Document:

exhibit_4-8.htm

Exhibit 4.8

 

Confidential

 

THE OFFER, ISSUANCE AND SALE OF THIS WARRANT AND ANY SECURITIES THAT MAY BE ISSUED UPON EXERCISE THEREOF) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.  THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION (OTHER THAN PURSUANT TO RULE 144(b)(1), PROVIDED THAT THE COMPANY HAS RECEIVED CUSTOMARY REPRESENTATIONS CERTIFYING AS TO THE AVAILABILITY OF SUCH RULE 144(b)(1)), UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.

April 14, 2016

 

__________________________________________________

WARRANT TO PURCHASE ORDINARY SHARES

OF

RADA ELECTRONICS INDUSTRIES LTD.

__________________________________________________

 

For VALUE RECEIVED DBSI Investments Ltd. (together with its successors, transferees and assigns, the “Holder”) is entitled to purchase subject to the provisions of this Warrant (this “Warrant”) from RADA Electronics Industries Ltd., an Israeli company (“Company”), during the term of this Warrant, at a purchase price per share equal to $0.1990 (as adjusted from time to time pursuant to the terms of this Warrant), up to 20,105,282 Ordinary Shares, par value NIS 0.015 per share, of the Company (the “Company Shares”) (as adjusted from time to time pursuant to the terms of this Warrant). The shares purchasable upon exercise of this Warrant and the purchase price per share, as adjusted from time to time pursuant to the terms of this Warrant, shall be referred to herein as the “Warrant Shares” and the “Exercise Price”, respectively.

 

	
1.

	
Exercise.

 

	
  

	
1.1.

	
Manner of Exercise. This Warrant may be exercised, at the Holder sole discretion, during the 36 months following the Closing Date as defined in the Purchase Agreement, in whole or in part, on one or more trenches during its term, provided that the amount of each trench shall not be in an amount less than US$ 1,000,000.  The Warrant may be exercised by the surrender of this Warrant, together with the Notice of Exercise in the form attached hereto, duly completed and executed by the Holder, at the principal office of the Company or at such other office or agency as the Company may designate, accompanied by payment in full of the aggregate Exercise Price payable in respect of the Warrant Shares purchasable upon such exercise. The Exercise Price may be paid by cash, check, wire transfer or by the cancellation of debt owed by the Company to the Holder.

 

	
  

	
1.2.

	
Effective Time of Exercise. Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in Section ‎1.1 above. At such time, the person(s) in whose name(s) any certificates representing the Warrant Shares shall be issuable upon exercise as provided in Section ‎1.4 below shall be deemed to have become the holder of record of such Warrant Shares represented by such certificates.

 

  

  

  

Confidential

 

	
  

	
1.3.

	
Delivery to Holder. As soon as practicable after the exercise of this Warrant in whole or in part, and in any event within ten (10) days thereafter, the Company at its expense will cause to be issued in the name of, and delivered to, the Holder, or as such Holder may direct:

 

	
  

	
 1.3.1.

	
a certificate(s) for the number of Warrant Shares to which such Holder shall be entitled, and

 

	
  

	
 1.3.2.

	
in case such exercise is in part only, a new warrant(s) (dated the date hereof) of like tenor, calling in the aggregate on the face(s) thereof for the number of Warrant Shares equal to the number of such shares called for on the face of this Warrant minus the number of such shares purchased by the Holder upon such exercise as provided in Sections ‎1.1.

 

	
  

	
1.4.

	
Conditional Exercise. In case of an exercise made in connection with a public offering of the Company Shares pursuant to an effective registration statement under the Securities Act or the equivalent actions under the laws of another jurisdiction, or a Liquidity Event (as defined below), such exercise may be made conditional upon the closing of such offering or event.

 

For purposes of this Warrant, the term “Liquidity Event” shall mean: (i) a sale of all or substantially all of the Company’s assets; (ii) a sale of all or substantially all of the Company’s issued and outstanding shares, such that following the transaction more than fifty percent (50%) of the Company’s issued shares are held by persons who, prior to the said transaction, held less than fifty percent (50%) of the Company’s issued shares; or (iii) a merger or consolidation of the Company with or into another corporation, such that following the transaction more than fifty percent (50%) of the surviving entity’s issued shares are held by persons who, prior to the said transaction, held less than fifty percent (50%) of the Company’s issued shares.

 

	
2.

	
Adjustments

 

The number and kind of securities purchasable upon the exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows:

 

	
  

	
2.1.

	
Stock Splits, Dividends and Combinations. If the outstanding Company Shares shall be subdivided into a greater number of shares or a dividend or other distribution payable in additional shares shall be paid in respect of Common Shares, the Exercise Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If outstanding Company Shares shall be combined into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination be proportionately increased. When any adjustment is required to be made in the Exercise Price, the number of Warrant Shares purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Exercise Price in effect immediately prior to such adjustment, by (ii) the Exercise Price in effect immediately after such adjustment.

 

  

- 2 -

  

Confidential

 

	
  

	
2.2.

	
Reclassification, Etc. In case of any reclassification or change of the outstanding securities of the Company or of any reorganization of the Company (or any other corporation the stock or securities of which are at the time receivable upon the exercise of this Warrant) or any similar corporate reorganization on or after the date hereof, then and in each such case the holder of this Warrant, upon the exercise hereof at any time after the consummation of such reclassification, change, reorganization, merger or conveyance, shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the exercise hereof prior to such consummation, the stock or other securities or property to which such holder would have been entitled upon such consummation if such holder had exercised this Warrant immediately prior thereto, all subject to further adjustment as provided in Section ‎2; and in each such case, the terms of this Section ‎2 shall be applicable to the shares of stock or other securities properly receivable upon the exercise of this Warrant after such consummation.

 

	
  

	
2.3.

	
Other Transactions.  In the event that the Company shall issue shares to its shareholders as a result of a split-off, spin-off or the like, then the Company shall only complete such issuance or other action if, as part thereof, allowance is made to protect the economic interest of the Holder either by increasing the number of Warrant Shares or by procuring that the Holder shall be entitled, on economically proportionate terms, to acquire additional shares of the spun-off or split-off entities. Upon each adjustment in the number or kind of Warrant Shares purchasable hereunder, the Exercise Price shall be proportionately increased or decreased, as the case may be, in a manner that is the inverse of the manner in which the number of Warrant Shares purchasable hereunder shall be adjusted.

 

	
  

	
2.4.

	
Notice of Adjustments.  Whenever the Exercise Price or the number of Warrant Shares purchasable hereunder shall be adjusted pursuant to this Section ‎2, the Company shall prepare a certificate signed by an executive officer of the Company setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, the Exercise Price and the number of Warrant Shares purchasable hereunder after giving effect to such adjustment, and shall cause copies of such certificate to be delivered to the Holder.

 

	
3.

	
Investment Representations.

 

	
  

	
3.1.

	
The Holder is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments in securities representing an investment decision like that involved in the purchase of this Warrant and the Warrant Shares (the “Purchased Securities”), without limitation of the representations and warranties included herein and in the Purchase Agreement.

 

	
  

	
3.2.

	
The Holder is acquiring the Purchased Securities in the ordinary course of its business and for its own account for investment only and with no present intention of distributing any of such Purchased Securities and does not have any current arrangement or understanding with any other persons regarding the distribution of such securities (this representation and warranty not limiting the Holder’s right to sell or distribute in compliance with the Securities Act and the rules and regulations thereunder); nothing contained herein shall be deemed a representation or warranty by the Holder to hold the Purchased Securities for any period of time;

 

  

- 3 -

  

Confidential

 

	
  

	
3.3.

	
The Holder will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the Purchased Securities, nor will the Holder engage in any short sale that results in a disposition of any of the Purchased Securities by the Holder, except in compliance with the Securities Act and the rules and regulations thereunder and any applicable state securities laws; and

 

	
  

	
3.4.

	
The Holder is either an “accredited investor” within the meaning of Rule 501(a) promulgated under the Securities Act or is not a "US Person" within the meaning of Rule 902(k) under the Securities Act.  Neither such inquiries nor any other due diligence investigation conducted by the Holder shall modify, limit or otherwise affect the Holder’s right to rely on the Company’s representations and warranties contained herein or in the Purchase Agreement.

 

	
  

	
3.5.

	
The Holder understands that its investment in the Purchased Securities involves a significant degree of risk, including a risk of total loss of Holder’s investment.  The Holder understands that no representation is being made as to the future value or market price of the Company Shares.  The Holder has the knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Purchased Securities and has the ability to bear the economic risks of an investment in the Purchased Securities.

 

	
  

	
3.6.

	
The Holder understands that, until all of the applicable provisions of Section ‎3.7 hereof are satisfied, any certificates representing the Purchased Securities will bear a restrictive legend in substantially the following form:

 

“THE OFFER, ISSUANCE AND SALE OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE (AND ANY SECURITIES THAT MAY BE ISSUED UPON EXERCISE OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.  THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION (OTHER THAN PURSUANT TO RULE 144(b)(1), PROVIDED THAT THE COMPANY HAS RECEIVED CUSTOMARY REPRESENTATIONS CERTIFYING AS TO THE AVAILABILITY OF SUCH RULE 144(kb(1)), UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”

 

  

- 4 -

  

Confidential

 

	
  

	
3.7.

	
Promptly following the earlier of (i) effectiveness of a registration statement under the Securities Act with respect to the sale of Purchased Securities or (ii) Rule 144(b)(1) becoming available, the Company shall (A) deliver to the transfer agent for the Company Shares (the “Transfer Agent”) irrevocable instructions that the Transfer Agent shall reissue a certificate representing the Warrant Shares without legends upon receipt by such Transfer Agent of: (a) the legended certificates for such Warrant Shares; and (b) either (1) a customary written representation by the Holder that Rule 144(b)(1) applies to the Warrant Shares represented thereby or (2) a written statement by the Company that the Holder may sell the Warrant Shares represented thereby in accordance with the Plan of Distribution contained in a registration statement that was declared effective under the Securities Act (the date on which the Transfer Agent receives all of the items listed in clauses (a), and (b) above, the “Legend Removal Date”), and (B) if required by the Transfer Agent, cause its counsel to deliver to the Transfer Agent one or more opinions to the effect that the removal of such legends in such circumstances may be effected under the Securities Act.  From and after the Legend Removal Date, upon the Holder’s written request, the Company shall promptly cause certificates evidencing the Holder’s Warrant Shares referred to in such written request to be replaced with certificates which do not bear such restrictive legends, and Warrant Shares subsequently issued upon due exercise of the Warrants shall not bear such restrictive legends, provided the provisions of clauses (a) and (b) above, as applicable, are satisfied with respect to such Warrant Shares.

 

	
4.

	
Exemption from Registration.  The Holder understands that the Purchased Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of the Securities Act, the rules and regulations thereunder and state securities laws and that the Company is relying upon the truth and accuracy of, and the Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility of the Holder to acquire the Purchased Securities.

 

	
5.

	
Transfer

 

	
  

	
5.1.

	
Subject to the restrictions on transfer provided herein and subject to Sections ‎3.6 and ‎3.7, this Warrant shall be transferable, in whole or in part, at the discretion of the Holder and the Company shall transfer this Warrant, in whole or in part, from time to time upon the books to be maintained by the Company for that purpose, upon surrender thereof for transfer accompanied by appropriate instructions for transfer and such other documents as may be reasonably required by the Company, including, if required by the Company, an opinion of its counsel to the effect that such transfer is exempt from the registration requirements of the Securities Act, to establish that such transfer is being made in accordance with the terms hereof, and a new Warrant(s) shall be issued to the transferee(s) and the surrendered Warrant shall be canceled by the Company.

 

	
  

	
5.2.

	
The Company will maintain a register containing the names and addresses of the Holder(s) of this Warrant. Until any transfer of this Warrant is made in the warrant register, the Company may treat the Holder of this Warrant as the absolute owner hereof for all purposes. Any Holder may change such Holder's address as shown on the warrant register by written notice to the Company requesting such change.

 

  

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Confidential

 

	
6.

	
No Impairment. The Company will not, by amendment of its charter documents or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, sale of assets, 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, or impair the economic interest of the Holder, but will at all times in good faith assist in the carrying out of all the provisions hereof and in taking of all such actions and making all such adjustments as may be necessary or appropriate in order to protect the rights and the economic interests of the Holder against impairment.

 

	
7.

	
Termination. This Warrant and the right to purchase securities upon exercise hereof shall terminate on 5:00 P.M. Eastern Time on the third anniversary of the Closing Date.

 

	
8.

	
Notices of Certain Transactions. In case:

 

	
  

	
8.1.

	
the Company shall take a record of the holders of its Company Shares (or other shares or securities at the time deliverable upon the exercise of this Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of any class or any other securities, or to receive any other right, to subscribe for or purchase any shares of any class or any other securities, or to receive any other right, or

 

	
  

	
8.2.

	
of any capital reorganization of the Company, any reclassification of the share capital of the Company, any Liquidity Event, or

 

	
  

	
8.3.

	
of the voluntary or involuntary dissolution, liquidation or winding-up of the Company, or

 

	
  

	
8.4.

	
of a public offering of the Company Shares pursuant to an effective registration statement under the Securities Act or the equivalent actions under the laws of another jurisdiction,

 

then, and in each such case, the Company will deliver to the Holder a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the estimated effective date on which such reorganization, reclassification, Liquidity Event, dissolution, liquidation or winding up is to take place, and the time, if any is to be fixed, as of which the holders of record of Company Shares (or such other shares or securities at the time deliverable upon such reorganization, reclassification, Liquidity Event, dissolution, liquidation or winding up) are to be determined. Such notice shall be delivered ten (10) days prior to the record date or estimated effective date for the event specified in such notice.

 

	
9.

	
Reservation of Shares.  The Company will at all times reserve and keep available, solely for the issuance and delivery upon the exercise of this Warrant, such Warrant Shares and other shares, securities and property, as from time to time shall be issuable upon the exercise of this Warrant.

 

	
10.

	
Registration Rights.

 

	
  

	
10.1.

	
The Company covenants and agrees that the Holder shall be entitled to registration rights pursuant to the Registration Rights Agreement of even date hereof, in respect of the Warrant Shares purchasable hereunder (and any shares issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such Warrant Shares), and the Warrant Shares shall be deemed to be Registrable Securities and Original Registrable Securities thereunder.

 

  

- 6 -

  

Confidential

 

	
  

	
10.2.

	
The Holder undertakes to be bound by the provisions of Section 9 of the Registration Rights Agreement of even date hereof, with respect to prohibitions to offer or sale any Warrant Shares (or any other shares exchanged therefor), if and to the extent that this Warrant has been exercised. For the purpose of this sub-section ‎10.2 the Holder shall be considered a “Holder”” and the Warrant Shares shall be considered “Registrable Securities”, all as defined in the Registration Rights Agreement.

 

	
11.

	
Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor, dated as of the date hereof.  This Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof to the Company or at the office of its stock transfer agent, if any, for other warrants of different denominations entitling the holders thereof to purchase in the aggregate the same number of Warrant Shares purchasable hereunder.

 

	
12.

	
Notices.  Any notice required or permitted by this Warrant shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or forty-eight (48) hours after being deposited in the regular mail as certified or registered mail (airmail if sent internationally) with postage prepaid, addressed (a) if to the Holder, to the address of the Holder most recently furnished in writing to the Company and (b) if to the Company, to the address set forth below or subsequently modified by written notice to the Holder.

 

	
  

	

12.1.

	

If to Holder:

	

to the address set forth on the signature page

 

	
  

	
12.2.

	
If to Company:

	
RADA Electronics Industries Ltd. 

7 Giborei Israel St.. Netanya 4250407, Israel

Attention: Chief Executive Officer

Telephone No.: (972)-(9)- 892111

Facsimile No.: (972)-(9)- 8855885

Email: Zvika.alon@rada.com

	
  

	 

Each of the above addressees may change its address for purposes of this Section bygiving to the other addressees notice of such new address in conformance with this paragraph.

 

	
13.

	
No Rights as Shareholder. The Holder shall not have any rights as a shareholder of the Company with regard to the Warrant Shares prior to the exercise of this Warrant, and then with respect to such Warrant Shares purchasable upon such exercise.

 

	
14.

	
No Fractional Interest.  No fractional shares will be issued in connection with any exercise hereunder, but in lieu of such fractional shares which would otherwise be issuable the number of shares shall rounded to the nearest whole number.

 

  

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Confidential

 

	
15.

	
Entire Agreement.  This Warrant constitutes the entire agreement between the parties hereto with regard to the subject matters hereof, and supercedes any prior communications, agreements and/or understandings between the parties hereto with regard to the subject matters hereof.

 

	
16.

	
Amendment or Waiver. This Warrant may be amended only by a written instrument signed by the Company and the Holder. Any term of this Warrant may be waived only by an instrument in writing signed by the party against which enforcement of the waiver is sought.

 

	
17.

	
Successors. All the covenants and provisions hereof by or for the benefit of the Holder shall bind and inure to the benefit of its respective successors and assigns hereunder.

 

	
18.

	
Governing Law; Jurisdiction. This Warrant shall be governed by and construed in accordance with the laws of the State of Israel, without giving effect to principles of conflicts of law. The parties hereby submit any dispute arising under or in relation to this Warrant to the exclusive jurisdiction of the competent court for the District of Tel Aviv-Jaffa.

 

	
19.

	
Headings.  The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

 

	
20.

	
Counterparts.  This Warrant may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart and that signatures may be provided by facsimile transmission.

 

 - Signature page follows -

 

  

- 8 -

  

Confidential

 

This WARRANT TO PURCHASE ORDINARY SHARES OF RADA ELECTRONICS INDUSTRIES LTD. is executed as of the date first set forth above.

	  	
RADA ELECTRONICS INDUSTRIES LTD.

 

By:   ________________________________________

Name:

Title:

 

Acknowledged and Agreed to:

 

	
DBSI INVESTMENTS LTD.

 

By:  ________________________________________

Name:

Title:

 

	
Address:

	  
	
Telephone No:

	
Facsimile No.:

	  
	
With a mandatory copy to:

	
Meitar Liquornik Geva Leshem Tal

16 Abba Hillel Road Ramat Gan 52506 Israel

Attention:              Asaf Harel, Advocate

Telephone No.:       (972)-(3)-610-3100

Facsimile No.:         (972)-(3)-6103-111

  

- 9 -

  

Confidential

 

NOTICE OF EXERCISE

 

	
To: RADA Electronics Industries Ltd. 

	Date: [_______ __, 201_]

 

The undersigned, pursuant to the provisions set forth in the attached WARRANT TO PURCHASE ORDINARY SHARES OF RADA ELECTRONICS INDUSTRIES LTD. hereby irrevocably elects to:

q purchase _________________________ Company Shares covered by such Warrant and herewith makes payment of $ ___________, representing the full purchase price for such shares at the price per share provided for in such Warrant (as adjusted from time to time pursuant to the terms of this Warrant), or

 

Please issue a certificate representing the Warrant Shares in the name of the undersigned or as otherwise indicated below, and if the number of Warrant Shares shall not be all the Warrant Shares purchasable upon exercise of the Warrant, that a new Warrant for the balance of the Warrant Shares purchasable upon exercise of this Warrant be registered in the name of the undersigned or as otherwise indicated below and delivered to the address stated below:

Name:

Address:

ID or Social Security No.:

 

	
______________________

	
_________________________

	
(Date)

	
(Print Name)

	  	  
	  	
_________________________

	  	
(Signature)

- 10 -exhibit_10-1.htm

Exhibit 10.1

 

PERSONAL EMPLOYMENT AGREEMENT

THIS PERSONAL EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into this 29th day of December, 2015 by and between A.D. Integrity Applications Ltd. (P.C 51-315187-8), of 19 Ha’Yahalomim St., P.O. Box 12163, Ashdod, 7760049, Israel (the “Company”) and Eran Cohen (I.D. No 055267744) of 6 Agmon St., Yavne, Israel 8150006 (the “COO”).

WHEREAS                      the Company desires to engage COO on a full time basis, and COO agrees to be engaged by the Company; and

 

WHEREAS                      the parties desire to state the terms and conditions of COO’s engagement by the Company, as set forth below.

 

NOW, THEREFORE, in consideration of the mutual premises, covenants and other agreements contained herein, the parties hereby agree as follows:

 

General

 

	
1.

	
Position.

 

	
  

	
1.1.

	
The COO shall serve in the position described in Exhibit A attached hereto.

 

	
  

	
1.2.

	
In such position, the COO shall report regularly and shall be subject to the direction and control of the Company's CEO.

 

	
  

	
1.3.

	
The COO shall have all of the powers, authorities, duties and responsibilities usually incident to the position of a COO of a corporation.

 

	
  

	
1.4.

	
The COO hereby acknowledges that the performance of his employment with the Company may require working overtime. However, COO acknowledges that he holds a senior position in the Company requiring a special degree of trust; accordingly, the provisions of The Work and Rest Hours Law, 5711-1951 (the “Rest Hours Law”), concerning separate and/or additional pay for overtime or for working weekends or on national holidays, shall not apply to this Agreement.

 

	
2.

	
Duties. The COO shall:

 

	
  

	
2.1.

	
devote his entire working time, energy, talent, working knowledge, experience and best efforts to the business and affairs of the Company and to the performance of his duties hereunder.

 

	
  

	
2.2.

	
duly and faithfully perform and discharge his obligations under this Agreement.

 

	
  

	
2.3.

	
immediately and without delay inform the Company's CEO of any affairs and/or matters that might entail a conflict of interest with the Position and/or employment hereunder.

 

	
  

	
2.4.

	
not assume whether with or without consideration, any employment obligations unrelated to the Company (and/or any subsidiary and/or parent company of the Company) and not to be retained as a consultant, advisor or contractor (whether or not compensated therefor) to any other business.

 

	
  

	
2.5.

	
not receive, whether during the Term (as defined below) and/or at any time thereafter, any payment, benefit and/or other consideration, from any third party in connection with his employment with Company.

 

	
3.

	
Location. The COO shall perform his duties hereunder at the Company's offices in Ashdod, Israel, and he understands and agrees that his position may involve international travels.

 

	
4.

	
COO's Representations and Warranties. The COO represents and warrants that the execution and delivery of this Agreement and the fulfillment of its terms: (i) will not constitute a default under or conflict with any agreement or other instrument to which he is a party or by which he is bound; and (ii) do not require the consent of any person or entity.

Term of Employment

 

	
5.

	
Term. The COO's employment with the Company shall commence on the date set forth in Exhibit A (the "Commencement Date"), and shall continue until it is terminated pursuant to the terms set forth herein.

 

	
6.

	
Termination at Will.

 

	
  

	
6.1.

	
Either party may terminate the employment relationship hereunder at any time, by giving the other party a prior written notice as set forth in Exhibit A (the "Notice Period").

 

  

  

  

	
  

	
6.2.

	
Notwithstanding the foregoing, the Company is entitled to terminate this Agreement with immediate effect upon a written notice to the COO and to pay the COO an amount equal to the Salary (as defined below) and the financial value of the other benefits the COO is entitled to receive under the Agreement during the Notice Period, in lieu of such prior notice.

 

	
  

	
6.3.

	
The Company and COO agree and acknowledge that the Company’s Severance Contribution to the Pension Insurance Scheme in accordance with Section 10 below, shall, provided contribution is made in full, be instead of severance payment to which the COO (or his beneficiaries) shall be entitled with respect to the Salary upon which such contributions were made and for the period in which they were made (the “Exempt Salary”), pursuant to Section 14 of the Severance Pay Law 5723 – 1963 (the “Severance Law”). The parties hereby adopt the General Approval of the Minister of Labor and Welfare, which is attached hereto as Exhibit B. The Company hereby forfeits any right it may have in the reimbursement of sums paid by Company into the Insurance Scheme, except: (i) in the event that COO withdraws such sums from the Insurance Scheme, other than in the event of death, disability or retirement at the age of 60 or more; or (ii) upon the occurrence of any of the events provided for in Sections 16 and 17 of the Severance Law. Nothing in this Agreement shall derogate from the COO’s rights to severance payment in accordance with the Severance Law or agreement or applicable ministerial order in connection with remuneration other than the Exempt Salary, to the extent such remuneration exists.

 

	
7.

	
Termination for Cause. The Company may immediately terminate the employment relationship for Cause, and such termination shall be effective as of the time of notice of the same. "Cause" shall mean termination under circumstances which deprive an employee of severance payment according to applicable law, including, but not limited to the breach of the confidentiality and non-competition provisions of this Agreement and/or breach of fiduciary duties.

 

	
8.

	
Notice Period; End of Relations. During the Notice Period and unless otherwise determined by the Company in a written notice to the severance, the employment relationship hereunder shall remain in full force and effect, the COO shall be obligated to continue to discharge and perform all of his duties and obligations with Company, and the COO shall cooperate with the Company and assist the Company with the integration into the Company of the person who will assume the COO's responsibilities.

Salary and Additional Compensation; Pension/Insurance Scheme

 

	
9.

	
Salary. In consideration for the performance by COO of all of his obligations hereunder, the COO shall be entitled to receive from the Company a monthly gross salary in the amount set forth in Exhibit A (the “Salary”). Except as specifically set forth herein, the Salary includes any and all payments to which the COO is entitled from the Company hereunder and under any applicable law, regulation or agreement. The Salary is to be paid to the COO no later than by the 9th day of each calendar month after the month for which the Salary is paid, after deduction of applicable taxes and like payments.

 

	
10.

	
Insurance and Social Benefits. The Company will insure the COO under one of the following Pension or Insurance schemes as will be selected by the COO:

 

Pension Fund (the "Pension Scheme") - (i) the Company will pay an amount equal to 6% of the Salary towards a fund for Tagmulim; and (ii) the Company will pay an amount equal to 8 1/3% of the Salary towards a fund for severance compensation (the “Company’s Severance Contribution”). Similarly, the Company shall deduct an amount equal to 5.5% of the Salary and shall pay such amount in respect of the Tagmulim component of the Pension Scheme; or

 

"Manager's Insurance Scheme" (the "Insurance Scheme") - (i) the Company will pay an amount equal to 5% of the Salary towards a fund for Tagmulim; and (ii) the Company will pay an amount equal to 8 1/3% of the Salary towards a fund for severance compensation (the “Company’s Severance Contribution”). Similarly the Company shall deduct an amount equal to 5% of the Salary, and shall pay such amount in respect of the Tagmulim component of the Insurance Scheme. Additionally, the Company shall pay an amount equals up to 2.5% of the Salary for a fund for the event of loss of working ability ("Ovdan Kosher Avoda").

 

The above contributions and deductions are subject to applicable law and therefore may be adjusted accordingly.

 

All of the COO's aforementioned contributions shall be transferred to the plans and funds by the Company by deducting such amounts from each monthly salary payment. The contributions set out above shall be made with respect to the total amount of the Salary notwithstanding the maximum amounts exempt from tax payment under applicable laws, provided that the COO shall bear all tax liability associated therewith.

  

  

  

Additional Benefits

 

	
11.

	
Vacation. The COO shall be entitled to the number of vacation days per year as set forth in Exhibit A, to be taken at times subject to the reasonable approval of the Company.

 

	
12.

	
Sick Leave; Recreation Pay. The COO shall be entitled to that number of paid sick leave per year as set forth in Exhibit A, and also to Recreation Pay ("Dmei Havra'a") as set forth in Exhibit A.

 

	
13.

	
Stock Options. In the first anniversary day of the employment, the Company will cause INTEGRITY APPLICATIONS, INC. ("Integrity"), a Delaware corporation and parent of the Company, to grant the COO options to purchase up to 16,000 common stock of Integrity at an exercise price equals to US$ 4.75 per share, on a fully diluted basis (the "Options"). The Options shall be subject to the terms and conditions set forth in the stock option agreement executed between Integrity and COO and pursuant to Integrity's 2010 Incentive Compensation Plan. The Options shall be vested in eight equal parts, at the end of every three months of engagement (each part will consist of 2,000 options) in each case, provided that on the date of vesting, the COO employment has not been terminated and/or expired. The first vesting point will occur 6 months after the Commencement Date.

 

	
14.

	
Company Car. the Company will provide the COO with a car of make and model similar to what used to be called group 4 (as was defined by the tax authorities for "Shovi Shimush Berechev"), pursuant to Company's discretion (the "Car"). The Car shall belong to or be leased by the Company for use by the COO during the period of his employment with the Company. The Car will be returned to the Company by the COO immediately after termination of the COO's employment by the Company. The Company shall bear all the fixed and variable costs of the Car, including licenses, insurance, gasoline, regular maintenance and repairs. The Company shall not, at any time, bear the costs of any tickets, traffic offense or fines of any kind. The Company shall bear all the personal tax consequences of the allocation of a company car to the benefit ("Gilum Male"). However, any expenses, payments or other benefits that are made in connection with the Car shall not be regarded as part of the Salary, for any purpose or matter, and no social benefits or other payments shall be paid on its account.

 

	
15.

	
Mobile Phone. the Company shall provide the COO a mobile phone, for use in connection with COO's duties hereunder. The Company shall bear all expenses relating to the COO’s use and maintenance of the phone attributed to the COO under this subsection. The Company shall bear all the personal tax consequences of the allocation of the mobile phone to his benefit.

 

	
16.

	
Non-Competition. the COO agrees and undertakes that he will not, so long as the Agreement is in effect and for a period of twelve (12) months following termination of the Agreement, for any reason whatsoever, directly or indirectly, in any capacity whatsoever, (i) engage in, become financially interested in, be employed by, or have any connection with any business or venture that is engaged in any activities competing with the activities of the Company and/or Integrity; (ii) employ or solicit employees or former employees of the Company and/or Integrity for the purposes of such activities; (iii) engage in business activities with third parties, including clients, suppliers, service providers, consultants and contractors, which at the time of termination of the Agreement or six (6) months earlier, were engaged in any form of relations, business or otherwise, with the Company and/or with Integrity. The COO’s undertakings pursuant to this Section shall also remain in force after the termination of this agreement, without any limitation.

 

	
17.

	
Secrecy and Nondisclosure. the COO undertakes to maintain absolute confidentiality and not to disclose nor convey to any person and/or entity whatsoever and not to use for his own purposes and/or for the purposes of others any commercial, technological or industrial information, trademarks, copyrights and other intellectual property relating to any business, operations or affairs of the Company and/or Integrity, including all information, whether written or oral, relating to the Company and/or Integrity, its products, customers, clients and business, commercial and technological secrets, or any other information the disclosure whereof is likely to result in damage to the Company and/or Integrity, or in an advantage to competitors, which reached or shall reach the COO’s knowledge, whether directly or indirectly, whether in Israel or abroad, during the course and/or in consequence of, his engagement by the Company (together the “Confidential Information”). The COO hereby undertakes to return, upon request, to the Company, all written materials, records, documents, computer software and/or hardware or any other material which belongs to the Company and/or Integrity and that might be in his possession, and if requested by the Company to do so, will execute a written statement confirming compliance with the above. The COO’s undertakings pursuant to this Section shall also remain in force after the termination of this agreement, without any limitation.

  

  

  

Miscellaneous

 

	
18.

	
The laws of the State of Israel shall apply to this Agreement and the sole and exclusive place of jurisdiction in any matter arising out of or in connection with this Agreement shall be the Tel-Aviv-Yafo Regional Labor Court.

 

	
19.

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

 

	
20.

	
No failure, delay or forbearance of either party in exercising any power or right hereunder shall in any way restrict or diminish such party's rights and powers under this Agreement, or operate as a waiver of any breach or nonperformance by either party of any terms or conditions hereof.

 

	
21.

	
In the event it shall be determined under any applicable law that a certain provision set forth in this Agreement is invalid or unenforceable, such determination shall not affect the remaining provisions of this Agreement unless the business purpose of this Agreement is substantially frustrated thereby.

 

	
22.

	
The preface and exhibits to this Agreement constitute an integral and indivisible part hereof.

 

	
23.

	
This Agreement constitutes the entire understanding and agreement between the parties hereto, supersedes any and all prior discussions, agreements and correspondence with regard to the subject matter hereof, and may not be amended, modified or supplemented in any respect, except by a subsequent writing executed by both parties hereto.

 

	
24.

	
The COO acknowledges and confirms that all the terms of his employment are personal and confidential, and undertake to keep such terms in confidence and refrain from disclosing such terms to any third party.

 

	
25.

	
All references to applicable laws are deemed to include all applicable and relevant laws and ordinances and all regulations and orders promulgated there under, unless the context otherwise requires. The parties agree that this Agreement constitutes, among others, notification in accordance with the Notice to Employees (Employment Terms) Law, 2002. Nothing in this agreement shall derogate from the COO’s rights according to applicable laws.

 

	
26.

	
The Company will be bound by this Agreement subject to its authorization by all necessary corporate actions.

IN WITNESS WHEREOF the parties have signed this Agreement as of the date first hereinabove set forth.

 

	
/s/ Avner Gal

	 	
/s/ Eran Cohen

	 
	 
A.D. Integrity Applications Ltd.

	 	 
Eran Cohen

	 

 

  

  

  

Exhibit A

To the Personal Employment Agreement by and between

The Company and the COO

 

	
Name & I.D. No: Name of Manager:

	
Eran Cohen, I.D. No 055267744

	 	 
	
1. Position: Position in the Company:

	
Chief Operational Officer of the Company and of Integrity Applications, Inc. the parent of the Company

	 	 
	
2. Under Direction of:

	
Chief Executive Officer

	 	 
	
3. Commencement Date: Commencement Date:

	
January 1, 2016

	 	 
	
4. Notice Period: Notice Period:

	
180 days

	 	 
	
5. Rest Days:

	
Saturday

	 	 
	
6. Salary (gross): Salary:

	
NIS 55,000

	 	 
	
7. Annual Vacation: Vacation Days Per Year:

	
20 days per year

	 	 
	
8. Sick Days: Sick Leave Days Per Year:

	
Pursuant to applicable law, however paid in full from first day

	 	 
	
9. Recreation Pay:

	
Pursuant to applicable law

  

  

  

Exhibit B

GENERAL APPROVAL REGARDING PAYMENTS BY EMPLOYERS TO A PENSION FUND AND 

INSURANCE FUND IN LIEU OF SEVERANCE PAY UNDER THE SEVERANCE PAY LAW, 5723-1963

 

By virtue of my power under Section 14 of the Severance Pay Law, 5723-1963 (hereinafter: the “Law”), I certify that payments made by an employer commencing from the date of the publication of this approval for the sake of his employee to a comprehensive pension provident fund that is not an insurance fund within the meaning set forth in the Income Tax Regulations (Rules for the Approval and Conduct of Provident Funds), 5724-1964 (hereinafter: the “Pension Fund”) or to managers’ insurance which includes the possibility to receive annuity payments under an insurance fund as aforesaid, (hereinafter: the “Insurance Fund”), including payments made by the employer by a combination of payments to a Pension Fund and an Insurance Fund (hereinafter: “Employer’s Payments”), shall be made in lieu of severance pay due to said employee with respect to the salary from which said payments were made and for the period they were paid (hereinafter: the “Exempt Salary”), provided that all the following conditions are fulfilled:

 

	
(1)

	
The Employer’s Payments –

 

	  	
(a)

	
to the Pension Fund are not less than 14 1/3% of the Exempt Salary or 12% of the Exempt Salary if the employer pays, for the sake of his employee, in addition thereto, payments to supplement severance pay to a severance pay provident fund or to an Insurance Fund in the employee’s name, in the amount of 2 1/3 % of the Exempt Salary. In the event that the employer has not paid the above mentioned 2 1/3% in addition to said 12%, his payments shall come in lieu of only 72% of the employee’s severance pay;

 

	  	
(b)

	
to the Insurance Fund are not less than one of the following:

 

	  	
(i)

	
13 1/3% of the Exempt Salary, provided that, in addition thereto, the employer pays, for the sake of his employee, payments to secure monthly income in the event of disability, in a plan approved by the Commissioner of the Capital Market, Insurance and Savings Department of the Ministry of Finance, in an amount equivalent to the lower of either an amount required to secure at least 75% of the Exempt Salary or in an amount of 2 1/2% of the Exempt Salary (hereinafter: “Disability Insurance Payment”);

 

	  	
(ii)

	
11% of the Exempt Salary, if the employer paid, in addition, the Disability Insurance Parent; and in such case, the Employer’s Payments shall come in lieu of only 72% of the employee’s severance pay. In the event that the employer has made payments in the employee’s name, in addition to the foregoing payments, to a severance pay provident fund or to an Insurance Fund in the employee’s name, to supplement severance pay in an amount of 2 1/3% of the Exempt Salary, the Employer’s Payments shall come in lieu of 100% of the employee’s severance pay.

 

	
(2)

	
No later than three months from the commencement of the Employer’s Payment, a written agreement was executed between the employer and the employee, which includes:

 

	  	
(a)

	
the employee’s consent to an arrangement pursuant to this approval, in an agreement specifying the Employer’s Payments, the Pension Fund and the Insurance Fund, as the case may be; said agreement shall also incorporate the text of this approval;

 

	  	
(b)

	
an advance waiver by the employer of any right which he may have to a refund of monies from his payments, except in cases in which the employee’s right to severance pay was denied by a final judgment pursuant to Sections 16 or 17 of the Law, and in such a case or in cases in which the employee withdrew monies from the Pension Fund or Insurance Fund, other than by reason of an entitling event; for these purposes an “Entitling Event” means death, disability or retirement at or after the age of 60.

 

	
(3)

	
This approval shall not derogate from the employee’s right to severance pay pursuant to any law, collective agreement, extension order or employment agreement with respect to compensation in excess of the Exempt Salary.

 

15th Sivan 5758 (June 9th, 1998).

 

  

  

  

Exhibit C

To the Personal Employment Agreement by and between

The Company and the Manager

 

	
Name of Manager:

 

	
Eran Cohen

 

	
ID No. of Manager:

	
055267744

 

	
1.

	
General

 

Capitalized terms herein shall have the meanings ascribed to them in the Agreement to which this Exhibit is attached (the "Agreement"). For purposes of any undertaking of the Manager toward the Company, the term Company shall include any subsidiaries, parent companies and affiliates of the Company. The Manager's obligations and representations and the Company's rights under this Exhibit shall apply as of the Commencement Date, regardless of the date of execution of the Agreement.

 

	
2.

	
Confidentiality; Proprietary Information

 

	
  

	
2.1.

	
"Proprietary Information" means confidential and proprietary information concerning the business and financial activities of the Company, including, without limitation, patents, patent applications, trademarks, copyrights and other intellectual property, and information relating to the same, technologies and products (actual or planned), know how, inventions, research and development activities, inventions, trade secrets and industrial secrets, and also confidential commercial information such as investments, investors, employees, customers, suppliers, marketing plans, etc., all the above - whether documentary, written, oral or computer generated. Proprietary Information shall also include information of the same nature which the Company may obtain or receive from third parties.

 

	
  

	
2.2.

	
Proprietary Information shall be deemed to include any and all proprietary information disclosed by or on behalf of the Company and irrespective of form but excluding information that was known to Manager prior to Manager's association with the Company, as evidenced by written records or is or shall become part of the public knowledge except as a result of the breach of the Agreement or this Exhibit by Manager.

 

	
  

	
2.3.

	
Manager recognizes that the Company received and will receive confidential or proprietary information from third parties, subject to a duty on the Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes. In connection with such duties, such information shall be deemed Proprietary Information hereunder, mutatis mutandis.

 

	
  

	
2.4.

	
Manager agrees that all Proprietary Information and other intellectual property and ownership rights in connection therewith shall be the sole property of the Company its subsidiaries, affiliates and their assignees. At all times, both during the employment relationship and after the termination of the engagement between the parties, Manager will keep in confidence and trust all Proprietary Information, and will not use or disclose any Proprietary Information or anything relating to it without the written consent of the Company or its subsidiaries or affiliates, except as may be necessary in the ordinary course of performing Manager's duties under the Agreement.

 

	
  

	
2.5.

	
Upon termination of Manager's employment with the Company or upon Company's first demand, Manager will promptly deliver to the Company all documents and materials of any nature pertaining to Manager's employment with the Company, and will not take with him any documents or materials or copies thereof containing any Proprietary Information.

 

	
  

	
2.6.

	
Manager's undertakings set forth in Section 1 through Section 6 shall remain in full force and effect after termination of the Agreement or any renewal thereof.

 

  

  

  

 

	
3.

	
Disclosure and Assignment of Inventions

 

	
  

	
3.1.

	
"Inventions" means any and all inventions, improvements, designs, concepts, techniques, methods, systems, processes, know how, computer software programs, databases, mask works and trade secrets, whether or not patentable, copyrightable or protectible as trade secrets; "Company Inventions" means any Inventions that are made or conceived or first reduced to practice or created by Manager, whether alone or jointly with others, during the period of Manager's employment with the Company, and which are: (i) developed using equipment, supplies, facilities or Proprietary Information of the Company, or (ii) result from work performed by Manager for the Company, or (iii) related to the field of business of the Company, or to current or anticipated research and development.

 

	
  

	
3.2.

	
Manager undertakes and covenants he will promptly disclose in confidence to the Company all Inventions deemed as Company Inventions. The Manager agrees and undertakes not to disclose to the Company any confidential information of any third party and, in the framework of his employment by the Company, not to make any use of any intellectual property rights of any third party.

 

	
  

	
3.3.

	
Manager hereby irrevocably transfers and assigns to the Company all worldwide patents, patent applications, copyrights, mask works, trade secrets and other intellectual property rights in any Company Invention, and any and all moral rights that he may have in or with respect to any Company Invention.

 

	
  

	
3.4.

	
Manager agrees to assist the Company, at the Company's expense, in every proper way to obtain for the Company and enforce patents, copyrights, mask work rights, and other legal protections for the Company Inventions in any and all countries. Manager will execute any documents that the Company may reasonably request for use in obtaining or enforcing such patents, copyrights, mask work rights, trade secrets and other legal protections. Such obligation shall continue beyond the termination of Manager's employment with the Company. Manager hereby irrevocably designates and appoints the Company and its authorized officers and agents as Manager's agent and attorney in fact, coupled with an interest to act for and on Manager's behalf and in Manager's stead to execute and file any document needed to apply for or prosecute any patent, copyright, trademark, trade secret, any applications regarding same or any other right or protection relating to any Proprietary Information (including Company Inventions), and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights, trademarks, trade secrets or any other right or protection relating to any Proprietary Information (including Company Inventions), with the same legal force and effect as if executed by Manager himself.

 

	
4.

	
Non-Competition

 

	
  

	
4.1.

	
In consideration of Manager's terms of employment hereunder and in order to enable the Company to effectively protect its Proprietary Information, Manager agrees and undertakes that he will not, so long as the Agreement is in effect, and for a period of twelve (12) months following termination of the Agreement, for any reason whatsoever, directly or indirectly, in any capacity whatsoever, engage in, become financially interested in (not including having shareholdings of up to 1% of the issued and outstanding share capital of the relevant business), be employed by, or have any connection with any business or venture that is engaged in any activities competing with the activities of the Company in the territories of Israel and USA only (and the Manager shall be permitted to be engaged in any activity carried out in other countries even if such activity is similar to the Company’s fields of business).

 

	
  

	
4.2.

	
Manager agrees and undertakes that during the employment relationship and for a period of twelve (12) months following termination of this employment for whatever reason, Manager will not, directly or indirectly, including personally or in any business in which Manager may be an employee, officer, director or shareholder: (i) solicit for employment any person who is employed by the Company, or any person retained by the Company as a consultant, advisor or the like who is subject to an undertaking towards the Company to refrain from engagement in activities competing with the activities of the Company (for purposes hereof, a "Consultant"), or was retained as an employee or a Consultant during the six months preceding termination of Manager's employment with the Company, or (ii) solicit any client and/or any supplier of the Company or anyone who was a client and/or supplier of the Company during the six months preceding termination of Manager's employment with the Company.

 

  

  

  

	
5.

	
Reasonableness of Protective Covenants

 

	
  

	
5.1.

	
Insofar as the protective covenants set forth in this Exhibit are concerned, Manager specifically acknowledges, stipulates and agrees as follows: (i) the protective covenants are reasonable and necessary to protect the goodwill, property and Proprietary Information of the Company, and the operations and business of the Company; and (ii) the time duration of the protective covenants is reasonable and necessary to protect the goodwill and the operations and business of Company, and does not impose a greater restrain than is necessary to protect the goodwill or other business interests of the Company. Nevertheless, if any of the restrictions set forth in this Exhibit is found by a court having jurisdiction to be unreasonable or overly-broad as to geographic area, scope or time or to be otherwise unenforceable, the parties hereto intend for the restrictions set forth in this Exhibit to be reformed, modified and redefined by such court so as to be reasonable and enforceable and, as so modified by such court, to be fully enforced.

 

	
6.

	
Remedies for Breach

 

	
  

	
6.1.

	
Manager acknowledges that the legal remedies for breach of the provisions of this Exhibit may be found inadequate and therefore agrees that, in addition to all of the remedies available to Company in the event of a breach or a threatened breach of any of such provisions, the Company may also, in addition to any other remedies which may be available under applicable law, obtain temporary, preliminary and permanent injunctions against any and all such actions.

 

	
7.

	
Intent of Parties

 

	
  

	
7.1.

	
Manager recognizes and agrees: (i) that this Exhibit is necessary and essential to protect the business of Company and to realize and derive all the benefits, rights and expectations of conducting Company’s business; (ii) that the area and duration of the protective covenants contained herein are in all things reasonable; and (iii) that good and valuable consideration exists under the Agreement, for Manager's agreement to be bound by the provisions of this Exhibit.

IN WITNESS WHEREOF the Manager has signed this Agreement as of the date first hereinabove set forth.

 

	
/s/ Eran Cohen

	 	 	 	 	 	 
	
Eran Cohen

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