EFTA00583654.pdf

THE COMPANIES LAW A COMPANY LIMITED BY SHARES ARTICLES OF REPORTY HOMELAND SECURITY LTD. (PC # 515106409) AS AMENDED AND RESTATED AND EFFECTIVE AS OF 2017 PRELIMINARY Definitions In these Articles the following terms shall bear the meaning ascribed to them below: "Affiliate" Shall mean any Person that is Controlled by, Controlling, or under common Control with such Person. "Articles" Shall mean these Amended and Restated Articles of Association, as originally registered and as may from time to time be amended. "Board" or "Board Shall mean the Company's Board of Directors. of Directors" "Business Day" Shall mean any day on which Banking Institutions (as defined under the Bank of Israel Law, 1954) are open for business. "Company" Shall mean Reporty Homeland Security Ltd. "Control" Shall mean the direct or indirect ownership of equity rights and/or decision making in an entity, whether or not enjoying a separate legal standing, that assure, in a permanent fashion, the majority of votes in the deliberation of such entity. "Deemed Shall mean any of the following transactions: (i) an acquisition of the Liquidation" Company or a merger between the Company and another non- affiliated entity in which the Shareholders do not own a majority of the shares of the surviving entity; (ii) the sale of all or substantially all of the Company's assets, or of the shares of the Company; (iii) an exclusive, irrevocable license of all or substantially all of the Company's intellectual property to a third party; or (iv) any other transaction in which control of the Company (at least 50%) is transferred (other than an IPO or other bona fide financing 1 45779-3443429v4 EFTA00583654  transaction) to a third party. "Director" Shall mean a member of the Board of Directors. "Dollar" or "US$" Shall mean United States Dollar. "Eligible Shall mean any Shareholder holding at least 3% of the issued and Shareholder(s)" outstanding share capital of the Company (on an as-converted basis). "Founder/s" Shall mean Amir Elichai, Alexander Dizengoff, Yoni Yitzon and Lital Leshem. "General Meeting" Shall have the meaning ascribed to it under the Israel Companies Law, 1999. "IPO" Shall mean the consummation of an initial public offering of the Company's securities, pursuant to a registration statement under the U.S. Securities Law of 1933, as amended, Israel Securities Laws or similar securities laws of another jurisdiction. "Law" or Shall mean the Israel Companies Law, 5759-1999. "Companies Law" "Legal Shall mean all applicable laws, statutes, rules, regulations, orders, Requirements" ordinances and requirements of all foreign, national, departmental and municipal governments. "NIS" Shall mean the New Israeli Shekel. "Ordinary Shall have the meaning ascribed to it under Article 31.1. Resolution" "Original Issue Shall mean with respect to Preferred A Shares US$ 34.2073, and with Price" or "Series A respect to the Preferred A-1 Shares US$ 114.0238, in each case PPS" subject to technical adjustments for any share split, share combination, subdivision, share dividend, recapitalization or like event. "Permitted Of a Person shall mean (a) an Affiliate of such Person, (b) if such Transferee" Person is a partnership, any general partners thereof, limited partners thereof, or affiliated partnerships managed by the same managing partner or management company, or managed directly or indirectly by an entity controlling, controlled by, or under common control with, such managing partner or management company, (c) with respect to any corporation - transferees that become transferees either (i) in a disposition in connection with the dissolution of the corporation, or (ii) in a disposition resulting from a regulatory or tax constraint applicable to the corporation or any of its members or shareholders (as applicable), (d) with respect to such Person - a parent, spouse (or widow or widower), or child ("Privileged Relation"), or a wholly owned corporation of such Person, (e) any transferee by will or operation of law, (f) in the case of a Person that holds shares in trust for others, to the 100% beneficial owner from a trust, partnership, limited 2 45779-3443429v4 EFTA00583655  liability company, custodianship or other fiduciary account, (g) a trust which does not permit any of the settled property or the income therefrom to be applied otherwise than for the benefit of the relevant transferor-Person and/or a Privileged Relation of that transferor- Person and no power of control over the voting powers conferred by any shares are subject to the consent of any Person other than the trustees of such transferor- Person or his Privileged Relations; (h) the surviving entity in the merger of such Person with another company; provided however, that (i) the Permitted Transferee shall have first assumed in writing, a copy of which was delivered to the Company, all the transferring Shareholder's obligations and undertakings to the Company and to any other Shareholders and if such obligations and undertakings are proportionate to the number of the transferred shares, then the respective portion of which, proportionate to the number of such shares so transferred; and (ii) the Permitted Transferee is not a direct competitor of the Company's services and/or products. "Person" Shall mean any individual or firm, corporation, partnership, association, corporate society trust, or other entity whether or not having a separate legal standing. "QIPO" Shall mean an IPO for which the Company has first obtained the affirmative vote or written consent of one of the Preferred A Directors in accordance with Article 72, provided that at least 1 (one) Preferred A Director is appointed. "Series A Closing" Shall mean, the date on which the closing of the transactions or "Closing" contemplated by the Series A SPA, has occurred. "Shares" Shall mean any shares of the Company's registered capital, unless the context implies otherwise. "Sharelitilder(s)" Shall mean a holder of Ordinary Shares and/or Preferred A Shares and/or Preferred A-1 Shares (as such terms are defined below). "Series A SPA" Shall mean the Series A Preferred Share Purchase Agreement, by and among the Company, the Founders and the Investor, dated March — r29 2015. "Subsidiary" Shall mean any subsidiary of the Company, in which the Company holds more than 50% of the outstanding share capital, in any jurisdiction. "Investor" Shall mean SUM (E.B.) 2015- Limited Partnership 2. Interpretation 2.1 Any reference to a percent of the Company's "Issued Share Capital" shall be to the Company's issued and paid-up share capital calculated according to the Shares' par value. 2.2 Terms and expressions used in these Articles and not defined herein, shall bear the 3 45779-3443429v4 EFTA00583656  Exeeution-Cepy same meaning as in the Law in force on the date when the Articles first become effective. 2.3 Sections 2, 4, 5, 6, 7, 8 and 10 of the Interpretation Law, 5741-1981, shall apply, mutatis mutandis, to the interpretation of the Articles. 2.4 The captions in the Articles are for convenience only and shall not be deemed a part hereof or affect the interpretation of any provision hereof. 3. Private Company The Company is a private company, until otherwise determined in accordance with the provisions of the Law, and until such time: (a) the right to transfer shares of the Company shall be restricted as hereinafter provided; (b) any invitation to the public to subscribe for any shares or debentures of the Company is hereby prohibited; (c) the number of shareholders of the Company exclusive of persons who are in the employment of the Company and of persons who having been formerly in the employment of the Company were, while in such employment, and have continued after termination of such employment to be, Shareholders, shall not exceed fifty (50). Two or more persons who jointly hold one or more shares in the Company shall, for the purposes of this Article, be deemed a single Shareholder. 4. Company Name The Company's name is Reporty Homeland Security Ltd. 5. Company Purpose The Company's purpose is to engage in any lawful business. The Company may, pursuant to a resolution of the Board of Directors, make contributions of reasonable sums and/or issue securities of the Company to worthy purposes and/or charitable organizations even if such contributions are not made on the basis of business considerations• provided however, that in no event shall the Company issue more than one percent (1%) in the aggregate of its share capital or securities convertible into its share capital to worthy purposes and/or charitable organizations. 6. Limitation of Liability The liability of each of the Shareholders for the indebtedness of the Company shall be limited to payment of the nominal value of the shares of that Shareholder. 7. Amendments Subject to any other provisions contained herein, these Articles may be amended or replaced at any time vested with votes constituting more than sixty five percent (65%) of the total voting power of the Company, if applicable according to the provisions of the Law. 8. Companies Law The provisions of the Companies Law shall apply other than with respect to matters for which these Articles provide otherwise in accordance with the Companies Law. 4 45779-3443429v4 EFTA00583657  SHARE CAPITAL 9. Share Capital 9.1 The authorized share capital of the Company is NIS 10,000 divided into 1,000,000 Shares, of which (a) 894834,898 are Ordinary Shares of NIS 0.01 par value each (the "Ordinary Shares");-and (b) 105,102 Preferred A Shares of NIS 0.01 par value each (the "Preferred A Shares"): and (c) 60.000 Preferred A-1 Shares of NIS 0.01 par value each (the "Preferred A-1 Shares", and together with the Preferred A Shares, the "Preferred Shares"). 9.2 Subject to the terms and conditions set forth herein, the Ordinary Shares shall grant their holders equal rights to participate and vote in all meetings of the Shareholders of the Company, to appoint Directors and to participate in the distribution of dividends, bonus shares, rights to shares and any surplus upon the liquidation of the Company, as well as any further right to be set under these Articles. 9.3 The rights attached to the Preferred Shares shall be all the rights attached to the Ordinary Shares and the other rights as set forth in these Articles. 10. Alteration of Share Capital Unless otherwise provided in these Articles, the Company may, subject to the provisions of the Law, from time to time by an Ordinary Resolution: 10.1 Increase its share capital by an amount it thinks expedient by the creation of new shares. The power to increase the share capital may be exercised by the Company whether or not all of the shares then authorized have been issued and whether or not all of the shares theretofore issued have been called up for payment. Such Ordinary Resolution shall set forth the amount of the increase, the number of the new shares created thereby, their nominal value and class, and may also provide for the rights, preferences or deferred rights that shall be attached to the newly created shares and the restrictions to which such shares shall be subject. 10.2 Consolidate all or any of its issued or unissued share capital and divide the same into shares of nominal value greater than the one set forth in Article 9 hereof. 10.3 Subdivide all or any of its issued or unissued share capital, into shares of nominal value less than the one set forth in Article 9 hereof; 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 in the subdivision. 10.4 Cancel any shares, which as at the date of the adoption of the Ordinary Resolution, have not been issued or agreed to be issued, and thereby reduce the amount of its share capital by the aggregate nominal value of the shares so canceled. 10.5 Subject to any approval or consent required by law, and without derogating from the Board of Directors' power to issue preference redeemable shares and redeem same under the Articles, reduce its share capital in any manner whatsoever. 5 45779-3443429v4 EFTA00583658  Exeeut-ion-Gapy SHARES 11. Rutlits Attached to Shares 11.1 Subject to any contrary provisions of these Articles, the same rights, obligations and restrictions shall be attached to all the Shares of the Company regardless of their denomination or class. 11.2 If at any time the share capital is divided into different classes of shares, the rights attached to any class may be modified or abrogated by an Ordinary Resolution of a General Meeting of the holders of the issued and outstanding shares of such class. The provisions of these Articles relating to General Meetings of the Company shall apply, mutatis mutandis, to any General Meeting of the holders of the shares of a specific class. 11.3 The creation of additional shares of a specific class, or the issuance of additional shares of a specific class, shall not be deemed, for purposes of Article 11.2, a modification or abrogation of rights attached to shares of such class or of any other class. 12. Certain Rights of the Preferred Shares 12.1 Every holder of Preferred Shares shall have one vote for each Ordinary Share into which the Preferred Shares held by him of record could be converted (as provided in this Article 12), on every resolution, without regard to whether the vote thereon is conducted by a show of hands, by written ballot or by any other means. The holders of Preferred Shares shall vote separately on all matters that by law or under these Articles are subject to a class vote. 12.2 Each Preferred Share shall be convertible into Ordinary Shares at the option of the holder thereof, at any time after the date on which such Preferred Share was issued by the Company, into such number of fully paid and non-assessable Ordinary Shares as is determined by dividing the Original Issue Price by the Conversion Price (as defined in this Article 1242), subject to proportional adjustment for share splits, dividends or recapitalizations or a similar event and any anti-dilution adjustments. 12.3 Each Preferred Share shall be converted automatically into Ordinary Shares in the event that (a) solely with respect to Preferred A Share, the Investor consents to such a conversion of the Preferred A Share into Ordinary Shares; or (b) upon the closing of a QIPO; or (c) solely with respect to Preferred A-1 Share, the holders of at least a majority of the issued and outstanding Preferred A-1 Shares elect to convert their Preferred =A I Shares into Ordinary Shares. Notwithstanding from the aforementioned, the conversion of the Preferred Shares into Ordinary Shares shall not result in termination of the preemptive rights or right of first refusal. 12.4 Before any holder of Preferred Shares shall be entitled (in the case of voluntary conversion) to convert the same into Ordinary Shares, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Company, and shall give a written notice by mail, postage prepaid, to the Company at its principal corporate office, of the election to convert the same. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the certificate representing the Preferred Shares to be converted, and the holder shall be treated for all purposes as the record holder of such Ordinary Shares as of such date. If the conversion is pursuant to an automatic conversion, in accordance with the provisions of Article 12.3 above, then the conversion shall take place automatically regardless of whether the certificates representing such shares have been surrendered to the Company. The Company shall, as soon as practicable after the conversion and 6 45779-3443429v4 EFTA00583659 gxec-utien-cepy surrender of the certificate for the Preferred Shares converted, issue and deliver at such office to such holder, a certificate or certificates for the number of Ordinary Shares to which such holder shall be entitled as aforesaid. 12.5 The initial Conversion Price for the Preferred Shares shall be the Original Issue Price for each such share (subject to any adjustments under this Article 12.5, the "Conversion Price") and initially, the conversion rate of the Preferred Shares shall be 1:1. Until a QIPO, with respect to the issuance of New Securities (as defined below), in the event that the Company issues New Securities at a price per share lower than the then applicable Conversion Price of any Preferred Shares ("Reduced Price" and a "Dilutive Event", respectively), then: (i) If the Dilutive Event occurs at or prior to the lapse of 36 months as of the Series A Closing, the then applicable Conversion Price shall be reduced on a full ratchet basis to be equal to the Reduced Price; OR, (ii) If the Dilutive Event occurs at any time following 36 months as of the Series A Closing, the Conversion Price shall be reduced, to a new Conversion Price determined by the following formula, based on a narrow-based weighted average anti-dilution protection, as follows: (Ax F) + x CP — A +C where: CP is the applicable adjusted Conversion Price; A is the number of issued and outstanding Ordinary Shares and Preferred Shares, on an as converted basis (i.e. not on a fully diluted basis), outstanding immediately prior to the relevant issuance of the New Securities; P' is the applicable Conversion Price in effect immediately prior to such issuance; C is the number of New Securities; and P" is the Reduced Price of such issuance. a. No adjustments of a Conversion Price shall be made in an amount less than one cent ($0.01) per share. No adjustment of a Conversion Price shall be made if it has the effect of increasing the Conversion Price beyond the Conversion Price in effect immediately prior to such adjustment. b. The consideration for the issuance of New Securities shall be deemed to be the amount of cash received therefor after giving effect to any discounts or commissions paid or incurred by the Company for any underwriting or otherwise in connection with the issuance and sale thereof, and shall not include consideration other than cash. In the case of the issuance of New Securities for a consideration in whole or in part other than cash, the price per share shall be deemed to be the fair market value thereof as determined by the Board. c. In the case of the issuance of options to purchase or rights to subscribe for Ordinary Shares, or securities, which by their terms are convertible into or exchangeable for Ordinary Shares or options to purchase or rights to subscribe for such convertible or exchangeable securities, to the extent such securities are deemed as "New Securities", the 7 45779-3443429v4 EFTA00583660 Execution-copy aggregate maximum number of Ordinary Shares deliverable upon exercise (assuming the satisfaction of any conditions to exercisability, including without limitation, the passage of time, but without taking into account potential anti-dilution adjustments) of such options to purchase or rights to subscribe for Ordinary Shares, or upon the exchange or conversion of such security, shall be deemed to have been issued at the time of the issuance of such options, rights or securities, at a consideration equal to the consideration (determined in the manner provided in this Article 12.5), received by the Company upon the issuance of such options, rights or securities plus any additional consideration payable to the Company pursuant to the term of such options, rights or securities (without taking into account potential anti-dilution adjustments) for the Ordinary Shares covered thereby; provided, however, that if any options as to which an adjustment to the Conversion Price has been made pursuant to this Article 12.5 expire without having been exercised (or their terms are being changed in a manner which should affect the Conversion Price), then the Conversion Price shall be readjusted as if such options had not been issued, or as if they had been issued in accordance with their new terms, as the case may be (without any effect, however, on adjustments to the Conversion Price as a result of other events described in this Article). d. For the purpose of this Article 12.5 hereof, the consideration for any New Securities shall be taken into account at the U.S. Dollar equivalent thereof, on the day such New Securities are issued or deemed to be issued. (iii) "New Securities" shall mean any shares issued, or deemed to have been issued pursuant to Sub-Article 12.5, by the Company other than: a. Shares issuable upon conversion of any of the Preferred Shares, b. Shares issuable as a dividend or distribution on the Preferred Shares or the Ordinary Shares, as applicable; c. Shares issuable upon exercise of options or warrants outstanding at the Series A Closing; d. Ordinary Shares issued pursuant to the closing of a QIPO; e. Ordinary Shares issued upon a stock split, stock dividend, or any subdivision of shares, recapitalization event or as dividend or bonus shares; f. Ordinary Shares issued or reserved for issuance upon exercise of options under the Option Pool, granted to officers, directors, employees and consultants of the Company. (iv) If the Company at any time pays a dividend, with respect to its Ordinary Shares only, payable in additional shares of Ordinary Shares or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Ordinary Shares, without any comparable payment or distribution to the holders of Preferred Shares, then the Conversion Price of each Preferred Shares shall be adjusted as at the date of such payment to that price determined by multiplying the Conversion Price in effect immediately prior to such payment by a fraction, the numerator of which shall be the total number of Ordinary Shares outstanding prior to the payment of such dividend, and the denominator of which shall be the total number of shares of Ordinary Shares outstanding immediately after the payment of such dividend (plus, in the event that the Company paid cash for fractional shares, the number of additional shares which would have been outstanding had the Company issued fractional shares in connection with such dividend). 12.6 If at any time or from time to time there shall be a recapitalization of the Ordinary Shares (other than a subdivision, combination or merger or sale of assets transaction provided for elsewhere in these Articles), provision shall be made so that the holders of the Preferred Shares 8 45779-3443429v4 EFTA00583661 Exeeutien-Cepy shall thereafter be entitled to receive upon conversion of the Preferred Shares the number of Ordinary Shares or other securities or property of the Company or otherwise, to which a holder of Ordinary Shares deliverable upon conversion of the Preferred Shares would have been entitled immediately prior to such recapitalization. In any such case, appropriate adjustments shall be made in the application of the provisions of this Article 12.5 with respect to the rights of the holders of the Preferred Shares after the recapitalization to the end that the provisions of this Article 12.5 (including adjustments of the Conversion Price then in effect and the number of shares issuable upon conversion of the Preferred Shares) shall be applicable after that event as nearly equivalent as may be practicable. 12.7 The Company will not, by amendment of these Articles or through any reorganization, recapitalization, 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 to be observed or performed hereunder in this Article 12 by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Article 12 and in taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the holders of the Preferred Shares against impairment. 12.8 No fractional shares shall be issued upon conversion of the Preferred Shares, and the number of shares of Ordinary Shares to be issued shall be rounded to the nearest whole share. 12.9 Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Article 12, the Company, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Preferred Shares a certificate setting forth each adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall furnish or cause to be furnished to such holder a table setting forth (A) such adjustment or readjustment, (B) the Conversion Price at the time in effect, and (C) the number of shares of Ordinary Shares and the amount, if any, of other property which at the time would be received upon the conversion of a Preferred Share. 12.10 In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (including a cash dividend) or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of any class or any other securities or property, or to receive any other right, the Company shall mail to each holder of Preferred Shares, at least twenty (20) days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right. 12.11 The Company shall at all times reserve and keep available out of its authorized but unissued Ordinary Shares, solely for the purpose of effecting the conversion of the Preferred Shares, such number of its Ordinary Shares as shall from time to time be sufficient to effect the conversion of all issued and outstanding Preferred Shares; and if at any time the number of authorized but unissued Ordinary Shares shall not be sufficient to effect the conversion of all then outstanding Preferred Shares, in addition to such other remedies as shall be available to the holders of such Preferred Shares, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued Ordinary Share capital to such number of shares as shall be sufficient for such purposes. 12.12 Unless specifically set forth herein to the contrary, all rights and privileges of the Preferred Shares shall be on an as-converted basis. 12.1212.13 Notwithstanding the provisions of Section 20(c) of the Companies Law, except as otherwise specifically set forth in these Articles, the rights, powers and privileges of all 9 45779-3443429v4 EFTA00583662  Exeeatien-cepy Preferred Shares shall be identical: (i) such shares will be deemed to be one class, except that and-(ii--a separate class vote of the applicable class of Preferred Shares shall-net be required in order to amend or waive the rights, preferences, privileges and/or restrictions granted to and imposed upon such class of Preferred Shares. For the avoidance of doubt, the Preferred A- I Shares have been classified as Preferred A- I Shares for convenience purposes only and the Preferred A-1 Shares shall constitute a part of the class of Preferred Shares for all intents and purpose (except that the Original Issue Price and Conversion Price thereof shall differ). The Preferred A Shares and Preferred A-1 Shares shall, unless specifically set forth in these Articles have all of the same rights and privileges and shall vote together as one class on all matters that may require the approval of a class of Shareholders of the Company. including, without limitation, in connection with any Deemed Liquidation, which includes, without limitation, a merger pursuant to Chapter 8 of the Companies Law. 13. Liquidation Preference Upon a Deemed Liquidation, all the assets and funds of the Company available for distribution among the Shareholders (in cash, cash equivalents, or, if applicable, securities) (the "Distributable Proceeds") shall be distributed to them in the following order and preference: 13.1. First, the holders of the Preferred Shares shall be entitled to receive, pro rata and pari-passu among the holders of the Preferred Shares, prior and in preference to any distribution of any of the Distributable Proceeds to all other equity securities of the Company for each of its Preferred Share, a per-share amount equal to: (i) 100% of the Series A PPS; plus (ii) 8% annual interest on that amount, compounded annually, from the date of its actual investment; plus (iii) any declared but unpaid dividends and less the amount of distributions actually received in any prior distribution event with respect to such Preferred Share (together, the "Preferred A Amount"). If upon any such Deemed Liquidation, the Distributable Proceeds available for distribution to its Shareholders shall be insufficient to pay the holders of each of the Preferred Shares the full amount to which they shall be entitled under this Subsection 13.1, the holders of Preferred Shares shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. 13.2. Second, following the payment in full of the Preferred A Amount, the remaining Distributable Proceeds available for distribution, if any, shall be distributed pro rata among all the Shareholders (including the holders of Preferred Shares), on an as converted basis. 13.3. Upon any liquidation, dissolution, bankruptcy or other winding up of the Company, which is not a Deemed Liquidation ("Liquidation"), the then applicable Distributable Proceeds shall be distributed in accordance with the distribution preference rights specified in Articles 13.1134 13.2. 14. Issuance of Shares 14.1 The issuance of Shares of the Company shall be under the control of the Board of Directors, who shall have the exclusive authority to issue the Company's Shares, in whole or in part, otherwise dispose of them or grant options to acquire shares, to such persons and on such terms and conditions as the Board of Directors may determine, all subject to the Shareholders' preemption rights set forth under Article 15 below. 10 45779-3443429v4 EFTA00583663  Exeetitien-Cepy 14.2 Without derogating from the foregoing, the Board of Directors may decide: (i) to issue shares having preferred rights or deferred rights, or right of redemption, and may issue shares with such restricted, preferred, deferred, special or other right in regard to the distribution of dividends, voting rights, appointment of directors, payment of capital, distribution of surplus assets upon the liquidation of the Company or in connection with other matters as the Board of Directors may decide; and (ii) subject to any applicable Legal Requirements, to pay a commission to any person for a subscription, or an agreement to subscribe, unconditionally or otherwise, for any share of the Company, and it shall be permissible to pay, or settle the payment of, such commission in cash or in Shares, paid for in full or in part, or a combination of both. 15. Preemption Rights 15.1 Until a QIPO, whenever the Board desires to issue New Securities subject to the provisions of these Articles, the Company shall first offer each of the Eligible Shareholders, to purchase a number of the New Securities proportionately to its respective outstanding shareholding percentage, on an as converted basis and on an outstanding basis), in the manner as hereinafter provided (the "Subscription Offer"). 15.2 The Subscription Offer shall be made in writing and shall be sent to each Eligible Shareholder to the address indicated in the Company's records. The Subscription Offer shall specify the number of the New Securities offered to the relevant Eligible Shareholder ("Offeree") to whom it is addressed, their class and the consideration requested for each New Securities. 15.3 Subject to this Article 15.3, each Offeree shall have a period of fourteen (14) days from the date a Subscription Offer is delivered thereto to notify the Company in writing of its desire to accept the Subscription Offer and to purchase the New Securities offered to it, in whole or in part, in accordance therewith (such notice shall be deemed as an irrevocable offer on behalf of such Offeree under the terms specified in the Subscription Offer). In addition and without derogating from the foregoing sentence, each Offeree shall have the right to purchase all or any part of the pro-rata share of any other Offeree entitled to such rights to the extent that such other Offeree does not elect to purchase its full pro-rata share (the "Subscription Notice"). 15.4 An Offeree who shall not have given a Subscription Notice within the said fourteen (14) day period shall be conclusively deemed to have rejected the Subscription Offer to him. A qualified or conditional acceptance of a Subscription Offer shall be conclusively deemed a rejection thereof. 15.5 In the event that according to the Subscription Notices the Offerees offer to purchase such number of New Securities which is a greater number than the number of the New Shares actually offered, then the New Securities shall be sold to the Offeree which sent the Subscription Notices on a pro rata basis which shall be calculated by dividing (a) the number of shares held by each such Offeree on the date of the applicable Subscription Notice, by (b) the aggregate number of Shares held by all the Offeree who sent Subscription Notices on the date of their applicable Subscription Notices (all on an as converted and on an outstanding basis). The Company shall notify each Offeree who sent a Subscription Notice of the portion of New Securities it is entitled to purchase in accordance with the terms hereof promptly after the end of the said fourteen (14) day period (the "Company's Notice"). In no event shall any Eligible Shareholder be required to purchase from the Company a portion of shares greater than the portion set under its Subscription Notice. 11 45779-3443429v4 EFTA00583664  Exeeutien-C-epy 15.6 The closing of the transaction for the issue and sale of the New Securities to the subscribing Offerees, if any (the "Subscription Closing"), shall take place and be consummated on the fifth (5'h) Business Day following the Company's Notice, and at a time and place determined by the Board, unless otherwise set forth in the Subscription Offer. At the Subscription Closing, the Company shall issue and sell the New Securities offered and subscribed for in accordance with the Subscription Notices against payment of the consideration and under the terms specified in the Subscription Offer. 15.7 If the Offerees do not exercise in full their pre-emptive right within the period specified above, then the Company shall have ninety (90) days after delivery of the Subscription Notice to sell the unsold portion of the New Securities at a price and upon general terms no more favorable to the purchasers thereof than specified in the Subscription Notice. If the Company has not sold the New Securities within said ninety (90) day period, the Company shall not thereafter issue or sell any New Securities without first offering such securities to the Offerees in the manner provided above. 15.8 The holders of Preferred Shares shall be entitled to assign to its Permitted Transferees, in full or in part, its rights to purchase New Securities as detailed above. 16. Share Certificates 16.1 Each Shareholder shall be entitled to receive from the Company one share certificate in respect of all of the Shares of any class registered in his name on the Register of Shareholders or, if approved by the Board of Directors, several share certificates, each for one or more of such Shares. 16.2 Each share certificate issued by the Company shall be numerated, denote the class and serial numbers of the Shares represented thereby and the name of the owner thereof as registered on the Register of Shareholders, and may also specify the amount paid-up thereon. Each share certificate shall be signed by those persons authorized to do so by the Board of Directors from time to time, together with the Company's rubber stamp. 16.3 A share certificate denoting two or more persons as joint owners of the Shares represented thereby shall be delivered to the person first named on the Register of Shareholders in respect of such joint ownership. 16.4 A share certificate which becomes defaced or defective will be replaced upon being delivered to the Company and being canceled. A share certificate lost or destroyed will be replaced upon furnishing of evidence to the satisfaction of the Board of Directors proving such loss or destruction and subject to the submission to the Company of an indemnity letter and/or collaterals as the Board of Directors may think fit. 16.5 A Shareholder requesting the replacement of a share certificate shall bear all expenses incurred by the Company in connection with the provisions of this Article. 17. Registered Owner 17.1 The Company shall be entitled to treat the person registered on the Register of Shareholders as the holder of any Share, as the absolute owner thereof, and accordingly, shall not be bound to acknowledge any trust or other right, whether at law or in equity, of any other person to or in respect of such Share. 12 45779-3443429v4 EFTA00583665  17.2 If two or more persons are registered as joint holders of a share they shall be jointly and severally liable for any calls or any other liability with respect to such share. However with respect to voting, power of attorney and furnishing notices, the one registered first in the Register of Shareholders, insofar as all the registered joint holders do not notify the Company in writing to relate to another one of them as the sole owner of the share, as aforesaid, shall be deemed to be the sole owner of the share. 17.3 In the case that two or more persons are registered as joint holders of a share, each one of them shall be permitted to give receipts binding all the joint holders for dividends or other moneys in connection with the share and the Company shall be permitted to pay all the dividends or other moneys due with respect to the share to one or more of the joint holders, as it shall choose. 18. Calls on Shares 18.1 The Company, with the sanction of the Board of Directors may, from time to time, make calls upon Shareholders to perform payment of any amount of the consideration of their Shares not yet paid, provided same amount is not, by the terms of issuance of same Shares, payable at a definite date. Each Shareholder shall pay to the Company the amount of every call so made upon him/it at the time(s) and place(s) designated in such call. Unless otherwise stipulated in the resolution of the Board of Directors, each payment with respect to a call shall be deemed to constitute a pro-rata payment on account of all of the Shares in respect of which such call was made. 18.2 A call may contain a demand for payment in installments. 18.3 A call shall be made in writing and shall be delivered to the Shareholder(s) in question not less than fourteen (14) days prior to the date of payment stipulated therein. Prior to the due date stipulated in the call the Company, with the sanction of the Board of Directors may, by delivering a written notice to the Shareholder(s), revoke such call, in whole or in part, postpone the designated date(s) of payment or change the designated place of payment. 18.4 If, according to the terms of issuance of any share, any amount is due at a definite date, such amount shall be paid on same date, and the holder of same share shall be deemed, for all intents and purposes, to have duly received a call in respect of such amount. 18.5 The joint holders of a share shall be bound jointly and severally to pay all calls in respect thereof. A call duly made upon one of the joint holders shall be deemed to have been duly made upon all of the joint holders. 18.6 Any amount not paid when due shall bear interest from its due date until its actual payment at a rate equal to the then prevailing rate of interest for unauthorized overdrafts as charged by Bank Leumi Le-Israel M. 18.7 The provisions of this Article 18 shall in no way deprive the Company of, or derogate from any other rights and remedies the Company may have against such Shareholder pursuant to the Articles or any pertinent law. 18.8 The Company, with the sanction of the Board of Directors, may agree to accept prepayment by any Shareholder of any amount due with respect to his Shares, and may pay 13 45779-3443429v4 EFTA00583666  Execution Cop interest for such prepayment at a rate as may be agreed upon between the Company and the Shareholder so prepaying. 18.9 With the approval of the Board of Directors, any Shareholder may pay to the Company any amount not yet payable in respect of his shares, and the Board of Directors may approve the payment of interest on any such amount until the same would be payable if it had not been paid in advance, at such rate and time(s) as may be approved by the Board of Directors. The Board of Directors may at any time cause the Company to repay all or any part of the money so advanced, without premium or penalty. Nothing in this Article 18 shall derogate from the right of the Board of Directors to make any call before or after receipt by the Company of any such advance. 19. Forfeiture and Surrender 19.1 If any Shareholder fails to pay when due any amount payable pursuant to a call, or interest thereon as provided for herein, the Company may, by a resolution of the Board of Directors and subject to the provisions of Section 181 of the Companies Law, at any time thereafter, so long as said amount or interest remains unpaid, forfeit all or any of the Shares in respect of which said call had been made. All expenses incurred by the Company with respect to the collection of any such amount or interest, including, inter-alia, attorneys' fees and costs of legal proceedings, shall be added to, and shall constitute a part of the amount payable to the Company in respect of such call for all purposes (including the accrual of interest thereon). 19.2 Upon the adoption