed or replaced in accordance with the applicable provisions of the Law.
|
Mergers
| 135. |
Notwithstanding Section 327 of the Law, the Company may approve any Merger as defined in the Law, by a resolution adopted by a simple vote cast at a General Meeting, not taking into account abstentions.
|
Notices
| 136. |
(a) Notices by the Company to a Shareholder shall be given by registered mail to the address, if any, supplied by such Shareholder for the purpose of giving notices, as listed in the Register. In the
absence of such address, notice shall be deemed to have been given by posting thereof at the Registered Office of the Company. Notice may also be given by way of transmission of facsimile and/or e-mail, based on details of such Shareholder as
listed in the Register.
(b) Notice by registered mail or notice sent to any address outside of the State of Israel
shall be deemed received three (3) days from the date on which a properly addressed, prepaid enclosure containing the notice was mailed. Notice by facsimile and/or e-mail, shall be deemed to be received one (1) day from their transmission.
|
| 137. |
Notice to joint Shareholders may be given by sending it only to the Shareholder first named in the Register for the applicable shares.
|
| 138. |
(a) The Board of Directors may authorize other methods of notice to Shareholders that are consistent with the Law and applicable rules and regulations.
(b) Notices of General Meetings will contain the information required by the Law and applicable
rules and regulations.
|
Exemption, Insurance and Indemnity
| 139. |
The Company may exempt any Officer from his liability to the Company for breach of duty of care, to the maximum extent permitted by law, before or after the occurrence giving rise to such liability.
|
| 140. |
Subject to the provisions of the Law, the Company may exempt and release in advance or retroactively, any Officer from liability resulting from his breach of his duty of care to the Company.
|
| 141. |
Subject to the provisions of the Law, the Company may procure, as the Board may from time to time determine, Directors' and Officers' liability insurance covering the liabilities of an Officer for any act
done by him by virtue of being an Officer, in respect of any of the following:
|
| (a) |
breach of duty of care towards the Company or towards any other person;
|
| (b) |
breach of fiduciary duty towards the Company, provided that such
Officer acted in good faith and had a reasonable basis to assume that his action would not harm the interests of the Company;
|
| (c) |
financial liabilities imposed on him in favor of a third party; or
|
| (d) |
any other event for which insurance of an Officer is or may be permitted.
|
| 142. |
Subject to the provisions of the Law, the Company may undertake in advance or retroactively to indemnify any past or present Officer in respect of a liability or expense as detailed in Article 143 below,
imposed on him as a result of an act carried out in his capacity as an Officer. However, if made in advance, such undertaking will be limited to the kinds of events that, in the Board's opinion, are foreseeable at the time of the approval of
the indemnification undertaking and will be limited to the amount fixed by the Board as reasonable under the circumstances which shall not exceed 25% of the Company's Shareholders Equity for the time being.
|
| 143. |
An indemnity, as provided in Article 142 above, may be issued in
respect of a liability or expense as follows:
|
| (a) |
financial liability imposed upon said Officer in favor of another person by virtue of a decision by a court of law, including a decision by way of settlement or a decision in arbitration which has been
confirmed by a court of law;
|
| (b) |
reasonable expenses of the proceedings, including lawyers' fees,
expended by the Officer or imposed on him by the court for:
|
| (1) |
proceedings issued against him by or on behalf of the Company or by a third party;
|
| (2) |
criminal proceedings in which the Officer was acquitted; or
|
| (3) |
criminal proceedings in which he was convicted in an offense,
which did not require proof of criminal intent; or
|
| (c) |
any other liability or expense for which the indemnification of an Officer is not precluded by Law.
|
| 144. |
Subject to the provisions of the Law, the Company may issue an
undertaking in advance or retroactively to indemnity any person, including an Officer, who acts or acted on behalf or at the request of the Company as a director or officer of another company in which the Company, directly or indirectly,
is a shareholder, or in which the Company has any other interest. Such indemnity will be in respect of a liability or expense referred to in Article 143 above, imposed on him as a result of an act carried out by him in his capacity as a
director or officer of the other company.
However, such undertaking, if made in advance, will be limited to the kinds of events that, in
the Board's opinion, are foreseeable at the time of the approval of the indemnification undertaking and will be limited to the amount set by the Board as reasonable under the circumstances which shall not exceed 25% of the Company's
Shareholders Equity for the time being.
|
| 145. |
Subject to the provisions of the Law, nothing in these
Articles will limit the Company, in any manner, from entering into an agreement of liability insurance, or in granting an exemption or indemnification in respect of:
|
| (a) |
an Officer, or a director or officer of another company as provided in Article 144 above, to the extent that the insurance, exemption or indemnity is not prohibited by law; or
|
| (b) |
any person who is not an officer, or a director of another company as provided in Article 144 above, including but not limited to employees and representatives of the Company.
|
Reorganization and Winding Up
| 146. |
If the Company will be wound up voluntarily the liquidators may, with the approval of a Special Majority of the Shareholders voting at a General Meeting, divide among the Shareholders any part of the
Company's assets remaining after payment of all of the Company's outstanding obligations. Such approval may also vest any part of the Company's assets to trustees under trusts for the benefit of the Shareholders as the liquidators may
determine.
|
| 147. |
On any sale of the Company or its assets through a liquidation or winding-up, a Special
Majority of the Shareholders voting at a General Meeting may authorize the Board of Directors or liquidators to: (a) accept fully or partly paid up Shares, debentures, or other Company securities, whether registered in Israel or in other
jurisdictions, whether existing or contingent, for the purchase in whole or in part of Company property and, if the profits of the Company permit, distribute such shares, securities or any other Company property among the Shareholders
without requiring their realization, or vest the same in trustees for their benefit; and/or (b) distribute or appropriate the Company's cash, Shares, other securities, benefits or property as so approved at the General Meeting. In such
case, all Shareholders will be bound to accept any valuation on distribution so authorized, and will waive all rights in relation to such valuation, except where otherwise required by law.
|
Amendments to Articles
| 148. |
These Articles
may be amended, in whole or in part, by an Ordinary Majority of the Shareholders voting at a General Meeting.
|
Exhibit 4.4
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
ORDINARY SHARES PURCHASE WARRANT
SUPERCOM LTD.
Warrant Shares: [ ] Issue Date: [ ], 2023
THIS ORDINARY SHARE PURCHASE WARRANT (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 Closing Date (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on [ ],
2028 (the “Termination Date”) but not thereafter, to subscribe for and purchase from SuperCom Ltd., an Israeli company (the “Company”), up to [ ] shares (as subject to adjustment hereunder, the “Warrant Shares”) of the
Company’s ordinary shares (the “Ordinary Shares”). The purchase price of one Ordinary Share 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 Securities Purchase Agreement (the “Purchase Agreement”), dated [ ], 2023, among the Company and the purchasers signatory thereto.
Section 2. Exercise.
a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant
may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or 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 Warrant 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 Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date 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 Shares available hereunder shall have the effect of lowering the outstanding number of
Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The
Company shall deliver any objection to any Notice of Exercise within one (1) Trading 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 Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise Price. The exercise price per Ordinary Share under this Warrant shall be $[ ], subject to adjustment hereunder (the “Exercise Price”).
c) Cashless Exercise. If after the 180th day of the date hereof there is no
effective registration statement registering, or the prospectus contained therein is not available for the issuance or resale of the Warrant Shares to or by 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 Shares 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 Ordinary Shares 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 Shares 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.
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a)
if the Ordinary Shares are then listed or quoted on a Trading Market, the bid price of the Ordinary Shares for the time in question (or the nearest preceding date) on the Trading Market on which the Ordinary Shares 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 OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Ordinary Shares for such date (or the
nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Ordinary Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary Shares 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 Ordinary Shares so reported, or (d) in all other cases, the fair market value of an Ordinary Share as determined by an independent appraiser
selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if
the Ordinary Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Ordinary Shares for such date (or the nearest preceding date) on the Trading Market on which the Ordinary Shares 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 OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Ordinary Shares for such date
(or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Ordinary Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary Shares 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 Ordinary Shares so reported, or (d) in all other cases, the fair market value of an Ordinary Share as determined by an independent
appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
If Warrant Shares 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 Shares 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 Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder
to be transmitted by the Transfer Agent to the Holder by crediting 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 the 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 the earlier of (A) the earlier of (i) two (2) Trading Days and (ii) the number of days comprising the Standard Settlement Period, in each case after the delivery to the
Company of the Notice of Exercise and (B) two (2) Trading Days after delivery of the aggregate Exercise Price to the Company (such date, the “Warrant Share 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 Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, 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 Share Delivery Date, provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise)
is received by the Company on or prior to the Warrant Share 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 Shares subject to such exercise (based on the VWAP of
the Ordinary Shares on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share
Delivery Date until such Warrant Shares 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 Ordinary Shares 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 Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit
to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise.
In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before
the Warrant Share Delivery Date (other than any such failure that is solely due to any action or inaction by the Holder with respect to such exercise), 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, Ordinary Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares 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 Ordinary Shares so purchased exceeds (y) the amount obtained by multiplying
(1) the number of Warrant Shares 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 Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Ordinary
Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Ordinary Shares having a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted exercise of Ordinary Shares 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 Ordinary Shares upon exercise of the Warrant as
required pursuant to the terms hereof.
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v. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which 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 Shares 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 Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares 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 Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise
shall be accompanied by the Assignment Form attached hereto duly executed by the Holder 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 Transfer Agent 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 Shares.
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 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 Transfer Agent setting forth the number of Ordinary Shares outstanding. Upon the written or oral request of a Holder, the Company shall within two (2) Trading Days 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% 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.
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 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) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section
3(a) above, if at any time that the Warrant is outstanding 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).
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c) 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).
d) 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, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification (other than a stock split), reorganization or recapitalization of the Ordinary Shares or any compulsory share exchange pursuant to
which the Ordinary Shares are 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 more than 50% of the outstanding
Ordinary Shares (not including any Ordinary Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business
combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the
occurrence of such Fundamental Transaction, at the option of the Holder (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 Ordinary Shares 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 Ordinary Shares 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, 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 common stock 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 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 Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and
the 100 day volatility 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 Fundamental Transaction, (C) the
underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and
(ii) the highest VWAP during the period beginning on the Trading Day immediately preceding the announcement of the applicable 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 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
and the other Transaction Documents 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 succeed to, and be substituted for (so that
from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the
Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein
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e) 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 Ordinary Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Ordinary Shares (excluding treasury
shares, if any) issued and outstanding.
f) 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 facsimile or 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; provided, however, that the Company may satisfy this notice requirement in this Section 3(f) by filing such notice with the Commission pursuant to a Report on Form 6-K or Annual Report.
ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend
(or any other distribution in whatever form) on the Ordinary Shares, (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 Shares rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights (excluding any granting or issuance of rights to all of the Company’s shareholders pursuant to a shareholder rights plans),
(D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Ordinary Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of
the assets of the Company, 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 facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 10
calendar days prior to the applicable record or effective date hereinafter specified (unless such information is filed with the Commission on its EDGAR system in which case a notice shall not be required), 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 Company’s subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a 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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g) Voluntary Adjustment By Company. The Company may, at any time during the term of
this Warrant, reduce the then current Exercise Price to any amount and extend the term of this Warrant for any period of time deemed appropriate by the Board of Directors of the Company, with the consent of the Holder.
Section 4. Transfer of Warrant.
a) Transferability. Subject to compliance with any applicable securities laws and the
conditions set forth in Section 4(d) hereof and to the provisions of Section 4.1 of the Purchase Agreement, 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.
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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 Issue 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.
d) Transfer Restrictions. If, at the time of the
surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state
securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the
Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.
e) Representation by the Holder. The Holder, by the acceptance hereof, represents and
warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part
thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.
Section 5. Miscellaneous.
a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does
not entitle the Holder to any voting rights, dividends or other rights as a stockholder 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 the rights of a Holder
to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.
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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 Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.
d) Authorized Shares.
The Company covenants that, at all times 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 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 Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Ordinary Shares may be listed. The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares 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 Shares 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 Shares 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.
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Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant
is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
e) Jurisdiction. All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.
f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, 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, notwithstanding the fact that the right to exercise this Warrant terminates on the Termination Date.
Without limiting any other provision of this Warrant or the Purchase Agreement, 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 notice, request or other document required or permitted to be given or
delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.
i) Limitation of Liability. No provision hereof, in the absence of any affirmative
action by the Holder to exercise this Warrant to purchase Warrant Shares, 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 as a
stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
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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 Shares.
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 of this Warrant, 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.
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SUPERCOM LTD.
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By:__________________________________________
Name: Ordan Trabelsi
Title: President and CEO
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NOTICE OF EXERCISE
TO: SUPERCOM LTD.
(1) The undersigned hereby elects to purchase ________ Warrant Shares 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 Shares 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 Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the
Securities Act of 1933, as amended.
[SIGNATURE OF HOLDER]
Name of Investing Entity: ________________________________________________________________________
Signature of Authorized Signatory of Investing
Entity: _________________________________________________
Name of Authorized Signatory: ___________________________________________________________________
Title of Authorized Signatory: ____________________________________________________________________
Date: ________________________________________________________________________________________
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to
exercise the Warrant to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
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Name:
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_________________________________________________________________ |
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(Please Print)
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Address:
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_________________________________________________________________ |
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Phone Number:
Email Address:
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(Please Print)
_________________________________________________________________
_________________________________________________________________
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Dated: _______________ __, ______
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Holder’s Signature: _______________________
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Holder’s Address:________________________
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Exhibit 4.5
PREFUNDED ORDINARY SHARES PURCHASE WARRANT
SUPERCOM LTD.
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Warrant Shares: [ ]
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Issue Date: [ ]
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THIS PREFUNDED ORDINARY SHARES PURCHASE WARRANT (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 Closing Date (the “Initial Exercise Date”) until this Warrant is
exercised in full (the “Termination Date”) but not thereafter, to subscribe for and purchase from SuperCom Ltd., an Israeli company (the “Company”), up to [ ] shares (as subject to adjustment hereunder, the “Warrant Shares”) of
the Company’s Ordinary Shares (the “Ordinary Shares”). The purchase price of one Ordinary Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section1.
Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated [ ], 2023, among the Company and
the purchaser signatory thereto.
Section 2. Exercise.
a) Exercise of Warrant. Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or 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 Warrant 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 Shares
available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date 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 Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount
equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of
Exercise within one (1) Trading 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 Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise Price. The aggregate exercise price of this Warrant, except for a
nominal exercise price of $0.00001 per Warrant Share, 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 $0.00001 per Warrant Share) 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 Ordinary Share under this Warrant shall be $0.00001, subject to adjustment hereunder (such
remaining unpaid exercise price, the “Exercise Price”).
c) Cashless Exercise. 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 Shares 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 Ordinary Shares 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 Shares 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.
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“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Shares are then listed or quoted on a Trading Market, the bid price of the Ordinary Shares for the time in question (or
the nearest preceding date) on the Trading Market on which the Ordinary Shares 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 OTCQB or
OTCQX is not a Trading Market, the volume weighted average price of the Ordinary Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Ordinary Shares are not then listed or quoted for trading on OTCQB or
OTCQX and if prices for the Ordinary Shares 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 Ordinary Share so reported, or (d) in all
other cases, the fair market value of an Ordinary Share as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
“VWAP” means, for any date, the price determined by the first of the following clauses
that applies: (a) if the Ordinary Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Ordinary Shares for such date (or the nearest preceding date) on the Trading Market on which the Ordinary Shares
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 OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Ordinary
Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Ordinary Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary Shares 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 Ordinary Share so reported, or (d) in all other cases, the fair market value of an Ordinary Share as determined by an
independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
If Warrant Shares 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 Shares 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 Shares Upon Exercise. The
Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting 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 the
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 the earlier of (A) the earlier of (i) two (2) Trading Days and (ii) the number of days comprising the Standard
Settlement Period, in each case after the delivery to the Company of the Notice of Exercise; provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise) is received by the Company by such date, and (B)
two (2) Trading Days after delivery of the aggregate Exercise Price to the Company (such date, the “Warrant Share Delivery Date”), provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise)
is received by the Company by such 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 Shares with respect to which this Warrant has been exercised,
irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to
deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share 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 Shares subject to such
exercise (based on the VWAP of the Ordinary Shares on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day
after such Warrant Share Delivery Date until such Warrant Shares 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 Ordinary Shares 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 Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the
Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon
Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise
on or before the Warrant Share Delivery Date (other than any such failure that is solely due to any action or inaction by the Holder with respect to such exercise), 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, Ordinary Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares 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 Ordinary Shares so purchased exceeds (y) the amount obtained by multiplying (1)
the number of Warrant Shares 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 Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Ordinary Shares
that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Ordinary Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an
attempted exercise of Ordinary Shares 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 Ordinary Shares upon exercise of the Warrant as required
pursuant to the terms hereof.
v. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which 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 Shares shall be made
without charge to the Holder for any issue or transfer tax or other incidental expenses in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares 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 Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder 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 Transfer Agent 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 Shares.
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 Limitation. 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 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 Transfer Agent setting forth the number of Ordinary Shares outstanding. Upon the
written or oral request of a Holder, the Company shall within two (2) Trading Days 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 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 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) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section
3(a) above, if at any time that this Warrant is outstanding the Company grants, issues or sells any Ordinary Share Equivalents or rights to purchase stock, warrants, securities or other property pro rata to all of 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 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).
c) 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).
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d) 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, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification (other than a stock split), reorganization or recapitalization of the Ordinary Shares or any compulsory share exchange pursuant to
which the Ordinary Shares are 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 more than 50% of the outstanding
Ordinary Shares (not including any Ordinary Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business
combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the
occurrence of such Fundamental Transaction, at the option of the Holder (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 Ordinary Share 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 Ordinary Shares 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 and the other Transaction Documents 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 succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents
with the same effect as if such Successor Entity had been named as the Company herein.
e) 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 Ordinary Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Ordinary Shares (excluding
treasury shares, if any) issued and outstanding.
f) 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 facsimile or 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; provided, however, that the Company may satisfy this notice requirement in this Section 3(f) by filing such notice with the Commission pursuant to a Report on Form 6-K or
Quarterly or Annual Report.
ii. Notice to allow Exercise by Holder. If (A) the Company shall declare a dividend
(or any other distribution in whatever form) on the Ordinary Shares, (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 Shares rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights (excluding any granting or issuance of rights to all of the Company’s shareholders pursuant to a shareholder rights plan), (D)
the approval of any stockholders of the Company shall be required in connection with any reclassification of the Ordinary Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of
the assets of the Company, 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 facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 10
calendar days prior to the applicable record or effective date hereinafter specified (unless such information is filed with the Commission on its EDGAR system in which case a notice shall not be required), 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 Company’s subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-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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iii. Voluntary Adjustment By Company. The Company may, at any time during the
term of this Warrant, reduce the then current Exercise Price to any amount for any period of time deemed appropriate by the Board of Directors of the Company, with the consent of the Holder.
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.
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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 Issue 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 Stockholder Until Exercise; No Settlement in Cash. This Warrant
does not entitle the Holder to any voting rights, dividends or other rights as a stockholder 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 the rights of a
Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will 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 appropriate
day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.
d) Authorized Shares.
The Company covenants that, at all times 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 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 Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Ordinary Shares may be listed. The Company covenants that
all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares 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 Shares 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 Shares 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 Shares
for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
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e) Jurisdiction. All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.
f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon
the exercise of this Warrant, if not registered, 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, notwithstanding the fact that the right to exercise this Warrant terminates on the Termination
Date. Without limiting any other provision of this Warrant or the Purchase Agreement, 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 notice, request or other document required or permitted to be
given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.
i) Limitation of Liability. No provision hereof, in the absence of any
affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, 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 Shares or
as a stockholder 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 Shares.
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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 of this Warrant, 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.
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SUPERCOM LTD.
By:________________________________
Name: Ordan Trabelsi
Title: President & CEO
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NOTICE OF EXERCISE
TO: SUPERCOM LTD.
(1) The undersigned hereby elects to purchase Warrant Shares 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 Shares 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 Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified
below:
_________________________________
The Warrant Shares shall be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated
under the Securities Act of 1933, as amended.
[SIGNATURE OF HOLDER]
Name of Investing Entity: ________________________________________________________________________
Signature of Authorized Signatory of Investing
Entity: _________________________________________________
Name of Authorized Signatory: ___________________________________________________________________
Title of Authorized Signatory: ____________________________________________________________________
Date: ________________________________________________________________________________________
EXHIBIT B
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
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Name:
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(Please Print)
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Address:
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______________________________________ |
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Phone Number:
Email Address:
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(Please Print)
______________________________________
______________________________________
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Dated: _______________ __, ______
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Holder’s Signature:______________________________________
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Holder’s Address: _______________________________________
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Exhibit 5.1
Tel-Aviv, July 31, 2023
SuperCom Ltd.
3 Rothschild Street
Tel Aviv 6688106
Israel
Re: Registration Statement on Form F-1
Ladies and Gentlemen:
We have acted as Israeli counsel to SuperCom Ltd., a company organized under the laws of the State of Israel (the “Company”) in connection
with the Registration Statement on Form F-1 (as amended through the date hereof, the “Registration Statement”) filed by the Company with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), for the registration and proposed offering by the Company under the Registration Statement of up to an aggregate amount of 8,000,000
units consisting of (i)(a) one ordinary share, with a par value NIS 2.5 per share, of the Company (the “ordinary shares”), and (b) one warrant to purchase one ordinary share (the “Regular Warrant” and together with the ordinary shares, the “Unit”);
and (ii)(a) one pre-funded warrant to purchase one ordinary share at an exercise price of $0.0001 per ordinary share (the “Pre-Funded Warrants”), and (b) the Regular Warrant (together with the Pre-Funded Warrant, the “Pre-Funded Unit”). The Regular
Warrants and the Pre-Funded Warrants are collectively referred to herein as the “Warrants”; the Warrants, the Units, the Pre-Funded Units and the ordinary shares underlying all and any of them are collectively referred to herein as the
“Securities”. The Securities are being registered by the Company in connection with a best efforts public offering of the Company (the “Offering”).
In connection herewith, we have examined such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for
the purpose of our opinion, and we have examined and relied without investigation as to matters of fact upon the Registration Statement and the exhibits thereto, and such certificates, statements and results of inquiries of public officials and
officers and representatives of the Company and originals or copies, certified or otherwise identified to our satisfaction, of such other documents, corporate records, certificates and instruments as we have deemed necessary or appropriate to
enable us to render the opinions expressed herein. We have assumed the genuineness of all signatures on all documents examined by us, the legal competence and capacity of natural persons, the authenticity of documents submitted to us as originals,
and the conformity with authentic original documents of all documents submitted to us as copies.
On the basis of the foregoing, and in reliance thereon, we are of the opinion that (i) the ordinary shares underlying the Units have been duly authorized by the Company, and when
issued and sold in the Offering as contemplated in the Registration Statement against payment to the Company of the consideration per Security and subject to final action by the Board of Directors of the Company or a pricing committee of the Board
of Directors of the Company approving the precise number and the price of the ordinary shares, will be validly issued, fully paid and non-assessable and (ii) the ordinary shares underlying the Warrants, when issued and sold by the Company and
delivered by the Company against receipt of the exercise price therefor, in accordance with and in the manner described in the Registration Statement and the Warrants, will be duly authorized and validly issued, fully paid and non-assessable.
We are members of the Israeli bar, and the opinions expressed herein are limited to questions arising under the laws of the State of Israel, and we disclaim any opinion
whatsoever with respect to matters governed by the laws of any other jurisdiction.
The opinion set forth above is subject, as to the enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the rights and
remedies of creditors generally and to the effect of general principles of equity.
In rendering the foregoing opinion, we have assumed that: (i) the Company will issue and deliver the Warrants, the Units, the Pre-Funded Units and the ordinary shares underlying all and any of them
in the manner contemplated by the Registration Statement; and (ii) the Warrants, the Units, the Pre-Funded Units and the ordinary shares underlying all and any of them will be issued in compliance with applicable federal and state securities laws.
The opinions we express above are based upon a review only of those laws, statutes, rules, ordinances and regulations which, in our experience, a lawyer who is a member of the bar of the State of
Israel exercising customary professional diligence would reasonably recognize as being applicable to the foregoing transactions..
In addition, the foregoing opinions are subject to (a) the effect of any bankruptcy, insolvency, reorganization, moratorium, arrangement or similar laws affecting the rights and remedies of
creditors’ generally, including without limitation the effect of statutory or other laws regarding fraudulent transfers or preferential transfers, and (b) general principles of equity, including without limitation concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of specific performance, injunctive relief or other equitable remedies regardless of whether enforceability is considered in a proceeding in equity or at law.
We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to us under the caption “Legal Matters” in the prospectus which
forms part of the Registration Statement. In giving such consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the SEC thereunder.
This opinion letter is rendered as of the date hereof and we disclaim any obligation to advise you of facts, circumstances, events or developments that may be brought to our
attention after the effective date of the Registration Statement that may alter, affect or modify the opinions expressed herein.
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Very truly yours,
/s/ S. FRIEDMAN, ABRAMSON & CO
S. FRIEDMAN, ABRAMSON & CO.
Advocates
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Exhibit 5.2
Attorneys at Law
1180 Avenue of the Americas | 8th Floor
New York, New York 10036
Dial: 212.335.0466
Fax: 917.688.4092
info@foleyshechter.com
www.foleyshechter.com
July 31, 2023
SuperCom Ltd.
3 Rothschild Street
Tel Aviv 6688106
Israel
Ladies and Gentlemen:
We have acted as special U.S. securities counsel to SuperCom Ltd., a company organized under the laws of the State of Israel (the “Company”), in connection with the Registration Statement on Form
F-1 (as amended through the date hereof, the “Registration Statement”) filed by the Company with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), for the registration and
proposed offering by the Company under the Registration Statement of up to an aggregate amount of 8,000,000 units consisting of (i)(a) one ordinary share, with a par value NIS 2.5 per share, of the Company (the “ordinary shares”), and (b) one
warrant to purchase one ordinary share (the “Regular Warrant” and together with the ordinary shares, the “Unit”); and (ii) units, with each unit consisting of (a) one pre-funded warrant to purchase one ordinary share at an exercise price of $0.0001
per ordinary share (the “Pre-Funded Warrants”), and (b) the Regular Warrant (together with the Pre-Funded Warrant, the “Pre-Funded Unit”). The Regular Warrants and the Pre-Funded Warrants are collectively referred to herein as the “Warrants”; the
Warrants, the Units, the Pre-Funded Units and the ordinary shares underlying all and any of them are collectively referred to herein as the “Securities”. The Securities are being registered by the Company in connection with a best efforts public
offering of the Company (the “Offering”).
In connection with this opinion, we have examined and relied upon the originals, or copies certified to our satisfaction, of such records, documents, certificates, opinions, memoranda and other
instruments as in our judgment are necessary or appropriate to enable us to render the opinion expressed below. As to certain factual matters, we have relied upon a certificate of an officer of the Company and have not independently verified such
matters. Other than our examination of the documents indicated above, we have made no other examination in connection with this opinion.
In rendering this opinion, we have assumed the legal capacity of all natural persons; the genuineness of all signatures on original documents; the authenticity of all documents submitted to us as
originals; the conformity to originals of all documents submitted to us as copies and the authenticity of the originals of such copies; the accuracy, completeness and authenticity of certificates of public officials; and the due authorization,
execution and delivery of all documents where authorization, execution and delivery are prerequisites to the effectiveness of such documents. We are not hereby rendering any opinion with respect to any ordinary shares issuable upon the conversion
or exercise of any Securities. We have assumed that (i) the Company is validly existing under the laws of the State of Israel, has the corporate power to enter into and perform its obligations under the Securities in accordance with their
respective terms, (ii) upon issuance, the Company will have duly authorized, executed and delivered the Securities in accordance with its organizational documents and the laws of the State of Israel, (iii) any ordinary shares issued upon conversion
of the Securities will be duly authorized, validly issued, fully paid and non-assessable, and (iv) the execution, delivery and performance by the Company of its obligations the Securities will not violate the laws of the State of Israel or any
other applicable laws (excepting from such assumption the laws of the State of New York). We have also assumed that any Securities offered under the Registration Statement are executed in the forms filed as exhibits to the Registration Statement or
incorporated by reference therein.
For purposes of the opinions set forth below, without limiting any other exceptions or qualifications set forth herein, we have assumed that (i) each of the Securities and agreements governing
Securities offered pursuant to the Registration Statement will be governed by the internal law of New York and (ii) after the issuance of any Securities offered pursuant to the Registration Statement, the total number of issued ordinary shares
together with the total number of shares of such share capital issuable upon the exercise, exchange, conversion or settlement, as the case may be, of any exercisable, exchangeable or convertible security (including without limitation any Unit or
Pre-Funded Unit), as the case may be, then outstanding, will not exceed the total number of authorized ordinary shares under the Company’s Articles of Association, as then in effect.
Because the agreements governing the Warrants (the “Warrant Agreements”) contain provisions stating that they are to be governed by the laws of the State of New York, we are rendering this opinion
as to New York law. Our opinion herein is expressed solely with respect to the laws of the State of New York. Our opinion is based on these laws as in effect on the date hereof. We express no opinion as to whether the laws of any particular
jurisdiction are applicable to the subject matter hereof and express no opinion and provide no assurance as to compliance with any federal or state law, rule or regulation relating to securities, or to the sale or issuance thereof. With respect to
all matters governed by the laws of the State of Israel, we have relied exclusively, with the permission of S. Freidman &Co, upon the legal opinion letter of S. Freidman &Co to the Company dated July 31, 2023
Based upon the foregoing, and subject to the additional qualifications set forth below, we are of the opinion that, when the Registration Statement has become effective under the Securities Act,
the Warrant Agreements and each of the Units, the Warrants and the other Securities, if and when issued and paid for in accordance with the terms of the Offering, will be valid and binding obligations of the Company enforceable against the Company
in accordance with their terms.
The opinions expressed above are subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general application affecting the rights and remedies
of creditors and to general principles of equity.
This opinion is rendered to you in connection with the Registration Statement. This opinion may not be relied upon for any other purpose, or furnished to, quoted or relied upon by any other person,
firm or corporation for any purpose, without our prior written consent, except that (i) this opinion may be furnished or quoted to judicial or regulatory authorities having jurisdiction over you, and (ii) this opinion may be relied upon by
purchasers and holders of the Units currently entitled to rely on it pursuant to applicable provisions of federal securities law. This opinion is limited to the matters expressly set forth in this letter, and no opinion is implied or may be
inferred beyond the matters expressly stated. This opinion speaks only as to law and facts in effect or existing as of the date hereof, and we undertake no obligation or responsibility to update or supplement this opinion to reflect any facts or
circumstances that may hereafter come to our attention or any changes in law that may hereafter occur.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to this firm under the caption “Legal Matters” in the Registration Statement and in
any Registration Statement pursuant to Rule 462(b) under the Securities Act. In giving such consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations
of the SEC.
Sincerely,
/s/ Foley Shechter Ablovatskiy LLP
Foley Shechter Ablovatskiy LLP
Exhibit 10.6
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is dated as of [ ], 2023, between SuperCom Ltd., an Israeli corporation (the “Company”), and the purchasers identified on the signature pages hereto (including its successors and
assigns, the “Purchaser” and collectively, the “Purchasers”).
WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the “Securities Act” or “Act”) and the rules and regulations (the “Rules and Regulations”) of the U.S. Securities and Exchange Commission (the “Commission”) thereunder, the Company
desires to issue and sell to the Purchasers, and the Purchasers desire to purchase from the Company, securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and
valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Purchasers agree as follows:
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:
“Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.
“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.
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the
United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close; provided, however, for clarification, commercial 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
the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered
by the applicable parties thereto, and all conditions precedent to (i) the Purchaser’s obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event
later than the second (2nd) Trading Day following the date hereof.
“Company Israeli Counsel” means S. Friedman & Co.
“Company US Counsel” means Foley Shechter Ablovatskiy LLP.
“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
“Disclosure Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:15 a.m.
(New York City time) and before midnight (New York City time) on any Trading Day, 9:16 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent, and
(ii) if this Agreement is signed between midnight (New York City time) and 9:15 a.m. (New York City time) on any Trading Day, no later than 9:16 a.m. (New York City time) on the date hereof, unless otherwise instructed as to an earlier time by the
Placement Agent.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
“Exempt Issuance” means (i) the issuance of securities to directors, officers, employees, advisors,
attorneys and consultants of the Company pursuant to employee benefit plans, equity incentive plans or other employee compensation plans existing on the date hereof and as described in the Prospectus or pursuant to Nasdaq Rule 5635(c)(4) or equity
incentive plans or other employee compensation plans adopted after the date hereof and with respect to such new plans approved by the majority of the disinterested directors of the Company, (ii) securities pursuant to the exercise, exchange or
conversion of any options, warrants, restricted stock units, rights or convertible securities outstanding on the date hereof, provided that such options, warrants, restricted stock units, rights or convertible 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 (other than in connection with stock splits or combinations or existing anti-dilution provisions
of such securities) or to extend the term of such securities, (iii) securities issued in connection with any joint venture, commercial or collaborative relationship, or the acquisition or license by the Company and/or its Subsidiaries of the
securities, businesses, property or other assets of another person, provided that such issuance is approved by the majority of the disinterested directors of the Company and provided that such securities are issued as “restricted securities” (as
defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 4.12(a) herein, and any such securities issued pursuant to Form F-4,
(iv) Securities issued pursuant to this Agreement.
“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(a).
“Ordinary Shares” means the ordinary shares of the Company, par value NIS 2.5 per share, and any other class of
securities into which such securities may hereafter be reclassified or changed.
“Ordinary Share Equivalents” means any securities of the Company or its Subsidiaries which would entitle
the holder thereof to acquire at any time Ordinary Shares, 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.
“Ordinary Warrants” means the Ordinary Share purchase warrants delivered to the Purchasers at the Closing in
accordance with Section 2.2(a) hereof, which Ordinary Warrants shall be exercisable immediately and have a term of exercise equal to five (5) years from the initial exercise date, in the form of Exhibit A attached hereto.
“Ordinary Warrant Shares” means the Ordinary Shares issuable upon exercise of the Ordinary Warrants.
“Per Share Purchase Price” equals $[ ], 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
and prior to the Closing Date, provided that the purchase price per Pre-Funded Warrant shall be the Per Share Purchase Price minus $0.00001.
“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.
“Placement Agent” means Maxim Group LLC.
“Placement Agency Agreement” means the Placement Agency Agreement by and between the Company and the Placement
Agent dated the date hereof.
“Pre-Funded Warrants” means the Pre-Funded Ordinary Share purchase warrants delivered to the Purchasers at the
Closing in accordance with Section 2.2(a) hereof, in the form of Exhibit B attached hereto.
“Pre-Funded Warrant Shares” means the Ordinary Shares issuable upon exercise of the Pre-Funded Warrants.
“Prospectus” means the final base prospectus filed for the Registration Statement, including all information,
documents and exhibits filed with or incorporated by reference into such base prospectus.
“Prospectus Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act
that is filed with the Commission and delivered by the Company to the Purchasers at the Closing, including all information, documents and exhibits filed with or incorporated by reference into such supplement to the Prospectus.
“Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.
“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(c).
“Registration Statement” means the effective registration statement with Commission (File No.
333-273291), including all information, documents and exhibits filed with or incorporated by reference into such registration statement, which registers the sale of the Shares, Warrants and Warrant Shares to the Purchasers.
“Rule 144” means Rule 144 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 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.
“Securities” means the Shares, the Warrants, the Warrant Shares, the Pre-Funded Warrants, and the Pre-Funded
Warrant Shares.
“Shares” means the shares of Ordinary Shares issued or issuable to the Purchasers pursuant to this Agreement.
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but
shall not be deemed to include locating and/or borrowing Ordinary Shares).
“Subscription Amount” means, as to the Purchaser, the aggregate amount to be paid for Shares, the Pre-Funded
Warrants, and Warrants purchased hereunder as specified below the Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds (minus, if applicable,
a Purchaser’s aggregate exercise price of the Pre-Funded Warrants, which amounts shall be paid as and when such Pre-Funded Warrants are exercised).
“Trading Day” means a day on which the principal Trading Market is open for trading.
“Trading Market” means any of the following markets or exchanges on which the Ordinary Shares 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 Pre-Funded Warrants, the Warrants, the Placement Agency
Agreement, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer Agent” means American Stock Transfer & Trust Company, LLC, the current transfer agent of the
Company and any successor transfer agent of the Company.
“Variable Rate Transaction” shall have the meaning ascribed to such term in Section 4.12(b).
“Warrants” means collectively, the (i) Ordinary Warrants and (ii) Pre-Funded Warrants.
“Warrant Shares” means collectively, the (i) Ordinary Warrant Shares and (ii) Pre- Funded Warrant Shares.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchasers agree to purchase, up to an aggregate of $[ ] of Shares and Warrants. Notwithstanding anything herein to the
contrary, to the extent that each Purchaser determines, in its sole discretion, that such Purchaser (together with such Purchaser’s Affiliates, and any Person acting as a group together with
such purchaser or any of such Purchaser’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation, or as the Purchaser may otherwise choose, the Purchaser may elect to purchase Pre-Funded Warrants in lieu of the Shares as
determined pursuant to Section 2.2(a) in such manner as to result in the same aggregate purchase price being paid by the Purchaser to the Company. The “Beneficial Ownership Limitation” shall be 4.99% (or, at the election of the Purchaser at Closing,
9.99%) of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of the Securities on the Closing Date. The Purchaser’s Subscription Amount as set forth on the signature page hereto executed by the Purchaser shall
be made available for “Delivery Versus Payment” (“DVP”) settlement with the Company or its designees. The Company shall deliver to each Purchaser its Shares and a Warrant as determined pursuant to Section 2.2(a), and the Company and each Purchaser
shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of the Placement Agent or such other
location as the parties shall mutually agree. Unless otherwise directed by the Placement Agent, settlement of the Shares shall occur via DVP (i.e., on the Closing Date, the Company shall issue the Shares registered in the Purchaser’s name and address
and released by the Transfer Agent directly to the account(s) at the Placement Agent identified by each Purchaser; upon receipt of such Shares, the Placement Agent shall promptly electronically deliver such Shares to the Purchaser, and payment
therefor shall be made by the Placement Agent (or its clearing firm) by wire transfer to the Company).
2.2 Deliveries.
(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i) this Agreement duly executed by the Company;
(ii) a legal opinion and negative assurance letter of Company US Counsel,
directed to the Placement Agent and the Purchasers, in a form reasonably acceptable to the Placement Agent and the Purchasers;
(iii) a legal opinion of Company Israeli Counsel, directed to the Placement
Agent and the Purchasers, in a form reasonably acceptable to the Placement Agent and the Purchasers;
(iv) the Company shall have provided the Purchasers with the Company’s wire
instructions, on Company letterhead;
(v) the Company shall have provided each Purchaser and the Placement Agent with a
certificate executed by the Chief Financial Officer of the Company, dated as of such date, in form and substance reasonably satisfactory to the Purchasers and the Placement Agent;
(vi) subject to the last sentence of Section 2.1, a copy of the irrevocable
instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”) Shares equal to the Purchasers’ Subscription Amount divided by the
Per Share Purchase Price, registered in the name of the Purchasers;
(vii) if applicable, a Pre-Funded Warrant registered in the name of each Purchaser, as
applicable, to purchase up to a number of Pre-Funded Warrant Shares equal to the difference between (A) such Purchaser’s Subscription Amount divided by the Per Share Purchase Price and (B) the number of Shares otherwise issuable to such Purchaser that
would cause such Purchaser’s beneficial ownership of Ordinary Shares to be more than the Beneficial Ownership Limitation with an exercise price equal to $0.00001 per Ordinary Share, subject to adjustment therein;
(viii) an Ordinary Warrant registered in the name of each Purchaser to purchase up to a
number of Ordinary Warrant Shares to 100% of such Purchaser’s Shares, with an exercise price equal to $[ ], subject to adjustment therein; and
(ix) the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).
(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:
(i) this Agreement duly executed by such Purchaser; and
(ii) such Purchaser’s Subscription Amount, which shall be made available for DVP settlement with the Company or its designees.
2.3 Closing
Conditions.
(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or
warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case they
shall be accurate as of such date);
(ii) all obligations, covenants and agreements of the Purchasers required to be
performed at or prior to the Closing Date shall have been performed; and
(iii) the delivery by the Purchasers of the items set forth in Section 2.2(b) of this Agreement.
(b) The obligations of the Purchasers in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or
warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case they shall
be accurate as of such date);
(ii) all obligations, covenants and agreements of the Company required to be performed
at or prior to the Closing Date shall have been performed;
(iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and
(v) from the date hereof to the Closing Date, trading in the Ordinary Shares shall not
have been suspended by the Commission or the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall
not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any
material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of the Purchaser,
makes it impracticable or inadvisable to purchase the Securities at the Closing.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules,
which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the
following representations and warranties to the Purchasers:
(a) Organization and Good Standing. Each “significant subsidiary” (as defined in
Article 1, Rule 1-02 of Regulation S-X) of the Company is set forth on Schedule 3.1(a) (collectively, the “Subsidiaries”). Each of the Company and its Subsidiaries has been duly organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation. Each of the Company and its Subsidiaries has full corporate power and authority to own its properties and conduct its business as currently being carried on and as described in the Registration Statement,
the Prospectus and the Prospectus Supplement, and is duly qualified to do business as a foreign corporation in good standing in each jurisdiction in which it owns or leases real property or in which the conduct of its business makes such qualification
necessary and in which the failure to have such power and authority or so qualify would have (a) a material adverse effect upon the business, properties, operations, condition (financial or otherwise) or results of operations of the Company and its
Subsidiaries, taken as a whole, or (b) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under the Transaction Documents (“Material Adverse Effect”). All of the issued and
outstanding shares of capital stock of each of the Subsidiaries have been duly and validly authorized and issued and are fully paid and nonassessable, and, except as otherwise described in the SEC Reports, the Registration Statement, the Prospectus and
the Prospectus Supplement, the Company owns of record and beneficially, free and clear of any security interests, claims, liens, proxies, equities or other encumbrances, all of the issued and outstanding shares of such stock.
(b) No Violations or Defaults. Neither the Company nor any of its Subsidiaries (A) is
in violation of its respective charters, bylaws or other organizational documents, (B) is in breach of or otherwise in default and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the performance or
observance of any term, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it is bound or to which any of its material property
or assets is subject, (C) is in violation in any respect of any law, ordinance, governmental rule, regulation or court order, decree or judgment to which it or its property or assets may be subject, including the Sarbanes–Oxley Act; or (D) is in
violation of any applicable requirements set forth in the rules of the Exchange Act; except, in the case of clauses (B), (C) and (D) of this paragraph (b), for any breaches, violations or defaults which, singularly or in the aggregate, would not have a
Material Adverse Effect.
(c) Authorization; No Conflicts; Authority. This Agreement has been duly authorized,
executed and delivered by the Company, and constitutes a valid, legal and binding obligation of the Company, enforceable 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. Warrants have been duly authorized, and when executed and delivered by the Company, shall constitute a valid, legal and binding obligation of the Company,
enforceable in accordance with their 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. The execution,
delivery and performance of the Transaction Documents and the consummation of the transactions herein and therein contemplated will not (A) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its Subsidiaries pursuant to any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the property or assets of the Company or any of its Subsidiaries is subject, (B) result in any violation of the
provisions of the Company’s charter or by-laws or (C) subject to the Required Approvals, result in the violation of any law or statute or any judgment, order, rule, regulation or decree of any court or arbitrator or federal, state, local or foreign
governmental agency or regulatory authority having jurisdiction over the Company or any of its Subsidiaries or any of their properties or assets (each, a “Governmental Authority”), except in the case of clause (A) or (C) as would not result in a
Material Adverse Effect. No consent, approval, authorization or order of, or registration or filing with any Governmental Authority is required for the execution, delivery and performance of this Agreement or for the consummation of the transactions
contemplated hereby, including the issuance or sale of the Shares by the Company, other than (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii) application(s) to
each applicable Trading Market for the listing of the Shares, Pre-Funded Warrants and Pre-Funded Warrant Shares for trading thereon in the time and manner required thereby, (iv) the filing of Form D with the Commission, and (v) such as may be required
under the Act, the rules of the Financial Industry Regulatory Authority (“FINRA”) or state securities or blue-sky laws (collectively, the “Required Approvals”); and the Company has full power and authority to enter into this the Transaction Documents
and to consummate the transactions contemplated hereby and thereby, including the authorization, issuance and sale of the Securities as contemplated by this Agreement.
(d) Issuance of the Securities; Registration. The Securities are duly authorized and,
when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. When paid for and issued in accordance with this
Agreement, the Warrants will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their respective 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. The Warrant Shares, when issued in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable, free and
clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of Shares issuable pursuant to this Agreement and shall reserve from its duly authorized capital stock the maximum number of
Warrant Shares issuable pursuant to the Warrants. The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective on [ ], 2023, including the Prospectus, and such
amendments and supplements thereto as may have been required to the date of this Agreement. The Company was at the time of the filing of the Registration Statement eligible to use Form F-3. The Registration Statement is effective under the Securities
Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the
knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Prospectus Supplement with the Commission pursuant to Rule 424(b). At the time the Registration
Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the
Securities Act and did not 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 not misleading; and the Prospectus and any amendments
or supplements thereto, at the time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain
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.
(e) Capitalization. The capitalization of the Company as of the date hereof is as set
forth on Schedule 3.1(e). All of the issued and outstanding shares of capital stock of the Company, including the outstanding Ordinary Shares, are duly authorized and validly issued, fully paid and nonassessable, have been issued in compliance with all
federal and state and foreign securities laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities that have not been waived in writing, and the holders thereof are not subject to
personal liability by reason of being such holders; the capital stock of the Company, including the Ordinary Shares and the Warrants, conforms in all material respects to the description thereof in the Registration Statement, the Prospectus and the
Prospectus Supplement. Except as set forth on Schedule 3.1(e), (A) there are no preemptive rights or other rights to subscribe for or to purchase, or any restriction upon the voting or transfer of, any Ordinary Shares pursuant to the Company’s charter,
by-laws or any agreement or other instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; and (B) neither the filing of the Registration Statement nor the offering or sale of
the Securities as contemplated by this Agreement gives rise to any rights for or relating to the registration of any Ordinary Shares or other securities of the Company (collectively “Registration Rights”). Except as a result of the purchase and sale
of the Securities or as set forth on Schedule 3.1(e), 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 Ordinary Shares or the capital stock of any Subsidiary, 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 or capital stock of any Subsidiary. Except as set forth on Schedule 3.1(e), 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. Except for the Authorized Share Approval, no further approval or authorization
of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders 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 stockholders.
(f) SEC Reports. 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 Registration Statement, the Prospectus and the Prospectus Supplement,
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 Company has never been an issuer subject to Rule 144(i) under the Securities Act.
(g) Financial Statements. The financial statements of the Company, together with the
related notes, set forth or incorporated by reference in the Registration Statement, the Prospectus and the Prospectus Supplement comply in all material respects with the requirements of the Securities Act and the Exchange Act and fairly present the
financial condition of the Company and its consolidated Subsidiaries as of the dates indicated and the results of operations and changes in cash flows for the periods therein specified in conformity with IFRS consistently applied throughout the periods
involved; the supporting schedules included in the Registration Statement present fairly the information required to be stated therein; all non-IFRS financial information included in the Registration Statement, the Prospectus and the Prospectus
Supplement complies with the requirements of Regulation G and Item 10 of Regulation S-K under the Act; and, except as disclosed in the SEC Reports, the Registration Statement, the Prospectus and the Prospectus Supplement, there are no material
off-balance sheet arrangements (as defined in Regulation S-K under the Act, Item 303(a)(4)(ii)) or any other relationships with unconsolidated entities or other persons, that may have a material current effect or, to the Company’s knowledge, material
future effect on the Company’s financial condition, results of operations, liquidity, capital expenditures, capital resources or significant components of revenue or expenses. No other financial statements or schedules are required to be included in
the Registration Statement, the Prospectus or the Prospectus Supplement. To the Company’s knowledge, Yarel + Partners, Certified Public Accountant (Isr.), which has expressed its opinion with respect to the financial statements and schedules filed as
a part of the Company’s Annual Report on Form 20-F and incorporated by reference into the Registration Statement and included in the Registration Statement, the Prospectus and the Prospectus Supplement is (x) an independent public accounting firm
within the meaning of the Act and the Rules and Regulations, (y) a registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”)) and (z) not in violation of the auditor independence
requirements of the Sarbanes-Oxley Act.
(h) Absence of Certain Events; Undisclosed Events, Liabilities or Developments.
Except as set forth in the SEC Reports or on Schedule 3.1(h), subsequent to the respective dates as of which information is given in the Prospectus and the Prospectus Supplement, neither the Company nor any of its Subsidiaries has incurred any material
liabilities or obligations, direct or contingent, or entered into any material transactions, or declared or paid any dividends or made any distribution of any kind with respect to its capital stock; and there has not been any change in the capital
stock (other than a change in the number of outstanding shares of due to the issuance of shares upon the exercise of outstanding options or warrants, settlement of restricted stock units or conversion of convertible securities), or any material change
in the short-term or long-term debt (other than as a result of the conversion of convertible securities), or any issuance of options, warrants, restricted stock units, convertible securities or other rights to purchase the capital stock, of the Company
or any of its Subsidiaries, or any event or development that has had a Material Adverse Effect or any development which could reasonably be expected to result in any Material Adverse Effect. Except for (i) the issuance of the Securities contemplated by
this Agreement, or (ii) as set forth on Schedule 3.1(h), 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, prospects, 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
(i) Absence of Proceedings. Except as set forth in the SEC Reports or on
Schedule3.1(i), there is not pending or, to the knowledge of the Company, threatened or contemplated, any action, suit or proceeding (a) to which the Company or any of its Subsidiaries is a party or (b) which has as the subject thereof any officer or
director of the Company or any Subsidiary, any employee benefit plan sponsored by the Company or any Subsidiary or any property or assets owned or leased by the Company or any Subsidiary before or by any court or Governmental Authority, or any
arbitrator, which, individually or in the aggregate, might result in any Material Adverse Effect, or would materially and adversely affect the ability of the Company to perform its obligations under the Transaction Documents or which are otherwise
material in the context of the sale of the Securities. There are no current or, to the knowledge of the Company, pending, legal, governmental or regulatory actions, suits or proceedings (x) to which the Company or any of its Subsidiaries is subject or
(y) which has as the subject thereof any officer or director of the Company or any Subsidiary, any employee plan sponsored by the Company or any Subsidiary or any property or assets owned or leased by the Company or any Subsidiary, that are required to
be described in the Registration Statement, Prospectus and the Prospectus Supplement by the Securities Act or by the Rules and Regulations and that have not been so described.
(j) Labor Relations. No labor dispute with the employees of the Company or any of
its Subsidiaries exists or, to the Company’s knowledge, is threatened or imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or its Subsidiaries’ principal suppliers, contractors or
customers, that could have a Material Adverse Effect.
(k) Compliance with Laws. The Company and each of its Subsidiaries holds, and is
operating in compliance in all material respects with, all franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders of any Governmental Authority or self-regulatory body required for the conduct of its
business and all such franchises, grants, authorizations, licenses, permits, easements, consents, certifications and orders are valid and in full force and effect; and neither the Company nor any of its Subsidiaries has received notice of any
revocation or modification of any such franchise, grant, authorization, license, permit, easement, consent, certification or order or has reason to believe that any such franchise, grant, authorization, license, permit, easement, consent, certification
or order will not be renewed in the ordinary course; and the Company and each of its Subsidiaries is in compliance in all material respects with all applicable federal, state, local and foreign laws, regulations, orders and decrees, except in each case
as could not have or reasonably be expected to result in a Material Adverse Effect.
(l) Compliance with Environmental Laws. Except as disclosed in the Prospectus
and the Prospectus Supplement, neither the Company nor any of its Subsidiaries is in violation of any statute, any rule, regulation, decision or order of any Governmental Authority or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), owns or operates any real property contaminated with any
substance that is subject to any environmental laws, is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or is subject to any claim relating to any Environmental Laws, which violation, contamination, liability or
claim would individually or in the aggregate, have a Material Adverse Effect; and the Company is not aware of any pending investigation which might lead to such a claim. Neither the Company nor any of its Subsidiaries anticipates incurring any
material capital expenditures relating to compliance with Environmental Laws.
(m) Ownership of Assets. Except as set forth in the SEC Reports, the Company and its
Subsidiaries have good and marketable title to all property (whether real or personal) described in the Registration Statement, the Prospectus and the Prospectus Supplement as being owned by them, in each case free and clear of all liens, claims,
security interests, other encumbrances or defects except such as are described in the Registration Statement, the Prospectus and the Prospectus Supplement or as would not, individually or in the aggregate, result in a Material Adverse Effect. The
property held under lease by the Company and its Subsidiaries is held by them under valid, subsisting and enforceable leases with only such exceptions with respect to any particular lease as do not interfere in any material respect with the conduct of
the business of the Company or its Subsidiaries.
(n) Intellectual Property The Company and each of its Subsidiaries owns,
possesses, or can acquire on reasonable terms, all Intellectual Property (as defined below) necessary for the conduct of the Company’s and it Subsidiaries’ business as now conducted or as described in the Registration Statement, the Prospectus and the
Prospectus Supplement to be conducted, except as such failure to own, possess, or acquire such rights would not result in a Material Adverse Effect. Furthermore, except as described in the Registration Statement, the Prospectus and the Prospectus
Supplement, (A) to the Knowledge (as defined herein) of the Company, there is no infringement, misappropriation or violation by third parties of any such Intellectual Property, except as such infringement, misappropriation or violation would not result
in a Material Adverse Effect; (B) there is no pending or, to the Knowledge of the Company, threatened, action, suit, proceeding or claim by others challenging the Company’s or any of its Subsidiaries’ rights in or to any such Intellectual Property, and
the Company is unaware of any objective facts which would form a reasonable basis for any such claim; (C) the Intellectual Property owned by the Company and its Subsidiaries, and to the Knowledge of the Company, the Intellectual Property licensed to
the Company and its Subsidiaries, has not been adjudged invalid or unenforceable, in whole or in part, and there is no pending or, to the Knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the validity or scope
of any such Intellectual Property; (D) there is no pending or, to the Knowledge of the Company, threatened action, suit, proceeding or claim by others that the Company or any of its Subsidiaries infringes, misappropriates or otherwise violates any
Intellectual Property or other proprietary rights of others, and neither the Company or any of its Subsidiaries has received any written notice of such claim, except as could not have or reasonably be expected to not have a Material Adverse Effect; and
(E) to the Company’s knowledge, no employee of the Company or any of its Subsidiaries is in or has ever been in violation of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement,
non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s employment with the Company or any of its Subsidiaries or actions undertaken by
the employee while employed with the Company or any of its Subsidiaries, except as such violation would not result in a Material Adverse Effect. “Intellectual Property” shall mean all patents, patent applications, trademarks, trademark registrations,
service marks, service mark registrations, trade names, copyrights, copyright registrations, licenses, inventions, trade secrets, Internet domain names, Internet domain name registrations, technology, registrations, trade secret rights, know-how and
other intellectual property.
(o) Insurance. The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent and customary in the business in which the Company is engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate
Subscription Amount. The Company has no 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.
(p) Internal Accounting Controls. Except as set forth in the SEC Reports, the Company
and its Subsidiaries 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 to permit preparation of financial statements in conformity with generally accepted accounting principles in the United States 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. Except as disclosed in the
Registration Statement, the Prospectus and the Prospectus Supplement, the Company’s internal control over financial reporting is effective and none of the Company, its board of directors and audit committee is aware of any “significant deficiencies” or
“material weaknesses” (each as defined by the Public Company Accounting Oversight Board) in its internal control over financial reporting, or any fraud, whether or not material, that involves management or other employees of the Company and its
Subsidiaries who have a significant role in the Company’s internal controls; and since the end of the latest audited fiscal year, there has been no change in the Company’s internal control over financial reporting (whether or not remediated) that has
materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company’s board of directors has, subject to the exceptions, cure periods and the phase in periods specified in the
applicable stock exchange rules (“Exchange Rules”), validly appointed an audit committee to oversee internal accounting controls whose composition satisfies the applicable requirements of the Exchange Rules and the Company’s board of directors and/or
the audit committee has adopted a charter that satisfies the requirements of the Exchange Rules.
(q) Certain Fees. Other than the compensation payable to the Placement Agent pursuant
to the terms of the Placement Agency Agreement or as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary 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. The Purchaser shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of
other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.
(r) Investment Company. The Company is not and, after giving effect to the offering
and sale of the Securities, will not be an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended.
(s) Listing and Maintenance Requirements. The Ordinary Shares are registered pursuant
to Section 12(b) or 12(g) 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 Ordinary Shares under the Exchange Act nor has the Company
received any notification that the Commission is contemplating terminating such registration. Except as set forth in the Registration Statement, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on
which the Ordinary Shares are or have been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as set forth in the Registration Statement, the Company is, and
has no reason to believe that it will not in the foreseeable future continue to be in compliance with all such listing and maintenance requirements. The Ordinary Shares are currently eligible for electronic transfer through the Depository Trust Company
or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.
(t) 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 to the Purchaser as a result of the Purchaser and the Company fulfilling their obligations or exercising their
rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchaser’s ownership of the Securities.
(u) Disclosure. Except with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided to the Purchaser or its agents or counsel with any information that it believes constitutes or might
constitute material, non-public information which is not otherwise disclosed in the Prospectus Supplement. The Company understands and confirms that the Purchaser will rely on the foregoing representation in effecting transactions in securities of
the Company. All of the disclosure furnished by or on behalf of the Company to the Purchaser regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure
Schedules to this Agreement, when taken together as a whole, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit 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 and when made, not misleading. The Company acknowledges and agrees that no Purchaser
makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.
(v) No Integrated Offering. Assuming the accuracy of the Purchaser’s
representations and warranties set forth in Section 3.2, 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 Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of the Ordinary Warrants or Ordinary
Warrant Shares under the Securities Act or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.
(w) 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 Securities 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 of the Closing Date. SEC Reports set forth as of the
date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) 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), (y) 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) or disclosed the SEC Reports, except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary
course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with United States generally accepted accounting principles. Neither the Company nor any Subsidiary is in
default with respect to any Indebtedness.
(x) Tax Status. The Company and its Subsidiaries (A) have timely filed all federal,
state, local and foreign income and franchise tax returns required to be filed and (B) are not in default in the payment of any taxes which were payable pursuant to said returns or any assessments with respect thereto, other than any which the Company
or any of its Subsidiaries is contesting in good faith; except those, in each of the cases described in clauses (A) and (B) of this paragraph (x), that would not, singularly or in the aggregate, have a Material Adverse Effect. There is no pending
dispute with any taxing authority relating to any of such returns, and the Company has no knowledge of any proposed liability for any tax to be imposed upon the properties or assets of the Company for which there is not an adequate reserve reflected in
the Company’s financial statements included in the Registration Statement, the Prospectus and the Prospectus Supplement.
(y) Anti-Bribery and Anti-Money Laundering Laws. Each of the Company, its
Subsidiaries, its affiliates and any of their respective officers, directors, supervisors, managers, agents, or employees, each in their respective roles with the Company, has not violated, its participation in the offering will not violate, and the
Company and each of its Subsidiaries has instituted and maintains policies and procedures designed to ensure continued compliance with, each of the following laws: anti-bribery laws, including but not limited to, any applicable law, rule, or
regulation of any locality in which the Company does business, including but not limited to any applicable law, rule, or regulation promulgated to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business
Transactions, signed December 17, 1997, including the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”), as amended, the U.K. Bribery Act 2010 (to the extent applicable), or any other applicable law, rule or regulation of similar purposes and
scope, or anti-money laundering laws, including but not limited to, applicable federal, state, international, foreign or other laws, regulations or government guidance regarding anti-money laundering, including, without limitation, Title 18 US. Code
section 1956 and 1957, the Patriot Act, the Bank Secrecy Act, and international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the
United States is a member and with which designation the United States representative to the group or organization continues to concur, all as amended, and any executive order, directive, or regulation pursuant to the authority of any of the foregoing,
or any orders or licenses issued thereunder.
(z) Acknowledgment Regarding Purchaser’s Purchase of Securities. The Company
acknowledges and agrees that the Purchaser is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that the Purchaser is not
acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by the Purchaser or any of its respective representatives or
agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchaser’s purchase of the Securities. The Company further represents to the Purchaser that the Company’s decision to enter into
this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
(aa) Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement
or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) the Purchaser has not been asked by the Company to agree, nor has the Purchaser agreed, to
desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) past or future open market or other
transactions by the Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities; (iii) the Purchaser, and counter-parties in “derivative” transactions, if any, to which the Purchaser is a party, directly or indirectly, presently may have a “short” position in the Ordinary Shares, and (iv) the Purchaser
shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands and acknowledges that (y) the Purchaser may engage in hedging activities at various times
during the period that the Securities are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the hedging activities are being conducted.
The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
(bb) Regulation M Compliance. The Company has not, and to its knowledge no one acting on
its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of
clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement of the Securities.
(cc) Regulatory Matters. The Company and each of its Subsidiaries possess all licenses,
certificates, authorizations and permits issued by, and have made all declarations and filings with, the appropriate local, state, federal or foreign governmental or regulatory agencies or bodies that are necessary for the ownership or lease of their
respective properties or the conduct of their respective businesses as described in the Registration Statement, the Prospectus and the Prospectus Supplement (collectively, the “Governmental Permits”), except where any failures to possess or make the
same would not, singularly or in the aggregate, have a Material Adverse Effect. The Company and its Subsidiaries are in compliance with all such Governmental Permits and all such Governmental Permits are valid and in full force and effect, except where
the noncompliance, validity or failure to be in full force and effect would not, singularly or in the aggregate, have a Material Adverse Effect. Neither the Company nor any Subsidiary has received notification of any revocation, modification,
suspension, termination or invalidation (or proceedings related thereto) of any such Governmental Permit and to the Knowledge of the Company, no event has occurred that allows or results in, or after notice or lapse of time or both would allow or
result in, revocation, modification, suspension, termination or invalidation (or proceedings related thereto) of any such Governmental Permit and the Company has no reason to believe that any such Governmental Permit will not be renewed, except where
such revocation, modification, suspension, termination, invalidation or nonrenewal would not, singularly or in the aggregate, have a Material Adverse Effect.
(dd) Stock Option Plans. Except as set forth on Disclosure Schedule 3(dd) or as
described in the SEC Reports, the Registration Statement, the Prospectus and the Prospectus Supplement, there are no options, warrants, restricted stock units, agreements, contracts or other rights in existence to purchase or acquire from the Company
or any Subsidiary of the Company any shares of the capital stock of the Company or any Subsidiary of the Company. The description of the Company’s stock option, stock bonus and other stock plans or arrangements (the “Company Stock Plans”), and the
options (the “Options”) or other rights granted thereunder, set forth in the Registration Statement, the Prospectus and the Prospectus Supplement accurately and fairly presents the information required to be shown with respect to such plans,
arrangements, options and rights. Each grant of an Option (A) was duly authorized no later than the date on which the grant of such Option was by its terms to be effective by all necessary corporate action, including, as applicable, approval by the
board of directors of the Company (or a duly constituted and authorized committee thereof) and any required shareholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly
executed and delivered by each party thereto and (B) was made in accordance with the terms of the applicable Company Stock Plan, and all applicable laws and regulatory rules or requirements, including all applicable federal securities laws.
(ee) 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 (“OFAC”).
(ff) 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 a Purchaser’s request.
(gg) 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.
(hh) Other Covered Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of
purchasers in connection with the sale of any Securities.
3.2 Representations and Warranties of the Purchasers. Each Purchaser hereby represents and warrants as of
the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):
(a) Organization; Authority. Such Purchaser is either an individual or an entity duly
incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by the Purchaser of the transactions
contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of the Purchaser. Each Transaction Document to which it is a party has
been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against it 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.
(b) Understandings or Arrangements. Such Purchaser is acquiring the Securities as
principal for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty not limiting the Purchaser’s right to sell
the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). The Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such Purchaser understands
that the Ordinary Warrants and Ordinary Warrants Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring such Securities as principal for his, her or its own
account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation
of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any
applicable state securities law (this representation and warranty not limiting such Purchaser’s right to sell such Securities pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws).
(c) Purchaser Status. At the time such Purchaser was offered the Securities, it was,
and as of the date hereof it is, and on each date on which it exercises any Warrants, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities Act.
(d) Experience of the Purchaser. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of
such investment. The Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
(e) Access to Information. Such Purchaser acknowledges that it has had the opportunity
to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the
Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary
to make an informed investment decision with respect to the investment. The Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided the Purchaser with any information or advice with
respect to the Securities nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Securities and the Placement Agent and any
Affiliate may have acquired non-public information with respect to the Company which the Purchaser agrees need not be provided to it. In connection with the issuance of the Securities to the Purchaser, neither the Placement Agent nor any of its
Affiliates has acted as a financial advisor or fiduciary to the Purchaser.
(f) Certain Transactions and Confidentiality. Other than consummating the
transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of
the Company during the period commencing as of the time that the Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated
hereunder and ending immediately prior to the execution hereof. Other than to other Persons party to this Agreement or to the Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors,
employees, agents and Affiliates, the Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for the
avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
(g) General Solicitation. Such Purchaser is not purchasing the Securities as a result
of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or, to the knowledge of such Purchaser, any
other general solicitation or general advertisement.
The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect the
Purchasers’ right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in
connection with this Agreement or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with
respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Legends.
The Shares shall be issued free of legends. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the issuance or resale of the Warrant Shares or if
the Warrant is exercised via cashless exercise, the Warrant Shares issued pursuant to any such exercise shall be issued free of all legends. If at any time following the date hereof the Registration Statement (or any subsequent registration statement
registering the sale or resale of the Warrant Shares) is not effective or is not otherwise available for the sale or resale of the Warrant Shares, the Company shall immediately notify the holders of the Warrants in writing that such registration
statement is not then effective and thereafter shall promptly notify such holders when the registration statement is effective again and available for the sale or resale of the Warrant Shares (it being understood and agreed that the foregoing shall
not limit the ability of the Company to issue, or any Purchaser to sell, any of the Warrant Shares in compliance with applicable federal and state securities laws).
4.2 Furnishing
of Information. Until the earlier of the time that (i) the Purchaser owns no Securities and (ii) the Warrants have expired, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.
4.3 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Ordinary
Warrants or Ordinary Warrant Shares or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other
transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.4 Securities Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press
release disclosing the material terms of the transactions contemplated hereby, and (b) file a Report on Form 6-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after
the issuance of such press release, the Company represents to the Purchaser that it shall have publicly disclosed all material, non-public information delivered to the Purchaser by the Company or any of its Subsidiaries, or any of their respective
officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide the Purchaser or its
respective agents or counsel (other than the Placement Agent) with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto the Purchaser shall have consented to the receipt
of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that the Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. In
addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any
of their respective officers, directors, agents, employees or Affiliates on the one hand, and the Purchaser or any of its Affiliates on the other hand, shall terminate. The Company and the Purchaser shall consult with each other in issuing any other
press releases with respect to the transactions contemplated hereby, and neither the Company nor the Purchaser 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 the Purchaser, or without the prior consent of the Purchaser, 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. Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Purchaser, or include the name of the
Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of the Purchaser, except (a) as required by federal securities law in connection with the filing of final Transaction Documents
with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchaser with prior notice of such disclosure permitted under this clause (b).
4.5 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 Purchaser 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 Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and
the Purchaser.
4.6 Non-Public Information. Except with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide the Purchaser or its agents or counsel (other than the
Placement Agent) with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto the Purchaser shall have consented to the receipt of such information and agreed with the
Company to keep such information confidential. The Company understands and confirms that the Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers any
material, non-public information to the Purchaser without the Purchaser’s consent, the Company hereby covenants and agrees that the Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective
officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information,
provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document 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. The Company understands and confirms that the Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of
the Company.
4.7 Use of Proceeds. The Company will apply the net proceeds from the sale of the Securities to be sold
by it hereunder for general corporate purposes and shall not use such proceeds: (a) for the redemption of any Ordinary Shares or Ordinary Share Equivalents, (b) for the settlement of any outstanding litigation or (c) in violation of FCPA or OFAC
regulations.
4.8 Indemnification of the Purchaser. Subject to the provisions of this Section 4.8, the Company will
indemnify and hold the Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any
other title), each Person who controls the Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons
with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a)
any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or
their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material breach
of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal
securities laws or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct). If any action shall be brought against any Purchaser Party in respect of which indemnity may be
sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any
Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (x) the
employment thereof has been specifically authorized by the Company in writing, (y) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (z) in such action there is, in the reasonable opinion of
counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate
counsel. The Company will not be liable to any Purchaser Party under this Agreement (1) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (2) to the
extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other
Transaction Documents. The indemnification required by Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements
contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
4.9 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 shares of Ordinary Shares for the purpose of enabling the Company to issue Shares pursuant to this Agreement and the Warrant Shares pursuant to any
exercise of the Warrants.
4.10 Listing of Ordinary Shares. The Company hereby agrees to use best efforts to maintain the listing or
quotation of the Ordinary Shares on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares and Warrant Shares on such Trading Market and promptly secure the
listing of all of the Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Ordinary Shares traded on any other Trading Market, it will then include in such application all of the Shares and
Warrant Shares, and will take such other action as is necessary to cause all of the Shares and Warrant Shares 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 Ordinary Shares 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. The Company agrees to maintain the
eligibility of the Ordinary Shares for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other
established clearing corporation in connection with such electronic transfer.
4.11 Reserved.
4.12 Subsequent
Equity Sales.
(a) From the date hereof until sixty (60) days after the Closing, neither the Company nor any subsidiary shall (i) issue, enter into any agreement to issue, or announce the issuance or proposed issuance of any shares of
Ordinary Shares or Ordinary Share Equivalents, or (ii) file or amend any registration statement or prospectus, other than as necessary to maintain the registration of the Securities governed by this Agreement.
(b) From the date hereof until the one (1) year anniversary of the Closing, the
Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Ordinary Shares or Ordinary Shares Equivalents (or a combination of units thereof) involving a Variable Rate
Transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional Ordinary Shares
either (A) at a conversion price, exercise price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the Ordinary Shares at any time after the initial issuance of such debt or equity securities,
or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Ordinary Shares or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future
determined price. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. Notwithstanding anything to the contrary herein, from
the date hereof until one hundred and twenty (120) days following the Closing Date, the Company may not enter into an At-the-Market transaction, whether through a new or an existing At-the-Market program; provided, that after such 120- day period, the
Company may enter into at-the-market transactions.
(c) Notwithstanding the foregoing, this Section 4.12 shall not apply in respect of an
Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance.
4.13 Certain Transactions and Confidentiality. The Purchaser covenants that neither it nor any Affiliate
acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that
the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4. The Purchaser covenants that until such time as the transactions contemplated by this Agreement are
publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, the Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure
Schedules. Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) the Purchaser makes no representation, warranty or covenant hereby that it will
not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) the Purchaser
shall not be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly
announced pursuant to the initial press release as described in Section 4.4, and (iii) the Purchaser shall not have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance
of the initial press release as described in Section 4.4.
4.14 Stock Split. Until the one-year anniversary of the Closing Date, the Company shall not undertake a
reverse or forward stock split or reclassification of the Ordinary Shares without the prior written consent of the Purchaser, other than a stock split that is required, in the good faith judgment of the Company’s board of directors, to maintain the
listing of the Ordinary Shares on the current Trading Market.
4.15 Exercise Procedures. The form of Notice of Exercise included in the Warrants set forth the totality of
the procedures required of the Purchaser in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required of the Purchaser to exercise its Warrants. Without limiting the preceding sentences, 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 form be required in order to exercise the Warrants. The Company shall honor exercises of the
Warrants and shall deliver Warrant Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.
ARTICLE V.
MISCELLANEOUS
5.1 Termination. This Agreement may be terminated by the Purchaser by written notice to the Company, if
the Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).
5.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each
party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The
Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered by the Purchaser), stamp taxes and other taxes and
duties levied in connection with the delivery of any Securities to the Purchaser.
5.3 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the
Prospectus and the Prospectus Supplement, 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.
5.4 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 time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address
as 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 time of transmission, if such notice or communication is delivered via facsimile at the facsimile
number or email attachment at the email address 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. To the extent that any notice provided pursuant to any Transaction Document 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.
5.5 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 Purchaser. 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.
5.6 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.
5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties
and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchaser (other than by merger). The Purchaser may assign any or all of its rights
under this Agreement to any Person to whom the Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that
apply to the “Purchaser.”
5.8 No Third-Party Beneficiaries. The Placement Agent shall be the third-party beneficiary of the
representations and warranties of the Company in Section 3.1 and the representations and warranties of the Purchaser in Section 3.2. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns
and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.
5.9 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
concerning the interpretations, enforcement and defense of the transactions contemplated by 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 or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such 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 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 any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.8,
the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.
5.10 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.11 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.
5.12 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.
5.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and
without limiting any similar provisions of) any of the other Transaction Documents, whenever the Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within
the periods therein provided, then the Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions
and rights; provided, however, that in the case of a rescission of an exercise of a Warrant, the Purchaser shall be required to return any Ordinary Shares subject to any such rescinded exercise notice concurrently with the return to the Purchaser of
the aggregate exercise price paid to the Company for such shares and the restoration of the Purchaser’s right to acquire such shares pursuant to the Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing such restored
right).
5.14 Replacement of Securities. If any certificate or instrument evidencing any Securities is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument,
but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary
indemnity) associated with the issuance of such replacement Securities.
5.15 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law,
including recovery of damages, the Purchaser 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.
5.16 Payment Set Aside. To the extent that the Company makes a payment or payments to the Purchaser pursuant
to any Transaction Document or the Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
5.17 Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts
owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to
which such partial liquidated damages or other amounts are due and payable shall have been canceled.
5.18 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.
5.19 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.
5.20 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY
AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature Pages Follow)
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated above.
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SUPERCOM LTD.
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Address for Notice:
|
|
By:__________________________________________
Name: Ordan Trabelsi
Title: President & CEO
With a copy to (which shall not constitute notice):
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Fax: +972 9 7940861
E-Mail: ordan@supercom.com
|
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER SIGNATURE PAGES TO SPCB SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated above.
Name of Purchaser: ________________________________________________________
Signature of Authorized Signatory of
Purchaser: _________________________________
Name of Authorized Signatory: _______________________________________________
Title of Authorized Signatory: ________________________________________________
Email Address of Authorized Signatory:_________________________________________
Facsimile Number of Authorized Signatory: __________________________________________
Address for Notice to Purchaser:
Address for Delivery of Warrants to Purchaser (if not same as address for notice):
Subscription Amount: $_________________
Shares: _________________
Pre-Funded Warrant Shares: _____________ Beneficial Ownership Blocker ☐ 4.99% or ☐ 9.99%
Warrant Shares: __________________ Beneficial Ownership Blocker ☐ 4.99% or ☐ 9.99%
EIN Number: _______________________
☐ Notwithstanding anything contained in this Agreement to
the contrary, by checking this box (i) the obligations of the above-signed to purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations of the Company to sell such securities to the
above-signed, shall be unconditional and all conditions to Closing shall be disregarded, (ii) the Closing shall occur on the first (1st) Trading Day following the date of this Agreement and (iii) any condition to Closing contemplated by
this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company or the above-signed of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition and
shall instead be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such agreement, instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing Date.
Exhibit 10.7
[ ], 2023
Mr. Ordan Trabelsi
Chief Executive Officer
SuperCom Ltd.
3 Rothschild Street
Tel Aviv 6688106
Israel
Dear Mr. Trabelsi:
This letter (the “Agreement”) constitutes the agreement between Maxim Group
LLC (“Maxim”) (the “Placement Agent”) and SuperCom Ltd., a company incorporated under the laws of Israel (the “Company”), pursuant
to which the Placement Agent shall serve as the placement agent for the Company, on a “reasonable best efforts” basis, in connection with the proposed placement (the “Placement”) of ordinary shares (the “Shares”) of the Company, par value NIS 2.5 per share (“Ordinary Shares”), pre-funded warrants to purchase Ordinary Shares (the “Pre-Funded
Warrants”) and warrants to purchase Ordinary Shares (the “Warrants”, and collectively with the Shares, and Pre-Funded Warrants, the “Securities”). The terms of
the Placement and the Securities shall be mutually agreed upon by the Company and the purchasers (each, a “Purchaser” and collectively, the “Purchasers”) and nothing
herein constitutes that the Placement Agent would have the power or authority to bind the Company or any Purchaser or an obligation for the Company to issue any Securities or complete the Placement. This Agreement and the documents executed and
delivered by the Company and the Purchasers in connection with the Placement, including but not limited to the Purchase Agreement (as defined below), shall be collectively referred to herein as the “Transaction Documents.” The date of the closing of the Placement shall be referred to herein as the “Closing Date.” The Company expressly acknowledges and agrees that the Placement
Agent’s obligations hereunder are on a reasonable best efforts basis only and that the execution of this Agreement does not constitute a commitment by the Placement Agent to purchase the Securities and does not ensure the successful placement of the
Securities or any portion thereof or the success of the Placement Agent with respect to securing any other financing on behalf of the Company. Following the prior written consent of the Company, the Placement Agent may retain other brokers or dealers
to act as sub-agents or selected-dealers on its behalf in connection with the Placement. The sale of the Securities to any Purchaser will be evidenced by a securities purchase agreement (the “Purchase Agreement”) between the Company and such Purchaser in a form mutually agreed upon by the Company and the Placement Agent. Capitalized terms that are not otherwise defined herein have the meanings given to such
terms in the Purchase Agreement. Prior to the signing of any Purchase Agreement, executive officers of the Company will be available upon reasonable notice and during normal business hours to answer inquiries from prospective Purchasers.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY;
COVENANTS OF THE COMPANY.
A. Representations of the Company. Each of the representations and warranties (together with any related
disclosure schedules thereto) and covenants made by the Company to the Purchasers in the Purchase Agreement in connection with the Placement is hereby incorporated herein by reference into this Agreement (as though fully restated herein) and is, as
of the date of this Agreement and as of the Closing Date, hereby made to, and in favor of, the Placement Agent. In addition to the foregoing, the Company represents and warrants that:
1. The Company has prepared and filed with the Commission a shelf registration statement on Form F-1 (Registration
No. 333-273291), and amendments thereto, and related preliminary prospectuses, for the registration under the Securities Act of 1933, as amended (the “Securities Act”), of the applicable Securities, which
registration statement (including post-effective amendments, if any) became effective on [ ], 2023. At the time of such filing, the Company met the requirements of Form F-1 under the Securities Act. Such registration statement meets the
requirements set forth in Rule 415(a)(1)(x) under the Securities Act and complies with said Rule. The Company will file with the Commission pursuant to Rule 424(b) under the Securities Act, and the rules and regulations (the “Rules and Regulations”) of the Commission promulgated thereunder, a prospectus supplement to the form of the base prospectus included in such registration statement relating to the placement of the Securities and
the plan of distribution thereof and has advised the Placement Agent of all further information (financial and other) with respect to the Company required to be set forth therein. Such registration statement, including the exhibits thereto, as
amended at the date of this Agreement, is hereinafter called the “Registration Statement”; such base prospectus in the form in which it appears in the Registration Statement is hereinafter called the “Base Prospectus”; and the supplemented form of prospectus, in the form in which it will be filed with the Commission pursuant to Rule 424(b) (including the Base Prospectus as so supplemented) is hereinafter called
the “Prospectus Supplement.” Any reference in this Agreement to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include the documents incorporated by
reference therein (the “Incorporated Documents”) pursuant to Item 12 of Form F-1 which were filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
on or before the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus Supplement, 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 Base Prospectus or the Prospectus Supplement 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 Base Prospectus or the Prospectus
Supplement, as the case may be, deemed to be incorporated therein by reference. All references in this Agreement to financial statements and schedules and other information which is “contained,” “included,” “described,” “referenced,” “set forth” or
“stated” in the Registration Statement, the Base Prospectus or the Prospectus Supplement (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is or is
deemed to be incorporated by reference in the Registration Statement, the Base Prospectus or the Prospectus Supplement, as the case may be. No stop order suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or
the Prospectus Supplement has been issued, and no proceeding for any such purpose is pending or has been initiated or, to the Company's knowledge, is threatened by the Commission. For purposes of this Agreement, “Free
Writing Prospectus” has the meaning set forth in Rule 405 under the Securities Act and the “Time of Sale Prospectus” means the preliminary prospectus, if any, together with the Free Writing
Prospectuses, if any, used in connection with the Placement, including any documents incorporated by reference therein.
2. The Registration Statement (and any further documents to be filed with the Commission) contains all exhibits
and schedules as required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the Securities Act and the Exchange Act and the
applicable Rules and Regulations and did not and, as amended or supplemented, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading. The Base Prospectus, the Time of Sale Prospectus and the Prospectus Supplement, each as of its respective date, comply in all material respects with the Securities Act and the Exchange Act and the applicable Rules and
Regulations. Each of the Base Prospectus, the Time of Sale Prospectus and the Prospectus Supplement, as amended or supplemented, did not and will not contain as of the date thereof any 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. The Incorporated Documents, when they were filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the applicable Rules and Regulations, and none of such documents, when they were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make
the statements therein (with respect to Incorporated Documents incorporated by reference in the Base Prospectus or Prospectus Supplement), 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 Base Prospectus, the Time of Sale Prospectus or Prospectus Supplement, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the
applicable Rules and Regulations, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not
misleading. No post-effective amendment to the Registration Statement reflecting any facts or events arising after the date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein is
required to be filed with the Commission. There are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities Act or (y) will not
be filed within the requisite time period. There are no contracts or other documents required to be described in the Base Prospectus, the Time of Sale Prospectus or Prospectus Supplement, or to be filed as exhibits or schedules to the Registration
Statement, which (x) have not been described or filed as required or (y) will not be filed within the requisite time period.
3. The Company is eligible to use Free Writing Prospectuses in connection with the Placement pursuant to Rules 164
and 433 under the Securities Act. Any Free Writing Prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities
Act and the applicable rules and regulations of the Commission thereunder. Each Free Writing Prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or behalf of or used
by the Company complies or will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. The Company will not, without the prior consent of the Placement Agent,
prepare, use or refer to, any Free Writing Prospectus.
4. There are no affiliations with any FINRA member firm among the Company's officers, directors or, to the
knowledge of the Company, any five percent (5.0%) or greater stockholder of the Company, except as set forth in the Registration Statement and SEC Reports.
B. Covenants of the Company. The Company has delivered or made available, or will as promptly as
practicable deliver or make available, to the Placement Agent 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), the Base Prospectus, the Time of Sale Prospectus and the Prospectus Supplement, as amended or supplemented, in such quantities and at such places as the Placement Agent 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 Securities pursuant to the Placement other than the Base Prospectus, the
Time of Sale Prospectus, the Prospectus Supplement, the Registration Statement, copies of the documents incorporated by reference therein and any other materials permitted by the Securities Act.
SECTION 2. REPRESENTATIONS OF THE PLACEMENT AGENT.
The Placement Agent represents and warrants that it (i) is a member in good standing of FINRA, (ii) is registered as a broker/dealer under the Exchange Act, (iii) is licensed as a broker/dealer under the laws of the States applicable to the offers
and sales of the Securities by the Placement Agent, (iv) is and will be a corporate entity validly existing under the laws of its place of incorporation, and (v) has full power and authority to enter into and perform its obligations under this
Agreement. The Placement Agent will immediately notify the Company in writing of any change in its status as such. The Placement Agent covenants that it will use its reasonable best efforts to conduct the Placement hereunder in compliance with the
provisions of this Agreement and the requirements of applicable law.
SECTION 3. COMPENSATION. In consideration of the
services to be provided for hereunder, the Company shall pay to the Placement Agent or its respective designees the following compensation with respect to the Securities which they are placing:
A. A cash fee (the “Cash Fee”) equal to an aggregate of seven percent
(7.0%) of the aggregate gross proceeds raised in the Placement. The Cash Fee shall be paid at the Closing of the Placement.
B. Subject to compliance with FINRA Rule 5110(f)(2)(D), the Company also agrees to reimburse the Placement Agent
for all travel and other out-of-pocket expenses, including the reasonable fees, costs and disbursements of its legal counsel, in an amount not to exceed an aggregate of $40,000 The Company will reimburse Placement Agent directly out of the Closing of
the Placement. In the event this Agreement shall terminate prior to the consummation of the Placement, the Placement Agent shall not be entitled to reimbursement for any expenses or costs incurred by the Placement Agent or on its behalf in connection
with the transaction contemplated hereby.
C. The Placement Agent reserves the right to reduce any item of its compensation or adjust the terms thereof as
specified herein in the event that a determination shall be made by FINRA to the effect that the Placement Agent’s aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
SECTION 4. INDEMNIFICATION. The Company agrees to
the indemnification and other agreements set forth in the Indemnification Provisions (the “Indemnification”) attached hereto as Addendum A, the provisions of which are incorporated herein by reference
and shall survive the termination or expiration of this Agreement.
SECTION 5. ENGAGEMENT TERM. The Placement Agent’s engagement hereunder shall be until the earlier of (i) the final closing date of the Placement and (ii) the date a party
terminates the engagement according to the terms of the next sentence (such date, the “Termination Date” and the period of time during which this
Agreement remains in effect is referred to herein as the “Term”). The engagement may be terminated at any time by either party upon three (3) days written notice to the other party, effective upon receipt of written notice to that effect by the other party. Notwithstanding anything to the contrary
contained herein, the provisions concerning the Company’s obligation to pay any fees actually earned pursuant to Section 3 hereof and the provisions concerning confidentiality, indemnification and contribution contained herein and the Company’s
obligations contained in the Indemnification Provisions will survive any expiration or termination of this Agreement. If this Agreement is terminated prior to the completion of the Placement, all fees due to the Placement Agent shall be paid by
the Company to the Placement Agent on or before the Termination Date (in the event such fees are earned or owed as of the Termination Date). The Placement Agent agrees not to use any confidential information concerning the Company provided to the
Placement Agent by the Company for any purposes other than those contemplated under this Agreement.
SECTION 6. PLACEMENT AGENT INFORMATION. The Company
agrees that any information or advice rendered by the Placement Agent in connection with this engagement is for the confidential use of the Company only in their evaluation of the Placement and, except as otherwise required by law, the Company will
not disclose or otherwise refer to the advice or information in any manner without the Placement Agent’s prior written consent.
SECTION 7. NO FIDUCIARY RELATIONSHIP. This Agreement
does not create, and shall not be construed as creating rights enforceable by any person or entity not a party hereto, except those entitled hereto by virtue of the Indemnification Provisions hereof. The Company acknowledges and agrees that the
Placement Agent is not and shall not be construed as a fiduciary of the Company and shall have no duties or liabilities to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention of the
Placement Agent hereunder, all of which are hereby expressly waived.
SECTION 8. CLOSING. The obligations of the Placement
Agent, and the closing of the sale of the Securities hereunder are subject to the accuracy, when made and on the Closing Date, of the representations and warranties on the part of the Company contained herein and in the Purchase Agreement, to the
accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of their obligations hereunder, and to each of the following additional terms and conditions, except as
otherwise disclosed to and acknowledged and waived by the Placement Agent by the Company:
A. No stop order suspending the effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the Commission, and any request for additional information on the part of the Commission (to be included in the Registration Statement, the Base Prospectus, the Prospectus
Supplement or otherwise) shall have been complied with to the reasonable satisfaction of the Placement Agent. Any filings required to be made by the Company in connection with the Placement shall have been timely filed with the Commission.
B. The Placement Agent shall not have discovered and disclosed to the Company on or prior to the Closing Date that
the Registration Statement, the Base Prospectus, the Prospectus Supplement or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of counsel for the Placement Agent, is material or omits to state any fact
which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading.
C. All corporate proceedings and other legal matters incident to the authorization, form, execution, delivery and
validity of each of this Agreement, the Securities, the Registration Statement, the Base Prospectus and the Prospectus Supplement and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for Maxim, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.
D. The Placement Agent shall have received from outside counsels to the Company such counsels’ written opinions,
addressed to the Placement Agent and the Purchasers and dated as of the Closing Date, in form and substance reasonably satisfactory to Maxim, including but not limited to: (i) an opinion of Foley Shechter Ablovatskiy LLP, U.S. counsel to the Company
with respect to certain securities matters; and (ii) an opinion of S. Friedman & Co., Israeli counsel to the Company with respect to certain corporate matters.
E. On the Closing Date, the Placement Agent shall have received a “comfort” letter from Yarel + Partners, Certified
Public Accountant (Isr.), addressed to the Placement Agent and in form and substance reasonably satisfactory in all respects to the Placement Agent and counsel for Maxim.
F. On the Closing Date, Placement Agent shall have received a certificate of the chief executive officer of the
Company, dated, as applicable, as of the date of such Closing, to the effect that, as of the date of this Agreement and as of the applicable date, the representations and warranties of the Company contained herein and in the Purchase Agreement were
and are accurate in all material respects, except for such changes as are contemplated by this Agreement and except as to representations and warranties that were expressly limited to a state of facts existing at a time prior to the applicable
Closing Date, and that, as of the applicable date, the obligations to be performed by the Company hereunder on or prior thereto have been fully performed in all material respects.
G. On the Closing Date, Placement Agent shall have received a certificate of the Secretary of the Company, dated,
as applicable, as of the date of such Closing, certifying to the organizational documents, good standing in the state of incorporation of the Company and board resolutions relating to the Placement of the Securities from the Company.
H. The Company (i) shall not have sustained since the date of the latest audited financial statements included or
incorporated by reference in the Registration Statement, the Base Prospectus and the Prospectus Supplement, any loss or interference with its business from fire, explosion, flood, terrorist act or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in or contemplated by the Registration Statement, the Base Prospectus and the Prospectus Supplement, and (ii) since the date of the latest audited
financial statements included or incorporated by reference in the Registration Statement, the Base Prospectus and the Prospectus Supplement there shall not have been any change in the capital stock or long-term debt of the Company or any change, or
any development involving a prospective change, in or affecting the business, general affairs, management, financial position, stockholders' equity, results of operations or prospects of the Company, otherwise than as set forth in or contemplated by
the Registration Statement, the Base Prospectus and the Prospectus Supplement, the effect of which, in any such case described in clause (i) or (ii), is, in the judgment of the Placement Agent, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Shares, the Pre-Funded Warrants and the Pre-Funded Warrant Shares on the terms and in the manner contemplated by the Base Prospectus, Time of Sale Prospectus and Prospectus Supplement.
I. The Ordinary Shares are registered under the Exchange Act and, as of the Closing Date, the Shares shall be
listed for trading on the Trading Market or other applicable U.S. national exchange and reasonable evidence of such action, if available, shall have been provided to the Placement Agent upon its request. The Company shall have taken no action
designed to, or likely to have the effect of terminating the registration of the Ordinary Shares under the Exchange Act or delisting or suspending from trading the Ordinary Shares from the Trading Market or other applicable U.S. national exchange,
nor has the Company received any information suggesting that the Commission or the Trading Market or other U.S. applicable national exchange is contemplating terminating such registration or listing.
J. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or
issued by any governmental agency or body which would, as of the Closing Date, prevent the issuance or sale of the Securities or materially and adversely affect or potentially and adversely affect the business or operations of the Company; and no
injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance or sale of the Securities or materially and adversely
affect or potentially and adversely affect the business or operations of the Company.
K. The Company shall have prepared and filed with the Commission a Report on Form 6-K with respect to the
Placement, including as an exhibit thereto this Agreement.
L. The Company shall have entered into a Purchase Agreement with each of the Purchasers and such agreements shall
be in full force and effect and shall contain representations, warranties and covenants of the Company as agreed between the Company and the Purchasers.
M. FINRA shall have raised no objection to the fairness and reasonableness of the terms and arrangements of this
Agreement. In addition, the Company shall, if requested by the Placement Agent, make or authorize Placement Agent’s counsel to make on the Company’s behalf, any filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110 with
respect to the Placement and pay all filing fees required in connection therewith.
N. Prior to the Closing Date, the Company shall have furnished to the Placement Agent such further information,
certificates and documents as the Placement Agent may reasonably request.
If any of the conditions specified in this Section 8 shall not have been fulfilled when and as required by this
Agreement, or if any of the certificates, opinions, written statements or letters furnished to the Placement Agent or to Placement Agent’s counsel pursuant to this Section 8 shall not be reasonably satisfactory in form and substance to the Placement
Agent and to Placement Agent’s counsel, all obligations of the Placement Agent hereunder may be cancelled by the Placement Agent at, or at any time prior to, the consummation of the Closing. Notice of such cancellation shall be given to the Company
in writing or orally. Any such oral notice shall be confirmed promptly thereafter in writing.
SECTION 9. [INTENTIONALLY DELETED]
SECTION 10. GOVERNING LAW. This Agreement will be
governed by, and construed in accordance with, the laws of the State of New York applicable to agreements made and to be performed entirely in such State. This Agreement may not be assigned by either party without the prior written consent of the
other party. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. Any right to trial by jury with respect to any dispute arising under this Agreement or any
transaction or conduct in connection herewith is waived. Any dispute arising under this Agreement may be brought into the courts of the State of New York or into the Federal Court located in New York, New York and, by execution and delivery of this
Agreement, the Company hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of aforesaid courts. Each party hereto hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by delivering a copy thereof via 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 manner permitted by law. If either party shall commence an action or proceeding to
enforce any provisions of a Transaction Document, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorney's fees and other out-of-pocket costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.
SECTION 11. ENTIRE AGREEMENT/MISC. This Agreement
(including the attached Indemnification Provisions) and the NDA (as defined below) embody the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter
hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force
and effect. This Agreement may not be amended or otherwise modified or waived except by an instrument in writing signed by the Placement Agent and the Company. The representations, warranties, agreements and covenants contained herein shall survive
the closing of the Placement and delivery of the Securities. 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 the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or a .pdf format 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.
SECTION 12. CONFIDENTIALITY. The Placement
Agent (i) will keep the Confidential Information (as such term is defined below) confidential and will not (except as required by applicable law or stock exchange requirement, regulation or legal process (“Legal
Requirement”)), without the Company’s prior written consent, disclose to any person any Confidential Information, and (ii) will not use any Confidential Information other than in connection with the Placement. The Placement Agent further
agrees to disclose the Confidential Information only to its Representatives (as such term is defined below) who need to know the Confidential Information for the purpose of the Placement, and who are informed by the Placement Agent of the
confidential nature of the Confidential Information. The term “Confidential Information” shall mean, all confidential, proprietary and non-public information (whether written, oral or electronic communications) furnished by the Company to
the Placement Agent or its Representatives in connection with the Placement Agent’s evaluation of the Placement. The term “Confidential Information” will not, however, include information which (i) is or becomes publicly available other than
as a result of a disclosure by the Placement Agent or its Representatives in violation of this Agreement, (ii) is or becomes available to the Placement Agent or any of its Representatives on a non-confidential basis from a third-party, (iii) is
known to the Placement Agent or any of its Representatives prior to disclosure by the Company or any of its Representatives, or (iv) is or has been independently developed by the Placement Agent and/or the Representatives without use of any
Confidential Information furnished to it by the Company. The term “Representatives” shall mean the Placement Agent’s directors, board committees, officers, employees, financial advisors, attorneys and accountants. This provision shall be in full
force until the earlier of (a) the date that the Confidential Information ceases to be confidential and (b) two years from the date hereof. Notwithstanding any of the foregoing, in the event that the Placement Agent or any of its Representatives
are required by Legal Requirement to disclose any of the Confidential Information, such Placement Agent and its Representatives will furnish only that portion of the Confidential Information which such Placement Agent or its Representative, as
applicable, is required to disclose by Legal Requirement as advised by counsel, and will use reasonable efforts to obtain reliable assurance that confidential treatment will be accorded the Confidential Information so disclosed. The Placement Agent
agrees not to use any Confidential Information concerning the Company or its subsidiaries provided to the Placement Agent or its Representatives (as defined in the NDA) by the Company or on its behalf for any purposes other than those contemplated
under this Agreement and subject to the terms and provisions of the confidentiality agreement executed by the parties in connection with this Agreement (the “NDA”).
SECTION 13. 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
sent to the email address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is sent to the email
address on the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m. (New York City time) on any business day, (c) the third business day following the date of mailing, if sent by U.S. internationally
recognized air 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 hereto.
SECTION 14. PRESS ANNOUNCEMENTS. The Company agrees
that the Placement Agent shall, from and after any Closing, have the right to reference in a customary manner the Placement and the Placement Agent’s role in connection therewith in the Placement Agent’s marketing materials and on its website and
to place advertisements in financial and other newspapers and journals, in each case at its own expense.
[The remainder of this page has been intentionally left blank.]
Please confirm that the foregoing correctly sets forth our agreement by signing and returning to Maxim the enclosed
copy of this Agreement.
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Very truly yours,
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MAXIM GROUP LLC
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By:
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Name: Clifford A. Teller
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Title: Co-President
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Address for notice:
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300 Park Avenue
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New York, NY 110022
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Attention:
Email:
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Accepted and Agreed to as of
the date first written above:
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SUPERCOM LTD.
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By:
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Name: Ordan Trabelsi
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Title: Chief Executive Officer
Address for notice:
SuperCom Ltd.
3 Rothschild Street
Tel Aviv 6688106
Israel
Attn: Chief Executive Officer Email:
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||
[Signature Page to Placement Agency Agreement Between
SuperCom Ltd. and Maxim Group LLC]
ADDENDUM A
INDEMNIFICATION PROVISIONS
In connection with the engagement of Maxim Group LLC (the “Lead Manager”) by SuperCom Ltd. (the “Company”) pursuant
to a placement agency agreement dated as of the date hereof, between the Company and the Lead Manager, as it may be amended from time to time in writing (the “Agreement”), the Company hereby agrees as follows:
1. To the extent permitted by law, the Company will indemnify the Lead Manager and each of their respective
affiliates, directors, officers, employees and controlling persons (within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934) (collectively, the “Representatives”) against all
losses, claims, damages, expenses and liabilities, as the same are incurred (including the reasonable fees and out-of-pocket expenses of one counsel, in addition to any required local counsel), relating to or arising out of its activities hereunder
or pursuant to the Agreement, except, with regard to the Lead Manager, to the extent that any losses, claims, damages, expenses or liabilities (or actions in respect thereof) are found in a final judgment (not subject to appeal) by a court of law to
have resulted primarily and directly from the Lead Manager’s or its Representatives’ willful misconduct or gross negligence in performing the services described herein, as the case may be.
2. Promptly after receipt by the Lead Manager of notice of any claim or the commencement of any action or
proceeding with respect to which the Lead Manager are entitled to indemnity hereunder, the Lead Manager will notify the Company in writing of such claim or of the commencement of such action or proceeding, and the Company will assume the defense of
such action or proceeding and will employ counsel reasonably satisfactory to the Lead Manager and will pay the fees and expenses of such counsel. Notwithstanding the preceding sentence, the Lead Manager will be entitled to employ counsel separate
from counsel for the Company and from any other party in such action if counsel for the Lead Manager reasonably determines that it would be inappropriate under the applicable rules of professional responsibility for the same counsel to represent both
the Company and the Lead Manager. In such event, the reasonable fees and disbursements of no more than one such separate counsel will be paid by the Company. The Company will have the exclusive right to settle the claim or proceeding provided that
the Company will not settle any such claim, action or proceeding without the prior written consent of the Lead Manager, which will not be unreasonably withheld.
3. The Company agrees to notify the Lead Manager promptly of the assertion against it or any other person of any
claim or the commencement of any action or proceeding relating to a transaction contemplated by the Agreement.
4. If for any reason the foregoing indemnity is unavailable to the Lead Manager or insufficient to hold the Lead
Manager harmless, then the Company shall contribute to the amount paid or payable by the Lead Manager, as the case may be, as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not only the
relative benefits received by the Company on the one hand, and the Lead Manager on the other, but also the relative fault of the Company on the one hand and the Lead Manager on the other that resulted in such losses, claims, damages or liabilities,
as well as any relevant equitable considerations. The amounts paid or payable by a party in respect of losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees and expenses incurred in defending any
litigation, proceeding or other action or claim. Notwithstanding the provisions hereof, the Lead Manager’s share of the liability hereunder shall not be in excess of the amount of fees actually received, or to be received, by the Lead Manager under
the Agreement (excluding any amounts received as reimbursement of expenses incurred by the Lead Manager).
5. These Indemnification Provisions shall remain in full force and effect whether or not the transaction
contemplated by the Agreement is completed and shall survive the termination of the Agreement, and shall be in addition to any liability that the Company might otherwise have to any indemnified party under the Agreement or otherwise.
[The remainder of this page has been intentionally left blank.]
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Very truly yours,
|
||
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MAXIM GROUP LLC
|
||
|
By:
|
||
|
Name: Clifford A. Teller
|
||
|
Title: Co-President
|
||
|
Address for notice:
|
||
|
300 Park Avenue
16th Floor
|
||
|
New York, NY 10022
|
||
|
Attention:
Email:
|
||
Accepted and Agreed to as of
the date first written above:
|
SUPERCOM LTD.
|
||
|
By:
|
||
|
Name: Ordan Trabelsi
|
||
|
Title: Chief Executive Officer
Address for notice:
SuperCom Ltd.
Rothschild
Tel Aviv 6688106
Israel
Attn: Chief Executive Officer Email:
|
||
[Signature Page to Indemnification Provisions Pursuant to
Placement Agency Agreement
between SuperCom Ltd. and Maxim Group LLC]
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form F-1 of SuperCom Ltd. of our report dated
April 19, 2023 relating to the financial statements which appear in SuperCom Ltd.’s Annual Report on Form 20-F for the year ended December 31, 2022. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
/s/ Yarel + Partners
Yarel + Partners
Certified Public Accountants (Isr.)
Tel Aviv, Israel
July 31, 2023
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form F-1 of SuperCom Ltd. of our report dated
April 4, 2022 relating to the financial statements which appear in SuperCom Ltd.’s Annual Report on Form 20-F for the year ended December 31, 2021. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
/s/Halperin Ilanit
Certified Public Accountants (Isr.)
Tel Aviv, Israel
July 31, 2023
