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Item 6.
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Indemnification of Directors and Officers.
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We indemnify our directors and officers to the maximum extent
permitted by Delaware law for the costs and liabilities of acting or failing to act in an official capacity. In addition, we have
entered into indemnification agreements with each of our executive officers and directors to provide them with the maximum indemnification
allowed under our amended and restated bylaws and applicable Delaware law, including indemnification for all judgments and expenses
incurred as the result of any lawsuit in which such person is named as a defendant by reason of being our director, officer or
employee, to the extent indemnification is permitted by the laws of Delaware. We believe that the indemnification agreements will
enhance our ability to continue to attract and retain qualified individuals to serve as directors and officers.
The articles of association of Protalix Ltd., our wholly-owned
subsidiary, allow it to exculpate, indemnify, and insure its office holders to the fullest extent permitted by Israeli law, as
described below. Accordingly, Protalix Ltd. has entered into indemnification agreements with each of its officers and directors
undertaking to indemnify them to the fullest extent permitted by Israeli law. As required by law, the indemnification is limited
to events determined as foreseeable by the board of directors of Protalix Ltd. based on the activities of Protalix Ltd. upon adoption
of the form of indemnification in 2016, and to an amount determined by the board of directors as reasonable under the circumstances.
We purchase and maintain a directors and officers liability
insurance policy which covers the liability of our directors and officers on a "claims made" basis for their ongoing
activity since December 28, 2006, with a limit of $30,000,000 for any one claim and in the aggregate for the period of insurance
with the addition of 20% of the above limit for legal defense costs (in Israel).
Furthermore, we purchase and maintain a Side A Excess and Difference
In Conditions insurance which covers the non-indemnifiable liability of our directors and officers on a "claims made"
basis for their ongoing activity since December 28, 2006, with a limit of $5,000,000 for any one claim and in the aggregate for
the period of insurance with the addition of 20% of the above limit for legal defense costs (in Israel).
As of the date of hereof, no claims for directors’ and
officers’ liability insurance have been filed under those policies and neither us nor Protalix Ltd. is aware of any pending
or threatened litigation or proceeding involving any of our directors or officers, or those of Protalix Ltd., in which indemnification
is sought.
We have undertaken to fulfill and honor in all respects the
obligations of Protalix Ltd. pursuant to any indemnification agreements between Protalix Ltd. and its directors in effect prior
to December 31, 2006 and to provide any substitute director and the officers of Protalix Ltd. with similar indemnification
agreements. We further agreed that any provision of Protalix Ltd.’s charter documents that relate to exculpation and indemnification
of officers and directors of Protalix Ltd. will not be amended, repealed, or otherwise modified in any manner that would adversely
affect the rights of the directors and officers, unless such modification is required by any applicable law.
Under Israeli law, an Israeli company may not exculpate an office
holder from liability for a breach of the duty of loyalty of the office holder. An Israeli company may exculpate an office holder
in advance from liability, in whole or in part, for damages caused due to a breach of duty of care owed to the company (other than
in the event that such liability arises out of a breach of duty of care to the company upon distribution) but only if a provision
authorizing such exculpation is inserted in its articles of association. Protalix Ltd.’s articles of association include
such a provision.
An Israeli company may indemnify an office holder in respect
of certain liabilities or expenses either in advance of an event or following an event provided a provision authorizing such indemnification
is inserted in its articles of association. Protalix Ltd.’s articles of association contain such an authorization. An Israeli
company may indemnify an office holder against the following liabilities or expenses incurred for acts performed as an office holder:
(A)
financial liability imposed on or incurred by him or her in favor of another person pursuant to a judgment, settlement or
arbitrator’s award approved by a court
;
(B)
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder
as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation
or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding;
and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding
as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an
offense that does not require proof of criminal intent or with regard to a monetary sanction;
(C)
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder
or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third party or in connection
with criminal proceedings in which the office holder was acquitted or as a result of a conviction for a crime that does not require
proof of criminal intent; and
(D)
A payment which the office holder is obligated to make to an injured party as set forth in Section
52(54)(a)(1)(a) of the Israeli Securities Law, 5278-1968, as amended (“Israeli Securities Law”), and reasonable litigation
expenses, including attorneys’ fees, that the office holder incurred in connection with a proceeding under Chapters H’3,
H’4 or I’1 of the Israeli Securities Law.
An undertaking provided in advance by an Israeli company to
indemnify an office holder with respect to (A), as abovementioned, must be limited to events which, in the opinion of the board
of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount
or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall
detail the abovementioned events and amount or criteria. We are permitted to provide an office holder advanced payments to cover
expenses covered under (D) above.
An Israeli company may insure an office holder against the following
liabilities incurred for acts performed as an office holder:
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a breach of duty of care to the company or to a third party;
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a breach of duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis
to believe that the act would not be detrimental to the interests of the company;
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a financial liability imposed on the office holder in favor of a third party in respect of an act performed in his or her capacity
as an office holder; and
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A payment which the office holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Israeli
Securities Law and reasonable litigation expenses, including attorneys’ fees, that the office holder incurred in connection
with a proceeding under Chapters H’3, H’4 or I’1 of the Israeli Securities Law.
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An Israeli company may not insure, indemnify or exculpate an
office holder against any of the following:
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a breach of duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to
believe that the act would not be detrimental to the interests of the company;
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a grossly negligent or intentional violation of an office holder’s duty of care;
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an act or omission committed with intent to derive illegal personal benefit; or
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a fine, civil fine, monetary sanction or ransom levied against the office holder.
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Under the Israeli law, exculpation, indemnification, and insurance
of office holders must be approved by the board of directors of Protalix Ltd. and, in respect of directors of Protalix Ltd., also
by the shareholders of Protalix Ltd. Such approvals were properly obtained.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors and officers or persons controlling us pursuant to the foregoing provisions, or
otherwise, we have been advised that, in the opinion of the Commission, such indemnification is against public policy as expressed
in the Securities Act, and is, therefore, unenforceable. With respect to insurance and indemnification for liabilities and expenses
arising under the Israeli Securities Law, such insurance and indemnification is permissible only to the extent described in this
Item 6.
The undersigned registrant hereby undertakes:
(1) to file, during
any period in which offers or sales are being made, a post-effective amendment to this Registration Statement;
(i) to
include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) to
reflect in the prospectus any facts or events arising after the effective date of the Registration statement (or most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the change in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set
forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and
(iii) to
include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration Statement.
provided
,
however
, that paragraphs (1)(i) and
(1)(ii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs
is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the Registration Statement;
(2) that, for the purpose
of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial
bona fide
offering thereof; and
(3) to remove from
registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of the offering.
The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial
bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person
of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.