UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

 

For the month of June 2025 (Report No. 4)

 

Commission file number: 001- 38041

 

SCISPARC LTD.

(Translation of registrant’s name into English)

 

20 Raul Wallenberg Street, Tower A,

Tel Aviv 6971916 Israel

(Address of principal executive offices)

 

Indicate by check mark whether the registrantfiles or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☒Form 40-F ☐

 

 

 

 

CONTENTS

 

SciSparc Ltd. (the “Company”)hereby announces that the shareholders of the Company approved all of the proposals brought before the adjourned annual general meetingof shareholders held on June 26, 2025 (the “Meeting”), by the respective requisite majority in accordance with the IsraeliCompanies Law, 5759-1999, and the Company’s amended and restated articles of association, as described in the Proxy Statement whichwas attached as Exhibit 99.1 to the Company’s Report of Foreign Private Issuer on Form 6-K, furnished to the Securities and ExchangeCommission (the “SEC”) on May 21, 2025, and sent to shareholders in connection with the Meeting.

 

A copy of the Company’samended and restated articles of association, approved by shareholders at the Meeting, is attached hereto as Exhibit 99.1.

 

A copy of the Company’scompensation policy, approved by shareholders at the Meeting, is attached hereto as Exhibit 99.2.

 

ThisReport of Foreign Private Issuer on Form 6-Kis incorporated by reference into the Company’s registration statements on Form F-3(File Nos. 333-286099, 333-275305, 333-269839, 333-266047, 333-248670 and 333-255408)and on Form S-8 (File Nos. 333-278437, 333-225773 and 333-286791)filed with the SEC to be a part thereof from the date on which this report is submitted, to the extentnot superseded by documents or reports subsequently filed or furnished.

 

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Exhibits No.    
99.1   Amended and Restated Articles of Association.
     
99.2   Compensation Policy for Executive Officers and Directors.

 

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SIGNATURES

 

Pursuant to the requirementsof the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

 

  SciSparc Ltd.
   
Date: June 26, 2025 By: /s/ Oz Adler
    Name: Oz Adler
Title: Chief Executive Officer

 

 

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Exhibit 99.1

 

THE COMPANIES LAW, 1999
A LIMITED LIABILITY COMPANY

 

AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
SCISPARC LTD.

 

As Adopted on June 26, 2025

 

Preliminary

 

1.Definitions; Interpretation.

 

(a)In these Articles, the following terms (whether or not capitalized)shall bear the meanings set forth opposite them, respectively, unless the subject or context requires otherwise.

 

  “Affiliate”   with respect to any specified person, shall mean, any other person who or which, directly or indirectly, controls, is controlled by, or is under common control with such specified person.
       
  “Articles”   shall mean these Amended and Restated Articles of Association, as amended from time to time.
       
  “Board of Directors”   shall mean the Board of Directors of the Company.
       
  “Chairperson”   shall mean the Chairperson of the Board of Directors, or the Chairperson of the General Meeting, as the context implies;
       
  “Companies Law”   shall mean the Israeli Companies Law, 5759-1999 and the regulations promulgated thereunder. The Companies Law shall include reference to the Companies Ordinance (New Version), 5743-1983, of the State of Israel, to the extent in effect according to the provisions thereof.
       
  “Company”   shall mean SciSparc Ltd.
       
  “Director(s)”   shall mean the member(s) of the Board of Directors holding office at a given time.
       
  “Economic Competition Law”   shall mean the Israeli Economic Competition Law, 5758-1988 and the regulations promulgated thereunder.
       
  “Effective Time”   shall mean the effective time of these Articles.
       
  “External Director(s)”   shall have the meaning provided for such term in the Companies Law.
       
  “General Meeting”   shall mean an Annual General Meeting or Special General Meeting of the Shareholders (each as defined in Article 23 of these Articles), as the case may be.
       
  “NIS”   shall mean New Israeli Shekels.
       
  “Office”   shall mean the registered office of the Company at any given time.
       
  “Office Holder” or “Officer”   shall have the meaning provided for such term in the Companies Law.
       
  “Ordinary Resolution”   means a resolution adopted at the (Annual or Special) General Meeting by a majority of those voting and without counting the abstaining votes.
       
  “Securities Law”   shall mean the Israeli Securities Law, 5728-1968, and the regulations promulgated thereunder.
       
  “Shareholder(s)”   shall mean the shareholder(s) of the Company, at any given time.
       
  “Stock Exchange”   shall mean the Nasdaq Stock Market or on any other stock exchange on which the Company’s ordinary shares are then listed for trading.

 

 

(b)Unless the contextshall otherwise require: words in the singular shall also include the plural, and vice versa; any pronoun shall include the correspondingmasculine, feminine and neuter forms; the words “include”, “includes” and “including” shall be deemedto be followed by the phrase “without limitation”; the words “herein”, “hereof” and “hereunder”and words of similar import refer to these Articles in their entirety and not to any part hereof; all references herein to Articles orclauses shall be deemed references to Articles or clauses of these Articles; any references to any agreement or other instrument or law,statute or regulation are to it as amended, supplemented or restated, from time to time (and, in the case of any law, to any successorprovisions or re-enactment or modification thereof being in force at the time); any reference to “law” shall include anylaw (‘din’) as defined in the Interpretation Law, 5741-1981 and any applicable supranational, national, federal, state,local, or foreign statute or law and shall be deemed also to refer to all rules and regulations promulgated thereunder; any referenceto a “day” or a number of “days” (without any explicit reference otherwise, such as to business days) shallbe interpreted as a reference to a calendar day or number of calendar days; any reference to a business day shall meaneach calendar day other than any calendar day on which commercial banks in New York, New York or Tel-Aviv, Israelare authorized or required by applicable law to close; reference to a month or year means according to the Gregorian calendar; any referenceto a “person” shall mean any individual, partnership, corporation, limited liability company, association, estate, any political,governmental, regulatory or similar agency or body, or other legal entity; and reference to “written” or “in writing”shall include written, printed, photocopied, typed, any electronic communication (including email, facsimile, signed electronically (inAdobe PDF, DocuSign or any other format)) or produced by any visible substitute for writing, or partly one and partly another, and signedshall be construed accordingly.

 

(c)The captions in these Articles are for convenience only andshall not be deemed a part hereof or affect the construction or interpretation of any provision hereof.

 

(d)The specific provisions of these Articles shall supersede theprovisions of the Companies Law to the extent permitted thereunder.

 

LimitedLiability

 

2.The Company is a limited liability company and each Shareholder’sliability for the Company’s debt is therefore limited (in addition to any liabilities under any contract) to the payment of thefull amount (par value (if any) and premium) such Shareholder was required to pay the Company for such Shareholder’s Shares (asdefined below) and which amount has not yet been paid by such Shareholder.

 

Company’sObjectives

 

3.Objectives.

 

The Company’s objectives areto carry on any business, and do any act, which is not prohibited by law.

 

4.Donations.

 

The Company may donate a reasonableamount of money (in cash or in kind, including the Company’s securities) to worthy purposes such as the Board of Directors may determinein its discretion, even if such donations are not made on the basis or within the scope of business considerations of the Company.

 

ShareCapital

 

5.Authorized ShareCapital.

 

(a)The authorized share capital of the Company shall consist of2,000,000,000 Ordinary Shares without par value (the “Shares”).

 

(b)The Shares shall rank pari passu in all respects. TheShares may be redeemable to the extent set forth in Article 18.

 

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6.Increase of AuthorizedShare Capital.

 

(a)The Company may, from time to time, by a Shareholders’resolution, whether or not all of the Shares then authorized have been issued, and whether or not all of the Shares theretofore issuedhave been called up for payment, increase its authorized share capital by increasing the number of Shares it is authorized to issue bysuch amount, and such additional Shares shall confer such rights and preferences, and shall be subject to such restrictions, as suchresolution shall provide.

 

(b)Except to the extent otherwise provided in such resolution,any new Shares included in the authorized share capital increase as aforesaid shall be subject to all of the provisions of these Articlesthat are applicable to Shares that are included in the existing share capital.

 

7.Special or Class Rights;Modification of Rights.

 

(a)The Company may, from time to time, by a Shareholders’resolution, provide for shares with such preferred or deferred rights or other special rights and/or such restrictions, whether in regardto dividends, voting, repayment of share capital or otherwise, as may be stipulated in such resolution.

 

(b)If at any time the share capital of the Company is divided intodifferent classes of shares, the rights attached to any class, unless otherwise provided by these Articles, may be modified or cancelledby the Company by a resolution of the General Meeting of the holders of all shares as one class, without any required separate resolutionof any class of shares.

 

(c)The provisions of these Articles relating to General Meetingsshall apply, mutatis mutandis, to any separate General Meeting of the holders of the shares of a particular class, it being clarifiedthat the requisite quorum at any such separate General Meeting shall be Shareholders present in person or by proxy and holding not lessthan thirty-three and one-third percent (331/3%) of the issued shares of such class, provided, however, that if (i) suchseparate General Meeting of the holders of the particular class was initiated by and convened pursuant to a resolution adopted by theBoard of Directors and (ii) at the time of such meeting the Company is qualified to use the forms of a “foreign private issuer”under US securities laws, then the requisite quorum at any such separate General Meeting shall be Shareholders (not in default in paymentof any sum referred to in Article 13 hereof) present in person or by proxy and holding not less than fifteen percent (15%) of theissued shares of such class.

 

(d)Unless otherwise provided by these Articles, an increase inthe authorized share capital, the creation of a new class of shares, an increase in the authorized share capital of a class of shares,or the issuance of additional shares thereof out of the authorized and unissued share capital, shall not be deemed, for purposes of thisArticle 7, to modify or derogate or cancel the rights attached to previously issued shares of such class or of any other class.

 

8.Consolidation,Division, Cancellation and Reduction of Share Capital.

 

(a)The Company may, from time to time, by or pursuant to an authorizationof a Shareholders’ resolution, and subject to applicable law:

 

(i) consolidate all or any partof its issued or unissued authorized share capital;

 

(ii) divide or sub-divide itsShares (issued or unissued) or any of them and the resolution whereby any Share is divided may determine that, as among the holders ofthe Shares resulting from such subdivision, one or more of the Shares may, in contrast to others, have any such preferred or deferredrights or rights of redemption or other special rights, or be subject to any such restrictions, as the Company may attach to unissuedor new shares;

 

(iii) cancel any authorized Shareswhich, at the date of the adoption of such resolution, have not been issued to any person nor has the Company made any commitment, includinga conditional commitment, to issue such Shares, and reduce the amount of its share capital by the amount of the Shares so canceled; or

 

(iv) reduce its share capitalin any manner.

 

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(b)With respect to any consolidation of issued Shares and withrespect to any other action which may result in fractional Shares, the Board of Directors may settle any difficulty which may arise withregard thereto, as it deems fit, and, in connection with any such consolidation or other action which could result in fractional shares,may, without limiting its aforesaid power:

 

(i) determine, as to the holderof Shares so consolidated, which issued Shares shall be consolidated;

 

(ii) issue, in contemplationof or subsequent to such consolidation or other action, Shares sufficient to preclude or remove fractional share holdings;

 

(iii) redeem such Shares or fractionalshares sufficient to preclude or remove fractional Share holdings;

 

(iv) round up, round down orround to the nearest whole number, any fractional Shares resulting from the consolidation or from any other action which may result infractional Shares; or

 

(v) cause the transfer of fractionalShares by certain Shareholders of the Company to other Shareholders thereof so as to most expediently preclude or remove any fractionalShare holdings, and cause the transferees of such fractional Shares to pay the transferors thereof the fair value thereof, and the Boardof Directors is hereby authorized to act in connection with such transfer, as agent for the transferors and transferees of any such fractionalShares, with full power of substitution, for the purposes of implementing the provisions of this sub-Article 8(b)(v).

 

9.Issuance of ShareCertificates, Replacement of Lost Certificates.

 

(a)To the extent that the Board of Directors determines that allShares shall be certificated or, if the Board of Directors does not so determine, to the extent that any Shareholder requests a sharecertificate or the Company’s transfer agent so requires, share certificates shall be issued under the corporate seal of the Companyor its written, typed or stamped name and shall bear the signature of one Director, the Company’s Chief Executive Officer, or anyperson or persons authorized therefor by the Board of Directors. Signatures may be affixed in any mechanical or electronic form, as theBoard of Directors may prescribe.

 

(b)Subject to the provisions of Article 9(a), each Shareholdershall be entitled to one numbered certificate for all of the Shares of any class registered in his or her name. Each certificate shallspecify the serial numbers of the Shares represented thereby and may also specify the amount paid up thereon. The Company (as determinedby an officer of the Company to be designated by the Chief Executive Officer) shall not refuse a request by a Shareholder to obtain severalcertificates in place of one certificate, unless such request is, in the opinion of such officer, unreasonable. Where a Shareholder hassold or transferred a portion of such Shareholder’s Shares, such Shareholder shall be entitled to receive a certificate in respectof such Shareholder’s remaining Shares, provided that the previous certificate is delivered to the Company before the issuanceof a new certificate.

 

(c)A share certificate registered in the names of two or more personsshall be delivered to the person first named in the Register of Shareholders in respect of such co-ownership.

 

(d)A share certificate which has been defaced, lost or destroyed,may be replaced, and the Company shall issue a new certificate to replace such defaced, lost or destroyed certificate upon payment ofsuch fee, and upon the furnishing of such evidence of ownership and such indemnity, as the Board of Directors in its discretion deemsfit.

 

10.Registered Holder.

 

Except as otherwise provided in theseArticles or the Companies Law, the Company shall be entitled to treat the registered holder of each Share as the absolute owner thereof,and accordingly, shall not, except as ordered by a court of competent jurisdiction, or as required by the Companies Law, be obligatedto recognize any equitable or other claim to, or interest in, such Share on the part of any other person.

 

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11.Issuance and Repurchaseof Shares.

 

(a)The unissued Shares from time to time shall be under the controlof the Board of Directors (and, to the extent permitted by applicable law, any Committee thereof), which shall have the power to issueor otherwise dispose of Shares and of securities convertible or exercisable into or other rights to acquire from the Company to suchpersons, on such terms and conditions (including, inter alia, price, with or without premium, discount or commission, and terms relatingto calls set forth in Article 13(f) hereof), and at such times, as the Board of Directors (or the Committee, as the case maybe) deems fit, and the power to give to any person the option to acquire from the Company any Shares or securities convertible or exercisableinto or other rights to acquire from the Company on such terms and conditions (including, inter alia, price, with or without premium,discount or commission), during such time as the Board of Directors (or the Committee, as the case may be) deems fit.

 

(b)The Company may at any time and from time to time, subject toapplicable law, repurchase or finance the purchase of any Shares or other securities issued by the Company, in such manner and undersuch terms as the Board of Directors shall determine, whether from any one or more Shareholders. Such purchase shall not be deemed aspayment of dividends and as such, no Shareholder will have the right to require the Company to purchase his or her Shares or offer topurchase shares from any other Shareholders.

 

12.Payment in Installment.

 

If pursuant to the terms of issuanceof any Share, all or any portion of the price thereof shall be payable in installments, every such installment shall be paid to the Companyon the due date thereof by the then registered holder(s) of the Share or the person(s) then entitled thereto.

 

13.Calls on Shares.

 

(a)The Board of Directors may, from time to time, as it, in itsdiscretion, deems fit, make calls for payment upon Shareholders in respect of any sum (including premium) which has not been paid upin respect of Shares held by such Shareholders and which is not, pursuant to the terms of issuance of such Shares or otherwise, payableat a fixed time, and each Shareholder shall pay the amount of every call so made upon him or her (and of each installment thereof ifthe same is payable in installments), to the person(s) and at the time(s) and place(s) designated by the Board of Directors,as any such times may be thereafter extended and/or such person(s) or place(s) changed. Unless otherwise stipulated in theresolution of the Board of Directors (and in the notice hereafter referred to), each payment in response to a call shall be deemed toconstitute a pro rata payment on account of all the Shares in respect of which such call was made.

 

(b)Notice of any call for payment by a Shareholder shall be givenin writing to such Shareholder not less than fourteen (14) days prior to the time of payment fixed in such notice, and shall specifythe time and place of payment, and the person to whom such payment is to be made. Prior to the time for any such payment fixed in a noticeof a call given to a Shareholder, the Board of Directors may in its absolute discretion, by notice in writing to such Shareholder, revokesuch call in whole or in part, extend the time fixed for payment thereof, or designate a different place of payment or person to whompayment is to be made. In the event of a call payable in installments, only one notice thereof need be given.

 

(c)If pursuant to the terms of issuance of a share or otherwise,an amount is made payable at a fixed time, such amount shall be payable at such time as if it were payable by virtue of a call made bythe Board of Directors and for which notice was given in accordance with paragraphs (a) and (b) of this Article 13, andthe provision of these Articles with regard to calls (and the non-payment thereof) shall be applicable to such amount or such installment(and the non-payment thereof).

 

(d)Joint holders of a Share shall be jointly and severally liableto pay all calls for payment in respect of such Share and all interest payable thereon.

 

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(e)Any amount called for payment which is not paid when dueshall bear interest from the date fixed for payment until actual payment thereof, at such rate (not exceeding the then prevailing debitoryrate charged by leading commercial banks in Israel), and payable at such time(s) as the Board of Directors may prescribe.

 

(f)Upon the issuance of Shares, the Board of Directors may providefor differences among the holders of such Shares as to the amounts and times for payment of calls for payment in respect of such Shares.

 

14.Prepayment.

 

With the approval of the Board ofDirectors, any Shareholder may pay to the Company any amount not yet payable in respect of his or her Shares, and the Board of Directorsmay approve the payment by the Company of interest on any such amount until the same would be payable if it had not been paid in advance,at such rate and time(s) as may be approved by the Board of Directors. The Board of Directors may at any time cause the Company torepay all or any part of the money so advanced, without premium or penalty. Nothing in this Article 14 shall derogate from the rightof the Board of Directors to make any call for payment before or after receipt by the Company of any such advance.

 

15.Forfeiture andSurrender.

 

(a)If any Shareholder fails to pay an amount payable by virtueof a call, installment or interest thereon as provided for in accordance herewith, on or before the day fixed for payment of thesame, the Board of Directors may at any time after the day fixed for such payment, so long as such amount (or any portion thereof)or interest thereon (or any portion thereof) remains unpaid, forfeit all or any of the Shares in respect of which such payment was calledfor. All expenses incurred by the Company in attempting to collect any such amount or interest thereon, including, without limitation,attorneys’ fees and costs of legal proceedings, shall be added to, and shall, for all purposes (including the accrual of interestthereon) constitute a part of, the amount payable to the Company in respect of such call.

 

(b)Upon the adoption of a resolution as to the forfeiture ofa Shareholder’s Share, the Board of Directors shall cause notice thereof to be given to such Shareholder, which notice shall statethat, in the event of the failure to pay the entire amount so payable by a date specified in the notice (which date shall be not lessthan fourteen (14) days after the date such notice is given and which may be extended by the Board of Directors), such Shares shallbe ipso facto forfeited, provided, however, that, prior to such date, the Board of Directors may cancel such resolutionof forfeiture, but no such cancellation shall stop the Board of Directors from adopting a further resolution of forfeiture in respectof the non-payment of the same amount.

 

(c)Without derogating from Articles 51 and 55 hereof, wheneverShares are forfeited as herein provided, all dividends, if any, theretofore declared in respect thereof and not actually paid shall bedeemed to have been forfeited at the same time.

 

(d)The Company, by resolution of the Board of Directors, mayaccept the voluntary surrender of any Share.

 

(e)Any Share forfeited or surrendered as provided herein, shallbecome the property of the Company as a dormant Share, and the same, subject to the provisions of these Articles, may be sold, re-issuedor otherwise disposed of as the Board of Directors deems fit.

 

(f)Any person whose Shares have been forfeited or surrenderedshall cease to be a Shareholder in respect of the forfeited or surrendered Shares, but shall, notwithstanding, be liable to pay, andshall forthwith pay, to the Company, all calls, interest and expenses owing upon or in respect of such Shares at the time of forfeitureor surrender, together with interest thereon from the time of forfeiture or surrender until actual payment, at the rate prescribed inArticle 13(e) above, and the Board of Directors, in its discretion, may, but shall not be obligated to, enforce or collectthe payment of such amounts, or any part thereof, as it shall deem fit. In the event of such forfeiture or surrender, the Company, byresolution of the Board of Directors, may accelerate the date(s) of payment of any or all amounts then owing to the Company by theperson in question (but not yet due) in respect of all Shares owned by such Shareholder, solely or jointly with another.

 

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(g)The Board of Directors may at any time, before any Shareso forfeited or surrendered shall have been sold, re-issued or otherwise disposed of, nullify the forfeiture or surrender on such conditionsas it deems fit, but no such nullification shall stop the Board of Directors from re-exercising its powers of forfeiture pursuant tothis Article 15.

 

16.Lien.

 

(a)Except to the extent the same may be waived or subordinatedin writing, the Company shall have a first and paramount lien upon all the Shares registered in the name of each Shareholder (withoutregard to any equitable or other claim or interest in such Shares on the part of any other person), and upon the proceeds of the salethereof, for his or her debts, liabilities and engagements to the Company arising from any amount payable by such Shareholder in respectof any unpaid or partly paid Share, whether or not such debt, liability or engagement has matured. Such lien shall extend to all dividendsfrom time to time declared or paid in respect of such Share. Unless otherwise provided, the registration by the Company of a transferof Shares shall be deemed to be a waiver on the part of the Company of the lien (if any) existing on such Shares immediately prior tosuch transfer.

 

(b)The Board of Directors may cause the Company to sell a Sharesubject to such a lien when the debt, liability or engagement giving rise to such lien has matured, in such manner as the Board of Directorsdeems fit, but no such sale shall be made unless such debt, liability or engagement has not been satisfied within fourteen (14) daysafter written notice of the intention to sell shall have been served on such Shareholder, his or her executors or administrators.

 

(c)The net proceeds of any such sale, after payment of the costsand expenses thereof or ancillary thereto, shall be applied in or toward satisfaction of the debts, liabilities or engagements of suchShareholder in respect of such Share (whether or not the same have matured), and the remaining proceeds (if any) shall be paid to theShareholder, his or her executors, administrators or assigns.

 

17.Sale After Forfeitureor Surrender or For Enforcement of Lien.

 

Upon any sale of a share after forfeitureor surrender or for enforcing a lien, the Board of Directors may appoint any person to execute an instrument of transfer of the Shareso sold and cause the purchaser’s name to be entered in the Register of Shareholders in respect of such Share. The purchaser shallbe registered as the Shareholder and shall not be bound to see to the regularity of the sale proceedings, or to the application of theproceeds of such sale, and after his or her name has been entered in the Register of Shareholders in respect of such Share, the validityof the sale shall not be impeached by any person, and the remedy of any person aggrieved by the sale shall be in damages only and againstthe Company exclusively.

 

18.Redeemable Shares.

 

The Company may, subject to applicablelaw, issue redeemable shares or other securities and redeem the same upon terms and conditions to be set forth in a written agreementbetween the Company and the holder of such shares or in their terms of issuance.

 

Transferof Shares

 

19.Registration ofTransfer.

 

No transfer of Shares shall be registeredunless a proper writing or instrument of transfer (in any customary form or any other form satisfactory to the Board of Directors or anofficer of the Company to be designated by the Chief Executive Officer) has been submitted to the Company (or its transfer agent), togetherwith any share certificate(s) and such other evidence of title as the Board of Directors or an officer of the Company to be designatedby the Chief Executive Officer may require. Notwithstanding anything to the contrary herein, Shares registered in the name of The DepositoryTrust Company or its nominee shall be transferrable in accordance with the policies and procedures of The Depository Trust Company. Untilthe transferee has been registered in the Register of Shareholders in respect of the Shares so transferred, the Company may continue toregard the transferor as the owner thereof. The Board of Directors, may, from time to time, prescribe a fee for the registration of atransfer, and may approve other methods of recognizing the transfer of Shares in order to facilitate the trading of the Company’sshares on the Stock Exchange.

 

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20.Suspension of Registration.

 

The Board of Directors may, in itsdiscretion to the extent it deems necessary, close the Register of Shareholders of registration of transfers of Shares for a period determinedby the Board of Directors, and no registrations of transfers of Shares shall be made by the Company during any such period during whichthe Register of Shareholders is so closed.

 

Transmissionof Shares

 

21.Decedents’Shares.

 

Upon the death of a Shareholder, theCompany shall recognize the custodian or administrator of the estate or executor of the will, and in the absence of such, the lawful heirsof the Shareholder, as the only holders of the right for the Shares of the deceased Shareholder, after receipt of evidence to the entitlementthereto, as determined by the Board of Directors or an officer of the Company to be designated by the Chief Executive Officer.

 

22.Receivers and Liquidators.

 

(a)The Company may recognize any receiver, liquidator or similarofficial appointed to wind-up, dissolve or otherwise liquidate a corporate Shareholder, and a trustee, manager, receiver, liquidatoror similar official appointed in bankruptcy or in connection with the reorganization of, or similar proceeding with respect to a Shareholderor its properties, as being entitled to the Shares registered in the name of such Shareholder.

 

(b)Such receiver, liquidator or similar official appointed towind-up, dissolve or otherwise liquidate a corporate Shareholder and such trustee, manager, receiver, liquidator or similar officialappointed in bankruptcy or in connection with the reorganization of, or similar proceedings with respect to a Shareholder or its properties,upon producing such evidence as the Board of Directors (or an officer of the Company to be designated by the Chief Executive Officer)may deem sufficient as to his or her authority to act in such capacity or under this Article, shall with the consent of the Board ofDirectors or an officer of the Company to be designated by the Chief Executive Officer (which the Board of Directors or such officermay grant or refuse in its absolute discretion), be registered as a Shareholder in respect of such Shares, or may, subject to the regulationsas to transfer herein contained, transfer such Shares.

 

GeneralMeetings

 

23.General Meetings.

 

(a)An annual General Meeting (“Annual General Meeting”)shall be held at such time and at such place, either within or outside of the State of Israel, as may be determined by the Board of Directors.

 

(b)All General Meetings other than Annual General Meetings shallbe called “Special General Meetings”. The Board of Directors may, at its discretion, convene a Special General Meetingat such time and place, within or outside of the State of Israel, as may be determined by the Board of Directors.

 

(c)If so determined by the Board of Directors, an Annual GeneralMeeting or a Special General Meeting may be held through the use of any means of communication approved by the Board of Directors, providedall of the participating Shareholders can hear each other simultaneously. A resolution approved by use of means of communications asaforesaid, shall be deemed to be a resolution lawfully adopted at such general meeting and a Shareholder shall be deemed present in personat such general meeting if attending such meeting through the means of communication used at such meeting.

 

24.Record Date forGeneral Meeting.

 

Notwithstanding any provision of theseArticles to the contrary, and to allow the Company to determine the Shareholders entitled to notice of or to vote at any General Meetingor any adjournment thereof, or entitled to receive payment of any dividend or other distribution or grant of any rights, or entitled toexercise any rights in respect of or to take or be the subject of any other action, the Board of Directors may fix a record date for theGeneral Meeting, which shall not be more than the maximum period and not less than the minimum period permitted by law. A determinationof Shareholders of record entitled to notice of or to vote at a General Meeting shall apply to any adjournment of the meeting; provided,however, that the Board of Directors may fix a new record date for the adjourned meeting.

 

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25.Shareholder Proposal Request.

 

(a)Any Shareholder or Shareholders of the Company holding atleast the required percentage under the Companies Law of the voting rights of the Company which entitles such Shareholder(s) torequire the Company to include a matter on the agenda of a General Meeting (the “Proposing Shareholder(s)”) may request,subject to the Companies Law, that the Board of Directors include a matter on the agenda of a General Meeting to be held in the future,provided that the Board of Directors determines that the matter is appropriate to be considered at a General Meeting (a “Proposal Request”).In order for the Board of Directors to consider a Proposal Request and whether to include the matter stated therein in the agendaof a General Meeting, notice of the Proposal Request must be timely delivered in accordance with applicable law, and the Proposal Requestmust comply with the requirements of these Articles (including this Article 25) and any applicable law and stock exchange rulesand regulations. The Proposal Request must be in writing, signed by all of the Proposing Shareholder(s) making such request,delivered, either in person or by registered mail, postage prepaid, and received by the Secretary (or, in the absence thereof, by theChief Executive Officer of the Company). To be considered timely, a Proposal Request must be received within the time periods prescribedby applicable law. The announcement of an adjournment or postponement of a General Meeting shall not commence a new time period (or extendany time period) for the delivery of a Proposal Request as described above. In addition to any information required to be includedin accordance with applicable law, a Proposal Request must include the following: (i) the name, address, telephone number,fax number and email address of the Proposing Shareholder (or each Proposing Shareholder, as the case may be) and, if an entity, thename(s) of the person(s) that controls or manages such entity; (ii) the number of Shares held by the Proposing Shareholder(s),directly or indirectly (and, if any of such Shares are held indirectly, an explanation of how they are held and by whom), which shallbe in such number no less than as is required to qualify as a Proposing Shareholder, accompanied by evidence satisfactory to the Companyof the record holding of such Shares by the Proposing Shareholder(s) as of the date of the Proposal Request; (iii) thematter requested to be included on the agenda of a General Meeting, all information related to such matter, the reason that such matteris proposed to be brought before the General Meeting, the complete text of the resolution that the Proposing Shareholder proposes tobe voted upon at the General Meeting, and a representation that the Proposing Shareholder(s) intend to appear in person or by proxyat the meeting; (iv) a description of all arrangements or understandings between the Proposing Shareholders and any other person(s) (namingsuch person or persons) in connection with the matter that is requested to be included on the agenda and a declaration signed by allProposing Shareholder(s) of whether any of them has a personal interest in the matter and, if so, a description in reasonable detailof such personal interest; (v) a description of all Derivative Transactions (as defined below) by each Proposing Shareholder(s) duringthe previous twelve (12) month period, including the date of the transactions and the class, series and number of securities involvedin, and the material economic terms of, such Derivative Transactions; and (vi) a declaration that all of the information that isrequired under the Companies Law and any other applicable law and stock exchange rules and regulations to be provided to the Companyin connection with such matter, if any, has been provided to the Company. The Board of Directors, may, in its discretion, to the extentit deems necessary, request that the Proposing Shareholder(s) provide additional information necessary so as to include a matterin the agenda of a General Meeting, as the Board of Directors may reasonably require.

 

A “Derivative Transaction”means any agreement, arrangement, interest or understanding entered into by, or on behalf or for the benefit of, any Proposing Shareholderor any of its Affiliates or associates, whether of record or beneficial: (1) the value of which is derived in whole or in part fromthe value of any class or series of shares or other securities of the Company, (2) which otherwise provides any direct or indirectopportunity to gain or share in any gain derived from a change in the value of securities of the Company, (3) the effect or intentof which is to mitigate loss, manage risk or benefit of security value or price changes, or (4) which provides the right to voteor increase or decrease the voting power of, such Proposing Shareholder, or any of its Affiliates or associates, with respect to any Sharesor other securities of the Company, which agreement, arrangement, interest or understanding may include, without limitation, any option,warrant, debt position, note, bond, convertible security, swap, stock appreciation right, short position, profit interest, hedge, rightto dividends, voting agreement, performance-related fee or arrangement to borrow or lend Shares (whether or not subject to payment, settlement, exerciseor conversion in any such class or series), and any proportionate interest of such Proposing Shareholder in the securities of the Companyheld by any general or limited partnership, or any limited liability company, of which such Proposing Shareholder is, directly or indirectly,a general partner or managing member.

 

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(b)The information required pursuant to this Article shall beupdated as of (i) the record date of the General Meeting, (ii) five business days before the General Meeting, and (iii) asof the General Meeting, and any adjournment or postponement thereof.

 

(c)The provisions of Articles 25(a) and 25(b) shallapply, mutatis mutandis, to any matter to be included on the agenda of a Special General Meeting which is convened pursuant toa request of a Shareholder duly delivered to the Company in accordance with the Companies Law.

 

26.Notice of GeneralMeetings; Omission to Give Notice.

 

(a)The Company is not required to give notice of a General Meeting,subject to any mandatory provision of the Companies Law.

 

(b)The accidental omission to give notice of a General Meetingto any Shareholder, or the non-receipt of notice sent to such Shareholder, shall not invalidate the proceedings at such meeting or anyresolution adopted thereat.

 

(c)No Shareholder present, in person or by proxy, at any timeduring a General Meeting shall be entitled to seek the cancellation or invalidation of any proceedings or resolutions adopted at suchGeneral Meeting on account of any defect in the notice of such meeting relating to the time or the place thereof, or any item acted uponat such meeting.

 

(d)In addition to any places at which the Company may make availablefor review by Shareholders the full text of the proposed resolutions to be adopted at a General Meeting, as required by the CompaniesLaw, the Company may add additional places for Shareholders to review such proposed resolutions, including an internet site.

 

Proceedingsat General Meetings

 

27.Quorum.

 

(a)No business shall be transacted at a General Meeting, orat any adjournment thereof, unless the quorum required under these Articles for such General Meeting or such adjourned meeting, as thecase may be, is present when the meeting proceeds to business.

 

(b)In the absence of contrary provisions in these Articles,the requisite quorum for any General Meeting shall be Shareholders (not in default in payment of any sum referred to in Article 13hereof) present in person or by proxy and holding shares conferring in the aggregate at least thirty-three and one-third percent (331/3%)of the voting power of the Company, provided, however, that if (i) such General Meeting was initiated by and convened pursuant toa resolution adopted by the Board of Directors and (ii) at the time of such General Meeting the Company is qualified to use theforms of a “foreign private issuer” under US securities laws, then the requisite quorum shall be Shareholders (not in defaultin payment of any sum referred to in Article 13 hereof) present in person or by proxy and holding Shares conferring in the aggregateat least fifteen percent (15%) of the voting power of the Company.

 

(c)If within half an hour from the time appointed for the meetinga quorum is not present, then without any further notice the meeting shall be adjourned either (i) to the same day in the nextweek, at the same time and place, (ii) to such day and at such time and place as indicated in the notice of such meeting, or(iii) to such day and at such time and place as the Chairperson of the General Meeting shall determine (which may be earlieror later than the date pursuant to clause (i) above). No business shall be transacted at any adjourned meeting except business whichmight lawfully have been transacted at the meeting as originally called. At such adjourned meeting, if the original meeting was convenedby a Shareholder pursuant to a request under Section 63 of the Companies Law, such Shareholder in addition to at least one or moreShareholder, present in person or by proxy, and holding the higher of ten percent (10%) of the voting power of the Company or thenumber of Shares required for making such request, shall constitute a quorum, but in any other case any Shareholder (not in default asaforesaid) present in person or by proxy, shall constitute a quorum.

 

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28.Chairperson ofGeneral Meeting.

 

The Chairperson of the Board of Directorsshall preside as Chairperson of every General Meeting of the Company. If at any meeting the Chairperson is not present within fifteen(15) minutes after the time fixed for holding the meeting or is unwilling or unable to act as Chairperson, any of the following maypreside as Chairperson of the meeting (and in the following order): a Director designated by the Board of Directors, the Chief ExecutiveOfficer, the Chief Financial Officer, the General Counsel, the Secretary or any person designated by any of the foregoing. If at any suchmeeting none of the foregoing persons is present or all are unwilling or unable to act as Chairperson, the Shareholders present (in personor by proxy) shall choose a Shareholder or its proxy present at the meeting to be Chairperson. The office of Chairperson shall not, byitself, entitle the holder thereof to vote at any General Meeting nor shall it entitle such holder to a second or casting vote (withoutderogating, however, from the rights of such Chairperson to vote as a Shareholder or proxy of a Shareholder if, in fact, the Chairpersonis also a Shareholder or such proxy).

 

29.Adoption of Resolutionsat General Meetings.

 

(a)Except as required by the Companies Law or these Articles,including, without limitation, Article 39 below, a resolution of the Shareholders shall be adopted if approved by the holders ofa simple majority of the voting power represented at the General Meeting in person or by proxy and voting thereon, as one class, anddisregarding abstentions from the count of the voting power present and voting. Without limiting the generality of the foregoing, a resolutionwith respect to a matter or action for which the Companies Law prescribes a higher majority or pursuant to which a provision requiringa higher majority would have been deemed to have been incorporated into these Articles, but for which the Companies Law allows theseArticles to provide otherwise (including, Sections 327 and 24 of the Companies Law), shall be adopted by a simple majority of the votingpower represented at the General Meeting in person or by proxy and voting thereon, as one class, and disregarding abstentions from thecount of the voting power present and voting.

 

(b)Every question submitted to a General Meeting shall be decidedby a show of hands, but the Chairperson of the General Meeting may determine that a resolution shall be decided by a written ballot.A written ballot may be implemented before the proposed resolution is voted upon or immediately after the declaration by the Chairpersonof the results of the vote by a show of hands. If a vote by written ballot is taken after such declaration, the results of the vote bya show of hands shall be of no effect, and the proposed resolution shall be decided by such written ballot.

 

(c)A defect in convening or conducting a General Meeting, includinga defect resulting from the non-fulfillment of any provision or condition set forth in the Companies Law or these Articles, includingwith regard to the manner of convening or conducting the General Meeting, shall not disqualify any resolution passed at the General Meetingand shall not affect the discussions or decisions which took place thereat.

 

(d)A declaration by the Chairperson of the General Meeting thata resolution has been carried unanimously, or carried by a particular majority, or rejected, and an entry to that effect in the minutebook of the Company, shall be prima facie evidence of the fact without proof of the number or proportion of the votes recorded in favorof or against such resolution.

 

30.Power to Adjourn.

 

A General Meeting, the considerationof any matter on its agenda, or the resolution on any matter on its agenda, may be postponed or adjourned, from time to time and fromplace to place: (i) by the Chairperson of a General Meeting at which a quorum is present (and he shall do so if directed by the GeneralMeeting, with the consent of the holders of a majority of the voting power represented in person or by proxy and voting on the questionof adjournment), but no business shall be transacted at any such adjourned meeting except business which might lawfully have been transactedat the meeting as originally called, or a matter on its agenda with respect to which no resolution was adopted at the meeting originallycalled; or (ii) by the Board of Directors (whether prior to or at a General Meeting).

 

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31.Voting Power.

 

Subject to the provisions of Article 32(a) andto any provision hereof conferring special rights as to voting, or restricting the right to vote, every Shareholder shall have one votefor each Share held by the Shareholder of record, on every resolution, without regard to whether the vote thereon is conducted by a showof hands, by written ballot, or by any other means.

 

32.Voting Rights.

 

(a)No Shareholder shall be entitled to vote at any General Meeting(or be counted as a part of the quorum thereat), unless all calls then payable by him or her in respect of his or her Shares in the Companyhave been paid.

 

(b)A company or other corporate body being a Shareholder ofthe Company may duly authorize any person to be its representative at any meeting of the Company or to execute or deliver a proxy onits behalf. Any person so authorized shall be entitled to exercise on behalf of such Shareholder all the power, which the Shareholdercould have exercised if it were an individual. Upon the request of the Chairperson of the General Meeting, written evidence of such authorization(in form acceptable to the Chairperson) shall be delivered to him or her.

 

(c)Any Shareholder entitled to vote may vote either in personor by proxy (who need not be a Shareholder of the Company), or, if the Shareholder is a company or other corporate body, by representativeauthorized pursuant to Article (b) above.

 

(d)If two or more persons are registered as joint holders ofany Share, the vote of the senior who tenders a vote, in person or by proxy, shall be accepted to the exclusion of the vote(s) ofthe other joint holder(s). For the purpose of this Article 32(d), seniority shall be determined by the order of registration ofthe joint holders in the Register of Shareholders.

 

(e)If a Shareholder is a minor, under protection, bankrupt orlegally incompetent, or in the case of a corporation, is in receivership or liquidation, it may, subject to all other provisions of theseArticles and any documents or records required to be provided under these Articles, vote through his, her or its trustees, receiver,liquidator, natural guardian or another legal guardian, as the case may be, and the persons listed above may vote in person or by proxy.

 

Proxies

 

33.Instrument of Appointment.

 

(a)An instrument appointing a proxy shall be in writing andshall be substantially in the following form:

 

    “I       of    
        (Name of Shareholder)       (Address of Shareholder)
    Being a shareholder of SciSparc Ltd. hereby appoints
            of    
        (Name of Proxy)       (Address of Proxy)
                 
    as my proxy to vote for me and on my behalf at the General Meeting of the Company to be held on the ___ day of _______, _______ and at any adjournment(s) thereof.
     
    Signed this ____ day of ___________, ______.
     
    (Signature of Appointor)”

 

or in any usual or common form orin such other form as may be approved by the Board of Directors. Such proxy shall be duly signed by the appointor of such person’sduly authorized attorney, or, if such appointor is company or other corporate body, in the manner in which it signs documents which bindsit together with a certificate of an attorney with regard to the authority of the signatories.

 

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(b)Subject to the Companies Law, the original instrument appointinga proxy or a copy thereof certified by an attorney (and the power of attorney or other authority, if any, under which such instrumenthas been signed) shall be delivered to the Company (at its Office, at its principal place of business, or at the offices of its registraror transfer agent, or at such place as notice of the meeting may specify) not less than forty eight (48) hours (or such shorterperiod as the notice shall specify) before the time fixed for such meeting. Notwithstanding the above, the Chairperson shall have theright to waive the time requirement provided above with respect to all instruments of proxies and to accept instruments of proxy untilthe beginning of a General Meeting. A document appointing a proxy shall be valid for every adjourned meeting of the General Meeting towhich the document relates.

 

34.Effect of Deathof Appointer of Transfer of Share and or Revocation of Appointment.

 

(a)A vote cast in accordance with an instrument appointing aproxy shall be valid notwithstanding the prior death or bankruptcy of the appointing Shareholder (or of his or her attorney-in-fact,if any, who signed such instrument), or the transfer of the Share in respect of which the vote is cast, unless written notice of suchmatters shall have been received by the Company or by the Chairperson of such meeting prior to such vote being cast.

 

(b)Subject to the Companies Law, an instrument appointing aproxy shall be deemed revoked (i) upon receipt by the Company or the Chairperson, subsequent to receipt by the Company of such instrument,of written notice signed by the person signing such instrument or by the Shareholder appointing such proxy canceling the appointmentthereunder (or the authority pursuant to which such instrument was signed) or of an instrument appointing a different proxy (and suchother documents, if any, required under Article 33(b) for such new appointment), provided such notice of cancellation or instrumentappointing a different proxy were so received at the place and within the time for delivery of the instrument revoked thereby as referredto in Article 33(b) hereof, or (ii) if the appointing Shareholder is present in person at the meeting for which such instrumentof proxy was delivered, upon receipt by the Chairperson of such meeting of written notice from such Shareholder of the revocation ofsuch appointment, or if and when such Shareholder votes at such meeting. A vote cast in accordance with an instrument appointing a proxyshall be valid notwithstanding the revocation or purported cancellation of the appointment, or the presence in person or vote of theappointing Shareholder at a meeting for which it was rendered, unless such instrument of appointment was deemed revoked in accordancewith the foregoing provisions of this Article 34(b) at or prior to the time such vote was cast.

 

Boardof Directors

 

35.Powers of the Boardof Directors.

 

(a)The Board of Directors may exercise all such powers and doall such acts and things as the Board of Directors is authorized by law or as the Company is authorized to exercise and do and are nothereby or by law required to be exercised or done by the General Meeting. The authority conferred on the Board of Directors by this Article 35shall be subject to the provisions of the Companies Law, these Articles and any regulation or resolution consistent with these Articlesadopted from time to time at a General Meeting, provided, however, that no such regulation or resolution shall invalidate any prior actdone by or pursuant to a decision of the Board of Directors which would have been valid if such regulation or resolution had not beenadopted.

 

(b)Without limiting the generality of the foregoing, the Boardof Directors may, from time to time, set aside any amount(s) out of the profits of the Company as a reserve or reserves for anypurpose(s) which the Board of Directors, in its absolute discretion, shall deem fit, including without limitation, capitalizationand distribution of bonus Shares, and may invest any sum so set aside in any manner and from time to time deal with and vary such investmentsand dispose of all or any part thereof, and employ any such reserve or any part thereof in the business of the Company without beingbound to keep the same separate from other assets of the Company, and may subdivide or re-designate any reserve or cancel the same orapply the funds therein for another purpose, all as the Board of Directors may from time to time think fit.

 

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36.Exercise of Powersof the Board of Directors.

 

(a)A meeting of the Board of Directors at which a quorum ispresent in accordance with Article 45 shall be competent to exercise all the authorities, powers and discretion vested in or exercisableby the Board of Directors.

 

(b)A resolution proposed at any meeting of the Board of Directorsshall be deemed adopted if approved by a majority of the Directors present, entitled to vote and voting thereon when such resolutionis put to a vote.

 

(c)The Board of Directors may adopt resolutions, without conveninga meeting of the Board of Directors, in writing or in any other manner permitted by the Companies Law.

 

(d)Notwithstanding anything to the contrary herein, includingunder Articles 36(a) and 36(b), and without derogating from any other approvals required pursuant to these Articles or applicablelaw, the following actions shall require the affirmative consent of at least three-quarters (3/4) of the Directors then in office andentitled to vote thereon:

 

(i) Any resolution to enter intoa merger, consolidation, acquisition, amalgamation, business combination, issue equity securities or debt securities convertible intoequity or other similar transaction (collectively, a “Transaction”), in each case that would reasonably be expectedto result (A) in any person (together with its Affiliates) becoming, as a result of such Transaction, a beneficial owner (as determinedin accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of fifteen percent(15%) or more of the Ordinary Shares issued and outstanding immediately following the consummation of such Transaction or (B) inthe increase in the beneficial ownership of Ordinary Shares of any person (together with its Affiliates) who immediately prior to theconsummation of such Transaction holds fifteen percent (15%) or more of the then issued and outstanding Ordinary Shares;

 

(ii) Any resolution to directlyor indirectly sell, assign, convey, transfer, lease or otherwise dispose, in one or series of related transactions, of all or substantiallyall of the assets of the Company and its subsidiaries, taken as a whole, to any person;

 

(iii) Any resolution to effectany material change to the principal business of the Company, enter into new lines of business that are materially different from theCompany’s then current line of business, or exit the then current line of business of the Company, or otherwise materially changethe Company’s strategy and/or policies with respect to its main lines of business; or

 

(iv) Any resolution to transferthe headquarters of the Company outside of Israel.

 

37.Delegation of Powers.

 

(a)The Board of Directors may, subject to the provisions ofthe Companies Law, delegate any or all of its powers to committees (in these Articles referred to as a “Committee of the Boardof Directors”, or “Committee”), each consisting of one or more persons (who may or may not be Directors),and it may from time to time revoke such delegation or alter the composition of any such Committee. Any Committee so formed shall, inthe exercise of the powers so delegated, conform to any regulations imposed on it by the Board of Directors, subject to applicable law.No regulation imposed by the Board of Directors on any Committee and no resolution of the Board of Directors shall invalidate any prioract done or pursuant to a resolution by the Committee which would have been valid if such regulation or resolution of the Board of Directorshad not been adopted. The meetings and proceedings of any such Committee of the Board of Directors shall, mutatis mutandis, be governedby the provisions herein contained for regulating the meetings of the Board of Directors, to the extent not superseded by any regulationsadopted by the Board of Directors. Unless otherwise expressly prohibited by the Board of Directors, in delegating powers to a Committeeof the Board of Directors, such Committee shall be empowered to further delegate such powers.

 

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(b)The Board of Directors may from time to time appoint a Secretaryto the Company, as well as Officers, agents, employees and independent contractors, as the Board of Directors deems fit, and may terminatethe service of any such person. The Board of Directors may, subject to the provisions of the Companies Law, determine the powers andduties, as well as the salaries and compensation, of all such persons.

 

(c)The Board of Directors may from time to time, by power ofattorney or otherwise, appoint any person, company, firm or body of persons to be the attorney or attorneys of the Company at law orin fact for such purposes(s) and with such powers, authorities and discretions, and for such period and subject to such conditions,as it deems fit, and any such power of attorney or other appointment may contain such provisions for the protection and convenience ofpersons dealing with any such attorney as the Board of Directors deems fit, and may also authorize any such attorney to delegate allor any of the powers, authorities and discretions vested in him or her.

 

38.Number of Directors.

 

(a)The Board of Directors shall consist of such number of Directors(not less than three (3) nor more than eight (8), including the External Directors, if any were elected) as may be fixed from timeto time by resolution of the Board of Directors.

 

39.Election and Removalof Directors.

 

(a)The Directors of the Company shall be appointed or re-appointedby Ordinary Resolution at the Annual General Meeting (other than External Directors, if any) following the expiration of the term ofoffice of the Directors of that class of Directors will be for a term of office that expires on the third annual general meeting followingsuch election or re-election, such that from the Annual General Meeting of 2021 and thereafter, each year the term of office of onlyone class of Directors will expire, unless their office is vacated pursuant to any law or as stipulated in these Articles.

 

This Section 39 (a) shallnot be amended unless an affirmative vote of 65% of the voting power represented at a general meeting of shareholders and voting thereonhas been obtained, provided that such majority constitutes more than 33.33% of the Company’s total issued and outstanding sharecapital at the record date for such general meeting.

 

(b)In accordance with the provisions of Section 39 (a) above,the Directors (excluding the External Directors if any were elected), shall be classified, with respect to the term for which they eachseverally hold office, into three classes, as nearly equal in number as practicable, hereby designated as Class I, Class IIand Class III (each, a “Class”).

 

(c)In accordance with the provisions of Section 39 (a) above,at each Annual General Meeting, each Nominee or Alternate Nominee (each as defined below) elected at such Annual General Meeting to serveas a Director in a Class whose term shall have expired at such Annual General Meeting shall be elected to hold office until the thirdAnnual General Meeting next succeeding his or her election and until his or her respective successor shall have been elected and qualified.Notwithstanding anything to the contrary, each Director shall serve until his or her successor is elected and qualified or until suchearlier time as such Director’s office is vacated.

 

(d)If the number of Directors (excluding External Directors,if any were elected) that comprises the Board of Directors is hereafter changed by the Board of Directors, any newly created directorshipsor decrease in directorships shall be so apportioned by the Board of Directors among the classes as to make all classes as nearly equalin number as is practicable, provided that no decrease in the number of Directors constituting the Board of Directors shall shorten theterm of any incumbent Director.

 

(e)Prior to every General Meeting of the Company at which Directorsare to be elected, and subject to clauses(a), (b) and (h) of this Article, the Board of Directors (or a Committee thereof)shall select, by a resolution adopted by a majority of the Board of Directors (or such Committee), a number of persons to be proposedto the Shareholders for election as Directors at such General Meeting (the “Nominees”).

 

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(f)Any Proposing Shareholder requesting to include on the agendaof a General Meeting a nomination of a person to be proposed to the Shareholders for election as Director (such person, an “AlternateNominee”), may so request provided that it complies with this Article 39(f), Article 25 and applicable law. Unlessotherwise determined by the Board of Directors, a Proposal Request relating to an Alternate Nominee is deemed to be a matter thatis appropriate to be considered only at an Annual General Meeting. In addition to any information required to be included in accordancewith applicable law, such a Proposal Request shall include information required pursuant to Article 25, and shall also setforth: (i) the name, address, telephone number, fax number and email address of the Alternate Nominee and all citizenships and residenciesof the Alternate Nominee; (ii) a description of all arrangements, relations or understandings during the past three (3) years,and any other material relationships, between the Proposing Shareholder(s) or any of its Affiliates and each Alternate Nominee;(iii) a declaration signed by the Alternate Nominee that he or she consents to be named in the Company’s notices and proxymaterials and on the Company’s proxy card relating to the General Meeting, if provided or published, and that he or she, if elected,consents to serve on the Board of Directors and to be named in the Company’s disclosures and filings; (iv) a declaration signedby each Alternate Nominee as required under the Companies Law and any other applicable law and stock exchange rules and regulations forthe appointment of such an Alternate Nominee and an undertaking that all of the information that is required under law and stock exchangerules and regulations to be provided to the Company in connection with such an appointment has been provided (including, informationin respect of the Alternate Nominee as would be provided in response to the applicable disclosure requirements under Form 20-F (orForm 10-K, if applicable) or any other applicable form prescribed by the U.S. Securities and Exchange Commission (the “SEC”));(v) a declaration made by the Alternate Nominee of whether he or she meets the criteria for an independent director and, if applicable,External Director of the Company under the Companies Law and/or under any applicable law, regulation or stock exchange rules, and ifnot, then an explanation of why not; and (vi) any other information required at the time of submission of the Proposal Requestby applicable law, regulations or stock exchange rules. In addition, the Proposing Shareholder(s) and each Alternate Nominee shallpromptly provide any other information reasonably requested by the Company, including a duly completed director and officer questionnaire,in such form as may be provided by the Company, with respect to each Alternate Nominee. The Board of Directors may refuse to acknowledgethe nomination of any person not made in compliance with the foregoing. The Company shall be entitled to publish any information providedby a Proposing Shareholder or Alternate Nominee pursuant to this Article 39(f) and Article 25, and the Proposing Shareholderand Alternate Nominee shall be responsible for the accuracy and completeness thereof.

 

(g)The Nominees or Alternate Nominees shall be elected by aresolution adopted at the General Meeting at which they are subject to election. Notwithstanding Articles 25(a) and 25(c), in theevent of a Contested Election, the method of calculation of the votes and the manner in which the resolutions will be presented to theGeneral Meeting shall be determined by the Board of Directors in its discretion. In the event that the Board of Directors does not oris unable to make a determination on such matter, then the method described in clause (ii) below shall apply. The Board of Directorsmay consider, among other things, the following methods: (i) election of competing slates of Director nominees (determined in amanner approved by the Board of Directors) by a majority of the voting power represented at the General Meeting in person or by proxyand voting on such competing slates, (ii) election of individual Directors by a plurality of the voting power represented at theGeneral Meeting in person or by proxy and voting on the election of Directors (which shall mean that the nominees receiving the largestnumber of “for” votes will be elected in such Contested Election), (iii) election of each nominee by a majority of thevoting power represented at the General Meeting in person or by proxy and voting on the election of Directors, provided that if the numberof such nominees exceeds the number of Directors to be elected, then as among such nominees the election shall be by plurality of thevoting power as described above, and (iv) such other method of voting as the Board of Directors deems appropriate, including useof a “universal proxy card” listing all Nominees and Alternate Nominees by the Company. For the purposes of these Articles,election of Directors at a General Meeting shall be considered a “Contested Election” if the aggregate number of Nomineesand Alternate Nominees at such meeting exceeds the total number of Directors to be elected at such meeting, with the determination thereofbeing made by the Secretary (or, in the absence thereof, by the Chief Executive Officer of the Company) as of the close of the applicablenotice of nomination period under Article 25 or under applicable law, based on whether one or more notice(s) of nominationwere timely filed in accordance with Article 25, this Article 39 and applicable law; provided, however,that the determination that an election is a Contested Election shall not be determinative as to the validity of any such notice of nomination;and provided, further, that, if, prior to the time the Company mails its initial proxy statement in connection with such election ofDirectors, one or more notices of nomination of an Alternate Nominee are withdrawn such that the number of candidates for election asDirector no longer exceeds the number of Directors to be elected, the election shall not be considered a Contested Election. Shareholdersshall not be entitled to cumulative voting in the election of Directors, except to the extent specifically set forth in this clause (g).

 

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(h)Notwithstanding anything to the contrary in these Articles,the election, qualification, removal or dismissal of External Directors, if so elected, shall be only in accordance with the applicableprovisions set forth in the Companies Law.

 

40.Commencement ofDirectorship.

 

Without derogating from Article 39,the term of office of a Director shall commence as of the date of his or her appointment or election, or on a later date if so specifiedin his or her appointment or election.

 

41.Continuing Directorsin the Event of Vacancies.

 

The Board of Directors (and, if sodetermined by the Board of Directors, the General Meeting) may at any time and from time to time appoint any person as a Director to filla vacancy (whether such vacancy is due to a Director no longer serving or due to the number of Directors serving being less than the maximumnumber stated in Article 38 hereof). In the event of one or more such vacancies in the Board of Directors, the continuing Directorsmay continue to act in every matter, provided, however, that if the number of Directors serving is less than the minimum number providedfor pursuant to Article 38 hereof, they may only act in an emergency or to fill the office of a Director which has become vacantup to a number equal to the minimum number provided for pursuant to Article 38 hereof, or in order to call a General Meeting of theCompany for the purpose of electing Directors to fill any or all vacancies. The office of a Director that was appointed by the Board ofDirectors to fill any vacancy shall only be for the remaining period of time during which the Director whose service has ended was filledwould have held office, or in case of a vacancy due to the number of Directors serving being less than the maximum number stated in Article 38hereof the Board of Directors shall determine at the time of appointment the class pursuant to Article 39 to which the additionalDirector shall be assigned.

 

42.Vacation of Office.

 

The office of a Director shall bevacated and he shall be dismissed or removed:

 

(a)ipso facto, upon his or her death;

 

(b)if he or she is prevented by applicable law from servingas a Director;

 

(c)if the Board of Directors determines that due to his or hermental or physical state he or she is unable to serve as a director;

 

(d)if his or her directorship expires pursuant to these Articlesand/or applicable law;

 

(e)by a resolution adopted at an Annual General Meeting by amajority of at least 65% of the total voting power of the Shares (with such removal becoming effective on the date fixed in such resolution);

 

(f)by his or her written resignation, such resignation becomingeffective on the date fixed therein, or upon the delivery thereof to the Company, whichever is later; or

 

(g)with respect to an External Director, if so elected, andnotwithstanding anything to the contrary herein, only pursuant to applicable law.

 

43.Conflict of Interests;Approval of Related Party Transactions.

 

(a)Subject to the provisions of applicable law and these Articles,no Director shall be disqualified by virtue of his or her office from holding any office or place of profit in the Company or in anycompany in which the Company shall be a Shareholder or otherwise interested, or from contracting with the Company as vendor, purchaseror otherwise, nor shall any such contract, or any contract or arrangement entered into by or on behalf of the Company in which any Directorshall be in any way interested, be avoided, nor, other than as required under the Companies Law, shall any Director be liable to accountto the Company for any profit arising from any such office or place of profit or realized by any such contract or arrangement by reasononly of such Director’s holding that office or of the fiduciary relations thereby established, but the nature of his or her interest,as well as any material fact or document, must be disclosed by him or her at the meeting of the Board of Directors at which the contractor arrangement is first considered, if his or her interest then exists, or, in any other case, at no later than the first meeting ofthe Board of Directors after the acquisition of his or her interest.

 

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(b)Subject to the Companies Law and these Articles, a transactionbetween the Company and an Office Holder, and a transaction between the Company and another entity in which an Office Holder of the Companyhas a personal interest, in each case, which is not an Extraordinary Transaction (as defined by the Companies Law), shall require onlyapproval by the Board of Directors or a Committee of the Board of Directors. Such authorization, as well as the actual approval, maybe for a particular transaction or more generally for specific type of transactions.

 

(c)Notwithstanding anything to the contrary in these Articles,the Company shall not engage in any Business Combination (as defined below) with any Shareholder and/or any of its Affiliates and/orinvestors for a period of three years following (i) with respect to any Shareholder holding as of the Effective Time fifteenpercent (15%) or more of the voting power of the Shares, the Effective Time and (ii) with respect to all Shareholders, each timeas such Shareholder and/or any of its Affiliates and/or investors become(s) (other than due to a buyback, redemption or cancellationof shares by the Company) the holder(s) (beneficially or of record) of fifteen percent (15%) or more of the issued and outstandingvoting power of the Shares (the “Threshold” and such shareholder, an “Interested Shareholder”),except if the Board of Directors approves either the Business Combination or the transaction which resulted in such Shareholder and/orany of its Affiliates and/or investors becoming an Interested Shareholder prior to consummation of a Business Combination. As used inthis Article 43 only, “Business Combination” means (i) a merger or consolidation of the Company in whichthe holders of a majority of the Ordinary Shares issued and outstanding immediately prior to the consummation of such transaction holdimmediately following the consummation of such transaction less than 50% of the issued and outstanding share capital of the surviving,acquiring or resulting company (or if the surviving, acquiring or resulting company is a wholly owned subsidiary of another company immediatelyfollowing the consummation of such transaction, the parent company of such surviving, acquiring or resulting company) or (ii) adisposition of assets of the Company with an aggregate market value equal to 10% or more of the Company’s assets or of its outstandingshares.

 

Proceedingsof the Board of Directors

 

44.Meetings.

 

(a)The Board of Directors may meet and adjourn its meetingsand otherwise regulate such meetings and proceedings as the Board of Directors thinks fit.

 

(b)A meeting of the Board of Directors shall be convened bythe Secretary upon instruction of the Chairperson or upon a request of at least two (2) Directors which is submitted to the Chairpersonor in any event that such meeting is required by the provisions of the Companies Law. In the event that the Chairperson does not instructthe Secretary to convene a meeting upon a request of at least two (2) Directors within seven (7) days of such request, thensuch two (2) Directors may convene a meeting of the Board of Directors. Any meeting of the Board of Directors shall be convenedupon not less than two (2) days’ notice, unless such notice is waived in writing by all of the Directors as to a particularmeeting or by their attendance at such meeting or unless the matters to be discussed at such meeting are of such urgency and importancethat notice is reasonably determined by the Chairperson as ought to be waived or shortened under the circumstances.

 

(c)Notice of any such meeting shall be given orally, by telephone,in writing or by mail, facsimile, email or such other means of delivery of notices as the Company may apply, from time to time.

 

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(d)Notwithstanding anything to the contrary herein, failureto deliver notice to a Director of any such meeting in the manner required hereby may be waived by such Director, and a meeting shallbe deemed to have been duly convened notwithstanding such defective notice if such failure or defect is waived prior to action beingtaken at such meeting, by all Directors entitled to participate at such meeting to whom notice was not duly given as aforesaid. Withoutderogating from the foregoing, no Director present at any time during a meeting of the Board of Directors shall be entitled to seek thecancellation or invalidation of any proceedings or resolutions adopted at such meeting on account of any defect in the notice of suchmeeting relating to the date, time or the place thereof or the convening of the meeting.

 

45.Quorum.

 

Until otherwise unanimously decidedby the Board of Directors, a quorum at a meeting of the Board of Directors shall be constituted by the presence in person or by any meansof communication of a majority of the Directors then in office who are lawfully entitled to participate and vote in the meeting. No businessshall be transacted at a meeting of the Board of Directors unless the requisite quorum is present (in person or by any means of communicationon the condition that all participating Directors can hear each other simultaneously) when the meeting proceeds to business. If withinthirty (30) minutes from the time appointed for a meeting of the Board of Directors a quorum is not present, the meeting shall standadjourned at the same place and time forty-eight (48) hours thereafter unless the Chairperson has determined that there is such urgencyand importance that a shorter period is required under the circumstances. If an adjourned meeting is convened in accordance with the foregoingand a quorum is not present within thirty (30) minutes of the announced time, the requisite quorum at such adjourned meeting shallbe, any two (2) Directors, if the number of Directors then serving is up to five (5), and any three (3) Directors, if the numberof Directors then serving is more than five (5), in each case who are lawfully entitled to participate in the meeting and who are presentat such adjourned meeting. At an adjourned meeting of the Board of Directors the only matters to be considered shall be those matterswhich might have been lawfully considered at the meeting of the Board of Directors originally called if a requisite quorum had been present,and the only resolutions to be adopted are such types of resolutions which could have been adopted at the meeting of the Board of Directorsoriginally called.

 

46.Chairperson ofthe Board of Directors.

 

The Board of Directors shall, fromtime to time, elect one of its members to be the Chairperson of the Board of Directors, remove such Chairperson from office and appointin his or her place. The Chairperson of the Board of Directors shall preside at every meeting of the Board of Directors, but if thereis no such Chairperson, or if at any meeting he is not present within fifteen (15) minutes of the time fixed for the meeting or ifhe is unwilling to take the chair, the Directors present shall choose one of the Directors present at the meeting to be the Chairpersonof such meeting. The office of Chairperson of the Board of Directors shall not, by itself, entitle the holder to a second or casting vote.

 

47.Validity of ActsDespite Defects.

 

All acts done or transacted at anymeeting of the Board of Directors, or of a Committee of the Board of Directors, or by any person(s) acting as Director(s), shall,notwithstanding that it may afterwards be discovered that there was some defect in the appointment of the participants in such meetingor any of them or any person(s) acting as aforesaid, or that they or any of them were disqualified, be as valid as if there wereno such defect or disqualification.

 

ChiefExecutive Officer

 

48.Chief ExecutiveOfficer.

 

The Board of Directors shallfrom time to time appoint one or more persons, whether or not Directors, as Chief Executive Officer of the Company who shall havethe powers and authorities set forth in the Companies Law, and may confer upon such person(s), and from time to time modify orrevoke, such titles and such duties and authorities of the Board of Directors as the Board of Directors may deem fit, subject tosuch limitations and restrictions as the Board of Directors may from time to time prescribe. Such appointment(s) may be eitherfor a fixed term or without any limitation of time, and the Board of Directors may from time to time (subject to any additionalapprovals required under, and the provisions of, the Companies Law and of any contract between any such person and the Company) fixtheir salaries and compensation, remove or dismiss them from office and appoint another or others in his, her or their place orplaces.

 

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Minutes

 

49.Minutes.

 

Any minutes of the General Meetingor the Board of Directors or any Committee thereof, if purporting to be signed by the Chairperson of the General Meeting, the Board ofDirectors or a Committee thereof, as the case may be, or by the Chairperson of the next succeeding General Meeting, meeting of the Boardof Directors or meeting of a Committee, as the case may be, shall constitute prima facie evidence of the matters recorded therein.

 

Dividends

 

50.Declaration ofDividends.

 

The Board of Directors may, from timeto time, declare, and cause the Company to pay dividends as permitted by the Companies Law. The Board of Directors shall determine thetime for payment of such dividends and the record date for determining the shareholders entitled thereto.

 

51.Amount Payableby Way of Dividends.

 

Subject to the provisions of theseArticles and subject to the rights or conditions attached at that time to any Share in the capital of the Company granting preferential,special or deferred rights or not granting any rights with respect to dividends, any dividend paid by the Company shall be allocated amongthe Shareholders (not in default in payment of any sum referred to in Article 13 hereof) entitled thereto on a pari passubasis in proportion to their respective holdings of the issued and outstanding Shares in respect of which such dividends are being paid.

 

52.Interest.

 

No dividend shall carry interest asagainst the Company.

 

53.Payment in Specie.

 

If so declared by the Board of Directors,a dividend declared in accordance with Article 50 may be paid, in whole or in part, by the distribution of specific assets of theCompany or by distribution of paid up Shares, debentures or other securities of the Company or of any other companies, or in any combinationthereof, in each case, the fair value of which shall be determined by the Board of Directors in good faith.

 

54.Implementationof Powers.

 

The Board of Directors may settle,as it deems fit, any difficulty arising with regard to the distribution of dividends, bonus shares or otherwise, and in particular, toissue certificates for fractions of shares and sell such fractions of shares in order to pay their consideration to those entitled thereto,or to set the value for the distribution of certain assets and to determine that cash payments shall be paid to the Shareholders on thebasis of such value, or that fractions whose value is less than NIS 0.01 shall not be taken into account. The Board of Directors may instructto pay cash or convey these certain assets to a trustee in favor of those people who are entitled to a dividend, as the Board of Directorsshall deem appropriate.

 

55.Deductions fromDividends.

 

The Board of Directors may deductfrom any dividend or other moneys payable to any Shareholder in respect of a Share any and all sums of money then payable by him or herto the Company on account of calls or otherwise in respect of Shares of the Company and/or on account of any other matter of transactionwhatsoever.

 

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56.Retention of Dividends.

 

(a)The Board of Directors may retain any dividend or other moneyspayable or property distributable in respect of a Share on which the Company has a lien, and may apply the same in or toward satisfactionof the debts, liabilities, or engagements in respect of which the lien exists.

 

(b)The Board of Directors may retain any dividend or other moneyspayable or property distributable in respect of a Share in respect of which any person is, under Articles 21 or 22, entitled to becomea Shareholder, or which any person is, under said Articles, entitled to transfer, until such person shall become a Shareholder in respectof such Share or shall transfer the same.

 

57.Unclaimed Dividends.

 

All unclaimed dividends or other moneyspayable in respect of a Share may be invested or otherwise made use of by the Board of Directors for the benefit of the Company untilclaimed. The payment of any unclaimed dividend or such other moneys into a separate account shall not constitute the Company a trusteein respect thereof, and any dividend unclaimed after a period of one (1) year (or such other period determined by the Board of Directors)from the date of declaration of such dividend, and any such other moneys unclaimed after a like period from the date the same were payable,shall be forfeited and shall revert to the Company, provided, however, that the Board of Directors may, atits discretion, cause the Company to pay any such dividend or such other moneys, or any part thereof, to a person who would have beenentitled thereto had the same not reverted to the Company. The principal (and only the principal) of any unclaimed dividend of such othermoneys shall be if claimed, paid to a person entitled thereto.

 

58.Mechanics of Payment.

 

Any dividend or other moneys payablein cash in respect of a Share, less the tax required to be withheld pursuant to applicable law, may, as determined by the Board of Directorsin its sole discretion, be paid by check or warrant sent through the post to, or left at, the registered address of the person entitledthereto or by transfer to a bank account specified by such person (or, if two (2) or more persons are registered as joint holdersof such Share or are entitled jointly thereto in consequence of the death or bankruptcy of the holder or otherwise, to any one of suchpersons or his or her bank account or the person who the Company may then recognize as the owner thereof or entitled thereto under Article 21or 22 hereof, as applicable, or such person’s bank account), or to such person and at such other address as the person entitledthereto may by writing direct, or in any other manner the Board of Directors deems appropriate. Every such check or warrant or other methodof payment shall be made payable to the order of the person to whom it is sent, or to such person as the person entitled thereto as aforesaidmay direct, and payment of the check or warrant by the banker upon whom it is drawn shall be a good discharge to the Company. Every suchcheck shall be sent at the risk of the person entitled to the money represented thereby.

 

Accounts

 

59.Books of Account.

 

The Company’s books of accountshall be kept at the Office of the Company, or at such other place or places as the Board of Directors may think fit, and they shall alwaysbe open to inspection by all Directors. No shareholder, not being a Director, shall have any right to inspect any account or book or othersimilar document of the Company, except as explicitly conferred by law or authorized by the Board of Directors. The Company shall makecopies of its annual financial statements available for inspection by the Shareholders at the principal offices of the Company. The Companyshall not be required to send copies of its annual financial statements to the Shareholders.

 

60.Auditors.

 

The appointment, authorities,rights and duties of the auditor(s) of the Company, shall be regulated by applicable law, provided, however, that in exercisingits authority to fix the remuneration of the auditor(s), the Shareholders in General Meeting may act (and in the absence of anyaction in connection therewith shall be deemed to have so acted) to authorize the Board of Directors (with right of delegation to aCommittee thereof or to management) to fix such remuneration subject to such criteria or standards, and if no such criteria orstandards are so provided, such remuneration shall be fixed in an amount commensurate with the volume and nature of the servicesrendered by such auditor(s). The General Meeting may, if so recommended by the Board of Directors, appoint the auditors for a periodthat may extend until the third Annual General Meeting after the Annual General Meeting in which the auditors were appointed.

 

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61.Fiscal Year.

 

The fiscal year of the Company shallbe the 12 months period ending on December 31 of each calendar year.

 

SupplementaryRegisters

 

62.Supplementary Registers.

 

Subject to and in accordance withthe provisions of Sections 138 and 139 of the Companies Law, the Company may cause supplementary registers to be kept in any place outsideIsrael as the Board of Directors may think fit, and, subject to all applicable requirements of law, the Board of Directors may from timeto time adopt such rules and procedures as it may think fit in connection with the keeping of such branch registers.

 

Exemption,Indemnity and Insurance

 

63.Insurance.

 

Subject to the provisions of the CompaniesLaw with regard to such matters, the Company may enter into a contract for the insurance of the liability, in whole or in part, of anyof its Office Holders imposed on such Office Holder due to an act performed by or an omission of the Office Holder in the Office Holder’scapacity as an Office Holder of the Company arising from any matter permitted by law, including the following:

 

(a)a breach of duty of care to the Company or to any other person;

 

(b)a breach of his or her duty of loyalty to the Company, providedthat the Office Holder acted in good faith and had reasonable grounds to assume that act that resulted in such breach would not prejudicethe interests of the Company;

 

(c)a financial liability imposed on such Office Holder in favorof any other person; and

 

(d)any other event, occurrence, matters or circumstances underany law with respect to which the Company may, or will be able to, insure an Office Holder, and to the extent such law requires the inclusionof a provision permitting such insurance in these Articles, then such provision is deemed to be included and incorporated herein by reference(including, without limitation, in accordance with Section 56h(b)(1) of the Securities Law, if and to the extent applicable,and Section 50P of the Economic Competition Law).

 

64.Indemnity.

 

(a)Subject to the provisions of the Companies Law, the Companymay retroactively indemnify an Office Holder of the Company to the maximum extent permitted under applicable law, including with respectto the following liabilities and expenses, provided that such liabilities or expenses were imposed on such Office Holder or incurredby such Office Holder due to an act performed by or an omission of the Office Holder in such Office Holder’s capacity as an OfficeHolder of the Company:

 

(i) a financial liability imposedon an Office Holder in favor of another person by any court judgment, including a judgment given as a result of a settlement or an arbitrator’saward which has been confirmed by a court;

 

(ii) reasonable litigation expenses,including legal fees, expended by the Office Holder (A) as a result of an investigation or proceeding instituted against him or herby an authority authorized to conduct such investigation or proceeding, provided that (1) no indictment (as defined in the CompaniesLaw) was filed against such Office Holder as a result of such investigation or proceeding; and (2) no financial liability in lieuof a criminal proceeding (as defined in the Companies Law) was imposed upon him or her as a result of such investigation or proceedingor if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent or(B) in connection with a financial sanction;

 

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(iii) reasonable litigation costs,including legal fees, expended by an Office Holder or which were imposed on an Office Holder by a court in proceedings filed against theOffice Holder by the Company or in its name or by any other person or in a criminal charge in respect of which the Office Holder was acquittedor in a criminal charge in respect of which the Office Holder was convicted for an offence which did not require proof of criminal intent;and

 

(iv) any other event, occurrence,matter or circumstance under any law with respect to which the Company may, or will be able to, indemnify an Office Holder, and to theextent such law requires the inclusion of a provision permitting such indemnity in these Articles, then such provision is deemed to beincluded and incorporated herein by reference (including, without limitation, in accordance with Section 56h(b)(1) of the IsraeliSecurities Law, if and to the extent applicable, and Section 50P(b)(2) of the RTP Law).

 

(b)Subject to the provisions of the Companies Law, the Companymay undertake to indemnify an Office Holder, in advance, with respect to those liabilities and expenses described in the following Articles:

 

(i) Sub-Article 64(a)(i)(a)(ii) to64(a)(iv); and

 

(ii) Sub-Article 64(a)(i),provided that:

 

(1) the undertaking to indemnifyis limited to such events which the Directors shall deem to be foreseeable in light of the operations of the Company at the time thatthe undertaking to indemnify is made and for such amounts or criterion which the Directors may, at the time of the giving of such undertakingto indemnify, deem to be reasonable under the circumstances; and

 

(2) the undertaking to indemnifyshall set forth such events which the Directors shall deem to be foreseeable in light of the operations of the Company at the time thatthe undertaking to indemnify is made, and the amounts and/or criterion which the Directors may, at the time of the giving of such undertakingto indemnify, deem to be reasonable under the circumstances.

 

65.Exemption.

 

Subject to the provisions of the CompaniesLaw, the Company may, to the maximum extent permitted by law, exempt and release, in advance, any Office Holder from any liability fordamages arising out of a breach of a duty of care.

 

66.General.

 

(a)Any amendment to the Companies Law or any other applicablelaw adversely affecting the right of any Office Holder to be indemnified, insured or exempt pursuant to Articles 63 to 65 and any amendmentsto Articles 63 to 65 shall be prospective in effect, and shall not affect the Company’s obligation or ability to indemnify, insureor exempt an Office Holder for any act or omission occurring prior to such amendment, unless otherwise provided by applicable law.

 

(b)The provisions of Articles 63 to 65 (i) shall applyto the maximum extent permitted by law (including, the Companies Law, the Securities Law and the Economic Competition Law); and (ii) arenot intended, and shall not be interpreted so as to restrict the Company, in any manner, in respect of the procurement of insurance and/orin respect of indemnification (whether in advance or retroactively) and/or exemption, in favor of any person who is not an Office Holder,including, without limitation, any employee, agent, consultant or contractor of the Company who is not an Office Holder; and/or any OfficeHolder to the extent that such insurance and/or indemnification is not specifically prohibited under law.

 

WindingUp

 

67.Winding Up.

 

If the Company is wound up, then,subject to applicable law and to the rights of the holders of Shares with special rights upon winding up, the assets of the Company availablefor distribution among the Shareholders shall be distributed to them in proportion to the number of issued and outstanding Shares heldby each Shareholder.

 

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Notices

 

68.Notices.

 

(a)Any written notice or other document may be served by theCompany upon any Shareholder either personally, by facsimile, email or other electronic transmission, or by sending it by prepaid mail(airmail if sent internationally) addressed to such Shareholder at his or her address as described in the Register of Shareholders orsuch other address as the Shareholder may have designated in writing for the receipt of notices and other documents.

 

(b)Any written notice or other document may be served by anyShareholder upon the Company by tendering the same in person to the Secretary or the Chief Executive Officer of the Company at the principaloffice of the Company, by facsimile transmission, email or other electronic submission, or by sending it by prepaid registered mail (airmailif posted outside Israel) to the Company at its Office.

 

(c)Any such notice or other document shall be deemed to havebeen served:

 

(i) in the case of mailing, forty-eight(48) hours after it has been posted, or when actually received by the addressee if sooner than forty-eight hours after it hasbeen posted, or

 

(ii) in the case of overnightair courier, on the next business day following the day sent, with receipt confirmed by the courier, or when actually receivedby the addressee if sooner than three business days after it has been sent;

 

(iii) in the case of personaldelivery, when actually tendered in person, to such addressee;

 

(iv) in the case of facsimile,email or other electronic transmission, on the first business day (during normal business hours in place of addressee) on whichthe sender receives automatic electronic confirmation by the addressee’s facsimile machine that such notice was received by theaddressee or delivery confirmation from the addressee’s email or other communication server.

 

(d)If a notice is, in fact, received by the addressee, it shallbe deemed to have been duly served, when received, notwithstanding that it was defectively addressed or failed, in some other respect,to comply with the provisions of this Article 68.

 

(e)All notices to be given to the Shareholders shall, with respectto any Share to which persons are jointly entitled, be given to whichever of such persons is named first in the Register of Shareholders,and any notice so given shall be sufficient notice to the holders of such Share.

 

(f)Any Shareholder whose address is not described in the Registerof Shareholders, and who shall not have designated in writing an address for the receipt of notices, shall not be entitled to receiveany notice from the Company.

 

(g)Notwithstanding anything to the contrary contained herein,notice by the Company of a General Meeting, containing the information required by applicable law and these Articles to be set forththerein, which is published, within the time otherwise required for giving notice of such meeting, in either or several of the followingmanners (as applicable) shall be deemed to be notice of such meeting duly given, for the purposes of these Articles, to any Shareholderwhose address as registered in the Register of Shareholders (or as designated in writing for the receipt of notices and other documents)is located either inside or outside the State of Israel:

 

(i) if the Company’s Sharesare then listed for trading on a national securities exchange in the United States or quoted in an over-the-counter market in theUnited States, publication of notice of a General Meeting pursuant to a report or a schedule filed with, or furnished to, the SECpursuant to the Securities Exchange Act of 1934, as amended; and/or

 

(ii) on the Company’s internetsite.

 

(h)The mailing or publication date and the record date and/ordate of the meeting (as applicable) shall be counted among the days comprising any notice period under the Companies Law and theregulations thereunder.

 

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Amendment

 

69.Amendment.

 

Any amendment of these Articles shallrequire, in addition and prior to the approval of the General Meeting of Shareholders in accordance with these Articles, also the approvalof the Board of Directors with the affirmative vote of at least three-quarters (3/4) of the Directors then in office and entitled to votethereon.

 

Forumfor Adjudication of Disputes

 

70.Forum for Adjudicationof Disputes.

 

(a)Unless the Company consents in writing to the selection ofan alternative forum, the federal district courts of the United States of America, shall be the exclusive forum for the resolutionof any complaint asserting a cause or causes of action arising under the U.S. Securities Act of 1933, as amended, includingall causes of action asserted against any defendant to such complaint. For the avoidance of doubt, this provision is intended to benefitand may be enforced by the Company, its officers and directors, the underwriters to any offering giving rise to such complaint, and anyother professional or entity whose profession gives authority to a statement made by that person or entity and who has prepared or certifiedany part of the documents underlying the offering. The foregoing provisions of this Article 70 shall not apply to causes of actionarising under the U.S. Securities Exchange Act of 1934, as amended.

 

(b)Unless the Company consents in writing to the selection ofan alternative forum, the competent courts in Tel Aviv, Israel shall be the exclusive forum for (i) any derivative action or proceedingbrought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officeror other employee of the Company to the Company or the Company’s shareholders, or (iii) any action asserting a claim arisingpursuant to any provision of the Companies Law or the Securities Law.

 

(c)Any person or entity purchasing or otherwise acquiring orholding any interest in shares of the Company shall be deemed to have notice of and consented to the provisions of this Article 70.

 

*      *       *

 

 

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Exhibit 99.2

 

COMPENSATION POLICY

SCISPARC LTD.

Compensation Policy for Executive Officers andDirectors

(As Adopted on June 26, 2025)

 

A. Overview and Objectives

 

1. Introduction

 

This document sets forth the CompensationPolicy for Executive Officers and Directors (this “Compensation Policy” or “Policy”) of SciSparcLtd. (“SciSparc” or the “Company”), in accordance with the requirements of the Companies Law, 5759-1999and the regulations promulgated thereunder (the “Companies Law”).

 

Compensation is a key component ofSciSparc’s overall human capital strategy to attract, retain, reward, and motivate highly skilled individuals that will enhanceSciSparc’s value and otherwise assist SciSparc to reach its business and financial long-term goals. Accordingly, the structure ofthis Policy is established to tie the compensation of each officer to SciSparc’s goals and performance.

 

For purposes of this Policy, “ExecutiveOfficers” shall mean “Office Holders” as such term is defined in Section 1 of the Companies Law, excluding, unless otherwiseexpressly indicated herein, SciSparc’s directors.

 

This policy is subject to applicablelaw and is not intended, and should not be interpreted as limiting or derogating from, provisions of applicable law to the extent notpermitted.

 

This Policy shall apply to compensationagreements and arrangements which will be approved after the date on which this Policy is adopted and shall serve as SciSparc’sCompensation Policy for three (3) years, commencing as of its adoption, unless amended earlier.

 

The Compensation Committee and theBoard of Directors of SciSparc (the “Compensation Committee” and the “Board”, respectively) shallreview and reassess the adequacy of this Policy from time to time, as required by the Companies Law.

 

2. Objectives

 

SciSparc’s objectives and goalsin setting this Policy are to attract, motivate and retain experienced and talented leaders who will contribute to SciSparc’s successand enhance shareholder value, while demonstrating professionalism in an achievement-oriented and merit-based culture that rewards long-termexcellence, and embedding and modeling SciSparc’s core values as part of a motivated behavior. To that end, this Policy is designed,among other things:

 

  2.1. To closely align the interests of the Executive Officers with those of SciSparc’s shareholders in order to enhance shareholder value;

 

  2.2. To align a significant portion of the Executive Officers’ compensation with SciSparc’s short and long-term goals and performance;

 

  2.3. To provide the Executive Officers with a structured compensation package, including competitive salaries, performance-motivating cash and equity incentive programs and benefits, and to be able to present to each Executive Officer an opportunity to advance in a growing organization;

 

  2.4. To strengthen the retention and the motivation of Executive Officers in the long-term;

 

  2.5. To provide appropriate awards in order to incentivize superior individual excellence and corporate performance; and

 

  2.6. To maintain consistency in the way Executive Officers are compensated.

 

 

3. Compensation Instruments

 

Compensation instrumentsunder this Policy may include the following:

 

  3.1. Base salary;

 

  3.2. Benefits;

 

  3.3. Cash bonuses;

 

  3.4. Equity based compensation;

 

  3.5. Change of control provisions; and

 

  3.6. Retirement and termination terms.

 

4. Overall Compensation - Ratio Between Fixed and Variable Compensation

 

  4.1. This Policy aims to balance the mix of “Fixed Compensation” (comprised of base salary and benefits) and “Variable Compensation” (comprised of cash bonuses and equity-based compensation) in order to, among other things, appropriately incentivize Executive Officers to meet SciSparc’s short and long-term goals while taking into consideration the Company’s need to manage a variety of business risks.

 

  4.2. The total annual target bonus and equity-based compensation per vesting annum (based on the fair market value at the time of grant calculated on a linear basis) of each Executive Officer shall not exceed 95% of such Executive Officer’s total compensation package for such year.

 

5. Inter-Company Compensation Ratio

 

  5.1. In the process of drafting this Policy, SciSparc’s Board and Compensation Committee have examined the ratio between employer cost associated with the engagement of the Executive Officers, including directors, and the average and median employer cost associated with the engagement of SciSparc’s other employees (including contractor employees as defined in the Companies Law) (the “Ratio”).

 

  5.2. The possible ramifications of the Ratio on the daily working environment in SciSparc were examined and will continue to be examined by SciSparc from time to time in order to ensure that levels of executive compensation, as compared to the overall workforce will not have a negative impact on work relations in SciSparc.

 

B. Base Salary and Benefits

 

6. Base Salary

 

  6.1. A base salary provides stable compensation to Executive Officers and allows SciSparc to attract and retain competent executive talent and maintain a stable management team. The base salary varies among Executive Officers, and is individually determined according to the educational background, prior vocational experience, qualifications, corporate role, business responsibilities and past performance of each Executive Officer.

 

  6.2. Since a competitive base salary is essential to SciSparc’s ability to attract and retain highly skilled professionals, SciSparc will seek to establish a base salary that is competitive with base salaries paid to Executive Officers in a peer group of other companies operating in technology sectors that are as much as possible similar in their characteristics to SciSparc. To that end, SciSparc shall utilize comparative market data and practices as a reference, including a survey comparing and analyzing the level of the overall compensation package offered to an Executive Officer of the Company with compensation packages for persons serving in similar positions (to that of the relevant officer) in the peer group. Such compensation survey may be conducted internally or through an external independent consultant.

 

  6.3. The Compensation Committee and the Board may periodically consider and approve base salary adjustments for Executive Officers. The main considerations for salary adjustment will be similar to those used in initially determining the base salary, but may also include change of role or responsibilities, recognition for professional achievements, regulatory or contractual requirements, budgetary constraints or market trends. The Compensation Committee and the Board will also consider the previous and existing compensation arrangements of the Executive Officer whose base salary is being considered for adjustment. Any limitation herein based on the annual base salary shall be calculated based on the monthly base salary applicable at the time of consideration of the respective grant or benefit.

 

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7. Benefits

 

  7.1. The following benefits may be granted to the Executive Officers in order, among other things, to comply with legal requirements:

 

  7.1.1. Vacation days in accordance with market practice;

 

  7.1.2. Sick days in accordance with market practice;

 

  7.1.3. Convalescence pay according to applicable law;

 

  7.1.4. Monthly remuneration for a study fund, as allowed by applicable law and with reference to SciSparc’s practice and the practice in peer group companies (including contributions on bonus payments);

 

  7.1.5. SciSparc shall contribute on behalf of the Executive Officer to an insurance policy or a pension fund, as allowed by applicable law and with reference to SciSparc’s policies and procedures and the practice in peer group companies (including contributions on bonus payments); and

 

  7.1.6. SciSparc shall contribute on behalf of the Executive Officer towards work disability insurance, as allowed by applicable law and with reference to SciSparc’s policies and procedures and to the practice in peer group companies.

 

  7.2. Non-Israeli Executive Officers may receive other similar, comparable or customary benefits as applicable in the relevant jurisdiction in which they are employed. Such customary benefits shall be determined based on the methods described in Section ‎6.2 of this Policy (with the necessary changes and adjustments).

 

  7.3. In the events of relocation and/or repatriation of an Executive Officer to another geography, such Executive Officer may receive other similar, comparable or customary benefits as applicable in the relevant jurisdiction in which he or she is employed or additional payments to reflect adjustments in the cost of living. Such benefits may include reimbursement for out-of-pocket one-time payments and other ongoing expenses, such as a housing allowance, a car allowance, home leave visit, etc.

 

  7.4. SciSparc may offer additional benefits to its Executive Officers, which will be comparable to customary market practices, such as, but not limited to: cellular and land line phone benefits, company car and travel benefits, reimbursement of business travel including a daily stipend when traveling and other business related expenses, insurances, other benefits (such as newspaper subscriptions, academic and professional studies), etc., provided, however, that such additional benefits shall be determined in accordance with SciSparc’s policies and procedures.

 

C. Cash Bonuses

 

8. Annual Cash Bonuses - The Objective

 

  8.1. Compensation in the form of an annual cash bonus is an important element in aligning the Executive Officers’ compensation with SciSparc’s objectives and business goals. Therefore, annual cash bonuses will reflect a pay-for-performance element, with payout eligibility and levels determined based on actual financial and operational results, in addition to other factors the Compensation Committee may determine, including individual performance.

 

  8.2. An annual cash bonus may be awarded to Executive Officers upon the attainment of pre-set periodical objectives and individual targets determined by the Compensation Committee (and, if required by law, by the Board) for each fiscal year, or in connection with such officer’s engagement, in case of newly hired Executive Officers, taking into account SciSparc’s short and long-term goals, as well as its compliance and risk management policies. The Compensation Committee and the Board may also determine applicable minimum thresholds that must be met for entitlement to the annual cash bonus (all or any portion thereof) and the formula for calculating any annual cash bonus payout, with respect to each fiscal year, for each Executive Officer. In special circumstances, as determined by the Compensation Committee and the Board (e.g., regulatory changes, significant changes in SciSparc’s business environment, a significant organizational change, significant merger and acquisition events, etc.), the Compensation Committee and the Board may modify the objectives and/or their relative weight during the fiscal year, or may modify payouts following the conclusion of the year.

 

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  8.3. In the event that the employment of an Executive Officer is terminated prior to the end of a fiscal year, the Company may (but shall not be obligated to) pay such Executive Officer an annual cash bonus (which may or may not be pro-rated) assuming the Executive Officer is otherwise entitled to an annual cash bonus.

 

  8.4. The actual annual cash bonus to be paid to Executive Officers shall be approved by the Compensation Committee and the Board.

 

9. Annual Cash Bonuses - The Formula

 

Executive Officers otherthan the CEO

 

  9.1. The performance objectives for the annual cash bonus of SciSparc’s Executive Officers, other than the chief executive officer (the “CEO”), may be approved by SciSparc’s CEO (in lieu of the Compensation Committee) and may be based on company, division/ departmental/business unit and individual objectives. Measurable performance objectives, which include the objectives and the weight to be assigned to each achievement in the overall evaluation, may be based on actual financial and operational results, personal objectives, operational objectives, project milestones objectives or investment in human capital objectives. The Company may also grant annual cash bonuses to SciSparc’s Executive Officers, other than the CEO, on a discretionary basis.

 

  9.2. The target annual cash bonus that an Executive Officer, other than the CEO, will be entitled to receive for any given fiscal year, will not exceed four (4) of such Executive Officer’s monthly base salaries.

 

  9.3. The maximum annual cash bonus, including for overachievement performance, that an Executive Officer, other than the CEO, will be entitled to receive for any given fiscal year, will not exceed five (5) of such Executive Officer’s monthly base salaries .

 

CEO

 

  9.4. The annual cash bonus of SciSparc’s CEO will be based on measurable performance objectives and subject to minimum thresholds as provided in Section 8.2 above and based on a discretionary element as provided in Section 9.5 below. Measurable performance objectives will be determined annually by SciSparc’s Compensation Committee (and, if required by law, by SciSparc’s Board) and will be based on company and personal objectives.

 

  9.5. The annual cash bonus granted to SciSparc’s CEO, may be based on a discretionary evaluation of the CEO’s overall performance by the Compensation Committee and the Board based on quantitative and qualitative criteria. The discretionary bonus for any given fiscal year will not exceed two (2) of the CEO’s monthly base salaries.

 

  9.6. The target annual cash bonus that the CEO will be entitled to receive for any given fiscal year, will not exceed six (6) of his or her monthly base salaries.

 

  9.7. The maximum annual cash bonus including for overachievement performance that the CEO will be entitled to receive for any given fiscal year, will not exceed eight (8) of his or her monthly base salaries.

 

10. Other Bonuses

 

  10.1. Special Bonus. SciSparc may grant its Executive Officers a special bonus as an award for special achievements (such as in connection with mergers and acquisitions, offerings, achieving target budget or business plan objectives under exceptional circumstances, or special recognition in case of retirement) or as a retention award at the CEO’s discretion for Executive Officers other than the CEO (and in the CEO’s case, at the Compensation Committee’s and the Board’s discretion), subject to any additional approval as may be required by the Companies Law (the “Special Bonus”). Any such Special Bonus will not exceed 200% of the Executive Officer’s annual base salary. A Special Bonus can be paid, in whole or in part, in equity in lieu of cash and the value of any such equity component of a Special Bonus shall be determined in accordance with Section ‎13.3 below.

 

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  10.2. Signing Bonus. SciSparc may grant a newly recruited Executive Officer a signing bonus. Any such signing bonus shall be granted and determined at the CEO’s discretion for Executive Officers other than the CEO (and in the CEO’s case, at the Compensation Committee’s and the Board’s discretion), subject to any additional approval as may be required by the Companies Law (the “Signing Bonus”). Any such Signing Bonus will not exceed 100% of the Executive Officer’s annual base salary.

 

  10.3. Relocation/ Repatriation Bonus. SciSparc may grant its Executive Officers a special bonus in the event of relocation or repatriation of an Executive Officer to another geography (the “Relocation Bonus”). Any such Relocation bonus will include customary benefits associated with such relocation and its monetary value will not exceed 100% of the Executive Officer’s annual base salary.

 

11. Compensation Recovery (“Clawback”)

 

  11.1. In the event of an accounting restatement, SciSparc shall be entitled to recover from its Executive Officers the bonus compensation or performance-based equity compensation in the amount in which such compensation exceeded what would have been paid based on the financial statements, as restated, provided that a claim is made by SciSparc prior to the second anniversary following the filing of such restated financial statements.

 

  11.2. Notwithstanding the aforesaid, the compensation recovery will not be triggered in the following events:

 

  11.2.1. The financial restatement is required due to changes in the applicable financial reporting standards; or

 

  11.2.2. The Compensation Committee has determined that Clawback proceedings in the specific case would be impossible, impractical, or not commercially or legally efficient.

 

  11.3. Nothing in this Section ‎11 derogates from any other “Clawback” or similar provisions regarding disgorging of profits imposed on Executive Officers by virtue of applicable securities laws or a separate contractual obligation.

 

D. Equity Based Compensation

 

12. The Objective

 

  12.1. The equity-based compensation for SciSparc’s Executive Officers will be designed in a manner consistent with the underlying objectives of the Company in determining the base salary and the annual cash bonus, with its main objectives being to enhance the alignment between the Executive Officers’ interests with the long-term interests of SciSparc and its shareholders, and to strengthen the retention and the motivation of Executive Officers in the long term. In addition, since equity-based awards are structured to vest over several years, their incentive value to recipients is aligned with longer-term strategic plans.

 

  12.2. The equity-based compensation offered by SciSparc is intended to be in the form of share options and/or other equity-based awards, such as restricted shares, RSUs or performance stock units, in accordance with the Company’s equity incentive plan in place as may be updated from time to time.

 

  12.3. All equity-based incentives granted to Executive Officers (other than bonuses paid in equity in lieu of cash) shall normally be subject to vesting periods in order to promote long-term retention of the awarded Executive Officers. Unless determined otherwise in a specific award agreement or in a specific compensation plan approved by the Compensation Committee and the Board, grants to Executive Officers other than non-employee directors shall vest based on time, gradually over a period of at least 2-4 years, or based on performance. The exercise price of options shall be determined in accordance with SciSparc’s policies, the main terms of which shall be disclosed in the annual report of SciSparc

 

  12.4. All other terms of the equity awards shall be in accordance with SciSparc’s incentive plans and other related practices and policies. Accordingly, the Board may, following approval by the Compensation Committee, make modifications to such awards consistent with the terms of such incentive plans, subject to any additional approval as may be required by the Companies Law.

 

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13. General Guidelines for the Grant of Awards

 

  13.1. The equity-based compensation shall be granted from time to time and be individually determined and awarded according to the performance, educational background, prior business experience, qualifications, corporate role and the personal responsibilities of the Executive Officer.

 

  13.2. In determining the equity-based compensation granted to each Executive Officer, the Compensation Committee and the Board shall consider the factors specified in Section 13.1 above, and in any event, the total fair market value of an annual equity-based compensation award at the time of grant (not including bonuses paid in equity in lieu of cash) shall not exceed: (i) with respect to the CEO - the higher of (w) 300% of his or her annual base salary or (x) 2% of the Company’s fair market value at the time of approval of the grant by the Board; and (ii) with respect to each of the other Executive Officers - the higher of (y) 150% of his or her annual base salary or (z) 1% of the Company’s fair market value at the time of approval of the grant by the Board.

 

  13.3. The fair market value of the equity-based compensation for the Executive Officers will be determined by using the Black Scholes formula or according to other acceptable valuation practices at the time of grant, in each case, as determined by the Compensation Committee and the Board.

 

E. Retirement and Termination of ServiceArrangements

 

14. Advanced Notice Period

 

SciSparc may provide an Executive Officer,on the basis of his/her seniority in the Company, his/her contribution to the Company’s goals and achievements and the circumstancesof his/her retirement prior notice of termination of up to twelve (12) months in the case of the CEO and chairperson of the Board andsix (6) months in the case of other Executive Officers, during which the Executive Officer may be entitled to all of the compensationelements, and to the continuation of vesting of his/her equity-based compensation. Such advance notice may or may not be provided in additionto severance, provided, however, that the Compensation Committee shall take into consideration the Executive Officer’s entitlementto advance notice in establishing any entitlement to severance and vice versa.

 

15. Adjustment Period

 

SciSparc may provide an additionaladjustment period of up to six (6) months to the CEO or to any other Executive Officer according to his/her seniority in the Company,his/her contribution to the Company’s goals and achievements and the circumstances of retirement, during which the Executive Officermay be entitled to all of the compensation elements, and to the continuation of vesting of his/her equity-based compensation.

 

16. Additional Retirement and Termination Benefits

 

SciSparc may provide additional retirementand terminations benefits and payments as may be required by applicable law (e.g., mandatory severance pay under Israeli labor laws),or which will be comparable to customary market practices.

 

17. Non-Compete Grant

 

Upon termination of employment andsubject to applicable law, SciSparc may grant to its Executive Officers a non-compete grant as an incentive to refrain from competingwith SciSparc for a defined period of time. The terms and conditions of the non-compete grant shall be decided by the Board and shallnot exceed such Executive Officer’s monthly base salary multiplied by twelve (12). The Board shall consider the existing entitlementsof the Executive Officer in connection with the consideration of any non-compete grant.

 

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18. Limitation Retirement and Termination of Service Arrangements

 

The total non-statutory payments underSection 14-17 above for a given Executive Officer shall not exceed the Executive Officer’s monthly base salary multiplied by twenty-four(24). The limitation under this Section 18 does not apply to benefits and payments provided under other chapters of this Policy.

 

F. Exculpation, Indemnification andInsurance

 

19. Exculpation

 

Each and every Director and ExecutiveOfficer may be exempted in advance for all or any of his/her liability for damage in consequence of a breach of the duty of care, to thefullest extent permitted by applicable law.

 

20. Insurance and Indemnification

 

  20.1. SciSparc may indemnify its directors and Executive Officers to the fullest extent permitted by applicable law, for any liability and expense that may be imposed on the director or the Executive Officer, as provided in the indemnity agreement between such individuals and SciSparc all subject to applicable law and the Company’s articles of association.

 

  20.2. SciSparc will provide directors’ and officers’ liability insurance (the “Insurance Policy”) for its directors and Executive Officers as follows:

 

  20.2.1. The limit of liability of the insurer shall not exceed the greater of $50 million or 50% of the Company’s shareholders equity based on the most recent financial statements of the Company at the time of approval of the Insurance Policy by the Compensation Committee; and

 

  20.2.2. The Insurance Policy, as well as the limit of liability and the premium for each extension or renewal shall be approved by the Compensation Committee (and, if required by law, by the Board) which shall determine that the sums are reasonable considering SciSparc’s exposures, the scope of coverage and the market conditions and that the Insurance Policy reflects the current market conditions and that it shall not materially affect the Company’s profitability, assets or liabilities.

 

  20.3. Upon circumstances to be approved by the Compensation Committee (and, if required by law, by the Board), SciSparc shall be entitled to enter into a “run off” Insurance Policy (the “Run-Off Policy”) of up to seven (7) years, with the same insurer or any other insurance, as follows:

 

  20.3.1. The limit of liability of the insurer shall not exceed the greater of $50 million or 50% of the Company’s shareholders equity based on the most recent financial statements of the Company at the time of approval by the Compensation Committee; and

 

  20.3.2. The Run-Off Policy, as well as the limit of liability and the premium for each extension or renewal shall be approved by the Compensation Committee (and, if required by law, by the Board) which shall determine that the sums are reasonable considering the Company’s exposures covered under such policy, the scope of coverage and the market conditions and that the Run-Off Policy reflects the current market conditions and that it shall not materially affect the Company’s profitability, assets or liabilities.

 

  20.4. SciSparc may extend an Insurance Policy in effect to include coverage for liability pursuant to a future public offering of securities as follows:

 

  20.4.1. The Insurance Policy, as well as the additional premium shall be approved by the Compensation Committee (and if required by law, by the Board) which shall determine that the sums are reasonable considering the exposures pursuant to such public offering of securities, the scope of coverage and the market conditions and that the Insurance Policy reflects the current market conditions, and that it does not materially affect the Company’s profitability, assets or liabilities.

 

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G. Arrangements upon Change of Control

 

21. The following benefits may be granted to the Executive Officers (in addition to, or in lieu of, the benefits applicable in the case of any retirement or termination of service) upon or in connection with a “Change of Control” or, where applicable, in the event of a Change of Control following which the employment of the Executive Officer is terminated or adversely adjusted in a material way:

 

  21.1. Acceleration of vesting of outstanding options or other equity-based awards;

 

  21.2. Extension of the exercise period of equity-based grants for SciSparc’s Executive Officers for a period of up to one (1) year, following the date of termination of employment; and

 

  21.3. Up to an additional six (6) months of continued base salary and benefits following the date of termination of employment (the “Additional Adjustment Period”). For avoidance of doubt, such additional Adjustment Period may be in addition to the advance notice and adjustment periods pursuant to Sections 14 and ‎15 of this Policy, but subject to the limitation set forth in Section 18 of this Policy.

 

  21.4. A cash bonus not to exceed 200% of the Executive Officer’s annual base salary in case of an Executive Officer other than the CEO and 250% in case of the CEO.

 

H. Board of Directors Compensation

 

22. All SciSparc’s non-employee Board members may be entitled to an annual cash fee retainer of up to $40,000 and up to $240,000 for the President or chairperson of SciSparc’s Board. The chairperson of SciSparc’s Board and the President may be paid an annual bonus of up to six (6) of his or her monthly cash compensation and up to an additional two (2) monthly cash compensation for overachievement. The discretionary bonus for any given fiscal year will not exceed two (2) monthly cash compensation.

 

23. The compensation of the Company’s external directors, if any are required and elected, shall be in accordance with the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director), 5760-2000, as amended by the Companies Regulations (Relief for Public Companies Traded in Stock Exchange Outside of Israel), 5760-2000, as such regulations may be amended from time to time.

 

24. Notwithstanding the provisions of Section 22 above, in special circumstances, such as in the case of a professional director, an expert director or a director who makes a unique contribution to the Company, such director’s compensation may be different than the compensation of all other directors and may be greater than the maximum amount allowed under Section 22.

 

25. Each non-employee member of SciSparc’s Board may be granted equity-based compensation. The total fair market value of a “welcome” or an annual equity-based compensation at the time of grant shall not exceed the higher of (i) $120,000 or (ii) 0.5% of the Company’s fair market value at the time of approval of the grant by the Board; and in the case of the President and chairperson of the Board - the higher of (i) 300% of his or her annual base salary or (ii) 2% of the Company’s fair market value at the time of approval of the grant by the Board.

 

26. All other terms of the equity awards shall be in accordance with SciSparc’s incentive plans and other related practices and policies. Accordingly, the Board may, following approval by the Compensation Committee, make modifications to such awards consistent with the terms of such incentive plans, subject to any additional approval as may be required by the Companies Law.

 

27. In addition, members of SciSparc’s Board may be entitled to reimbursement of expenses in connection with the performance of their duties.

 

28. The compensation (and limitations) stated under Section H will not apply to directors who serve as Executive Officers.

 

I. Miscellaneous

 

29. Nothing in this Policy shall be deemed to grant to any of SciSparc’s Executive Officers, employees, directors, or any third party any right or privilege in connection with their employment by or service to the Company, nor deemed to require SciSparc to provide any compensation or benefits to any person. Such rights and privileges shall be governed by applicable personal employment agreements or other separate compensation arrangements entered into between SciSparc and the recipient of such compensation or benefits. The Board may determine that none or only part of the payments, benefits and perquisites detailed in this Policy shall be granted, and is authorized to cancel or suspend a compensation package or any part of it.

 

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30. An Immaterial Change in the Terms of Employment of an Executive Officer other than the CEO may be approved by the CEO, provided that the amended terms of employment are in accordance with this Policy. An “Immaterial Change in the Terms of Employment” means a change in the terms of employment of an Executive Officer with an annual total cost to the Company not exceeding an amount equal to two (2) monthly base salaries of such employee.

 

31. In the event that new regulations or law amendment in connection with Executive Officers’ and directors’ compensation will be enacted following the adoption of this Policy, SciSparc may follow such new regulations or law amendments, even if such new regulations are in contradiction to the compensation terms set forth herein.

 

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This Policy is designed solely for the benefitof SciSparc and none of the provisions thereof are intended to provide any rights or remedies to any person other than SciSparc.

 

 

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