Common use of The Preferred Shares Clause in Contracts

The Preferred Shares. The Preferred Shares confer on the holders thereof all rights accruing to holders of Ordinary Shares in the Company, and in addition, bear the following rights: (a) Subject to any provisions hereof conferring special rights as to voting, or restricting the right to vote, 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), 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 Preferred Shareholder shall be entitled to vote, together with the holders of Ordinary Shares. Except as provided otherwise in these Articles or as otherwise provided by law, the Preferred Shareholders shall vote together with the holders of the Ordinary Shares as a single class (on an as-converted basis). (b) Each Preferred Share shall be initially convertible at the option of the holder thereof, at any time after the date of issuance of such share, at the registered office of the Company (“Office”), into such number of fully paid and non-assessable Ordinary Shares as is determined by dividing the applicable Original Issue Price by the applicable Conversion Price and subject to adjustment under Article 5(d)) at the time in effect for such share. Furthermore, each Preferred Share shall be converted into such number of fully paid and non-assessable Ordinary Shares as is determined by dividing the applicable Original Issue Price by the applicable Conversion Price and subject to adjustment under Article 5(d)) at the time in effect for such share immediately prior to the closing of a Qualified IPO. (c) Before any holder of Preferred Shares shall be entitled (in the case of a conversion at such holder’s option) to convert the same into Ordinary Shares, he/she/it shall surrender the certificate or certificates therefor, duly endorsed, at the Office, and shall give written notice by mail, postage prepaid, to the Company at its principal corporate office, of the election to convert the same and shall state therein the name or names of any nominee for such holder in which the certificate or certificates for Ordinary Shares are to be issued. In the event that any Preferred Shareholder holding conversion rights pursuant to Article 5 elects to convert any of its Preferred Shares into Ordinary Shares such shareholder shall surrender the certificate or certificates representing such shares, to the Office, and shall give written notice to the Company at its Office, accompanied with a detailed written explanation as to how many Preferred Shares the Preferred Shareholder wishes to reclassify (“Conversion Notice”). Within a reasonable time after the receipt of the Conversion Notice by the Company, the Company shall seek any shareholders’ resolutions necessary to effectuate any such conversion by reclassification (if any). If no shareholders resolutions are required to give effect to such reclassification, such reclassification shall be deemed to have been effected immediately prior to the close of business on the date on which the Company received the Conversion Notice, or such later date as may be detailed in the Conversion Notice. However, if such reclassification requires an additional shareholders resolution(s), then in such event, such reclassification shall be deemed to have been effected immediately upon the adoption of the said resolution(s) or such later date as may be detailed in the Conversion Notice. The Company shall, as soon as practicable after the conversion by reclassification and tender of the certificate for the shares converted by reclassification, against the receipt of the original share certificate, issue and deliver a certificate or certificates for the number of Ordinary Shares to which such shareholder shall be entitled as a result of the aforesaid and shall indicate the same in the Register of Shareholders. If the conversion is in connection with a an IPO, then the conversion shall be deemed to have taken place automatically upon the reclassification of Preferred Shares into Ordinary Shares regardless of whether the certificates representing such shares have been tendered to the Company, but from and after such conversion any such certificates not tendered to the Company shall be deemed to evidence solely the Ordinary Shares received upon such conversion and the right to receive a certificate for such Ordinary Shares. If the conversion is in connection with a an IPO, the conversion may, at the option of any holder tendering Preferred Shares for conversion, be conditioned upon the closing with the underwriter of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive the Ordinary Shares issuable upon such conversion of the Preferred Shares shall not be deemed to have converted such Preferred Shares until immediately prior to the closing of such offer of securities. The Company shall, as soon as practicable after the conversion and tender of the certificate for the Preferred Shares converted, issue and deliver at such office to such holder of Preferred Shares or to the nominee or nominees of such holder of Preferred Shares, a certificate or certificates for the number of Ordinary Shares to which such holder shall be entitled as aforesaid. In the event that at any time the Company receives a Conversion Notice or in the event of a Qualified IPO or any other conversion by reclassification contemplated in Article 5, each shareholder shall execute any document and/or resolution requested by the Company reasonably necessary in order to give effect to the reclassification privileges as set forth in Article 5. (d) The initial conversion price for the Preferred Shares shall be the Original Issue Price (subject to any adjustments under this Article 5(d)) (the “Conversion Price”). The Conversion Price shall be adjusted from time to time as follows: (A) Upon each issuance (or Deemed Issuance, as defined above) by the Company of any Additional Shares (as defined below) at a price per share less than the applicable Conversion Price then in effect, except for an issuance described in Article 5(d)(iv) below, such Conversion Price will be reduced, for no additional consideration, in accordance with a weighted average anti-dilution formula, to a price (calculated to the nearest cent) determined by the following formula : CP2 = CP1 * (A+B) / (A+C) CP2 = New Series A Conversion Price following the issuance of Additional Shares CP1 = Series A Conversion Price in effect immediately prior to the new issuance of Additional Shares A = Number of Ordinary Shares deemed to be outstanding immediately prior to new issue of Additional Shares on an as converted basis, treating for this purpose as outstanding all Ordinary Shares issuable upon conversion of all issued Preferred Shares and all Ordinary Shares issuable upon conversion or exercise of any other then currently outstanding convertible securities, warrants or options, but such number of Ordinary Shares shall not include any convertible securities converting into the then applicable Additional Shares. B = Aggregate consideration received by the Company with respect to the new issue of Additional Shares divided by CP1. (i.e. Aggregate consideration / CP1) C = Number of Additional Shares issued (B) No adjustments to the Conversion Price shall be made in an amount less than one agura (NIS 0.01) per share. No adjustment to the Conversion Price shall be made if it has the effect of increasing the Conversion Price beyond the applicable Conversion Price immediately prior to such adjustment. (C) The consideration for the issuance of Additional Shares in the case of the issuance of Additional Shares for cash shall be deemed to be the amount of cash received therefor. In the case of the issuance of the Additional Shares for consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair value thereof as determined by the Board of Directors in good-faith. In the case of a Deemed Issuance of Additional Shares, the consideration for the Additional Shares shall be deemed to be the aggregate consideration received by the Company on the issuance of the securities themselves, taken together with any additional consideration (if any) to be paid to the Company on the exercise or conversion of the securities. (D) In the case of the issuance of options to purchase or rights to subscribe for Ordinary Shares, or securities by their terms convertible into or exchangeable for Ordinary Shares or options to purchase or rights to subscribe for such convertible or exchangeable securities, the aggregate maximum number of Ordinary Shares deliverable upon exercise (assuming the satisfaction of any conditions to exercise, 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 be Additional Shares 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 Sub-article (d)(i)(C)), 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 4(d)(i)(D) expire without having been exercised, then the Conversion Price shall be readjusted as if such options had not been issued (without any effect, however, on adjustments to the Conversion Price as a result of other events described in this Article). (E) For purpose of Sub-article (d)(i) hereof, the consideration for any Additional Shares shall be taken into account at the U.S. Dollar equivalent thereof, on the day such Additional Shares are issued or deemed to be issued pursuant to Sub-article (d)(i)(D).

The Preferred Shares. The Preferred Shares confer on the holders thereof all rights accruing to holders of Ordinary Shares in the Company, and in addition, bear the following rights: (a) Subject to any provisions hereof conferring special rights as to voting, or restricting the right to vote, 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), 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 Preferred Shareholder shall be entitled to vote, together with the holders of Ordinary Shares. Except as provided otherwise in these Articles or as otherwise provided by law, the Preferred Shareholders shall vote together with the holders of the Ordinary Shares as a single class (on an as-converted basis). (b) Each Preferred Share shall be initially convertible at the option of the holder thereof, at any time after the date of issuance of such share, at the registered office of the Company (“Office”), into such number of fully paid and non-assessable Ordinary Shares as is determined by dividing the applicable Original Issue Price by the applicable Conversion Price and subject to adjustment under Article 5(d)) at the time in effect for such share. Furthermore, each Preferred Share shall be converted into such number of fully paid and non-assessable Ordinary Shares as is determined by dividing the applicable Original Issue Price by the applicable Conversion Price and subject to adjustment under Article 5(d)) at the time in effect for such share immediately prior to the closing of a Qualified IPO. (c) Before any holder of Preferred Shares shall be entitled (in the case of a conversion at such holder’s option) to convert the same into Ordinary Shares, he/she/it shall surrender the certificate or certificates therefor, duly endorsed, at the Office, and shall give written notice by mail, postage prepaid, to the Company at its principal corporate office, of the election to convert the same and shall state therein the name or names of any nominee for such holder in which the certificate or certificates for Ordinary Shares are to be issued. In the event that any Preferred Shareholder holding conversion rights pursuant to Article 5 elects to convert any of its Preferred Shares into Ordinary Shares such shareholder shall surrender the certificate or certificates representing such shares, to the Office, and shall give written notice to the Company at its Office, accompanied with a detailed written explanation as to how many Preferred Shares the Preferred Shareholder wishes to reclassify (“Conversion Notice”). Within a reasonable time after the receipt of the Conversion Notice by the Company, the Company shall seek any shareholders’ resolutions necessary to effectuate any such conversion by reclassification (if any). If no shareholders resolutions are required to give effect to such reclassification, such reclassification shall be deemed to have been effected immediately prior to the close of business on the date on which the Company received the Conversion Notice, or such later date as may be detailed in the Conversion Notice. However, if such reclassification requires an additional shareholders resolution(s), then in such event, such reclassification shall be deemed to have been effected immediately upon the adoption of the said resolution(s) or such later date as may be detailed in the Conversion Notice. The Company shall, as soon as practicable after the conversion by reclassification and tender of the certificate for the shares converted by reclassification, against the receipt of the original share certificate, issue and deliver a certificate or certificates for the number of Ordinary Shares to which such shareholder shall be entitled as a result of the aforesaid and shall indicate the same in the Register of Shareholders. If the conversion is in connection with a an IPO, then the conversion shall be deemed to have taken place automatically upon the reclassification of Preferred Shares into Ordinary Shares regardless of whether the certificates representing such shares have been tendered to the Company, but from and after such conversion any such certificates not tendered to the Company shall be deemed to evidence solely the Ordinary Shares received upon such conversion and the right to receive a certificate for such Ordinary Shares. If the conversion is in connection with a an IPO, the conversion may, at the option of any holder tendering Preferred Shares for conversion, be conditioned upon the closing with the underwriter of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive the Ordinary Shares issuable upon such conversion of the Preferred Shares shall not be deemed to have converted such Preferred Shares until immediately prior to the closing of such offer of securities. The Company shall, as soon as practicable after the conversion and tender of the certificate for the Preferred Shares converted, issue and deliver at such office to such holder of Preferred Shares or to the nominee or nominees of such holder of Preferred Shares, a certificate or certificates for the number of Ordinary Shares to which such holder shall be entitled as aforesaid. In the event that at any time the Company receives a Conversion Notice or in the event of a Qualified IPO or any other conversion by reclassification contemplated in Article 5, each shareholder shall execute any document and/or resolution requested by the Company reasonably necessary in order to give effect to the reclassification privileges as set forth in Article 5. (d) The initial conversion price for the Preferred Shares shall be the Original Issue Price (subject to any adjustments under this Article 5(d)) (the “Conversion Price”). The Conversion Price shall be adjusted from time to time as follows: (A) Upon each issuance (or Deemed Issuance, as defined above) by the Company of any Additional Shares (as defined below) at a price per share less than the applicable Conversion Price then in effect, except for an issuance described in Article 5(d)(iv) below, such Conversion Price will be reduced, for no additional consideration, in accordance with a weighted average anti-dilution formula, to a price (calculated to the nearest cent) determined by the following formula : CP2 = CP1 * (A+B) / (A+C) CP2 = New Series A Conversion Price following the issuance of Additional Shares CP1 = Series A Conversion Price in effect immediately prior to the new issuance of Additional Shares Shares A = Number of Ordinary Shares deemed to be outstanding immediately prior to new issue of Additional Shares on an as converted basis, treating for this purpose as outstanding all Ordinary Shares issuable upon conversion of all issued Preferred Shares and all Ordinary Shares issuable upon conversion or exercise of any other then currently outstanding convertible securities, warrants or options, but such number of Ordinary Shares shall not include any convertible securities converting into the then applicable Additional Shares. B = Aggregate consideration received by the Company with respect to the new issue of Additional Shares divided by CP1. (i.e. Aggregate consideration / CP1) C = Number of Additional Shares issued (B) No adjustments to the Conversion Price shall be made in an amount less than one agura (NIS 0.01) per share. No adjustment to the Conversion Price shall be made if it has the effect of increasing the Conversion Price beyond the applicable Conversion Price immediately prior to such adjustment. (C) The consideration for the issuance of Additional Shares in the case of the issuance of Additional Shares for cash shall be deemed to be the amount of cash received therefor. In the case of the issuance of the Additional Shares for consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair value thereof as determined by the Board of Directors in good-faith. In the case of a Deemed Issuance of Additional Shares, the consideration for the Additional Shares shall be deemed to be the aggregate consideration received by the Company on the issuance of the securities themselves, taken together with any additional consideration (if any) to be paid to the Company on the exercise or conversion of the securities. (D) In the case of the issuance of options to purchase or rights to subscribe for Ordinary Shares, or securities by their terms convertible into or exchangeable for Ordinary Shares or options to purchase or rights to subscribe for such convertible or exchangeable securities, the aggregate maximum number of Ordinary Shares deliverable upon exercise (assuming the satisfaction of any conditions to exercise, 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 be Additional Shares 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 Sub-article (d)(i)(C)), 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 4(d)(i)(D) expire without having been exercised, then the Conversion Price shall be readjusted as if such options had not been issued (without any effect, however, on adjustments to the Conversion Price as a result of other events described in this Article). (E) For purpose of Sub-article (d)(i) hereof, the consideration for any Additional Shares shall be taken into account at the U.S. Dollar equivalent thereof, on the day such Additional Shares are issued or deemed to be issued pursuant to Sub-article (d)(i)(D).