Tel Aviv Stock Exchange Ltd. — Capital/Financing Update 2023

Feb 28, 2023

THE TEL-AVIV STOCK EXCHANGE LTD.

(hereafter: "the Company")

Date: February 28, 2023

Immediate Report on a Non-Material and Non-Extraordinary Private Placement

In accordance with the Securities Law, 1968 (hereafter: "the Securities Law") and in accordance with the Securities Regulations (Private Placement of Securities in a Listed Company), 2000 (hereafter: "the Private Placement Regulations", the Company hereby announces that, on February 26, 2023 the Board of Directors of the Company (after obtaining the approval of the Company's Audit Committee that convened in its capacity as a Compensation Committee on the same day), an equity compensation plan, under which Warrants that are exercisable into shares of the Company may be allotted to officers of the Company (hereafter, also: "the Plan").

The Company's Board of Directors also approved the grant of Warrants that constitutes a nonmaterial and non-extraordinary private placement. Presented below is information concerning the Granted Warrants and the Plan, in accordance with Regulation 21 of the Private Placement Regulations:

1. General

• 1.1. In accordance with the 2023-2025 Compensation Policy, on February 26, 2023 the Board of Directors, after obtaining the approval of the Audit Committee in its capacity as the Compensation Committee (hereafter "the Compensation Committee"), approved this Plan for the grant of Warrants to officers of the Company, pursuant to its terms, as detailed in this document below (hereafter: "the Warrant Plan").
• 1.2. The plan is for the allocation of up to 4,100,000 Warrants, in total, which are exercisable, each, into one ordinary share with no par value of the Company (hereafter: "Ordinary Share"). To the date of this Plan, the maximum theoretical number of shares exercisable by virtue of the Warrants that would be granted pursuant to this Plan, is 4,100,000 Ordinary Shares (hereafter, collectively: "the Pool").

It should be noted that the allocation of the full number of Ordinary Shares that would derive from the exercise of the Warrants is purely theoretical, since in practice the offerees shall not be allotted the full number of exercise shares, but only the number of shares that reflects the amount of the monetary benefit embodied in the Warrants, as detailed below.

• 1.3. The Company will maintain in its authorized share capital a quantity of Ordinary Shares that is sufficient to secure the execution of the right to exercise the Warrants that the Company offers under the Plan and, where necessary, will have its authorized share capital increased.
• 1.4. Among the individuals that are eligible to participate in the equity compensation plan as offerees are existing and future officers (including the CEO of the Company and directors).
• 1.5. The purpose of the equity compensation plan is to further the interests and goals of the Company, by allowing the officers of the Company to partake in its success and its business results as an additional, long-term incentive in performing their duties.
• 1.6. The grant of the Warrants to the offerees is in compliance with the Company Compensation Policy, as approved by the general meeting of the Company's shareholders on January 12, 2023 (hereafter: "the 2023 Compensation Policy"), and will serve as an incentive for them to contribute and to serve in the Company over a prolonged period, thereby also giving weight to long-term considerations in the management of the Company and in its activity as well as in the strategic thinking that is required for its future growth and the realization of the Company's strategic plan.
• 1.7. The Board of Directors has also approved, after obtaining the approval of the Compensation Committee, the grant, out of the Pool, of 2,980,000 Warrants that are exercisable into 2,980,000 Ordinary Shares of the Company (subject to adjustments, as described in section 2.5 below) to officers reporting to the CEO (hereafter: "the Granted Warrants") The Granted Warrants will be allocated to a Trustee (as defined below).

In this report, above and below: "the Warrants" or "Warrants" - warrants that are granted under the Plan, each exercisable into one Ordinary Share of the Company, subject to the adjustments described in section 2.5 below.

1.8. The Offerees

9 offerees who serve as Company officers reporting to the CEO, with whom an employeremployee relationship exists (hereafter, jointly and severally: "the Offerees" and "the Offeree").

To remove any doubt, it is hereby clarified that the Offerees are not an interested party within the meaning of the term in Section 270(5) of the Companies Law, and that none of the aforesaid Offerees will become an interested party or a stakeholder as a result of the grant of the Warrants and/or their exercise.

• 1. Terms of the Securities the Offering of which is Proposed, their Quantity and their Percentage of the Voting Rights and the Issued and Paid-Up Share Capital of the Company, After the Allotment and On a Fully Diluted Basis
• 2.1. The Number of Granted Warrants and the Percentage of the Exercise Shares Deriving from the Granted Warrants in the Issued and Paid-Up Share Capital
  • 2.1.1 According to the resolution of the Company's Board of Directors, as above, the Trustee appointed in accordance with the provisions of Section 102 of the Income Tax Ordinance [New Version], and the regulations, the rules, the circulars and the directives issued by virtue thereof (hereafter: "the Trustee") will be allotted, on behalf of the Offerees, a total of 2,980,000 Warrants exercisable into 2,980,000 Ordinary Shares (subject to the adjustments in section 2.5 below). The Warrants will be allotted to the Offerees for no consideration.

The Trustee for the purposes of the Plan is I.B.I. Trust I.L. Ltd.

• 2.1.2 The Warrants will not be listed on The Tel Aviv Stock Exchange Ltd. (hereafter: "TASE"). The shares of the Company that would be allotted by the Company to the Offeree upon the exercise of the Warrants (hereafter: "the Exercise Shares") are Ordinary Shares of the Company. The Exercise Shares shall be, commencing on their exercise date, equal in rights for all intents and purposes to the existing Ordinary Shares in the Company's share capital.
• 2.1.3 To the date of the report, the authorized share capital of the Company is 150,000,000 Ordinary Shares. The issued and paid-up share capital of the Company as of the grant date is 100,350,211 Ordinary Shares¹ . After the allotment of the Warrants to the Offerees there will be no change in the issued and paid-up share capital of the Company.
• 2.1.4 Under the theoretical assumption of the full exercise and conversion of all of the Granted Warrants, after the allotment the issued and paid-up share capital of the Company will total 103,330,211 Ordinary Shares² , and the Company shares that will derive from the exercise and/or conversion of all of the Granted Warrants will constitute approximately 2.88% of the issued and paid-up share capital of the Company, after the allotment.
• 2.1.5 Under the theoretical assumption of the full exercise and conversion of all of the Warrants in the Pool (including the Granted Warrants), after the allotment the issued and paid-up share capital of the Company will total 108,700,211 Ordinary Shares³ , and the Company shares that will derive from the exercise and/or conversion of all of the Warrants in the Pool will constitute approximately 7.68% of the issued and paid-up share capital of the Company, after the allotment.
• 2.1.6 This assumption concerning the full exercise of the Warrants, is solely theoretical, since in practice an Offeree that exercises the Warrants will not be allocated the full number of Exercise Shares deriving therefrom, but only the number of Exercise Shares that reflects the amount of the monetary benefit embodied in the Warrants, as calculated on the exercise date of those Warrants, as detailed in section 2.3.2 below.
• 2.1.7 The Exercise Shares will be allotted out of the Company's authorized share capital and will be registered in the name of the Nominee Company of the Tel-Aviv Stock Exchange Ltd. Alternatively, the Exercise Shares may be transferred out of the Company's dormant shares (which are registered in the name of the Nominee Company of the Tel-Aviv Stock Exchange Ltd.) and their listing on TASE will be reinstated upon such transfer.

¹ At end-of-day of February 23, 2023; excluding dormant shares.

²Excluding dormant shares.

³Excluding dormant shares.

2.2. Allotment of the Warrants and their Exercise

2.2.1 Each Offeree shall be entitled to exercise the Warrants that had been allotted to the Trustee on his behalf, in whole or in part, in accordance with the terms of the Plan, as of the date that shall be determined on the date of their grant to the Offeree (above and below: "the Vesting Date") and over a period, as shall be determined on the date of their grant to the Offeree (above and below: "the Exercise Period"), whether in a single batch of Warrants or in a number of batches (above and below: "Batch/es"), all as shall be determined on the date of their grant to the Offeree, and prescribed in the allotment agreement.

The Vesting Dates of the Granted Warrants are as follows:

• 2.2.1.1 1/3 of the Warrants (the first Batch) the Vesting Date of the first Batch is at the end of 12 months of the date of allotment;
• 2.2.1.2 1/3 of the Warrants (the second Batch) the Vesting Date of the second Batch is at the end of 24 months of the date of allotment;
• 2.2.1.3 1/3 of the Warrants (the third Batch) the Vesting Date of the third Batch is at the end of 36 months of the date of allotment.

In calculating the precise numbers of the Warrants in each of the first two Batches, the number of Warrants will be rounded down, and in the third and final Batch - the number of Warrants will be rounded up to the total number of Warrants granted to each Offeree.

All of the Granted Warrants shall be exercisable commencing on the Vesting Date of the relevant Batch until the end of 48 months of the allotment date.

• 2.2.2 The Offeree shall be entitled, subject to the terms of the Plan, to exercise the Granted Warrants commencing on the Vesting Date of each Batch of Warrants. The Warrants shall be exercisable commencing on the aforesaid Vesting Date until the end of the Exercise Period of that Batch of Warrants.
• 2.2.3 At the end of the Exercise Period, all of the Warrants granted, but not exercised, pursuant to the Plan, that are included in the relevant Batch, shall expire, and those Warrants will return to the Pool and may be reallotted to any Offeree.
• 2.2.4 All of the Warrants shall be allotted on behalf of the relevant Offeree to the Trustee, shortly after the receipt of all of the approvals that are required in accordance with Section 102 of the Income Tax Ordinance, following the signing of the allotment agreement and all requisite documents by the Offerees. The allocation date of the Warrants for each of the Offerees shall be the date of delivery to the Trustee of the deed of allotment in respect of the Warrants allotted to the Offeree (hereafter: "the Allotment Date").
• 2.2.5 The Exercise Prices of the Warrants

As described in section 3 below.

2.3. The Exercise Process of the Warrants

• 2.3.1 The exercise of the Warrants pursuant to the Plan will not take place on the date of record for the distribution of bonus shares, an offer by way of rights, a dividend distribution, consolidation of capital, capital split or the reduction of capital (each of the above shall be hereafter referred to as "Company Event"). In addition, if the ex-date of a Company Event falls before the date of record of the Company Event, no exercise of Warrants pursuant to the Plan shall take place on such ex date.
• 2.3.2 the exercise of Warrants pursuant to the Warrant Plan, on behalf of the Offeree, will be executed through the Trustee.
• 2.3.3 If during the Exercise Period of Warrants, the Offeree wishes to exercise Warrants that he is entitled to exercise pursuant to the terms of the Plan and the grant resolution, the Offeree shall deliver to the Trustee and to the Company an exercise notice, signed by him (in this section 2.3 below: "the Exercise Notice"). In the Exercise Notice the Offeree will specify, inter alia, the number of Warrants that he wishes to exercise. The exercise date will be the date on which the Offeree delivers the Exercise Notice, as above (hereafter: "the Exercise Date").
• 2.3.4 Where an Exercise Notice has been delivered by an Offeree, the following shall apply:
  • 2.3.4.1 A calculation will be performed of the difference between:

The average closing price on TASE of an Ordinary Share in the period that preceded the Exercise Date, which is of the same duration as the period used to determine the exercise price (hereafter: "the Average Closing Price of the Share"), multiplied by the number of shares that would derive from the Warrants in relation to which the Exercise Notice was given (adjusted as stated in section 2.5 below, as appropriate);

And:

The exercise price, as per section 3.2 below (adjusted as stated in section 2.5 below, as appropriate) of the Warrants in relation to which the Exercise Notice was given, multiplied by the number of the aforesaid Warrants.

This difference will serve as the amount of monetary benefit arising to the Offeree on the Exercise Date (above and below: "the Amount of Monetary Benefit").

• 2.3.4.2 After determining the Amount of Monetary Benefit, as above, the Company will allot to the Trustee on behalf of the Offeree a number of Ordinary Shares, the aggregate market cap of which, based on the closing price of the Company's Ordinary Shares on TASE on the trading day preceding the Exercise Date, equals the Amount of Monetary Benefit.
• 2.3.4.3 Any fractional share resulting from the aforesaid calculation will be rounded down to the nearest whole share.
• 2.3.5 The Trustee will act in relation to the Warrants and in relation to the Exercise Shares in accordance with the provisions of Section 102 of the Income Tax Ordinance, including the rules, the circulars and the directives issued by virtue thereof.
• 2.3.6 It is hereby clarified that any Warrant granted that is not exercised by the end of the stipulated Exercise Period, shall expire and will no longer confer any right on the Offeree. It is further clarified that Warrants that an Offeree shall not be entitled to exercise pursuant to the terms of the Plan, shall expire and will no longer confer any right on the Offeree. To remove any doubt, it is hereby clarified that Warrants that expire as aforesaid will return to the Pool and may be reallotted.
• 2.3.7 The exercise expenses and any commission involved in the exercise, shall be borne by the Offeree.
• 2.4. Terms of the Plan in the Event of Termination of the Employment Relationship

For the purposes of this Plan: "Termination of the Employment Relationship", signifies termination of the employer-employee relationship pursuant to the law, and in the case of an officer who is not an employee, but serves under a service agreement with him - termination of the engagement in such agreement (and in the case of a director - termination of office).

• 2.4.1 Termination of the Employment Relationship for a Non-Extraordinary Cause
  • 2.4.1.1 Subject to the provisions of Section 102 of the Income Tax Ordinance and to the provisions of any law, the officer shall be entitled to exercise only the Warrants (other than those exercised or expired), the Vesting Date of which falls before the date of Termination of the Employment Relationship, with the addition of the proportionate share of the next (only one) annual Batch, the Vesting Date of which takes place after the date of Termination of the Employment Relationship (if any);

Such proportionate share will be determined as the ratio between the actual employment period of the officer and 12 months.

For this purpose: "the Actual Employment Period of the Officer" - the period that elapsed from the last Vesting Date that took place prior to the date of Termination of the Employment Relationship between the officer and the Company, or from the allotment date (if the Termination of the Employment Relationship takes place prior to the Vesting Date of the first Batch), as appropriate, until the date of Termination of the Employment Relationship.

The right to exercise the Warrants, as above, shall be until the end of the period prescribed for their exercise.

2.4.1.2 If the Termination of the Employment Relationship between the officer and the Company is the result of death (god forbid) or of the loss of working capacity, then all of the Warrants granted to the officer (other than those exercised or expired) shall be exercisable by the Offeree or by the heirs of the Offeree or his estate administrators, as appropriate, under the terms prescribed in this regard in the Warrant Plan and subject to its terms, this, to remove any doubt, notwithstanding the stated in section 2.4.1.1 above.

2.4.1.3 It is hereby clarified that Warrants that are exercisable, as stated in this section 2.4.1 above, that have not been exercised by the end of the period prescribed for their exercise, as appropriate, shall expire and will not confer any right. It is further clarified that Warrants that an Offeree shall not be entitled to exercise pursuant to the terms of the Warrant Plan, shall expire and will no longer confer any right.

2.4.2 Termination of the Employment Relationship for an Extraordinary Cause

Notwithstanding the aforesaid, if the Termination of the Employment Relationship between an officer and the Company is the result of an extraordinary cause, then all of the Warrants that had been allotted in the name of the Trustee on behalf of the officer, other than those exercised or expired, shall expire on the date of Termination of the Employment Relationship between the officer and the Company or on the date of delivery of the letter concerning the Termination of the Employment Relationship to the officer, whichever is earlier; this, even if the Vesting Date of the aforesaid Warrants has elapsed and even if the officer is entitled to exercise them pursuant to the terms stipulated in the Warrant Plan and/or the grant resolution.

2.5. Adjustment Provisions in Protection of the Offerees

• 2.5.1 Should the Company distribute a cash dividend for which the date of record, as defined in the TASE Rules (as defined in Section 46 of the Securities Law), for its distribution (hereafter: "the Date of Record" and "the TASE Rules", respectively) takes place after the day of a resolution to grant Warrants under the Plan, but prior to the exercise or expiration of such Warrants, on the Ex Date, as defined in the TASE Rules (hereafter: "the Ex Date") the exercise price of a Warrant that has not yet been exercised or expired, as aforesaid, shall be reduced by the gross amount of the dividend per share that has been distributed as stated above.
• 2.5.2 Should the Company distribute bonus shares for which the Date of Record takes place after the day of a resolution to grant Warrants under the Plan, but prior to the exercise or expiration of such Warrants, the number of shares to which the Offeree shall be entitled upon the exercise of the such Warrants shall increase by the number of shares to which the Offeree would have been entitled as bonus shares had he exercised the Warrants prior to the Date of Record for the distribution of the bonus shares. The exercise price per Warrant will not change as a result of the increase in the number of Exercise Shares to which the Offeree would be entitled due to the distribution of bonus shares, as stated above.

It is hereby clarified that the number of Exercise Shares to which the Offeree shall be entitled will only be adjusted in the event of a distribution of bonus shares, as described in this section above, but will not be adjusted for any other offerings (including offerings to interested parties); it is further clarified that the Offeree's entitlement to securities of the Company, in the case of the a distribution of bonus shares, as described above, shall only apply commencing on the exercise date of the Warrants and only in relation to the actual Warrants that are exercised by the Offeree.

• 2.5.3 Should the Company offer to its shareholders, by way of rights, rights to purchase any securities, for which the Date of Record takes place after the day of a resolution to grant Warrants under the Plan, but prior to the exercise or expiration of such Warrants, the number of Exercise Shares resulting from the exercise of the Warrants will be adjusted for the benefit component of the rights, as reflected in the ratio of the closing price of the share on TASE on the last trading day prior to the Ex Date and the ex-rights base price of the share.
• 2.5.4 In any event of consolidation or split of the Company's share capital, the Company will make the necessary changes or adjustments to prevent dilution or expansion of the rights of the Offeree, so as to decrease or increase, as appropriate, the number of Exercise Shares deriving from the Granted Warrants, and/or decrease or increase the exercise price of each Warrant, as appropriate.
• 2.5.5 In the event of a restructuring of the Company (hereafter: "Restructuring") or the merger of the Company with or into another company, by way of a share swap, cash acquisition or otherwise (hereafter: "Merger") or the sale of all of the assets of the Company or of the issued share capital of the Company or of substantially all of the assets of the Company, to any third party (hereafter: "Sale"), the Compensation Committee and the Board of Directors may, inter alia, at their sole discretion, pursue one or more of the following courses of action:
  • 2.5.5.1 Accelerate the Vesting Date of Warrants or bring forward the end-date of the Exercise Period, all at the sole discretion of the Compensation Committee and the Board of Directors; or,
  • 2.5.5.2 Determine that a Warrant that has been allotted under the Warrant Plan shall be replaced with or converted into an alternative warrant that would be allotted by the Company or to another warrant that would be allotted by the new company, after the Merger or the Sale, all at the sole discretion of the Compensation Committee and the Board of Directors; or,
  • 2.5.5.3 Determine that a Warrant that has been allotted under the Warrant Plan shall be adopted by the new company, such that it shall be exercisable into a share of the new company, subject to adjustments and changes as shall be determined by the Compensation Committee and the Board of Directors for this purpose, all at the sole discretion of the Compensation Committee and the Board of Directors; or,
• 2.5.5.4 Determine the cancelation or the return to the Company of a Warrant that has been allotted under the Warrant Plan and the payment by the Company to an Offeree that returns the Warrant, as aforesaid, of pecuniary damages in respect of the cancelation or the return of the Warrant, as above, all at the sole discretion of the Compensation Committee and the Board of Directors; or,
• 2.5.5.5 Execute any action, adjustment or change in connection with a Warrant that has been allotted under the Warrant Plan and its terms, to the extent necessary under the circumstances, all at the sole discretion of the Compensation Committee and the Board of Directors.

For the purposes of the provisions of this section, the term "the new company" shall refer to a company with which a merger is performed or a sale transaction is executed or to another company that would succeed the Company after the Restructuring, as the case may be.

• 2.5.6 If, as a result of any of the adjustments that are set out in this section 2.5 above, the Company is required to allot fractional shares, the Company will not allot such fractional shares, and the number of shares to be allotted to the Offeree will be rounded down to the nearest whole share.
• 2.5.7 The calculation of the adjustments required pursuant to this section 2.5 above, as described above, will be executed and approved by an independent accountant that will be selected by the Compensation Committee.
• 2.6. Non-Negotiability or Transferability of the Warrants
  • 2.6.1 The Warrants that will be granted under the Warrant Plan may not be transferred, assigned, pledged, mortgaged or seized, with the exception of transfer to heirs in accordance with the law. In the case of transfer to heirs, as above, the terms of the Warrant Plan and its provisions shall bind the heirs for all intents and purposes.
  • 2.6.2 The transfer of rights to heirs, as described in section 2.6.1 above, shall take effect and bind the Company only once the Company has been furnished with the following approvals, signed and approved by a notary:
    • 2.6.2.1 An application, in writing, for the transfer of the rights, as above, as well as a copy of a legal document that gives rise to or that confirms that individual's right in relation to the estate of the Offeree and gives rise to or confirms the right of the transferee; and
    • 2.6.2.2 A consent, in writing, of the transferee to: (a) pay any payment that is required according to the provisions of the Plan, and (b) comply with all of the provisions of the Plan; and,
    • 2.6.2.3 Any other evidence that is required in the opinion of the administrator of the Plan to substantiate the right to transfer the Warrants or the Exercise Shares or that is required to substantiate the validity of the transfer.
• 2.6.3 To remove any doubt, it is hereby clarified that, subject to the provisions of the Plan, only the Offeree shall possess rights in relation to the Warrants that are allotted in the name of the Trustee, on his behalf, pursuant to the Plan and in accordance with its provisions and terms, and the Plan shall not confer any rights on any other individual.
• 2.6.4 The Trustee will not transfer Warrants to any third party, other than as stipulated in the terms of the Plan, based on instructions issued to him by the administrator of the Plan.
• 2.6.5 To remove any doubt, it is hereby clarified that the securities offered under the Plan shall also be subject to the restrictions imposed by the Securities Law and the Securities Regulations (Details with regard to Sections 15A to 15C of the Law), 2000.

2.7. Rights Attaching to the Exercise Shares

• 2.7.1 The Exercise Shares will be equal in rights to the Ordinary Shares of the Company, for all intents and purposes, commencing on their allotment date, and shall be entitled to any dividend or another benefit, the Date of Record for the receipt of which falls on or subsequent to the date of allotment of the Exercise Shares.
• 2.7.2 It is hereby clarified that the Offeree shall have no rights as a shareholder in the Company in relation to Warrants that are granted to him under the Plan. In addition, unless otherwise determined in the terms of the Warrant Plan, the Offeree shall have no rights as a shareholder in the Company, in relation to the Exercise Shares, this until the registration of the Exercise Shares to his credit in an account maintained with the TASE member (which are included among the shares that are registered in the name of a nominee company).
• 2.7.3 As long as Exercise Shares are held by the Trustee on behalf of an Offeree, the Offeree may vote in respect of the Exercise Shares. An Offeree that wishes to participate in general meetings of the Company or to exercise his right to vote in respect of the Exercise Shares that are held by the Trustee on his behalf, will apply to the Trustee in writing at least four business days prior to the date of the meeting and the Trustee will transfer to the Offeree a proxy letter to participate in the general meeting and to vote in respect of the Exercise Shares that are held by the Trustee on behalf of the Offeree, in compliance with the directives that the Company has determined for all of its shareholders.

For the purposes of this section 2.7.3 above, "business day" signifies any weekday on which most of the banks in Israel are open for business.

3. The Consideration

• 3.1. The Warrants are offered to the Offerees for no consideration.
• 3.2. Bearing in mind the provisions of the 2023-2025 Compensation Policy, the exercise price of the Granted Warrants, as approved on the Grant Date (i.e., the date of the Board of Directors' resolution on the granting of the Granted Warrants from February 26, 2023) is 120% of the Average Closing Price of the Company's share on TASE during the 30 trading days that

preceded the Grant Date and amounts to NIS 24.386. The exercise price will not be linked to the CPI or to any currency.

• 3.3. The exercise price of the additional Warrants that remain in the Pool after the allotment of the Granted Warrants, will be determined on their Grant Date (hereafter: "the Exercise Price"). Bearing in mind the provisions, the Exercise Prices will be specified in the allotment agreement that would be signed with each Offeree (hereafter: "the Allotment Agreement").
• 3.4. It is hereby clarified that on the Date of Exercise the Offerees will not be required to actually pay the Exercise Price of the Warrants that would be allotted to the Trustee on their behalf, and it will only be used to determine the Amount of Monetary Benefit and the number of Exercise Shares that would actually be allotted to the Offerees, as described in section 2.3.2 above.

4. Agreements between the Offeree and a Shareholder in the Company

To the best of the Company's knowledge, and based on an examination performed with the Offerees, there are no written or verbal agreements between the any of the Offerees and shareholders in the Company, or between the Offeree and other parties, concerning the purchase or sale of securities of the Company or concerning the voting rights therein.

5. Restrictions on Transactions in the Offered Securities that Shall Apply to the Offeree

Without prejudice to the lockup directives that apply to the Offeree by virtue of the provisions of Section 102, the Warrants shall be subject to the restrictions prescribed in the Securities Law and the Securities Regulations (Details with regard to Sections 15A to 15C of the Law), 2000, as specified below:

• 5.1. The Offeree may not offer the securities without publishing a prospectus the publication of which has been authorized by the Securities Authority, for the duration of six months from the allotment date (hereafter in this section: "the Period").
• 5.2. In the six consecutive quarters after the end of the Period, the Offeree may offer as part of the trading on TASE, without publishing a prospectus the publication which has been authorized by the Authority, a quantity of securities that shall not exceed on any trading day on TASE, the average daily volume of trading in the securities on TASE during the eight weeks that preceded the date of the offer, and provided that the overall quantity offered in any quarter shall not exceed 1% of the Company's issued and paid-up capital as of the date of the offer. The aforesaid shall also apply to securities purchased in all of the aforesaid periods other than under a prospectus and other than from the Company as part of the trading on TASE, as well as to securities deriving from the exercise or conversion of securities allotted to the Offeree.

In this section, "issued and paid-up share capital" - excluding shares arising from the exercise or conversion of convertible securities that had been allotted up to the date of the offer and have not yet been exercised or converted.

5.3. In addition to the aforesaid, the Offeree is subject to the restrictions prescribed in the Plan, as described above, and to the following additional restrictions:

• 5.4. The Warrants may not be transferred, with the exception of transfer to heirs in accordance with the law, as stated in section 2.6.
• 5.5. The Offerees are subject to the provisions of Section 102 of the Income Tax Ordinance and to any law, regulation or condition of the tax authorities in this regard.

Yours sincerely,

The Tel-Aviv Stock Exchange Ltd. Signed by: Ittai Ben Zeev, CEO