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zk1110258.htm


SECURITIES AND EXCHANGE COMMISSION
 
WASHINGTON, D.C. 20549
 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER
 
PURSUANT TO RULE 13a-16 OR 15d-16 OF
 
THE SECURITIES EXCHANGE ACT OF 1934
 
For the month of August, 2011
 
_______________________
 
BioLineRx Ltd.
 (Translation of Registrant’s name into English)
 
_______________________
 
P.O. Box 45158
19 Hartum Street
Jerusalem 91450, Israel
 (Address of Principal Executive Offices)
_______________________
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:         
 
Form 20-F þ   Form 40-F o
 
Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:           
 
Yes o    No þ
 
 
 

 
 
The Registrant announces that on August 1, 2011, it published on the Magna site of the Tel Aviv Stock Exchange a Motion that was filed with the Jerusalem District Court in Israel with respect to an Arrangement under Section 350(i) of the Israel Companies Law. Pursuant to the Motion, the District Court was requested to approve an Arrangement that would  extend the final date for exercising certain warrants issued in May 2009 by the Company to the public, from December 28, 2011 to June 30, 2013. The Company also filed on the Magna site on August 1, 2011, a Notice of Filing a Motion and an Affidavit, which was sworn by Mr Philip Serlin, the Company's Chief Financial and Operating Officer, in connection with the Motion.  Attached hereto as Exhibits 1, 2 and 3 respectively, are the Notice of Filing a Motion, the Motion and the Affidavit.
 
 
 

 
 
Pursuant to the requirements of 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.
 
 
BioLineRx Ltd.
 
       
 
By:
/s/ Philip Serlin  
   
Philip Serlin
 
   
Chief Financial Officer and Operating Officer
 
       
Dated: August 8, 2011
 


 

 
exhibit_1.htm


Exhibit 1
 
In the District Court of Jerusalem
 
Notice of Filing a Motion with the Court
 
In accordance with the Companies Regulations (Motion for Settlement or
Arrangement), 2001 (the "Regulations")
 
In re:  BioLineRX Ltd.; Company no.:  51-339875-0,  Address:  19 Hartum St., Jerusalem.
 
Counsel representing the Company in filing this Motion:  Advocates Gil Oren and/or Amir Assali, of Yigal Arnon & Co., 1 Azrieli Center, Tel Aviv 67021, Tel.  03-6087850, Fax  03-6087723.
 
Notice is hereby served that on July 31, 2011, the Company filed with the District Court of Jerusalem (the "Court") a motion to approve an arrangement between the Company and holders of the Company's Warrants (Series 2) (the "Warrants" and the "Motion"). The proposed Arragement will extend by approximately 18 months, until June 30, 2013, the exercise period of the Warrants (which were issued in accordance with a shelf offering report of the Company dated December 27, 2009, which was published under a shelf prospectus dated May 3, 2009), all as detailed in and subject to the Motion.
 
Copies of the Motion and all attachments thereto shall be provided, free of charge, to any stakeholder, upon receipt of a written request.
 
In accordance with Section 34 of the Regulations, objections to the Motion may be filed with the Court no later than August 11, 2011.
 


 

 

 

 
exhibit_2.htm


Exhibit 2
 
In the District Court
District of Jerusalem
 
In re:
Motion to Approve an Arrangement In Accordance with Section 350 of the Companies Law, 1999

And in re:              BioLineRX Ltd., Private Company No.  51-339875-0
Of 19 Hartum St., Jerusalem
Represented by Advocates Gil Oren and/or Amir Assali
From Yigal Arnon & Co.
Of 1 Azrieli Center, Tel Aviv 67021
Tel.   03-6087850, Fax  03-6087723

Movant

And in re:             Israel Securities Authority
Of 22 Kanfei Nesharim St., Jerusalem
Tel.   02-6556555, Fax  02-6513646

Official Respondent
 
Motion to approve an arrangement between the Company and
holders of Warrants (Series 2) of the Company in accordance
with Section 350 of the Companies Law, 1999
 
We hereby respectfully request the Court, in accordance with its authority under Section 350 of the Companies Law, 1999 (the “Companies Law”) and the Companies Regulations (Motion for Settlement or Arrangement), 2002 (the “Regulations”), to issue the following decisions:
 
 
a.
To order that meetings of the Company's shareholders and of holders of options (Series 2) (the  "Warrants") (and together:  "the "Meetings") shall be convened by the Movant; the agenda for such Meetings shall be to approve an extension of the Warrants (Series 2) in accordance with the provisions of Section 350 of the Companies Law (the "Arrangement"), as detailed herein.
 
In order to approve the proposed Arrangement at the general Meetings, the Arrangement must be approved by a majority of those present and voting, holding together three quarters of the value present at the vote, in accordance with Section 350(i) of the Companies Law.
 
 
 

 
 
In this context let us note that the Company shall consider any holder of Warrants (Series 2) who, at the time of the general Meeting, holds Warrants (Series 2) at a percentage (to the aggregate number of Warrants (Series 2)) that is equal to or lower than the percentage of his holdings of the Company's issued and outstanding share capital, as a person who, due to a conflict of interest, may not participate in the general Meeting of holders of Warrants (Series 2).
 
The Company shall also treat any shareholder who, at the Record Date designated for the Shareholders' Meeting, holds such percentage of shares that is equal to or lower than the percentage of his holding of Warrants (Series 2) of the Company, as a person who, due to a conflict of interest, may not participate in the Shareholders' Meeting.
 
Given the above, the vote of any holders with holdings that bar their participation at the Meetings as explained above, shall not be counted.
 
For the purpose of determining which holder is prohibited due to his holdings as explained above, from participating in the Meetings, each holder of Warrants (Series 2) and/or shares of the Company who participates in either of the Meetings, shall be required to make a statement of his holdings of Warrants (Series 2) and shares of the Company.  With respect to the Meeting of holders of Warrants (Series 2), the statement shall be as of the time of the Meeting; the applicable time for determining the ratio that creates a conflict of interest at the shareholders' Meeting shall be the Record Date for participation in the shareholders' Meeting.
 
b.
To exercise the authority of the Court in accordance with Section 3(c) of the Regulations, and exempt the Movant from the obligation to effect service as set forth in Section 3(b) of the Regulations.
 
c.
To issue an order whereby notices of the foregoing general Meetings shall be made solely by immediate reports, in accordance with the Securities Law, 1968 (the  "Securities Law") and the regulations promulgated thereunder and by publication, at least 14 days prior to the applicable Meeting, of ads in two Hebrew language daily newspapers with a large readership, and to order that the Record Date for the purpose of voting at the Meeting of holders of Warrants (Series 2) shall be the time of the Meeting.
 
d.
To order that the presence, in person or by proxy, of at least two holders of Warrants, representing at least one quarter (25%) of the existing Warrants shall constitute a quorum for the general Meeting of holders of Warrants.  If a quorum is not present within half an hour from the time scheduled for the general Meeting, the Meeting shall adjourn to the following day at the same time and place (the   "Adjourned Meeting").  The presence, in person or by proxy, of at least two holders of Warrants, shall constitute a quorum for the Adjourned Meeting of holders of Warrants.
 
 
- 2 -

 
 
e.
To issue an order whereby the General Meetings shall take place in accordance with the provisions set forth herein, and where no such provision is made, in accordance with the provisions of the Company's Articles of Association regarding shareholders' meetings.
 
f.
In accordance with the authority granted to the Court under Section 8 of the Regulations, to exempt the Movant from submission of such details and attachment of documents as required in Section 7 of the Regulations,that were not submitted in this Motion because they are irrelevant.
 
g.
To authorize the management of the Company to determine and/or change technical instructions that are necessary in order to implement the proposed Arrangement, if and to the extent such instructions shall be necessary.
 
h.
After the General Meetings and subject to the resolutions adopted thereby, the Movant shall file a motion with the Court to approve the proposed Arrangement in accordance with Section 350 of the Companies Law.
 
i.
To issue any other remedy as the Court may deem appropriate and just.
 
Details and Reasons for the Motion
 
1.
Description of the Company and its Business
 
1.1
General
 
The Movant is a public company whose shares are traded on the Tel Aviv Stock Exchange Ltd ("TASE") and accordingly makes public reports pursuant to the Securities Law and the regulations promulgated thereunder.  Information about the assets, liabilities, operations and results of the Company are accessible to all.
 
According to a shelf offering of the Company of December 27, 2009, which was published under a shelf prospectus dated May 3, 2009 (the "Shelf Prospectus"), the Company issued to the public 7,528,946 Warrants (Series 2) (the "Warrants").  Each Warrant is exercisable into one registered ordinary share of the Company, par value NIS 0.01 each (subject to adjustments), against payment in cash of an exercise price of NIS 6.08, unlinked. Any Warrant that is not exercised by December 28, 2011, inclusive, shall expire, be null and void and shall not confer upon the holder any right whatsoever.
 
 
- 3 -

 
 
All other terms of the Warrants are described in Section 2.11 of the Shelf Prospectus.
 
A copy of the Cover of the Shelf Prospectus and of Section 2.11 thereto are attached as Exhibit A hereto and constitute an integral part hereof.
 
On June 14, 2011, the Company's Board of Directors resolved to extend the exercise period of the Warrants and to submit a motion to the Court for this purpose.
 
1.2
The Company's Activities
 
The Company, itself and through corporate entities that it owns (the "Group"), engages in the development of medical products for a range of diseases, as of early development stages and through advanced clinical trials.  The Group has a range of professional capabilities, including scientific, regulatory, managerial and financial.
 
As of the date hereof, the Group has one field of activity, which is reserach and development of therapeutic products, and it currently has 14 products in varying stages of development:
 
 
a.
Five products are in the clinical development stages (efficiency and safety trials in humans). Further development of one of these products (BL-1040) is implemented by Ikaria, a U.S. company which is a leader in its field, under an out-license granted to Ikaria by the Company.
 
 
b.
Nine products are in various pre-clinical development stages.
 
The Company's entire periodic report as of December 31, 2010 (as published by the Company on Magna) is attached as Exhibit B hereto and constitutes an integral part hereof.
 
1.3
The Company's Securities
 
The Company's securities, as of today, include:
 
(a)    123,592,794 shares, par value NIS 0.01 each.  (the "Shares").
 
(b)    7,528,946 Warrants (Series 2).
 
(b)    6,583,459 Warrants (unregistered).
 
 
- 4 -

 
 
2.
The Proposed Arrangement and Explanations Therefor
 
2.1
The Proposed Arrangement
 
We respectfully ask the Court to authorize the Company to offer the holders of the Company's Warrants (Series 2) and shareholders, an arrangement which would extend the exercise period of the Warrants (Series 2), in accordance with Section 350 of the Companies Law, as follows:
 
Extension of the exercise period of the Warrants to June 30, 2013.
 
All other terms of the Warrants (Series 2) shall remain unchanged.
 
For avoidance of doubt it is expressly stated that one should not see in this Motion an expression of the Company's opinion regarding the future value of its shares and/or Warrants, nor is it assuming any obligation that the price of the Company's shares and/or Warrants will go up, nor is it making any recommendation to exercise (or not to exercise) the Warrants now or at any future time.
 
Since under Part II of the TASE Regulations, the exercise period of the Warrants may only be changed by an arrangement approved by the Court in accordance with Section 350 of the Companies Law, the Arrangement, which includes mainly an extension of the exercise period of the Warrants, requires approval by the Court in accordance with Section 350 of the Companies Law (approval by the General Meetings is not enough for this purpose) (for further details see Section 3 hereof).
 
2.2
The Majority Needed to Approve the Arrangement
 
As detailed in the preamble hereto, we respectfully ask the Court to order that separate general meetings shall be held, of holders of Warrants that are not also shareholders, of all of the Company's shareholders, of shareholders that do not hold Warrants (Series 2), and any other class meeting as may be required.
 
The majority required in order to approve the proposed Arrangement at each of these meetings, is as fixed in Section 350(i) of the Companies Law, namely, a majority of those voting, less abstentions, and provided that that in the aggregate they hold three quarters of the value represented at the vote.
 
 
- 5 -

 
 
2.3
Explanations for the Proposed Arrangement
 
It is the opinion of the Company that the exercise period of the Warrants (Series 2) should be extended, because approval of the proposed Arrangement would only benefit Warrant holders and the Company:
 
As of now, there are 7,528,946 Warrants (Series 2) in circulation which are exercisable as mentioned by December 28, 2011, against a payment in cash of an exercise price of NIS 6.08.
 
 
(a)
An extension would give holders of Warrants (Series 2) more time to consider the economic benefits of such exercise, in the hope that in the course of the extension the Company's share price will go up, such that exercise would eventually make financial sense.  Extension of the exercise period would therefore increase the probability that Warrants will be exercised.
 
 
(b)
If Warrants (Series 2) of the Company are exercised, this would inject additional capital into the Company, without any additional material fund raising costs to the Company, and would increase the Company's equity.
 
 
(c)
The Company estimates that, if the exercise period is not extended, and given the low probability that Warrants (Series 2) shall be exercised by the expiration of the exercise period, the Warrants (Series 2) will expire as originally scheduled, and the Company shall not have raised any funds through the Warrants (Series 2).
 
 
(d)
In the period between the issuance of the Warrants (Series 2) in December 2009, and the date hereof, the highest price of the Company's share was NIS 4.75 (on March 7, 2010).  As of July 19, 2011, the Company's share price is approximately NIS 1.675. A comparison of the exercise price of the Warrants (Series 2) and the Company's share price as provided above, shows that the probability that the Warrants will be exercised by the end of the exercise period is very low.
 
 
(e)
In the Company's estimation, the proposed Arrangement constitutes a benefit to holders of the Company's Warrants (Series 2). Given the costs of other financing alternatives, it is also advantageous to the Company. Furthermore, the proposed Arrangement has no adverse effect for the Company's shareholders and/or creditors.
 
3.
The Legal Aspect
 
in accordance with TASE instructions (Section 91, Chapter XIV of the TASE Regulations) and with Section 2.11.8(c) of the Shelf Prospectus, the terms of the Warrants, with respect to the exercise period, can be amended, provided that such amended is effected through a settlement or an arrangement approved by the Court under Section 350 of the Companies Law. Such approval is required even if the proposed transaction is beneficial to the Company's warrant holders and has no adverse effect on any other part.
 
 
- 6 -

 
 
A copy of Section 91, Chapter XIV of the TASE Regulations is attached as Exhibit C hereto and constitutes an integral part hereof.
 
A copy of Section 2.11 of the Shelf Prospectus is attached as Exhibit A hereto and constitute an integral part hereof.
 
All the documents which, in the Company's opinion, participants in the General Meetings shall need in order to decide whether to adopt the proposed Arrangement, are attached hereto.
 
4.
Receiver or Liquidator
 
No receiver or liquidator has been appointed for the Company.
 
5.
Benefits to Officers of the Company
 
To the Company's best knowledge, officers of the Company shall not, in their capacity as officers, shareholders or creditors of the Company, derive any personal benefits from the proposed Arrangement.
 
6.
Controlling Shareholder
 
As of the date hereof, the Company has no controlling shareholder as such term is defined in the Securities Law.
 
7.
Classes of Shares; Effect of the Proposed Arrangement on Existing Rights of Company Shareholders
 
7.1
As of the date hereof, the registered share capital of the Company is NIS 2,500,000, divided into 250,000,000 ordinary shares, par value NIS 0.01   each ("Ordinary Shares").
 
7.2
The issued share capital of the Company is 123,592,794 Ordinary Shares.
 
7.3
In the Company's estimation, the proposed Arrangement shall have no adverse effect on the existing rights of the Company's shareholders.  Notwithstanding the above, any shareholder who may consider himself to have been adversely affected by the approval, in and of itself, of the proposed Arrangement, shall be able to vote at the General Meetings of the Company's shareholders, which will be convened in accordance with Section 350(i) of the Companies Law.
 
 
- 7 -

 
 
This Motion is also a motion to the Court to authorize the Company to convene the General Meetings of the shareholders, as described above.
 
8.
Creditors of the Company
 
Extension of the exercise period of the Warrants is beneficial to the Company and its creditors, and would increase the probability that Warrants shall be exercised into Company shares and thus increase the Company's equity.  The position of all of the Company's creditors, material and minor creditors alike, shall therefore only improve as a result of the proposed Arrangement.
 
Given all of the above, the Company respectfully asks the Court to exempt it from submitting the documents listed in Section 7(b) of the Regulations, because, to the best of the Company's understanding, such documents are only required where the arrangement sought by the company would affect its creditors; as explained, this is not the case with respect to the Arrangement contemplated herein.
 
9.
Guarantees, Sureties and other Securities
 
No guarantees, sureties or other securities have been provided or offered to the Company in connection with the Arrangement.
 
10.
Costs of the Arrangement
 
The estimated cost of implementing the Arrangement in its entirety is approximately NIS 37,000 (exclusive of VAT).
 
11.
Position Holder to Perform the Proposed Arrangement
 
The Company is not proposing any position holder to perform the proposed Arrangement.
 
12.
Affidavit
 
This Motion is supported by the affidavit of Mr. Philip Serlin, the Company's CFO and VP Operations.
 
It would be lawful and equitable to grant this Motion.
 
Amir Assali, Advocate
Yigal Arnon & Co. Law Firm
Counsels for the Movants

This 28th day of July, 2011
 
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exhibit_3.htm


Exhibit 3
 
Affidavit
 
I the undersigned, Philip Serlin, bearer of ID number   310550157, having been cautioned that I must state the truth and that I shall be subject to the penalties prescribed by law if I fail to do so, do hereby make the following statement:
 
 
1.
This affidavit is made in support of the motion (the  "Motion") filed by BioLineRx Ltd. (the  "Company") regarding extension of the exercise period of its Warrants (Series 2), all as detailed in and subject to the Motion.
 
 
2.
I am the Company's Chief Financial and Operating Officer, and have been authorized by the Company to make this affidavit.  Unless otherwise stated, I have personal knowledge of the facts detailed herein.   Sections herein that include legal elements, including Section 5 hereof, are in accordance with legal advice that I have received.
 
 
3.
Description of the Company and Its Business
 
 
3.1
General
 
The Movant is a public company whose shares are traded on the Tel Aviv Stock Exchange Ltd ("TASE") and accordingly makes public reports pursuant to the Securities Law and the regulations promulgated thereunder.  Information about the assets, liabilities, operations and results of the Company are accessible to all.
 
According to a shelf offering of the Company of December 27, 2009, which was published under a shelf prospectus dated May 3, 2009 (the "Shelf Prospectus"), the Company issued to the public 7,528,946 Warrants (Series 2) (the "Warrants").  Each Warrant is exercisable into one registered ordinary share of the Company, par value NIS 0.01 each (subject to adjustments), against payment in cash of an exercise price of NIS 6.08, unlinked.  Any Warrant that is not exercised by December 28, 2011, inclusive, shall expire, be null and void and shall not confer upon the holder any right whatsoever.
 
All other terms of the Warrants are described in Section 2.11 of the Shelf Prospectus.
 
A copy of the Cover of the Shelf Prospectus and of Section 2.11 thereto are attached as Exhibit A to the Motion and constitute an integral part thereof.
 
On June 14, 2011, the Company's Board of Directors resolved to extend the exercise period of the Warrants and to submit a motion to the Court for this purpose.
 
 
 

 
 
 
3.2
The Company's Activities
 
The Company, itself and through corporate entities that it owns (the "Group"), engages in the development of medical products for a range of diseases, as of early development stages and through advanced clinical trials.  The Group has a range of professional capabilities, including scientific, regulatory, managerial and financial.
 
As of the date hereof, the Group has one field of activity, which is reserach and development of therapeutic products, and it currently has 14 products in varying stages of development:
 
 
a.
Five products are in the clinical development stages (efficiency and safety trials in humans). Further development of one of these products (BL-1040) is implemented by Ikaria, a U.S. company which is a leader in its field, udner an out-license granted to Ikaria by the Company.
 
 
b.
Nine products are in various pre-clinical development stages.
 
The Company's entire periodic report as of December 31, 2010 (as published by the Company on Magna) is attached as Exhibit B to the Motion and constitutes an integral part thereof.
 
 
3.3
The Company's Securities
 
The Company's securities, as of today, include:
 
(a)    123,592,794 shares, par value NIS 0.01 each.  (the "Shares").
 
(b)    7,528,946 Warrants (Series 2).
 
(b)    6,583,459 Warrants (unregistered).
 
 
4.
The Proposed Arrangement and Explanations Therefor
 
 
4.1
The Proposed Arrangement
 
The Court is respectfully asked to authorize the Company to offer the holders of the Company's Warrants (Series 2) and shareholders, an arrangement which would extend the exercise period of the Warrants (Series 2), in accordance with Section 350 of the Companies Law, as follows:
 
Extension of the exercise period of the Warrants to June 30, 2013.
 
All other terms of the Warrants (Series 2) shall remain unchanged.
 
 
- 2 -

 
 
For avoidance of doubt it is expressly stated that one should not see  in this Motion an expression of the Company's opinion regarding the future value of its shares and/or Warrants, nor is it assuming any obligation that the price of the Company's shares and/or Warrants will go up, nor is it making any recommendation to exercise (or not to exercise) the Warrants now or at any future time.
 
Since under Part II of the TASE Regulations, the exercise period of the Warrants may only be changed by an arrangement approved by the Court in accordance with Section 350 of the Companies Law, the Arrangement, which includes mainly an extension of the exercise period of the Warrants, requires approval by the Court in accordance with Section 350 of the Companies Law (approval by the General Meetings is not enough for this purpose) (for further details see Section 5 hereof).
 
 
4.2
The Majority Needed to Approve the Arrangement
 
As detailed in the preamble to the Motion, the Court is respectfully asked to order that separate general meetings shall be held, of holders of Warrants that are not also shareholders, of all of the Company's shareholders, of shareholders that do not hold Warrants (Series 2), and any other class meeting as may be required.
 
The majority required in order to approve the proposed Arrangement at each of these meetings, is as fixed in Section 350(i) of the Companies Law, namely, a majority of those voting, less abstentions, and provided that that in the aggregate they hold three quarters of the value represented at the vote.
 
 
4.3
Explanations for the Proposed Arrangement
 
It is the opinion of the Company that the exercise period of the Warrants (Series 2) should be extended, because approval of the proposed Arrangement would only benefit Warrant holders and the Company:
 
As of now, there are 7,528,946 Warrants (Series 2) in circulation which are exercisable as mentioned by December 28, 2011, against a payment in cash of an exercise price of NIS 6.08.
 
 
(a)
An extension would give holders of Warrants (Series 2) more time to consider the economic benefits of such exercise, in the hope that in the course of the extension the Company's share price will go up, such that exercise would eventually make financial sense.  Extension of the exercise period would therefore increase the probability that Warrants will be exercised.
 
 
- 3 -

 
 
 
(b)
In Warrants (Series 2) of the Company are exercised, this would inject additional capital into the Company, without any additional material fund raising costs to the Company, and would increase the Company's equity.
 
 
(c)
The Company estimates that, if the exercise period is not extended, and given the low probability that Warrants (Series 2) shall be exercised by the expiration of the exercise period, the Warrants (Series 2) will expire as originally scheduled, and the Company shall not have raised any funds through the Warrants (Series 2).
 
 
(d)
In the period between the issuance of the Warrants (Series 2) in December 2009, and the date hereof, the highest price of the Company's share was NIS 4.75 (on March 7, 2010).  As of July 19, 2011, the Company's share price is approximately NIS 1.675. A comparison of the exercise price of the Warrants (Series 2) and the Company's share price as provided above, shows that the probability that the Warrants will be exercised by the end of the exercise period is very low.
 
 
(e)
In the Company's estimation, the proposed Arrangement constitutes a benefit to holders of the Company's Warrants (Series 2). Given the costs of other financing alternatives, it is also advantageous to the Company. Furthermore, the proposed Arrangement has no adverse effect for the Company's shareholders and/or creditors.
 
 
5.
The Legal Aspect
 
in accordance with TASE instructions (Section 91, Chapter XIV of the TASE Regulations) and with Section 2.11.8(c) of the Shelf Prospectus, the terms of the Warrants, with respect to the exercise period, can be amended, provided that such amended is effected through a settlement or an arrangement approved by the Court under Section 350 of the Companies Law. Such approval is required even if the proposed transaction is beneficial to the Company's warrant holders and has no adverse effect on any other part.
 
 
A copy of Section 91, Chapter XIV of the TASE Regulations is attached as Exhibit C to the Motion and constitutes an integral part thereof.
 
 
- 4 -

 
 
A copy of Section 2.11 of the Shelf Prospectus is attached as Exhibit A to the Motion and constitutes an integral part thereof.
 
 
All the documents which, in the Company's opinion, participants in the General Meetings shall need in order to decide whether to adopt the proposed Arrangement, are attached to the Motion.
 
 
6.
Receiver or Liquidator
 
No receiver or liquidator has been appointed for the Company.
 
 
7.
Benefits to Officers of the Company
 
To the Company's best knowledge, officers of the Company shall not, in their capacity as officers, shareholders or creditors of the Company, derive any personal benefits from the proposed Arrangement.
 
 
8.
Controlling Shareholder
 
As of the date hereof, the Company has no controlling shareholder as such term is defined in the Securities Law.
 
 
9.
Classes of Shares; Effect of the Proposed Arrangement on Existing Rights of Company Shareholders
 
 
9.1
As of the date hereof, the registered share capital of the Company is NIS 2,500,000, divided into 250,000,000 ordinary shares, par value NIS 0.01   each ("Ordinary Shares").
 
 
9.2
The issued share capital of the Company is 123,592,794 Ordinary Shares.
 
 
9.3
In the Company's estimation, the proposed Arrangement shall have no adverse effect on the existing rights of the Company's shareholders.  Notwithstanding the above, any shareholder who may consider himself to have been adversely affected by the approval, in and of itself, of the proposed Arrangement, shall be able to vote at the General Meetings of the Company's shareholders, which will be convened in accordance with Section 350(i) of the Companies Law.
 
 
9.4
This Motion is also a motion to the Court to authorize the Company to convene the General Meetings of the shareholders, as described above.
 
 
- 5 -

 
 
 
10.
Creditors of the Company
 
Extension of the exercise period of the Warrants is beneficial to the Company and its creditors, and would increase the probability that Warrants shall be exercised into Company shares and thus increase the Company's equity.  The position of all of the Company's creditors, material and minor creditors alike, shall therefore only improve as a result of the proposed Arrangement.
 
Given all of the above, the Company respectfully asks the Court to exempt it from submitting the documents listed in Section 7(b) of the Regulations, because, to the best of the Company's understanding, such documents are only required where the arrangement sought by the company would affect its creditors; as explained, this is not the case with respect to the Arrangement contemplated in the Motion.
 
 
11.
Guarantees, Sureties and other Securities
 
No guarantees, sureties or other securities have been provided or offered to the Company in connection with the Arrangement.
 
 
12.
Costs of the Arrangement
 
The estimated cost of implementing the Arrangement in its entirety is approximately NIS 37,000 (exclusive of VAT).
 
 
13.
Third Party to Manage the Proposed Arrangement
 
The Company is not proposing any third party to manage the proposed Arrangement.
 
My name is Philip Serlin, the signature below is my own, and my affidavit above is truthful.

     
Date
 
Philip Serlin

I, the undersigned, Amir Assali, of 132 Menachem Begin St., Tel-Aviv , hereby confirm that Mr. Philip Serlin, whom I know in person, appeared before me today. After I warned him that he must state the truth or else he might be liable to the penalties prescribed by law, he confirmed that his affidavit, above, was truthful and signed it in my presence.

     
Date
 
Amir Assali, Advocate
 
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