S-8

As filed with the Securities and Exchange Commission on July 16, 2021

Registration No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-8
REGISTRATION STATEMENT

UNDER
THE SECURITIES ACT OF 1933

PainReform Ltd.

(Exact name of registrant as specified in its charter)

Israel	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4 Bruria St.

Tel Aviv, Israel

Tel +972 3 7177051

(Address of principal executive offices, including zip code)

2008 PainReform Option Plan and

2019 PainReform Option Plan

(Full title of the plan)

Puglisi & Associates
850 Library Avenue, Suite 204
Newark, Delaware 19711
302-738-6680

(Name, address and telephone number, including area code, of agent for service)

Copies to:

Ronen Kantor, Esq. Doron Tikotzky Kantor Gutman & Amit Gross B.S.R. 4 Tower, 33 Floor 7 Metsada Street, Bnei Brak 5126112 Israel Tel: +972 3 613 3371 Gary Emmanuel, Esq. Mark Selinger, Esq. McDermott Will & Emery LLP
340 Madison Avenue
New York, NY 10173 Tel: (212) 547-5400

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

CALCULATION OF REGISTRATION FEE

Title of Securities to be Registered	Amount to be Registered(1)		Proposed maximum offering price per share			Proposed maximum aggregate offering price		Amount of registration fee
Ordinary Shares, par value NIS 0.03 per share, reserved for issuance pursuant to the 2019 PainReform Option Plan		1,099,052	$	2.919	(2)	$	3,207,583.26	$	349.95
Ordinary Shares, par value NIS 0.03 per share, reserved for issuance pursuant to options outstanding under the 2019 PainReform Option Plan		920,404	$	3.96	(3)	$	3,644,799.84	$	397.65
Ordinary Shares, par value NIS 0.03 per share, reserved for issuance pursuant to options outstanding under the 2008 PainReform Option Plan		153,882	$	0.24	(4)	$	36,931.68	$	4.03
Total		2,173,338		N/A		$	6,889,314.78	$	751.63

(1)	Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), this registration statement (the “Registration Statement”) shall also cover any additional ordinary shares that become issuable under the 2008 PainReform Option Plan (the “2008 Plan”) and the 2019 PainReform Option Plan (the “2019 Plan”) by reason of any share dividend, share split, recapitalization or other similar transaction.
(2)	The proposed maximum offering price per share is calculated in accordance with Rules 457(c) and 457(h) under the Securities Act, solely for purposes of calculating the registration fee on the basis of $2.919 per share, the average of the high and low price of the Registrant’s ordinary shares as reported on the Nasdaq Capital Market on July 15, 2021.
(3)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(h) of the Securities Act based on $3.96, the weighted average exercise price per ordinary share (rounded to the nearest cent) of the outstanding option awards under the 2019 Plan as of the date of this Registration Statement.
(4)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(h) of the Securities Act based on $0.24, the weighted average exercise price per ordinary share (rounded to the nearest cent) of the outstanding option awards under the 2008 Plan as of the date of this Registration Statement.

PART 1

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

ITEM 1.          PLAN INFORMATION*

ITEM 2.          REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*

* Information required by Part I to be contained in the Section 10(a) prospectus is omitted from this Registration Statement in accordance with Rule 428 under the Securities Act and the Note to Part I of Form S-8. The documents containing information specified in this Part I will be separately provided to the participants in the 2008 Plan and the 2019 Plan covered by this Registration Statement, as specified by Rule 428(b)(1) under the Securities Act.

PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.          INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents filed with the Securities and Exchange Commission (the “SEC”) by PainReform Ltd. (the “Registrant”) are incorporated herein by reference.

(1) The Registrant’s Annual Report on Form 20-F for the year ended December 31, 2020 filed with the SEC on March 18, 2021;

(2) The Registrant’s Reports on Form 6-K filed with the SEC on March 18, 2021 and May 13, 2021; and

(3) The description of the registrant’s ordinary shares, par value NIS 0.03 per share, included in the registration statement on Form 8-A filed on August 31, 2020 (File No. 001-39481) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including any amendment or report filed for the purpose of updating such description.

In addition to the foregoing, all documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, and all reports on Form 6-K subsequently filed by the Registrant which state that they are incorporated by reference herein, prior to the filing of a post- effective amendment which indicates that all securities offered hereunder have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be part hereof from the date of filing of such documents and reports.

Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement herein, or in any subsequently filed document which also is or is deemed to be incorporated by reference, modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement.

 ITEM 4.          DESCRIPTION OF SECURITIES

Not applicable.

ITEM 5.          INTEREST OF NAMED EXPERTS AND COUNSEL

Not applicable.

ITEM 6.          INDEMNIFICATION OF DIRECTORS AND OFFICERS

Under the Israeli Companies Law, 5759-1999 ( the “Companies Law”), a company may not exculpate an office holder from liability for a breach of the duty of loyalty.  An Israeli company may exculpate an office holder in advance from liability to the company, in whole or in part, for damages caused to the company as a result of a breach of the duty of care but only if a provision authorizing such exculpation is included in its articles of association.  Our amended and restated articles of association include such a provision.  The Company may not exculpate in advance a director from liability arising out of a prohibited dividend or distribution to shareholders.

Under the Companies Law and the Israeli Securities Law, 5728-1968 (the “Securities Law”), a company may indemnify, or undertake in advance to indemnify, an office holder for the following liabilities and expenses, imposed on office holder or incurred by office holder due to acts performed by him or her as an office holder, provided its articles of association include a provision authorizing such indemnification:

• monetary liability incurred by or imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator’s award approved by a court.  However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to certain events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the foreseen events and amount or criteria;

 

• reasonable litigation expenses, including reasonable attorneys’ fees, incurred by the office holder as (1) a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent or (2) in connection with a monetary sanction;

 

• a monetary liability imposed on him or her in favor of an injured party at an Administrative Procedure (as defined below) pursuant to Section 52(54)(a)(1)(a) of the Securities Law;

 

• expenses incurred by an office holder in connection with an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees; and

 

• reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf, or by a third-party, or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent.

An “Administrative Procedure” is defined as a procedure pursuant to chapters H3 (Monetary Sanction by the Israeli Securities Authority), H4 (Administrative Enforcement Procedures of the Administrative Enforcement Committee) or I1 (Arrangement to prevent Procedures or Interruption of procedures subject to conditions) to the Securities Law.

Under the Companies Law and the Securities Law, a company may insure an office holder against the following liabilities incurred for acts performed by him or her as an office holder if and to the extent provided in the company’s articles of association:

• a breach of the duty of care to the company or to a third-party, to the extent such a breach arises out of the negligent conduct of the office holder;

• a monetary liability imposed on the office holder in favor of a third-party;

 

• a monetary liability imposed on the office holder in favor of an injured party at an Administrative Procedure pursuant to Section 52(54)(a)(1)(a) of the Securities Law; and

 

• expenses incurred by an office holder in connection with an Administrative Procedure, including reasonable litigation expenses and reasonable attorneys’ fees.

Under the Companies Law, a company may not indemnify, exculpate or insure an office holder against any of the following:

• a breach of the duty of loyalty, except for indemnification and insurance for a breach of the duty of loyalty to the company to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;

 

• an act or omission committed with intent to derive unlawful personal benefit; or

• a fine or forfeit levied against the office holder.

Under the Companies Law, exculpation, indemnification and insurance of office holders must be approved by the compensation committee and the board of directors and, with respect to certain office holders or under certain circumstances, also by the shareholders, as described under “Directors, Senior Management and Employees— Board Practices – Exculpation, Insurance and Indemnification of Directors and Officers” in the Registrant’s most recent annual report on Form 20-F.

The Registrant’s amended and restated articles of association permit it to exculpate, indemnify and insure its office holders to the fullest extent permitted by the Companies Law and Securities Law.  Each of the Registrant’s office holders have entered into an indemnification agreement exculpating them, to the fullest extent permitted by Israeli law, from liability to the Registrant for damages caused to us as a result of a breach of the duty of care and undertaking to indemnify them to the fullest extent permitted by Israeli law, including with respect to liabilities resulting from certain acts performed by such office holders in their capacity as an office holder of the Registrant, its subsidiaries or its affiliates. The indemnification is limited both in terms of amount and coverage.

In the opinion of the SEC, indemnification of directors and office holders for liabilities arising under the Securities Act, however, is against public policy and therefore unenforceable.

ITEM 7.          EXEMPTION FROM REGISTRATION CLAIMED 

Not applicable.

ITEM 8.          EXHIBITS

See attached Exhibit Index.

ITEM 9.          UNDERTAKINGS

(a)          The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)   To include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii)  To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement;

provided, however, that subparagraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in the periodic reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act that are incorporated by reference in this registration statement.

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements.

(b)          The undersigned registrant hereby further undertakes that, for the purposes of determining any liability under the Securities Act, each filing of the Company’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c)          Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Tel Aviv, Israel, on July 16, 2021.

PAINREFORM LTD.
By:	/s/Ilan Hadar
Name:	Ilan Hadar
Title:	Chief Executive Officer

 

POWER OF ATTORNEY

Each of the undersigned officers and directors of PainReform Ltd. hereby severally constitutes and appoints Ilan Hadar, the true and lawful attorney with full power to them, to sign for the undersigned and in his or her name in the capacities indicated below, any and all amendments, including the post-effective amendments, to this Registration Statement, and generally to do all such things in the undersigned’s name and behalf in such capacities to enable PainReform Ltd. to comply with the applicable provisions of the Securities Act of 1933, as amended, and all rules and regulation thereunder, and all requirements of the Securities and Exchange Commission, and each of the undersigned hereby ratifies and confirms all that said attorneys or any of them shall lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities and on July 16, 2021.

Signatures	Title	Date
/s/ Ilan Hadar	Chief Executive Officer	July 16, 2021
Ilan Hadar	(Principal Executive, Financial and Accounting Officer)
/s/ Ehud Geller	Executive Chairman	July 16, 2021
Ehud Geller
/s/ Prof. Eli Hazum	Chief Technology Officer and Director	July 16, 2021
Prof. Eli Hazum
/s/ Efi Cohen-Arazi	Director	July 16, 2021
Efi Cohen-Arazi
/s/ Dr. Ellen S. Baron	Director	July 16, 2021
Dr. Ellen S. Baron
/s/ Augustine Lawlor	Director	July 16, 2021
Augustine Lawlor

SIGNATURE OF AUTHORIZED REPRESENTATIVE OF THE REGISTRANT

Pursuant to the Securities Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of PainReform Ltd., has signed this registration statement or amendment thereto in Newark, Delaware, United States of America on July 16, 2021

Puglisi & Associates
By:	/s/Donald J. Puglisi
Name:	Donald J. Puglisi
Title:	Managing Director

EXHIBIT INDEX

Exhibit Number		Description of Exhibit
3.1		Amended and Restated Articles of Association of the Company, as currently in effect (unofficial English translation from Hebrew original) (included as Exhibit 3.2 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on August 5, 2020, and incorporated herein by reference)
3.2		Specimen Share Certificate (included as Exhibit 4.1 to the Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on August 5, 2020, as amended, and incorporated herein by reference)
5.1*		Opinion of  Doron Tikotzky Kantor Gutman Nass & Amit Gross as to the legality of the securities being registered
23.1*		Consent of Brightman Almagor Zohar & Co.
23.2*		Consent of Doron Tikotzky Kantor Gutman Nass & Amit Gross (included in Exhibit 5.1)
24.1*		Power of Attorney (included on the signature page of this Registration Statement)
99.1*		2008 PainReform Option Plan
99.2		2019 PainReform Option Plan (included as Exhibit 10.1 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on June 30, 2020, and incorporated herein by reference)
*	Filed herewith.

EX-5.1

Exhibit 5.1

Yaron Tikotzky, Adv. (CPA)* Eli Doron, Adv. & Notary Ronen Kantor, Adv. Amit Gross, Adv. & Notary Dr. Shlomo Nass, Adv. (CPA) Giora Gutman, Adv. Rachel (Goren) Cavallero, Adv. Gil Mor, Adv. & Notary** Sharon Fishman, Adv. & Notary Moti Hoffman, Adv. & Notary Efrat Hamami, Adv. Tamir Kalderon, Adv. Asaf Gershgoren, Adv. & economist Efi Ohana, Adv. & economist Asaf Hofman, Adv. & economist Ron Soulema, Adv.& Notary Moti Philip, Adv. Shai Glikman, Adv. Rotem Nissim, Adv. Hadas Garoosi, Adv. Igal Rosenberg, Adv. Sagiv Bar Shalom, Adv. Avi Omrad, Adv. Ori Perel, Adv. Shai Pnini, Adv. Jonathan Friedland, Adv. *** Tali Pery, Adv. Tsvia shiff, Adv. Rachel Don Yehia, Adv. Sandrine Dray, Adv. Mediator & Notary**** Nahi Hamud, Adv. Shmulik Cohen, Adv. Yair Messalem, Adv. Maayan Peled, Adv. Ehud Kremer. Adv. liav Menachem, Adv. Notary & Mediator Dana Oron Almog, Adv. Lilach Cohen-Shamir, Adv. Rivka Mangoni, Adv. Israel Asraf, Adv. & Notary Shay Almakies, Adv. & Notary Gali Ganoni, Adv. Odelia Cohen-Schondorf, Adv. Yana Shapiro Orbach, Adv. Lilach Cohen-Shamir, Adv. Rivka Mangoni, Adv. Israel Asraf, Adv. & Notary Shay Almakies, Adv. & Notary Gali Ganoni, Adv. Odelia Cohen-Schondorf, Adv. Yana Shapiro Orbach, Adv. Nidal Siaga, Adv. Amit Moshe Cohen, Adv. Moran Ovadia, Adv. Sonny Knaz, Adv. Racheli Levi, Adv. Liron Tery, Adv. Idan Halili, Adv. Bat-El Ovadia, Adv. Aharon Eitan, Adv. Rania Elime, Adv. Ronit Rabinovich, Adv. Mor Rozenson, Adv. Iris Borcom, Adv. Inbal Naim, Adv. Amir Keren, Adv. Ariel Regev, Adv. Yonatan Gamarnik, Adv. Ben Mugraby, Adv. Liran Aharoni, Adv. Shirli Shlezinger, Adv. Jacob Bayarsky, Adv. Matan Hemo, Adv. Or Nass, Adv. Omer Katzir, Adv. & economist Adi Barnes, Adv. Noy Keren, Adv. Doron Pesso, Adv. Ronit Israeli, Adv. Felix Naftaliev, Adv. Lipaz Karni, Adv. Dov Alter, Adv. Itay Bendet, Adv. Monica kevorkian karawani, Adv. July 16, 2021 Painreform Ltd. 4 Bruria St.    Tel Aviv, 6745442 Israel Ladies and Gentlemen,                  Re: REGISTRATION STATEMENT ON FORM S-8 We are acting as Israeli counsel for Painreform Ltd., an Israeli company (the “Company”), in connection with the preparation of a Registration Statement on Form S-8 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Act”), pertaining to the registration of 2,173,338 Ordinary Shares 0.01 NIS par value of the Company (the “Plan Shares”) under the Painreform 2008 Option Plan and 2019 Option Plan (together the “Plan”). In rendering our opinion, we have examined, and have relied as to factual matters solely upon, originals or copies certified, or otherwise identified to our satisfaction, of such documents, corporate records or other instruments as we have deemed necessary or appropriate for the purposes of this opinion. In our examination we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity with the originals of all documents submitted to us as copies. We have, when relevant facts material to our opinion were not independently established by us, relied to the extent we deemed such reliance proper upon written or oral statements of officers and other representatives of the Company. In giving the opinion expressed herein, no opinion is expressed as to the laws of any jurisdiction other than the State of Israel. Based upon and subject to the foregoing, we are of the opinion that the Plan Shares, when issued pursuant to the terms of the Plan, and the terms of any agreements relating to such issuance, will be upon receipt of the consideration provided for in the Plan, validly issued, fully paid and non-assessable. This opinion is intended solely for the benefit and use of the Company and other persons who are entitled to rely on the Registration Statement, and is not to be used, released, quoted, or relied upon by anyone else for any purpose (other than as required by law), without our prior written consent. We hereby consent to the filing of this opinion as Exhibit A to the Registration Statement, and to the use of our name wherever appearing in the Registration Statement in connection with Israeli law. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
Very truly yours, /s/ Doron, Tikotzky, Kantor, Gutman, Nass, Amit Gross & Co Doron, Tikotzky, Kantor, Gutman, Nass, Amit Gross & Co Advocates & Notaries

Eli Kulas. Adv. Notary & Mediator – Counselor

Yaacov Wagner, Senior judge (retired), Adv.- L.L.M, Mediator & Arbitrator- Counselor

Jan Robinsohn, M.Jur. Adv. & Notary - Counselor*****

Giora Amir (1928-2020)

* Member of the New York State Bar

** Member of the Law Society in

England & Wales

 ***Member of the Bar, Israel and New York; Consular Agent and Honorary Consul of the United States of America (Ret.)
**** Accredited by the consulate of France

***** Honorary Consul Of The Republic

Of Poland (ret.)

mail@dtkgg.com
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EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in this Registration Statement on Form S-8 of our report dated March 18, 2021 relating to the financial statements of Painreform Ltd. (the “Company”), appearing in the Annual Report on Form 20-F of the Company for the year ended December 31, 2020.

/s/ Brightman Almagor Zohar & Co.

A Firm in the Deloitte Global Network

Tel Aviv, Israel

July 16, 2021

EX-99.1

Exhibit 99.1

PainReform Ltd.

2008 Option Plan

1.          Name.  This plan, as adopted by the Board of Directors of PainReform Ltd., (the “Company”) on [________], 2008, and as amended from time to time, shall be known as the “PainReform Ltd. 2008 Option Plan” (the “Plan”).

2.          Purpose of the Plan.  The purposes of this Plan are to attract and retain the best available individuals for positions of substantial responsibility, and to promote the success of the Company’s and Affiliate’s business by aligning the financial interests of individuals providing services to the Company and Affiliates with long-term shareholder value.

3.          Headings and Definitions

3.1.          The section headings are intended solely for the reader’s convenience and in no event shall they constitute a basis for the interpretation of the Plan.

3.2.          In this Plan, the following terms shall have the meanings set forth beside them:

“Affiliate”	Corporate .entities who are related to the Company by way of common ownership or control, either partially or entirely, including but not limited to any “employing company” as defined in Section 102(a) of the Ordinance;
‘‘Applicable Law”	The legal requirements applicable to the administration of option and share award plans, any Stock Exchange rules or regulations and the applicable laws, rules and regulations of any country or jurisdiction where Options are granted under the Plan, as such laws, rules, regulations and requirements shall be in place from time to time;
“Approved Option”	An Option granted under Section 102, in accordance with the “capital gain route”, and other rights granted with respect to such Option;
“Board”	The Company’s Board of Directors, or, subject to applicable law and the Company’s Articles of Association, any committee

“Cause”

Any of the following- (a)          A material breach of the employment or engagement agreement between the Company or an Affiliate and a Participant, including but not limited to, a breach of any confidentiality duty of a Participant (including in regards to the confidentiality of this Plan and any grant made there-under), inappropriate use of confidential information of the Company or an Affiliate or an event of breach of trust or breach of any 110n-competition obligation of a Participant; (b)          Any act which constitutes a breach of a Participant’s fiduciary duty towards the Company or an Affiliate, including without limitation disclosure of confidential information of the Company or an Affiliate and acceptance or solicitation to receive unauthorized or undisclosed benefits, irrespective of their nature, or funds or promises to receive either, from individuals, Consultants or corporate entities that the Company or an Affiliate does business with; (c)          Any act of fraud by a Participant or embezzlement of funds of the Company or an Affiliate; (d)          Any conduct or omission by, or state of affairs related to, the Participant reasonably determined by the Board to be materially detrimental to, or against the interests of, the Company or an Affiliate; (e)          Any conviction of any felony involving moral turpitude or affecting the Company or an Affiliate; (f)          Circumstances justifying the revocation and/or reduction of a Participant’s entitlement to severance pay pursuant to Sections 16 or 17 of the Severance Pay Law, 1963; or (g)          Any other reason which is be defined as Cause in the Participant’s personal employment contract.

“Company”

PainReform Ltd., company number 51-405659-7, a company incorporated under the laws of Israel or any Successor Company;

2

“Consultant’	Shall mean any person, except an Employee, engaged by the Company or an Affiliate, in order to render services to such company, including as an advisor or officer;
“Controlling Shareholder”	A controlling shareholder of the Company as defined in section 32(9) of the Ordinance;
“Employee”	Shall mean any person, who is a common law employee of the •
“Exercise Price”	Shall mean the consideration required to be paid by a Participant in order to exercise one Option;
“Expiration Date”	With respect to an Option, the earlier of (i) the time such Option is fully exercised, or (ii) ten (10) years from the Grant Date of such Option, or (ii) the time on which such Option expires in accordance with Sections 9 and 12 below;
“Fair Market Value”	Shall mean as of any date, the value of an ordinary share of the Company determined as follows: (i) If the ordinary shares are listed on any established Stock Exchange, the Fair Market Value shall be the closing sales price for such ordinary shares (or the closing bid, if no sales were reported), as quoted on such Stock Exchange for the last market trading day prior to the time of determination; (ii) If the ordinary shares are regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value shall be the mean between the high bid and low asked prices for the ordinary shares on the last market trading day prior to the day of determination, or; (iii) In the absence of any of the above, the Fair Market Value thereof shall be determined in good faith by the Board of Directors of the Company. For the avoidance of doubt, the above definition of Fair Market Value shall not apply for the purpose of determining the tax liability pursuant to section 102(b)(3) of the Ordinance;

3

“Grant Date”	The date on which an Option is granted to a Participant, as set forth in the resolution of the Board granting such Option;
“Holding Period”	the holding period provided under Section 102 in respect of the “capital gain route” or under a tax ruling by the Israeli Tax Authority;
“Ordinance “	The Israeli Income Tax Ordinance [New Version], 1961, as amended from time to time;
“Option”	An option to purchase one Share, granted to a Participant, subject to the provisions of this Plan and the applicable Option Agreement;
“Option Agreement”	A written agreement between the Company and a Participant setting forth the terms under which Options are granted to a Participant;
“Participant”	Shall mean an Employee of or Consultant of the Company or an Affiliate to which an Option was granted;
“Plan”	Shall mean this PainReform Ltd. 2008 Option Plan, including any amendments thereto;
“Section 102”	Section 102 of the Ordinance and the Israeli Income Tax Rules (Tax Relief in Issuance of Shares to Employees) 2003, as amended from time to time;
“Share”	An ordinary share of the Company, nominal value NIS 0.01, which is issued or issuable to a Participant upon exercise of an  \ Option;
“Stock Exchange”	Any stock exchange, on which ordinary shares of the Company are listed, or such other market or a national market system, on which the Company’s ordinary shares’ prices are regularly quoted;
“Structural Change”	Any Deemed Liquidation Event, as defined in and determined pursuant to the Company’s Articles of Association in effect from time to time.

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“Successor Company”	Shall mean any entity with or into which the Company merged, or to which certain operations or certain assets of the Company were transferred, or which purchased substantially all the Company’s assets or ordinary shares, provided that the Company is not the surviving entity;
“Tax”	Any applicable tax and other compulsory payments such as social security and health tax contributions under any applicable law;
“Termination”	For an Employee, the termination of employment as an Employee, and for a Consultant, the interruption, expiration, or termination of such person’s consulting or advisory relationship with the Company or an Affiliate, or the occurrence of any termination event as set forth in such person’s Option Agreement; For the purpose of this plan, any temporary intem1ption in such person’s availability to provide services to the Company or an Affiliate, which has been authorized in writing by the Board prior to its commencement, shall not be considered as Termination;
“Termination Date”	With regard to any Employ, the first date following the Date of Grant on which there are no longer employment relations between such Employee and the Company or an Affiliate, for any reason whatsoever; however for the purpose of Termination for Cause, the Termination Date is the date on which a notice regarding such termination was sent by the Company or an Affiliate to the Employee; With regard to any Consultant, the earlier of (i) the date of termination of the agreement between the Consultant and the Company or an Affiliate; or (ii) the date on which a notice regarding such termination of agreement was sent by the Company or an Affiliate, or by the Consultant, to the other party;
“Transfer”	With respect of any Option or Share - the sale, assignment, transfer, pledge, mortgage or other disposition thereof or the grant of any right to a third party thereto;

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“Trustee”	Any trustee appointed by the Company in accordance with Section 102 and approved by the Israeli Tax Authority;
“Non-Approved 102 Option”	An Option which does not qualify as an Approved Option;
“Vesting Date”	The date upon which the Option becomes exercisable, as determined in accordance with this Plan and set forth in the Option Agreement.

4.          Administration of the Plan

4.1.          The Board shall have the power to administer the Plan.

4.2.          Subject to the provisions of the Plan, the Board shall have the authority, at its discretion: (i) to grant Options to Participants; (ii) to determine the terms and provisions of each Option granted (which need not be identical), including, but not limited to, the number of Options to be granted to each Participant, provisions concerning the time and the extent to which the Options may be exercised, the underlying Shares sold and the nature and duration of restrictions as to the Transferability of Options and/or Shares; (iii) to amend, modify or supplement (with the consent of the applicable Participant, if such amendments adversely affect the terms of his Options) the terms of each outstanding Option; (iv) to interpret the Plan; (v) to prescribe, amend, and rescind rules and regulations relating to the Plan, including the form of Option Agreements; (vi) to authorize conversion or substitution under the Plan of any or all Options or Shares and to cancel or suspend Options, as necessary, provided the interests of the Participants are not harmed; (vii) to accelerate or defer (with the consent of the Participant) the right of a Participant to exercise in whole or in part, any previously granted Options; (viii) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Option previously granted by the Board; and (ix) to make all other dete11ninations deemed necessary or advisable for the administration of the Plan.

4.3.          This Plan shall apply to grants of Options made following the adoption of this Plan by the Board.

4.4.          All decisions, determinations, and interpretations of the Board shall be final and binding on all Participants unless otherwise determined by the Board.

5.          Eligibility.  Options may be granted to Participants and to persons who have signed an employment or consultancy agreement with the Company or an Affiliate; An Approved Option may only be granted to Israeli Employees of the Company or an Affiliate as stated in Section 102, who at the time of grant, or a-s a consequence of the grant are not a Controlling Shareholder of the Company.

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6.          Shares Reserved for the Plan

6.1.          Subject to Section 12.1 of the Plan, the maximum aggregate number of Shares that may be subject to awards under the Plan and any other share and option plans which may be adopted by the Company in the future, unless otherwise approved by the Board, and subject to any adjustment made to the share capital of the Company by way of share split, reverse share split, distribution of share dividend or similar recapitalization events, at any time hereafter, is [503; 680]ordinary shares of the Company, nominal value NIS 0.01 each.  The Shares may be authorized but unissued ordinary shares, or reacquired ordinary shares of the Company.  If an Option should expire or become un-exercisable for any reason without having been exercised in full Shares that were subject thereto shall, unless the Plan shall have been terminated, become available for future grant under the Plan.  In addition, any Shares which are retained by the Company upon exercise of an Option in order to satisfy the Exercise Price for such Option or any withholding taxes due with respect to such Exercise shall be treated as not issued and shall continue to be available under the Plan.  Shares issued under the Plan and later repurchased by the Company pursuant to any repurchase right which the Company may have, shall be available for future grant under the Plan.

6.2.          The Company during the term of this Plan will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

6.3.          The Shares constitute part of the ordinary shares of the Company, and they shall have equal rights for all intents and purposes as the rights attached to the ordinary shares of the Company, subject to the provisions of this Plan and an Option Agreement.  Any change of the Company’s Articles of Association, which may change the rights attached to the Company’s ordinary shares, shall also apply to the Shares, and the provisions hereof shall apply with the necessary modifications arising from any such change.

6.4.          The grant of Options under this Plan shall not restrict the Company in any way regarding future creation of additional and/or other classes of shares, including classes of shares, which may in any manner be preferred over the currently existing ordinary shares which are offered to Participants under this Plan.  The grant of Options under this Plan shall not entitle any Participant to receive any compensation (other than adjustments as provided herein) in the event of any change of the Company’s capital.

7.          Options

7.1.          Grant

7.1.1          The Board may grant from time to time to Participants, Options on a personal basis.  The Options granted pursuant to the Plan, shall be evidenced by a written Option Agreement between the Company and the Participant, in such form as the Board shall from time to time approve.  Each Option Agreement shall state, among other matters, the number of Options granted, the Vesting Dates, the Exercise Price, the tax route and such other terms and conditions as the Board at its discretion may prescribe, provided that they are consistent with this Plan.

7.1.2          Options which are Approved Options, as determined in the Option Agreement, and any Shares issued in respect of such Approved Option shall be subject to the Trustee’s trusteeship, as provided in Section 11 below.  Any grant of an Approved Option shall be subject to compliance with the conditions of Section 102 including and shall be granted only after the submission of the Plan for approval by the Israeli Tax Authority.

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7.2.          Vesting.

The Board shall set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Options that will vest and become exercisable.  The Board .may set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals (including, but not limited to, continued employment), or any other basis determined by the Board in its discretion.  The vesting conditions and schedule shall be set in the applicable Option Agreement No Option shall be exercised after the Expiration Date.  The vesting provisions of individual Options may vary.

7.3.          An Option may be subject to such other te1ms and conditions, not inconsistent with the Plan, on the time or times when it may be exercised as the Board may deem appropriate.

7.4.          Exercise of Options

7.4.1          An Option shall be exercised by submission to the Company of a notice of exercise, in a form set by the Company.  The exercise of an Option shall occur on such time on which a notice of exercise has been received by the Company accompanied by payment in full of the Exercise Price payable therefor, as soon as practicable thereafter the Company will issue the Share(s) underlying such exercised Option, provided that the Shares so issued shall not be delivered to the Participant or any third party (other than the Trustee, if applicable) unless and until all applicable Tax was paid to the Trustee’s (if applicable) and the Company’s full satisfaction and subject to compliance with Applicable Law.

7.4.2          Except as otherwise provided in the Plan or in an Option Agreement, an Option may be exercised in full or in part, provided it is not exercised for a fraction of a Share.

7.4.3          Notices of exercise of Options, which are submitted after the Expiration Date, or which relate to Options that have not yet vested, or which do not contain all of the details required by the exercise form, shall not be accepted and shall have no force whatsoever.

7.4.4          The Pa1ticipant shall sign any document required under any Applicable Law or by the Company or the Trustee for the purposes of issuance of the Shares.

7.5.          Consideration.  The Exercise Price shall be paid in cash or check at the time the Option is exercised.  Should the Company’s ordinary shares be listed for trade on a Stock Exchange the Board may consider allowing a cashless exercise, subject to the provisions of Applicable Law.  If, as of the date of exercise of an Option the Company is then permitting cashless exercises, the Participants will be able to engage in a “same day sale” cashless brokered exercise program, involving one or more brokers, through such a program that complies with the Applicable Laws and that ensures prompt delivery to the Company of the amount required to pay the Exercise Price and any Tax.

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7.6.          The Exercise Price shall be denominated in the currency of the primary economic environment of, at the Company’s discretion, either the Company or the Participant (that is the functional currency of the Company or the currency in which the Participant is paid).

8.          Terms and Conditions of the Options.  Options granted under the Plan shall be evidenced by the related Option Agreement and shall be subject to the following terms and conditions and to such other terms and conditions included in the Option Agreement not inconsistent therewith, as the Board shall determine:

8.1.          Non Transferability of Option.  Unless otherwise determined by the Board, an Option shall not be Transferable by the Participant other than by will or by the laws of descent.  Options or rights arising therefrom shall not be subject to mortgage, attachment or other willful encumbrance, and no power of attorney shall be issued in respect thereof, whether such enter into force immediately or at a future date.

8.2.          One Time Benefit.  The Options and underlying Shares are extraordinary, one-time benefits granted to the Participants, and are not and shall not be deemed a salary component for any purpose whatsoever, including in connection with calculating severance compensation under any Applicable Law.

8.3.          Fractions.  An Option may not be converted into a fraction of a Share.  In lieu of issuing fractional Shares, on the vesting of a .fraction of an Option, the Company shall convert any such fraction of an Option, which represents a right to receive 0.5 or more of a Share, to one Share and shall extinguish any such fraction of an Option, which represents a right to receive less than 0.5 of a Share without issuing any Shares.

8.4.          Term.  No full or partial exercise of an Option shall be carried out following the Expiration Date of such Option.

9.          Termination of Employment or Engagement.

9.1.          Unvested Options.  Unless otherwise determined by the Board, in the case of Termination, any Option or portion thereof that was not vested as of the Termination Date shall immediately expire on the Termination Date.

9.2.          Vested Options

  9.2.1    Termination other than for Cause.

9.2.1.1          Unless otherwise determined by the • Board, in the case of Termination other than for Cause, any Option or portion thereof that is vested as of the Termination Date may be exercised but only within such period of time ending on the earlier of (i) ninety (90) days following the Termination Date, or (ii) the Expiration Date, but only to the extent to which such Option was exercisable at the time of the Termination Date.  If, after the Termination Date, the Participant does not exercise his or her Option within the time specified above or in the Option Agreement, the Option shall expire.

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9.2.1.2          In the event of (i) Termination as a result of the Participant’s death or disability or (ii) the Participant dies within the period (if any) specified in the Option Agreement after the Termination Date, then the Option may be exercised (to the extent exercisable as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Participant’s death, but only within the period ending on the earlier of (1) the date twelve (12) months following the date of death or the Termination Date due to disability (as the case may be) (or such longer or shorter period specified in the Option Agreement) or (2) the Expiration Date.  If after death or termination due to disability (as the case may be), the Option is not exercised within the time •• specified herein, the Option shall expire.

9.2.1.3          If the exercise of an Option following the Termination Date would be prohibited at any time solely because the issuance of Shares would violate requirements of any Applicable Law, then the Option shall expire at the end of a_ period of ninety (90) days after the Termination Date, or twelve (12) months after the date of death, as applicable, during which the exercise of the Option would not be in violation of such requirements

9.2.1.4          It is clarified that during such periods following the Termination Date the Participant’s entitlement to Options shall not continue to vest.

9.2.1.5          The Board shall have the sole authority to extend the exercise periods detailed in sections 9.2.1. l - 9.2.1.3 above at its sole discretion.

  9.2.2    Termination for Cause.  If a Participant’s employment or engagement with the Company is terminated for Cause, any Option or portion thereof that has not been exercised as of the Termination Date shall immediately expire on the Termination Date.

9.3.          No Participant shall be entitled to claim against the Company that he or she was prevented from continuing to vest Options as of the Termination Date.  Such Participant shall not be entitled to any compensation in respect of the Options which would have vested in his favor had such Participant’s employment or engagement with the Company not been terminated.

10.          No Right to Employment, Service or Shares.  The grant of an Option or a Share under the Plan shall impose no obligation on the Company or an Affiliate to continue the employment of any Employee or the engagement with any Consultant and shall not lessen or affect the Company’s or an Affiliate’s right to terminate the employment or service relationship of such Participant at any time and/or for any or no reason with or without Cause.  No Participant or other person shall have any claim to be granted any Options, and there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Options.  The te1ms and conditions of Options and the Board’s determinations and interpretations with respect thereto need not be the same with respect to each Pa1ticipant (whether or not such Participants are similarly situated).

Nothing contained in the Plan shall prevent the Company from adopting, adjusting or continuing in effect compensation arrangements, which may, but need not, provide for the grant of Options or Shares.

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11.          Trust

11.1.          Unless provided otherwise by the Board, Approved Options and any Shares issued in connection with such Approved Options, shall be held by the Trustee for the benefit of the Participant, in accordance with the provisions of Section 102 in the “capital gain route”.  Any exercise of an Option or sale of a Share shall be notified to the Trustee.

11.2.          The validity of any order given to the Trustee by a Participant shall be subject to approval of such order by the Company.  The Company does not undertake to approve orders given by any Participant to the Trustee within any period of time.

11.3.          Subject to the provisions of this Plan, the Approved Options and any Shares issued in connection with such Approved Options shall not be released from the control of the Trustee nor shall they be Transferred unless the Company and the Trustee are satisfied that the full amounts of Tax due by the applicable Participant have been paid or will be paid.

11.4.          Subject to the provisions of Section 102, a Participant shall not Transfer or release from the control of the Trustee any Approved Option or any Share issued in connection with such Approved Options, until the lapse of the Holding Period.  Notwithstanding the above, if any such sale, release or Transfer occurs during the Holding Period, the sanctions under Section 102 shall apply to and shall be home by such Participant.

11.5.          As long as the Approved Options and any Shares issued in connection with such Approved Options are held by the Trustee for the benefit of the Participant, all rights of the Participant over the Approved Options and Shares cannot be Transferred other than by will or laws of descent and distribution.

11.6.          Without derogating from the aforementioned, the Board shall have the authority to determine the specific procedures and conditions of the trusteeship with the Trustee in a separate agreement between the Company and the Trustee, all subject to Section 102.

11.7.          Should the Approved Options or any Shares issued in connection with such Approved Options be transferred by power of a last will or under laws of decent, the provisions of Section 102 shall apply to the heirs or transferees of the deceased Participant.

11.8.          Approved Options that do not comply with the requirements of Section 102 shall be considered Non-Approved 102 Options.

12.          Adjustments to the Shares subject to the Plan

12.1.          Adjustment Due to Change in Capital.  If the ordinary shares of the Company shall at any -time be changed or exchanged by declaration of a share dividend (bonus shares), share split, combination or exchange of shares, recapitalization, or any other like event by or of the Company, and as often as the same shall occur, then the number and class of the Shares underlying the Options subject to the Plan and the Exercise Price of the Options shall be appropriately and equitably adjusted so as to maintain the proportionate equity portion represented by the Option, provided, however, that no adjustment shall be made by reason of the distribution of subscription rights (rights offering) on outstanding ordinary shares or other issuance of shares by the Company.  Upon happening of any of the foregoing, the class and aggregate number of Shares underlying the Options, issuable pursuant to the Plan under section 6 above, shall be appropriately adjusted by the Board, whose determination in that respect shall be final, bindh1g, and conclusive.  Except as expressly provided herein, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares underlying an Option.  Any adjustment according to this section shall be subject to the receipt of a tax ruling or approval from the tax authorities, as necessary.

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12.2.          Structural Change.  Without derogating from the Board’s general power under the Plan, in the event of any Structural Change, the Board shall be entitled (but not obliged), at its sole discretion, to determine any of the following: (i) provide for an assumption or exchange of Options and/or Shares for options and/or shares and/or other securities or rights of the Successor Company; and/or (ii) provide for an exchange of Options or Shares for a monetary compensation; and/or (iii) determine that all unvested Options and un-exercised vested Options shall expire on the date of such Structural Change.  In the case of assumption and/or substitution of Options, appropriate adjustments shall be made so as to reflect such action and all other terms and conditions of the Option Agreements shall remain unchanged, including but not limited to the vesting schedule, all subject to the determination of the Board, which determination shall be at its sole discretion and final.  The grant of any substitutes for the Options and/or Shares to Participants further to a Structural Change, as provided in sub-clauses (i) and (ii), shall be considered as full compliance with the terms of this Plan.  The value of the exchanged Options and/or Shares pursuant to this section 12.2 shall be determined in good faith solely by the Board, based on the Fair Market Value, and its decision shall be final and binding on all the Participants.

Unless determined otherwise by the Board of Directors, any Options not assumed or exchanged for options and/or shares and/or other securities or rights of the Successor Company shall expire immediately prior to the consummation of the Structural Change.

For the purposes of this section 12.2, Options shall be considered assumed or substituted if, following the Structural Change, the Options confer the right to purchase or receive, for each underlying Share immediately prior to the Structural Change, the consideration (whether shares, options, cash, or other securities or prope1ty) received in the Structural Change by holders of ordinary shares held on the effective date of the Structural Change (and if such holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding ordinary shares); provided, however, that if such consideration received in the Structural Change is not solely ordinary shares (or their equivalent) of the Successor Company or its parent or subsidiary, the Board may, with the consent of the Successor Company, provide for the consideration received in the Structural Change, for each underlying Share immediately prior to the Structural Change, to be solely •ordinary shares (or their equivalent) of the Successor Company or its parent or subsidiary equal in value to the per Share consideration received by holders of a majority of the outstanding ordinary shares in the Structural Change; and provided further that the Board may determine, at its discretion, that in lieu of such assumption or substitution of Options for options of the Successor Company or its parent or subsidiary, such Options will be substituted for any other type of asset or property including cash which is fair under the circumstances.

Without derogating from the above, in the event of a Structural Change the Board shall be entitled, at its sole discretion, to require the Participants to exercise all vested Options within a set time period and sell all of their Shares on the same terms and conditions as applicable to the other shareholders selling their Company’s ordinary shares as part of the Structural Change.  Each Participant acknowledges and agrees that the Board shall be entitled to authorize any one of its members to sign share transfer deeds in customary form in respect of the Shares held by such Participant and that such share transfer deed shall bind the Participant

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12.3.          Liquidation.  In the event of the proposed dissolution or liquidation of the Company, all Options will expire immediately prior to the consummation of such proposed action, unless otherwise provided by the Board.

13.          Taxes and Withholding Tax

13.1.          Approved Optionsand Non-Approved 102 Options shall be taxed in accordance with Section 102.  For the, avoidance of doubt it is clarified that any Option granted to a Consultant or a Controlling Shareholder or any Option granted to a Participant who is not an Israeli tax resident, shall not be subject to the provisions of Section 102 and shall be taxed in accordance with Applicable Law.

13.2.          Any Tax imposed in respect of the Options and/or Shares, including, but not limited to, in respect of the grant of Options, and/or the exercise of Options into Shares, and/or the Transfer, waiver, or expiration of Options and/or Shares, and/or the sale of Shares, shall be borne solely by the Participants, and in the event of death by their heirs or transferees.  The Company, the Affiliates, the Trustee (if applicable) or anyone on their behalf shall not be required to bear the aforementioned Taxes, directly or indirectly, nor shall they be required to gross up such Tax in the Participants’ salaries or remuneration.  The applicable Tax shall be deducted from the proceeds of sale of Shares or shall be paid to the Company, an Affiliate or the Trustee (if applicable) by the Participants, including, for the avoidance of doubt, in the event of a cashless exercise.  Without derogating from the aforementioned, the Company, an Affiliate and the Trustee (if applicable) shall be entitled to withhold Taxes according to the requirements of any Applicable Laws, rules, and regulations, including withholding taxes at source.

13.3.          The Company’s or Trustee’s (if applicable) obligation to deliver Shares upon exercise of an Option or to sell or transfer Shares is subject to payment (or provision for payment satisfactory to the Board and the Trustee (if applicable)) by the Participant of all Taxes due by him under any Applicable Law.

13.4.          The Participants shall indemnify the Company and/or the applicable Affiliate and/or the Trustee (if applicable), immediately upon request, for any Tax (including interest and/or fines of any type and/or linkage differentials in respect of Tax and/or withheld Tax) for which the Participant is liable under any Applicable Law or under the Plan, and which was paid by the Company, the Affiliate or the Trustee (if applicable), or which the Company, the Affiliate or the Trustee (if applicable) are required to pay.  The Company, the Affiliate and the Trustee (if applicable) may exercise such indemnification by deducting the amount subject to indemnification from the Participants’ salaries or remunerations.

13.5.          In respect to Non-Approved 102 Options, if there occurs a Termination of the Participant’s service to or employment with the Company, the Participant shall extend to the Company or the applicable Affiliate a security or guarantee for the payment of Tax due in respect of such Option as required under Section 102.

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14.          Registration of the Shares on a Stock Exchange

14.1.          Should reorganization or certain other arrangements regarding the Company’s share capital be necessary prior to the registration of the Company’s ordinary shares on a Stock Exchange, such arrangements or reorganization may be also carried out in respect of the Participants and their Options and/or Shares.•

14.2.          The Participant acknowledges that in the event that the Company’s ordinary shares shall be registered for trading in any Stock Exchange, or in the event of a private offering of shares, the Participant’s rights to sell the Shares may be subject to certain limitations (including a lock-up period), as will be requested by the Company or its underwriters, and the Participant unconditionally agrees and accepts any such limitations.

14.3.          The Company does not undertake to cause the ordinary shares or the Shares to be listed on a Stock Exchange, or that the registration of the ordinary shares for trade, if at all, shall take place within a certain period of time.

15.          The Rights Attached to the Shares

15.1.          Equal Rights.  The Shares constitute part of the ordinary shares of the Company, and they shall have equal rights for all intents and purposes as the rights attached to the ordinary shares of the Company, subject to the provisions of this Plan and any Option Agreement.  The Shares, being part of the ordinary shares of the Company, shall not be protected against dilution in any manner whatsoever, unless otherwise determined by the Board.  It is hereby clarified that the Shares shall not constitute a separate class of shares, but shall be an integral part of the Company’s ordinary shares.

Any change of the Company’s Articles of Association, which may change the rights attached to the Company’s ordinary shares, shall also apply to the Shares, and the provisions hereof shall apply with the necessary modifications arising from any such change.

The grant of Options and Shares under this Plan shall not restrict the Company in any way regarding future creation of additional and/or other classes of shares, including classes of shares, which may in any manner be preferred over the currently existing ordinary shares which are offered to Participants under this Plan.  Subject to section 12.1 above, the grant of Options and Shares under this Plan shall not entitle any Pa1ticipant to receive any compensation in the event of any change of the Company’s capital.

15.2.          Dividend Rights.  No Participant shall have any rights to receive dividends in respect of Shares, until such Shares are issued to the Participant or the Trustee.  Following the issuance of such Shares by the Company, such Shares will entitle the Participant to receive any dividend, to which other holders of ordinary shares in the Company are entitled.

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15.3.          Right of First Refusal

   15.3.1          Notwithstanding anything to the contrary in the incorporation documents of the Company, none of the Participants shall have a right of first refusal in relation with any sale of shares in the Company by virtue of the Shares held by such Participant or for its benefit.

   15.3.2          Unless otherwise determined by the Board, until consummation of an initial public offering of the Company’s securities under the securities laws of any jurisdiction (“®”), a Participant shall not have the right to sell Shares issued upon the exercise of an Option within six (6) months and one day of the date of exercise of such Option or issuance of such Shares.

   15.3.3          Sale of Shares by the Participant shall be subject to a right of first refusal as set forth in the incorporation documents of the Company or any shareholders agreements, investors’ rights agreements or similar agreement(s) by which some or all holders of ordinary shares of the Company are bound.  In the event that the incorporation documents or such agreements of the Company do not contain any provision regarding rights of first refusal, then, unless otherwise determined by the Board, until consummation of an IPO, the sale of Share issuable upon the exercise of an Option shall be subject to a right of first refusal on the part of the-Repurchaser(s).

“Repurchaser(s)” means (i) the Company, if permitted by applicable law, (ii) if the Company is not permitted by applicable law, then any affiliate of the Company designated by the Board; or (iii) if no decision is reached by the Board, then the Company’s then existing shareholders who hold more than 2% of the then issued and outstanding share capital of the Company (save, for avoidance of doubt, for other Participants who already exercised their Options), pro rata in accordance with their respective shareholding.

The Participant shall give a notice of sale (hereinafter the “Notice”) to the Company in order to offer the Shares to the Repurchaser(s).

   15.3.4          The Notice shall specify the name of each proposed purchaser or other transferee (hereinafter the “Proposed Transferee”), the number of Shares offered for sale, the price per Share and the payment terms.  The Repurchaser(s) will be entitled for thirty (30) days from the day of receipt of the Notice (hereinafter the “Notice Period”), to purchase all or part of the offered Shares on a - pro rata basis based upon their respective holdings in the Company.

   15.3.5          If by the end of the Notice Period not all of the offered Shares have been purchased by the Repurchaser(s), the Participant shall be entitled to sell all Shares at any time during the ninety (90) days following the end of the Notice Period on terms not more favorable than those set out in the Notice, provided that the Proposed Transferee agrees in writing that the provisions of this Section shall continue to apply to the Shares in the hands of such Proposed Transferee.  Any sale of Shares issued under the Plan by the Participant that is not made in accordance with the Plan or the Option Agreement shall be null and void.

   15.3.6          The Board shall be entitled not to approve and/or recognize a transfer of Shares if such a transfer has not been performed in accordance with the provisions of this section 15.3 or in the event that it has not been preformed in accordance with the provisions of Section 102 and/or section 11 above.

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   15.3.7          In the event that the Participant’s Shares shall be over-subscribed, each Repurchaser shall be entitled to purchase his pro-rate share of the Shares (calculated by dividing each acquiring Repurchaser’s rates of holdings or beneficially ownership in the Company, by the aggregate rates of holdings or beneficially ownership in the Company of all the Repurchaser who wish to acquire the Shares).

   15.3.8          Without derogating from the aforementioned, any sale of Shares in accordance with this section 15.3 shall be subject to the prior approval of the Board.

15.4.          Bring Along.  For the avoidance of doubt it is clarified that as part of the ordinary shares .of the Company, Shares issued upon exercise of Options or in connection thereto shall be subject to any bring-along provision included in the incorporation documents of the Company or any shareholders agreement or similar agreement(s) by which some or all holders of ordinary shares of the Company are bound.

15.5.          Voting Rights.  No Participant shall have any rights to vote in the Company’s meetings in respect of underlying Shares, until certificates in respect of such Shares will be issued to the Participant, or the Trustee.  Following the issuance of such Shares certificates by the Company, the Participant shall have the same voting rights as other holders of ordinary shares in the Company do.  Notwithstanding the aforesaid, and as long as the Company’s ordinary shares are not traded on a Stock Exchange, the Participants shall be obliged to enter into voting agreements with the Company, and/or with certain shareholders of the Company, if so dete11nined by the Board, and as included in the Option Agreement.

16.          Changes to the Plan.  The Board shall be entitled, from time to time, to update and/or change the terms of this Plan, in whole or in part, at its sole discretion, provided that in the Board’s opinion such a change shall not materially derogate from the rights attached to the Options and/or Shares already granted under this Plan, unless mutually agreed otherwise between the Participant and the Company.  The Board shall be entitled to terminate this Plan at any time, provided that such termination shall not materially affect the rights of Participants, to whom Options have already been granted.

17.          Effective Date and Duration of the Plan

17.1.          The Plan shall be effective as of the day it was adopted by the Board and shall terminate at the end of ten (10) years from such day of adoption.

17.2.          The Company shall obtain the approval of the Company’s shareholders for the adoption of this Plan or for any amendment to this Pl.in, if shareholders’ approval is necessary or desirable to comply with any Applicable Law, including without limitation the securities laws of jurisdictions applicable to Options granted to Participants under this Plan, or if shareholders’ approval is required by any authority or by any governmental agency or by any national securities exchange, including without limitation the US Securities and Exchange Commission.

17.3.          Termination of the Plan shall not affect the Board’s ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination.

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18.          Successors and Assigns.  The Plan and any Option granted thereafter shall be binding on all successors and assigns of the Company and a Participant, including, without limitation, the estate of such Participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant’s creditors.

19.          Miscellaneous

19.1.          Notices.  Notices and requests regarding this Plan shall be sent in writing by registered mail or by courier to the addresses of the Company and the Participant as follows: if to the Company: at its principal offices; if to the Participant - to the Participant’s address, as registered in the Company’s registries.  Such notices shall be deemed received at the addressee as follows: if sent by registered mail - within three (3) business days following their deposit for mailing at a post office located in the country of addressee, or seven (7) business days following their deposit for mailing at a post office located outside the country of addressee, and if hand-delivered - on the day of delivery (or refusal to receive).

19.2.          This Plan (together with the applicable Option Agreement(s) entered into with a11y Pa1ticipant) constitutes the .entire agreements and understandings between the Company and such Participant in connection with the grant of Options to Participant.  Any representation and/or promise and/or undertaking made and/or given by the Company or by whosoever on its behalf, which has not been explicitly expressed herein, shall have no force and effect.

19.3.          Choice of Law.  Unless otherwise specified in a specific Option Agreement, this Plan shall be governed by and construed in accordance with the laws of Israel, without giving effect to principles of conflicts of law.  The competent courts of Tel Aviv-Jaffa shall have exclusive jurisdiction to hear all disputes arising in connection with this Plan.

* * * * *

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