Tufin Software Technologies Ltd. (Form: F-1, Received: 03/06/2019 17:31:50)

As filed with the Securities and Exchange Commission on March 6, 2019 .

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM F-1

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

_____________

Tufin Software Technologies Ltd.

(Exact name of Registrant as specified in its charter)

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Not Applicable

(Translation of Registrant’s name into English)

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State of Israel	7373	Not Applicable
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

Tufin Software Technologies Ltd.

5 Shoham Street

Ramat-Gan 52521, Israel

+972 (3) 612-8118

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

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Tufin Software North America, Inc.

2 Oliver Street, Suite 702

Boston, Massachusetts 02109-4901

+1 (877) 270-7711

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

_____________

Copies to:



Colin J. Diamond, Esq. White & Case LLP 1221 Avenue of the Americas New York, New York 10020-1095 Tel: +1 (212) 819-8200 Fax: +1 (212) 354-8113	Amir Halevy, Adv. Perry E. Wildes, Adv. Gross, Kleinhendler, Hodak, Halevy, Greenberg, Shenhav & Co. One Azrieli Center, Round Tower Tel Aviv 67021, Israel Tel: +972 (3) 607-4444 Fax: +972 (3) 607-4470	Kenneth J. Gordon, Esq. Michael J. Minahan, Esq. Goodwin Procter LLP 100 Northern Avenue Boston, Massachusetts 02210 Tel: +1 (617) 570-1000 Fax: +1 (617) 801-8717	Ido Zemach, Adv. Yoni Henner, Adv. Goldfarb Seligman & Co. 98 Yigal Alon Street Ampa Tower Tel Aviv 6789141, Israel Tel: +972 (3) 608-9999 Fax: +972 (3) 608-9855

Approximate date of commencement of proposed sale to the public : As soon as practicable after effectiveness of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933. Emerging growth company. x

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. x

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

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CALCULATION OF REGISTRATION FEE



Title of each class of securities to be registered	Proposed maximum aggregate offering price(1)(2)	Amount of registration fee
Ordinary shares, par value NIS 0.01 per share	$100,000,000	$12,120.00


(1)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.


(2)	Includes shares granted pursuant to the underwriters’ option to purchase additional shares. See “Underwriting.”

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

TABLE OF CONTENTS



Summary	1
Risk Factors	12
Special Note Regarding Forward-Looking Statements	41
Market and Industry Data	42
Use of Proceeds	43
Dividend Policy	44
Capitalization	45
Dilution	46
Selected Consolidated Financial Data	48
Management’s Discussion and Analysis of Financial Condition and Results of Operations	51
Business	70
Management	85
Principal Shareholders	113
Certain Relationships and Related Party Transactions	115
Description of Share Capital	118
Shares Eligible for Future Sale	126
Taxation and Israeli Government Programs Applicable to our Company	128
U.S. and Israeli Tax Consequences for our Shareholders	132
Underwriting	141
Expenses of the Offering	147
Legal Matters	148
Experts	148
Enforceability of Civil Liabilities	149
Where You Can Find Additional Information	151
Index to Consolidated Financial Statements	F-1

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Neither we nor the underwriters, nor any of their respective agents, have authorized anyone to provide information different from that contained in this prospectus, any amendment or supplement to this prospectus or in any free writing prospectus prepared by us or on our behalf. Neither we nor the underwriters, nor any of their respective agents, take any responsibility for, and can provide no assurance as to the reliability of, any information other than the information in this prospectus and any free writing prospectus prepared by us or on our behalf. Neither the delivery of this prospectus nor the sale of our ordinary shares means that information contained in this prospectus is correct after the date of this prospectus. This prospectus is not an offer to sell or the solicitation of an offer to buy these ordinary shares in any circumstances under which such offer or solicitation is unlawful.

For investors outside of the United States: Neither we nor the underwriters, nor any of their respective agents, have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about, and to observe any restrictions relating to, this offering and the distribution of this prospectus outside of the United States.

References in this prospectus to the Global 2000 are to the world’s 2,000 largest public companies as published by Forbes on June 16, 2018.

SUMMARY

This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information that you should consider before deciding to invest in our ordinary shares. You should read the entire prospectus carefully, including “Risk Factors” and our consolidated financial statements and notes to those consolidated financial statements, before making an investment decision. In this prospectus, the terms “Tufin,” “we,” “us,” “our” and “the company” refer to Tufin Software Technologies Ltd. and its subsidiaries .

Overview

We are pioneering a policy-centric approach to security and IT operations. We transform enterprises’ security operations by helping them visualize, define and enforce a unified security policy across complex, heterogeneous IT and cloud environments. Our products govern how individuals, systems and applications are permitted to communicate and provide policy-based security automation, enabling customers to reduce the time to implement complex network changes from days to minutes. Our solutions increase business agility, eliminate errors from manual processes and ensure continuous compliance through a single console. Since our inception, our solutions have been purchased by over 2,000 customers in over 70 countries, including approximately 15% of the Global 2000.

Cybersecurity is critical for enterprises of all sizes. As enterprises embrace digital transformation and adopt new technologies such as cloud-based services, software-defined networks, microservices and containers, the IT and cloud environments become increasingly complex and vulnerable to attack. In response to the heightened threat environment, lack of a defined network perimeter and a constantly changing attack surface, enterprises continue to implement additional firewalls, endpoint security, identity and access management and other security solutions. However, we believe most enterprises lack effective and comprehensive security policy management , which results in a trade-off between the necessary security posture and business requirements for speed, agility and innovation.

We believe a new approach to enterprise security is necessary: a data-driven framework centered on policy management and operationalized through policy-based automation, enhancing compliance and security while improving operational efficiency. To address this need, we have developed highly differentiated technology with four main pillars:


•	Policy-centric approach . We enable enterprises to visualize, define and enforce a unified security policy that acts as the foundation of governance and control, replacing ad-hoc configurations across fragmented networks.


•	Automation of network changes . We automate the network change process across complex, heterogeneous environments, increasing business agility, enabling faster application deployment and reducing human error.


•	Data-driven . Our approach draws data from across a customer’s IT and cloud environments, providing insights on connectivity and end-to-end visibility across the network.


•	Open and extensible framework . Our open solutions serve as a centralized control layer for our customers’ networks and can connect to a wide range of third-party technologies through application program interfaces, or APIs.

We offer five products that comprise the Tufin Orchestration Suite: SecureTrack, SecureChange, SecureApp and, most recently, Orca and Iris. SecureTrack, SecureChange and SecureApp enable enterprises to visualize, define and enforce their security policy across heterogeneous networks, both on premise and in the cloud. SecureTrack serves as the foundation of SecureChange and SecureApp. SecureTrack provides visibility across the network and helps organizations define a unified security policy and maintain compliance. SecureChange provides customers with the ability to automate changes across the network while maintaining compliance with policy and security standards. SecureApp provides

application connectivity management and streamlines communication between application developers and network engineers. Our newest products, Orca and Iris, provide cloud-based security automation solutions in response to the growth of containers and cloud-native environments.

We have experienced strong growth. For the years ended December 31, 2017 and 2018, our revenues were $64.5 million and $85.0 million , respectively, representing year-over-year growth of 31.7% . For the years ended December 31, 2017 and 2018, our net loss was $2.8 million and $4.3 million , respectively.

Industry Background

Enterprises that lack a comprehensive security policy are facing challenges in balancing the necessary security and risk posture with their business requirements, leaving security, network and compliance professionals overwhelmed. Several industry trends contribute to operational challenges in managing risk, as set forth below:

•

Increasing frequency and sophistication of cyberattacks. Enterprises worldwide are under constant security threat from both external cyberattackers and malicious insiders in search of sensitive information and vital systems. Cyberattackers are increasingly able to breach networks and locate and steal sensitive enterprise data. As a result, numerous enterprise boards are prioritizing and reshaping their cybersecurity approaches.

•

Growing complexity of software-defined networks . Enterprises have been undergoing a digital transformation. They are rapidly shifting on-premise workloads to cloud environments to meet the changing demands of their markets and customers. To keep pace with this transformation, enterprises design scalable and flexible workloads and connections, which increase network complexity and the velocity of changes. The rise of technologies such as microservices and containers introduces additional complexity. The growing use of these dynamic technologies has raised business expectations on agility and increased the need for a unified security approach across networks and applications.

•

Accelerating pace of application development and deployment . The accelerating pace of business and technological developments requires numerous and continuous application and infrastructure changes. The rise of the DevOps model, which is a set of software development practices that allows applications and features to be rapidly developed and deployed, has led to increased release velocity. Enterprises that use manual change processes struggle to keep pace and lack policy consistency, resulting in an ever-growing backlog of changes, delayed software releases and heightened security exposure.

•

Evolving regulatory and compliance requirements . Global enterprises need to maintain compliance with a new wave of government regulations, corporate security policies and industry standards related to privacy and cybersecurity. Manual changes to network policy are difficult to track and are more likely to be non-compliant. As a result, enterprises seek cost-efficient security solutions to meet compliance requirements.

•

Legacy security approaches can no longer address cybersecurity threats in the ever-changing IT and cloud environments . Traditional security policy management approaches address governance and control, but lack critical characteristics such as a unified security policy, automation, scalability, end-to-end visibility and extensibility. We believe a new approach to enterprise security is necessary: a data-driven framework centered on policy management and operationalized through automation.

Benefits of Our Solutions

Our solutions enable our customers to visualize, define and enforce a security policy that dictates how users, systems and different organizational functions across the enterprise should be allowed to communicate. We automate our customers’ security policy management, allowing them to accelerate application deployment time without introducing non-compliant changes that could lead to vulnerabilities, and giving better visibility and control over all of their IT and cloud environments. This approach drives business agility and cost reduction while facilitating continuous compliance across hybrid, multi-vendor, multi-platform and heterogeneous environments. Our customers use our products to:

•

Accelerate business agility through end-to-end automation of security changes . Our automated solutions allow our customers to implement application changes onto their networks in minutes, not days. Our solutions accelerate security management processes, increase operational efficiency and reduce the traditional lag between software development and revenue-generating deployment. Increased efficiency frees up valuable IT resources to focus on higher-value tasks, all while remaining secure and compliant.

•

Reduce security risk through adoption of a unified security policy and continuous compliance . We enable enterprises to create a unified security policy that acts as the foundation of their security decision making. Effective security policy governs how individuals, systems and applications communicate. A well-defined security policy forms the basis of our automation capabilities, guiding the change implementation logic and ensuring continuous compliance with corporate security policies, government regulations and industry standards.

•

Navigate the complexity of hybrid and fragmented networks with a centralized control layer . We offer a centralized security management layer that analyzes, defines and implements enterprise-specific security policies. Our network abstraction layer allows for the automation of security changes across the network, including firewalls, traditional networks, public and private cloud environments, microservices and containers. Our solutions act as an independent third-party management layer, extending the security policy to every corner of the network, even as it grows, changes and adapts to new business demands and cybersecurity threats.

•

Enhance visibility and control . Our solutions provide customers with complete visibility over their IT and cloud environments, and enable them to quickly view changes and their impact on security posture prior to deployment. Our solutions monitor, collect and record configuration changes across the enterprise. They verify the adherence of these changes to the unified security policy, helping customers visualize any resulting compliance gaps or related vulnerabilities. We use topology intelligence to map out resources and connections, even across fragmented, complex environments. Enterprises can use our products to centrally manage and enforce their security policy with significant improvements in speed and ease-of-use through a multi-environment, ‘single pane of glass’ interface to ensure compliance and control.

Our Market Opportunity

We believe the majority of enterprises lack effective and comprehensive security policy management, which is critical to controlling network change. As digital transformation creates more complexity within IT and cloud environments, we believe our policy-centric, automated solutions will garner a growing share of enterprise security spend. In its September 14, 2018 publication Forecast Analysis: Information Security, Worldwide, 2Q18 Update , Gartner estimated that worldwide spending on information security products and services will reach more than $133 billion in 2019. In addition, 451 Research LLC’s VotE Information Security: Workloads and Key Projects 2018 study, covering 550 organizations of different sizes across 10 industry verticals, found that 83% of the companies surveyed did not have security automation and orchestration technologies in place, but 54% of those companies planned to deploy such technologies within the next 24 months. We believe increased security spending and adoption of security automation and orchestration technologies represent a significant opportunity for us.

We also believe our policy management and automation solutions overlap with several markets defined by IDC. IDC has estimated that:


•	the market for IT operations management, which improves user access to applications, business services and data sources on diverse platforms, will grow from $8.9 billion in 2018 to $11.7 billion by 2022, according to its Worldwide IT Operations Management Software Forecast for 2018-2022;


•	the market for IT automation and configuration management, which supports DevOps automation and orchestration, digital enterprises, hybrid cloud architectures and microservices-based applications, will grow from $6.7 billion in 2018 to $8.4 billion in 2022, according to its Worldwide IT Automation and Configuration Management Software Forecast for 2018-2022;


•	the market for policy and compliance (a sub-segment of security and vulnerability management), which enables enterprises to create, measure and report on security policy and regulatory compliance, will grow from $2.0 billion in 2018 to $3.1 billion in 2022, according to its Worldwide Security and Vulnerability Management Forecast for 2018-2022 ; and


•	the market for vulnerability assessment (a sub-segment of security and vulnerability management), which scans networks and applications for security vulnerabilities, will grow from $2.2 billion in 2018 to $3.7 billion by 2022, according to its Worldwide Security and Vulnerability Management Forecast for 2018-2022 .

We believe that our solutions will attract a meaningful portion of these markets, resulting in a multi-billion dollar addressable market. As we continue to innovate and introduce new products, the use cases for our solutions will expand, which we expect will lead to incremental growth in our addressable market opportunity.

We believe our policy management and automation functionalities define a new market, and we are not aware of any third-party research that accurately defines the scope of our directly addressable opportunity. As such, we estimated the market size using third-party data and, when third-party data was not available, internal estimates. We segment enterprises based on estimates of their network infrastructure size and their need for our solutions across their networks, and apply an average annual billings figure per segment based on an estimated prior five years of inventory, resulting in an estimated directly addressable market of $10.3 billion, which includes on-premise firewalls, private cloud and public cloud orchestration segments, for the fiscal year ending December 31, 2019.

Our Competitive Strengths

We believe we have several competitive advantages, including:


•	Pioneer in security policy management . We are a pioneer in the security policy management market. We believe we were the first company to introduce security policy automation solutions with SecureChange and SecureApp, and we believe our position as a market leader reinforces our brand and supports our position as one of the most prominent players in an increasingly important segment.

•


•	Scalable, extensible enterprise-grade solutions . Our solutions scale up to the largest enterprises with thousands of network devices (e.g., firewalls and routers) through their distributed architecture and high availability offering. Our extensible API framework allows our customized solutions to interface with most IT management frameworks and systems, and is used by customers, partners

and our professional services team who develop scripts and extensions on top of the Tufin Orchestration Suite.


•	Customer-first approach . Customer success has always been our priority. Since our inception, we have built a strong, customer-first approach and developed a powerful array of products and solutions to meet our customers’ needs and expectations. Our premium support services are available at all times to ensure that customers’ problems are addressed quickly.


•	Automation-driven return on investment . Enterprises quickly realize value upon deployment of our solutions. Our policy-driven automation allows customers to implement accurate and compliant network changes within minutes rather than days, allowing them to introduce new business applications faster and redeploy IT resources into higher-value projects.

Our Growth Strategy

•

Acquire new Global 2000 customers and mid-market customers . Since our inception, our solutions have been purchased by over 2,000 customers in over 70 countries, including approximately 15% of the Global 2000. Revenue generated from our Global 2000 customers, excluding maintenance renewals, represented an average of 65% of our total revenue over the fiscal years ended December 31, 2016 to 2018. We believe we have a significant growth opportunity with Global 2000 customers that currently lack a security policy management solution or that use a competing product that lacks automation. We also continue to pursue mid-market accounts with increasing need for security policy management solutions.

•

Expand within our customer base through new use cases and larger deployments . We aim to drive policy management and automation across the entire enterprise to help our customers fully benefit from our solutions. Customers often contract with us for a portion of their IT and cloud environments or begin only with SecureTrack. Over time, customers often expand their network coverage or recognize the benefits of automated policy changes at the network and application levels and adopt our SecureChange and SecureApp solutions. Most recently, customers moving applications to the cloud have demonstrated interest in Orca and Iris.

•


•	Democratize policy management across functions . Our customers continue to find new use cases for our policy management and automation products. For example, as enterprises continue to implement DevOps teams and practices, we believe they will need to introduce security measures earlier in the application development and deployment lifecycle.

Risks Associated With Our Business

Investing in our ordinary shares involves risks. You should carefully consider the risks described in “Risk Factors” beginning on page 12 before making a decision to invest in our ordinary shares. If any of these risks actually occurs, our business, financial condition and results of operations would likely be materially adversely affected. In such case, the trading price of our ordinary shares would likely decline, and you may lose all or part of your investment. The following is a summary of some of the principal risks we face:


•	The security policy management market is rapidly evolving and difficult to predict. If the market does not evolve as we anticipate or if our target customers do not adopt our solutions, our revenues may not grow as expected and our share price may decline.


•	If we are unable to acquire new customers, particularly large organizations, our future revenues and operating results will be harmed.


•	Our business depends substantially on our ability to retain customers and expand our offerings to them, and our failure to do so could harm future results of operations.


•	Our sales cycle is long and unpredictable, which may cause significant fluctuations in our quarterly results of operations.


•	We face competition in the security policy management market in which we operate, and we may lack sufficient financial or other resources to maintain or improve our competitive position.


•	Our revenue growth rate over the past year may not be indicative of our future performance.


•	Our business could be adversely affected if we are unable to manage changes to our business model over time.


•	Our business and operations have experienced rapid growth, and if we do not appropriately manage any future growth, our results of operations will be harmed.


•	We have a history of losses, and we may not be able to generate sufficient revenues to achieve and sustain profitability.


•	We have identified a material weakness in our internal control over financial reporting. If we fail to maintain effective internal control over financial reporting, we may be unable to report our financial results accurately or meet our reporting obligations.


•	If third-party applications and network products change such that we do not or cannot maintain the compatibility of our platforms and solutions with these applications and products, or if we fail to provide integrations that our customers desire, demand for our solutions and platforms could decline.

Corporate Information

We are incorporated under the laws of the State of Israel. Our principal executive offices are located at 5 Shoham Street, Ramat-Gan 52521, Israel, and our telephone number is +972 (3) 612-8118. Our website address is www.tufin.com. Information contained on, or that can be accessed through, our website does not constitute a part of this prospectus and is not incorporated by reference herein. We have included our website address in this prospectus solely for informational purposes. Our agent for service of process in the United States is Tufin Software North America, Inc., located at 2 Oliver Street, Suite 702, Boston, Massachusetts 02109-4901, and its telephone number is +1 (877) 270-7711.

Throughout this prospectus, we refer to various trademarks, service marks and trade names that we use in our business. The “Tufin” design logo is the property of Tufin Software Technologies Ltd. Tufin ^® is our registered trademark in the United States. We have several other trademarks, service marks and pending applications relating to our products. In particular, although we have omitted the “ ^® ” and “™” trademark designations in this prospectus from each reference to Unified Security Policy, Tufin Orchestration Suite,

SecureChange, SecureTrack and SecureApp, all rights to such trademarks are nevertheless reserved. Other trademarks and service marks appearing in this prospectus are the property of their respective holders.

THE OFFERING



Ordinary shares offered	ordinary shares

Ordinary shares to be outstanding after this offering	ordinary shares

Underwriters’ option	We have granted the underwriters an option to purchase up to additional ordinary shares for a period of 30 days after the date of this prospectus.

Use of proceeds	We intend to use the net proceeds we receive from this offering for working capital and other general corporate purposes. We expect to continue to invest in and to grow our research and development capabilities as well as expand our sales force and marketing team. See “Use of Proceeds.”

Risk factors	See “Risk Factors” and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our ordinary shares.

Proposed NYSE symbol	TUFN

The number of ordinary shares to be outstanding after this offering is based on 37,054,542 ordinary shares outstanding as of February 15, 2019. The number of ordinary shares to be outstanding after this offering excludes (1) ordinary shares reserved for issuance under our equity incentive plans, of which there were outstanding options to purchase shares at a weighted average exercise price of $ per share, and (2) 40,000 ordinary shares underlying warrants issued to an Israeli non-profit organization with an exercise price of $2.868 per share.

Unless otherwise indicated, this prospectus:


•	reflects the conversion of all outstanding preferred shares into 24,625,126 ordinary shares on a one-for-one basis, which will occur automatically immediately prior to the closing of this offering;


•	assumes an initial public offering price of $ per ordinary share, the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus;


•	gives effect to the adoption of our amended and restated articles of association, which will become effective upon the closing of this offering and will replace our articles of association currently in effect;


•	assumes no exercise of the underwriters’ option to purchase up to additional ordinary shares;


•	includes 41,667 ordinary shares underlying warrants that have been exercised but for which shares have not yet been issued; and


•	reflects a reverse share split effected on .

SUMMARY CONSOLIDATED FINANCIAL DATA

The following tables set forth our summary consolidated financial data. You should read the following summary consolidated financial data in conjunction with “Selected Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus. Historical results are not necessarily indicative of the results that may be expected in the future. Our financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP.

The summary consolidated statements of operations data for each of the years in the two-year period ended December 31, 2018 and the summary balance sheet data as of December 31, 2018 are derived from our audited consolidated financial statements appearing elsewhere in this prospectus.



	Year ended December 31,
	2017			2018
	(in thousands, except share and per share amounts)
Consolidated Statements of Operations:
Revenues:
Product	$	30,855		$	42,554
Maintenance and professional services	33,685			42,427
Total revenues	64,540			84,981
Cost of revenues:
Product	1,702			2,324
Maintenance and professional services	7,778			11,112
Total cost of revenues(1)	9,480			13,436
Gross profit	55,060			71,545
Operating expenses:
Research and development(1)	17,672			21,363
Sales and marketing(1)	35,042			46,092
General and administrative(1)	4,608			6,022
Total operating expenses	57,322			73,477
Operating loss	$	(2,262	)	$	(1,932	)
Financial income (loss), net	267			(1,047		)
Loss before taxes on income	$	(1,995	)	$	(2,979	)
Taxes on income	(797		)	(1,283		)
Net loss	$	(2,792	)	$	(4,262	)
Basic and diluted net loss per ordinary share(2)	$	(0.24	)	$	(0.35	)
Weighted average number of ordinary shares used in computing basic and diluted net loss per ordinary share(2)	11,808,817			12,068,470
Basic pro forma net loss per ordinary share(3)				$	(0.12	)
Weighted average number of shares used in computing pro forma basic and diluted net loss per ordinary share(3)				36,693,596



	As of December 31, 2018
	Actual			Pro Forma(4)			Pro Forma As Adjusted(4)
	(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	15,248		$	15,248		$
Working capital, excluding deferred revenue(5)	17,781			17,781
Deferred revenue, current and non-current	31,464			31,464
Total assets	47,133			47,133
Redeemable convertible preferred shares	26,699			—			—
Total shareholders’ deficit	(29,946		)	(3,247		)



	Year ended December 31,
	2017			2018
	(in thousands)
Supplemental Financial Data:
Non-GAAP operating profit (loss)(6)	$	(152	)	$	1,249


(1)	Includes share-based compensation expense as follows:



	Year ended December 31,
	2017		2018
	(in thousands)
Share-based Compensation Expense:
Cost of revenues	$	332	$	634
Research and development	660		731
Sales and marketing	765		1,458
General and administrative	353		358
Total share-based compensation expenses	$	2,110	$	3,181


(2)	Basic and diluted net loss per ordinary share is computed based on the weighted average number of ordinary shares outstanding during each period. For additional information, see Note 2 to our consolidated financial statements included elsewhere in this prospectus.

(3)

Pro forma basic and diluted net loss per ordinary share and pro forma weighted average shares outstanding assumes the conversion of all of our outstanding preferred shares into ordinary shares, which will occur immediately prior to the completion of this offering, but does not give effect to the issuance of shares in connection with this offering. For additional information on the conversion of the preferred shares, see Note 11 to our consolidated financial statements included elsewhere in this prospectus.

(4)

Pro forma gives effect to the conversion of all of our outstanding preferred shares into ordinary shares, which will occur immediately prior to the completion of this offering. Pro forma as adjusted gives effect to (x) the same item as set forth in “pro forma,” and (y) the issuance and sale of ordinary shares in this offering at an assumed initial public offering price of $ per ordinary share after deducting underwriting discounts and estimated offering expenses payable by us.


(5)	We define working capital as total current assets minus total current liabilities.

(6)

Non-GAAP operating profit (loss) is a non-GAAP financial measure. We define non-GAAP operating profit (loss) as operating profit excluding share-based compensation expense. Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company’s non-cash expense, we believe that providing non-GAAP financial measures that exclude non-cash share-based compensation expense allows for more meaningful comparisons between our operating results from period to period. This non-GAAP financial measure is an important tool for financial and operational decision-making and for evaluating our operating results over different periods. The following table reconciles operating loss, the most directly comparable U.S. GAAP measure, to non-GAAP operating profit (loss) for the periods presented:



	Year ended December 31,
	2017			2018
	(in thousands)
Reconciliation of Operating Loss to Non-GAAP Operating Profit (Loss):
Operating loss	$	(2,262	)	$	(1,932	)
Add: share-based compensation	$	2,110		$	3,181
Non-GAAP operating profit (loss)(6)	$	(152	)	$	1,249

For a description of how we use non-GAAP operating profit (loss) to evaluate our business, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Performance.”

Other companies, including companies in our industry, may calculate non-GAAP operating profit (loss) differently or not at all, which reduces the usefulness of non-GAAP operating profit (loss) as a comparative measure. You should consider non-GAAP operating profit (loss) along with other financial performance measures, including operating profit, and our financial results presented in accordance with U.S. GAAP.

RISK FACTORS

This offering and an investment in our ordinary shares involve a high degree of risk. You should consider carefully the risks described below and all other information contained in this prospectus, including our financial statements and related notes thereto, before you decide to buy our ordinary shares. If any of the following risks actually occurs, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our ordinary shares would likely decline, and you might lose all or part of your investment.

Risks Related to Our Business and Our Industry

The security policy management market is rapidly evolving and difficult to predict. If the market does not evolve as we anticipate or if our target customers do not adopt our solutions, our revenues may not grow as expected and our share price may decline.

We believe our future success depends in large part on growth in the security policy management market in which we compete. The security policy management market is relatively new and subject to rapid technological change, evolving industry standards, a shift in the enforcement or scope of regulations to which our customers are subject, as well as changing customer needs, requirements and preferences. As such, it is difficult to predict important market trends, including potential growth. For example, organizations that currently use home-grown tools may believe that they already have sufficient security policy management products. Therefore, such organizations may continue spending their network infrastructure budgets on other products and may not adopt our solutions in addition to or in lieu of other existing solutions. If the security policy management market does not evolve in the way we anticipate or if organizations do not recognize the benefits our solutions offer in addition to or in place of other existing solutions, then our revenues may not grow as expected and our share price could decline.

If we are unable to acquire new customers, particularly large organizations, our future revenues and operating results will be harmed.

Our growth strategy is dependent, in part, on our ability to acquire new customers, particularly large organizations. For example, in the year ended December 31, 2018, large organizations, which we define as those comprising the Global 2000, accounted for 66% of our revenues. The size and number of customers that we add in a given period significantly and directly impacts both our short-term and long-term revenues. If we are unable to attract a sufficient number of new large organization customers or if we attract customers that place orders of an insufficient size, we may be unable to generate revenue growth at desired rates. The security policy management market is competitive and we cannot guarantee that we will out-perform our competitors. In addition, in many cases, our primary competition is in-house, manual, spreadsheet driven processes and homegrown approaches to security management . As a result, we may not be able to add new customers at the levels we expect, or may need to spend more than we budgeted on our efforts to do so. Competition in the marketplace may also result in us winning fewer new customers, lowering prices or offering sales incentives to new customers. These factors may have a material negative impact on our future revenues and operating results.

Sales to large organizations involve risks that may not be present (or that are present to a lesser extent) with sales to smaller entities. These risks include:


•	increased purchasing power and leverage held by large organizations in negotiating contractual arrangements with us, including, in certain cases, clauses that provide preferred pricing of configurations with similar specifications;


•	the timing of individual large sales, which in some cases have occurred in a quarter subsequent to those we anticipated, or have not occurred at all;


•	longer sales cycles and the associated risk that substantial time and resources may be spent on a potential customer that ultimately elects not to purchase our products or purchases fewer products than we anticipated;


•	more stringent or costly requirements imposed upon us in our maintenance and professional services contracts with such customers, including stricter response times and penalties for any failure to meet maintenance and professional services requirements;


•	more complicated and costly implementation processes and network infrastructure; and


•	closer relationships with, and increased dependence upon, large technology companies who may offer competing products and have stronger brand recognition.

If we are unable to increase sales of our solutions and products to large organizations while mitigating the risks associated with serving such customers, our business, results of operations, prospects and financial condition may suffer.

Our business depends substantially on our ability to retain customers and expand our offerings to them, and our failure to do so could harm future results of operations.

We generate a significant portion of our revenues from sales to existing customers and our business depends substantially on our ability to retain customers and expand our offerings to them. In 2017 and 2018, we generated over 75% and 70% of our revenues, respectively, from sales to existing customers, including renewals. Our Tufin Orchestration Suite is currently comprised of five products: SecureTrack, SecureChange, SecureApp and, most recently, Orca and Iris. The majority of our customers initially purchase SecureTrack to monitor part of their networks. Initial product deployments frequently expand across departments, divisions and geographies and result in the purchase of additional products, such as SecureChange and SecureApp. In addition, we expect an increasing portion of our revenues to be derived from additional sales to our customers of Orca and Iris, which allow for policy-driven automation and security management in cloud-native environments.

The rate at which our existing customers purchase additional products and services depends on a number of factors, including the perceived need for additional IT security, our customers’ IT budgets, the efficacy of our solutions, general economic conditions, our customers’ overall satisfaction with our products and services and the continued growth and economic health of our customer base. If our efforts to sell additional products and services to our customers are not successful, our future revenues and operating results will be harmed.

We devote significant efforts to developing and marketing product updates to existing customers and rely on these efforts for a portion of our revenues. This requires a significant investment in building and maintaining customer relationships, as well as significant research and development efforts in order to launch product updates and new products. Our future success depends, in part, on our ability to continue to expand sales of our current product offerings to existing customers, sell additional licenses for our current products to our existing customers and develop and sell new products to existing customers.

Our sales cycle is long and unpredictable, which may cause significant fluctuations in our quarterly results of operations.

The timing of our sales and related revenue recognition is difficult to predict because of the length and unpredictability of the sales cycle for our products. We and our channel partners often spend significant time and resources to better educate and familiarize potential customers with the value proposition of our products and platform. Our sales cycle usually lasts several months from proof of concept to purchase order from our customers, and it is often even longer, less predictable and more resource-intensive for larger transactions. Customers may also require additional internal approvals or seek to test our products for a longer trial basis before deciding to purchase our solutions. Furthermore, even if we close a large transaction during a given quarter, we may be unable to recognize the revenues derived from such a transaction due to our revenue recognition policy. See “Management’s Discussion and Analysis of

Financial Condition and Results of Operations—Application of Critical Accounting Policies and Estimates—Revenue Recognition.”

In addition, in the past, customers have deferred significant purchases to the last quarter of the year when they can determine what amount of their annual budget remains unused. As a result, the timing of individual sales can be difficult to predict. We generally expect an increase in business activity as we approach our fiscal year end in December, driven by our customers’ buying patterns. We believe that these seasonal trends will continue to affect our quarterly results. Large individual sales have, in some cases, occurred in quarters subsequent to those we anticipated or have not occurred at all. The loss or delay of one or more large transactions in a quarter could impact our anticipated results of operations for that quarter and future quarters for which revenue from that transaction is delayed. We may not be able to accurately predict or forecast the timing of sales, which could cause our results to vary significantly from our expectations and the expectations of market analysts. In addition, we might devote substantial time and effort to a particular unsuccessful sales effort, and as a result we could lose other sales opportunities or incur expenses that are not offset by an increase in revenue, which could harm our business.

We face competition in the security policy management market in which we operate, and we may lack sufficient financial or other resources to maintain or improve our competitive position.

We face competition in the security policy management market in which we operate. In many cases, our primary competition is in-house, manual, spreadsheet driven processes and homegrown approaches to security management , and we and our channel partners may not be successful in educating and familiarizing potential customers with the value associated with our products and services. Our direct competitors include vendors such as AlgoSec, Inc., FireMon, LLC and Skybox Security LLC that offer solutions that compete with all or some of our products or product features. We also indirectly compete with large IT companies that offer a broad array of traditional security management solutions, such as Symantec Corporation and Cisco Systems, Inc., for a share of enterprises’ IT security budgets. These large companies have the technical and financial resources and broad customer bases needed to bring products that are competitive with ours to market and already have existing relationships as a trusted vendor for other products. Such companies may use these advantages to offer products and services that are perceived to be as effective as ours at a lower price or for free as part of a larger product package or solely in consideration for maintenance and professional services fees. As the security policy management market grows, we expect competition to increase in the future from both existing competitors and new companies that may enter our markets. Some of our competitors may develop different products that compete with our current solutions and respond more quickly and effectively than we do to new or changing opportunities, technologies, standards or client requirements, including in cloud-native environments.

Organizations that use other products or home-grown tools may believe that these products or tools are sufficient to meet their security policy management needs or that our products only serve the needs of a portion of the enterprise security market. Accordingly, these organizations may continue allocating their information technology budgets for other products, and may not adopt our products. Further, many organizations have invested substantial personnel and financial resources to design and operate their networks and have established deep relationships with other providers of networking and security products. As a result, these organizations may prefer to purchase from their existing suppliers rather than add or switch to a new supplier, such as us, regardless of product performance, features, or greater services offerings or may be more willing to incrementally add solutions to their existing security infrastructure from existing suppliers than to replace it wholesale with our solutions.

Our current and potential competitors may also establish cooperative relationships among themselves or with third parties that may further enhance their resources. Current or potential competitors may be acquired by third parties with greater available resources. As a result of such acquisitions, our current or potential competitors might be able to adapt more quickly to new technologies and customer needs, devote greater resources to the promotion or sale of their products and services, initiate or withstand

substantial price competition, take advantage of other opportunities more readily or develop and expand their product and service offerings more quickly than we do.

Our revenue growth rate over the past year may not be indicative of our future performance.

Our revenue growth rate in recent periods should not be viewed as an indication of our future performance. For the years ended December 31, 2017 and 2018, our revenues were $64.5 million and $85.0 million , respectively, representing year-over-year growth of 31.7% . We may not achieve similar revenue growth rates in future periods. Factors that could impact our ability to increase our revenue include our ability to increase the size or efficiency of our sales force, which has expanded rapidly in recent years, our ability to achieve repeat purchases by existing customers, our ability to successfully compete with other companies and the extent to which we are successful in securing large scale deployments, particularly among Global 2000 enterprises. If we are unable to maintain consistent revenue or revenue growth, our share price could experience volatility, and our ability to achieve and maintain profitability could be adversely affected.

Our business could be adversely affected if we are unable to manage changes to our business model over time.

We sell our software primarily through perpetual license agreements and, to a lesser extent, term-based license agreements rather than utilizing a Software-as-a-Service, or SaaS, model. SaaS is a model of software deployment in which a software provider typically licenses an application to customers for use as a service on demand through web browser technologies. While we do not currently earn any revenue from SaaS products, in the future, we plan to deploy certain of our new products as SaaS subscriptions to enable more customers to use our solutions beyond our existing on-premise offerings. A SaaS business model can require a vendor to undertake substantial capital investments and develop related sales and support resources and personnel. In recent years, companies have begun to expect that enterprise software solutions will be provided through a SaaS model. If customers were to require that we provide our products via a SaaS deployment, we would need to deploy resources to implement this alternative business model, which would negatively affect our results. In addition, if we shift to a subscription-based model or make other significant changes to our business model, we may fail to make such a transition in a timely manner or do so at a sustainable pace, either of which could have an adverse effect on our business, results of operations, financial condition and cash flows.

Our business and operations have experienced rapid growth, and if we do not appropriately manage any future growth, our results of operations will be harmed.

We have experienced rapid growth over the last several years, which has placed and will continue to place significant demands on our management, administrative, operational and financial infrastructure. For example, as of December 31, 2017, we had 325 employees and independent contractors compared to 424 as of December 31, 2018, and we expect to continue to expand our headcount. We expect to manage a more complex array of internal systems and processes as we scale aspects of our business in proportion to our growth, including an expanded sales force, additional customer service and research and development personnel, as well as more complex administrative systems related to managing increased headcount.

Our success will depend in part upon our ability to manage our growth effectively. To do so, we must continue to increase the productivity of our existing employees, particularly our sales force, and hire, train, and manage new employees and expand our network of channel partners. To manage the domestic and international growth of our operations and personnel, we will need to continue to improve our operational, financial, and management controls, as well as our reporting processes and procedures. In addition, we will hire additional personnel to support our financial reporting function.

These additional investments will increase our operating costs, which will make it more difficult for us to offset any future revenue shortfalls by reducing expenses in the short term. We may not be able to successfully acquire or implement these or other improvements to our systems and processes in an

efficient or timely manner, or once implemented, we may discover deficiencies in their capabilities or effectiveness. We may experience difficulties in managing improvements to our systems and processes or in integrating with third-party technology. In addition, our systems and processes may fail to prevent or detect errors, omissions or fraud. Our failure to improve our systems and processes, or their failure to operate effectively and in the intended manner, may result in the disruption of our current operations and customer relationships, our inability to manage the growth of our business and our inability to accurately forecast and report our revenues, expenses and earnings, any of which may materially harm our business, results of operations, prospects and financial condition.

We have a history of losses, and we may not be able to generate sufficient revenues to achieve and sustain profitability.

We have incurred net losses in each period since our inception, including net losses of $2.8 million and $4.3 million for the years ended December 31, 2017 and 2018, respectively. As of December 31, 2018, our accumulated deficit was $40.3 million. We expect our operating expenses to increase significantly as we continue to expand our sales and marketing efforts, in part, by building our sales platforms, continue to invest in research and development and continue to expand our operations in existing and new geographies and vertical markets. We also expect to continue to devote significant research and development resources to our on-premise and cloud solutions. In addition, we expect to incur significant additional legal, accounting and other expenses related to being a public company upon the completion of this offering. While our revenues have grown in recent years, if our revenues decline or fail to grow at a rate faster than these increases in our operating expenses, we will not be able to achieve and maintain profitability in future periods. As a result, we may continue to generate losses. We cannot assure you that we will achieve profitability in the future or that, if we do become profitable, we will be able to sustain profitability.

We have identified a material weakness in our internal control over financial reporting. If we fail to maintain effective internal control over financial reporting, we may be unable to report our financial results accurately or meet our reporting obligations.

In connection with the issuance of our consolidated financial statements for each of the years ended December 31, 2017 and 2018, we identified a material weakness in our internal control over financial reporting as of December 31, 2017 and 2018. A “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Specifically, we determined that we do not have sufficient finance staff to provide for effective control over our period-end financial reporting process. As a result of having insufficient staff, we were unable to adequately segregate duties in a manner consistent with control objectives for our period-end financial reporting process.

We have initiated actions toward remediating this material weakness by identifying our staffing requirements and commencing the process of hiring additional personnel for our finance team with the appropriate level of training and expertise. However, the implementation of these initiatives may not fully address this or any other material weakness or other deficiencies that we may have in our internal control over financial reporting.

We will assess our internal control environment and the potential remediation of this material weakness. If we are unable to certify that our internal control over financial reporting is effective pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we could lose investor confidence in the accuracy and completeness of our financial reports, which could harm our business, the price of our ordinary shares and our ability to access the capital markets.

If third-party applications and network products change such that we do not or cannot maintain the compatibility of our platforms and solutions with these applications and products, or if we fail to provide integrations that our customers desire, demand for our solutions and platforms could decline.

The attractiveness of our platforms depends, in part, on our ability to integrate with third-party applications and network products that our customers use or desire to use. Third-party providers may change the features of their applications and platforms or alter the terms governing use of their applications and platforms in an adverse manner. Further, third-party application providers may refuse to partner with us, or limit or restrict our access to their applications and platforms. Such changes could functionally limit or terminate our ability to use these third-party applications and systems with our platform, which could negatively impact our offerings and harm our business. If we fail to integrate our platforms with new third-party applications that our customers desire, or to adapt to the requirements of such third-party applications and platforms, we may not be able to offer the functionality that our customers expect, which would negatively impact our offerings and, as a result, harm our business.

If our products do not effectively interoperate with our customers’ existing or future IT infrastructures, deployments and integrations could be delayed or canceled, which would harm our business.

Our products must effectively interoperate with our customers’ existing or future IT infrastructure, which often has different specifications, utilizes multiple protocol standards, deploys products from multiple vendors and contains multiple generations of products that have been added over time. As a result, when problems occur in a network, it may be difficult to identify the sources of these problems. If we find errors in the existing software or defects in the hardware used in our customers’ infrastructure or problematic network configurations or settings, we may have to modify and improve our software so that our products will integrate with our customers’ infrastructure. In such cases, our products may be unable to support some of the configurations or protocols used in our customers’ infrastructure. These issues could cause longer deployment and integration times for our products and could cause order cancellations, either of which would adversely affect our business, results of operations and financial condition. Additionally, any changes in our customers’ IT infrastructure that degrade the functionality of our products or services, which are better supported by competitive software, could adversely affect the adoption and usage of our products.

Estimates of market opportunity and forecasts of market growth included in this prospectus may prove to be inaccurate.

Growth forecasts included in this prospectus relating to our market opportunity and the expected growth in the security policy management market, which are subject to significant uncertainty, may prove to be inaccurate. We believe our policy management and automation functionalities define a new market, and we are not aware of any third-party research that accurately defines the scope of our directly addressable opportunity. As such, we estimated the market size using third-party data and, when third-party data was not available, internal estimates. We segment enterprises based on estimates of their network infrastructure size and their need for our solutions across their networks, and apply an average annual billings figure per segment based on an estimated prior five years of inventory, resulting in an estimated directly addressable market of $10.3 billion, which includes on-premise firewalls, private cloud and public cloud orchestration segments, for the fiscal year ending December 31, 2019.

The addressable market we estimate may not materialize for many years. Even if the markets in which we compete meet the size estimates and growth forecast in this prospectus, our business could fail to grow at similar rates. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties. Accordingly, the forecasts of market growth included in this prospectus are not indicative of our future growth.

Because we derive substantially all of our revenues from sales of licenses and maintenance for SecureTrack, SecureChange and SecureApp, which belong to a single platform of products – the Tufin Orchestration Suite – the failure of these products to satisfy customers or to achieve increased market acceptance would adversely affect our business.

In 2018, we generated substantially all of our revenues from sales of licenses and maintenance for SecureTrack, SecureChange and SecureApp. We recently introduced Orca and Iris to market, and have not yet derived revenues from the sale of these products. We expect to continue to derive a majority of our revenues from license and maintenance sales relating to the Tufin Orchestration Suite in the future. As such, market acceptance of this platform of products is critical to our continued success. Demand for licenses for the Tufin Orchestration Suite is affected by a number of factors, some of which are outside of our control, including continued market acceptance of our software by our customers and potential customers, the viability of existing and new use cases, technological change and growth or contraction in our market. If we are unable to continue to meet customer demands or to achieve more widespread market acceptance of our software, our business, operations, financial results and growth prospects will be materially and adversely affected.

If we are unable to increase market awareness of our company and our solutions, or fail to successfully promote or protect our brand, our competitive market position and revenues may not continue to grow or may decline.

We believe that improved awareness of our brand and the value proposition of our solutions will be essential to our continued growth and our success. Many factors, some of which are beyond our control, are important to maintaining and enhancing our brand, including our ability to increase awareness among existing and potential channels partners through various means of marketing and promotional activities. If our marketing efforts are unsuccessful in improving market awareness of our brand and our solutions, then our business, results of operations, prospects, and financial condition will be adversely affected, and we will not be able to achieve sustained growth.

Moreover, due to the intensely competitive nature of our market, we believe that building and maintaining our brand and reputation is critical to our success and that the importance of positive brand recognition will increase as competition in our market further intensifies. While we believe that we are successfully building a well-established brand and have invested and expect to continue to invest substantial resources to promote and maintain our brand, both domestically and internationally, there can be no assurances that our brand development strategies will enhance our reputation or brand recognition or lead to increased revenue.

Furthermore, an increasing number of independent industry analysts and researchers, such as Gartner, IDC and 451 Research LLC, regularly evaluate, compare and publish reviews regarding the functionality of security products and services, including our solutions. These reviews may significantly influence the market perception of our solutions. We do not have any control over the content of these independent industry analysts and researchers’ reports, and our reputation and brand could be harmed if they publish negative reviews of our solutions or do not view us as a market leader. The strength of our brand may also be negatively impacted by our competitors’ marketing efforts, which may include incomplete, inaccurate and misleading statements about our business, products and services. If we are unable to maintain a strong brand and reputation, sales to new and existing customers could be adversely affected, and our financial performance could be harmed.

Our business and reputation could be harmed based on real or perceived shortcomings, defects or vulnerabilities in our solutions or the failure of our solutions to meet customers’ expectations.

Our customers face increasingly sophisticated and targeted cyberthreats. If we fail to update our products to detect or prevent such threats, our business and reputation will suffer. Moreover, as our solutions are adopted by an increasing number of enterprises and governmental entities, cyberattackers may focus on finding ways to defeat our solutions. The data stored in our products’ database is highly sensitive, and includes our customers’ current enterprise-wide network configuration and security policies. If our

products’ security configuration is breached, this data could be used by malicious actors, including external hackers and rogue employees within our customers’ organizations, to plan how they could effectively traverse our customers’ networks and gain unauthorized access to critical systems and data. A breach or theft of our customers’ sensitive business data, regardless of whether the breach or theft is attributable to the failure of our products, could adversely affect the market’s perception of the efficacy of our solutions and current or potential customers may look to our competitors for alternatives to our solutions. The failure of our products may also subject us to lawsuits and financial losses stemming from indemnification of our partners and other third parties, as well as the expenditure of significant financial resources to analyze, correct or eliminate any vulnerabilities. Although we seek to limit our financial exposure in such circumstances through caps on our indemnification obligations, customers may litigate the enforceability of such caps and it is possible that such litigation may be successful in certain circumstances. Any such event could also cause us to suffer reputational harm, lose existing customers or deter them from purchasing additional products and services and prevent new customers from purchasing our solutions.

Our business and reputation could be harmed if cybersecurity risks materialize.

Cybersecurity threats are a growing and evolving risk, and often are difficult or impossible to detect for long periods of time or to successfully defend against. Successful attacks, whether through external or internal actors, could harm the confidentiality, integrity and availability of personal data and other sensitive information, as well as the integrity and availability of our systems, products and services in a manner that could materially and adversely affect our business. Because techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. In addition, such a security breach could impair our ability to operate our business, including our ability to provide maintenance and support services to our customers. If this happens, our revenues could decline and our business could suffer. In addition, if we suffer a highly publicized security breach, even if our platform and solutions perform effectively, such a breach could cause us to suffer reputational harm, lose existing commercial relationships and customers or deter customers from purchasing additional solutions and prevent new customers from purchasing our solutions.

We are subject to data privacy laws, the breach of which could subject us to fines and harm our reputation.

We are subject to an expanding number of domestic, international and contractual legal requirements regarding privacy, personal data rights and cybersecurity. These laws, rules and regulations continue to evolve and address a range of issues, including restrictions or technological requirements regarding the collection, use, storage, protection, retention or transfer of data. Violation of these requirements could result in substantial fines, penalties and related defense costs. For example, the GDPR provides for penalties that could reach the greater of 20 million Euros or 4% of a company’s worldwide annual turnover. In addition, because we operate in a number of jurisdictions, we may be subject to a variety of local data privacy laws, which can change frequently and potentially conflict with our existing obligations. These legal requirements may be interpreted and enforced in a manner that is inconsistent with our existing practices or the features of our products and services. We may also be subject to claims of liability or responsibility for the actions of third parties with whom we interact or upon whom we rely in relation to various products and services, including but not limited to our channel partners. In addition to the possibility of our being subject to enforcement actions, fines, lawsuits and other claims, we could be required to fundamentally change our business activities and practices or modify our products and services, which could have an adverse effect on our business. Any inability to adequately address customer privacy and data protection concerns, even if unfounded, or to comply with applicable privacy and data protection laws, regulations and policies, could result in additional cost and liability to us, damage our reputation, inhibit sales and adversely affect our business.

If we do not effectively expand, train and retain our sales force, we may be unable to acquire new customers or sell additional products and services to existing customers, and our business will suffer.

Our future success depends, in part, on our ability to continue to expand, train and retain our sales force. Our inability to attract or retain qualified personnel or delays in hiring required sales personnel may seriously harm our business, financial condition and results of operations. Any of our employees may terminate their employment at any time, subject to certain notice requirements. Our ability to continue to attract and retain highly skilled personnel is critical to our future success. During 2018, we increased the number of our sales and marketing personnel from 128 to 166. We expect to continue to expand our sales and marketing personnel significantly and face a number of challenges in achieving our hiring and integration goals. There is intense competition for individuals with sales training and experience. In addition, the training and integration of a large number of sales and marketing personnel in a short time requires the allocation of significant internal resources. We invest significant time and resources in training new sales force personnel to understand our solutions and growth strategy. However, there is no guarantee that our recent hires and planned new hires will become as productive as we expect or require, and we may be unable to hire or retain sufficient numbers of qualified individuals in the future in the markets in which we currently operate or where we seek to conduct business. Our failure to hire a sufficient number of qualified sales force members and train them to operate at target performance levels may materially and adversely impact our projected growth rate.

Our ability to enhance our products may be harmed if we are unable to attract and retain sufficient research and development personnel, and if we are unable to generate an adequate return on our investment in research and development.

Our ability to enhance our products may be harmed if we are unable to attract and retain sufficient engineers and research and development personnel. Our principal research and development activities are conducted from our headquarters in Israel, and we face significant competition for suitably skilled engineers and research and development personnel in this region, where the availability of such personnel is limited. We also engage a number of developers in Bucharest, Romania as independent contractors in order to benefit from the significant pool of talent that is more readily available in this market. Larger companies may expend more resources than we do on employee recruitment and may be able to offer more favorable compensation and incentive packages than us. If we cannot attract or retain a sufficient number of skilled research and development employees, our business, prospects and results of operations could be adversely affected.

In order to remain competitive, we expect to continue to dedicate significant financial and other resources to develop new solutions, applications and enhancements to our existing products and platforms. For example, in 2018, we increased our dedicated research and development personnel by 33% compared to 2017. However, investing in research and development personnel, developing new products and enhancing existing products are expensive and time consuming, and there is no assurance that such activities will result in significant new marketable products or enhancements to our products, design improvements, cost savings, revenues or other expected benefits. If we delay releasing product enhancements and new solutions, or are otherwise unable to generate an adequate return on our investment, our business and results of operations may be materially and adversely affected.

If we fail to maintain successful relationships with our channel partners, or if our channel partners fail to perform, our ability to market, sell and distribute our solutions will be limited, and our business, financial position and results of operations will be harmed.

We sell our products and services through our sales force, including our field sales team and our inside sales team, which works closely with our global network of approximately 140 active channel partners. Our channel partners include distributors and resellers, as well as service delivery partners that help customers successfully deploy, configure, customize and maintain our products and services. Our channel partners fulfill orders constituting substantially all of our revenues. Certain of our new customer leads are generated by our channel partners. For the years ended December 31, 2017 and 2018, our two largest channel partners accounted for 16% and 13% of our revenues and 13% and 10% of our revenues, respectively. Our agreements with these channel partners provide that each partner agrees to sell and distribute our products within certain territories for one year. These agreements are nonexclusive and non-transferable, and automatically renew unless terminated by either party after providing prior written notice. As of December 31, 2017, five of our channel partners accounted for 10% or more of our accounts receivable, accounting for an aggregate of 62% of our accounts receivable in 2017. As of December 31, 2018, three of our channel partners accounted for 10% of more of our accounts receivable, accounting for an aggregate of 36% of our accounts receivable in 2018. Our engagements with these channel partners are generally based on separate contractual relationships with different business units across multiple jurisdictions rather than on a single agreement.

As a result of this concentration, if a channel partner ceases to perform services for us, we may face disruptions in deploying solutions to our customers. Additionally, we are exposed to the credit risk of our channel partners in the event they become insolvent while owing us payment. If our channel partners do not effectively provide support to the satisfaction of our customers, we may be required to provide support to such customers, which would require us to invest in additional personnel and may require us to devote significant time and resources. If our channel partners do not effectively market and sell our solutions, or choose to use greater efforts to market and sell the products and services of our competitors, our ability to grow our business may be adversely affected.

Our relationships with channel partners have been, and could in the future be, terminated with little or no notice if they become subject to bankruptcy or other similar proceedings. The loss of our major channel partners, the inability to replace them or the failure to recruit additional channel partners could materially and adversely affect our results of operations. If we are unable to maintain our relationship with channel partners or otherwise develop and expand our sales channels, or if our channel partners fail to perform, our business, financial position and results of operations could be adversely affected.

Our increasing focus on expanding security policy management to cloud-native environments presents execution and competitive risks.

While many organizations see the cloud as a scalable extension of their existing data center, some are adopting the DevOps approach to cloud application development. Pricing and delivery models are evolving. Different usage models and network security architectures in the cloud influence customers’ choice of cloud-based security products. We are devoting significant resources to develop and deploy our cloud-based strategies. Our ecosystem must continue to evolve with this changing environment. Unlike traditional enterprise applications, in which every connectivity change is controlled and managed by IT, in cloud-native environments the developers and DevOps engineers typically have administrative rights over the infrastructure. The connectivity decisions and changes made by developers in cloud-native applications can have an immediate impact on the organization’s security posture, with little or no oversight by the security team. Our success in developing cloud-native solutions is connected with the fragmentation of enterprise networks between on-premise networks and the cloud environment, the growing use of cloud infrastructure and cloud-native development environments and the level of adoption of cloud platforms such as such as Google Cloud, Amazon Web Services, or AWS, and Microsoft Azure.

We may not establish sufficient market share to achieve the scale necessary to achieve our business objectives. If we are not effective in executing organizational and technical changes to increase efficiency

and accelerate innovation, or if we fail to generate sufficient usage of our new products and services, we may not grow revenues in line with the infrastructure and development investments described above.

If our maintenance or professional services are not satisfactory to our customers, they may not renew their maintenance or professional services contracts, which could adversely affect our future results of operations.

Our customers depend in large part on customer support delivered through our channel partners or by us to resolve issues relating to the use of our solutions. Our agreements with customers typically provide certain service level commitments, including with respect to initial response time for support. Our business relies on our customers’ satisfaction with the technical maintenance and support and professional services we provide to support our products. While the majority of our software is sold under perpetual license agreements, all of our maintenance and professional services contracts are sold on a term basis. Our customers typically purchase one or three years of software maintenance in addition to their initial purchase of our products, with an option to renew their maintenance contracts. In order for us to maintain and improve our results of operations, it is important that our existing customers renew their maintenance contracts when the term expires. For example, for each of the years ended December 31, 2017 and 2018, our maintenance renewal rate was over 90%. Maintenance and support revenues have increased as a percentage of our revenues in each of these years.

The failure of our customers to correctly use our solutions, or our failure to effectively assist customers in deploying and integrating our solutions and providing effective ongoing support, may result in an increase in the vulnerability of our customers’ networks and their sensitive business data. If we fail to provide technical support services that are responsive, satisfy our customers’ expectations and resolve issues that they encounter with our products and services, then they may elect not to renew annual maintenance and support contracts and they may choose not to purchase additional products and services from us. Accordingly, our failure to provide satisfactory technical support or professional services could lead our customers not to renew their agreements with us or renew on terms less favorable to us, and therefore have a material and adverse effect on our business and results of operations.

We depend on a single third-party hardware manufacturer for the hardware that we use to fulfill certain orders for our software licenses.

We depend on a single third-party manufacturer to supply the computer hardware on which our licensed software is installed for certain customers. Specifically, when placing an order, a customer may elect to download our software onto its own computer hardware that meets our specifications or purchase computer hardware from us with our software pre-installed. Approximately one half of our sales i n 2017 and one third of our sales in 2018 were transactions in which customers purchased software pre-installed on computer hardware that we supplied. Our computer hardware supplier fulfills our requirements on a purchase order basis and we hold only limited inventory. We do not have a long-term contract with the supplier that guarantees capacity or the continuation of particular pricing terms. There are alternative suppliers for the computer hardware, but that hardware would initially not be optimized for our software. Furthermore, in the event of a disruption in supply, we would need to inform customers with pending orders regarding the change in hardware and offer them the choice of supplying their own hardware or using alternate hardware that we would supply, both of which may cause delays in the timely fulfillment of their orders. This could have a material adverse effect on our business and results of operations.

If our products fail to help our customers achieve and maintain compliance with government regulations and industry standards, our business and results of operations could be materially adversely affected.

We generate a substantial portion of our revenues from our products and services because they help our customers achieve and maintain compliance with government regulations and industry standards, and we expect that will continue for the foreseeable future. Industry standards may change with little or no notice, including changes that could make them more or less onerous for businesses. Governments may also adopt new laws or regulations, or make changes to existing laws or regulations, that could impact

whether our solutions enable our customers to maintain compliance with such laws or regulations. Examples of industry and government regulations include the Payment Card Industry Data Security Standard, or PCI-DSS, the Sarbanes-Oxley Act, the North American Electric Reliability Corporation Critical Infrastructure Protection standards, or NERC-CIP, the General Data Protection Regulation, or GDPR, the NIST Cybersecurity Framework and the Health Insurance Portability and Accountability Act of 1996, or HIPAA . If we are unable to adapt our solutions to changing regulatory standards in a timely manner, or if our solutions fail to expedite our customers’ compliance initiatives, our customers may lose confidence in our products and could switch to products offered by our competitors. In addition, if regulations and standards related to information security change in a manner that makes them less onerous, our customers may view government and industry regulatory compliance as less critical to their businesses, and our customers may be less willing to purchase our products and services. In either case, our sales and financial results would suffer.

If we are unable to adequately protect our proprietary technology and intellectual property rights, our business could suffer substantial harm.

Our software and other proprietary information are protected by copyright on creation. Copyright registrations, which have so far not been necessary, may be sought on an as-needed basis. We also control access to and use of our proprietary software, proprietary technology and other confidential information through the use of internal and external controls, including contractual agreements containing confidentiality obligations with our employees, independent consultants, independent contractors, professional services team, partners and customers. Our confidentiality agreements are designed to protect our proprietary information, and the clauses requiring assignment of inventions are designed to grant us ownership of technologies that are developed through our relationship with the respective counterparty. Despite our efforts to protect our trade secrets and proprietary rights through intellectual property rights, confidentiality agreements and licenses (including non-disclosure and invention assignment agreements), unauthorized parties may still copy or otherwise obtain and use our intellectual property and technology.

In addition, we seek to protect our intellectual property by filing Israeli, U.S. and other foreign patent applications related to our proprietary technology. As of December 31, 2018, we had 14 issued patents in the United States. We also had four issued patents and one pending patent application in Israel. We may file additional patent applications in the future. In order to benefit from the protection of patents and other intellectual property rights, we must monitor and detect infringement and pursue infringement claims in certain circumstances in relevant jurisdictions, all of which are costly, time-consuming and uncertain. We may choose not to seek patent protection for certain innovations or in certain jurisdictions. Furthermore, the scope of our issued patents may be insufficient, and they may not provide us with any competitive advantages. Our patents and other intellectual property rights may be challenged by others or invalidated through administrative processes or litigation. In addition, the issuance of a patent does not guarantee that we have an absolute right to practice the patented invention. As a result, we may not be able to obtain adequate protection or effectively enforce our issued patents or other intellectual property rights.

We cannot assure you that the steps taken by us will deter or prevent infringement or misappropriation of our intellectual property or technology. In addition, the laws of some foreign countries where we operate do not protect our intellectual property and technology to as great an extent as the laws of the United States, and many foreign countries do not enforce these laws as diligently as government agencies and private parties in the United States.

We may be subject to intellectual property rights claims by third parties, which may be costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies.

Companies in the software and technology industries, including some of our current and potential competitors, own large numbers of copyrights, trademarks, trade secrets and patents,and frequently enter into litigation based on allegations of infringement, misappropriation or other violations of intellectual property rights. From time to time, third parties may assert their patent, copyright, trademark and other intellectual property rights against us, our channel partners or our customers.

Successful claims of infringement or misappropriation by a third-party could prevent us from using or distributing certain products or performing certain services or could require us to pay substantial damages (including, for example, treble damages if we are found to have willfully infringed patents and increased statutory damages if we are found to have willfully infringed copyrights), royalties or other fees. Such claims also could require us to cease making, licensing or using solutions that are alleged to infringe or misappropriate the intellectual property of others, to expend additional development resources to attempt to redesign our products or services or otherwise to develop non-infringing technology, to enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies or intellectual property rights, and to indemnify our partners and other third parties, including our customers and channel partners whom we typically indemnify against such claims. Even if third parties may offer a license to their intellectual property, the terms of any offered license may not be acceptable, and the failure to obtain a license or the costs associated with any license could cause our business, results of operations or financial condition to be materially and adversely affected.

We indemnify our channel partners and customers against claims that our products infringe the intellectual property rights of third parties. Defending against claims of infringement or being deemed to be infringing the intellectual property rights of others could impair our ability to innovate, develop, distribute and sell our current and planned products and services. If we are unable to protect our intellectual property and technology and ensure that we are not violating the intellectual property rights of others, we may find ourselves at a competitive disadvantage to others who need not incur the additional expense, time and effort required to create the innovative products that have enabled us to be successful to date.

Our use of open source software could negatively affect our ability to sell our software and subject us to possible litigation.

We use open source software in our products and our development environments and expect to continue to use open source software in the future. Open source software is typically provided without warranties or assurances of any kind. Some open source licenses contain requirements that the users of such software make available source code for modifications or derivative works we create based upon the open source software used, and many open source licenses include provisions that have not been interpreted by the courts. We monitor and control our use of open source software in an effort to avoid unanticipated conditions or restrictions on our ability to successfully commercialize our products and solutions. We believe that our compliance with the obligations under the various applicable licenses has mitigated the risks that we would trigger any such conditions or restrictions. However, such use may have inadvertently occurred in the development and offering of our products and solutions. If we combine our proprietary software with open source software in a certain manner that is not intended under our policies or monitoring practices, we could, under certain open source licenses, be required to release the source code of our proprietary software to the public. This would allow our competitors to create similar products quickly with lower development effort and ultimately could result in a loss of sales for us.

The terms of many open source software licenses have not been interpreted by U.S. or foreign courts, and there is a risk that, once interpreted, those licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to successfully commercialize our products and solutions. For example, certain open source software licenses may be interpreted to require that we offer our products or solutions that use the open source software for no cost; that we make available the

source code for modifications or derivative works we create based upon, incorporating or using the open source software (or that we grant third parties the right to decompile, disassemble, reverse engineer or otherwise derive such source code); that we license such modifications or derivative works under the terms of the particular open source license; or that otherwise impose limitations, restrictions or conditions on our ability to use, license, host or distribute our products and solutions in a manner that limits our ability to successfully commercialize our products.

This potential litigation could require us to purchase costly licenses or devote additional research and development resources to change our products or services, either of which would have a negative effect on our business and results of operations. In addition, if the license terms for the open source software we utilize change, we may be forced to reengineer our offerings or incur additional costs. Although we monitor the use and incorporation of open source software into our products, we cannot be certain that we have, in all cases, incorporated open source software in our products in a manner that is consistent with the applicable open source license terms.

Third parties may bring legal actions against us.

Third parties may bring legal actions against us. Such actions, even if without merit, could harm our business. Litigation in general, and intellectual property and securities litigation in particular, can be expensive, lengthy and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. An unfavorable resolution of any lawsuit could adversely affect our business, results of operations, prospects, or financial condition.

Although we have contractual protections, such as warranty disclaimers and limitation of liability provisions, in our standard terms and conditions of sale, they may not fully or effectively protect us from claims by customers, commercial relationships or other third parties. Any insurance coverage we have may not adequately cover all claims asserted against us, or cover only a portion of such claims. In addition, even claims that ultimately are unsuccessful could result in our expenditure of funds in litigation and divert management’s time and other resources.

We are subject to a number of risks associated with international sales and operations.

We operate a global business with offices located in Israel, the United States and England. In the year ended December 31, 2018, we generated 56.8%, 38.4% and 4.8% of our revenues from customers in the Americas, EMEA and the rest of the world, respectively. Business practices in the international markets that we serve may differ from those in the United States and may require us to include non-standard terms in customer contracts, such as extended payment or warranty terms. To the extent that we enter into customer contracts that include non-standard terms related to payment, warranties, or performance obligations, our results of operations may be adversely impacted.

Additionally, our international sales and operations are subject to a number of risks, including the following:


•	greater difficulty in enforcing contracts and managing collections, as well as longer collection periods;


•	higher costs of doing business internationally, including costs incurred in establishing and maintaining office space and equipment for our international operations;


•	management communication and integration problems resulting from cultural and geographic dispersion;


•	risks associated with trade restrictions and foreign legal requirements, including any importation, certification, and localization of our platforms that may be required in foreign countries;


•	greater risk of unexpected changes in regulatory practices, tariffs and tax laws and treaties;


•	compliance with anti-bribery laws, including, without limitation, compliance with the U.S. Foreign Corrupt Practices Act, the bribery sections of the Israeli Penal Law, 5737-1977 and the U.K. Bribery Act;


•	heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;


•	the uncertainty of protection for intellectual property rights in some countries;


•	general economic and political conditions in these foreign markets; and


•	double taxation of our international earnings and potentially adverse tax consequences due to changes in the tax laws of the United States, Israel or the other jurisdictions in which we operate.

These and other factors could harm our ability to generate future international revenues and, consequently, materially impact our business, results of operations and financial condition.

We are dependent on the continued services and performance of our two founders, the loss of either of whom could adversely affect our business.

Our business depends on the continued services and performance of our two founders, Reuven Kitov, our Chief Executive Officer and Chairman of the Board of Directors, and Reuven Harrison, our Chief Technology Officer and a director, to execute on our business plan, and to identify and pursue new opportunities and product innovations. We do not carry key man life insurance on either of Mr. Kitov or Mr. Harrison and, even if we did, such coverage would likely be insufficient to compensate us for the loss of their services. The loss of services of either of Mr. Kitov or Mr. Harrison could significantly delay or prevent the achievement of our development and strategic objectives.

Our corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity and teamwork fostered by our culture, which could adversely affect our business.

We believe that our corporate culture has been and will continue to be a key contributor to our success. From December 31, 2016 to December 31, 2018, we increased the size of our workforce by 55 employees in Israel and by 111 employees in other countries, and we expect to continue to hire aggressively as we expand. In addition, we plan to continue to expand our international operations, which may affect our culture as we seek to find, hire and integrate additional international employees while maintaining our corporate culture. If we do not continue to maintain our corporate culture as we grow, we may be unable to continue to foster the innovation, integrity and collaboration we believe we need to support our growth. Our substantial anticipated headcount growth, international expansion and our transition from a private company to a public company may result in a change to our corporate culture, which could adversely affect our business.

Prolonged economic uncertainties or downturns could materially adversely affect our business.

Our business depends on our current and prospective customers’ ability and willingness to invest money in security policy management, which in turn is dependent upon their overall economic health. Negative economic conditions in the global economy, including conditions resulting from financial and credit market fluctuations, could cause a decrease in corporate spending on security software. The Americas accounted for the majority of our revenues in each of the years ended December 31, 2017 and 2018, nearly all of which were generated in the United States. EMEA also accounted for a significant portion of our revenues in each of the years ended December 31, 2017 and 2018, with revenues generated in Germany representing 27% and 25%, respectively, of EMEA revenues. Economic downturns and geopolitical challenges in the Americas, EMEA or certain other parts of the world may cause our customers in those locations to reevaluate decisions to purchase our solutions or to delay their purchasing decisions, which could adversely impact our results of operations due to the importance that region to us.

In addition, a significant portion of our revenues is generated from customers in the financial services industry, including banking and insurance, and the telecommunications industry. In 2017 and 2018, we generated approximately 50% and 53%, respectively, of our revenues from customers in the financial services and telecommunications industries. Negative economic conditions may cause customers in those industries in particular to reduce their IT spending. Customers may delay or cancel IT projects, choose to focus on in-house development efforts or seek to lower their costs by renegotiating maintenance and support agreements. To the extent purchases of licenses for our software are perceived by customers and potential customers to be discretionary, our revenues may be disproportionately affected by delays or reductions in general IT spending. If the economic conditions of the general economy or industries in which we operate worsen from present levels, our results of operation could be adversely affected.

Our business depends, in part, on sales to the public sector, and significant changes in the contracting or fiscal policies of the public sector could have an adverse effect on our business.

We derive a portion of our revenues from sales of our solutions to federal, state, local and foreign governments, and we believe that the success and growth of our business will continue to depend in part on our successful procurement of government contracts. Factors that could impede our ability to maintain or increase the amount of revenues derived from government contracts include:


•	changes in fiscal or contracting policies;


•	decreases in available government funding;


•	changes in government programs or applicable requirements;


•	the adoption of new laws or regulations or changes to existing laws or regulations; and


•	potential delays or changes in the government appropriations or other funding authorization processes.

The occurrence of any of the foregoing could cause governments and governmental agencies to delay or refrain from purchasing our solutions or otherwise have an adverse effect on our business, operating results and financial condition.

Requirements associated with being a public company in the United States will require significant resources and management attention.

Requirements associated with being a public company in the United States will require significant resources and management attention. After the completion of this offering, we will become subject to certain reporting requirements of the Securities Exchange Act of 1934, or the Exchange Act, and the other rules and regulations of the Securities and Exchange Commission, or the SEC, and the New York Stock Exchange, or the NYSE . We will also be subject to various other regulatory requirements, including the Sarbanes-Oxley Act. We expect these rules and regulations to increase our legal, accounting and financial compliance costs and to make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain directors’ and officers’ liability insurance, which could make it more difficult for us to attract and retain qualified members of our board of directors. We cannot predict or estimate the amount of additional costs we will incur as a public company or the timing of such costs.

We have recently implemented a new ERP system to provide for greater depth and breadth of functionality and effectively manage our business data, communications, operations and other business processes. A failure of our new system to perform as we anticipate may result in transaction errors, processing inefficiencies and sales losses, may otherwise disrupt our operations and materially and adversely affect our business, results of operations and financial condition and may harm our ability to accurately forecast sales demand, fulfill our contractual obligations and file reports with the SEC on a timely and accurate basis. In addition, due to the systemic internal control features within ERP systems,

we may experience difficulties that may affect our internal control over financial reporting, which may create a significant deficiency or material weakness in our overall internal controls. The risks associated with a new ERP system are greater for us as a newly public company.

In addition, complying with these rules and regulations and the increasingly complex laws pertaining to public companies will require substantial attention from our senior management, which could divert their attention away from the day-to-day management of our business. These cost increases and the diversion of management’s attention could materially and adversely affect our business, financial condition and results of operations. We will also need to hire additional personnel to support our financial reporting function, and may face challenges in doing so.

We may acquire other businesses, which could require significant management attention, disrupt our business, dilute shareholder value and adversely affect our results of operations.

As part of our business strategy and in order to remain competitive, we may acquire or make investments in complementary companies, products or technologies. However, we have not made any acquisitions to date, and as a result, our ability as an organization to acquire and integrate other companies, products or technologies in a successful manner is unproven. We may not be able to find suitable acquisition candidates, and we may not be able to complete such acquisitions on favorable terms, if at all. If we do complete acquisitions, we may not ultimately strengthen our competitive position or achieve our goals, and any acquisitions we complete could be viewed negatively by our customers, analysts and investors. In addition, if we are unsuccessful at integrating such acquisitions or the technologies associated with such acquisitions, our revenues and results of operations could be adversely affected. Any integration process may require significant time and resources, and we may not be able to manage the process successfully. We may not successfully evaluate or utilize the acquired technology or personnel or accurately forecast the financial impact of an acquisition transaction, including accounting charges. We may have to pay cash, incur debt or issue equity securities to pay for any such acquisition, each of which could adversely affect our financial condition or the value of our ordinary shares. The sale of equity or issuance of debt to finance any such acquisitions could result in dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations.

We are subject to governmental export and import controls that could subject us to liability in the event of non-compliance or impair our ability to compete in international markets.

We incorporate encryption capabilities into certain of our products and these products thus may be subject to U.S. export control requirements. We are also subject to Israeli regulations controlling the use, import and export of encryption technology since our product development initiatives are primarily conducted in Israel. In December 2013, regulations under the Wassenaar Arrangement for the first time included a chapter on cyber-related matters. We believe that our products do not fall under this chapter; however, in the future we may become subject to this regulation or similar regulations, which would limit our sales and marketing activities and could therefore have an adverse effect on our results of operations. We have satisfied U.S. and Israeli export control requirements to export our products to most customers and jurisdictions outside of the United States and Israel, and we have satisfied other provisions of Israeli law governing the use of encryption technology. If the applicable U.S. and Israeli requirements regarding the export of encryption software or technology change or if we change the encryption means in our products or technology, we may need to satisfy additional requirements in the United States or Israel. Furthermore, various other countries regulate the import of certain encryption products and technology, including import permitting and licensing requirements, and have enacted laws that could limit our ability to distribute our products or could limit our customers’ ability to implement our products in those countries.

We are also subject to U.S. and Israeli export control and economic sanctions laws, which prohibit the shipment of certain products to embargoed or sanctioned countries and regions, governments and persons. Our products and technologies could be exported to these sanctioned targets by our channel partners despite the contractual undertakings they have given us and any such export could have negative consequences, including government investigations, penalties and reputational harm. Any

change in export or import regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential customers with international operations. Any decreased use of our products or limitation on our ability to export or sell our products would likely adversely affect our business, financial condition and results of operations.

In addition, in the future we may be subject to defense-related export controls. For example, currently our solutions are not subject to supervision under the Israeli Defense Export Control Law, 5767-2007, or the Import and Export Decree (Export Control over Dual Use Goods, Services and Technology), 5766-2006, but if the definitions of regulated cybersecurity are changed and our products are becoming classified as defense-related, we would become subject to such regulation. In particular, under the Defense Export Control Law, an Israeli company may not conduct “defense marketing activity” without a defense marketing license from the Israeli ministry of defense and may be subject to a requirement to obtain a specific license from the Israeli ministry of defense for any export of defense-related products, services and/or know-how. The definition of defense marketing activity is broad and includes any marketing of “defense equipment, services and/or know-how” outside of Israel or to a non-Israeli, which includes dual-use equipment, services and/or know-how (equipment, services and/or know-how that can be used for civilian or defensive purposes such as our cybersecurity solutions) that is specified in the list of Goods and Dual-Use Technology annexed to the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, if intended for defense use or defense user only, or is specified under Israeli legislation. Similar issues could arise under the U.S. defense/military export controls under the Arms Export Control Act and the International Traffic in Arms Regulations.

Risks Related to Our Ordinary Shares and the Offering

Our share price may be volatile, and you may lose all or part of your investment.

The initial public offering price for the ordinary shares sold in this offering will be determined by negotiation between us and representatives of the underwriters. This price may not reflect the market price of our ordinary shares following this offering and the price of our ordinary shares may decline. In addition, the market price of our ordinary shares could be highly volatile and may fluctuate substantially as a result of many factors, including:


•	actual or anticipated fluctuations in our results of operations;


•	variance in our financial performance from the expectations of market analysts;


•	announcements by us or our competitors of significant business developments, changes in service provider relationships, acquisitions or expansion plans;


•	changes in the prices of our products and services;


•	our involvement in litigation;


•	our sale of ordinary shares or other securities in the future;


•	market conditions in our industry;


•	changes in key personnel;


•	the trading volume of our ordinary shares;


•	changes in the estimation of the future size and growth rate of our markets; and


•	general economic and market conditions.

In addition, the stock markets have experienced extreme price and volume fluctuations. Broad market and industry factors may materially harm the market price of our ordinary shares, regardless of our

operating performance. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted against that company. If we were to be involved in any similar litigation, we could incur substantial costs and our management’s attention and resources could be diverted.

Low trading volume may also increase the price volatility of our ordinary shares. A thin trading market could cause the price of our ordinary shares to fluctuate significantly more than the stock market as a whole.

There has been no prior public market for our ordinary shares, and an active trading market may never develop.

Prior to this offering, there has been no public market for our ordinary shares. An active trading market may never develop following completion of this offering or, if developed, may not be sustained. The lack of an active market may impair your ability to sell your ordinary shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your ordinary shares. An inactive market may also impair our ability to raise capital by selling our ordinary shares and may impair our ability to acquire other companies by using our ordinary shares as consideration.

If we do not meet the expectations of equity research analysts, if they do not publish research or reports about our business or if they issue unfavorable commentary or downgrade our ordinary shares, the price of our ordinary shares could decline.

The trading market for our ordinary shares will rely, in part, on the research and reports that equity research analysts publish about us and our business. The analysts’ estimates are based upon their own opinions and are often different from our estimates or expectations. If our results of operations are below the estimates or expectations of public market analysts and investors, our share price could decline. Moreover, the price of our ordinary shares could decline if one or more securities analysts downgrade our ordinary shares or if those analysts issue other unfavorable commentary or cease publishing reports about us or our business.

Following the closing of this offering, a number of significant beneficial owners of our shares will have a significant influence over matters requiring shareholder approval, which could delay or prevent a change of control, and our articles of association will contain provisions that could make it difficult or expensive for a third party to pursue a takeover attempt.

Following the closing of this offering, the largest beneficial owners of our shares, entities and individuals affiliated with Marker LLC and Catalyst Private Equity Partners (Israel) II, Limited Partnership, each of which currently beneficially owns more than 10% of our outstanding shares, will beneficially own in the aggregate % of our ordinary shares or % if the underwriters exercise their option to purchase additional ordinary shares. As a result, these shareholders individually could exert significant influence, and if they were to act together could exert a controlling influence, over our operations and business strategy and would have sufficient voting power to control the outcome of matters requiring shareholder approval. These matters may include:


•	the composition of our board of directors, which has the authority to direct our business and to appoint and remove our officers;


•	approving or rejecting a merger, consolidation or other business combination;


•	raising future capital; and


•	amending our articles of association, which govern the rights attached to our ordinary shares.

This concentration of ownership of our ordinary shares could delay or prevent proxy contests, mergers, tender offers, open-market purchase programs or other purchases of our ordinary shares that might otherwise give you the opportunity to realize a premium over the then-prevailing market price of our

ordinary shares. This concentration of ownership may also adversely affect our share price. Further, our amended and restated articles of association, which will become effective upon the closing of this offering, contain provisions that could make it difficult or expensive for a third party to pursue a tender offer, change in control or takeover attempt that is opposed by our management and board of directors even if such a transaction would be beneficial to our shareholders. We will also have a staggered board of directors that could make it more difficult for shareholders to change the composition of our board of directors in any one year. These anti-takeover provisions could substantially impede the ability of public shareholders to change our management or board of directors.

As a foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of otherwise applicable NYSE requirements, which may, in the future, result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers.

As a foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of those otherwise required under NYSE rules for U.S. domestic issuers. For example, foreign private issuers are permitted to follow home country practices with regard to director nomination procedures and the approval of compensation of officers. Additionally, foreign private issuers are not required to maintain a board comprised of a majority of independent directors. Foreign private issuers are also exempt from NYSE rules that require shareholder approval prior to (i) the adoption or amendment of an equity compensation plan or (ii) the issuance of ordinary shares, or securities convertible into or exercisable for ordinary shares, in private offerings in excess of 20% of a company’s outstanding ordinary shares or voting power, as well as other private offerings to related parties. However, notwithstanding our ability to follow the corporate governance practices of our home country, Israel, we have elected to comply with NYSE corporate governance requirements that are applicable to U.S. domestic issuers. Nevertheless, we may, in the future, decide to rely on foreign private issuer exemptions and follow Israeli home country governance practices in lieu of complying with some or all NYSE corporate governance requirements, which may provide less protection to you than is accorded to investors of domestic issuers. See “Management-Corporate Governance Practices.”

As a foreign private issuer we will not be subject to the provisions of Regulation FD or U.S. proxy rules and will be exempt from filing certain Exchange Act reports.

As a foreign private issuer, we will be exempt from a number of requirements under U.S. securities laws that apply to public companies that are not foreign private issuers. In particular, we will be exempt from the rules and regulations under the Exchange Act, related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file annual and current reports and financial statements with the SEC as frequently or as promptly as U.S. domestic companies whose securities are registered under the Exchange Act and we will generally be exempt from filing quarterly reports with the SEC under the Exchange Act. We will also be exempt from the provisions of Regulation FD, which prohibits the selective disclosure of material nonpublic information to, among others, broker-dealers and holders of a company’s securities under circumstances in which it is reasonably foreseeable that the holder will trade in such company’s securities on the basis of the information. Even though we intend to comply voluntarily with Regulation FD, these exemptions and leniencies will reduce the frequency and scope of information and protections to which you are entitled as an investor.

We are not required to comply with the proxy rules applicable to U.S. domestic filers, including the requirement applicable to emerging growth companies to disclose the compensation of our Chief Executive Officer and other two most highly compensated executive officers on an individual, rather than an aggregate, basis. Nevertheless, regulations promulgated under the Israeli Companies Law will require us, after we become a public company, to disclose the annual compensation of our five most highly compensated officers on an individual basis, rather than on an aggregate basis. This disclosure will not be as extensive as that required of a U.S. domestic issuer. We intend to commence providing such disclosure, at the latest, in the annual proxy statement for our 2020 annual general meeting of

shareholders, which will be furnished under cover of a Form 6-K and we may elect to provide such information at an earlier date.

In order to maintain our current status as a foreign private issuer, either (a) more than 50% of our outstanding voting securities must be directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our executive officers or directors may not be U.S. citizens or residents, (ii) more than 50% of our assets cannot be located in the United States and (iii) our business must be administered principally outside the United States. Following the completion of this offering or at some other time thereafter, U.S. residents may directly or indirectly own more than 50% of our outstanding voting securities. If so, we will cease to qualify as a foreign private issuer if we do not meet the requirements set forth in (b) above .

Although we have elected to comply with certain U.S. regulatory provisions, our loss of foreign private issuer status would make such provisions mandatory. The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer would be significantly higher. If we are not a foreign private issuer, we will be required to file periodic reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. We would also be required to follow U.S. proxy disclosure requirements, including the requirement to disclose more detailed information about the compensation of our senior executive officers on an individual basis. We may also be required to modify certain of our policies to comply with good governance practices associated with U.S. domestic issuers. Such conversion and modifications will involve additional costs. In addition, we would lose our ability to rely upon exemptions from certain corporate governance requirements on U.S. stock exchanges that are available to foreign private issuers.

The market price of our ordinary shares could be negatively affected by future sales of our ordinary shares.

After this offering, there will be shares of our ordinary shares outstanding. Sales by us or our shareholders of a substantial number of ordinary shares in the public market following this offering, or the perception that these sales might occur, could cause the market price of our ordinary shares to decline or could impair our ability to raise capital through a future sale of, or pay for acquisitions using, our equity securities. Of our issued and outstanding shares, all the ordinary shares sold in this offering will be freely transferable, except for any shares acquired by our “affiliates,” as that term is defined in Rule 144 under the U.S. Securities Act of 1933, as amended, or the Securities Act. Following completion of this offering, % of our outstanding ordinary shares (or % if the underwriters exercise their option in full) will be considered restricted shares and % will be held by our affiliates. Such securities can be resold into the public markets in the future in accordance with the requirements of Rule 144, including volume limitations, manner of sale requirements and notice requirements. See “Shares Eligible for Future Sale.”

We, our executive officers and directors, and the holders of substantially all of our outstanding ordinary shares, have agreed with the underwriters that, subject to limited exceptions, for a period of 180 days after the date of this prospectus, we and they will not directly or indirectly offer, pledge, sell, contract to sell, grant any option to purchase or otherwise dispose of any ordinary shares or any securities convertible into or exercisable or exchangeable for ordinary shares, or in any manner transfer all or a portion of the economic consequences associated with the ownership of ordinary shares, or cause a registration statement covering any ordinary shares to be filed except for the ordinary shares offered in this offering, without the prior written consent of the designated representatives of the underwriters, who may, in their sole discretion and at any time without notice, release all or any portion of the shares subject to these lock-up agreements.

At any time following the closing of this offering, subject, however, to the 180-day lock-up agreement entered into with the underwriters, the holders of of our ordinary shares are entitled to require that we register their shares under the Securities Act for resale into the public markets. All shares sold pursuant to an offering covered by such registration statement will be freely transferable. See “Certain Relationships and Related Party Transactions-Registration Rights.”

In addition to our current shareholders’ registration rights, as of December 31, 2018 we had granted options to purchase 10,125,201 shares under our share option plans and had an additional 201,523 shares available for future grant. Following this offering, we intend to file a registration statement on Form S-8 under the Securities Act registering the shares under our share option plans. Shares included in such registration statement will be available for sale in the public market immediately after such filing, subject to vesting provisions, except for shares held by affiliates who will have certain restrictions on their ability to sell.

We may have exposure to greater tax liabilities than anticipated.

We have endeavored to structure our activities in a manner so as to minimize our and our subsidiaries’ aggregate tax liabilities. However, we have operations in various taxing jurisdictions, and our tax liabilities in one or more jurisdictions could be more than reported in respect of prior taxable periods and more than anticipated in respect of future taxable periods. In this regard, the amount of income taxes that we pay in future taxable periods could be higher if earnings are lower than anticipated in jurisdictions where lower statutory tax rates apply and higher than anticipated in jurisdictions where higher statutory tax rates apply.

In addition, we have entered into transfer pricing arrangements that establish transfer prices for our intercompany operations. However, our transfer pricing procedures are not binding on the applicable taxing authorities. No official authority in any country has made a binding determination as to whether or not we are operating in compliance with its transfer pricing laws. Accordingly, taxing authorities in any of the countries in which we operate could challenge our transfer prices and require us to adjust them to reallocate our income and potentially to pay additional taxes for prior tax periods. For example, the tax authorities in the United States have increased their focus on transfer pricing procedures, which could result in a greater likelihood of a challenge to our transfer pricing arrangements and the risk that we will be required to adjust them and reallocate our income. Such an adjustment could result in a higher effective tax rate than that to which we are currently subject. We expect that the issue of the validity of our transfer pricing procedures will become of greater importance as we continue our expansion in markets in which we currently have a limited presence and attempt to penetrate new markets. Any change to the allocation of our income as a result of reviews by taxing authorities could have a negative effect on our financial condition and results of operations.

Moreover, the determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment and the ultimate tax determination is uncertain for many transactions and calculations. Although we believe our estimates are reasonable, our ultimate tax liability may differ from the amounts recorded in our financial statements and may materially adversely affect our financial condition and results of operations in the period or periods for which such determination is made. We have created reserves with respect to tax liabilities where we believe it to be appropriate. However, there can be no assurance that our ultimate tax liability will not exceed the reserves we have created.

The Base Erosion and Profit Shifting, or BEPS, project undertaken by the Organization for Economic Cooperation and Development, or the OECD, may also have adverse consequences on our tax liabilities. The BEPS project contemplates changes to numerous international tax principles, as well as national tax incentives, and these changes, which are being adopted in different manners by individual countries, could adversely affect our income tax liability. Even as countries translate the BEPS recommendations into specific national tax laws, it remains difficult to predict with accuracy the magnitude of any impact that such new rules may have on our financial results.

In addition, the 2017 Tax Cuts and Jobs Act, or the TCJA, made significant changes to the U.S. Internal Revenue Code, including a reduction in the U.S. federal corporate income tax rate from the previous top marginal rate of 35% to a flat rate of 21% and limitations on certain corporate deductions and credits. Also, the TCJA requires complex computations to be performed that were not previously required in U.S. tax law, significant judgments to be made in interpretation of the provisions of the TCJA and significant estimates in calculations and the preparation and analysis of information not previously relevant or regularly produced. The U.S. Treasury Department, the U.S. Internal Revenue Service, or IRS, and other standard-setting bodies could interpret or issue guidance on how provisions of the TCJA will be applied or

otherwise administered that is different from our interpretation. Finally, foreign governments may enact tax laws in response to the TCJA that could result in further changes to global taxation and materially adversely affect our financial position and results of operations.

U.S. holders that own 10% or more of the vote or value of our ordinary shares may suffer adverse tax consequences if we and/or any of our non-U.S. subsidiaries are characterized as a “controlled foreign corporation,” or a CFC, under Section 957(a) of the U.S. Internal Revenue Code of 1986, as amended, or the Code.

A non-U.S. corporation is considered a CFC if more than 50% of (1) the total combined voting power of all classes of shares of such corporation entitled to vote, or (2) the total value of the shares of such corporation, is owned, or is considered as owned by applying certain constructive ownership rules, by U.S. shareholders (within the meaning of the Code) on any day during the taxable year of such non-U.S. corporation. Certain U.S. shareholders of a CFC generally are required to include currently in gross income such shareholders’ share of the CFC’s “Subpart F income,” a portion of the CFC’s earnings to the extent the CFC holds certain U.S. property and a portion of the CFC’s “global intangible low-taxed income” (as defined under Section 951A of the Code). Such U.S. shareholders are subject to current U.S. federal income tax with respect to such items, even if the CFC has not made an actual distribution to such shareholders. “Subpart F income” includes, among other things, certain passive income (such as income from dividends, interests, royalties, rents and annuities or gain from the sale of property that produces such types of income) and certain sales and services income arising in connection with transactions between the CFC and a person related to the CFC. “Global intangible low-taxed income” may include most of the remainder of a CFC’s income over a deemed return on its tangible assets.

As a result of the ownership of our shares, certain voting arrangements with respect to our shares, and certain changes in the U.S. tax law introduced by the TCJA, we believe that we and our non-U.S. subsidiaries may be classified as CFCs in the prior taxable year as well as the current taxable year in which this offering occurs. These determinations cannot be made with certainty. In the event that we or any of our subsidiaries are a CFC, U.S. holders who hold 10% or more of the vote or value of our ordinary shares may realize adverse U.S. federal income tax consequences, such as current U.S. taxation of Subpart F income and of any such shareholder’s share of our or our subsidiaries’ accumulated non-U.S. earnings and profits (regardless of whether we make any distributions), taxation of amounts treated as global intangible low-taxed income under Section 951A of the Code with respect to such shareholder and being subject to certain reporting requirements with the IRS. Any such U.S. holder who is an individual generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a U.S. corporation. If you are a U.S. holder who holds 10% or more of the vote or value of our ordinary shares, you should consult your own tax advisors regarding the U.S. tax consequences of acquiring, owning or disposing our ordinary shares and the impact of the TCJA, especially the changes to the rules relating to CFCs.

U.S. holders of our ordinary shares may suffer adverse tax consequences if we are characterized as a passive foreign investment company, or a PFIC, under Section 1297(a) of the Code.

Generally, if, for any taxable year, at least 75% of our gross income is passive income, or at least 50% of the average quarterly value of our total gross assets (which, if we are a CFC for the year of the offering may be measured by the adjusted tax basis of our assets, and for subsequent years, assuming we are publicly traded, the total value of our assets may be measured in part by the market value of our ordinary shares, which is subject to change) is attributable to assets that produce passive income or that are held for the production of passive income, including cash, we would be characterized as a PFIC for U.S. federal income tax purposes. For purposes of these tests, passive income includes dividends, interest, gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. Additionally, a look-through rule generally applies with respect to 25% or more owned subsidiaries. If we are characterized as a PFIC, U.S. holders of our ordinary shares may suffer adverse tax consequences, including having gains realized on the sale of our ordinary shares treated as ordinary

income, rather than capital gain, the loss of the preferential tax rate applicable to dividends received on our ordinary shares by individuals who are U.S. holders and having interest charges apply to distributions by us and to the proceeds of sales of our ordinary shares. In addition, special information reporting may be required. See “U.S. and Israeli Tax Consequences for our Shareholders—Certain U.S. Federal Income Tax Consequences—Passive Foreign Investment Company Considerations.”

The determination of whether we are a PFIC will depend on the nature and composition of our income and the nature, composition and value of our assets from time to time. The 50% passive asset test described above is generally based on the fair market value of each asset, with the value of goodwill and going concern value determined in large part by reference to the market value of our ordinary shares, which may be volatile. If we are a CFC and not publicly traded throughout the relevant taxable year, however, the test may be applied based on the adjusted basis of our assets. Based on our belief that we may be classified as a CFC in the current taxable year in which this offering occurs and certain estimates of the adjusted tax bases of our assets, we believe that we may be classified as a PFIC with respect to the taxable year ending December 31, 2019. However, this determination is subject to uncertainty. Our status may also depend, for example, on how quickly we utilize the cash proceeds from this offering in our business. Moreover, because PFIC status is based on our income, assets and activities for the entire taxable year, it is not possible to determine whether we will be characterized as a PFIC for the 2019 taxable year or any subsequent year until after the close of the relevant year. We can therefore make no assurances regarding our PFIC status for any taxable year, and our U.S. counsel expresses no opinion with respect to our PFIC status for our current or future taxable years. We will determine whether we were a PFIC or not for each taxable year and make such determination available to U.S. holders.

The tax consequences that would apply if we were a PFIC would also be different from those described above if a U.S. holder were able to make a valid “qualified electing fund,” or QEF, election. We will use commercially reasonable efforts to make available to U.S. holders such information with respect to the Company as is necessary for U.S. holders to make QEF elections with respect to the Company if we are classified as a PFIC. See “U.S. and Israeli Tax Consequences for our Shareholders—Certain U.S. Federal Income Tax Consequences—Passive Foreign Investment Company Considerations.”

You will experience immediate and substantial dilution in the net tangible book value of the ordinary shares you purchase in this offering.

The initial public offering price of our ordinary shares substantially exceeds the pro forma net tangible book value per share of our ordinary shares immediately after this offering. Accordingly, based on an initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting underwriting discounts and the estimated offering expenses payable by us, you will pay more for your shares than the amounts paid by our existing shareholders for their ordinary shares and you will suffer immediate dilution of $ per share in pro forma net tangible book value of our ordinary shares. If outstanding options to purchase our ordinary shares are exercised in the future, you will experience additional dilution. See “Dilution.”

We have broad discretion over the use of proceeds we receive in this offering and may not apply the proceeds in ways that increase the value of your investment.

Our management will have broad discretion in the application of the net proceeds from this offering and, as a result, you will have to rely upon the judgment of our management with respect to the use of these proceeds. Our management may spend a portion or all of the net proceeds in ways that not all shareholders approve of or that may not yield a favorable return. The failure by our management to apply these funds effectively could harm our business.

We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our ordinary shares less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, and may remain an emerging growth company for up to five years. For so long as we remain

an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In this prospectus, we have not included all of the executive compensation-related information that would be required if we were not an emerging growth company. We cannot predict whether investors will find our ordinary shares less attractive if we rely on these exemptions. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares and our share price may be more volatile.

We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our ordinary shares.

We have never declared or paid any cash dividends on our ordinary shares and do not intend to pay any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the development of our business and for general corporate purposes. In addition, our ability to pay cash dividends is currently limited by the terms of our credit agreements, and any future credit agreements may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our ordinary shares. Accordingly, investors must rely on sales of their ordinary shares after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

Risks Related to Our Incorporation and Location in Israel

Our corporate headquarters and principal research and development activities are located in Israel and, therefore, our business and operations may be adversely affected by political, economic and military conditions in Israel.

We are incorporated under Israeli law and our corporate headquarters, including our principal research and development facilities, are located in Israel. In addition, certain of our key employees and directors and officers are residents of Israel. Accordingly, political, economic and military conditions in the Middle East in general, and in Israel in particular, directly affect our business, product development and results of operations, and we may be adversely affected by a significant increase in the rate of inflation or a significant downturn in the economic or financial condition in Israel.

Since the State of Israel was established in 1948, a number of armed conflicts have occurred between Israel and its neighboring countries, and since 2000, there have been increasing occurrences of terrorist violence. In recent years, hostilities between Israel and Hezbollah in Lebanon (and Syria) and Hamas in the Gaza Strip have both involved missile strikes in various parts of Israel causing disruption of economic activities. This violence has strained Israel’s relationship with its Arab citizens, Arab countries and, to some extent, with other countries around the world. Our corporate headquarters and principal research and development activities are located in the range of missiles that could be fired from Lebanon, Syria or the Gaza Strip into Israel. In addition, Israel faces many threats from more distant neighbors, in particular, Iran (which is believed to be an ally of Hamas in Gaza and Hezbollah in Lebanon) . Any armed conflicts involving Israel or in the region or any political instability in the region, including acts of terrorism as well as cyberattacks or any other hostilities involving or threatening Israel, would likely negatively affect business conditions and could make it more difficult for us to conduct our operations in Israel, which could increase our costs and adversely affect our financial results . Our commercial insurance does not cover losses that may occur as a result of an event associated with the security situation in the Middle East, such as damages to our facilities resulting in disruption of our operations. Although the Israeli government is currently committed to covering the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained, or if

maintained, will be sufficient to compensate us fully for damages incurred. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflict involving Israel could adversely affect our operations and results of operations.

Several countries, principally in the Middle East, as well as certain companies, organizations and movements, restrict doing business with Israel or Israeli companies, and additional countries may impose restrictions on doing business with Israel and Israeli companies. In addition, there have been increased efforts by activists to cause companies and consumers to boycott Israeli goods based on Israeli government policies. Similarly, Israeli companies are limited in conducting business with entities from several countries. Such business restrictions and boycotts, particularly if they become more widespread, may materially and adversely impact our ability to sell our products and on the expansion of our business. We could be adversely affected by the interruption or curtailment of trade between Israel and its trading partners.

Exchange rate fluctuations between the U.S. dollar, the New Israeli Shekel, the Euro and other foreign currencies, may negatively affect our future revenues.

We generate substantially all of our revenues in U.S. dollars. The majority of our operating expenses are incurred in foreign currencies, and are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes between the U.S. dollar and the New Israeli Shekel, or the NIS, the Euro and, to a lesser extent, the British Pound. As a result, our financial results may be affected by fluctuations in the exchange rates of currencies in the countries in which our products may be sold. For example, during 2017, we witnessed a strengthening of the average exchange rate of the NIS against the dollar, which increased the dollar value of Israeli expenses. If the NIS strengthens against the dollar, as it did in 2017, the dollar value of our Israeli expenses, mainly personnel and facility-related, will increase. We have entered into forward contracts with major banks to provide partial protection against foreign currency exchange risks resulting from expenses paid in NIS during the year. Although exposure to currency fluctuations to date has not had a material adverse effect on our business, there can be no assurance that our limited hedging transactions will provide sufficient protection and that such fluctuations in the future will not have a material adverse effect on our operating results and financial condition.

Our operations may be affected by negative labor conditions in Israel.

Strikes and work stoppages occur relatively frequently in Israel. If Israeli trade unions threaten additional strikes or work stoppages and such strikes or work stoppages occur, these may, if prolonged, have a material adverse effect on the Israeli economy and on our business, including our ability to deliver products to our customers in a timely manner.

Our operations could be disrupted by the obligations of our personnel to perform military service.

As of December 31, 2018, we had 217 employees based in Israel. Our operations could be disrupted by the obligations of some of our personnel to perform military service. Certain of our employees in Israel, generally males, including executive officers, may be called upon to perform obligatory military reserve service on an annual basis until they reach the age of 40 (and in some cases, up to age 49) and, in certain emergency circumstances, may be called to immediate and prolonged active duty on very short notice. Our operations could be disrupted by the absence for military service for extended periods of a significant number of our employees. Such disruption could materially and adversely affect our business and results of operations.

The termination or reduction of tax and other incentives that the Israeli government provides to domestic companies may increase the costs involved in operating a company in Israel.

The Israeli government currently provides tax and capital investment incentives to domestic companies, as well as grant and loan programs relating to research and development and marketing and export activities. In recent years, the Israeli government has reduced the benefits available under these programs and the Israeli governmental authorities have indicated that the government may in the future further reduce or eliminate the benefits of those programs. We have taken in the past and may take

advantage of these benefits and programs again in the future, however, there is no assurance that such benefits and programs will continue to be available to us in the future. If such benefits and programs were terminated or further reduced, it could have an adverse effect on our business, operating results and financial condition.

Enforcing a U.S. judgment against us and our current executive officers and directors, or asserting U.S. securities law claims in Israel, may be difficult.

We are incorporated under the laws of the State of Israel. Service of process upon us and upon our directors and officers and any Israeli experts named in this registration statement, most of whom reside outside of the United States, may be difficult to obtain within the United States. Furthermore, because a majority of our assets and most of our directors, officers and such Israeli experts are located outside of the United States, any judgment obtained in the United States against us or any of them may be difficult to collect within the United States.

We have irrevocably appointed Tufin Software North America, Inc. as our agent to receive service of process in any action against us in any U.S. federal or state court arising out of this offering or any purchase or sale of securities in connection with this offering.

We have been informed by our legal counsel in Israel, Gross, Kleinhendler, Hodak, Halevy, Greenberg, Shenhav & Co., that it may be difficult to assert U.S. securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws on the basis that Israel is not the most appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. There is little binding case law in Israel addressing these matters. If U.S. law is found to be applicable, the content of applicable U.S. law must be proven as a fact which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law.

See “Enforceability of Civil Liabilities” for additional information on your ability to enforce civil claim against us and our executive officers and directors named in this prospectus.

Provisions of our amended and restated articles of association and Israeli law and tax considerations may delay, prevent or make difficult an acquisition of us, which could prevent a change of control and negatively affect the price of our ordinary shares.

Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for certain transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions. These provisions of Israeli law may delay, prevent or make difficult an acquisition of us, which could prevent a change of control and therefore negatively affect the price of our ordinary shares. For example, under the Israeli Companies Law, upon the request of a creditor of either party to a proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that as a result of the merger the surviving company will be unable to satisfy the obligations of any of the parties to the merger. In addition, our executive officers and certain other key employees are entitled to certain benefits in connection with a change of control of our company.

Our amended and restated articles of association provide that our directors (other than external directors) are elected on a staggered basis, such that a potential acquirer cannot readily replace our entire board of directors at a single annual general shareholder meeting.

Furthermore, Israeli tax considerations may make potential transactions unappealing to us or to our shareholders, especially for those shareholders whose country of residence does not have a tax treaty with Israel, which exempts such shareholders from Israeli tax. For example, Israeli tax law does not recognize tax-free share exchanges to the same extent as U.S. tax law. With respect to mergers, Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent on the fulfillment of a number of conditions, including, in some cases, a holding period of two years from the date of the transaction during which sales and dispositions of shares of the participating companies are subject to

certain restrictions. Moreover, with respect to certain share swap transactions, the tax deferral is limited in time, and when such time expires, the tax becomes payable even if no disposition of the shares has occurred. In order to benefit from the tax deferral, a pre-ruling from the Israel Tax Authority might be required.

We may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business.

We have entered into assignment of invention agreements with our research and development employees pursuant to which such individuals agreed to assign to us all rights to any inventions created during or as a result of their employment or engagement with us or in our field of business. A significant portion of our intellectual property has been developed by our employees in the course and as a result of their employment for us. Under the Israeli Patent Law, 5727-1967, or the Patent Law, inventions conceived by an employee during the scope of his or her employment with a company and as a result thereof are regarded as “service inventions,” which belong to the employer, absent a specific agreement between the employee and employer giving the employee service invention rights. The Patent Law also provides that if there is no agreement between an employer and an employee with respect to the employee’s right to receive compensation for such “service inventions,” the Israeli Compensation and Royalties Committee, or the Committee, a body constituted under the Patent Law, shall determine whether the employee is entitled to remuneration for his or her service inventions and the scope and conditions for such remuneration. A recent decision by the Committee clarifies that the right to receive consideration for “service inventions” can be waived by the employee and that in certain circumstances, such waiver does not necessarily have to be explicit. In order to determine the scope and validity of such wavier, the Committee will examine, on a case-by-case basis, the general contractual framework between the parties, using interpretation rules of the general Israeli contract laws. Further, the Committee has not yet determined one specific formula for calculating this remuneration (but rather uses the criteria specified in the Patent Law). Although our employees have agreed to assign to us service invention rights and have specifically waived their right to receive any special remuneration for such assignment beyond their regular salary and benefits, we may face claims that the assignment is not enforceable or demanding remuneration in consideration for assigned inventions. As a consequence of such claims, we could be required to pay additional remuneration or royalties to our current and/or former employees, or be forced to litigate such claims, which could negatively affect our business.

The government tax benefits that we currently are entitled to receive require us to meet several conditions and may be terminated or reduced in the future.

Some of our operations in Israel may entitle us to certain tax benefits under the Law for the Encouragement of Capital Investments, 5719-1959, or the Investment Law, once we are profitable. If we do not meet the requirements for maintaining these benefits, they may be reduced or canceled and the relevant operations would be subject to Israeli corporate tax at the standard rate, which is set at 23% in 2018 and thereafter. In addition to being subject to the standard corporate tax rate, we could be required to refund any tax benefits that we have already received, plus interest and penalties thereon. Even if we continue to meet the relevant requirements, the tax benefits that our current “Benefited Enterprise” is entitled to may not be continued in the future at their current levels or at all. If these tax benefits were reduced or eliminated, the amount of taxes that we pay would likely increase, as all of our operations would consequently be subject to corporate tax at the standard rate, which could adversely affect our results of operations. Additionally, if we increase our activities outside of Israel, for example, by way of acquisitions, our increased activities may not be eligible for inclusion in Israeli tax benefits programs. See “Taxation and Israeli Government Programs Applicable to our Company” for additional information concerning these tax benefits.

Your rights and responsibilities as a shareholder will be governed by Israeli law, which differs in some material respects from the rights and responsibilities of shareholders of U.S. companies.

The rights and responsibilities of the holders of our ordinary shares are governed by our amended and restated articles of association and by Israeli law. These rights and responsibilities differ in some material

respects from the rights and responsibilities of shareholders in U.S. corporations. For example, a shareholder of an Israeli company has a duty to act in good faith and in a customary manner in exercising its rights and performing its obligations towards such company and its shareholders, and to refrain from abusing its power in such company, including, among other things, voting at a general meeting of shareholders on matters such as amendments to a company’s articles of association, increases in a company’s authorized share capital, mergers and acquisitions and related party transactions requiring shareholder approval. In addition, a shareholder who is aware that it possesses the power to determine the outcome of a shareholder vote or to appoint or prevent the appointment of a director or executive officer in the company has a duty of fairness toward the company. There is limited case law available to assist us in understanding the nature of these duties or the implications of these provisions. These provisions may be interpreted to impose additional obligations and liabilities on holders of our ordinary shares that are not typically imposed on shareholders of U.S. corporations.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

We make forward-looking statements in this prospectus that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, results of operations, liquidity, plans and objectives. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential,” or the negative of these terms or other similar expressions. The statements we make regarding the following matters are forward-looking by their nature:


•	our expectation that policy-centric, automated solutions will garner a growing share of enterprise security spend;


•	our expectations for growth in certain key verticals and geographic regions and our intention to expand international operations;


•	our plans to invest in and grow our sales force and marketing team and develop our sales platform;


•	our plans to deploy additional cloud-based subscription products over time, to enable more customers to consume our products beyond our existing on-premise solutions;


•	our expectations regarding customer relationships developed by our hybrid sales model;


•	our expectations regarding maintaining a high level of customer retention to achieve favorable return on investments;


•	our expectations regarding growth in the market for enterprise security and network management products;


•	our plans to continue investing in and growing our research and development capabilities;


•	our expectations regarding sales of our new products, Orca and Iris;


•	our intention to invest further in the Tufin Orchestration Suite to extend its functionality and features;


•	our expectations regarding seasonality;


•	our expectations regarding sales driven by channel partners and our technology alliance partners through joint selling efforts and go-to-market strategies; and


•	our expectations regarding our tax classifications.

The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. The forward-looking statements are based on our beliefs, assumptions and expectations of future performance, taking into account the information currently available to us. These statements are only predictions based upon our current expectations and projections about future events. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the risks provided under “Risk Factors” in this prospectus.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus, to conform these statements to actual results or to changes in our expectations.

MARKET AND INDUSTRY DATA

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations, market position, market opportunity and market size, is based on information from various sources, including Gartner, Inc., or Gartner, International Data Corporation, or IDC, and 451 Research LLC on assumptions that we have made that are based on those data and other similar sources and on our knowledge of the markets for our products and services. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. While we believe the market position, market opportunity and market size information included in this prospectus is generally reliable, such information is inherently imprecise. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

USE OF PROCEEDS

We estimate that our net proceeds from this offering, after deducting the underwriting discount and estimated offering expenses payable by us, will be approximately $ million, or approximately $ million if the underwriters exercise in full their option to purchase additional ordinary shares, based upon an assumed initial public offering price of $ per ordinary share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus.

A $1.00 increase (decrease) in the assumed initial public offering price of $ per ordinary share would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming the number of shares offered as set forth on the cover page of this prospectus remains the same and after deducting underwriting discounts and estimated offering expenses payable by us. Similarly, each increase (decrease) of 100,000 shares in the number of ordinary shares offered would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming that the assumed initial public offering price remains the same, and after deducting underwriting discounts and estimated offering expenses payable by us.

We anticipate that we will use the net proceeds we receive from this offering, including any net proceeds we receive from the exercise of the underwriters’ option to acquire additional ordinary shares in the offering, for working capital and other general corporate purposes. We expect to continue to invest in and to grow our research and development capabilities as well as expand our sales force and marketing team.

DIVIDEND POLICY

We may declare a dividend to be paid to the holders of our ordinary shares in proportion to their respective shareholdings. However, we have never declared or paid any cash dividends on our ordinary shares and we do not anticipate paying any cash dividends in the foreseeable future. In addition, our ability to pay cash dividends is currently limited by the terms of our credit agreements, and any future credit agreements may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our ordinary shares. We currently intend to retain future earnings to finance operations and expand our business.

The distribution of dividends may also be limited by the Israeli Companies Law, 5759-1999, or the Israeli Companies Law, which permits the distribution of dividends only out of “profits,” as such term is defined in the Israeli Companies Law. Our board of directors is authorized to declare dividends, provided that there is no reasonable concern that payment of the dividend will prevent us from satisfying our existing and foreseeable obligations as they become due. For purposes of the Israeli Companies Law, profits means the greater of retained earnings or earnings derived over the two most recent fiscal years after deduction of previous distributions that were not already deducted from the surpluses, as evidenced by financial statements prepared for periods no more than six months prior to the date of distribution. In addition, dividends may be paid with the permission of an Israeli court, provided that there is no reasonable concern that payment of the dividend will prevent a company from satisfying its existing and foreseeable obligations as they become due. Under the Israeli Companies Law, dividend distributions are determined by the board of directors and do not require the approval of the shareholders of a company unless the company’s articles of association provide otherwise. Our amended and restated articles of association do not require shareholder approval of a dividend distribution and provide that dividend distributions may be determined by our board of directors, subject to the provisions of the Israeli Companies Law.

CAPITALIZATION

The following table sets forth our cash and cash equivalents and total capitalization as of December 31, 2018, as follows:


•	on an actual basis;


•	on a pro forma basis to give effect to the conversion of all of our outstanding preferred shares into ordinary shares, which will occur immediately prior to the completion of this offering; and


•	on a pro forma as adjusted basis to give effect to (x) the same item as set forth in “pro forma,” and (y) the issuance and sale of ordinary shares in this offering at an assumed initial public offering price of $ per ordinary share after deducting underwriting discounts and estimated offering expenses payable by us.

You should read this information in conjunction with our consolidated financial statements and the related notes appearing at the end of this prospectus and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and other financial information contained in this prospectus.



	As of December 31, 2018
	Actual			Pro Forma			Pro Forma As Adjusted
	(in thousands, except share and per share amounts)
Cash and cash equivalents	$	15,248		$	15,248		$
Long-term loan	—			—
Redeemable Convertible Preferred Shares:
Preferred shares of NIS 0.01 par value: 29,301,032 preferred shares authorized at December 31, 2018; 24,625,126 preferred shares issued and outstanding at December 31, 2018; no preferred shares issued and outstanding pro forma (unaudited)	26,699			—
Shareholders’ (deficit) equity:
Ordinary shares of NIS 0.01 par value; 79,000,068 shares authorized at December 31, 2018; 12,398,978 shares issued and outstanding at December 31, 2018; 37,024,104 shares issued and outstanding pro forma (unaudited)	30			96
Additional paid-in capital	10,337			36,970
Accumulated deficit	(40,313		)	(40,313		)
Total shareholders’ deficit	(29,946		)	(3,247		)
Total capitalization	$	(3,247	)	$	(3,247	)	$

A $1.00 increase (decrease) in the assumed initial public offering price of $ per ordinary share, would increase (decrease) the as adjusted amount of each of cash and cash equivalents, additional paid-in capital, total equity and total capitalization by approximately $ million, assuming that the number of ordinary shares offered , as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and estimated offering expenses payable by us.

DILUTION

If you purchase any of the shares offered by this prospectus, you will experience dilution to the extent of the difference between the offering price per share that you pay in this offering and the pro forma as adjusted net tangible book value per ordinary share immediately after this offering. Our net tangible book value as of December 31, 2018 was $0.10 per ordinary share. Consolidated net tangible book value per ordinary share was calculated by subtracting our total tangible assets from our total liabilities and dividing the difference by the number of ordinary shares outstanding.

After giving effect to the sale of ordinary shares that we are offering at an assumed initial public offering price of $ per ordinary share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting the underwriting discount and estimated offering expenses payable by us, our consolidated net tangible book value on an adjusted basis as of December 31, 2018 would have been $ per ordinary share. This amount represents an immediate decrease in net tangible book value of $ per ordinary share to our existing shareholders and an immediate increase in net tangible book value of $ per ordinary share to new investors purchasing ordinary shares in this offering. We determine dilution by subtracting the as adjusted net tangible book value per ordinary share after this offering from the amount of cash that a new investor paid for an ordinary share.

The following table illustrates this dilution:



Assumed initial public offering price per ordinary share			$
Net tangible book value per ordinary share as of December 31, 2018	$	0.10
Increase per ordinary share attributable to this offering
Pro forma as adjusted net tangible book value per ordinary share after this offering
Dilution per ordinary share to new investors in this offering			$

A $1.00 increase (decrease) in the assumed initial public offering price of $ per ordinary share would increase (decrease) our pro forma as adjusted net tangible book value by $ million, or $ per share, and the pro forma dilution per share to investors in this offering would be $ million, or $ per share, for a $1.00 increase (decrease), respectively, assuming that the number of shares offered, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and estimated offering expenses payable by us. Each increase (decrease) of 100,000 million shares in the number of shares offered would increase (decrease) our pro forma as adjusted net tangible book value by approximately $ million, or $ per share, and the pro forma dilution to investors in this offering would be $ per share, assuming that the assumed initial public offering price remains the same, and after deducting underwriting discounts and estimated offering expenses payable by us.

If the underwriters exercise their option to purchase additional ordinary shares in full in this offering, the as adjusted net tangible book value after the offering would be $ per ordinary share, the decrease in net tangible book value per ordinary share to existing shareholders would be $ and the increase in net tangible book value per ordinary share to new investors would be $ per ordinary share, in each case assuming an initial public offering price of $ per ordinary share.

The following table summarizes, as of December 31, 2018, the differences between the number of purchased ordinary shares, the total consideration paid in cash and the average price per ordinary share that existing shareholders paid, on the one hand, and new investors are paying in this offering, on the other hand. The calculation below is based on an assumed initial public offering price of $ per ordinary share before deducting underwriting discounts and estimated offering expenses payable by us.



	Shares Purchased			Total Consideration				Average Price Per Share
	Number	Percent		Amount		Percent		Average Price Per Share
Existing shareholders	37,024,104	%		$	28,531	%		$
New investors
Total		100	%			100	%

The foregoing tables and calculations exclude (1) 10,125,201 ordinary shares reserved for issuance under our share option plans as of December 31, 2018, of which there were options to purchase 10,125,201 shares at a weighted average exercise price of $ 1.18 per share, and (2) 40,000 ordinary shares underlying warrants issued to an Israeli non-profit organization with an exercise price of $2.868 per share.

To the extent any of these outstanding options is exercised, there will be further dilution to new investors. To the extent all of such outstanding options had been exercised as of December 31, 2018, the as adjusted net tangible book value per share after this offering would be $ , and total dilution per share to new investors would be $ .

If the underwriters exercise their option to purchase additional shares in full:


•	the percentage of ordinary shares held by existing shareholders will decrease to approximately % of the total number of our ordinary shares outstanding after this offering; and


•	the number of shares held by new investors will increase to , or approximately % of the total number of our ordinary shares outstanding after this offering.

SELECTED CONSOLIDATED FINANCIAL DATA

The following tables set forth our selected consolidated financial data. You should read the following selected consolidated financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus. Historical results are not necessarily indicative of the results that may be expected in the future. Our financial statements have been prepared in accordance with U.S. GAAP.

The selected consolidated statements of operations data for each of the years in the two-year period ended December 31, 2018 and the consolidated balance sheet data as of December 31, 2018 are derived from our audited consolidated financial statements appearing elsewhere in this prospectus.



	Year ended December 31,
	2017			2018
	(in thousands, except share and per share amounts)
Consolidated Statements of Operations:
Revenues:
Product	$	30,855		$	42,554
Maintenance and professional services	33,685			42,427
Total revenues	64,540			84,981
Cost of revenues:
Product	1,702			2,324
Maintenance and professional services	7,778			11,112
Total cost of revenues(1)	9,480			13,436
Gross profit	55,060			71,545
Operating expenses:
Research and development(1)	17,672			21,363
Sales and marketing(1)	35,042			46,092
General and administrative(1)	4,608			6,022
Total operating expenses	57,322			73,477
Operating loss	$	(2,262	)	$	(1,932	)
Financial income (loss), net	267			(1,047		)
Loss before taxes on income	$	(1,995	)	$	(2,979	)
Taxes on income	(797		)	(1,283		)
Net loss	$	(2,792	)	$	(4,262	)
Basic and diluted net loss per ordinary share(2)	$	(0.24	)	$	(0.35	)
Weighted average number of ordinary shares used in computing basic and diluted net loss per ordinary share(2)	11,808,817			12,068,470
Basic pro forma net loss per ordinary share(3)				(0.12		)
Weighted average number of shares used in computing pro forma basic and diluted net loss per ordinary share(3)				36,693,596



	Year ended December 31,
	2017			2018
	(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	14,700		$	15,248
Working capital, excluding deferred revenue(4)	15,247			17,781
Deferred revenue, current and non-current	23,957			31,464
Total assets	35,126			47,133
Redeemable convertible preferred shares	26,699			26,699
Total shareholders’ deficit	(29,028		)	(29,946		)



	Year ended December 31,
	2017			2018
	(in thousands)
Supplemental Financial Data:
Non-GAAP operating profit (loss)(5)	$	(152	)	$	1,249


(1)	Includes share-based compensation expense as follows:



	Year ended December 31,
	2017		2018
	(in thousands)
Share-based Compensation Expense:
Cost of revenues	$	332	$	634
Research and development	660		731
Sales and marketing	765		1,458
General and administrative	353		358
Total share-based compensation expenses	$	2,110	$	3,181


(2)	Basic and diluted net loss per ordinary share is computed based on the weighted average number of ordinary shares outstanding during each period. For additional information, see Note 2 to our consolidated financial statements included elsewhere in this prospectus.

(3)


(4)	We define working capital as total current assets minus total current liabilities.

(5)



	Year ended December 31,
	2017			2018
	(in thousands)
Reconciliation of Operating Loss to Non-GAAP Operating Profit (Loss):
Operating loss	$	(2,262	)	$	(1,932	)
Add: share-based compensation	2,110			3.181
Non-GAAP operating profit (loss)	$	(152	)	$	1,249

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that are subject to known and unknown risks and uncertainties. Actual results and the timing of events may differ significantly from those expressed or implied in such forward-looking statements due to a number of factors, including those set forth in the section entitled “Risk Factors” and elsewhere in this prospectus. You should read the following discussion in conjunction with “Special Note Regarding Forward-Looking Statements” and “Risk Factors.”

Overview

We generate revenues from sales of our products and associated maintenance and professional services. We primarily sell our software through perpetual license agreements and, to a lesser extent, term-based license agreements. Our products offer the same functionality whether our customers receive them through a perpetual or term-based license. Our agreements with customers for software licenses include maintenance contracts and may also include professional services contracts. Maintenance revenues consist of fees for providing software updates and technical support for our products for a specified term, which is typically one or three years. We offer a portfolio of professional services and extended support contract options to assist our customers with integration, customization, optimization, training and ongoing advanced technical support.

Our goal is to provide significant benefits to customers seeking to enforce enterprise-wide security policies and automate network change process, which we believe will enable us to maximize the lifetime value of our customers. We believe our existing customers serve as a strong source of incremental revenues given our multiple product offerings and the growing complexity of IT and cloud environments and networks. Our products provide customers the flexibility to initially deploy one or more of our products in all or parts of their IT and cloud environments, and further expand deployment as they purchase additional products or cover additional parts of their IT and cloud environments. We believe our “land and expand” sales strategy capitalizes on this potential. We make significant investments in acquiring new customers and expect to achieve a favorable return on investments by maintaining a high level of customer retention, which we define as our maintenance renewal rate. We calculate our maintenance renewal rate by taking the total prior period maintenance revenues from customers that have renewed in the trailing 12-month period and dividing that figure by our total prior period maintenance revenues for all customers with contracts that were up for renewal in the trailing 12-month period. For each of the years ended December 31, 2017 and 2018, our maintenance renewal rate was over 90%. Our new business from existing customers, including new licenses for our products and attached maintenance and professional services contracts, constitutes a significant part of our revenues, accounting for 65% and 60% of our total revenues from new business in the years ended December 31, 2017 and 2018, respectively.

We believe our diverse global footprint provides a significant growth opportunity. We aim to continue to expand our business globally, particularly in the Americas and EMEA. In 2018, the Americas accounted for 57% of our revenues and EMEA accounted for 38% of our revenues. We expect sales in the Americas

to continue to account for a majority of our revenues in the near- and medium- terms. Our customers include leading enterprises across a broad range of geographies in a diverse set of industries, including financial services, telecommunications, automotive, manufacturing, energy, healthcare and pharmaceuticals, technology, government, retail and business services. We believe our expansion within the Global 2000 is a key indicator of our market penetration and the value that our products provide to large customers.

We sell our products and services through our sales force, including our field sales team and our inside sales team, which works closely with our global network of approximately 140 active channel partners. Our highly trained sales force is responsible for overall market development. Our sales force consists of our field sales team, which accounts for most of our sales, and our inside sales team. Our field sales team targets large organizations, which we define as those comprising the Global 2000, while our inside sales team targets mid-market companies that do not belong to the Global 2000. Within our field sales team, our regional field sales representatives develop new business relationships with our key customers, and our channel account managers support and expand existing relationships with our channel partners. Our sales engineers provide technical expertise and support, and architect our solutions to address the business needs of our customers. Our sales cycle usually lasts several months from proof of concept to purchase order, and is often longer for larger transactions. As of December 31, 2018, we had sales personnel in 24 countries. We have expanded our sales force in each of the last two fiscal years, and we plan to continue to do so.

Our channel partners include distributors and resellers, as well as service delivery partners that help customers successfully deploy, configure, customize and maintain our products and services. We sell substantially all of our products and services through our global network of channel partners, who then sell to end-user customers. When analyzing our business, we refer to end-user customers as our customers throughout this prospectus even if our direct commercial relationship is with a channel partner. We consider our channel partners active if they have sold our products or services in the trailing 12-month period.

We integrate with our platform partners, such as Check Point, Cisco, Fortinet, Palo Alto Networks, F5 Networks, Forcepoint, Juniper Networks, VMware, AWS and Microsoft Azure, to provide vendor agnostic solutions, which is key to our value proposition. In addition, we believe our technology alliance partner program, which is an ecosystem of technology partners who build certified integrations to our platform, helps to expand our common use cases.

We have been growing our business consistently over the last several years. Our revenue growth is attributable to sales to new enterprise customers and incremental sales to existing customers. For the years ended December 31, 2017 and 2018, our revenues were $64.5 million and $85.0 million , respectively, representing year-over-year growth of 31.7% .

Key Factors Affecting Our Performance

We believe the growth of our business and our future success depends on a number of factors, including the following:

•

Number of Customers . We believe the size of our customer base is an indicator of our market penetration and our net customer additions are an indicator of the growth of our business and future revenue opportunity. We believe we have a significant opportunity to expand our footprint through new installations and displacement of our competitors’ solutions. To do so, we plan to continue to grow our sales team, leverage our channel partner relationships and enhance our marketing efforts. We believe organizations choose us for our customer-first approach, continuing innovation and seamless integration with third-party technologies.

We define a customer as a distinct entity, division or business unit of a company that has purchased our products or services and is eligible to receive maintenance and support. Since our inception, over 2,000 customers in over 70 countries have purchased our solutions, including approximately 15% of

the Global 2000. As of December 31, 2017 and 2018, we had 1,489 and 1,566 customers, respectively.

•

Sales to Existing Customers . We believe our existing customers provide a significant source of revenue growth. We derive an increasing portion of our revenues from existing customers. For example, during the year ended December 31, 2018, we generated approximately 60% of our revenues, excluding maintenance renewals, from sales to existing customers. We exclude maintenance renewals from this and other calculations (in each case, as indicated) in order to illustrate the impact of new sales to existing customers, isolated from the incremental maintenance revenues we receive when our existing customers renew their maintenance contracts.

The chart below shows the initial and incremental sales of perpetual and term licenses, excluding maintenance renewals, by cohort. Each colored segment represents a new customer cohort in their initial year of purchase. The pattern of a large spend in the initial year followed by consistent and incremental buying in subsequent years reflects our ability to expand the deployment of our solutions as our existing customers purchase additional products or cover additional parts of their networks.

•

Maintenance Renewal Rates. We believe our maintenance renewal rates are an important metric to measure our ability to provide significant value to our existing customers. We generate incremental maintenance revenues when our customers renew their maintenance contracts. We measure the maintenance renewal rate of our customers over a trailing 12-month period, based on a dollar renewal rate of contracts expiring during that time period. For each of the years ended December 31, 2017 and 2018, our maintenance renewal rate was over 90%. Our key strategies to maintain our renewal rate include continuing to provide more valuable features and network device coverage in our product updates, focusing on the quality and reliability of our customer service and support and ensuring our customers receive value from our products.

•

Sales to Large Organizations. In the year ended December 31, 2018, large organizations, which we define as those comprising the Global 2000, accounted for 66% of our revenues, compared to 67% of our revenues in 2017. Sales to large organizations involve a distinct set of opportunities and challenges. Large organizations sales are characterized by longer sales cycles and additional time and resources spent on a potential customer.

For the years ended December 31, 2017 and 2018, the average spend for all customers, excluding maintenance renewals, was $94,000 and $119,000, respectively. During those years, the average spend for Global 2000 customers, excluding maintenance renewals, was $151,000 and $201,000,

respectively; and the average spend for non-Global 2000 customers, excluding maintenance renewals, was $48,000 and $66,000, respectively. We define average spend as total sales, excluding maintenance renewals, for the relevant customer group (i.e., all customers, Global 2000 customers or non-Global 2000 customers) divided by the number of customers belonging to such customer group.

•

Seasonality . We generally expect an increase in business activity in the fourth quarter, driven by our customers’ buying patterns. We believe that these seasonal trends will continue to affect our quarterly results. The loss or delay of one or more large transactions in a quarter could impact our anticipated results of operations for that quarter and future quarters for which revenue from that transaction is delayed.

Components of Statements of Operations

Revenues

We derive our revenues from the following:

Product Revenues . We generate product revenues from sales of our software licenses and third-party hardware to new customers and sales of additional licenses and third-party hardware to existing customers. We generate the vast majority of our revenues through sales of software with less than 5% of our revenues generated through sales of third-party hardware in 2017. We primarily sell our software through perpetual license agreements and, to a lesser extent, term-based license agreements. Beginning on January 1, 2017, we adopted ASC 606. As a result, we recognize revenues from software sold through term-based license agreements upfront, upon delivery. As a percentage of total revenues, we expect our product revenues to vary from quarter to quarter based on seasonal and cyclical factors. We are focused on acquiring new customers as well as increasing product revenues from our existing customers.

Maintenance and Professional Services Revenues. We generate maintenance and professional services revenues by selling maintenance contracts and, to a lesser extent, by providing professional services to our customers. Maintenance includes software updates and technical support. Our contracts with customers for software licenses include maintenance for a specified term. We recognize revenues associated with maintenance on a straight-line basis over the specified maintenance period. Professional services consist of deployment services for our products, and customization of our solutions and their integration in the customer’s environment. We typically bill for professional services and training services on a fixed fee basis and recognize revenues as we perform the services. As a percentage of total revenues, we expect our maintenance and professional services revenues to vary from quarter to quarter based on fluctuations in license sales, maintenance renewal rates, professional services attach rates and cyclical factors. The increase in maintenance is attributable to the growth in our software license sales to new and existing customers.

See Note 2 to our consolidated financial statements “Significant Accounting Policies—Revenue recognition” for more information.

Geographic Breakdown of Revenues

The following table sets forth the geographic breakdown of our revenues by region for the periods indicated:



	Year ended December 31,
	2017				2018
	Amount		%		Amount		%
	(in thousands)
Americas	$	35,020	54.3	%	$	48,267	56.8	%
EMEA	26,099		40.4		32,595		38.4
Rest of World	3,421		5.3		4,119		4.8
Total	$	64,540	100.0	%	$	84,981	100.0	%

The Americas accounted for the majority of our revenues in each of the years ended December 31, 2017 and 2018, nearly all of which were generated in the United States. EMEA also accounted for a significant portion of our revenues in each of the years ended December 31, 2017 and 2018, with revenues generated in Germany representing 27% and 25%, respectively, of EMEA revenues.

Cost of Revenues and Gross Profit

Our total cost of revenues is comprised of the following:

Cost of Product Revenues. Cost of product revenues consist primarily of personnel costs (including share-based compensation) associated with the processing and delivery of our software licenses to customers and, to a lesser extent, the purchase and delivery of third-party hardware as well as other overhead costs. There is no direct cost of revenues associated with our software products because we deliver our software products electronically. Electronic delivery occurs when we provide the customer with access to the software and license key via a secure portal. We expect our cost of product revenues to increase in absolute dollar amounts as we increase the number of personnel involved in the delivery of our products and as we increase sales of third-party hardware.

Cost of Maintenance and Professional Services Revenues. Cost of maintenance and professional services revenues consist primarily of personnel costs for those responsible for providing maintenance and support and professional services to our global customer base. Such personnel costs consist of salaries, benefits, bonuses and share-based compensation. We expect our cost of maintenance and professional services revenues to continue to increase in absolute dollars as we hire additional professional services and technical support personnel to support our business.

Gross profit is total revenues less total cost of revenues. Gross margin is gross profit expressed as a percentage of total revenues. Our gross margin fluctuates from quarter-to-quarter based on the mix of product revenues and maintenance and professional services revenues. We expect our gross margins to continue to fluctuate.

Operating Expenses

Our operating expenses consist of research and development expenses, sales and marketing expenses and general and administrative expenses. For each category, personnel costs are the most significant component of our operating expenses. Personnel costs consist of salaries and employee benefits (including vacation expenses, bonuses and share-based compensation). Sales commissions account for a significant portion of our sales and marketing compensation costs. We expect personnel and all allocated overhead costs to continue to increase in absolute dollars as we hire new employees and add facilities to accommodate our growing personnel and business.

Research and Development . Research and development expenses consist primarily of personnel costs attributable to our research and development personnel, subcontractors and consultants, as well as allocated overhead costs. We expense research and development expenses as incurred. We expect that our research and development expenses will continue to increase in absolute dollars as we increase our research and development headcount to further strengthen our technology platform and invest in the development of existing and new products.

Sales and Marketing. Sales and marketing expenses are the largest component of our operating expenses and consist primarily of personnel costs, including variable compensation, as well as travel expenses, marketing and business development costs (including marketing campaigns, tradeshows and recruitment) and allocated overhead costs. We expect sales and marketing expenses will continue to increase in absolute dollars and account for the majority of our operating costs as we expand our international sales and marketing efforts.

General and Administrative. General and administrative expenses consist primarily of personnel costs for our executive, finance, IT, human resources, legal and administrative personnel. General and administrative expenses also include external legal, accounting and other professional service fees. We expect that general and administrative expenses will increase in absolute dollars and as a percentage of revenues in the near term as we grow and expand our operations and prepare to operate as a public company, including higher legal, corporate insurance, investor relations and accounting expenses, and the additional costs of achieving and maintaining compliance with the Sarbanes-Oxley Act and related regulations.

Financial Income (Loss), Net

Financial income (loss), net, consists primarily of bank charges, interest paid on our long-term loan, interest earned on our cash, cash equivalents and restricted bank deposits, and foreign currency exchange fluctuations. Foreign currency exchange fluctuations reflect gains or losses related to transactions denominated in currencies other than the U.S. dollar, particularly the NIS. As a result of our global presence, we expect to continue to incur expenses in currencies other than the U.S. dollar. As such, we expect our exposure to fluctuations in foreign currencies to continue.

Taxes on Income

The standard corporate tax rate in Israel for 2018 and thereafter is 23%, and was 24% for 2017. We have net operating loss carry forwards. As of December 31, 2018, our net operating loss carry forwards for Israeli tax purposes amounted to approximately $20.5 million. Under Israeli law, net operating losses can be carried forward indefinitely and offset against certain future taxable income. We expect that if or when we become profitable, we will generate the substantial majority of our taxable income in Israel.

In addition, we are entitled to tax benefits under the Investment Law in Israel in respect of our status as a Benefited Enterprise. Under the Investment Law, our effective tax rate to be paid with respect to our Israeli taxable income as a Benefited Enterprise may be lower than the standard corporate tax rate. The tax benefit period for the Benefited Enterprise program under the Investment Law is expected to end in 2022. The availability of these tax benefits is subject to certain requirements, including making specified investments in property and equipment, and financing a percentage of investments with share capital. If we do not meet these requirements in the future, the tax benefits may be canceled and we could be required to refund any tax benefits that we have already received. See “Taxation and Israeli Government Programs Applicable to our Company—Tax Benefits for a Benefited Enterprise.”

Our U.S. and European subsidiaries currently generate taxable income in the United States and Europe. To the extent that we generate taxable income in Israel, our effective tax rate will be a weighted average rate based on the applicable U.S., European and Israeli rates.

Results of Operations

The following tables summarize our results of operations in dollars and as a percentage of our total revenues for the periods indicated. The period-to-period comparison of results is not necessarily indicative of results for future periods.



	Year ended December 31,
	2017					2018
	Amount			%		Amount			%
	(Dollars in thousands)
Revenues:
Product	$	30,855		47.8	%	$	42,554		50.1	%
Maintenance and professional services	33,685			52.2		42,427			49.9
Total revenues	64,540			100.0		84,981			100.0
Cost of revenues:
Product	1,702			2.6		2,324			2.7
Maintenance and professional services	7,778			12.1		11,112			13.1
Total cost of revenues(1)	9,480			14.7		13,436			15.8
Gross profit	55,060			85.3		71,545			84.2
Operating expenses:
Research and development(1)	17,672			27.4		21,363			25.1
Sales and marketing(1)	35,042			54.3		46,092			54.2
General and administrative(1)	4,608			7.1		6,022			7.1
Total operating expenses	57,322			88.8		73,477			86.5
Operating loss	$	(2,262	)	(3.5	)	$	(1,932	)	(2.3)
Financial income (loss), net	267			0.4		(1,047		)	(1.2)
Loss before taxes on income	$	(1,995	)	(3.1	)	$	(2,979	)	(3.5)
Taxes on income	(797		)	(1.2	)	(1,283		)	(1.5)
Net loss	$	(2,792	)	(4.3	)%	$	(4,262	)	(5.0	)%


(1)	Includes share-based compensation expense as follows:



	Year ended December 31,
	2017		2018
	(in thousands)
Share-based Compensation Expense:
Cost of revenues	$	332	$	634
Research and development	660		731
Sales and marketing	765		1,458
General and administrative	353		358
Total share-based compensation expenses	$	2,110	$	3,181

Comparison of the Years Ended December 31, 2017 and 2018

Revenues



	Year ended December 31,
	2017		2018		Change
	Amount		Amount		Amount			%
	(Dollars in thousands)
Revenues:
Product	$	30,855	$	42,554	$	11,699		37.9	%
Maintenance and support	27,966		37,155		9,189			32.9
Professional services	5,719		5,272		(447		)	(7.8	)
Total revenues	$	64,540	$	84,981	$	20,441		31.7	%

Revenues increased by $20.4 million, or 31.7%, from $64.5 million in 2017 to $85.0 million in 2018. This growth was achieved primarily due to increased sales of our products and services from new and existing customers across all regions and was most pronounced in the Americas, which accounted for a $13.2 million increase.

Product revenues increased by $11.7 million, or 37.9%, from $30.9 million in 2017 to $42.6 million in 2018. This increase was driven by increased sales volumes primarily to new customers buying our network policy security management and automation solutions, as well as upsell and expansion sales to existing customers. The substantial majority of our product revenues was attributable to sales of perpetual licenses.

Maintenance and support revenues grew by $9.2 million, or 32.9%, from $28.0 million in 2017 to $37.2 million in 2018 due to an increase in the sale of maintenance and support services to both new and existing customers.

Professional services revenues decreased by $0.4 million, or 7.8%, from $5.7 million in 2017 to $5.3 million in 2018. This decrease was attributable to performance progress of services.

Cost of Revenues



	Year ended December 31,
	2017		2018	Change
	Amount		Amount	Amount		%
	(Dollars in thousands)
Cost of revenues:
Product	$	1,702	2,324	$	622	36.5	%
Maintenance and professional services	7,778		11,112	3,334		42.8
Total cost of revenues	$	9,480	13,436	$	3,956	41.7	%

Cost of revenues increased by $4.0 million, or 41.7%, from $9.5 million in 2017 to $13.4 million in 2018. This increase was primarily driven by the increase in compensation costs and related overhead associated with the increase in support and professional services personnel.

Cost of product revenues increased by $0.6 million, or 36.5%, from $1.7 million in 2017 to $2.3 million in 2018. The increased cost of product revenues was primarily attributable to the increased purchases of hardware.

Cost of maintenance and professional services revenues increased by $3.3 million, or 42.8%, from $7.8 million in 2017 to $11.1 million in 2018. The increase in cost of maintenance and professional services revenues was driven primarily by an increase in personnel costs and related overhead expenses as we grew our technical support and professional services headcount to support our increased sales.

Gross Profit



	Year ended December 31,
	2017				2018				Gross Profit Change
	Gross Profit		Gross Margin		Gross Profit		Gross Margin		Amount		%
Gross profit	$	55,060	85.3	%	$	71,545	84.2	%	$	16,485	29.9%

Gross profit increased by $16.5 million, or 29.9%, from $55.1 million in 2017 to $71.5 million in 2018. Gross margins decreased from 85.3% to 84.2% during the same period. This decrease was driven by our costs of revenues increasing by a larger percentage than our revenues.

Operating Expenses



	Year ended December 31,
	2017		2018		Change
	Amount		Amount		Amount		%
	(Dollars in thousands)
Operating expenses:
Research and development	$	17,672	$	21,363	$	3,691	20.9	%
Sales and marketing	35,042		46,092		11,050		31.5
General and administrative	4,608		6,022		1,414		30.7
Total operating expenses	$	57,322	$	73,477	$	16,155	28.2	%

Operating expenses increased by $16.1 million, or 28.2%, from $57.3 million in 2017 to $73.5 million in 2018. This increase was driven primarily by increases in sales and marketing expenses.

Research and Development . Research and development expenses increased by $3.7 million, or 20.8%, from $17.7 million in 2017 to $21.4 million in 2018. This increase was primarily attributable to an increase of $2.7 million in compensation expenses as we grew our research and development team from 114 at the end of 2017 to 152 at the end of 2018 in order to enhance and further develop our existing and new products. The increase was also partially attributable to an increase of $0.7 million in allocated overhead costs.

Sales and Marketing. Sales and marketing expenses increased by $11.1 million, or 31.5%, from $35.0 million in 2017 to $46.1 million in 2018. This increase was attributable to a $7.3 million increase in compensation expenses as we grew our sales and marketing organization from 128 at the end of 2017 to 166 at the end of 2018, a $1.5 million increased investment in marketing programs compared to 2017. The remainder of the increase is attributable to allocated overhead costs.

General and Administrative . General and administrative expenses increased by $1.4 million, or 30.6%, from $4.6 million in 2017 to $6.0 million in 2018. This increase was primarily attributable to an increase of $0.6 million in compensation costs due to increase in headcount coupled with a $0.6 million increase in accounting and legal expenses including those that are associated with this offering .

Financial Income (Loss), Net



	Year ended December 31,
	2017		2018			Change
	Amount		Amount			Amount			%
	(Dollars in thousands)
Financial income (loss), net	$	267	$	(1,047	)	$	(1,314	)	(492.1)%

Financial income (loss), net decreased from financial income of $0.3 million in 2017 to a financial loss, net of $1.0 million in 2018. The decrease was primarily due to a loss of $0.7 million due to exchange rate fluctuations in the foreign currencies against the U.S. dollar and a $0.3 million hedging instrument loss.

Taxes on Income



	Year ended December 31,
	2017			2018			Change
	Amount			Amount			Amount			%
	(Dollars in thousands)
Taxes on income	$	(797	)	$	(1,283	)	$	(486	)	(61.0)%

Taxes on income increased from a tax expense of $0.8 million in 2017 to a tax expense of $1.3 million in 2018. W e have established a full valuation allowance against potential future benefits for deferred tax assets including loss carryforwards generated in Israel. In the United States, we have recorded a deferred tax asset of $0.5 million and $0.7 million as of December 31, 2017 and 2018, respectively.

Quarterly Results of Operations and Seasonality

The following tables present our unaudited condensed consolidated quarterly results of operations in dollars and as a percentage of revenues for the periods indicated. In the opinion of management, the financial information reflects all adjustments, consisting only of normal recurring adjustments, which we consider necessary for a fair presentation of this data. This information should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere in this prospectus. The historical quarterly results presented are not necessarily indicative of the results that may be expected for any future quarters or periods.



	Three months ended
	Mar 31, 2017			June 30, 2017			Sept 30, 2017			Dec 31, 2017			Mar 31, 2018			June 30, 2018			Sept 30, 2018			Dec 31, 2018
	(in thousands)
Revenues:
Product	$	5,250		$	5,799		$	5,970		$	13,836		$	8,422		$	8,308		$	8,723		$	17,101
Maintenance and professional services	7,069			7,021			9,150			10,445			9,478			10,214			10,615			12,120
Total revenues	12,319			12,820			15,120			24,281			17,900			18,522			19,338			29,221
Cost of revenues:
Product	554			389			326			433			657			344			462			861
Maintenance and professional services	1,452			1,854			1,991			2,481			2,575			2,526			2,829			3,182
Total cost of revenues(1)	2,006			2,243			2,317			2,914			3,232			2,870			3,291			4,043
Gross profit	10,313			10,577			12,803			21,367			14,668			15,652			16,047			25,178
Operating expenses:
Research and development(1)	3,991			4,636			4,157			4,888			4,670			5,004			5,284			6,405
Sales and marketing(1)	7,091			8,297			8,376			11,278			9,147			11,896			12,035			13,014
General and administrative(1)	852			1,314			1,071			1,371			1,097			1,201			1,432			2,292
Total operating expenses	11,934			14,247			13,604			17,537			14,914			18,101			18,751			21,711
Operating profit (loss)	(1,621		)	(3,670		)	(801		)	3,830			(246		)	(2,449		)	(2,704		)	3,467
Financial income, net	188			(147		)	119			107			(112		)	(244		)	(231		)	(460		)
Profit (loss) before taxes on income	(1,433		)	(3,817		)	(682		)	3,937			(358		)	(2,693		)	(2,935		)	3,007
Taxes on income	(148		)	(181		)	(118		)	(350		)	(368		)	(366		)	(343		)	(206		)
Net income (loss)	$	(1,581	)	$	(3,998	)	$	(800	)	$	3,587		$	(726	)	$	(3,059	)	$	(3,278	)	$	2,801


(1)	Includes share-based compensation expense as follows:



	Three months ended
	Mar 31, 2017	June 30, 2017	Sept 30, 2017	Dec 31, 2017	Mar 31, 2018	June 30, 2018	Sept 30, 2018	Dec 31, 2018
	(in thousands)
Cost of revenues	18	45	121	148	111	194	144	185
Research and development	50	361	108	141	91	225	193	222
Sales and marketing	104	235	184	242	167	350	456	485
General administrative	16	251	40	46	53	50	113	142
Total share-based compensation expenses	188	892	453	577	422	819	906	1,034



	Three months ended
	Mar 31, 2017		June 30, 2017		Sept 30, 2017		Dec 31, 2017		Mar 31, 2018		June 30, 2018		Sept 30, 2018		Dec 31, 2018
	(as a percentage of total revenue)
Revenues:
Product	42.6	%	45.2	%	39.5	%	57.0	%	47.1	%	44.9	%	45.1	%	58.5	%
Maintenance and professional services	57.4		54.8		60.5		43.0		52.9		55.1		54.9		41.5
Total revenues	100.0		100.0		100.0		100.0		100.0		100.0		100.0		100.0
Cost of revenues:
Product	4.5		3.0		2.2		1.8		3.7		1.9		2.4		2.9
Maintenance and professional services	11.8		14.5		13.2		10.2		14.4		13.6		14.6		10.9
Total cost of revenues	16.3		17.5		15.4		12.0		18.1		15.5		17.0		13.8
Gross profit	83.7		82.5		84.7		88.0		81.9		84.5		83.0		86.2
Operating expenses:
Research and development	32.4		36.2		27.5		20.1		26.1		27.0		27.3		21.9
Sales and marketing	57.6		64.7		55.4		46.4		51.1		64.2		62.2		44.5
General and administrative	6.9		10.2		7.1		5.6		6.1		6.5		7.4		7.8
Total operating expenses	96.9		111.1		90.0		72.1		83.3		97.7		97.0		74.3
Operating loss	(13.2	)	(28.6	)	(5.3	)	15.8		(1.4	)	(13.2	)	(14.0	)	11.9
Financial income, net	1.5		(1.1	)	0.8		0.4		(0.6	)	(1.3	)	(1.2	)	(1.6	)
Profit (loss) before taxes on income	(11.6	)	(29.8	)	(4.5	)	16.2		(2.0	)	(14.5	)	(15.2	)	10.3
Taxes on income	(1.2	)	(1.4	)	(0.8	)	(1.4	)	(2.1	)	(2.0	)	(1.8	)	(0.7	)
Net income (loss)	(12.8	)%	(31.2	)%	(5.3	)%	14.8	%	(4.1	)%	(16.5	)%	(17.0	)%	9.6	%

Quarterly Revenue Trends. Our quarterly revenues from product has increased year-over-year due to an increase in sales of licenses to new customers buying our network policy management solutions as well as upsell and expansion sales to our existing customers. Our quarterly revenues from maintenance and professional services has increased year-over-year due to an increase in maintenance and support services to new and existing customers. Our fourth quarter has historically been our strongest quarter for sales due to the purchasing pattern of our customers. We expect this trend to continue.

Quarterly Gross Profit and Margin Trends. Our quarterly gross profit increased year-over-year. Our fourth quarter gross profit and our gross margin has historically been our strongest, which is consistent with our quarterly revenue trends. This fluctuation is primarily due to higher revenues in the fourth quarter relative to other quarters without a corresponding increase in the cost of products and maintenance and professional services costs.

Quarterly Operating Expense Trends. Our quarterly operating expenses increased year-over-year primarily due to the addition of personnel in connection with the expansion of our business. Our total operating expenses generally increase in the fourth quarter due to increased headcount and related compensation. Research and development expenses increased sequentially over the periods as we increased our headcount to support continued investment in our future products and services offerings. Sales and marketing expense increased over the periods as we incurred higher costs associated with commission expenses to sales people, personnel counts associated with increases in headcount and an increase in overhead allocations. General and administrative expense increased over the periods primarily due to an increase in personnel and an increase in accounting and legal expenses including those expenses associated with this offering.

Liquidity and Capital Resources

Since 2015, we have primarily funded our operations through sales of our products and services. Prior to 2015, we funded our operations primarily through the sale of preferred shares and cash generated from operating activities.

As of December 31, 2018, we had $15.2 million of cash and cash equivalents. This compared with cash and cash equivalents of $14.7 million as of December 31, 2017. We believe that our existing cash and cash equivalents together with our cash from operating activities will be sufficient to fund our operations and capital expenditures for at least the next 12 months. Our future capital requirements will depend on many factors, including our rate of revenues growth, the expansion of our sales and marketing activities, the timing and extent of spending to support product development efforts and expansion into new geographic locations, the timing of introductions of new products and enhancements to existing products and the continuing market acceptance of our products and solutions.

Term Loan and Revolving Credit Line

On August 4, 2015, we entered into a Loan and Security Agreement, consisting of a $2.0 million term loan facility and a $6.0 million revolving credit line facility, by and among Tufin Software Technologies Ltd., as Israeli borrower, Tufin Software North America, Inc., as U.S. borrower and Silicon Valley Bank, as lender.

On January 24, 2017, we modified the Loan and Security Agreement to extend the maturity date to January 23, 2018 and to increase the amount of the revolving credit line facility to $10.0 million (with a one-year term extension to January 2018). As of December 31, 2017, the balance outstanding under the term loan facility, accruing interest at a floating rate per annum equal to the prime rate (as defined in the Loan and Security Agreement, as modified) plus 2.75%, was $0.9 million, out of which $0.7 million was presented to be repaid in 2018, and $0.2 million were presented as a long-term loan to be repaid in 2019. As of December 31, 2017, our maximum borrowing capacity under the revolving credit line facility was approximately $10.0 million, and effective interest rates on the used credit line varied between 4.500% and 7.125% annually, based on meeting certain covenants set forth in the Loan and Security Agreement.

We subsequently modified the Loan and Security Agreement. Pursuant to the Loan and Security Agreement, as modified, we created two debentures in favor of Silicon Valley Bank, pursuant to which Silicon Valley Bank has a first ranking floating charge over all of our present and future assets (including Intellectual Property, as defined in the Loan and Security Agreement) and a first ranking fixed charge over our registered and unissued share capital, our reputation and goodwill, our Intellectual Property, Accounts (as defined in the Loan and Security Agreement), our right to receive funds from our customers, other fixed assets and tax benefits.

On September 27, 2018, we amended and restated Loan and Security Agreement. The Loan and Security Agreement, as amended and restated, provides for customary representations, warranties, affirmative and negative covenants and events of default. In addition, at the end of each calendar year, we have undertaken under the Loan and Security Agreement, as amended and restated, to create a first ranking fixed charge over each account existing at such time which advances are or have been made, our right to receive funds from our customers, our intellectual property and equipment, and a first ranking fixed charge over our equity holdings in the shares of Tufin Software Europe Limited.

As of December 31, 2018, the balance outstanding under the term loan facility, accruing interest at a floating rate per annum equal to the prime rate (as defined in the Loan and Security Agreement, as amended and restated) plus 2.75%, was $0.2 million, all of which has presented as credit to be repaid in 2019.

As of December 31, 2018, our maximum borrowing capacity under the revolving credit line facility was approximately $15 million. Borrowings under the revolving credit line facility bear interest at a rate varying between floating per annum rate equal to the prime rate (as defined in the Loan and Security Agreement, as amended and restated) plus 1.25% , provided that we meet certain covenants set forth in the Loan and

Security Agreement, as amended and restated. The revolving credit line facility matures on September 27, 2019. As of December 31, 2018, we had no outstanding borrowings on our revolving credit line facility.

Net Cash Provided by (Used in) Operating Activities

Cash provided by operating activities was $4.6 million for the year ended December 31, 2018. This was primarily due to an increased net loss of $4.3 million adjusted by non-cash charges of $4.5 million, primarily relating to depreciation of property and equipment and compensation related to options granted to our employees, and a net increase of $4.4 million in our net operating assets and liabilities.

Cash used in operating activities of $0.4 million for the year ended December 31, 2017, was primarily due to a net loss of $2.8 million adjusted by non-cash charges of $2.4 million, primarily relating to depreciation of property and equipment and compensation related to options granted to our employees, and a net decrease of $0.1 million in our net operating assets and liabilities.

Net Cash Provided by (Used in) Investing Activities

Net cash used in investing activities was $1.6 million in 2018. Net cash used in investing activities was $0.8 million in 2017. Investing activities have consisted primarily of purchases of property and equipment.

Net Cash Provided by (Used in) Financing Activities

Net cash used in financing activities was $0.6 million in 2018, consisting of $0.7 million for the repayment of a long-term loan and $0.1 million relating to deferred offering costs partially offset by $0.2 million in proceeds from the exercise of employee share options. Net cash used in financing activities was $0.3 million in 2017, consisting of $0.7 million for the repayment of a long-term loan partially offset by $0.4 million in proceeds from the exercise of employee share options. We expect the completion of this offering to result in a material increase in net cash provided by financing activities.

Contractual Obligations

The following summarizes our contractual obligations as of December 31, 2018:



	Total		Less Than 1 Year		1 – 3 Years		4 – 5 Years		More Than 5 Years
	(U.S. $ in thousands)
Operating lease obligations(1)	$	21,444	$	1,457	$	7,459	$	4,258	$	8,270
Term loan facility—principal(2)	222		222		—		—		—
Term loan facility—interest(3)	4		4		—		—		—
Revolving line of credit(4)	38		38		—		—		—
Total	$	21,706	$	1,721	$	7,459	$	4,258	$	8,270


(1)	Operating lease obligations consist of contractual lease expenses under our operating leases.


(2)	Represents outstanding principal on our term loan facility with Silicon Valley Bank.


(3)	Represents interest on our term loan facility with Silicon Valley Bank.


(4)	Represents fees on our revolving credit line facility with Silicon Valley Bank, all of which remains undrawn.

Application of Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected.

The critical accounting policies requiring estimates, assumptions, and judgments that we believe have the most significant impact on our consolidated financial statements are described below.

Revenue Recognition

Effective January 1, 2017, we elected to early adopt Accounting Standards Codification 606, Revenue from Contracts with Customers , or ASC 606, on a modified retrospective basis. The revenue recognition accounting policies and estimates described below reflect the adoption of ASC 606. For additional information on our adoption of ASC 606, see Note 2 to our consolidated financial statements included elsewhere in this prospectus. We determine the appropriate revenue recognition for our contracts with customers by analyzing the type, terms and conditions of each contract. We classify the revenue components as products according to the attributes of the underlying components.

We sell our on-premises software licenses through both perpetual and, to a lesser extent, term-based license agreements. Our products offer the same functionality whether our customers receive them through a perpetual or term-based license. We deliver our software licenses electronically. Electronic delivery occurs when we provide the channel partner or customer with access to our software and license key via a secure portal. We generally recognize revenues from on-premises software licenses upfront when we make the software available to the channel partner or, if we are selling directly, customer. We recognize hardware sales upon delivery.

We generally recognize revenues from software sold through term-based license agreements upfront, upon delivery to the channel partner or, if we are selling directly, customer. We defer the associated maintenance revenues and recognize them over the contract period. Assuming we expect to recover the costs, we capitalize all incremental costs we incur to obtain a contract with a customer that we would not have incurred if we had not obtained the contract. We include amortization expense in sales and marketing expenses in our consolidated statements of operations. We amortize costs incurred in obtaining a contract as a sales and marketing expense on a straight-line basis over the expected period of benefit. We periodically review these costs for impairment.

Our contract payment terms typically range between 30 and 120 days. We assess collectability based on several factors, including collection history.

Our contracts with customers for software licenses include maintenance and may also include training and/or professional services. Maintenance consists of fees for providing software updates and technical support for our products for a specified term. We recognize maintenance revenues ratably over the contractual service period. We bill for professional services on a fixed fee basis and recognize revenues as we perform the services. We defer payments received in advance of services performed and recognize such payments when we perform the related services.

In contracts with multiple performance obligations, we account for individual performance obligations separately if they are distinct. We allocate the transaction price to each performance obligation based on its relative standalone selling price out of the total consideration of the contract. For maintenance and support contracts, we determine the standalone selling price based on the price at which we separately sell a renewal contract. We determine the standalone selling price for sales of licenses using the residual approach. For professional services, we determine the standalone selling prices based on the price at which we separately sell those services.

Share-Based Compensation

We measure and recognize share-based compensation expense in our consolidated financial statements based on the grant date fair value of the award. We recognize the grant date fair value of the award as an expense based on the straight-line method over the requisite service periods in our consolidated statements of operations.

We estimate the grant date fair value of a share option using the Black-Scholes option-pricing model. Our use of the Black-Scholes option-pricing model requires the input of highly subjective assumptions,

including estimated fair value of our ordinary share price, expected share price volatility and expected term. Any changes in these highly subjective assumptions would significantly impact our share-based compensation expense.

We estimate the fair value of options granted to employees and non-employees at the date of grant using the following assumptions:


•	Risk-Free Interest Rate . We base the risk-free interest rate on the implied yield on currently available U.S. treasury zero-coupon securities with a remaining term equal to the expected life of our options.


•	Dividend Yield . We base dividend yield on our historical experience and expectation of no future dividend payouts. We have historically not paid cash dividends and have no foreseeable plans to pay cash dividends in the future.


•	Expected Volatility . We base expected share price volatility on the historical volatility of the ordinary shares of comparable companies that are publicly traded.


•	Expected Term . The expected term of options granted represents the period of time that options granted are expected to be outstanding. We estimate the fair value of our ordinary shares underlying our share-based awards using the income approach.

The following table summarizes the assumptions used in the Black-Scholes option-pricing model to determine the fair value of our options:



	Year ended December 31
	2017	2018
Risk-free interest rate	2.08%-2.21%	2.68%-3.03%
Expected volatility	70%	65%-66%
Expected term (in years)	6-11	6
Dividend yield	0%	0%

Ordinary Share Valuation

Our board of directors determined the fair value of the ordinary shares underlying our share options with the assistance of a third-party specialist and in accordance with the guidelines outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation . In the absence of a public trading market, we exercised significant judgment and considered numerous objective and subjective factors to determine the fair value of our ordinary shares as of the date of each option grant, including the following factors:


•	valuations performed by third-party valuation firms;


•	the prices, rights, preferences and privileges of our convertible preferred shares relative to those of our ordinary shares;


•	the lack of marketability of our ordinary shares


•	our actual operating and financial performance;


•	current business conditions and projections;


•	our history and the timing of the introduction of new products and services;


•	our stage of development;


•	the likelihood of achieving a liquidity event, such as an initial public offering or merger or acquisition of our business given prevailing market conditions;


•	the market performance of comparable publicly-traded companies; and


•	U.S. and global capital market conditions.

In valuing our ordinary shares, a hybrid of the probability-weighted expected method, or PWERM, and an Option Pricing Method, or OPM, was utilized. The PWERM involves the estimation of the value of our company (the Equity Value) under future potential outcomes and estimates the probability of each outcome. The per share value of our ordinary shares determined using the PWERM is ultimately based upon probability-weighted per share values resulting from potential future scenarios - in our case: an initial public offering scenario and a non-IPO scenario.

The Equity Value in the IPO scenario was allocated to each of our shares on as converted basis, and discounted to present value equivalent using our estimated cost of equity.

In order to estimate the Equity Value in the non-IPO scenario, we first determined the fair value of our business, or Enterprise Value, using the income approach, which requires significant assumptions and judgments. The income approach estimates the fair value of our business based on the present value of our future estimated cash flows. These future cash flows are discounted to their present value equivalent using a rate of return that reflects the risks inherent in our achieving these estimated cash flows, as well as the time value of money. The Enterprise Value was then adjusted to net financial assets (in our case, cash and cash equivalents) in order to determine the Equity Value.

The resulting Equity Value in the non-IPO scenario was allocated to our various share classes using the OPM to determine the value of the securities compromising our share capital in the aforementioned scenarios.

After we allocated the Equity Value in each of the IPO and non-IPO scenarios to the various classes of shares, we applied a discount for lack of marketability, or DLOM, to arrive at the fair value of our ordinary shares in each of the above scenarios. A DLOM is intended to account for the lack of marketability of shares that are not traded on public exchanges based on the theory that as a private company, an owner of the shares has limited opportunities to sell the shares and any such sale would involve more significant transaction costs, thereby reducing overall fair market value.

Once we are operating as a public company, we will rely on the closing price of our ordinary shares are reported by the NYSE on the date of grant to determine the fair value of our ordinary shares.

Based on the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, the aggregate intrinsic value of our outstanding share-based awards as of , 2019 was , of which related to vested awards and related to unvested awards.

Income Taxes

We account for income taxes using the asset and liability approach, which requires the recognition of taxes payable or refundable for the current year and the deferred tax liabilities and assets for the future tax consequences of events that we have recognized in our financial statements or tax returns.

We measure current and deferred tax liabilities and assets based on provisions of the relevant tax law. We reduce the measurement of deferred tax assets, if necessary, by the amount of any tax benefits that we do not expect to realize. We classify interest and penalties relating to uncertain tax positions within taxes on income.

Accounts Receivable

We present accounts receivable in our consolidated balance sheets net of allowance for doubtful accounts. We estimate the collectability of accounts receivable balances and adjust its allowance for doubtful accounts based on past write-offs and collections, current credit conditions and the age of the balances. We evaluate a number of factors to assess collectability, including an evaluation of the

creditworthiness of the specific customer, past due amounts, payment history, and current economic conditions. When revenue recognition criteria are not met for a sale transaction that has been billed, we do not recognize deferred revenues on our balance sheet or the related account receivable.

Derivative Instruments

We carry out transactions involving foreign currency exchange derivative financial instruments. These transactions are designed to hedge our exposure in currencies other than the U.S. dollar, and are not designated as an accounting hedge. We are primarily exposed to foreign exchange risk with respect to recognized assets and liabilities and anticipated transactions denominated in the NIS, Euro and British Pound, including payroll expenses.

Off-Balance Sheet Arrangements

We do not currently engage in off-balance sheet financing arrangements. In addition, we do not have any interest in entities referred to as variable interest entities, which includes special purposes entities and other structured finance entities.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk is primarily a result of fluctuations in foreign currency exchange rates.

Foreign Currency Exchange Risk

We generate substantially all of our revenues in U.S. dollars. The majority of our operating expenses is incurred in foreign currencies, and is subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the NIS, the Euro and, to a lesser extent, the British Pound.

Our statements of operations and cash flows could be adversely affected in the future due to changes in foreign exchange rates. For example, an immediate 10% decrease or increase in the relative value of the U.S. dollar to the NIS would result in a $3.1 million loss or gain on our consolidated statements of operations and cash flows.

We have entered into forward contracts with major banks to protect against foreign currency exchange risks resulting from expenses paid in NIS during the year. See Note 10 to our consolidated financial statements under “Hedging Activities” for more information.

Interest Rate Sensitivity

Our exposure to market risk for changes in interest rates relates primarily to our cash and cash equivalents and our outstanding debt obligations. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of the interest rates in Europe, Israel and the United States. However, because of the short-term nature of the instruments in our portfolio, a sudden change in market interest rates would not be expected to have a material impact on our consolidated financial statements.

Our total indebtedness, including borrowings on our term loan facility and revolving credit line facility, is $0.2 million as of December 31, 2018. Our exposure to interest rates relates to the change in the amounts of interest we must pay on our borrowings, which bear variable rates of interest. The effect of a hypothetical 100 basis point change in our interest rate would not have a material impact on our interest expense in our consolidated financial statements.

New and Revised Financial Accounting Standards

Under the JOBS Act, we meet the definition of an “emerging growth company.” As such, we may avail ourselves of an extended transition period for complying with new or revised accounting standards.

However, we have chosen to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

Recent Accounting Pronouncements

See Note 2 to our consolidated financial statements “Significant Accounting Policies—Recently issued accounting standards” for more information.

BUSINESS

Overview

Cybersecurity is critical for enterprises of all sizes. As enterprises embrace digital transformation and adopt new technologies such as cloud-based services, software-defined networks, microservices and containers, the IT and cloud environments become increasingly complex and vulnerable to attack. In response to the heightened threat environment, lack of a defined network perimeter and a constantly changing attack surface, enterprises continue to implement additional firewalls, endpoint security, identity and access management and other security solutions. However, we believe most enterprises lack effective and comprehensive security policy management . For example, e nterprises often rely on their in-house network and security teams to manually process change requests, which increases the risk of human error and cybersecurity vulnerabilities and delays the pace of application releases. This results in a trade-off between the necessary security posture and business requirements for speed, agility and innovation.


•	Policy-centric approach . We enable enterprises to visualize, define and enforce a unified security policy that acts as the foundation of governance and control, replacing ad-hoc configurations across fragmented networks.


•	Automation of network changes . We automate the network change process across complex, heterogeneous environments, increasing business agility, enabling faster application deployment and reducing human error.


•	Data-driven . Our approach draws data from across a customer’s IT and cloud environments, providing insights on connectivity and end-to-end visibility across the network.


•	Open and extensible framework . Our open solutions serve as a centralized control layer for our customers’ networks and can connect to a wide range of third-party technologies through APIs.

Our comprehensive security policy management solutions rely on a set of proprietary technologies that provide a high level of security, scalability and performance. Our core technologies, which serve as the foundation of both our network and cloud-based products, include analysis engines, a provisioning engine, API integrations and infrastructure technology. For example, one of our analysis engines, our topology intelligence engine, uses network routing algorithms to calculate the paths between different points on the network and provides our customers with a graphic display of devices and data flows. Another analysis engine, our sophisticated policy analysis engine, calculates the expected connectivity and access behavior of network devices and cloud platforms. Our automated change provisioning engine automatically implements policy changes approved by security administrators.

We believe enterprises choose us for our customer-first approach, continuing innovation and integrations with key technology leaders. Our customers include leading enterprises across a broad range of geographies in a diverse set of industries, including financial services, telecommunications, automotive, manufacturing, energy, healthcare and pharmaceuticals, technology, government, retail and business services. We sell our products and services through our sales force, including our field sales team and our inside sales team, which works closely with our global network of approximately 140 active channel partners. Our channel partners include distributors and resellers, as well as service delivery partners that help customers successfully deploy, configure, customize and maintain our products and services. We believe our hybrid sales model helps us maintain strong customer relationships and effectively acquire new customers.

Industry Background

Enterprises increasingly focus on cybersecurity. In response to the heightened threat environment, lack of a defined network perimeter and a constantly changing attack surface, enterprises continue to implement additional firewalls, endpoint security, identity and access management and other security solutions. Nevertheless, cyberattackers can exploit a growing attack surface that lacks a defined network perimeter, is subject to constant change and is exposed to vulnerabilities exacerbated by human error and manual business processes.

We believe the majority of enterprises lack effective and comprehensive security policy management, which is critical to controlling security policy changes. Effective security policy governs how individuals, systems and applications communicate. Current solutions lack a comprehensive security policy and rely on network change processes that are manual, error prone and take days to implement. Enterprises that lack a comprehensive security policy are facing challenges in balancing the necessary security and risk posture with their business requirements, leaving security, network and compliance professionals overwhelmed.

Several industry trends contribute to operational challenges in managing risk, as set forth below:

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raised business expectations on agility and increased the need for a unified security approach across networks and applications.

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Evolving regulatory and compliance requirements . Global enterprises need to maintain compliance with a new wave of government regulations, corporate security policies and industry standards related to privacy and cybersecurity. Examples of such regulations include PCI-DSS, the Sarbanes-Oxley Act, NERC-CIP, GDPR, the NIST Cybersecurity Framework and HIPAA. Manual changes to network policy are difficult to track and are more likely to be non-compliant. As a result, enterprises seek cost-efficient security solutions to meet compliance requirements.

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Benefits of Our Solutions

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Our Market Opportunity

We believe the majority of enterprises lack effective and comprehensive security policy management, which is critical to controlling network change. As digital transformation creates more complexity within IT and cloud environments, we believe our policy-centric, automated solutions will garner a growing share of enterprise security spend. Gartner estimated that worldwide spending on information security products and services will reach more than $133 billion in 2019. In addition, 451 Research LLC’s VotE Information Security: Workloads and Key Projects 2018 study, covering 550 organizations of different sizes across 10 industry verticals, found that 83% of the companies surveyed did not have security automation and orchestration technologies in place, but 54% of those companies planned to deploy such technologies within the next 24 months. We believe increased security spending and adoption of security automation and orchestration technologies represent a significant opportunity for us.

We also believe our policy management and automation solutions overlap with several markets defined by IDC. IDC has estimated that:


•	the market for IT operations management, which improves user access to applications, business services and data sources on diverse platforms, will grow from $8.9 billion in 2018 to $11.7 billion by 2022, according to its Worldwide IT Operations Management Software Forecast for 2018-2022;


•	the market for IT automation and configuration management, which supports DevOps automation and orchestration, digital enterprises, hybrid cloud architectures and microservices-based applications, will grow from $6.7 billion in 2018 to $8.4 billion in 2022, according to its Worldwide IT Automation and Configuration Management Software Forecast for 2018-2022;


•	the market for policy and compliance (a sub-segment of security and vulnerability management), which enables enterprises to create, measure and report on security policy and regulatory compliance, will grow from $2.0 billion in 2018 to $3.1 billion in 2022, according to its Worldwide Security and Vulnerability Management Forecast for 2018-2022 ; and


•	the market for vulnerability assessment (a sub-segment of security and vulnerability management), which scans networks and applications for security vulnerabilities, will grow from $2.2 billion in 2018 to $3.7 billion by 2022, according to its Worldwide Security and Vulnerability Management Forecast for 2018-2022 .

directly addressable market of $10.3 billion, which includes on-premise firewalls, private cloud and public cloud orchestration segments, for the fiscal year ending December 31, 2019.

Our Competitive Strengths

We believe we have several competitive advantages, including:


•	Pioneer in security policy management . We are a pioneer in the security policy management market. We believe we were the first company to introduce security policy automation solutions with SecureChange and SecureApp, and we believe our position as a market leader reinforces our brand and supports our position as one of the most prominent players in an increasingly important segment.

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Advanced technology and ongoing innovation . We have over a decade of experience and believe our ability to innovate is the cornerstone of our position as a technology leader. Our comprehensive security policy management solutions rely on a set of proprietary technologies that provide a high level of security, scalability and performance. Our core technologies, which serve as the foundation of both our network and cloud-based products, include analysis engines, a provisioning engine, API integrations and infrastructure technology. We are continuously improving our portfolio to create solutions that provide both agility and security for our customers, through policy-driven automation. We announced our latest product offerings, Orca and Iris, in April 2018 and November 2018, respectively. Unlike traditional security tools, Orca and Iris provide automated, policy-based security analysis in cloud-native environments, which helps enterprises develop unified, multi-cloud policies.

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Scalable, extensible enterprise-grade solutions . Our solutions scale up to the largest enterprises with thousands of network devices (e.g., firewalls and routers) through their distributed architecture and high availability offering. Our extensible API framework allows our customized solutions to interface with most IT management frameworks and systems, and is used by customers, partners and our professional services team who develop scripts and extensions on top of the Tufin Orchestration Suite.

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Customer-first approach . Customer success has always been our priority. Since our inception, we have built a strong, customer-first approach and developed a powerful array of products and solutions to meet our customers’ needs and expectations. Our premium support services are available at all times to ensure that customers’ problems are addressed quickly. We have a dedicated customer success team, which focuses on ensuring high customer satisfaction while driving customer loyalty and increased sales. As customer satisfaction is vital to us, we are continually improving our products and services to further solidify our customer relationships and trust. As a result, we have a long-term, loyal base of customers.

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Automation-driven return on investment . Enterprises quickly realize value upon deployment of our solutions. Our policy-driven automation allows customers to implement accurate and compliant network changes within minutes rather than days, allowing them to introduce new business applications faster and redeploy IT resources into higher-value projects. This also allows enterprises to accelerate development and deployment of revenue-generating applications, further increasing their return on investment.

Our Growth Strategy

We intend to execute on the following growth strategies:

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Acquire new Global 2000 customers and mid-market customers . Since our inception, our solutions have been purchased by over 2,000 customers in over 70 countries, including approximately 15% of the Global 2000. Revenue generated from our Global 2000 customers, excluding maintenance renewals, represented an average of 65% of our total revenue over the fiscal years ended December 31, 2016 to 2018. We believe we have a significant growth opportunity with Global 2000 customers that currently lack a security policy management solution or that use a competing product that lacks automation. We identified opportunities in key verticals such as the

federal government and plan to expand to several key geographic regions. We also continue to pursue mid-market accounts with increasing need for security policy management solutions. We plan to grow our direct sales team and develop our inside sales platform to pursue the large pool of mid-market accounts.

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Extend security product leadership with innovative new products . We will continue to innovate in ways that enable frictionless collaboration between business and infrastructure teams. We intend to invest further in the Tufin Orchestration Suite to extend its functionality and features. We believe this will enhance our ability to generate revenue within our existing customer base and pursue new opportunities. We will also continue to introduce new products to broaden our appeal to customers and stay ahead of the market. In April 2018, we launched Orca, a cloud-based solution that enables users to extend our policy-based approach to secure microservices and containers. In November 2018, we launched Iris, a cloud-based application-centric solution that enables security policy management across cloud platforms. Lastly, we plan to deploy additional cloud-based subscription products over time, to enable more customers to consume our products beyond our existing on-premise solutions.

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Grow and cultivate our security partner ecosystem . We have built an extensive global channel partner ecosystem that extends our geographic coverage, drives awareness of our brand and accelerates usage and adoption of our products. We have also formed alliances with technology partners in the network security, security operations, incident response, vulnerability management and security compliance sectors. In April 2018, we launched our technology alliance partner program, which is an ecosystem of technology partners who build certified integrations to our platform in order to expand our common use cases. We believe our partners contribute thought leadership and accelerated sales.

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Democratize policy management across functions . Our customers continue to find new use cases for our policy management and automation products. For example, as enterprises continue to implement DevOps teams and practices, we believe they will need to introduce security measures earlier in the application development and deployment lifecycle. We designed Orca to address this with cloud-based security automation for microservices and containers. Orca moves security earlier into the continuous integration and continuous deployment, or CI/CD, pipeline by leveraging a centralized policy engine. We envision additional use cases and revenue opportunities will be unlocked as we build out the commercial ecosystem around Orca.

Our Products

Security and IT operations management has become an increasingly resource-intensive and high-risk task for enterprises. The accelerating pace of business and technological developments require numerous application and infrastructure changes, and enterprise networks are becoming increasingly complex. E nterprises often rely on their in-house network and security teams to manually process change requests, which increases the risk of human error and cybersecurity vulnerabilities and delays the pace of application releases.

Enterprises use our security policy management products to create a unified security policy and give them the ability to implement accurate network changes in minutes instead of days while improving their security posture and business agility. We offer five products that comprise the Tufin Orchestration Suite: SecureTrack, SecureChange, SecureApp and, most recently, Orca and Iris. SecureTrack, SecureChange and SecureApp enable enterprises to unify, visualize and control their security policy across heterogeneous networks, both on premise and in the cloud, while Orca and Iris provide visibility and security policy solutions for provisioned and cloud-native environments.

Security Policy Automation for the Extended Enterprise

The Tufin Orchestration Suite provides a policy-centric solution for automatically designing, provisioning, analyzing and auditing enterprise security changes. From applications to firewalls, our products provide advanced automation capabilities to increase business agility, eliminate errors stemming from manual processes and ensure continuous compliance through a single interface. Our unified security policy empowers network and IT security teams to effectively safeguard complex, heterogeneous environments through a central security policy, which can be applied over all of their IT and cloud environments and across different platforms.

The majority of our customers initially purchase SecureTrack to monitor a portion of their networks. Initial product deployments frequently expand across networks, departments, divisions and geographies in response to a need for an enterprise-wide approach for security policy management, as well as the need to automate the network change process. Our “land and expand” sales strategy capitalizes on this potential. As we expanded our portfolio of solutions within the Tufin Orchestration Suite, customers have increasingly purchased SecureChange and SecureApp on top of their initial transactions.

SecureTrack . Enterprises use SecureTrack to understand their enterprise security infrastructure and manage a wide range of devices from a central console. SecureTrack enables security administrators to define and manage a centralized security policy, minimize the attack surface and ensure continuous compliance across the network. SecureTrack also provides a foundation of our customers to use SecureChange and SecureApp, and delivers the following key benefits:


•	Policy definition . SecureTrack includes our unified security policy, which visualizes, defines and enforces a zone-to-zone segmentation policy that dictates how users, systems and applications can communicate across the entire enterprise. Our unified security policy serves as the security policy framework for the entire Tufin Orchestration Suite.


•	Security and compliance . SecureTrack provides monitoring, assessment and alerts on security and compliance risk, ensuring real-time accountability, transparency and consistency with the unified security policy. It also generates a variety of configurable audit reports that support regulatory compliance standards.


•	Visibility . SecureTrack builds a dynamic topology map of network connectivity across the enterprise and the cloud. It also provides real-time visibility into all security policy configurations and changes. This visibility enables security teams to efficiently manage configuration changes, troubleshoot problems and prepare for audits.

SecureChange . SecureChange is the change management and automation component of the Tufin Orchestration Suite. Enterprises use SecureChange to quickly and accurately assess, provision and verify security configuration changes across physical networks and cloud platforms, while maintaining security and compliance. SecureChange delivers the following key benefits:


•	Business agility . SecureChange increases business agility through security change automation. It automates manual change processes, giving them the ability to implement changes in minutes instead of days.


•	Security and compliance . SecureChange proactively checks every change request for risk and compliance against the unified security policy before and after changes are implemented. It also maintains comprehensive ticket and process documentation, which reduces the need for painstaking information gathering and analysis before internal and external audits.


•	Control and accuracy . SecureChange reduces inaccuracies due to human error through automated change design and provisioning for multi-vendor environments.

SecureApp. SecureApp is the application management and secure connectivity automation component of the Tufin Orchestration Suite. Enterprises use SecureApp to define, manage and monitor network connectivity for their applications. SecureApp delivers the following key benefits:


•	Visibility and control . SecureApp provides an intuitive interface to define application-critical connectivity needs. It serves as a central repository of application connectivity requirements and indicates current connectivity status.

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Business continuity and agility . SecureApp monitors network device configurations and alerts security administrators to changes that could affect application availability. SecureApp also provides graphical diagnostic tools that help our customers identify, troubleshoot and automatically repair connectivity issues. By providing detailed insight into an application’s connectivity needs and status, SecureApp accelerates service deployment, provides business continuity and simplifies network operations.


•	Security and compliance . SecureApp proactively creates clean, reliable network configurations. It automatically recommends policy rule changes and decommissions unnecessary network access paths that can lead to a security breach.

Cloud-Native Security Policy Management

While many enterprises see the cloud as a scalable extension of their existing data center, some are adopting the DevOps approach to cloud application development. Unlike traditional enterprise applications, in which every connectivity change is fully controlled and managed by IT, in cloud-native environments the developers and DevOps engineers typically have full administrative rights over the infrastructure. The connectivity decisions and changes made by developers in cloud-native applications, with little or no oversight by the security team, can have an immediate impact on the enterprise’s security posture.

We recently expanded our product suite to address cloud-native environments and applications. We announced our latest product offerings, Orca and Iris, in April 2018 and November 2018, respectively. Unlike traditional security tools, Orca and Iris provide automated, policy-based security analysis in cloud-

native environments, which helps enterprises develop unified, multi-cloud policies. By embedding security into the DevOps, pipeline, we believe we can enable enterprises to properly secure their cloud-native environments.

Orca. Orca provides policy-based security automation for microservices and secure containers. Microservices are an application development approach in which a large application is built as a collection of modular components or services. Containers are the lowest level of a microservice that hold the running application, libraries and their dependencies. DevOps teams can integrate Orca with their CI/CD tools and Kubernetes clusters (a popular container orchestrator), which secures the environment while maintaining business agility. Orca delivers the following key benefits:


•	Automation . Orca is used to allow DevOps teams in CI/CD environments to discover connectivity among microservices and automatically identify risks and generate security policies.

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Security and compliance . Orca identifies and protects against the exploitation of container vulnerabilities in both development and deployment stages. It unifies policy management across Kubernetes clusters and other surrounding security controls, which are increasingly vulnerable to cyberattacks. When Orca detects an anomaly, it can automatically restrict network traffic flows and isolate the environment to reduce the attack surface.


•	Customization . Orca integrates with third-party notification and security services using our publicly available open API, to fit each enterprise’s specific platforms and needs.

Iris. Iris scans cloud environments, analyzing access policies and resource metadata, to visualize cloud application connectivity. It allows IT and DevOps teams to define a unified security policy for cloud applications that enables granular access control within and between applications in the cloud. Iris delivers the following key benefits:


•	Visibility . Iris scans cloud-native environments and provides clear visibility into application connectivity, taking all of the different cloud access controls into account.


•	Security and compliance . Iris monitors the cloud environment and discovers resources that are risky or non-compliant with the unified security policy. It automates risk monitoring in the cloud and enables IT and DevOps teams to respond quickly to critical application threats.

Our Technology

Analysis Engines

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Topology intelligence . Our topology intelligence engine uses network routing algorithms to calculate the paths between different points on the network and provides our customers with a graphic display of devices and data flows. Network administrators use our topology intelligence to quickly determine which devices and cloud platforms a network connection can traverse, which enables them to automate network path analysis and troubleshoot issues.


•	Network usage analysis engine . Our network usage analysis engine detects unused elements of a security policy by analyzing network flows and traffic hits over a specified time period. Our technology leverages an automated workflow process to decommission unnecessary access and reduce the attack surface.


•	Policy analysis engine. Our policy analysis engine calculates the expected connectivity and access behavior of network devices and cloud platforms. Security administrators can use different parameters and logic to determine in real time if supported network devices and cloud security groups will allow or block specific connections.


•	Risk and compliance analysis engines . Our risk engine proactively analyzes risk by identifying potential security violations, checking the existing configuration or the proposed access changes against the unified security policy. Our compliance analysis engine creates an audit trail in real time by automatically documenting any remedial changes.

Our technology also provides cloud-based security automation for applications developed in CI/CD mode. Our CI/CD vulnerability scanning and compliance validation embeds security at the

development and testing stage, and enables our customers’ DevOps teams to quickly identify security issues, reducing the probability of vulnerabilities in production environments.

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Change designer engine . Our change designer engine automates enterprise security access requests. It first identifies the connection-relevant network devices and cloud platforms based on topology intelligence, and then recommends the optimal policy change based on information from the policy analysis engine. Our technology provides vendor-specific suggestions that maximize security and performance, while offering accurate configuration changes designed to be intuitive and user friendly.

Provisioning Engine


•	Change provisioning engine . Our technology automatically implements policy changes approved by security administrators. Our automated change provisioning engine supports all major network, security and cloud vendors. In zero-touch automation mode, our technology automatically applies recommended policy changes without the need for human intervention.

API Integrations

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Extensible APIs . Our technology features a RESTful API framework to enable extensibility and interoperability with third-party systems, including ticketing and service management systems such as ServiceNow and BMC Remedy. Our professional services team, as well as our customers and partners, use the API framework to supplement the Tufin Orchestration Suite with additional functionality by integrating with the third-party security ecosystem. We integrate with our platform partners, such as Check Point, Cisco, Fortinet, Palo Alto Networks, F5 Networks, Forcepoint, Juniper Networks, VMware, AWS and Microsoft Azure, to provide vendor agnostic solutions, which is key to our value proposition. In addition, we believe our technology alliance partner program, which is an ecosystem of technology partners who build certified integrations to our platform, helps to expand our common use cases.

Infrastructure Technology

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Distributed architecture . Customers can deploy our products across multiple distributed servers. Rather than monitoring all devices and platforms from a single server, remote collectors monitor local network devices (e.g., firewalls and routers), process the raw data and upload compressed data to a central server over a secure connection. Using a fully distributed architecture, our products can easily scale to meet the demands of large organizations.

Our Services

Professional Services

Our professional services team helps customers with product deployment, integration, customization, optimization, operation and training. We support initial product setup, implementation and configuration, and help customers integrate our products with existing third-party applications and internally developed tools. Our professional services team also helps customers define their unified security policy, model their network topology, configure workflows, discover application connectivity and deliver customized reporting according to their requirements. In addition, we provide technical training so that our customers can use our products with confidence. We also enable our authorized service delivery partners to provide similar professional services.

Maintenance and Support

We offer several levels of technical support for our products by providing customers with access to our user and partner portal, our knowledge center and our regional support centers. We provide customers with software bug repairs, system enhancements and updates, as well as access to our technical support experts. Our support engineers liaise with our product experts to diagnose and solve our customers’ technical challenges. In addition to post-sales support activities, we emphasize service readiness by

coordinating with our product management team to define prerequisite product and service quality levels prior to their release. Additionally, our designated support engineers serve as ongoing, accessible customer resources.

Our Customers

Since our inception, our solutions have been purchased by over 2,000 customers in over 70 countries, including approximately 15% of the Global 2000. We sell substantially all of our products and services through our global network of channel partners, including distributors and resellers, who then sell to end-user customers. For the years ended December 31, 2017 and 2018, our two largest channel partners accounted for 16% and 13% of our revenues and 13% and 10% of our revenues, respectively. Our agreements with these channel partners provide that each partner agrees to sell and distribute our products within certain territories for one year. These agreements are nonexclusive and non-transferable, and automatically renew unless terminated by either party after providing prior written notice.

When analyzing our business, we refer to end-user customers as our customers throughout this prospectus, even if our direct commercial relationship is with a channel partner. Our customers include leading enterprises across a broad range of geographies in a diverse set of industries, including financial services, telecommunications, automotive, manufacturing, energy, healthcare and pharmaceuticals, technology, government, retail and business services.

Our diverse global footprint is evidenced by the fact that in 2018, we generated 56.8% of our revenues from customers in the Americas, 38.4% in EMEA and 4.8% in APAC.

Case Studies

A Leading Energy Trading Company

Challenge. As the energy trading company moved more of its operations to the cloud, it faced growing challenges including limited visibility into the security of its cloud environment and an increasing frequency of network security changes that began to overwhelm its existing team.

Solution and benefits . By deploying our solutions, the energy trading company gained complete visibility across its on-premise network security infrastructure and its AWS-based cloud environment. As a result of its better visibility, the energy trading company successfully passed its next audit within just a couple of days. Also, by automating its network security changes using SecureChange, the energy trading company initially reduced the time to implement changes from six to eight days down to six hours.

A Leading Health Services Organization

Challenges. A leading health services organization need to address challenges related to its manual review of firewall access rules across a large network for compliance purposes.

Solutions and benefits. By deploying SecureTrack and SecureChange , the health services organization improved productivity by reducing the network security engineering and architecture team’s time spent on manual reviews. Our solutions automated the health services organization’s process of requesting and approving firewall changes via APIs . The health services organization uses our solutions to manage its ongoing change monitoring process, identify violations and maintain continuous compliance and audit readiness throughout the year.

A Leading Utility Company

Challenges. A leading utility company initially evaluated our solutions to resolve challenges involving firewall access rules across a large network that needed to comply with NERC-CIP regulations .

Solutions and benefits. By deploying SecureTrack and SecureChange, the utility improved productivity by reducing the time spent on manual reviews and by simplifying the process to request and approve firewall

changes. The utility company also has an ongoing change monitoring process to identify violations and maintain continuous compliance and audit readiness throughout the year.

Sales and Marketing

Sales

Our highly trained sales force is responsible for overall market development. Our sales force consists of our field sales team, which accounts for most of our sales, and our inside sales team. Our field sales team targets large organizations, which we define as those comprising the Global 2000, while our inside sales team targets mid-market companies that do not belong to the Global 2000. Within our field sales team, our regional field sales representatives develop new business relationships with our key customers, and our channel account managers support and expand existing relationships with our channel partners. Our sales engineers provide technical expertise and support, and architect our solutions to address the business needs of our customers. Our sales cycle usually lasts several months from proof of concept to purchase order, and is often longer for larger transactions. As of December 31, 2018, we had sales personnel in 24 countries. We have expanded our sales force in each of the last two fiscal years, and we plan to continue to do so.

Our channel partners include distributors and resellers, as well as service delivery partners that help customers successfully deploy, configure, customize and maintain our products and services. In addition, on October 2, 2018, we launched our “Tufin as a Service” program – a consumption-based, pay-per-use services model that enables Managed Security Service Providers, or MSSPs, to offer our security policy management solutions to their customers.

Marketing

Our marketing strategy is focused on promoting brand awareness through differentiated positioning, messaging and thought leadership. We achieve this by educating the market on effective security policy change management, communicating our product advantages and business benefits, generating leads for our sales force and channel partners, and promoting our brand. We market our products and services as enterprise security policy management solutions for complex networks and cloud-based environments.

We execute our marketing strategy by leveraging a combination of internal marketing professionals, external marketing partners and a network of platform and technology partners. Our internal marketing enterprise is responsible for branding, digital content generation and targeted advertising through active digital channels. We actively drive thought leadership by providing community education through our online technical webinars in multiple regions. We sponsor and host demand-generation events including our channel and technical partners’ events and industry conferences, as well as local events for specific customers and prospect accounts in multiple regions. Our conferences and events demonstrate our strong commitment to enabling our partners and customers to succeed, and provide an opportunity to create a pipeline for new sales to prospective customers and additional sales to existing customers.

Research and Development

Continued investment in research and development is critical to our business. Our research and development efforts focus primarily on improving our existing products and services with additional innovative features and functionality, as well as developing new products and services. For example, we regularly release enhanced capabilities of the Tufin Orchestration Suite. We believe the timely development of new products, including both on-premise and cloud solutions, is essential to maintaining our competitive position.

Our research and development expenses were $17.7 million in 2017 and $21.4 million in 2018. We plan to continue investing significantly in research and development initiatives across our global innovation

centers in Ramat-Gan, Israel, Misgav, Israel and Bucharest, Romania. By spreading our research and development team across multiple locations, we increase our access to highly skilled engineering talent, which provides us opportunities for evolution and growth.

Intellectual Property

Our commercial success depends, in part, on our ability to protect our core technologies and other intellectual property assets. We rely on a combination of trade secrets, copyright and trademark laws, confidentiality procedures, technical know-how and continuing innovation to protect our intellectual property and maintain our competitive advantage. Our technical personnel use their skills, knowledge and experience to develop, strengthen and maintain our proprietary position in the security policy automation market. In addition, we seek to protect our intellectual property by filing Israeli, U.S. and other foreign patent applications related to our proprietary technology.

Our software and other proprietary information are protected by copyright on creation. Copyright registrations, which have so far not been necessary, may be sought on an as-needed basis. We also control access to and use of our proprietary software, proprietary technology and other confidential information through the use of internal and external controls, including contractual agreements containing confidentiality obligations with our employees, independent consultants, independent contractors, professional services team, partners and customers. Our confidentiality agreements are designed to protect our proprietary information, and the clauses requiring assignment of inventions are designed to grant us ownership of technologies that are developed through our relationship with the respective counterparty. We also license software from third parties for use in developing our products and for integration into our products, including open source software. Despite our efforts to protect our trade secrets and proprietary rights through intellectual property rights, confidentiality agreements and licenses (including non-disclosure and invention assignment agreements), unauthorized parties may still copy or otherwise obtain and use our intellectual property and technology.

As of December 31, 2018, we had registered two trademarks in the United States, two trademarks in Israel and two trademarks in the European Union, and have one pending trademark application in Israel. As of December 31, 2018, we had 14 issued patents in the United States. We also had four issued patents and one pending patent application in Israel.

Competition

The security policy management market in which we operate is relatively new and evolving. We are a market-leading provider of enterprise security automation and management products. In many cases, our primary competition is in-house, manual, spreadsheet driven processes and homegrown approaches to security management . Our direct competitors include vendors such as AlgoSec, Inc., FireMon, LLC and Skybox Security LLC that offer solutions that compete with all or some of our products or product features. We also indirectly compete with large IT companies that offer a broad array of traditional security management solutions, such as Symantec Corporation and Cisco Systems, Inc., for a share of enterprises’ IT security budgets.

As our market further develops, we anticipate that competition will increase based on customer demand for security automation and management solutions. Furthermore, we believe enterprises will allocate an increasing portion of their IT security budgets, and specifically security management spending, to operational security and automation solutions.

The principal competitive factors in our market include:


•	security change automation;


•	multi-vendor integration and heterogeneous network topology;


•	application connectivity in modern IT and cloud environments;


•	efficacy in provisioned and cloud-native environments;


•	suitability for DevOps processes and microservice architectures;


•	scalability and overall performance; and


•	strong relationships with existing IT vendors.

Properties

Our corporate headquarters are located in Ramat-Gan, Israel in an office consisting of 36,292 square feet, where we also employ our primary research and development team and a portion of our support and general administrative teams. The lease for this office expires on April 7, 2019. We recently entered into a new lease agreement for our corporate headquarters office, consisting of approximately 62,859 square feet to accommodate current and future growth. The lease for this office expires January 31, 2029 (with an option to extend until January 31, 2034). Our U.S. headquarters are located in Boston, Massachusetts in an office consisting of approximately 3,214 rentable square feet, where we employ a portion of our marketing and general administrative teams. The lease for this office expires in December 31, 2023. We also lease an office in Karmiel, Israel (which serves as a research and development site), Akron, Ohio (which hosts the Americas technology support, professional services and inside sales teams) and Reading, England (which hosts the European inside sales team). We believe our facilities are sufficient to meet our current needs and anticipate that suitable additional space will be readily available to accommodate any foreseeable expansion of our operations.

Employees

As of December 31, 2018, we had 424 employees, independent consultants and independent contractors, of which 217 were in located in Israel, 119 were in located the United States, 22 were located in the United Kingdom and approximately 66 were located across 21 other countries. Set forth below is a breakdown of our global workforce of employees, independent consultants and independent contractors by category of activity as of the dates indicated:



	As of December 31,
	2016	2017	2018
Services and support	35	59	75
Research and development	103	114	152
Sales and marketing	100	128	166
General and administrative	20	24	31
Total	258	325	424

Legal Proceedings

From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not currently a party to any material litigation. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

MANAGEMENT

Executive Officers and Directors

The following table sets forth the name, age and position of each of our executive officers, directors and director nominees as of the date of this prospectus.



Name	Age	Position
Executive Officers
Reuven Kitov	45	Chief Executive Officer, Co-Founder and Chairman of the Board
Reuven Harrison	49	Chief Technology Officer, Co-Founder and Director
Jack Wakileh	47	Chief Financial Officer
Kevin Maloney	64	Senior Vice President of Global Sales
Pat Walsh	52	Chief Marketing Officer
Yoram Gronich	50	Vice President of Research & Development
Pamela Cyr	50	Senior Vice President of Business Development
Rajiv Motwane	40	Vice President of Global Services & Support
Ofer Or	42	Vice President of Products
Directors
Ohad Finkelstein	58	Director
Yuval Shachar	56	Director
Yair Shamir	73	Director
Edouard Cukierman	53	Director
Ronni Zehavi	52	Director


(1)	Member or proposed member of our compensation committee upon listing on the NYSE.


(2)	Member or proposed member of our audit committee upon listing on the NYSE.


(3)	Member or proposed member of our nominating and corporate governance committee upon listing on the NYSE.


(4)	Independent director under NYSE rules.


(5)	Proposed to serve as an external director under the Israeli Companies Law subject to ratification of their election as external directors under the Israeli Companies Law by our shareholders within three months following this offering.

Reuven Kitov is our Chief Executive Officer, Co-Founder and Chairman of the board of directors, which positions he has held since co-founding Tufin in January 2005. Prior to co-founding Tufin, Mr. Kitov held key project management and development roles at Check Point Software Technologies, Inc. from 1998 to 2003. Mr. Kitov holds a Bachelor of Science degree in Computer Science from the University of Maryland in College Park, Maryland.

Reuven Harrison is our Chief Technology Officer, Co-Founder and a director, which positions he has held since co-founding Tufin in January 2005. Prior to co-founding Tufin, Mr. Harrison held key software developer positions at Check Point Software Technologies, Inc. from 1999 to 2003, as well as other key positions at Capsule Tech, Inc. from 1997 to 1999 and ECS Inc. from 1991 to 1996. Mr. Harrison holds a Bachelor of Arts degree in Mathematics and Philosophy from Tel Aviv University in Israel.

Jack Wakileh is our Chief Financial Officer, which position he has held since July 2013. Prior to joining Tufin, Mr. Wakileh worked as a financial and business consultant for various technology companies from 2010 to 2013. He was a Co-Founder of iSpade Technologies Ltd. and was Chief Financial Officer from 2008 to 2010, Co-Chief Executive Officer of LEADIP Systems Ltd. from 2006 to 2007 and Chief Financial Officer of VCON Telecommunications Ltd. from 1999 to 2005 prior to which he held the Corporate Controller position. Mr. Wakileh holds a Bachelor of Arts degree in Accounting and Economics from Tel Aviv University in Israel and is a Certified Public Accountant.

Kevin Maloney is our Senior Vice President of Global Sales, which position he has held since July 2015. Prior to joining Tufin, Mr. Maloney held senior management positions at Easylink Services International Corporation from December 2007 to July 2012, Network General Corporation from June 2006 to November 2007 and Check Point Software Technologies, Inc. from June 2005 to June 2006. Mr. Maloney holds a Master of Business Administration degree from the Stetson School of Business and Economics at Mercer University in Macon, Georgia and a degree from Wheeling Jesuit University in Wheeling, West Virginia.

Pat Walsh is our Chief Marketing Officer, which position he has held since March 2016. Prior to joining Tufin, Mr. Walsh held executive marketing positions as Vice President of Marketing at Core Security (which was acquired by Courion in 2016) from October 2013 to December 2015 and Chief Marketing Officer of Talend, Inc., a leading big data and enterprise integration vendor, from October 2010 to August 2013. He previously held key marketing positions at Progress Software from September 2008 to September 2010, IONA Technologies from 2004 to 2008, Solid Information Technology from 2000 to 2003 and HP from 1990 to 2000. Mr. Walsh holds a Master of Engineering degree in Engineering Management and a Bachelor of Arts degree in Engineering and Economics each from Dartmouth College in Hanover, New Hampshire.

Yoram Gronich is our Vice President of Research & Development, which position he has held since September 2008. Prior to joining Tufin, Mr. Gronich held software management and engineering positions at Symantec Corporation from 2005 to 2008. He previously held project management and team leader roles at Check Point Software Technologies, Inc. from 2002 to 2005. Mr. Gronich holds a Master of Science degree in Electrical Engineering and a Bachelor of Science degree in Physics and Computer Science each from Tel Aviv University in Israel.

Pamela Cyr is our Senior Vice President of Business Development, which position she has held since November 2014. Prior to joining Tufin, Ms. Cyr held key leadership development positions as Vice President, North America, of LetMobile (which was acquired by LanDesk in 2014) from July 2013 to May 2014 and Senior Vice President of Business Development and Strategic Alliances at Veracode, Inc., where she was responsible for ecosystem strategy and development, from 2011 to 2012. Prior to Veracode, she was Vice President of Business Development for Aveksa (which was acquired by RSA, the security division of EMC in July 2013) from 2007 to 2011. Ms. Cyr holds a Master of Science degree in Electrical Engineering from Worcester Polytechnic Institute in Worcester, Massachusetts and a Bachelor of Science degree in Computer Systems Engineering from the University of Massachusetts in Amherst, Massachusetts.

Raj Motwane is our Vice President of Global Services & Support, which position he has held since July 2017. Prior to joining Tufin, Mr. Motwane served as Senior Vice President of Client Success and Operations at IANS from September 2016 to July 2017 and General Manager of Services and Customer Success at IBM Resilient Systems from March 2015 to August 2016. He previously held key project management and customer support positions at EMC from 2004 to April 2015 and General Electric from 2001 to 2004. Mr. Motwane holds a Master of Business Administration degree from Babson College in Wellesley, Massachusetts and a Bachelor of Science degree in Information Systems from Northeastern University in Boston, Massachusetts.

Ofer Or has served as our Vice President of Products since July 2014. Prior to assuming this role, Mr. Or served as our Director of Research & Strategy. Prior to joining Tufin, he held senior product management positions at Check Point Software Technologies, Inc. from 2009 to 2013. Mr. Or also held product marketing and business development positions at Microsoft from 2007 to 2009 and Amdocs Ltd. from 2006 to 2007. Before that, he held several R&D Leadership positions at Check Point Software Technologies, Inc. from 2000 to 2005, and in an elite computer unit of the Israel Defense Forces from 1994 to 2000. Mr. Or holds a Master of Business Administration degree from INSEAD University in Fontainebleau, France, and holds a Master of Arts degree in Law and a Bachelor of Arts degree in Political Science and Sociology, each from Bar Ilan University in Ramat-Gan, Israel.

Ohad Finkelstein has served as a director since January 2011. Mr. Finkelstein serves as Managing Partner of Danli Capital, an investment advisory firm that he founded in 2017. Mr. Finkelstein is the Co-Founding Partner of Marker LLC, which he founded in 2011. Prior to that, from 2005 to 2011, he led international investment for Venrock, an Israeli venture capital firm. He served as the Chairman, Chief Executive Officer and President at Interoute Communications Limited from 1999 to 2003. Mr. Finkelstein holds a Bachelor of Arts degree in Political Science and International Marketing from the University of California, Los Angeles.

Yuval Shachar has served as a director since October 2009. Mr. Shachar is the Executive Chairman and Co-Founder of Team8, a venture capital firm specializing in incubation of security companies. Mr. Shachar serves as Founding Venture Partner of Innovation Endeavors, which he joined at its inception, previously serving as an investment partner of its predecessor fund from 2013. Mr. Shachar served as Co-Founding Partner of Marker LLC and its predecessors from 2011. From 2004 to 2009, he served as General Manager of a Cisco business unit in its Service Provider group. Prior to that, Mr. Shachar served as Co-Founder, President and CEO of P-Cube (which was acquired by Cisco), and co-founded each of Pentacom and Infogear (which were each acquired by Cisco). From 1995 to 1998, Mr. Shachar served as Vice President of Research and Development at VocalTec Ltd. (which completed an IPO on The Nadaq Stock Market, or Nasdaq , in 1996), and previously held key engineering and management positions at National Semiconductors. Mr. Shachar holds a Bachelor of Science degree in Mathematics and Computer Science from Tel Aviv University in Israel.

Yair Shamir has served as a director from 2007 to 2013 and again from October 2018 to present. Mr. Shamir has been a Founding and Managing Partner of Catalyst Investments since its establishment from 1999 to 2013 and again from 2015 to present. Mr. Shamir was elected as a member of the Israeli Parliament (Knesset) and served as Minister of Agriculture of the State of Israel from 2013 to 2015. Mr. Shamir served until August 2018 as the Chairman of Board of N.T.A. – Metropolitan Mass Transit System. He served as the Chairman of Israel’s National Roads Company from 2011 to 2012. Mr. Shamir served as the Chairman of Israel Aerospace Industries Ltd. from 2005 until 2011. From 2004 to 2007, Mr. Shamir was the Chairman of Shamir Optical Industry Ltd. From 2004 to 2005, Mr. Shamir served as the Chairman of EL AL. From 1997 to 2004, Mr. Shamir served as the Chief Executive Officer and Chairman of VCON Telecommunications Ltd. Mr. Shamir was a board member of DSP Group Corporation from 2005 to 2013. Mr. Shamir holds a Bachelor of Science degree in Electronics Engineering from the Technion, Israel Institute of Technology in Haifa, Israel.

Edouard Cukierman has served as a director since 2014. Mr. Cukierman has been a Founding and Managing Partner of Catalyst Investments since its establishment in 1999, and has served as the Chairman of Cukierman & Co. Investment House since its establishment. Prior to establishing and managing Catalyst Investment, Mr. Cukierman was the President and Chief Executive Officer of Astra Technological Investments, a Venture Capital Fund established in 1993. Mr. Cukierman serves as a board member of Dori Media Group. He is also is the Founder of the GoforIsrael annual conference. Mr. Cukierman served as a Reserve Officer of the Crisis & Hostage Negotiation Team and IDF Spokesman Unit. Mr. Cukierman holds a Master of Business Administration degree from INSEAD University in Fontainebleau, France and a Bachelor of Science degree from the Technion, Israel Institute of Technology in Haifa, Israel.

Ronni Zehavi has served as a director since 2015. Mr. Zehavi serves as Chief Executive Officer of Hibob, a cloud-based people management platform, which he co-founded in October 2015. He is also a director of Shiur Archer, a non-profit education development organization, which he joined in January 2014. Mr. Zehavi was Co-Founder and Chief Executive Officer of Cotendo, an IT company that provides online training software solutions, from 2008 to 2012. He previously served as Vice President of Operations and Human Resources at Commtouch Software from 2001 to 2008. Mr. Zehavi holds a Master of Arts degree in Organizational Sociology from Bar-Ilan University in Israel and a Bachelor of Arts degree in History and Educational Management from Tel Aviv University in Israel.

Corporate Governance Practices

Under the Israeli Companies Law, companies incorporated under the laws of the State of Israel whose shares are publicly traded, including companies with shares listed on the NYSE , are considered public companies under Israeli law and are required to comply with various corporate governance requirements under Israeli law relating to matters such as external directors, the audit committee, the compensation committee and an internal auditor. This is the case even if our shares are not listed on a stock exchange in Israel. Subject to certain exceptions, these requirements are in addition to the corporate governance requirements imposed by NYSE rules and other applicable provisions of U.S. securities laws to which we will become subject (as a foreign private issuer) upon the closing of this offering and upon listing on the NYSE . Under NYSE rules, a foreign private issuer, such as us, may generally follow its home country rules of corporate governance in lieu of the comparable NYSE corporate governance requirements, except for certain matters including (among others) the composition and responsibilities of the audit committee and the independence of its members within the meaning of the rules and regulations of the SEC.

We intend to comply with the rules generally applicable to U.S. domestic companies listed on the NYSE . We may in the future decide to use the foreign private issuer exemption with respect to certain NYSE corporate governance requirements.

Board of Directors and Officers

Under the Israeli Companies Law, our board of directors determines our policies and supervises the performance of our Chief Executive Officer. Our board of directors may exercise all powers and may take all actions that are not specifically granted to our shareholders or to management. Our executive officers are responsible for our day-to-day management. Our executive officers serve at the discretion of our board of directors, subject to the terms of their respective employment agreements.

Independent Directors

We comply with NYSE rules, which require that a majority of our directors are independent. Our board of directors has determined that all of our directors and director nominees, other than Reuven Kitov and Reuven Harrison, qualify as independent under such rules. The definition of independent director under NYSE rules and the definition of external director under the Israeli Companies Law overlap to a significant degree such that we expect the two directors serving as external directors to satisfy the requirements to be independent under NYSE rules . In addition, both independent directors and external directors serve for a period of three years; independent directors pursuant to the staggered board provisions of our articles of association and external directors pursuant to the requirements of the Israeli Companies Law. However, external directors must be elected by a special majority of shareholders while independent directors may be elected by a simple majority. See “—External Directors” for a description of external director requirements under the Israeli Companies Law.

Board Composition and Election

Under our amended and restated articles of association, which will become effective upon the closing of this offering, the number of directors on our board of directors must be no less than six and no more than 10, including any external directors required to be appointed under the Israeli Companies Law and any director appointed by one or both of our founders, or a founder director, pursuant to the appointment rights described under “ — Appointment Rights.” The minimum and maximum number of directors may be changed, at any time and from time to time, by a special vote of the holders of at least 66 2/3% of our outstanding shares.

Other than external directors, for whom special election requirements apply under the Israeli Companies Law, as detailed below, and any founder director, our directors are divided into three classes with staggered three-year terms. Each class of directors consists, as nearly as possible, of 1/3 of the total number of directors constituting the entire board of directors (other than the external directors and any

founder director). At each annual general meeting of our shareholders, the election or re-election of directors following the expiration of the term of office of the directors of that class of directors will be for a term of office that expires on the third annual general meeting following such election or re-election, such that from 2020 and after, at each annual general meeting the term of office of only one class of directors will expire. Each director, aside from our external directors and any founder director, holds office until the annual general meeting of our shareholders for the year in which his or her term expires and until his or her successor is duly appointed, unless the tenure of such director expires earlier pursuant to the Israeli Companies Law or unless removed from office by a vote of the holders of at least 66 2/3% of the total voting power of our shareholders at a general meeting of our shareholders in accordance with our articles of association.

Our directors who are not external directors or founder directors will be divided among the three classes as follows:


•	the Class I directors will consist of , and , and their terms will expire at our annual general meeting of shareholders to be held in 2020;


•	the Class II directors, will consist of , and , and their terms will expire at our annual general meeting of shareholders to be held in 2021; and


•	the Class III directors will consist of , and , and their terms will expire at our annual general meeting of shareholders to be held in 2022.

and will serve as our external directors and, subject to their election within three months following this offering, will each have a term of three years.

Appointment Rights

Under our amended and restated articles of association, which will become effective upon the closing of this offering, our founders, Reuven Kitov and Reuven Harrison, jointly have the right to appoint one director to our board of directors so long as they each hold voting control over 2% of our outstanding ordinary shares. Pursuant to an agreement between them, Reuven Kitov will designate the director to be appointed in this instance subject to prior consultation with Reuven Harrison. If only one of the founders holds voting control over 2% of our outstanding ordinary shares, such founder has the sole right to appoint one director. The appointment rights of our founders are suspended if either founder is otherwise serving on our board of directors. The term of office for a founder director expires if the appointment rights are suspended or if the founders or founder, as the case may be, no longer holds the requisite voting control.

Under our amended and restated articles of association, our board of directors may appoint new directors to fill vacancies (whether such vacancy is due to a director no longer serving or due to the number of directors serving being less than the maximum required in our amended and restated articles of association). Our amended and restated articles of association provide that the term of a director appointed by our board of directors to fill any vacancy will be for the remaining term of office of the director(s) whose office(s) have been vacated. External directors are elected for an initial term of three years and may be elected for up to two additional three-year terms (or more) under the circumstances described below. External directors may be removed from office only under the limited circumstances set forth in the Israeli Companies Law. See “—External Directors.”

Other Considerations

Under the Israeli Companies Law, the chief executive officer of a public company may not serve as the chairman of the board of directors of that company unless approved by a special majority of shareholders. However, if the roles of chief executive officer and chairman of the board of directors are held by the same person and this arrangement was approved by the company’s shareholders prior to its initial public offering and is described in the company’s initial public offering prospectus, shareholder approval is only required upon the lapse of the fifth anniversary of the initial public offering. Mr. Reuven Kitov, our Chief

Executive Officer, also serves as our Chairman of the board of directors, as was approved by our shareholders prior to this offering. We may, at the conclusion of the five-year period, and again thereafter, seek further shareholder approval for the renewal of such dual role for up to an additional three years at a time.

In addition, under the Israeli Companies Law, our board of directors must determine the minimum number of directors who are required to have “accounting and financial expertise.” Under applicable regulations, a director with accounting and financial expertise is a director who, by reason of his or her education, professional experience and skill, has a high level of proficiency in and understanding of business accounting matters and financial statements. He or she must be able to thoroughly comprehend the financial statements of the company and initiate debate regarding the manner in which financial information is presented. See also “—External Directors” below. In determining the number of directors required to have such expertise, the board of directors must consider, among other things, the type and size of the company and the scope and complexity of its operations. Our board of directors has determined that we require at least one director with the requisite accounting and financial expertise, and it has determined has such expertise.

There are no familial relationships among any of our office holders (including directors).

Compensation of Executive Officers and Directors

The aggregate compensation, including share-based compensation, paid by us to our executive officers and directors for the year ended December 31, 2018, was approximately $3.6 million. This amount includes approximately $0.4 million set aside or accrued to provide pension, severance, retirement or similar benefits or expenses, but does not include business travel, relocation, professional and business association dues and expenses reimbursed to officers, and other benefits commonly reimbursed or paid by companies in Israel.

Under regulations promulgated under the Israeli Companies Law, once our shares become listed on the NYSE , we will be required to disclose the compensation granted to our five most highly compensated office holders in the proxy statements we publish for our annual shareholders meetings. See “Disclosure of Compensation of Executive Officers” below.

External Directors

Under the Israeli Companies Law, companies incorporated under the laws of the State of Israel that are “public companies,” including companies with shares listed on the NYSE , are generally required to appoint at least two external directors who meet the qualification requirements set forth in the Israeli Companies Law. Effective from April 2016, companies whose shares are traded on specified U.S. stock exchanges, including the NYSE , and which do not have a controlling shareholder (as such term is defined in the Israeli Companies Law), may (but are not required to) elect to opt out of the requirement to maintain external directors and opt out of the composition requirements under the Israeli Companies Law with respect to the audit and compensation committees. Upon completion of this offering, we do not believe that we will have a controlling shareholder and therefore will qualify for such exemption, but we do not currently intend to rely on such exemption.

The appointment of external directors must be made by a general meeting of our shareholders no later than three months following the closing of this offering, and therefore we intend to hold a shareholders’ meeting within three months of the closing of this offering for the appointment of two external directors.

A person may not be appointed as an external director if the person is a relative of a controlling shareholder or if on the date of the person’s appointment or within the preceding two years the person or his or her relatives, partners, employers or anyone to whom that person is subordinate, whether directly or indirectly, or entities under the person’s control have or had any affiliation with any of (each an “affiliated party”): (1) us; (2) any person or entity controlling us on the date of such appointment; (3) any relative of a controlling shareholder; or (4) any entity controlled, on the date of such appointment or within

the preceding two years, by us or by a controlling shareholder. If there is no controlling shareholder or any shareholder holding 25% or more of voting rights in a company, a person may not be appointed as an external director if the person has any affiliation to the chairman of the board of directors, the general manager (chief executive officer), any shareholder holding 5% or more of the company’s shares or voting rights or the senior financial officer as of the date of the person’s appointment.

The term “controlling shareholder” means a shareholder with the ability to direct the activities of the company, other than by virtue of being an office holder. A shareholder is presumed to have “control” of the company and thus to be a controlling shareholder of the company if the shareholder holds 50% or more of the “means of control” of the company. “Means of control” is defined as (1) the right to vote at a general meeting of a company or a corresponding body of another corporation or (2) the right to appoint directors of the corporation or its general manager (chief executive officer). For the purpose of approving related-party transactions, the term also includes any shareholder that holds 25% or more of the voting rights of a company if the company has no shareholder that owns more than 50% of its voting rights and two or more shareholders who have a personal interest in such a transaction are deemed as joint holders.

The term affiliation includes:


•	an employment relationship;


•	a business or professional relationship maintained on a regular basis;


•	control; and


•	service as an office holder, excluding service as a director in a private company prior to the first offering of its shares to the public if such director was appointed as a director of the private company in order to serve as an external director following the initial public offering.

The term “relative” is defined as a spouse, sibling, parent, grandparent, descendant, spouse’s descendant and the spouse of each of the foregoing.

The term “office holder” is defined as a director, general manager (chief executive officer), chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities of any of the foregoing positions, without regard to such person’s title, or other manager directly subordinate to the general manager.

A person may not serve as an external director if that person or that person’s relative, partner, employer, a person to whom such person is subordinate (directly or indirectly) or any entity under the person’s control has a business or professional relationship with any entity that has an affiliation with any affiliated party, even if such relationship is intermittent (excluding insignificant relationships). Additionally, any person who has received compensation intermittently (excluding insignificant relationships) other than compensation permitted under the Israeli Companies Law may not continue to serve as an external director.

No person can serve as an external director if the person’s position or other affairs create, or may create, a conflict of interest with the person’s responsibilities as a director or may otherwise interfere with the person’s ability to serve as a director or if such a person is an employee of the Israel Securities Authority or of an Israeli stock exchange. If at the time an external director is appointed all current members of the board of directors, who are not controlling shareholders or relatives of controlling shareholders, are of the same gender, then the external director to be appointed must be of the other gender. In addition, a person who is a director of a company may not be elected as an external director of another company if, at that time, a director of the other company is acting as an external director of the first company.

The Israeli Companies Law provides that an external director must meet certain “professional qualifications” or have “accounting and financial expertise” and that at least one external director must have accounting and financial expertise. However, if a company’s shares are traded on certain stock exchanges, including the NYSE , then if at least one of its other directors (1) has accounting and financial expertise as defined in the Israeli Companies Law and applicable regulations (as described above) and

(2) meets the independence requirements for membership on the audit committee in accordance with the applicable foreign law, then neither external director is required to possess accounting and financial expertise as long as both possess other requisite professional qualifications. The determination of whether a director possesses accounting and financial expertise is made by the board of directors.

The determination of whether a director possesses the requisite professional qualifications is made by the board of directors. The regulations promulgated under the Israeli Companies Law define an external director with requisite professional qualifications as a director who satisfies one of the following requirements: (1) the director holds an academic degree in either economics, business administration, accounting, law or public administration; (2) the director either holds an academic degree in any other field or has completed another form of higher education in the company’s primary field of business or in an area which is relevant to his or her office as an external director in the company; or (3) the director has at least five years of experience serving in any one of the following, or at least five years of cumulative experience serving in two or more of the following capacities: (a) a senior business management position in a company with a substantial scope of business; (b) a senior position in the company’s primary field of business; or (c) a senior position in public administration.

Until the lapse of a two-year period from the date that an external director of a company ceases to act in such capacity, the company in which such external director served, and its controlling shareholder or any entity under control of such controlling shareholder may not, directly or indirectly, grant such former external director, or his or her spouse or child, any benefit, including via (1) the appointment of such former director or his or her spouse or his child as an officer in the company or in an entity controlled by the company’s controlling shareholder, (2) the employment of such former director and (3) the engagement, directly or indirectly, of such former director as a provider of professional services for compensation, directly or indirectly, including via an entity under his or her control. With respect to a relative who is not a spouse or a child, such limitations shall only apply for one year from the date such external director ceased to be engaged in such capacity.

External directors are elected by shareholders. The shareholders voting in favor of their election must include at least a majority of the shares of the non-controlling shareholders of the company who voted on the matter. This minority approval requirement need not be met if the total shareholdings of those non-controlling shareholders who vote against their election represent 2% or less of all of the voting rights in the company.

The initial term of an external director is three years and he or she may be reelected for up to two additional three-year terms. Thereafter, in a company whose shares are listed for trading on, among others, the NYSE , such as the company, he or she may be reelected by our shareholders for additional periods not to exceed three years each, if the company’s audit committee and the board of directors, in that order, confirm that, in light of the external director’s expertise and special contribution to the work of the board of directors and its committees, the reelection for such additional period is beneficial to the company. Reelection of an external director may be effected through one of the following mechanisms: (i) the board of directors proposed the reelection of the nominee and the election was approved by the shareholders by the majority required to appoint external directors for their initial term as described above; or (ii) a shareholder holding 1% or more of the voting rights proposed the reelection of the nominee (who may not be a “related shareholder or competitor” as such term is defined in the Israeli Companies Law) or the external director himself or herself proposed their own reelection, and the reelection is approved by a majority of the votes cast by the shareholders of the company, excluding the votes of controlling shareholders and those who have a personal interest in the matter as a result of their relations with the controlling shareholders; provided that the aggregate votes cast in favor of the reelection by such non-excluded shareholders constitute more than 2% of the voting rights in the company.

External directors can be removed from office only by the same special percentage of shareholders as can elect them, or by a court, and then only if the external directors cease to meet the statutory qualifications with respect to their appointment or if they violate their duty of loyalty to the company.

Any committee of the board of directors must include at least one external director, except that the audit and compensation committees must include all of the external directors. An external director is entitled to compensation as provided in regulations adopted under the Israeli Companies Law and is otherwise prohibited from receiving any other compensation, directly or indirectly, in connection with such service.

An external director is entitled to compensation and reimbursement of expenses in accordance with regulations promulgated under the Israeli Companies Law and is prohibited from receiving any other compensation, directly or indirectly, in connection with serving as a director except for certain exculpation, indemnification and insurance provided by the company, as specifically allowed by the Israeli Companies Law.

Audit Committee

Israeli Companies Law Requirements

Under the Israeli Companies Law, the board of directors of any public company must also appoint an audit committee comprised of at least three directors, including all of the external directors. The audit committee may not include:


•	the chairman of the board of directors;


•	a controlling shareholder or a relative of a controlling shareholder;


•	any director employed by us or by one of our controlling shareholders or by an entity controlled by our controlling shareholders (other than as a member of the board of directors);


•	any director who regularly provides services to us, to one of our controlling shareholders or to an entity controlled by our controlling shareholders; or


•	a director who derives most of his or her income from a controlling shareholder.

According to the Israeli Companies Law, the majority of the members of the audit committee, as well as the majority of members present at audit committee meetings, will be required to be “independent” (as defined below) and the chairman of the audit committee will be required to be an external director. Any persons disqualified from serving as a member of the audit committee may not be present at the audit committee meetings, unless such person qualifies under one of the exemptions of the Israeli Companies Law.

The term “independent director” is defined under the Israeli Companies Law as an external director or a director who meets the following conditions and who is appointed or classified as such according to the Israeli Companies Law: (1) the conditions for his or her appointment as an external director (as described above) are satisfied and the audit committee approves the director having met such conditions and (2) subject to certain exceptions, he or she has not served as a director of the company for over nine consecutive years with any interruption of up to two years of his or her service not being deemed a disruption to the continuity of his or her service.

Listing Requirements

Under NYSE corporate governance requirements, we are required to maintain an audit committee consisting of at least three independent directors, all of whom are financially literate and one of whom has accounting or related financial management expertise.

Our audit committee will consist of , and . will serve as the Chairman of the audit committee. All members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and NYSE corporate governance rules. Our board of directors has determined in its business judgment that is an audit committee financial expert as defined by the SEC rules and has the requisite accounting or related financial management expertise

as required by NYSE corporate governance requirements. Each of the members of the audit committee is “independent” as such term is defined in Rule 10A-3(b)(1) under the Exchange Act.

Approval of Transactions with Related Parties

The approval of the audit committee is required to effect specified actions and transactions with office holders and controlling shareholders and their relatives, or in which they have a personal interest. See “—Fiduciary Duties and Approval of Specified Related Party Transactions and Compensation under Israeli Law.” The audit committee may not approve an action or a transaction with a controlling shareholder or with an office holder unless, among other things, at the time of approval the audit committee meets the composition requirements under the Israeli Companies Law.

Audit Committee Role

In connection with this offering, our board of directors approved an audit committee charter, which will become effective upon listing on the NYSE, setting forth the responsibilities of the audit committee consistent with the Israeli Companies Law, SEC rules and NYSE corporate governance requirements, which include:


•	retaining and terminating our independent auditors, subject to board of directors and shareholder ratification;


•	overseeing the independence, compensation and performance of the company’s independent auditors;


•	the appointment, compensation, retention and oversight of any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit services;


•	pre-approval of audit and non-audit services to be provided by the independent auditors;


•	reviewing with management and our independent directors our financial statements prior to their submission to the SEC; and


•	approval of certain transactions with office holders and controlling shareholders, as described below, and other related party transactions.

Additionally, under the Israeli Companies Law, the role of the audit committee includes the identification of irregularities in our business management, among other things, by consulting with the internal auditor or our independent auditors and suggesting an appropriate course of action to the board of directors. In addition, the audit committee or the board of directors, as set forth in the articles of association of the company, is required to approve the yearly or periodic work plan proposed by the internal auditor. The audit committee is required to assess the company’s internal audit system and the performance of its internal auditor. The Israeli Companies Law also requires that the audit committee assess the scope of the work and compensation of the company’s external auditor. In addition, the audit committee is required to determine whether certain related party actions and transactions are “material” or “extraordinary” for the purpose of the requisite approval procedures under the Israeli Companies Law and whether certain transactions with a controlling shareholder will be subject to a competitive procedure.

The audit committee charter states that in fulfilling its role the committee is empowered to conduct or authorize investigations into any matters within its scope of responsibilities.

Compensation Committee

Under the Israeli Companies Law, public companies are required to appoint a compensation committee in accordance with the guidelines set forth thereunder.

The compensation committee must consist of at least three members. All of the external directors must serve on the committee and constitute a majority of its members. The chairman of the compensation

committee must be an external director. The remaining members are not required to be external directors, but must be directors who qualify to serve as members of the audit committee (as described above).

The compensation committee will consist of , and , and will assist the board of directors in determining compensation for our directors and officer. will serve as the Chairman of the compensation committee.

Listing Requirements

Under SEC and NYSE rules, there are heightened independence standards for members of the compensation committee, including a prohibition against the receipt of any compensation from us other than standard supervisory board member fees. Although foreign private issuers are not required to meet this heightened standard, our board of directors has determined that all of our expected compensation committee members meet this heightened standard.

Compensation Committee Role

In connection with this offering, our board of directors approved a compensation committee charter, which will become effective upon listing on the NYSE, setting forth the responsibilities of the compensation committee consistent with the Israeli Companies Law, SEC rules and NYSE corporate governance requirements, which include:


•	recommending to the board of directors the compensation policy for directors and officers, and to recommend to the board of directors once every three years whether the compensation policy that had been approved should be extended for a period of more than three years;


•	recommending to the board of directors updates to the compensation policy, from time to time, and examine its implementation;


•	deciding whether to approve the terms of office and employment of directors and officers that require approval of the compensation committee;


•	deciding whether the compensation terms of the chief executive officer, which were determined pursuant to the compensation policy, will be exempted from approval by the shareholders because such approval would harm the ability to engage the chief executive officer; and


•	administering and, where applicable, recommending to our board of directors regarding the awarding of employee equity grants.

Compensation Policy

In general, under the Israeli Companies Law, a public company must have a compensation policy approved by the board of directors after receiving and considering the recommendations of the compensation committee. In addition, the compensation policy requires the approval of the general meeting of the shareholders, which approval requires one of the following: (i) the majority of shareholder votes counted at a general meeting including the majority of all of the votes of those shareholders who are non-controlling shareholders and do not have a personal interest in the approval of the compensation policy, who vote at the meeting (excluding abstentions) or (ii) the total number of votes against the proposal among the shareholders mentioned in clause (i) above does exceed 2% of the voting rights in the company. Under special circumstances, the board of directors may approve the compensation policy despite the objection of the shareholders on the condition that the compensation committee and then the board of directors decide, on the basis of detailed arguments and after discussing again the compensation policy, that approval of the compensation policy, despite the objection of the meeting of shareholders, is for the benefit of the company.

If a company initially offer its securities to the public, like us, adopts a compensation policy in advance of its initial public offering, and describes it in its prospectus, then such compensation policy shall be deemed a validly adopted policy in accordance with the Israeli Companies Law requirements described

above. Furthermore, if the compensation policy is set in accordance with the aforementioned relief, then it will remain in effect for term of five years from the date such company has become a public company.

The compensation policy must be based on certain considerations, include certain provisions and needs to reference certain matters as set forth in the Israeli Companies Law.

The compensation policy must serve as the basis for decisions concerning the financial terms of employment or engagement of office holders, including exculpation, insurance, indemnification or any monetary payment or obligation of payment in respect of employment or engagement. The compensation policy must relate to certain factors, including advancement of the company’s objectives, business plan and long-term strategy, and creation of appropriate incentives for office holders. It must also consider, among other things, the company’s risk management, size and the nature of its operations. The compensation policy must furthermore consider the following additional factors:


•	the education, skills, experience, expertise and accomplishments of the relevant office holder;


•	the office holder’s position, responsibilities and prior compensation agreements with him or her;

•

the ratio between the cost of the terms of employment of an office holder and the cost of the employment of other employees of the company, including employees employed through contractors who provide services to the company, in particular the ratio between such cost, the average and median salary of the employees of the company, as well as the impact of such disparities on the work relationships in the company;


•	if the terms of employment include variable components—the possibility of reducing variable components at the discretion of the board of directors and the possibility of setting a limit on the value of non-cash variable equity-based components; and

•

if the terms of employment include severance compensation—the term of employment or office of the office holder, the terms of his or her compensation during such period, the company’s performance during the such period, his or her individual contribution to the achievement of the company goals and the maximization of its profits and the circumstances under which he or she is leaving the company.

The compensation policy must also include, among others:


•	with regards to variable components:

•

with the exception of office holders who report directly to the chief executive officer, determining the variable components on long-term performance basis and on measurable criteria; however, the company may determine that an immaterial part of the variable components of the compensation package of an office holder’s shall be awarded based on non-measurable criteria, if such amount is not higher than three monthly salaries per annum, while taking into account such office holder contribution to the company; and


•	the ratio between variable and fixed components, as well as the limit of the values of variable components at the time of their grant;


•	a condition under which the office holder will return to the company, according to conditions to be set forth in the compensation policy, any amounts paid as part of his or her terms of employment, if such amounts were paid based on information later to be discovered to be wrong, and such information was restated in the company’s financial statements;


•	the minimum holding or vesting period of variable equity-based components to be set in the terms of office or employment, as applicable, while taking into consideration long-term incentives; and


•	a limit to retirement grants.

Our compensation policy, which will become effective immediately prior to the closing of this offering, is designed to promote retention and motivation of directors and executive officers, incentivize superior

individual excellence, align the interests of our directors and executive officers with our long-term performance and provide a risk management tool. To that end, a portion of an executive officer compensation package is targeted to reflect our short and long-term goals, as well as the executive officer’s individual performance. On the other hand, our compensation policy includes measures designed to reduce the executive officer’s incentives to take excessive risks that may harm us in the long-term, such as limits on the value of cash bonuses and equity-based compensation, limitations on the ratio between the variable and the total compensation of an executive officer and minimum vesting periods for equity-based compensation.

Our compensation policy also addresses each of our executive officers’ individual characteristics (such as his or her respective position, education, scope of responsibilities and contribution to the attainment of our goals) as the basis for compensation variation among our executive officers, and considers the internal ratios between compensation of our executive officers and directors and other employees. Pursuant to our compensation policy, the compensation that may be granted to an executive officer may include: base salary, annual bonuses and other cash bonuses (such as a signing bonus and special bonuses with respect to any special achievements, such as outstanding personal achievement, outstanding personal effort or outstanding company performance), equity-based compensation, benefits and retirement and termination of service arrangements. All cash bonuses are limited to a maximum amount linked to the executive officer’s base salary. In addition, the total variable compensation components (cash bonuses and equity-based compensation) may not exceed % of each executive officer’s total compensation package with respect to any given calendar year.

An annual cash bonus may be awarded to executive officers upon the attainment of pre-set periodic objectives and individual targets. The annual cash bonus that may be granted to our executive officers other than our chief executive officer will be based on performance objectives and a discretionary evaluation of the executive officer’s overall performance by our chief executive officer and subject to minimum thresholds. The annual cash bonus that may be granted to executive officers other than our chief executive officer may be based entirely on a discretionary evaluation. Furthermore, the performance objectives will be recommended by our chief executive officer and approved by our compensation committee (and, if required by law, by our board of directors).

The performance measurable objectives of our chief executive officer will be determined annually by our compensation committee and board of directors, will include the weight to be assigned to each achievement in the overall evaluation. A less significant portion of the chief executive officer’s annual cash bonus may be based on a discretionary evaluation of the chief executive officer’s overall performance by the compensation committee and the board of directors based on quantitative and qualitative criteria.

The equity-based compensation under our compensation policy for our executive officers (including members of our board of directors) is designed in a manner consistent with the underlying objectives 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 our long-term interests and those of our shareholders and to strengthen the retention and the motivation of executive officers in the long term. Our compensation policy provides for executive officer compensation in the form of share options or other equity-based awards, such as restricted shares and restricted share units, in accordance with our equity incentive plans then in place. All equity-based incentives granted to executive officers shall be subject to vesting periods in order to promote long-term retention of the executive officers. 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, role and the personal responsibilities of the executive officer.

In addition, our compensation policy contains compensation recovery provisions which allows us under certain conditions to recover bonuses paid in excess, enables our chief executive officer to approve an immaterial change in the terms of employment of an executive officer (provided that the changes of the terms of employment are in accordance our compensation policy) and allows us to exculpate, indemnify and insure our executive officers and directors subject to certain limitations set forth thereto.

Our compensation policy also provides for compensation to the members of our board of directors either (i) in accordance with the amounts provided in the Israeli Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director) of 2000, as amended by the Israeli Companies Regulations (Relief for Public Companies Traded in Stock Exchange Outside of Israel) of 2000, as such regulations may be amended from time to time, or (ii) in accordance with the amounts determined in our compensation policy.

Our compensation policy was adopted on and is filed as an exhibit to the registration statement of which this prospectus forms a part.

Nominating and Corporate Governance Committee

Upon listing on the NYSE , our nominating and corporate governance committee will consist of , and .

Listing Requirements

Under NYSE corporate governance requirements, we are required to maintain a nominating and corporate governance committee composed only of independent directors. Although foreign private issuers are not required to comply with independent nominating and corporate governance committee requirements under the NYSE, our board of directors has determined that all of our expected compensation committee members meet such standards.

Nominating and Corporate Governance Committee Role

In connection with this offering, our board of directors approved a nominating and corporate governance committee charter, which will become effective upon listing on the NYSE, setting forth the responsibilities of the nominating and corporate governance committee consistent with the Israeli Companies Law, SEC rules and NYSE corporate governance requirements, which include:


•	supporting and advising our board of directors in selecting director nominees, consistent with the criteria approved by our board of directors, who are best able to fulfill the responsibilities of a director;


•	overseeing the evaluation of our board of directors and our management; and


•	otherwise taking a leadership role in shaping our corporate governance establishing and maintaining effective corporate governance policies and practices, including, but not limited to, developing and recommending to our board of directors a set of corporate governance guidelines applicable to our company.

Internal Auditor

Under the Israeli Companies Law, the board of directors of a public company must appoint an internal auditor based on the recommendation of the audit committee. The role of the internal auditor is, among other things, to examine whether a company’s actions comply with applicable law and orderly business procedure. Under the Israeli Companies Law, the internal auditor may not be an interested party or an office holder or a relative of an interested party or of an office holder, nor may the internal auditor be the company’s independent auditor or the representative of the same.

An “interested party” is defined in the Israeli Companies Law as (i) a holder of 5% or more of the issued share capital or voting power in a company, (ii) any person or entity who has the right to designate one or more directors or to designate the chief executive officer of the company or (iii) any person who serves as a director or as a chief executive officer of the company. As of the date of this prospectus, we have not yet appointed our internal auditor.

Fiduciary Duties and Approval of Specified Related Party Transactions and Compensation under Israeli Law

Fiduciary Duties of Office Holders

The Israeli Companies Law imposes a duty of care and a duty of loyalty on all office holders of a company. The duty of care requires an office holder to act with the degree of skill and care with which a reasonable office holder in the same position would have acted under the same circumstances. The duty of care includes, among other things, a duty to use reasonable means, in light of the circumstances, to obtain:


•	information on the advisability of a given action brought for his or her approval or performed by virtue of his or her position; and


•	all other important information pertaining to such action.

The duty of loyalty incumbent on an office holder requires him or her to act in good faith and for the benefit of the company, and includes, among other things, the duty to:


•	refrain from any act involving a conflict of interest between the performance of his or her duties in the company and his or her other duties or personal affairs;


•	refrain from any activity that is competitive with the business of the company;


•	refrain from exploiting any business opportunity of the company for the purpose of gaining a personal advantage for himself or herself or others; and


•	disclose to the company any information or documents relating to the company’s affairs which the office holder received as a result of his or her position as an office holder.

Disclosure of Personal Interests of an Office Holder and Approval of Certain Transactions

Under the Israeli Companies Law, a company may approve an act specified above which would otherwise constitute a breach of the office holder’s fiduciary duty, provided that the office holder acted in good faith, the act or its approval does not harm the company, and the office holder discloses to the company his or her personal interest in the transaction (including any significant fact or document) a reasonable time before the approval of such act. Any such approval is subject to the terms of the Israeli Companies Law, setting forth, among other things, the appropriate bodies of the company required to provide such approval, and the methods of obtaining such approval.

The Israeli Companies Law requires that an office holder promptly disclose to the company any direct or indirect personal interest that he or she may have and all related material information or documents known to him or her relating to any existing or proposed transaction by the company. An interested office holder’s disclosure must be made promptly and in any event no later than the first meeting of the board of directors at which the transaction is considered. An office holder is not obliged to disclose such information if the personal interest of the office holder derives solely from the personal interest of his or her relative in a transaction that is not considered an extraordinary transaction.

If the transaction is an extraordinary transaction, the office holder must also disclose any personal interest held by:


•	the office holder’s relatives (spouse, siblings, parents, grandparents, descendants, spouse’s descendants and the spouses of any of these people); or


•	any company in which the office holder or his or her relatives holds 5% or more of the shares or voting rights, serves as a director or general manager or has the right to appoint at least one director or the general manager.

Under the Israeli Companies Law, unless the articles of association of a company provide otherwise, a transaction with an office holder or with a third party in which the office holder has a personal interest, which is not an extraordinary transaction, requires approval by the board of directors. Our amended and restated articles of association provide that such a transaction, which is not an extraordinary transaction, shall be approved by the board of directors or a committee of the board of directors or any other body or person (which has no personal interest in the transaction) authorized by the board of directors. If the transaction considered is an extraordinary transaction with an office holder or third party in which the office holder has a personal interest, then audit committee approval is required prior to approval by the board of directors. Under specific circumstances, shareholder approval may also be required. For the approval of compensation arrangements with directors and executive officers, see “—Compensation of Directors and Executive Officers.”

Any persons who have a personal interest in the approval of a transaction that is brought before a meeting of the board of directors or the audit committee may not be present at the meeting or vote on the matter. However, if the chairman of the board of directors or the chairman of the audit committee, as applicable, has determined that the presence of an office holder with a personal interest is required, such office holder may be present at the meeting for the purpose of presenting the matter. Notwithstanding the foregoing, a director who has a personal interest may be present at the meeting of the board of directors or the audit committee (as applicable) and vote on the matter if a majority of the members of the board of directors or the audit committee (as applicable) have a personal interest in the approval of such transaction. If a majority of the directors at a board of directors meeting have a personal interest in the transaction, such transaction also generally requires approval of the shareholders of the company.

A “personal interest” is defined under the Israeli Companies Law as the personal interest of a person in an action or in a transaction of the company, including the personal interest of such person’s relative or the interest of any other corporate body in which the person and/or such person’s relative is a director or general manager, a 5% shareholder or holds 5% or more of the voting rights, or has the right to appoint at least one director or the general manager, but excluding a personal interest stemming solely from the fact of holding shares in the company. A personal interest also includes (1) a personal interest of a person who votes according to a proxy of another person, including in the event that the other person has no personal interest, and (2) a personal interest of a person who gave a proxy to another person to vote on his or her behalf regardless of whether or not the discretion of how to vote lies with the person voting.

An “extraordinary transaction” is defined under the Israeli Companies Law as any of the following:


•	a transaction other than in the ordinary course of business;


•	a transaction that is not on market terms; or


•	a transaction that may have a material impact on the company’s profitability, assets or liabilities.

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Disclosure of Personal Interests of a Controlling Shareholder and Approval of Transactions

Pursuant to the Israeli Companies Law, the disclosure requirements that apply to an office holder also apply to a controlling shareholder of a public company. Extraordinary transactions with a controlling shareholder or in which a controlling shareholder has a personal interest, including a private placement in which a controlling shareholder has a personal interest, and the terms of engagement of the company, directly or indirectly, with a controlling shareholder or a controlling shareholder’s relative (including through a corporation controlled by a controlling shareholder), regarding the company’s receipt of services from the controlling shareholder, and if such controlling shareholder is also an office holder or employee of the company, regarding his or her terms of employment, require the approval of each of (i) the audit committee (or the compensation committee with respect to the terms of the engagement as an office holder or employee, including insurance, indemnification and compensation), (ii) the board of directors and (iii) the shareholders, in that order. In addition, the shareholder approval must fulfill one of the following requirements:


•	a majority of the shares held by shareholders who have no personal interest in the transaction and are voting at the meeting must be voted in favor of approving the transaction, excluding abstentions; or


•	the shares voted by shareholders who have no personal interest in the transaction who vote against the transaction represent no more than 2% of the voting rights in the company.

In addition, an extraordinary transaction with a controlling shareholder or in which a controlling shareholder has a personal interest, and an engagement of the company, directly or indirectly, with a controlling shareholder or a controlling shareholder’s relative (including through a corporation controlled by a controlling shareholder), regarding the company’s receipt of services from the controlling shareholder, and if such controlling shareholder is also an office holder or employee of the company, regarding his or her terms of employment, in each case with a term of more than three years requires the abovementioned approval every three years, however, transactions not involving the receipt of services or compensation can be approved for a longer term, provided that the audit committee determines that such longer term is reasonable under the circumstances. In addition, transactions with a controlling shareholder or a controlling shareholder’s relative who serves as an officer in a company, directly or indirectly (including through a corporation under his control), involving the receipt of services by a company or their compensation can have a term of five years from the company’s initial public offering under certain circumstances.

The Israeli Companies Law requires that every shareholder that participates, in person or by proxy, in a vote regarding a transaction with a controlling shareholder, must indicate in advance or in the ballot whether or not that shareholder has a personal interest in the vote in question. Failure to so indicate will generally result in the invalidation of that shareholder’s vote.

Disclosure of Compensation of Executive Officers

For so long as we qualify as a foreign private issuer, we are not required to comply with the proxy rules applicable to U.S. domestic companies, including the requirement applicable to emerging growth companies to disclose the compensation of our chief executive officer and other two most highly compensated executive officers on an individual, rather than an aggregate, basis. Nevertheless, regulations promulgated under the Israeli Companies Law will require us, after we become a public company, to disclose the annual compensation of our five most highly compensated office holders on an individual basis, rather than on an aggregate basis. This disclosure will not be as extensive as that required of a U.S. domestic issuer. We intend to commence providing such disclosure, at the latest, in the annual proxy statement for our first annual general meeting of shareholders following this offering, which will be furnished under cover of a Form 6-K and we may elect to provide such information at an earlier date.

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Compensation of Directors and Executive Officers

Directors . Under the Israeli Companies Law, the compensation of our directors requires the approval of our compensation committee, the subsequent approval of the board of directors and, unless exempted under regulations promulgated under the Israeli Companies Law, the approval of the shareholders at a general meeting. If the compensation of our directors is inconsistent with our compensation policy, then, the compensation committee and board of directors may approve such compensation under special circumstances, as long as they consider those provisions that must be included in the compensation policy according to the Israeli Companies Law, and provided that shareholder approval is obtained, which approval should satisfy one of the following:


•	at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such matter, present and voting at such meeting, are voted in favor of the compensation package, excluding abstentions; or


•	the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such matter voting against the compensation package does not exceed 2% of the aggregate voting rights in the company.

Executive Officers (other than the Chief Executive Officer) . The Israeli Companies Law requires the approval of the compensation of a public company’s executive officers (other than the chief executive officer) in the following order: (i) the compensation committee, (ii) the company’s board of directors and (iii) if such compensation arrangement is inconsistent with the company’s compensation policy, the company’s shareholders (by a special majority vote as discussed above with respect to the approval of director compensation). However, if the shareholders of the company do not approve a compensation arrangement with an executive officer that is inconsistent with the company’s compensation policy, the compensation committee and board of directors may override the shareholders’ decision if each of the compensation committee and the board of directors provide detailed reasons for their decision.

Chief Executive Officer . The Israeli Companies Law requires the approval of the compensation of a public company’s chief executive officer in the following order: (i) the company’s compensation committee, (ii) the company’s board of directors and (iii) the company’s shareholders (by a special majority vote as discussed above with respect to the approval of director compensation). However, if the shareholders of the company do not approve the compensation arrangement with the chief executive officer, the compensation committee and board of directors may override the shareholders’ decision if each of the compensation committee and the board of directors provide a detailed report for their decision. The approval of each of the compensation committee and the board of directors should be in accordance with the company’s compensation policy; however, in special circumstances, they may approve compensation terms of a chief executive officer that are inconsistent with such policy provided that they have considered those provisions that must be included in the compensation policy according to the Israeli Companies Law and that shareholder approval was obtained (by a special majority vote as discussed above with respect to the approval of director compensation). In addition, the compensation committee may waive the shareholder approval requirement with regards to the approval of the engagement terms of a candidate for the chief executive officer position, if they determine that the compensation arrangement is consistent with the company’s compensation policy, and that the chief executive officer did not have a prior business relationship with the company or a controlling shareholder of the company and that subjecting the approval of the engagement to a shareholder vote would impede the company’s ability to employ the chief executive officer candidate.

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Duties of Shareholders

Under the Israeli Companies Law, a shareholder has a duty to refrain from abusing its power in the company and to act in good faith and in an acceptable manner in exercising its rights and performing its obligations to the company and other shareholders, including, among other things, when voting at meetings of shareholders on the following matters:


•	an amendment to the articles of association;


•	an increase in the company’s authorized share capital;


•	a merger; and


•	the approval of related party transactions and acts of office holders that require shareholder approval.

A shareholder also has a general duty to refrain from discriminating against other shareholders.

The remedies generally available upon a breach of contract will also apply to a breach of the shareholder duties mentioned above, and in the event of discrimination against other shareholders, additional remedies may be available to the injured shareholder.

In addition, any controlling shareholder, any shareholder that knows that its vote can determine the outcome of a shareholder vote and any shareholder that, under a company’s articles of association, has the power to appoint or prevent the appointment of an office holder, or any other power with respect to a company, is under a duty to act with fairness towards the company. The Israeli Companies Law does not describe the substance of this duty except to state that the remedies generally available upon a breach of contract will also apply in the event of a breach of the duty to act with fairness, taking the shareholder’s position in the company into account.

Approval of Private Placements

Under the Israeli Companies Law and the regulations promulgated thereunder, a private placement of securities of an Israeli public company whose shares are traded solely outside of Israel, like we will be upon completion of this offering, does not require approval at a general meeting of the shareholders of a company; provided however, that in special circumstances, such as a private placement which is intended to obviate the need to conduct a special tender offer or a private placement which qualifies as a related party transaction, approval at a general meeting of the shareholders of a company is required. See “Description of Share Capital—Acquisitions under Israeli Law.” However, upon completion of this offering, we will be subject to NYSE corporate governance requirements relating to private placements.

Exculpation, Insurance and Indemnification of Directors and Officers

Under the Israeli Companies Law, a company may not exculpate an office holder from liability for a breach of the duty of loyalty. An Israeli company may exculpate an office holder in advance from liability to the company, in whole or in part, for damages caused to the company as a result of a breach of duty of care but only if a provision authorizing such exculpation is included in its articles of association. Our amended and restated articles of association, which will become effective upon the closing of this offering, include such a provision. The company may not exculpate in advance a director from liability arising from a breach of his or her duty of care in connection with a prohibited dividend or distribution to shareholders.

As permitted under the Israeli Companies Law, our amended and restated articles of association provide that we may indemnify an office holder in respect of the following liabilities, payments and expenses incurred for acts performed by him or her as an office holder, either in advance of an event or following an event:


•	a monetary liability incurred by or imposed on the office holder in favor of another person pursuant to a court judgment, including pursuant to a settlement confirmed as judgment or arbitrator’s decision

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approved by a competent court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to 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 foreseen events and amount or criteria;

•

reasonable litigation expenses, including reasonable attorneys’ fees, which were incurred by the office holder as a result of an investigation or proceeding filed against the office holder by an authority authorized to conduct such investigation or proceeding, provided that such investigation or proceeding was either (i) concluded without the filing of an indictment against such office holder and without the imposition on him of any monetary obligation in lieu of a criminal proceeding, (ii) concluded without the filing of an indictment against the office holder but with the imposition of a monetary obligation on the office holder in lieu of criminal proceedings for an offense that does not require proof of criminal intent or (iii) in connection with a monetary sanction;

•

reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or which were imposed on the office holder by a court (i) in a proceeding instituted against him or her by the company, on its behalf, or by a third party, (ii) in connection with criminal indictment of which the office holder was acquitted or (iii) in a criminal indictment which the office holder was convicted of an offense that does not require proof of criminal intent;


•	expenses he or she incurs as a result of administrative proceedings that may be instituted against him or her under Israeli securities laws, if applicable, and payments made to injured persons under specific circumstances thereunder; and


•	any other matter in respect of which it is permitted or will be permitted under applicable law to indemnify an office holder in the company.

As permitted under the Israeli Companies Law, our amended and restated articles of association provide that we may insure an office holder against the following liabilities incurred for acts performed by him or her as an office holder:


•	a breach of the duty of loyalty to the company, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm the company;


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


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


•	expenses he or she incurs as a result of administrative proceedings that may be instituted against him or her under the Israeli securities laws if applicable, and payments made to injured persons under specific circumstances thereunder; and


•	any other matter in respect of which it is permitted or will be permitted under applicable law to insure the liability of an office holder in the company.

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


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


•	a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;

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


•	a fine or forfeit levied against the office holder.

Under the Israeli Companies Law, exculpation, indemnification and insurance of office holders must be approved by the compensation committee and the board of directors and, with respect to directors or controlling shareholders, their relatives and third parties in which controlling shareholders have a personal interest, also by the shareholders.

Our amended and restated articles of association permit us to exculpate, indemnify and insure our office holders to the fullest extent permitted or to be permitted by law. Our office holders are currently covered by a directors’ and officers’ liability insurance policy. As of the date of this prospectus, no claims for directors’ and officers’ liability insurance have been filed under this policy and we are not aware of any pending or threatened litigation or proceeding involving any of our office holders, including our directors, in which indemnification is sought.

We have entered into agreements with each of our current office holders exculpating them from a breach of their duty of care to us to the fullest extent permitted by law, subject to limited exceptions, and undertaking to indemnify them to the fullest extent permitted by law, subject to limited exceptions, including, with respect to liabilities resulting from this offering, to the extent that these liabilities are not covered by insurance. This indemnification is limited, with respect to any monetary liability imposed in favor of a third party, to events determined as foreseeable by the board of directors based on our activities. The maximum aggregate amount of indemnification that we may pay to our office holders based on such indemnification agreement is the greater of (1) 25% of our total shareholders’ equity pursuant to our most recent financial statements as of the time of the actual payment of indemnification and (2) $40 million (as may be increased from time to time by shareholders’ approval); provided, however, that in relation to indemnification claimed in connection with a public offering of our securities, the amount, if higher, shall be equal to the aggregate proceeds from the sale by the Company and/or any shareholder of the Company in connection with such public offering . Such indemnification amounts are in addition to any insurance amounts. Each office holder who agrees to receive this letter of indemnification also gives his approval to the termination of all previous letters of indemnification that we have provided to him or her in the past, if any. However, in the opinion of the SEC, indemnification of office holders for liabilities arising under the Securities Act is against public policy and therefore unenforceable.

Employment and Consulting Agreements with Executive Officers

We have entered into written employment or service agreements with each of our executive officers. See “Certain Relationships and Related Party Transactions—Agreements with Directors and Officers—Employment Agreements.”

Directors’ Service Contracts

There are no arrangements or understandings between us, on the one hand, and any of our directors, on the other hand, providing for benefits upon termination of their employment or service as directors of our company.

Share Option Plans

2007 Israeli Share Option Plan

Effective Date and Shares Reserved. On October 21, 2007, our board of directors adopted the 2007 Israeli Share Option Plan, or the 2007 Plan. The 2007 Plan generally allowed us to grant options to our employees, directors, officers, consultants, advisors and any other person providing services to us or any of our affiliates. As of December 31, 2018, options to purchase a total of 6,407,273 shares were outstanding under the 2007 Plan. In May 2017, we extended the terms of options held by certain holders under the 2007 Plan by an additional 10 years. Unless earlier terminated pursuant to the original terms of

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the 2007 Plan, all granted but unexercised options will expire and cease to be exercisable at 5:00 p.m. Israel time on the 10 ^th anniversary of the vesting commencement date of such options.

Plan Administration. The 2007 Plan may be administered by our board of directors or a committee thereof. Subject to Israeli law and our articles of association or any resolution to the contrary by our board of directors, the administrator is authorized, in its sole and absolute discretion, to exercise all powers and authorities specifically granted to it under the 2007 Plan or necessary or advisable in the administration of the 2007 Plan.

Vesting Terms and Conditions of the Options . Unless otherwise determined by the administrator, options under the 2007 Plan vest and become exercisable as follows: 25% of the shares covered by the options vested on the first anniversary of the vesting commencement date, 1/3 of the remaining shares vest on each subsequent anniversary of the vesting commencement date and all options become fully vested by the fourth anniversary of the vesting commencement date.

Israeli Tax Law. Unless otherwise determined by the administrator, any underlying shares issued upon exercise of options (granted through the “capital gains track through a trustee” in accordance with Section 102(b)(2) of the Israeli Income Tax Ordinance (New Version), 1961, or the Israeli Tax Ordinance), will be held by a trustee until the lapse of the holding period (as defined in the 2007 Plan), or, subject to a tax ruling, until the earlier of a merger (as defined in the 2007 Plan) or an initial public offering. We appointed a trustee to hold the allocated options and underlying shares issued upon the exercise off such options in a trust on behalf of each applicable Israeli grantee. No underlying shares or additional rights we issue to the trustee will be held for a period longer than 20 years after the end of the term of the options.

Termination of Employment or Service . In the event that the employment or service of a grantee terminates (other than by reason of death, disability retirement or for cause), all options of such grantee that are vested but unexercised on the date of the termination may be exercised unless earlier terminated in accordance with their terms and if not previously expired, no later than the earlier of (i) 90 days after such termination and (ii) the term of the option. All other granted options will expire upon such termination. In the event of a grantee’s death during employment or service, or in the event of a grantee’s termination due to retirement or disability, all of the grantee’s vested but unexercised options will be exercisable until the earlier of (i) 180 days after the date of termination of employment and (ii) the term of the option. In the event of a grantee’s termination for cause, all options, whether vested or unvested, will expire.

Merger . In the event of a merger transaction (as defined in the 2007 Plan), the administrator in its sole discretion, will decide (i) if and how the unvested options will be canceled, replaced or accelerated, (ii) if and how vested options will be exercised, replaced and/or sold by us or the trustee on the behalf of Israeli participants and (iii) how underlying shares issued upon exercise of the options and held by the trustee on behalf of Israeli participants will be replaced and/or sold by the trustee on behalf of the Israeli participant.

2008 U.S. Stock Plan

Effective Date and Shares Reserved. On May 25, 2008, our board of directors adopted the 2008 U.S. Stock Plan, or the 2008 Plan. The 2008 Plan generally allows for the grant of nonstatutory share options, incentive share options that satisfy the requirements of Section 422 of the Code, and the sale or award of shares to our employees, outside directors and consultants and those of Tufin Software North America, Inc., as well as any of our other subsidiaries. As of December 31, 2018, options to purchase a total of 3,393,928 shares were outstanding under the 2008 Plan. The 2008 Plan will automatically terminate 10 years after the later of (i) adoption by the board of directors or (ii) the most recent increase in the number of shares reserved under the 2008 Plan that was approved by shareholders. We no longer make awards under the 2008 Plan.

Plan Administration . The 2008 Plan may be administered by one or more committees of the board of directors. The entire board of directors may administer the 2008 Plan if no committee is otherwise appointed. Subject to the provisions of the 2008 Plan, the board of directors will have full authority and

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discretion to take any actions it deems necessary or advisable for the administration of the 2008 Plan. All decisions, interpretations and other actions of the board of directors will be final and binding on all participants.

Terms and Conditions of Awards . Any shares issued upon exercise of an option or awarded or sold under the 2008 Plan may be subject to the special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the board of directors may determine.

Options . The 2008 Plan requires that options have an exercise price that is not less than 100% of the fair market value of a share on the grant date. Incentive share options granted to an employee owning more than 10% of our or any of our subsidiaries’ combined voting power will have an exercise price of at least 110% of the fair market value of the share on the grant date. The expiration date of an option may be no later than the 10 ^th anniversary of the date of grant (or the fifth anniversary in the case of incentive share options granted to employees who, at the time of grant, own more than 10% of our or any of our subsidiaries’ combined voting power).

Change in Control. In the event that the company is a party to a merger, consolidation, exchange of shares, sale of all or substantially all of its assets or like event, all outstanding options will be subject to the applicable transaction agreement, which will provide for one or more of the following: (i) the continuation of the outstanding options by the company (if the company is the surviving corporation); (ii) the assumption of the outstanding option by the surviving corporation or its parent in a manner that complies with Section 424(a) of the Code; (iii) the substitution by the surviving corporation or its parent of new options for the outstanding options in a manner that complies with Section 424(a) of the Code; or (iv) the cancelation of the outstanding options without the payment of any consideration.

2018 U.S. Equity-Based Incentive Plan

Effective Date and Shares Reserved . On April 9, 2018, our board of directors adopted the 2018 U.S. Equity-Based Incentive Plan, or the 2018 Plan. The 2018 Plan generally allowed us to grant options to our employees, directors, officers, consultants, advisors and any other person providing services to us or any of our affiliates who are U.S. citizens or who are resident aliens of the United States for U.S. federal income tax purposes. The maximum aggregate number of shares that may be issued pursuant to awards under the 2018 Plan is 350,000 shares. No more than 350,000 shares may be issued as a result of the exercise of incentive share options under the 2018 Plan. As of December 31, 2018, a total of 324,000 shares were outstanding under the 2018 Plan and we had 26,000 shares available for future grants.

Plan Administration . The 2018 Plan may be administered by a committee of the board of directors. The entire board of directors may administer the 2018 Plan if no committee is otherwise appointed. Subject to the provisions of the 2018 Plan, the administrator of the 2018 Plan has full authority and discretion to take any actions it deems necessary or advisable for the administration of the 2018 Plan. All decisions, interpretations and other actions of the administrator of the 2018 Plan will be final and binding on all participants, unless otherwise determined by the board of directors.

Options. The 2018 Plan allows for the grant of nonqualified share options and incentive share options that satisfy the requirements of Section 422 of the Code. Each award will be evidenced by an option agreement that will govern such award’s terms and conditions. Only our employees or employees of our parent or subsidiaries are eligible to receive incentive share options. The 2018 Plan requires that incentive share options have an exercise price that is not less than 100% of the fair market value of a share on the grant date and that nonqualified share options have an exercise price equal to the fair market value of a share on the grant date unless the committee administering the 2018 Plan specifies otherwise and the option complies with Section 409A of the Code. Incentive share options granted to an employee owning more than 10% of our or our and our subsidiaries’ combined voting power will have an exercise price of at least 110% of the fair market value of the shares on the grant date. The expiration date of an option may be no later than the 10 ^th anniversary of the date of grant, unless otherwise determined by the committee administering the 2018 Plan (or the fifth anniversary in the case of incentive

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share options granted to employees who, at the time of grant, own more than 10% of our or our parent’s or subsidiaries’ combined voting power).

Termination of Employment or Service . In the event that the employment or service of a grantee terminates (other than by reason of death, disability or retirement), all awards of such grantee that are unvested at the time of such termination will terminate on the date of such termination, and all awards of such grantee that are vested and exercisable at the time of such termination may, unless earlier terminated in accordance with their terms, be exercised within 12 months after the date of such termination (or such different period as the committee administering the 2018 Plan will prescribe). In the event of a grantee’s death during employment or service or within three months following such grantee’s termination, or in the event of a grantee’s termination due to disability, all of the grantee’s vested awards may be exercised at any time within one year after such death or disability. In the event of a grantee’s retirement, all of the grantee’s vested awards, unless earlier terminated in accordance with their terms, may be exercised at any time within the three month period following such retirement. If we (or our affiliate, when applicable) terminate the grantee’s employment or service for cause, or if at any time during the exercise period, facts or circumstances arise or are discovered with respect to the grantee that would have constituted cause, all awards theretofore granted to such grantee will, to the extent not theretofore exercised, terminate on the date of such termination (or on such subsequent date on which such facts or circumstances arise or are discovered, as the case may be) unless otherwise determined by the committee administering the 2018 Plan.

Merger or Sale . In the event of a merger or sale, unless otherwise determined by the committee administering the 2018 Plan in its sole and absolute discretion, any award then outstanding will be assumed or will be substituted by us or by the successor corporation in the merger or sale or by any affiliate thereof under substantially the same terms as the award. In the event that awards are not assumed or substituted for equivalent awards, the committee administering the 2018 Plan may (i) provide for a grantee to have the right to exercise an award, or otherwise accelerate vesting of an award, as to all or part of the shares covered thereby, including shares covered by the award which would not otherwise be exercisable or vested, and/or (ii) provide for the cancelation of each outstanding award at the closing of the merger or sale, and payment to the grantee. In the event of a merger or sale, the committee administering the 2018 Plan may, without the consent of the grantee, amend, modify or terminate awards as the committee will deem in good faith to be appropriate.

2019 Equity-Based Incentive Plan

Effective Date and Shares Reserved. Our 2019 Equity-Based Incentive Plan, or the 2019 Plan, which will become effective upon shareholder approval, will replace our 2007 Plan and our 2018 Plan, or the Prior Plans. From and after the effective date of the 2019 Plan, no further grants will be made under the Prior Plans. The 2019 Plan generally allows for the grant of options, restricted shares, restricted share units and other share-based awards to our and our affiliates’ employees, directors, officers, consultants and advisors. The 2019 Plan is intended to enable us to issue awards under varying tax regimes, including Section 102 and Section 3(i) awards pursuant to the Israeli Tax Ordinance and incentive stock options within the meaning of Section 422 of the Code. The maximum aggregate number of shares that may be issued pursuant to awards under the 2019 Plan is the sum of (a) 2,750,000 shares plus (b) on January 1 of each calendar year during the term of the 2019 Plan commencing in 2020, a number of shares equal to the lesser of: (i) an amount determined by our board of directors, if so determined prior to the January 1 of the calendar year in which the increase will occur, (ii) 5% of the total number of shares outstanding on December 31 of the immediately preceding calendar year and (iii) 5,000,000 shares.

Additionally, any share (i) underlying an award under the 2019 Plan or the Prior Plans (in an amount not to exceed shares under the Prior Plans) that has expired, or was canceled, terminated, forfeited, repurchased or settled in cash in lieu of issuance of shares, for any reason, without having been exercised , (ii) tendered to pay the exercise price of an award (or the exercise price or other purchase price of any option or other award under the Prior Plans), or withholding tax obligations with respect to an award (or any awards under the Prior Plans), or (iii) subject to an award (or any award under the Prior

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Plans) that is not delivered to a grantee because such shares are withheld to pay the exercise price (or of any award under the Prior Plans), or withholding tax obligations with respect to such Award (or such other award) will automatically be available for grant under the 2019 Plan. As of , 2019, were outstanding under the 2019 Plan and shares were available for future grant under the 2019 Plan.

Plan Administration . Either our board of directors or a committee established by our board of directors administers the 2019 Plan, and such administrator will have full authority in its discretion to determine (i) eligible grantees, (ii) grants of awards and setting the terms and provisions of award agreements (which need not be identical) and any other agreements or instruments under which awards are made, including, but not limited to, the number of shares underlying each award and the class of shares underlying each award (if more than one class was designated by our board of directors), (iii) the time or times at which awards will be granted, (iv) the terms, conditions and restrictions applicable to each award (which need not be identical) and any shares acquired upon the exercise or (if applicable) vesting thereof, (v) to accelerate, continue, extend or defer the exercisability of any award or the vesting thereof, including with respect to the period following a grantee’s termination of employment or other service, (vi) the interpretation of the 2019 Plan and any award agreement and the meaning, interpretation and applicability of terms referred to in applicable laws, (vii) policies, guidelines, rules and regulations relating to and for carrying out the 2019 Plan, and any amendment, supplement or rescission thereof, as it may deem appropriate, (viii) to adopt supplements to, or alternative versions of, the 2019 Plan, including, without limitation, as it deems necessary or desirable to comply with the laws of, or to accommodate the tax regime or custom of, foreign jurisdictions whose citizens or residents may be granted awards, (ix) the fair market value of the shares or other property, (x) the tax track (capital gains, ordinary income track or any other track available under the Section 102 of the Israeli Tax Ordinance) for the purpose of Section 102 to the Israeli Tax Ordinance, (xi) the authorization and approval of conversion, substitution, cancellation or suspension under and in accordance with the 2019 Plan of any or all awards or shares, (xii) the amendment, modification, waiver or supplement of the terms of each outstanding award (with the consent of the applicable grantee, if such amendments refers to the increase of the exercise price of awards or reduction of the number of shared underlying an award (but, in each case, other than as a result of an adjustment or exercise of rights in accordance with the provisions of the 2019 Plan) unless otherwise provided under the terms of the 2019 Plan, (xiii) without limiting the generality of the foregoing, and subject to the provisions of applicable law, to grant to a grantee who is the holder of an outstanding award, in exchange for the cancellation of such award, a new award having an exercise price lower than that provided in the award so canceled and containing such other terms and conditions as the committee may prescribe in accordance with the provisions of the 2019 Plan or to set a new exercise price for the same award lower than that previously provided in the award, (xiv) to correct any defect, supply any omission or reconcile any inconsistency in the 2019 Plan or any award agreement and all other determinations and take such other actions with respect to the 2019 Plan or any award as it may deem advisable to the extent not inconsistent with the provisions of the 2019 Plan or applicable law, (xv) to designate any of our officers or other persons to manage the day to day administration of the awards granted under the 2019 Plan or authorize any of them to act on behalf of the committee with respect to any matter, right, obligation, determination or election which is the responsibility of or which is allocated to the committee herein, (xvi) to determine that awards, shares issuable upon the exercise or (if applicable) vesting of awards and/or any securities issued or distributed with respect thereto, shall be allocated or issued to, or held by, the representative in trust for the benefit of the grantees and (xvii) any other matter which is necessary or desirable for, or incidental to, the administration of the 2019 Plan and any award thereunder. The board of directors and the committee need not take the same action or determination with respect to all awards, with respect to certain types of awards, with respect to all service providers or any certain type of service providers and actions and determinations may differ as among the grantees, and as between the grantees and any other holders of our securities. The board of directors may, at any time, suspend, terminate, modify, or amend the 2019 Plan, whether retroactively or prospectively.

Types and Terms and Conditions of Awards . The committee may grant awards intended to qualify as an incentive stock option, non-qualified stock option, Section 102 award, Section 3(i) award, or other

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designations under other regimes. The 2019 Plan generally requires that incentive stock options have an exercise price that is not less than 100% of the fair market value of a share underlying such options or 110% in case of an employee who at the time of the grant owns shares possessing more than 10% of the total combined voting power of all classes of our shares or of any parent or subsidiary of the company on the date of grant of such options or such other price as may be determined pursuant to the Code. The exercise price of any other awards granted will be determined by the committee.

The exercise period of an option award will be 10 years from the date of grant of the award unless otherwise determined by the committee, but subject to the vesting and the early termination provisions, provided that the period of an incentive stock option granted to an employee who at the time of the grant owns shares possessing more than 10% of the total combined voting power of all classes of our shares or of any parent or subsidiary of the company, shall not exceed five years from the date of grant. Except as described below, an award generally may not be exercised unless the grantee is then in our employ or service and unless the grantee has remained continuously so employed since the date of grant of the award and throughout the vesting dates. In the event that the employment or service of a grantee terminates (other than by reason of death, disability or retirement), unless otherwise determined by the committee, all awards of such grantee that are unvested at the time of such termination shall terminate on the date of such termination, and all awards of such grantee that are vested and exercisable at the time of such termination may, unless earlier terminated in accordance with their terms, be exercised within up to three months after the date of such termination (or such different period as the committee will prescribe), but in any event no later than the date of expiration of the award’s term as set forth in the award agreement or pursuant to this 2019 Plan. In the event of a grantee’s death during employment or service or within three months following such grantee’s termination, (or such longer period as determined by the committee), or in the event of a grantee’s termination due to disability, all of the grantee’s vested awards may be exercised at any time within one year after such death or disability (or such longer period as determined by the committee) . In the event of a grantee’s retirement, all of the grantee’s vested awards, unless earlier terminated in accordance with their terms, may be exercised at any time within the three month period following such retirement (or such different period as the committee shall prescribe) . If we (or our affiliate, when applicable) terminate the grantee’s employment or service for cause (as defined in the 2019 Plan), or if at any time during the exercise period (whether prior to and after termination of employment or service, and whether or not the grantee’s employment or service is terminated by either party as a result thereof), facts or circumstances arise or are discovered with respect to the grantee that would have constituted cause, all awards theretofore granted to such grantee (whether vested or not) shall, to the extent not theretofore exercised, terminate on the date of such termination (or on such subsequent date on which such facts or circumstances arise or are discovered, as the case may be) unless otherwise determined by the committee.

Section 102 of the Israeli Tax Ordinance allows our employees, directors and officers who are not controlling shareholders and are Israeli residents for tax purposes to receive favorable tax treatment for share-based awards. Section 102 includes two alternatives for tax treatment involving the issuance of awards to a trustee for the benefit of the grantees and also includes an additional alternative for the issuance of awards directly to the grantee. We intend to elect the “capital gain track” pursuant to Section 102(b)(2) of the Israeli Tax Ordinance for grants to eligible Israeli grantees as provided above, which may allow favorable tax treatment for such grantees. In order to comply with the terms of the capital gain track, all awards granted under the 2019 Plan and subject to the provisions of Section 102 of the Israeli Tax Ordinance, as well as the shares issued upon exercise of such awards and any rights granted thereunder, including bonus shares, must be registered in the name of a trustee selected by the board and held in trust for the benefit of the relevant grantee for the requisite period prescribed by the Israeli Tax Ordinance or such longer period as set by the committee. The trustee may release these awards or shares to the holders thereof after the expiration of the required statutory holding period, provided that the trustee has received an acknowledgment from the Israeli Income Tax Authority that the grantee paid all applicable taxes, or the trustee and/or us and/or our affiliate withholds all applicable taxes and compulsory payments due. Our non-employee service providers and controlling shareholders may only be granted options or

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RSUs under Section 3(i) of the Israeli Income Tax Ordinance, which will be taxed as ordinary income upon the exercise of such awards into shares.

The administrator may grant restricted share units, or RSUs, under the 2019 Plan, which are awards covering a number of shares that are settled, if vested, by issuance of those shares. The award agreement for any restricted shares granted will provide the vesting schedule and purchase price, if any, for the restricted shares. If a grantee’s employment or services to the company or any affiliate thereof shall terminate for any reason prior to the vesting of such grantee’s restricted shares, any shares that remain subject to vesting will be forfeited by such grantee. No payment of exercise price (subject to applicable law and the terms of the award agreement) will be required as consideration for RSUs.

The administrator may grant other awards under the 2019 Plan, including shares (which may, but need not, be restricted shares), cash, a combination of cash and shares, awards denominated in share units, and share appreciation rights. However, to qualify as Section 102 or Section 3(i) awards pursuant to the Israeli Tax Ordinance, the award must be share-based compensation only and not cash compensation or any award that is settled in cash.

Adjustment Provisions . In the event of a division or subdivision of our outstanding share capital, any distribution of bonus shares (share split), consolidation or combination of our share capital (reverse stock split), reclassification with respect to our shares or any similar recapitalization events, a merger (including, a reverse merger and a reverse triangular merger), consolidation, amalgamation or like transaction of us with or into another corporation, reorganization (which may include a combination or exchange of shares, spin-off or other corporate divestiture or division, or other similar occurrences), the committee shall have the authority to make, without the need for a consent of any holder of an award, such adjustments as determined by the committee to be appropriate, in its discretion, in order to adjust (i) the number and class of shares reserved and available for grants of awards, (ii) the number and class of shares covered by outstanding awards, (iii) the exercise price per share covered by any award, (iv) the terms and conditions concerning vesting and exercisability and the term and duration of the outstanding awards and (v) any other terms of the award that in the opinion of the committee should be adjusted.

In the event of (i) a sale of all or substantially all of our assets, or a sale (including an exchange) of all or substantially all of our shares, to any person, or a purchase by any of our shareholders or by an affiliate of such shareholder, of all or substantially all of our shares held by all or substantially all other shareholders or by other shareholders who are not affiliated with such acquiring party; (ii) a merger (including, a reverse merger and a reverse triangular merger), consolidation, amalgamation or like transaction of us with or into another corporation; (iii) a scheme of arrangement for the purpose of effecting such sale, merger, consolidation, amalgamation or other transaction; (iv) change in board event, which means any time at which individuals who, as of the effective date of the 2019 Plan, constitute the incumbent board cease for any reason to constitute at least a majority of the board; provided, however, that any individual becoming a director subsequent to the effective date of the 2019 Plan whose election, or nomination for election by our shareholders, was approved by a vote of at least a majority of the directors then comprising the incumbent board shall be considered as though such individual were a member of the incumbent board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the board; (v) approval by our shareholders of a complete liquidation or dissolution of the company; or (vi) such other transaction or set of circumstances that is determined by the board (being the incumbent board in case of a change in board event), in its discretion, to be a transaction subject to these provisions of the 2019 Plan; excluding any of the above transactions in clauses (i) through (v) if the board (being the incumbent board in case of a change in board event) determines that such transaction should be excluded from the definition hereof and the applicability of this provision of the 2019 Plan, any award then outstanding will be assumed or will be substituted by us or by the successor corporation in such change in control or by any affiliate thereof, as determined by the committee in its discretion, under terms as determined by the committee or the terms of the 2019 Plan applied by the successor corporation to such assumed or substituted award, unless otherwise determined by the sole and absolute discretion of

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the committee. Regardless of whether or not awards are assumed or substituted the committee may (but will not be obligated to), in its sole discretion: (1) provide for grantees to have the right to exercise their awards or otherwise for the acceleration of vesting of award in respect of all or part of the shares covered by the awards which would not otherwise be exercisable or vested, under such terms and conditions as the committee will determine, including the cancellation of all unexercised awards (whether vested or unvested) upon or immediately prior to the closing of the change in control; and/or (2) provide for the cancelation of each outstanding and unexercised award at or immediately prior to the closing of the change in control, and payment to the grantees of an amount in cash, our shares, the acquirer or of a corporation or other business entity which is a party to the change in control or other property, as determined by the committee to be fair in the circumstances, and subject to such terms and conditions as determined by the committee. Notwithstanding the foregoing, in the event of change in control, the committee may determine, in its sole discretion, that upon completion of such change in control, the terms of any award be otherwise amended, modified or terminated, as the committee deems in good faith to be appropriate.

Miscellaneous Provisions . Awards under the 2019 Plan are not transferable other than by will or by the laws of descent and distribution or to a grantee’s designated beneficiary, unless, in the case of awards other than incentive stock options, otherwise determined by our committee or under the 2019 Plan, and generally expire 10 years following the grant date. The board of directors may at any time amend, suspend, terminate or modify the 2019 Plan and the administrator may at any time modify or amend any award under the 2019 Plan.

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PRINCIPAL SHAREHOLDERS

The following table sets forth information with respect to the beneficial ownership of our shares as of the date of this prospectus and after this offering by:


•	each person or entity known by us to own beneficially more than 5% of our outstanding shares;


•	each of our directors, director nominees and executive officers individually; and


•	all of our executive officers, directors and director nominees as a group.

The beneficial ownership of ordinary shares is determined in accordance with the rules of the SEC and generally includes any ordinary shares over which a person exercises sole or shared voting or investment power, or the right to receive the economic benefit of ownership. For purposes of the table below, we deem shares subject to options or warrants that are currently exercisable or exercisable within 60 days of February 15, 2019, to be outstanding and to be beneficially owned by the person holding the options or warrants for the purposes of computing the percentage ownership of that person but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person. The percentage of shares beneficially owned prior to the offering is based on 37,054,542 ordinary shares outstanding as of February 15, 2019. We have also set forth below information known to us regarding any significant change in the percentage ownership of our ordinary shares by any major shareholders during the past three years.

As of February 15, 2019, we had 15 holders of record of our ordinary shares in the United States. These shareholders held in the aggregate 39% of our outstanding ordinary shares.

All of our shareholders, including the shareholders listed below, have the same voting rights attached to their ordinary shares. See “Description of Share Capital—Voting Rights.”

Following the closing of this offering, neither our principal shareholders nor our directors and executive officers have different or special voting rights with respect to their ordinary shares.

Unless otherwise noted below, each shareholder’s address is Tufin Software Technologies Ltd., 5 Shoham Street, Ramat-Gan 52521, Israel.

A description of any material relationship that our principal shareholders have had with us or any of our predecessors or affiliates since January 1, 2016 is included under “Certain Relationships and Related Party Transactions.”

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Name of Beneficial Owner

Shares Beneficially Owned Prior to Offering

Number of Shares Offered

Shares Beneficially Owned After Offering

Number of Shares Offered Pursuant to Over-Allotment Option

Number

Executive Officers, Directors and Director Nominees

Reuven Kitov

3,546,753

9.6

Reuven Harrison

3,546,753

9.6

Jack Wakileh

Kevin Maloney

Pat Walsh

Yoram Gronich

Pamela Cyr

Rajiv Motwane

Ofer Or

Ohad Finkelstein(1)

Yuval Shachar(1)

Yair Shamir(2)

Edouard Cukierman(2)

Ronni Zehavi

All executive officers, directors and director nominees as a group (14 persons)

Principal Shareholders

Catalyst Private Equity Partners (Israel) II, Limited Partnership(3)

9,721,914

26.4

Entities affiliated with Marker LLC(4)

10,632,198

28.9

Sberbank (SBT Venture Fund I L.P.)(5)

2,423,305

6.6

Entities affiliated with Vintage Investment Partners(6)

3,854,644

10.5


(1)	Indirectly owns 10,632,198 shares through entities affiliated with Marker LLC. See Note 4 below.


(2)	Indirectly owns 9,721,914 shares through Catalyst Private Equity Partners (Israel) II, Limited Partnership. See Note 3 below.

(3)

Shares beneficially owned prior to this offering consist of 9,583,334 preferred shares and 138,580 common shares held by Catalyst Private Equity Partners (Israel) II, Limited Partnership (“Catalyst Israel”). Catalyst Israel holds 3,421,250 preferred shares and 49,472 common shares in trust for Catalyst Private Equity Partners (Israel B) II, L.P. and 670,833 preferred shares and 9,700 common shares in trust for Catalyst Private Equity Partners (Israel C) II, L.P. The general partner of these funds is Catalyst Investments II L.P. (the “General Partner”). Voting and investment power over the shares resides in the board of directors of Catalyst Equity (2006) Ltd. (the “Catalyst Board”), the general partner of the General Partner. The Catalyst Board is comprised of Edouard Cukierman, Yair Shamir, Roger Cukierman and Luc Muller. The mailing address of the individuals and entities related to Catalyst Equity (2006) Ltd. is 28 Haarbaa St., Tel Aviv 6473925, Israel.

(4)

Shares beneficially owned prior to this offering consist of 1,131,818 shares held by Marker II LP, 2,829,546 shares held by Marker Lantern II Ltd. and 6,670,834 shares held by Marker TF Investments Ltd. Richard Scanlon is the sole director of the managers and the general partner, as the case may be, of each of the foregoing entities and, accordingly, has voting and investment power over the shares held by such entities. The address of the foregoing entities and individuals is c/o Marker LLC, 10 East 53 ^rd Street, New York, New York 10022.


(5)	Sberbank (Sberbank of Russia) is a public company a majority of whose shares are owned by the Central Banks of the Russian Federation. The address of Sberbank (SBT Venture Fund I L.P.) is 1 East Poultry Avenue, London, EC1A 9PT, United Kingdom.

(6)

Shares beneficially owned prior to this offering consist of 1,307,871 shares held by Vintage Investment Partners VI (Cayman), L.P., 420,062 shares held by Vintage Investment Partners VI (Israel), L.P., 1,241,786 shares held by Vintage Investment Partners V (Cayman), L.P. and 884,925 shares held by Vintage Investment Partners V (Israel), L.P. The general partner of these entities is the GP of Vintage Investment Partners VI (Israel and Cayman) is Vintage Investment VI L.P.; the GP of Vintage Investment Partners V (Israel and Cayman) is Vintage Investments 5 L.P. Voting and investment power over the shares resides with the applicable GP. The address of the foregoing entities and individuals is c/o Vintage Investment Partners, 12 Abba Eban Avenue, Ackerstein Towers Building D, 10th Floor, Herzliyah Pituach 46120, Israel.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Our policy is to enter into transactions with related parties on terms that, on the whole, are no more favorable, or no less favorable, than those available from unaffiliated third parties. Based on our experience in the business sectors in which we operate and the terms of our transactions with unaffiliated third parties, we believe that all of the transactions described below met this policy standard at the time they occurred. The following is a description of material transactions, or series of related material transactions, since January 1, 2016, to which we were or will be a party and in which the other parties included or will include our directors, executive officers, holders of more than 5% of our voting securities or any member of the immediate family of any of the foregoing persons.

Agreements with Related Parties

Financing Transactions

Original Rounds of Financing . Since 2007, we have raised capital through equity financings. Between 2007 and 2014, we raised capital through sales of our ordinary shares and our Series A, B, C, C-1 and D preferred shares.

Series D Financing. In August 2014, we sold Series D preferred shares convertible into 1,743,206 ordinary shares at a price per underlying preferred share of $2.86828 for an aggregate purchase price of approximately $5.0 million. Each Series D preferred share will convert into one ordinary share upon the closing of this offering. The following table sets forth the number of ordinary shares resulting from conversion upon the closing of this offering of the Series D preferred shares purchased by entities which, as of the date of this prospectus, beneficially own more than 5% of our ordinary shares assuming the conversion of all of outstanding preferred shares:



	Aggregate Purchase Price		Number of Ordinary Shares Resulting from the Conversion of Series D Preferred Shares
	(in thousands)
Entities affiliated with Vintage Investment Partners	$	6,350	2,213,872

Registration Rights

Form F-1 Demand Rights. At any time after the effective date of our initial public offering, the holders of at least 25% of the shares held by our former preferred shareholders can provide us a written request to file a registration statement in respect of the ordinary shares issued upon conversion of the preferred shares, or the “registrable securities.” Within 10 days of the receipt of a request to effect such registration, we must give written notice of the request to the other holders of the registrable securities. We are not required to effect more than two registrations on Form F-1 that have been declared or ordered effective as promptly as practicable. We are only required to effect any such registration if the anticipated aggregate proceeds will be at least $5.0 million (net of underwriting discounts and commissions).

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Form F-3 Demand Rights. Upon the written request of any former preferred shareholders that we effect a registration on Form F-3, we must give written notice of the proposed registration within 10 days, and any related qualification or compliance, to all other former preferred shareholders. We must use commercially reasonable efforts to effect such registration and all such qualifications and compliances requested, together with all or such portion of the registrable securities of any other former preferred shareholders joining in such request. We are not required to effect a registration on Form F-3 more than twice in any 12-month period. We are only required to effect any such registration if the anticipated aggregate proceeds will be at least $1.0 million.

Shelf Takedown. Upon the written request of any former preferred shareholders that we effect a public offering using an effective shelf registration statement, we must give written notice of the proposed offering within 10 days (or two business days in connection with an underwritten “block trade”), and any related qualification or compliance, to all other former preferred shareholders. We are not required to effect an underwritten shelf takedown if we effected a demand registration, piggyback offering or underwritten shelf takedown within the preceding 90 days. We are only required to effect an underwritten shelf takedown if the anticipated aggregate proceeds will be at least $5.0 million.

Piggyback Offerings . Following this offering, shareholders holding registrable securities will also have the right to request to participate in any offering initiated by us, subject to specified exceptions. Holders of registrable securities continue to have the right to participate in subsequent piggyback offerings regardless of whether the holder has opted out of prior offerings.

Cutback. In the event that the underwriter advises us that marketing factors require a limitation on the number of shares that can be included in a registered offering, the shares will be included in the registration statement in an agreed order of preference among the holders of registration rights. The same preference also applies in the case of a piggyback offering, but we have first preference and the amount of registrable securities to be included may not be reduced below 25% of the total amount of securities included in such offering.

Termination. Rights granted to holders of registrable securities pursuant to the amended and restated investors’ rights agreement terminate on the fifth anniversary of the closing of this offering. With respect to any of our holders of registrable securities that hold less than 4% of our outstanding ordinary shares, such rights terminate when the shares held by such shareholder can be sold within a 90-day period under Rule 144. We have the right to terminate or delay any registration or offering, even if such registration or offering is subject to piggyback rights.

Expenses. We will pay all expenses in carrying out the foregoing registrations or offerings other than any underwriting discounts and commissions.

Rights of Appointment

Our current board of directors consists of seven directors. Pursuant to our amended and restated articles of association currently in effect, Catalyst Private Equity Partners (Israel) II, Limited Partnership, or Catalyst, had the right to appoint two members of our board of directors and Marker TF Investments Ltd., or Marker, had the right to appoint one member. Catalyst appointed Yair Shamir and Edouard Cukierman to our board of directors and Marker appointed Ohad Finkelstein. These appointment rights terminate upon the closing of this offering.

As of the date of this prospectus, we are not a party to, and are not aware of, any voting agreements among our shareholders. Our founders, Reuven Kitov and Reuven Harrison, have agreed that Mr. Kitov will designate the director that our founders are permitted to jointly appoint under certain circumstances for so long as our founders share such designation right as set forth in our amended and restated articles of association, which will become effective upon the closing of this offering. See “Management—Board of Directors and Officers—Appointment Rights.”

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Agreements with Directors and Officers

Employment Agreements. We have entered into written employment agreements with each of our executive officers. These agreements provide for notice periods of varying duration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary and benefits. These agreements also contain customary provisions regarding noncompetition, confidentiality of information and assignment of inventions. However, the enforceability of the noncompetition provisions may be limited under applicable law.

Options. Since October 2007, we have granted options to purchase our ordinary shares to our officers and certain of our directors. Such option agreements may contain acceleration provisions upon certain merger, acquisition, or change of control transactions. We describe our option plans under “Management—Share Option Plans.” If our relationship with an executive officer or a director is terminated, except for cause (as defined in the various option plan agreements), all options that are vested will remain exercisable for 90 days after such termination (180 days in case of death, retirement or disability) or until expiration of the term of the option award, whichever is earlier.

Exculpation, Indemnification and Insurance. Our articles of association permit us to exculpate, indemnify and insure certain of our office holders to the fullest extent permitted by the Israeli Companies Law. We intend to enter into agreements with our office holders, exculpating them from a breach of their duty of care to us to the fullest extent permitted by law and undertaking to indemnify them to the fullest extent permitted by law, subject to certain exceptions, including with respect to liabilities resulting from this offering to the extent that these liabilities are not covered by insurance. See “Management—Exculpation, Insurance and Indemnification of Directors and Officers.”

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DESCRIPTION OF SHARE CAPITAL

The following descriptions of our share capital and provisions of our amended and restated articles of association are summaries and are qualified by reference to the amended and restated articles of association, which will become effective upon the closing of this offering.

General

Upon the closing of this offering, our authorized share capital will consist of 150,000,000 ordinary shares, par value NIS 0.01 per share, of which, effective upon closing of this offering, shares will be issued and outstanding (assuming that the underwriters do not exercise their option to purchase additional ordinary shares).

All of our outstanding ordinary shares will be validly issued, fully paid and non-assessable. Our ordinary shares are not redeemable and do not have any preemptive rights.

Our Registration Number and Purpose

Our registration number with the Israeli Registrar of Companies is 51-362739-8. Our purpose as set forth in our amended and restated articles of association is to engage in any lawful activity.

Voting Rights and Conversion

All ordinary shares will have identical voting and other rights in all respects.

Transfer of Shares

Our fully paid ordinary shares are issued in registered form and may be freely transferred under our amended and restated articles of association, unless the transfer is restricted or prohibited by another instrument, applicable law or the rules of a stock exchange on which the shares are listed for trade. The ownership or voting of our ordinary shares by non-residents of Israel is not restricted in any way by our amended and restated articles of association or the laws of the State of Israel, except for ownership by nationals of some countries that are, or have been, in a state of war with Israel.

Liability to Further Capital Calls

Our board of directors may make, from time to time, such calls as it may deem fit upon shareholders with respect to any sum unpaid with respect to shares held by such shareholders, which is not payable at a fixed time. Such shareholder shall pay the amount of every call so made upon him. Unless otherwise stipulated by the board of directors, each payment in response to a call shall be deemed to constitute a pro rata payment on account of all shares with respect to which such call was made. A shareholder shall not be entitled to his rights as shareholder, including the right to dividends, unless such shareholder has fully paid all the notices of call delivered to him, or which according to our amended and restated articles of association are deemed to have been delivered to him, together with interest, linkage and expenses, if any, unless otherwise determined by the board of directors.

Business Combinations

Under our amended and restated articles of association, which will become effective upon the closing of this offering, we may not engage in any “business combinations” with any “interested shareholder” for a three-year period following the time that such shareholder became an interested shareholder, unless:


•	prior to the time that such shareholder became an interested shareholder, our board of directors approved either the business combination or the transaction which resulted in the shareholder becoming an interested shareholder; or

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•

upon consummation of the transaction which resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of our voting shares outstanding at the time the transaction commenced excluding for purposes of determining our voting shares outstanding (but not the outstanding voting shares owned by the interested shareholder) those shares owned by persons who are directors and also officers; or


•	at the time that such shareholder became an interested shareholder, or subsequent to such time, the business combination is approved by our board of directors and authorized at a general meeting of shareholders by the affirmative vote of at least 66 2/3% of our voting shares outstanding that are not owned by the interested shareholder.

Generally, a “business combination” includes any merger, consolidation, sale or other transaction resulting in a financial benefit to the interested shareholder. Subject to certain exceptions, an “interested shareholder” is any person (other than us and any of our direct or indirect majority-owned subsidiaries) who , together with such person’s affiliates and associates, owns, or within the previous three years owned, 15% or more of our voting shares.

Under certain circumstances, this provision will make it more difficult for a person who would be an “interested shareholder” to effect various business combinations with a corporation for a three-year period. This provision may encourage companies interested in acquiring us to negotiate in advance with our board of directors because the shareholder approval requirement would be avoided if our board of directors approves either the business combination or the transaction which results in the shareholder becoming an interested shareholder. These provisions also may have the effect of preventing changes in our board of directors and may make it more difficult to accomplish transactions which shareholders may otherwise deem to be in their best interests.

Election of Directors

Our ordinary shares do not have cumulative voting rights for the election of directors. As a result, the holders of a majority of the voting power represented at a shareholders meeting have the power to elect our directors, except any founder director and subject to the special approval requirements for external directors under the Israeli Companies Law described under “Management—External Directors.”

Under our amended and restated articles of association, which will become effective immediately prior to the completion of this offering, the number of directors on our board of directors must be no less than six and no more than 10, including any external directors required to be appointed under the Israeli Companies Law and any founder director. The minimum and maximum number of directors may be changed, at any time and from time to time, by a special vote of the holders of at least 2/3 of our outstanding shares.

Other than external directors, for whom special election requirements apply under the Israeli Companies Law, and any founder director, the vote required to appoint a director is a simple majority vote. In addition, under our amended and restated articles of association, our board of directors may elect new directors to fill vacancies (whether such vacancy is due to a director no longer serving or due to the number of directors serving being less than the maximum required in our amended and restated articles of association), provided that the total number of directors shall not, at any time, exceed 10 directors and provided that our board of directors may not elect external directors or any founder director. Our amended and restated articles of association provide that the term of a director appointed by our board of directors to fill any vacancy will be for the remaining term of office of the director(s) whose office(s) have been vacated. Furthermore, under our amended and restated articles of association, our directors, other than external directors and any founder director, are divided into three classes with staggered three-year terms. Each class of directors consists, as nearly as possible, of 1/3 of the total number of directors constituting the entire board of directors (other than the external directors and any founder director). For a more detailed description on the composition of our board of election procedures of our directors, other than our external directors, see “Management—Board of Directors and Officers.”

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External directors are elected for an initial term of three years, may be elected for additional three-year terms , and may be removed from office pursuant to the terms of the Israeli Companies Law. For further information on the election and removal of external directors, see “Management—External Directors.”

Dividend and Liquidation Rights

We have never declared or paid any cash dividends on our ordinary shares. We may declare a dividend to be paid to the holders of our ordinary shares in proportion to their respective shareholdings. See above under “Dividend Policy” for more information with respect to the requirements under Israeli law for the declaration and payment of dividends to our shareholders.

In the event of our liquidation, after satisfaction of liabilities to creditors, our assets will be distributed to the holders of our ordinary shares in proportion to their shareholdings. This right, as well as the right to receive dividends, may be affected by the grant of preferential dividend or distribution rights to the holders of a class of shares with preferential rights that may be authorized in the future.

Exchange Controls

There are currently no Israeli currency control restrictions on remittances of dividends on our ordinary shares, proceeds from the sale of the shares or interest or other payments to non-residents of Israel, except for shareholders who are subjects of certain countries that are, or have been, in a state of war with Israel at such time.

Shareholder Meetings

Under Israeli law, we are required to hold an annual general meeting of our shareholders once every calendar year that must be held no later than 15 months after the date of the previous annual general meeting. All general meetings other than the annual meeting of shareholders are referred to in our amended and restated articles of association as special meetings. Our board of directors may call special meetings whenever it sees fit, at such time and place, within or outside of Israel, as it may determine. In addition, the Israeli Companies Law provides that our board of directors is required to convene a special general meeting upon the written request of (i) any two of our directors or one-quarter of the members of our board of directors or (ii) one or more shareholders holding, in the aggregate, either (a) 5% or more of our outstanding issued shares and 1% or more of our outstanding voting power or (b) 5% or more of our outstanding voting power.

Under Israeli law, one or more shareholders holding at least 1% of the voting rights at the general meeting may request that the board of directors include a matter in the agenda of a general meeting to be convened in the future, such as nominating a director candidate, provided that it is appropriate to discuss such a matter at the general meeting. Our articles of association contain procedural guidelines and disclosure items with respect to the submission of shareholder proposals for shareholders meetings.

Subject to the provisions of the Israeli Companies Law and the regulations promulgated thereunder, shareholders entitled to participate and vote at general meetings are the shareholders of record on a date to be decided by the board of directors, which may be between four and 40 days prior to the date of the meeting. Furthermore, the Israeli Companies Law requires that resolutions regarding, among other things, the following matters must be passed at a general meeting of our shareholders:


•	amendments to our amended and restated articles of association;


•	appointment or termination of our auditors;


•	election of directors, including external directors (unless otherwise determined in our amended and restated articles of association);


•	approval of certain related party transactions;


•	increases or reductions of our authorized share capital;

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•	a merger; and


•	the exercise of our board of directors’ powers by a general meeting, if our board of directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management.

Under our amended and restated articles of association, we are not required to give notice to our registered shareholders pursuant to the Israeli Companies Law, unless otherwise required by law. The Israeli Companies Law requires that a notice of any annual general meeting or special general meeting be provided to shareholders at least 21 days prior to the meeting and if the agenda of the meeting includes the appointment or removal of directors, the approval of transactions with office holders or interested or related parties, or an approval of a merger, or as otherwise required under applicable law, notice must be provided at least 35 days prior to the meeting. Under the Israeli Companies Law, shareholders of a public company are not permitted to take action by written consent in lieu of a meeting. Our amended and restated articles of association provide that a notice of general meeting shall be published by us on Form 6-K at a date prior to the meeting as required by law.

Voting Rights

Quorum Requirements

Pursuant to our amended and restated articles of association, holders of our ordinary shares have one vote for each ordinary share held on all matters submitted to a vote before the shareholders at a general meeting. Under our amended and restated articles of association, the quorum required for general meetings of shareholders must consist of at least two shareholders present in person or by proxy (including by voting deed) holding 1/3 or more of our voting rights. A meeting adjourned for lack of a quorum will generally be adjourned to the same day of the following week at the same time and place, or to such other day, time or place as indicated by our board of directors if so specified in the notice of the meeting. At the reconvened meeting, any number of shareholders present in person or by proxy shall constitute a lawful quorum.

Vote Requirements

Our amended and restated articles of association provide that all resolutions of our shareholders require a simple majority vote, unless otherwise required by the Israeli Companies Law or by our amended and restated articles of association.

Our amended and restated articles of association provide that all resolutions of our board of directors require a simple majority vote of the directors present and voting at such meeting, unless otherwise required by the Israeli Companies Law or by our amended and restated articles of association. Pursuant to our amended and restated articles of association, in the event the vote is tied, the c hairman of the board of directors will have a casting vote.

Pursuant to our amended and restated articles of association, an amendment to our amended and restated articles of association regarding any change of the composition or election procedures of our directors will require a special majority vote (66 2∕3%). In addition, any change to the rights and privileges of the holders of any class of our shares requires a simple majority of the class so affected (or such other percentage of the relevant class that may be set forth in the governing documents relevant to such class), in addition to the simple majority vote of all classes of shares voting together as a single class at a shareholder meeting.

Under the Israeli Companies Law, each of (i) the approval of an extraordinary transaction with a controlling shareholder and (ii) the terms of employment or other engagement of the controlling shareholder of the company or such controlling shareholder’s relative (even if not extraordinary) requires the approval described above under “Management—Fiduciary Duties and Approval of Specified Related Party Transactions and Compensation under Israeli Law—Disclosure of Personal Interests of a Controlling Shareholder and Approval of Transactions.” Certain transactions with respect to remuneration of our office holders and directors require further approvals described above under “Management—

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Fiduciary Duties and Approval of Specified Related Party Transactions and Compensation under Israeli Law—Compensation of Directors and Executive Officers.” Another exception to the simple majority vote requirement is a resolution for the voluntary winding up, or an approval of a scheme of arrangement or reorganization, of the company pursuant to Section 350 of the Israeli Companies Law, which requires the approval of holders of 75% of the voting rights represented at the meeting, in person or by proxy and voting on the resolution.

Access to Corporate Records

Under the Israeli Companies Law, shareholders are provided access to: minutes of our general meetings; our shareholders register and material shareholders register, our amended and restated articles of association, our financial statements and any document that we are required by law to file publicly with the Israeli Companies Registrar or the Israel Securities Authority. In addition, shareholders may request to be provided with any document related to an action or transaction requiring shareholder approval under the related party transaction provisions of the Israeli Companies Law. We may deny this request if we believe it has not been made in good faith or if such denial is necessary to protect our interest or protect a trade secret or patent.

Modification of Class Rights

Under the Israeli Companies Law and our amended and restated articles of association, the rights attached to any class of share, such as voting, liquidation and dividend rights, may be amended by adoption of a resolution by the holders of a majority of the shares of that class present at a separate class meeting, or otherwise in accordance with the rights attached to such class of shares, in addition to the simple majority vote of all classes of shares voting together as a single class at a shareholder meeting, as set forth in our amended and restated articles of association.

Registration Rights

In connection with this offering, we intend to enter into an amended and restated investors’ rights agreement that will entitle certain of our shareholders to certain registration rights following the closing of this offering. For a discussion of such rights, see “Certain Relationships and Related Party Transactions—Agreements with Related Parties—Registration Rights.”

Acquisitions under Israeli Law

Full Tender Offer. A person wishing to acquire shares of an Israeli public company and who would as a result hold over 90% of the target company’s issued and outstanding share capital is required by the Israeli Companies Law to make a tender offer to all of the company’s shareholders for the purchase of all of the issued and outstanding shares of the company. A person wishing to acquire shares of a public Israeli company and who would as a result hold over 90% of the issued and outstanding share capital of a certain class of shares is required to make a tender offer to all of the shareholders who hold shares of the relevant class for the purchase of all of the issued and outstanding shares of that class. If the shareholders who do not accept the offer hold less than 5% of the issued and outstanding share capital of the company or of the applicable class, and more than half of the shareholders who do not have a personal interest in the offer accept the offer, all of the shares that the acquirer offered to purchase will be transferred to the acquirer by operation of law. However, a tender offer will also be accepted if the shareholders who do not accept the offer hold less than 2% of the issued and outstanding share capital of the company or of the applicable class of shares.

Upon a successful completion of such a full tender offer, any shareholder that was an offeree in such tender offer, whether such shareholder accepted the tender offer or not, may, within six months from the date of acceptance of the tender offer, petition an Israeli court to determine whether the tender offer was for less than fair value and that the fair value should be paid as determined by the court. However, under certain conditions, the offeror may include in the terms of the tender offer that an offeree who accepted the offer will not be entitled to petition the Israeli court as described above.

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If (a) the shareholders who did not respond or accept the tender offer hold at least 5% of the issued and outstanding share capital of the company or of the applicable class or the shareholders who accept the offer constitute less than a majority of the offerees that do not have a personal interest in the acceptance of the tender offer or (b) the shareholders who did not accept the tender offer hold 2% or more of the issued and outstanding share capital of the company (or of the applicable class), the acquirer may not acquire shares of the company that will increase its holdings to more than 90% of the company’s issued and outstanding share capital or of the applicable class from shareholders who accepted the tender offer.

Special Tender Offer . The Israeli Companies Law provides that an acquisition of shares of an Israeli public company must be made by means of a special tender offer if as a result of the acquisition the purchaser would become a holder of 25% or more of the voting rights in the company. Similarly, the Israeli Companies Law provides that an acquisition of shares in a public company must be made by means of a special tender offer if as a result of the acquisition the purchaser would become a holder of more than 45% of the voting rights in the company. These requirements do not apply if, in general, the acquisition (1) was made in a private placement that received shareholder approval, (2) was from a 25% or greater shareholder of the company which resulted in the acquirer becoming a 25% or greater shareholder of the company, or (3) was from a 45% or greater shareholder of the company which resulted in the acquirer becoming a 45% or greater shareholder of the company.

A special tender offer must be extended to all shareholders of a company but the offeror is not required to purchase shares representing more than 5% of the voting power attached to the company’s outstanding shares, regardless of how many shares are tendered by shareholders. A special tender offer may be consummated only if (i) at least 5% of the voting power attached to the company’s outstanding shares will be acquired by the offeror and (ii) the number of shares tendered in the offer exceeds the number of shares whose holders objected to the offer (excluding the purchaser and its controlling shareholders, holders of 25% or more of the voting rights in the company or any person having a personal interest in the acceptance of the tender offer or any other person acting on their behalf, including the relatives and entities under such person’s control). If a special tender offer is accepted, then the purchaser or any person or entity controlling it or under common control with the purchaser or such controlling person or entity may not make a subsequent tender offer for the purchase of shares of the target company and may not enter into a merger with the target company for a period of one year from the date of the offer, unless the purchaser or such person or entity undertook to effect such an offer or merger in the initial special tender offer.

Merger . The Israeli Companies Law permits merger transactions if approved by each party’s board of directors and, unless certain requirements described under the Israeli Companies Law are met, by a majority vote of each party’s shares, and, in the case of the target company, a majority vote of each class of its shares, voted on the proposed merger at a shareholders meeting.

For purposes of the shareholder vote, unless a court rules otherwise, the merger will not be deemed approved if a majority of the votes of shares represented at the shareholders meeting that are held by parties other than the other party to the merger, or by any person (or group of persons acting in concert) who holds (or hold, as the case may be) 25% or more of the voting rights or the right to appoint 25% or more of the directors of the other party, vote against the merger. If, however, the merger involves a merger with a company’s own controlling shareholder or if the controlling shareholder has a personal interest in the merger, then the merger is instead subject to the same special majority approval that governs all extraordinary transactions with controlling shareholders. See “Management—Fiduciary Duties and Approval of Specified Related Party Transactions and Compensation under Israeli Law—Disclosure of Personal Interests of a Controlling Shareholder and Approval of Transactions.”

If the transaction would have been approved by the shareholders of a merging company but for the separate approval of each class or the exclusion of the votes of certain shareholders as provided above, a court may still approve the merger upon the request of holders of at least 25% of the voting rights of a company, if the court holds that the merger is fair and reasonable, taking into account the value to the parties to the merger and the consideration offered to the shareholders of the company.

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Upon the request of a creditor of either party to the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that, as a result of the merger, the surviving company will be unable to satisfy the obligations of the merging entities, and may further give instructions to secure the rights of creditors.

In addition, a merger may not be consummated unless at least 50 days have passed from the date on which a proposal for approval of the merger was filed by each party with the Israeli Registrar of Companies and at least 30 days have passed from the date on which the merger was approved by the shareholders of each party.

Israeli tax law treats some acquisitions, such as share-for-share exchanges between an Israeli company and a foreign company, less favorably than U.S. tax laws. For example, Israeli tax law may, under certain circumstances, subject a shareholder who exchanges his ordinary shares for shares in another corporation to taxation prior to the sale of the shares received in such share-for-share swap.

Anti-Takeover Measures under Israeli Law

The Israeli Companies Law allows us to create and issue shares having rights different from those attached to our ordinary shares, including shares providing certain preferred rights with respect to voting, distributions or other matters and shares having preemptive rights. As of the closing of this offering, no preferred shares will be authorized under our amended and restated articles of association. In the future, if we do authorize, create and issue a specific class of preferred shares, such class of shares, depending on the specific rights that may be attached to it, may have the ability to frustrate or prevent a takeover or otherwise prevent our shareholders from realizing a potential premium over the market value of their ordinary shares. The authorization and designation of a class of preferred shares will require an amendment to our amended and restated articles of association, which requires the prior approval of the holders of a majority of the voting power attaching to our issued and outstanding shares at a general meeting. The convening of the meeting, the shareholders entitled to participate and the majority vote required to be obtained at such a meeting will be subject to the requirements set forth in the Israeli Companies Law as described above in “—Voting Rights.”

Borrowing Powers

Pursuant to the Israeli Companies Law and our amended and restated articles of association, our board of directors may exercise all powers and take all actions that are not required under law or under our amended and restated articles of association to be exercised or taken by our shareholders, including the power to borrow money for company purposes.

Changes in Capital

Our amended and restated articles of association enable us to increase or reduce our share capital. Any such changes are subject to the provisions of the Israeli Companies Law and must be approved by a resolution duly adopted by our shareholders at a general meeting. In addition, transactions that have the effect of reducing capital, such as the declaration and payment of dividends in the absence of sufficient retained earnings or profits, require the approval of both our board of directors and an Israeli court.

Establishment

We were incorporated under the laws of the State of Israel on January 2, 2005. We are registered with the Israeli Registrar of Companies.

Transfer Agent and Registrar

The transfer agent and registrar for our ordinary shares is American Stock Transfer & Trust Company, LLC. Its address is 6201 15th Avenue, Brooklyn, New York 11219, and its telephone number is +1 (800) 937-5449.

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Listing

We have applied to have our ordinary shares listed on the NYSE under the symbol “TUFN.”

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our ordinary shares. Future sales of substantial amounts of ordinary shares, including shares issued upon the exercise of outstanding options, in the public market after this offering, or the possibility of these sales occurring, could adversely affect the prevailing market price for our ordinary shares or impair our ability to raise equity capital.

Upon completion of this offering, we will have an aggregate of ordinary shares outstanding. Of these shares, the shares sold in this offering will be freely tradeable without restriction or further registration under the Securities Act, unless purchased by “affiliates” as that term is defined under Rule 144 of the Securities Act, who may sell only the volume of shares described below and whose sales would be subject to additional restrictions described below. The remaining shares, representing of our outstanding shares will be held by our existing shareholders. These shares will be “restricted securities” as that phrase is defined in Rule 144 under the Securities Act. Subject to certain contractual restrictions, including the lock-up agreements described below, holders of restricted shares will be entitled to sell those shares in the public market pursuant to an effective registration statement under the Securities Act or if they qualify for an exemption from registration under Rule 144. Sales of these shares in the public market after the restrictions under the lock-up agreements lapse, or the perception that those sales may occur, could cause the prevailing market price to decrease or to be lower than it might be in the absence of those sales or perceptions.

Lock-up Agreements

We, our directors and executive officers and substantially all of our shareholders have agreed not to offer, sell, agree to sell, directly or indirectly, or otherwise dispose of any ordinary shares or any securities convertible into or exchangeable for ordinary shares except for the ordinary shares offered in this offering without the prior written consent of J.P. Morgan Securities LLC for a period of 180 days after the date of this prospectus.

Eligibility of Restricted Shares for Sale in the Public Market

The ordinary shares that are not being sold in this offering, but which will be outstanding at the time this offering is complete, will be eligible for sale into the public market, under the provisions of Rule 144 commencing after the expiration of the restrictions under the lock-up agreements, subject to volume restrictions discussed below under “—Rule 144.”

Rule 144

In general, under Rule 144 under the Securities Act, a person (or persons whose shares are aggregated) who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale, and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months (including any period of consecutive ownership of preceding non-affiliated holders) would be entitled to sell those shares, subject only to the availability of current public information about us. A non-affiliated person who has beneficially owned restricted securities within the meaning of Rule 144 for at least one year would be entitled to sell those shares without regard to the provisions of Rule 144.

A person (or persons whose shares are aggregated) who is deemed to be an affiliate of ours and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months would be entitled to sell within any three-month period a number of shares that does not exceed the greater of 1% of the then outstanding shares of our ordinary shares or the average weekly trading volume of our ordinary shares on the NYSE during the four calendar weeks preceding such sale. Such sales are also subject to certain manner of sale provisions, notice requirements and the availability of current public information about us.

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Options

Following the completion of this offering, we intend to file a registration statement on Form S-8 under the Securities Act to register ordinary shares reserved for issuance under our equity incentive plans. The registration statement on Form S-8 will become effective automatically upon filing.

Ordinary shares issued upon exercise of a share option and registered under the Form S-8 registration statement will, subject to vesting provisions, lock-up agreements with the underwriters and Rule 144 volume limitations applicable to our affiliates, be available for sale in the open market immediately after the 180-day lock-up agreements expire.

Registration Rights

Following the completion of this offering, the holders of up to ordinary shares are entitled to request that we register their ordinary shares under the Securities Act, subject to cutback for marketing reasons and certain other conditions. These shareholders are also entitled to “piggyback” registration rights, which are also subject to cutback for marketing reasons and certain other conditions. Registration of such shares under the Securities Act would result in such shares becoming freely tradable without restriction under the Securities Act, except for shares purchased by affiliates, immediately upon the effectiveness of such registration. See “Certain Relationships and Related Party Transactions—Registration Rights.” Any sales of securities by these shareholders could have a material adverse effect on the trading price of our ordinary shares.

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TAXATION AND ISRAELI GOVERNMENT PROGRAMS APPLICABLE TO OUR COMPANY

The following is a brief summary of the material Israeli tax laws applicable to us, and certain Israeli Government programs. Some parts of this discussion are based on new tax legislation which has not been subject to judicial or administrative interpretation. The discussion should not be construed as legal or professional tax advice and does not cover all possible tax considerations. You should consult your own tax advisor concerning the tax consequences of your particular situation, as well as any tax consequences that may arise under the laws of any state, local, foreign or other taxing jurisdiction.

General Corporate Tax Structure in Israel

Israeli resident companies are generally subject to corporate tax, currently at the rate of 23% (in 2017 the corporate tax rate was 24%). However, the effective tax rate payable by a company that derives income from a Benefited Enterprise or a Preferred Enterprise (as discussed below) may be considerably less.

Capital gains derived by an “Israeli resident company” are subject to tax at the prevailing corporate tax rate. Under Israeli tax legislation, a corporation will be considered as an “Israeli resident company” if it meets one of the following: (i) it was incorporated in Israel or (ii) the control and management of its business are exercised in Israel.

Law for the Encouragement of Industry (Taxes), 5729-1969

The Law for the Encouragement of Industry (Taxes), 5729-1969, the Industry Encouragement Law, provides several tax benefits for “Industrial Companies.”

The Industry Encouragement Law defines an “Industrial Company” as a company resident in Israel and which was incorporated in Israel of which 90% or more of its income in any tax year, other than income from defense loans, is derived from an “Industrial Enterprise” owned by it and which is located in Israel. An “Industrial Enterprise” is defined as an enterprise whose principal activity in a given tax year is industrial production.

The following corporate tax benefits, among others, are available to Industrial Companies:


•	amortization over an eight-year period of the cost of purchased know-how and patents and rights to use a patent and know-how which are used for the development or advancement of the Industrial Enterprise;


•	under limited conditions, an election to file consolidated tax returns with related Israeli Industrial Companies; and


•	expenses related to a public offering are deductible in equal amounts over three years.

Although as of the date of this prospectus, we do not have industrial production activities, we may qualify as an Industrial Company in the future and may be eligible for the benefits described above.

Tax Benefits and Grants for Research and Development

Israeli tax law allows, under certain conditions, a tax deduction for expenditures, including capital expenditures, for the year in which they are incurred. Expenditures are deemed related to scientific research and development projects, if:


•	the expenditures are approved by the relevant Israeli government ministry, determined by the field of research;


•	the research and development must be for the promotion of the company; and

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•	the research and development is carried out by or on behalf of the company seeking such tax deduction.

The amount of such deductible expenses is reduced by the sum of any funds received through government grants for the financing of such scientific research and development projects. No deduction under these research and development deduction rules is allowed if such deduction is related to an expense invested in an asset depreciable under the general depreciation rules of the Israeli Tax Ordinance. Expenditures not so approved are deductible in equal amounts over three years.

From time to time, we may apply to the Innovation Authority for approval to allow a tax deduction for all research and development expenses during the year incurred. There can be no assurance that such application will be accepted.

Law for the Encouragement of Capital Investments, 5719-1959

The Law for the Encouragement of Capital Investments, 5719-1959, or the Investment Law, provides certain incentives for capital investments in production facilities (or other eligible assets) by “Industrial Enterprises” (as defined under the Investment Law).

Tax Benefits Prior to the 2005 Amendment

An investment program that is implemented in accordance with the provisions of the Investment Law prior to the 2005 Amendment, referred to as an “Approved Enterprise,” is entitled to certain benefits. A company that wished to receive benefits as an Approved Enterprise must have received approval from the Investment Center of the Israeli Ministry of Economy and Industry, or the Investment Center. Each certificate of approval for an Approved Enterprise relates to a specific investment program in the Approved Enterprise, delineated both by the financial scope of the investment and by the physical characteristics of the facility or the asset.

In general, an Approved Enterprise is entitled to receive a grant from the Government of Israel or an alternative package of tax benefits, known as the alternative benefits track. The tax benefits from any certificate of approval relate only to taxable profits attributable to the specific Approved Enterprise. Income derived from activity that is not integral to the activity of the Approved Enterprise does not enjoy tax benefits.

In addition, a company that has an Approved Enterprise program is eligible for further tax benefits if it qualifies as a Foreign Investors’ Company, or FIC, which is a company with a level of foreign investment, as defined in the Investment Law, of more than 25%. The level of foreign investment is measured as the percentage of rights in the company (in terms of shares, rights to profits, voting and appointment of directors), and of combined share and loan capital, that are owned, directly or indirectly, by persons who are not residents of Israel. The determination as to whether a company qualifies as an FIC is made on an annual basis.

We are currently not entitled to tax benefits for Approved Enterprise.

Tax Benefits Subsequent to the 2005 Amendment

The 2005 Amendment applies to new investment programs commencing after 2004, but does not apply to investment programs approved prior to April 1, 2005. The 2005 Amendment provides that terms and benefits included in any certificate of approval that was granted before the 2005 Amendment became effective (April 1, 2005) will remain subject to the provisions of the Investment Law as in effect on the date of such approval. Pursuant to the 2005 Amendment, the Investment Center will continue to grant Approved Enterprise status to qualifying investments. The 2005 Amendment, however, limits the scope of enterprises that may be approved by the Investment Center by setting criteria for the approval of a facility as an Approved Enterprise, such as provisions generally requiring that at least 25% of the Approved Enterprise’s income be derived from exports.

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The 2005 Amendment provides that Approved Enterprise status will only be necessary for receiving cash grants. As a result, it was no longer necessary for a company to obtain Approved Enterprise status in order to receive the tax benefits previously available under the alternative benefits track. Rather, a company may claim the tax benefits offered by the Investment Law directly in its tax returns, provided that its facilities meet the criteria for tax benefits set forth in the amendment. Companies are entitled to approach the Israeli Tax Authority for a pre-ruling regarding their eligibility for benefits under the Investment Law, as amended.

In order to receive the tax benefits, the 2005 Amendment states that a company must make an investment which meets all of the conditions, including exceeding a minimum investment amount specified in the Investment Law. Such investment allows a company to receive “Benefited Enterprise” status, and may be made over a period of no more than three years from the end of the year in which the company requested to have the tax benefits apply to its Benefited Enterprise. Where the company requests to apply the tax benefits to an expansion of existing facilities, only the expansion will be considered to be a Benefited Enterprise and the company’s effective tax rate will be the weighted average of the applicable rates. In this case, the minimum investment required in order to qualify as a Benefited Enterprise is required to exceed a certain percentage of the value of the company’s production assets before the expansion.

The extent of the tax benefits available under the 2005 Amendment to qualifying income of a Benefited Enterprise depend on, among other things, the geographic location in Israel of the Benefited Enterprise. The location will also determine the period for which tax benefits are available. Such tax benefits include an exemption from corporate tax on undistributed income for a period of between two to ten years, depending on the geographic location of the Benefited Enterprise in Israel, and a reduced corporate tax rate of between 10% and the applicable corporate tax for the remainder of the benefits period, depending on the level of foreign investment in the company in each year. A company qualifying for tax benefits under the 2005 Amendment which pays a dividend out of income derived by its Benefited Enterprise during the tax exemption period will be subject to corporate tax in respect of the gross amount of the dividend at the otherwise applicable corporate tax rate or a lower rate in the case of a qualified FIC which is at least 49% owned by non-Israeli residents. Dividends paid out of income attributed to a Benefited Enterprise are generally subject to withholding tax at source at the rate of 15% or such lower rate as may be provided in an applicable tax treaty.

The benefits available to a Benefited Enterprise are subject to the fulfillment of conditions stipulated in the Investment Law and its regulations. If a company does not meet these conditions, it may be required to refund the amount of tax benefits, as adjusted by the Israeli consumer price index, and interest, or other monetary penalties.

We applied for tax benefits as a “Benefited Enterprise” with 2009 and 2011 as the “Years of Election.” We may be entitled to tax benefits under this regime in respect of the 2011 “Year of Election” once we are profitable for tax purposes and subject to the fulfillment of all the relevant conditions. If we do not meet these conditions, the tax benefits may not be applicable which would result in adverse tax consequences to us. Alternatively, and subject to the fulfillment of all the relevant conditions, we may elect in the future to irrevocably waive the tax benefits available for Benefited Enterprise and claim the tax benefits available to Preferred Enterprise under the 2011 Amendment (as detailed below).

Tax Benefits for a Preferred Enterprise

The Investment Law was significantly amended as of January 1, 2011, or the 2011 Amendment. The 2011 Amendment introduced new benefits to replace those granted in accordance with the provisions of the Investment Law in effect prior to the 2011 Amendment.

The 2011 Amendment introduced new tax benefits for income generated by a “Preferred Company” through its “Preferred Enterprise,” in accordance with the definition of such term in the Investment Law, which generally means that a “Preferred Company” is an industrial company meeting certain conditions (including a minimum threshold of 25% export).

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A Preferred Company is entitled to a reduced corporate tax rate of 16% (prior to 2014, the tax rates were 15% for 2011 and 2012 and 12.5% for 2013) with respect to its income derived from its Preferred Enterprise, unless the Preferred Enterprise is located in development area A, in which case the rate will be 7.5%, (prior to 2017, the tax rates were 10% for 2011 and 2012, 7% for 2013 and 9% for 2014 through 2016). Our operations are currently not located in development area A.

Dividends paid out of income attributed to a Preferred Enterprise are generally subject to withholding tax at the source at the rate of 20%, or such lower rate as may be provided in an applicable tax treaty (subject to the receipt in advance of a valid certificate from the Israeli Tax Authority allowing for a reduced tax rate). However, if such dividends are paid to an Israeli company, no tax is required to be withheld (although, if the funds are subsequently distributed to individuals or to non-Israeli residents (individuals and corporations), the withholding tax would apply).

We are currently not entitled to tax benefits for a Preferred Enterprise.

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U.S. AND ISRAELI TAX CONSEQUENCES FOR OUR SHAREHOLDERS

The following description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership and disposition of our ordinary shares. This section contains a discussion of material U.S. and Israeli tax consequences concerning the ownership and disposition of our ordinary shares purchased by investors in this offering. This summary does not discuss all the aspects of U.S. and Israeli tax law that may be relevant to a particular investor in light of his or her personal investment circumstances or to some types of investors subject to special treatment under U.S. or Israeli law. Examples of this kind of investor include traders in securities or persons that own, directly or indirectly, 10% or more of our outstanding voting capital, all of whom are subject to special tax regimes not covered in this discussion.

SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE ISRAELI OR OTHER TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR ORDINARY SHARES, INCLUDING, IN PARTICULAR, THE EFFECT OF ANY FOREIGN, STATE OR LOCAL TAXES.

Taxation of Our Shareholders

Capital Gains

Capital gain tax is imposed on the disposition of capital assets by an Israeli resident, and on the disposition of such assets by a non-Israeli resident if those assets are either (i) located in Israel, (ii) are shares or a right to a share in an Israeli resident corporation or (iii) represent, directly or indirectly, rights to assets located in Israel. The Israeli Tax Ordinance distinguishes between “Real Gain” and the “Inflationary Surplus.”

Real Gain is the excess of the total capital gain over Inflationary Surplus computed generally on the basis of the increase in the Israeli consumer price index between the date of purchase and the date of disposition. Inflationary Surplus is not currently subject to tax in Israel.

Real Gain accrued by individuals on the sale of our ordinary shares will be taxed at the rate of 25%. However, if the individual shareholder is a “Significant Shareholder” (i.e., a person who holds, directly or indirectly, alone or together with another, 10% or more of one of the Israeli resident company’s means of control at the time of the sale or at any time during the preceding 12 month period), such gain will be taxed at a rate of 30%. Furthermore, where an individual claimed real interest expenses and linkage differences on securities, the capital gain on the sale of the securities will be liable to a rate of 30%, this, until the determination of provisions and conditions for the deduction of real interest expenses and linkage differences under section 101A(a)(9) and 101A(b) of the Israeli Tax Ordinance.

Real Gain derived by corporations will be generally subject to the regular corporate tax rate (23% in 2018 and thereafter). Individual shareholders whose income from the sale of securities is considered as business income are taxed at the marginal tax rates applicable to business income (up to 47% in 2018, not including the Excess Tax). Either the purchaser, the Israeli stockbrokers or the Israeli financial institution through which the shares are held, is obliged to withhold tax in the amount of consideration paid upon the sale of securities (or the Real Capital Gain realized on the sale, if known) at the Israeli corporate tax rate (23% in 2018 and thereafter) or 25% in case the seller is an individual. The individual may provide an approval from the Israel Tax Authority for a reduced tax withholding rate, according to the applicable rate.

Notwithstanding the foregoing, capital gain derived from the sale of our ordinary shares by a non-Israeli shareholder may be exempt under the Israeli Tax Ordinance from Israeli capital gain tax provided that the seller does not have a permanent establishment in Israel to which the derived capital gain is attributed. However, non-Israeli corporations will not be entitled to the foregoing exemption if more than 25% of its

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means of control are held, directly and indirectly, by Israeli residents, or Israeli residents are entitled to 25% or more of the revenues or profits of the corporation, directly or indirectly. In addition, such exemption would not be available to a person whose gains from selling or otherwise disposing of the securities are deemed to be business income.

In addition, the sale of shares may be exempt from Israeli capital gain tax under the provisions of an applicable tax treaty. For example, the U.S.-Israel Tax Treaty exempts U.S. residents from Israeli capital gain tax in connection with such sale, provided (i) the U.S. resident owned, directly or indirectly, less than 10% of an Israeli resident company’s voting power at any time within the 12-month period preceding such sale, (ii) the seller, being an individual, is present in Israel for a period or periods of less than 183 days during the taxable year and (iii) the capital gain from the sale was not derived through a permanent establishment of the U.S. resident in Israel.

In some instances where our shareholders may be liable for Israeli tax on the sale of their ordinary shares, the payment of the consideration may be subject to the withholding of Israeli tax at source at a rate of 25% if the seller is an individual and at the corporate tax rate (23% in 2018 and thereafter) if the seller is a corporation. Shareholders may be required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding at source at the time of sale.

Upon the sale of securities traded on a stock exchange a detailed return, including a computation of the tax due, must be filed and an advanced payment must be paid on January 31 and June 30 of every tax year in respect of sales of securities made within the previous six months. However, if all tax due was withheld at source according to applicable provisions of the Israeli Tax Ordinance and regulations promulgated thereunder, the aforementioned return need not be filed and no advance payment must be paid. Capital gain is also reportable on the annual income tax return.

Dividends

We have never paid cash dividends. A distribution of a dividend by our company from income attributed to a Benefited Enterprise will generally be subject to withholding tax in Israel at a rate of 15% unless a reduced tax rate is provided under an applicable tax treaty. A distribution of a dividend by our company from income attributed to a Preferred Enterprise will generally be subject to withholding tax in Israel at the following tax rates: Israeli resident individuals - 20%; Israeli resident companies - 0% for a Preferred Enterprise; Non-Israeli residents - 20%, subject to a reduced rate under the provisions of any applicable double tax treaty. A distribution of dividends from income, which is not attributed to a Benefited Enterprise or Preferred Enterprise to an Israeli resident individual, will generally be subject to withholding tax at a rate of 25%, or 30% if the dividend recipient is a “Significant Shareholder” (as defined above) at the time of distribution or at any time during the preceding 12-month period. If the recipient of the dividend is an Israeli resident corporation, such dividend will not be subject to Israeli tax provided the income from which such dividend is distributed was derived or accrued within Israel.

The Israeli Tax Ordinance provides that a non-Israeli resident (either individual or corporation) is generally subject to Israeli withholding tax on the receipt of dividends at the rate of 25% (30% if the dividends recipient is a “Significant Shareholder” (as defined above), at the time of distribution or at any time during the preceding 12-month period); such rates may be reduced under the provisions of an applicable double tax treaty. Under the U.S.-Israel Tax Treaty. Under the U.S.-Israel Tax Treaty, the following withholding rates will apply in respect of dividends distributed by an Israeli resident company to a U.S. resident: (i) if the U.S. resident is a corporation which holds during that portion of the taxable year which precedes the date of payment of the dividend and during the whole of its prior taxable year (if any), at least 10% of the outstanding shares of the voting share capital of the Israeli resident paying corporation and not more than 25% of the gross income of the Israeli resident paying corporation for such prior taxable year (if any) consists of certain type of interest or dividends, the rate is 12.5%, (ii) if both the conditions mentioned in clause (i) above are met and the dividend is paid from an Israeli resident company’s income which was entitled to a reduced tax rate applicable to an Approved Enterprise, the rate is 15% and (iii) in all other cases, the rate is 25%. The aforementioned rates under the U.S.-Israel Double Tax Treaty will not apply if the dividend income was derived through a permanent establishment of the U.S. resident in Israel.

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A non-Israeli resident who receives dividends from which tax was withheld is generally exempt from the obligation to file tax returns in Israel with respect to such income, provided that (i) such income was not generated from a business conducted in Israel by the taxpayer and (ii) the taxpayer has no other taxable sources of income in Israel with respect to which a tax return is required to be filed.

Dividends are generally subject to Israeli withholding tax at a rate of 25% so long as the shares are registered with a nominee company (whether or not the recipient is a “Significant Shareholder,” as defined above), unless relief is provided in a treaty between Israel and the shareholder’s country of residence and provided that a certificate from the Israel Tax Authority allowing for a reduced withholding tax rate is obtained in advance.

Excess Tax

Individuals who are subject to tax in Israel are also subject to an additional tax at a rate of 3% on annual income exceeding NIS 641,880 (for 2018 and thereafter), linked to the annual change in the Israeli consumer price index, including, but not limited to income derived from, dividends, interest and capital gains.

Foreign Exchange Regulations

Non-residents of Israel who hold our ordinary shares are able to receive any dividends, and any amounts payable upon the dissolution, liquidation and winding up of our affairs, repayable in non-Israeli currency at the rate of exchange prevailing at the time of conversion. However, Israeli income tax is generally required to have been paid or withheld on these amounts. In addition, the statutory framework for the potential imposition of currency exchange control has not been eliminated, and may be restored at any time by administrative action.

Estate and Gift Tax

Israeli law presently does not impose estate or gift taxes.

Certain U.S. Federal Income Tax Consequences

The following is a description of certain U.S. federal income tax consequences relating to the acquisition, ownership and disposition of our ordinary shares. This description addresses only the U.S. federal income tax consequences to holders that are initial purchasers of our ordinary shares pursuant to the offering and that will hold such ordinary shares as capital assets. This description does not address tax considerations applicable to holders that may be subject to special tax rules, including, without limitation:


•	banks, financial institutions or insurance companies;


•	real estate investment trusts, regulated investment companies or grantor trusts;


•	brokers, dealers or traders in securities, commodities or currencies;


•	tax‑exempt entities or organizations, including an “individual retirement account” or “Roth IRA” as defined in Section 408 or 408A of the Code, respectively;


•	certain former citizens or long‑term residents of the United States;


•	persons that received our shares as compensation for the performance of services;


•	persons that will hold our shares as part of a “hedging,” “integrated” or “conversion” transaction or as a position in a “straddle” for U.S. federal income tax purposes;


•	partnerships (including entities classified as partnerships for U.S. federal income tax purposes) or other pass-through entities, or holders that will hold our shares through such an entity;


•	S corporations;

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•	holders that acquire ordinary shares as a result of holding or owning our preferred shares;


•	holders whose “functional currency” is not the U.S. dollar; or


•	holders that own directly, indirectly or constructively 10% or more of the voting power or value of our shares.

Moreover, this description does not address the U.S. federal estate, gift or alternative minimum tax consequences, or any state, local or foreign tax consequences, of the acquisition, ownership and disposition of our ordinary shares.

This description is based on the Code, existing, proposed and temporary U.S. Treasury Regulations and judicial and administrative interpretations thereof, in each case as in effect and available on the date hereof. All of the foregoing is subject to change, which change could apply retroactively and could affect the tax consequences described below. There can be no assurances that the U.S. Internal Revenue Service, or the IRS, will not take a different position concerning the tax consequences of the acquisition, ownership and disposition of our ordinary shares or that such a position would not be sustained. Holders should consult their own tax advisors concerning the U.S. federal, state, local and foreign tax consequences of purchasing, owning and disposing of our ordinary shares in their particular circumstances.

For purposes of this description, a “U.S. Holder” is a beneficial owner of our ordinary shares that, for U.S. federal income tax purposes, is:


•	a citizen or resident of the United States;


•	a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any state thereof, including the District of Columbia;


•	an estate the income of which is subject to U.S. federal income taxation regardless of its source; or


•	a trust if such trust has validly elected to be treated as a U.S. person for U.S. federal income tax purposes or if (1) a court within the United States is able to exercise primary supervision over its administration and (2) one or more U.S. persons have the authority to control all of the substantial decisions of such trust.

A “Non-U.S. Holder” is a beneficial owner of our ordinary shares that is neither a U.S. Holder nor a partnership (or other entity treated as a partnership for U.S. federal income tax purposes).

If a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds our ordinary shares, the tax treatment of a partner in such partnership will generally depend on the status of the partner and the activities of the partnership. Such a partner or partnership should consult its tax advisor as to the particular U.S. federal income tax consequences of acquiring, owning and disposing of our ordinary shares in its particular circumstance.

You should consult your tax advisor with respect to the U.S. federal, state, local and foreign tax consequences of acquiring, owning and disposing of our ordinary shares.

Distributions

Subject to the discussion below under “Passive Foreign Investment Company Considerations,” if you are a U.S. Holder, the gross amount of any distribution made to you with respect to our ordinary shares before reduction for any Israeli taxes withheld therefrom, other than certain distributions, if any, of our ordinary shares distributed pro rata to all our shareholders, generally will be includible in your income as dividend income to the extent such distribution is paid out of our current or accumulated earnings and profits as determined under U.S. federal income tax principles. To the extent that the amount of any distribution exceeds our current and accumulated earnings and profits as determined under U.S. federal

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income tax principles, it will be treated first as a return of your adjusted tax basis in our ordinary shares and thereafter as either long-term or short-term capital gain depending upon whether the U.S. Holder has held our ordinary shares for more than one year as of the time such distribution is received. However, because we do not expect to maintain calculations of our earnings and profits under U.S. federal income tax principles, U.S. Holders should expect that the entire amount of any distribution generally will be reportable as dividend income. Subject to the discussion below under “Passive Foreign Investment Company Considerations,” non-corporate U.S. Holders may qualify for the preferential rates of taxation with respect to dividends on ordinary shares applicable to long-term capital gains (i.e., gains from the sale of capital assets held for more than one year), provided that certain conditions are met, including the absence of certain risk reduction transactions. In addition, some corporate U.S. Holders may be entitled to a dividends received deduction. However, such preferential rate of taxation shall not apply if we are a PFIC for the taxable year in which we pay a dividend, or if we were a PFIC for the preceding taxable year. Likewise, such dividends will not be eligible for the dividends received deduction generally allowed to corporate U.S. Holders.

Subject to certain conditions and limitations, Israeli tax withheld on dividends may be deducted from your taxable income or credited against your U.S. federal income tax liability. If you are a U.S. Holder, dividends paid to you with respect to our ordinary shares will generally be treated as foreign source income, which may be relevant in calculating your foreign tax credit limitation. However, for periods in which we are a “U.S.-owned foreign corporation,” a portion of dividends paid by us may be treated as U.S. source solely for purposes of the foreign tax credit. We would be treated as a U.S.-owned foreign corporation if 50% or more of the total value or total voting power of our shares are owned, directly, indirectly or constructively by U.S. persons. To the extent any portion of our dividends is treated as U.S. source income pursuant to this rule, the ability of a U.S. Holder to claim a foreign tax credit for any Israeli withholding taxes payable in respect of our dividends may be limited. A U.S. Holder entitled to benefits under the U.S.-Israel Tax Treaty may, however, elect to treat any dividends as foreign source income for foreign tax credit purposes if the dividend income is separated from other income items for purposes of calculating the U.S. Holder’s foreign tax credit. U.S. Holders should consult their own tax advisors about the impact of, and any exception available to, the special sourcing rule described in this paragraph, and the desirability of making, and the method of making, such an election.

The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends that we distribute generally should constitute “passive category income,” or, in the case of certain U.S. Holders, “general category income.” A foreign tax credit for foreign taxes imposed on distributions may be denied if you do not satisfy certain minimum holding period requirements. The rules relating to the determination of the foreign tax credit are complex, and you should consult your tax advisor to determine whether and to what extent you will be entitled to this credit.

Subject to the discussion below under “Backup Withholding Tax and Information Reporting Requirements,” if you are a Non-U.S. Holder, you generally will not be subject to U.S. federal income (or withholding) tax on dividends received by you on our ordinary shares, unless you conduct a trade or business in the United States and such income is effectively connected with that trade or business (or, if required by an applicable income tax treaty, the dividends are attributable to a permanent establishment or fixed base that such holder maintains in the United States).

Sale, Exchange or Other Taxable Disposition of Ordinary Shares

Subject to the discussion below under “Passive Foreign Investment Company Considerations,” if you are a U.S. Holder, you generally will recognize gain or loss on the sale, exchange or other taxable disposition of our ordinary shares equal to the difference between the amount realized on such sale, exchange or other taxable disposition and your adjusted tax basis in our ordinary shares, and such gain or loss will be capital gain or loss. If Israeli tax is imposed on the sale, exchange or other disposition of our ordinary shares, a U.S. Holder’s amount realized will include the gross amount of the proceeds before deduction of the Israeli tax. The adjusted tax basis in an ordinary share generally will be equal to the cost of such ordinary share. If you are a non‑corporate U.S. Holder, capital gain from the sale, exchange or other

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taxable disposition of ordinary shares is generally eligible for a preferential rate of taxation applicable to capital gains, provided that your holding period for such ordinary shares exceeds one year (i.e., such gain is long‑term capital gain). The deductibility of capital losses for U.S. federal income tax purposes is subject to limitations under the Code.

Any gain or loss that a U.S. Holder recognizes from the sale, exchange or other taxable disposition of our ordinary shares generally will be treated as U.S. source income or loss for foreign tax credit limitation purposes. Accordingly, because you may use foreign tax credits to offset only the portion of U.S. federal income tax liability that is attributed to foreign source income, you may be unable to claim a foreign tax credit with respect to the Israeli tax, if any, on gains from the sale, exchange or other taxable disposition of our ordinary shares. You should consult your tax advisor as to whether the Israeli tax on gains may be creditable against your U.S. federal income tax on foreign-source income from other sources.

Subject to the discussion below under “Backup Withholding Tax and Information Reporting Requirements,” if you are not a U.S. Holder, you generally will not be subject to U.S. federal income or withholding tax on any gain realized on the sale or exchange of our shares, unless:


•	such gain is effectively connected with your conduct of a trade or business in the United States;


•	or you are an individual and have been present in the United States for 183 days or more in the taxable year of such sale or exchange and certain other conditions are met.

Passive Foreign Investment Company Considerations

A non‑U.S. corporation will generally be classified as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes in any taxable year in which, after applying certain look‑through rules with respect to the income and assets of subsidiaries, either:


•	at least 75% of its gross income is “passive income”; or

•

at least 50% of the average quarterly value of its total gross assets (which, if it is a CFC for the year of the offering may be measured by the adjusted tax basis of its assets, and for subsequent years, assuming it is publicly traded, the total value of its assets may be measured in part by the market value of its ordinary shares, which is subject to change) is attributable to assets that produce passive income or are held for the production of passive income.

Passive income for this purpose generally includes, among other things, dividends, interest, royalties, rents and gains from commodities transactions and from the sale or exchange of property that gives rise to passive income. Assets that produce or are held for the production of passive income may include cash, even if held as working capital or raised in a public offering, marketable securities and other assets that may produce passive income. In determining whether a non-U.S. corporation is a PFIC, a proportionate share of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account.

Our status as a PFIC will depend on the nature and composition of our income and the nature, composition and value of our assets from time to time. The 50% passive asset test described above is generally based on the fair market value of each asset, with the value of goodwill and going concern value determined in large part by reference to the market value of our ordinary shares, which may be volatile. If we are a CFC and not publicly traded throughout the relevant taxable year, however, the test may be applied based on the adjusted tax bases of our assets. Based on our belief that we may be classified as a CFC in the current taxable year in which this offering occurs and certain estimates of the adjusted tax bases of our assets, we believe that we may be classified as a PFIC in the current taxable year ended December 31, 2019. This determination is, however, subject to uncertainty. Our status may also depend, for example, on how quickly we utilize the cash proceeds from this offering in our business. Moreover, because PFIC status is based on our income, assets, and activities for the entire taxable year, it is not possible to determine whether we will be characterized as a PFIC for the 2019 taxable year or any subsequent year until after the close of the relevant year. Accordingly, no assurances can be made

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regarding our PFIC status in one or more subsequent years, and our U.S. counsel expresses no opinion with respect to our PFIC status in the taxable year ended December 31, 2018 or 2019, and also expresses no opinion with respect to our predictions or past determinations regarding our PFIC status in the past or in the future. We will determine whether we were a PFIC or not for each taxable year and make such determination available to U.S. Holders.

If we are a PFIC in any taxable year during which a U.S. Holder owns ordinary shares, such U.S. Holder could be liable for additional taxes and interest charges upon (1) a distribution paid during a taxable year that is greater than 125% of the average annual distributions paid in the three preceding taxable years, or, if shorter, the U.S. Holder’s holding period for the ordinary shares, and (2) any gain recognized on a sale, exchange or other taxable disposition, including a pledge, of the ordinary shares, whether or not we continue to be a PFIC. In these circumstances, the tax will be determined by allocating such distribution or gain ratably over the U.S. Holder’s holding period for the ordinary shares. The amount allocated to the current taxable year (i.e., the year in which the distribution occurs or the gain is recognized) and any year prior to the first taxable year in which we are a PFIC will be taxed as ordinary income earned in the current taxable year. The amount allocated to other taxable years will be taxed at the highest marginal rates in effect for individuals or corporations, as applicable, to ordinary income for each such taxable year, and an interest charge, generally applicable to underpayments of tax, will be added to the tax. If we are a PFIC for any year during which a U.S. Holder holds the ordinary shares, we must generally continue to be treated as a PFIC by that holder for all succeeding years during which the U.S. Holder holds the ordinary shares, unless we cease to meet the requirements for PFIC status and the U.S. Holder makes a “deemed sale” election with respect to the ordinary shares. If such election is made, the U.S. Holder will be deemed to have sold the ordinary shares it holds at their fair market value on the last day of the last taxable year in which we qualified as a PFIC, and any gain from such deemed sale would be subject to the consequences described above. After the deemed sale election, the U.S. Holder’s ordinary shares with respect to which the deemed sale election was made will not be treated as shares in a PFIC, unless we subsequently again become a PFIC.

If we are a PFIC for any taxable year during which a U.S. Holder holds the ordinary shares and one of our non-U.S. subsidiaries is also a PFIC (i.e., a lower-tier PFIC), such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC and would be subject to the rules described above on certain distributions by the lower-tier PFIC and a disposition of shares of the lower-tier PFIC, even though such U.S. Holder would not receive the proceeds of those distributions or dispositions. Each U.S. Holder is advised to consult its tax advisors regarding the application of the PFIC rules to any of our subsidiaries.

The tax consequences that would apply if we were a PFIC would be different from those described above if a timely and valid “mark-to-market” election is made by a U.S. Holder for the ordinary shares held by such U.S. Holder. An electing U.S. Holder generally would take into account as ordinary income each year, the excess of the fair market value of the ordinary shares held at the end of the taxable year over the adjusted tax basis of such ordinary shares. The U.S. Holder would also take into account, as an ordinary loss each year, the excess of the adjusted tax basis of such ordinary shares over their fair market value at the end of the taxable year, but only to the extent of the excess of amounts previously included in income over ordinary losses deducted in prior years as a result of the mark-to-market election. The U.S. Holder’s tax basis in the ordinary shares would be adjusted to reflect any income or loss recognized as a result of the mark-to-market election. Any gain from a sale, exchange or other taxable disposition of the ordinary shares in any taxable year in which we are a PFIC would be treated as ordinary income and any loss from such sale, exchange or other taxable disposition would be treated first as ordinary loss (to the extent of any net mark-to-market gains previously included in income) and thereafter as capital loss. If, after having been a PFIC for a prior taxable year, we cease to be classified as a PFIC, the U.S. Holder would not be required to take into account any latent gain or loss in the manner described above and any gain or loss recognized on the sale or exchange of the ordinary shares would be classified as a capital gain or loss.

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A mark-to-market election is available to a U.S. Holder only for “marketable stock.” Generally, ordinary shares will be considered marketable stock if it is “regularly traded” on a “qualified exchange” within the meaning of applicable Treasury Regulations. A class of stock is regularly traded during any calendar year during which such class of stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. The ordinary shares will be marketable stock as long as they remain listed on a qualified exchange, such as the NYSE or Nasdaq, and are regularly traded. A mark-to-market election will not apply to the ordinary shares for any taxable year during which we are not a PFIC, but will remain in effect with respect to any subsequent taxable year in which we become a PFIC. Such election will not apply to any subsidiary that we own. Accordingly, a U.S. Holder may continue to be subject to the PFIC rules with respect to any lower-tier PFICs notwithstanding the U.S. Holder’s mark-to-market election for the ordinary shares.

The tax consequences that would apply if we were a PFIC would also be different from those described above if a U.S. Holder were able to make a valid “qualified electing fund,” or QEF, election.

If we are a PFIC, a U.S. Holder that makes a timely and valid QEF election for the first tax year in which the holding period of its shares begins generally will not be subject to the default PFIC rules discussed above with respect to its shares. Rather, a U.S. Holder that makes a timely and valid QEF election will be subject to U.S. federal income tax on such U.S. Holder’s pro rata share of our ordinary earnings and net capital gain, if any. A U.S. Holder that makes a QEF election will be subject to U.S. federal income tax on such amounts for each tax year in which the company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by the company. However, for any tax year in which the company is a PFIC and has no net income or gain, U.S. Holders that have made a QEF election would not have any income inclusions as a result of the QEF election. If a U.S. Holder that made a QEF election has an income inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporation, any such interest paid will be treated as “personal interest,” which is not deductible.

A U.S. Holder that makes a timely and effective QEF election with respect to the company generally (a) may receive a tax-free distribution from the company to the extent that such distribution represents “earnings and profits” of the company that were previously included in income by the U.S. Holder because of such QEF election and (b) will adjust such U.S. Holder’s tax basis in the shares to reflect the amount included in income or allowed as a tax-free distribution because of such QEF election. In addition, a U.S. Holder that makes a QEF election generally will recognize capital gain or loss on the sale or other taxable disposition of shares. A QEF election will be treated as “timely” if such QEF election is made for the first year in the U.S. Holder’s holding period for the shares in which the company was a PFIC. A U.S. Holder may generally make a timely QEF election by filing a completed IRS Form 8621, including a PFIC Annual Information Statement, with its U.S. federal income tax return for such year. A retroactive QEF election generally may be made only by filing a protective statement with such return and if certain other requirements are met or with the consent of the IRS. If a U.S. Holder owns PFIC stock indirectly through another PFIC, separate QEF elections must be made for the PFIC in which the U.S. Holder is a direct shareholder and the subsidiary PFIC for the QEF rules to apply to both PFICs.

A QEF election will apply to the tax year for which such QEF election is timely made and to all subsequent tax years, unless such QEF election is invalidated or terminated or the IRS consents to revocation of such QEF election. If a U.S. Holder makes a QEF election and, in a subsequent tax year, the company ceases to be a PFIC, the QEF election will remain in effect (although it will not be applicable) during those tax years in which the company is not a PFIC. Accordingly, if the company becomes a PFIC in another subsequent tax year, the QEF election will be effective and the U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which the company qualifies as a PFIC.

We will use commercially reasonable efforts to make available to U.S. Holders such information with respect to the company as is necessary for U.S. Holders to make QEF elections with respect to the company if we are classified as a PFIC. We may elect to provide such information on our website. Each

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U.S. Holder should consult its own tax advisors regarding the availability of, procedure for making, and consequences of a QEF election with respect to the company’s shares.

Each U.S. Holder who is a shareholder of a PFIC must file an annual information report on IRS Form 8621 containing such information as the U.S. Treasury Department may require. The failure to file IRS Form 8621 could result in the imposition of penalties and the extension of the statute of limitations with respect to U.S. federal income tax.

The U.S. federal income tax rules relating to PFICs are very complex. Prospective U.S. investors are strongly urged to consult their own tax advisors with respect to the impact of these rules on the purchase, ownership and disposition of our ordinary shares, the consequences to them of an investment in a PFIC, any elections available with respect to the ordinary shares and the IRS information reporting obligations with respect to the purchase, ownership and disposition of the ordinary shares.

Medicare Tax

Certain U.S. Holders that are individuals, estates or trusts are subject to a 3.8% tax on all or a portion of their “net investment income,” which may include all or a portion of their dividend income and net gains from the disposition of ordinary shares. Each U.S. Holder that is an individual, estate or trust is urged to consult its tax advisors regarding the applicability of the Medicare tax to its income and gains in respect of its investment in our ordinary shares.

Backup Withholding Tax and Information Reporting Requirements

U.S. backup withholding tax and information reporting requirements may apply to certain payments to certain holders of stock. Information reporting generally will apply to payments of dividends on, and to proceeds from the sale or redemption of, our ordinary shares made within the United States, or by a U.S. payor or U.S. middleman, to a holder of our ordinary shares, other than an exempt recipient (including a payee that is not a U.S. person that provides an appropriate certification and certain other persons). A payor will be required to withhold backup withholding tax from any payments of dividends on, or the proceeds from the sale or redemption of, ordinary shares within the United States, or by a U.S. payor or U.S. middleman, to a holder, other than an exempt recipient, if such holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with, or establish an exemption from, such backup withholding tax requirements. Any amounts withheld under the backup withholding rules will be allowed as a credit against the beneficial owner’s U.S. federal income tax liability, if any, and any excess amounts withheld under the backup withholding rules may be refunded, provided that the required information is timely furnished to the IRS.

Foreign Asset Reporting

Certain U.S. Holders who are individuals are required to report information relating to an interest in our ordinary shares, subject to certain exceptions (including an exception for shares held in accounts maintained by U.S. financial institutions) by filing IRS Form 8938 (Statement of Specified Foreign Financial Assets) with their federal income tax return. U.S. Holders are urged to consult their tax advisors regarding their information reporting obligations, if any, with respect to their ownership and disposition of our ordinary shares.

The above description is not intended to constitute a complete analysis of all tax consequences relating to acquisition, ownership and disposition of our ordinary shares. You should consult your tax advisor concerning the tax consequences of your particular situation.

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UNDERWRITING

We are offering the ordinary shares described in this prospectus through a number of underwriters. J.P. Morgan Securities LLC, Barclays Capital Inc. and Jefferies LLC are acting as book‑running managers of the offering and as representatives of the underwriters. We expect to enter into an underwriting agreement with the representatives on behalf of the underwriters. Subject to the terms and conditions of the underwriting agreement, we will agree to sell to the underwriters, and each underwriter will severally agree to purchase, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of ordinary shares listed next to its name in the following table:



Name	Number of Shares
J.P. Morgan Securities LLC
Barclays Capital Inc.
Jefferies LLC
Oppenheimer & Co. Inc.
Piper Jaffray & Co.
Stifel, Nicolaus & Company, Incorporated
William Blair & Company, L.L.C.
Total

The underwriters will be committed to purchase all the ordinary shares offered by us if they purchase any shares. The underwriting agreement will also provide that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may be increased or the offering may be terminated.

The underwriters propose to offer the ordinary shares directly to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $ per share. After the initial offering of the shares to the public, if all of the ordinary shares are not sold at the initial public offering price, the underwriters may change the offering price and the other selling terms. Sales of shares made outside of the United States may be made by affiliates of the underwriters.

The underwriters will have an option to buy up to additional ordinary shares from us to cover sales of shares by the underwriters which exceed the number of shares specified in the table above. The underwriters will have 30 days from the date of this prospectus to exercise this option to purchase additional shares. If any shares are purchased with this option to purchase additional shares, the underwriters will purchase shares in approximately the same proportion as shown in the table above. If any additional ordinary shares are purchased, the underwriters will offer the additional shares on the same terms as those on which the shares are being offered.

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The underwriting fee is equal to the public offering price per ordinary share less the amount paid by the underwriters to us per ordinary share. The underwriting fee is $ per share. The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares.



Paid by the Company
	Without exercise of option to purchase additional shares exercise	With full exercise of option to purchase additional shares exercise
Per Share	$	$
Total	$	$

We estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately $ .

A prospectus in electronic format may be made available on the web sites maintained by one or more underwriters, or selling group members, if any, participating in the offering. The underwriters may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives to underwriters and selling group members that may make Internet distributions on the same basis as other allocations.

We will agree that we will not, subject to limited exceptions, (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act relating to, any ordinary shares or securities convertible into or exchangeable or exercisable for any ordinary shares, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, or (ii) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any ordinary shares or any such other securities (regardless of whether any of these transactions are to be settled by the delivery of our ordinary shares or such other securities, in cash or otherwise), in each case without the prior written consent of J.P. Morgan Securities LLC for a period of 180 days after the date of this prospectus, other than the ordinary shares to be sold hereunder and any ordinary shares issued upon the exercise of options granted under our existing share option plans.

Our directors and executive officers, and substantially all of our shareholders will enter into lock‑up agreements with the underwriters prior to the commencement of this offering pursuant to which each of these persons or entities, with limited exceptions, for a period of 180 days after the date of this prospectus, may not, without the prior written consent of J.P. Morgan Securities LLC, (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any ordinary shares or any securities convertible into or exercisable or exchangeable for our ordinary shares (including, without limitation, ordinary shares or such other securities which may be deemed to be beneficially owned by such directors, executive officers, managers and members in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a share option or warrant) or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the ordinary shares or such other securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of ordinary shares or such other securities, in cash or otherwise, or (3) make any demand for or exercise any right with respect to the registration of our ordinary shares or any security convertible into or exercisable or exchangeable for our ordinary shares.

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We will agree to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act.

We have applied to have our ordinary shares approved for listing on the NYSE under the symbol “TUFN.”

In connection with this offering, the underwriters may engage in stabilizing transactions, which involves making bids for, purchasing and selling our ordinary shares in the open market for the purpose of preventing or retarding a decline in the market price of our ordinary shares while this offering is in progress. These stabilizing transactions may include making short sales of the ordinary shares, which involves the sale by the underwriters of a greater number of ordinary shares than they are required to purchase in this offering, and purchasing ordinary shares on the open market to cover positions created by short sales. Short sales may be “covered” shorts, which are short positions in an amount not greater than the underwriters’ option to purchase additional shares referred to above, or may be “naked” shorts, which are short positions in excess of that amount. The underwriters may close out any covered short position either by exercising their option to purchase additional shares, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market compared to the price at which the underwriters may purchase shares through the option to purchase additional shares. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the ordinary shares in the open market that could adversely affect investors who purchase in this offering. To the extent that the underwriters create a naked short position, they will purchase shares in the open market to cover the position.

The underwriters have advised us that, pursuant to Regulation M of the Securities Act, they may also engage in other activities that stabilize, maintain or otherwise affect the price of the ordinary shares, including the imposition of penalty bids. This means that if the representatives of the underwriters purchase ordinary shares in the open market in stabilizing transactions or to cover short sales, the representatives can require the underwriters that sold those shares as part of this offering to repay the underwriting discount received by them.

These activities may have the effect of raising or maintaining the market price of the ordinary shares or preventing or retarding a decline in the market price of the ordinary shares, and, as a result, the price of the ordinary shares may be higher than the price that otherwise might exist in the open market. If the underwriters commence these activities, they may discontinue them at any time. The underwriters may carry out these transactions on the NYSE , in the over‑the‑counter market or otherwise.

Prior to this offering, there has been no public market for our ordinary shares. The initial public offering price will be determined by negotiations between us and the representatives of the underwriters. In determining the initial public offering price, we and the representatives of the underwriters expect to consider a number of factors including:


•	the information set forth in this prospectus and otherwise available to the representatives;


•	our prospects and the history and prospects for the industry in which we compete;


•	an assessment of our management;


•	our prospects for future earnings;


•	the general condition of the securities markets at the time of this offering;


•	the recent market prices of, and demand for, publicly traded ordinary shares of generally comparable companies; and


•	other factors deemed relevant by the underwriters and us.

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Neither we nor the underwriters can assure investors that an active trading market will develop for our ordinary shares, or that the shares will trade in the public market at or above the initial public offering price.

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

Certain of the underwriters and their affiliates have provided in the past to us and our affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for us and such affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. In addition, from time to time, certain of the underwriters and their affiliates may effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future.

Notice to Prospective Investors in the European Economic Area

In relation to each Member State of the European Economic Area (each, a “Relevant Member State”), no offer of ordinary shares may be made to the public in that Relevant Member State other than:


A.	to any legal entity which is a qualified investor as defined in the Prospectus Directive;


B.	to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives; or


C.	in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of shares shall require the company or the representatives to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

Each person in a Relevant Member State who initially acquires any shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed that it is a “qualified investor” within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive. In the case of any shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the shares acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any shares to the public other than their offer or resale in a Relevant Member State to qualified investors as so defined or in circumstances in which the prior consent of the representatives has been obtained to each such proposed offer or resale.

This prospectus has been prepared on the basis that any offer of shares in any Relevant Member State will be made pursuant to an exemption under the Prospectus Directive from the requirement to publish a prospectus for offers of shares. Accordingly any person making or intending to make an offer in that Relevant Member State of shares which are the subject of the offering contemplated in this prospectus may only do so in circumstances in which no obligation arises for the company or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Directive in relation to such offer. Neither

144

we nor the underwriters have authorized, nor do they authorize, the making of any offer of shares in circumstances in which an obligation arises for the company or the underwriters to publish a prospectus for such offer.

For the purpose of the above provisions, the expression “an offer to the public” in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in the Relevant Member State by any measure implementing the Prospectus Directive in the Relevant Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member States) and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

Notice to Prospective Investors in the United Kingdom

In the United Kingdom, this document is being distributed only to, and is directed only at, and any offer subsequently made may only be directed at persons who are “qualified investors” (as defined in the Prospectus Directive) (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or the Order 2005, and/or (ii) who are high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order 2005 (all such persons together being referred to as “relevant persons”) or otherwise in circumstances which have not resulted and will not result in an offer to the public of the shares in the United Kingdom within the meaning of the Financial Services and Markets Act 2000.

Any person in the United Kingdom that is not a relevant person should not act or rely on the information included in this document or use it as basis for taking any action. In the United Kingdom, any investment or investment activity that this document relates to may be made or taken exclusively by relevant persons.

Notice to Prospective Investors in Israel

This document does not constitute a prospectus under the Israel Securities Law, 5728-1968, and has not been filed with or approved by the Israel Securities Authority nor have the securities offered under this document been approved or disapproved by the Israel Securities Authority or registered for sale in Israel. The ordinary shares will not be offered or sold to the public in Israel, except that the underwriters may offer and sell such shares, and distribute this prospectus to investors listed in the first addendum, or the Addendum, to the Israel Securities Law, consisting primarily of joint investment in trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange, underwriters purchasing for their own account, venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals,” each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors. Qualified investors are required to complete and sign a questionnaire to confirm that they fall within the scope of the Addendum. Any resale in Israel, directly or indirectly, to the public of the securities offered by this prospectus is subject to restrictions on transferability and must be effected only in compliance with the Israel Securities Law.

Notice to Prospective Investors in Canada

The ordinary shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the ordinary shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

145

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.

Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

146

EXPENSES OF THE OFFERING

We estimate that our expenses in connection with this offering, other than underwriting discounts, will be as follows:



Expenses	Amount
SEC registration fee	$	12,120
NYSE listing fee
FINRA filing fee	15,500
Printing and engraving expenses
Legal fees and expenses
Accounting fees and expenses
Miscellaneous costs
Total	$

All amounts in the table are estimates except the SEC registration fee, the NYSE listing fee and the FINRA filing fee. We will pay all of the expenses of this offering listed above.

147

LEGAL MATTERS

The validity of the ordinary shares being offered by this prospectus and other legal matters concerning this offering relating to Israeli law will be passed upon for us by Gross, Kleinhendler, Hodak, Halevy, Greenberg, Shenhav & Co., Tel Aviv, Israel. Certain legal matters in connection with this offering relating to U.S. law will be passed upon for us by White & Case LLP, New York, New York. Certain legal matters in connection with this offering will be passed upon for the underwriters by Goldfarb Seligman & Co., Tel Aviv, Israel, with respect to Israeli law, and by Goodwin Procter LLP, Boston, Massachusetts, with respect to U.S. law.

EXPERTS

The consolidated financial statements as of December 31, 2017 and 2018 and for the years then ended included in this prospectus have been so included in reliance on the report of Kesselman & Kesselman, Certified Public Accountants (Isr.), an independent registered public accounting firm and member firm of PricewaterhouseCoopers International Limited, given on the authority of said firm as experts in auditing and accounting.

148

ENFORCEABILITY OF CIVIL LIABILITIES

Subject to specified time limitations and legal procedures, under the rules of private international law currently prevailing in Israel, Israeli courts may enforce a U.S. judgment in a civil matter which, subject to certain exceptions, is non-appealable, including a judgment based upon the civil liability provisions of the Securities Act or the Exchange Act and including a monetary or compensatory judgment in a non-civil matter, provided that, among other things, the following key conditions are met:


•	the judgment is obtained after due process before a court of competent jurisdiction, according to the laws of the state in which the judgment is given and the judgment is enforceable according to the law of the foreign state in which the relief was granted;


•	the obligation imposed by the judgment is enforceable according to the rules relating to the enforceability of judgments in Israel; and


•	the substance of the judgment and its enforcement is not contrary to the law, public policy, security or sovereignty of the State of Israel.

Even if the above conditions are met, an Israeli court will not enforce a U.S. judgment in a civil matter if:


•	the judgment was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases);


•	the judgment was obtained by fraud;


•	the opportunity given to the defendant to bring its arguments and evidence before the court was not reasonable in the opinion of the Israeli court;


•	the judgment was rendered by a court not competent to render it according to the laws of private international law as they apply in Israel;


•	the judgment is contradictory to another judgment that was given in the same matter between the same parties and that is still valid; or


•	at the time the action was brought in the foreign court, a lawsuit in the same matter and between the same parties was pending before a court or tribunal in Israel.

149

If a foreign judgment is enforced by an Israeli court, it generally will be payable in NIS, which can then be converted into non-Israeli currency and transferred out of Israel. The usual practice in an action before an Israeli court to recover an amount in a non-Israeli currency is for the Israeli court to issue a judgment for the equivalent amount in NIS at the rate of exchange in force on the date of the judgment, but the judgment debtor may make payment in non-Israeli currency. Pending collection, the amount of the judgment of an Israeli court stated in NIS ordinarily will be linked to the Israeli consumer price index plus interest at the annual statutory rate set by Israeli regulations prevailing at the time. Judgment creditors must bear the risk of unfavorable exchange rates.

150

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form F-1 under the Securities Act relating to this offering of our ordinary shares. This prospectus does not contain all of the information contained in the registration statement. The rules and regulations of the SEC allow us to omit certain information from this prospectus that is included in the registration statement. Statements made in this prospectus concerning the contents of any contract, agreement or other document are summaries of all material information about the documents summarized, but are not complete descriptions of all terms of these documents. If we filed any of these documents as an exhibit to the registration statement, you may read the document itself for a complete description of its terms.

The SEC maintains an Internet website that contains reports and other information regarding issuers that file electronically with the SEC. Our filings with the SEC are available to the public through the SEC’s website at www.sec.gov.

We are not currently subject to the informational requirements of the Exchange Act. Upon completion of this offering, we will be subject to the information reporting requirements of the Exchange Act that are applicable to foreign private issuers, and under those requirements will file reports with the SEC. As a foreign private issuer, we will be exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we will file with the SEC, within four months after the end of each fiscal year, or such applicable time as required by the SEC, an annual report on Form 20-F containing financial statements which will be audited and reported on, with an opinion expressed, by an independent registered public accounting firm, and will furnish to the SEC, on Form 6-K, unaudited quarterly financial information for the first three quarters of each fiscal year within 60 days after the end of each such quarter, or such applicable time as required by the SEC.

151

TUFIN SOFTWARE TECHNOLOGIES LTD.

CONSOLIDATED FINANCIAL STATEMENTS

INDEX



	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2017 and 2018	F-3
Consolidated Statements of Operations for the years ended December 31, 2017 and 2018	F-6
Consolidated Statements of Redeemable Convertible Preferred Shares and Changes in Shareholders’ Deficit as of December 31, 2017 and 2018	F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2018	F-8
Notes to Consolidated Financial Statements	F-9

F-1

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Tufin Software Technologies Ltd.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Tufin Software Technologies Ltd. and its subsidiaries (the “Company”) as of December 31, 2018 and 2017, and the related consolidated statements of operations, of redeemable convertible preferred shares and changes in shareholders deficit and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principles

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for revenue recognition and the manner in which it accounts for forfeitures within share-based compensation in 2017.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Kesselman & Kesselman

Certified Public Accountants (Isr.)

A member firm of PricewaterhouseCoopers International Limited

Tel-Aviv, Israel

March 6, 2019

We have served as the Company’s auditor since 2007.

F-2

TUFIN SOFTWARE TECHNOLOGIES LTD.

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands



	December 31,
	2017		2018
Assets
CURRENT ASSETS:
Cash and cash equivalents	$	14,700	$	15,248
Restricted bank deposits	159		561
Accounts receivable (net of allowance for doubtful accounts of $63 and $97 at December 31, 2017 and December 31, 2018, respectively)	11,492		14,716
Deferred costs	207		288
Prepaid expenses and other current assets	1,257		5,152
Total current assets	27,815		35,965
NON CURRENT ASSETS:
Long-term restricted bank deposits	761		1,789
Property and equipment, net	1,829		2,563
Accrued severance fund	199		144
Deferred costs	3,754		5,025
Deferred tax assets	540		689
Deferred offering costs	—		730
Other non-current assets	228		228
Total non-current assets	7,311		11,168
Total assets	$	35,126	$	47,133

The accompanying notes are an integral part of the consolidated financial statements.

F-3

TUFIN SOFTWARE TECHNOLOGIES LTD.

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands (except share and per share data)



	December 31,
	2017		2018		2018 Pro forma Unaudited
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Current maturities of long-term loan	$	667	$	222
Trade payables	640		3,096
Employee and payroll accrued expenses	9,247		9,976
Other accounts payables	2,014		4,890
Deferred revenues	16,690		18,172
Total current liabilities	29,258		36,356
NON-CURRENT LIABILITIES:
Long-term loan	222		—
Long-term deferred revenues	7,267		13,292
Liability for severance pay	287		220
Other non-current liabilities	421		512
Total non-current liabilities	8,197		14,024
Total liabilities	$	37,455	$	50,380
COMMITMENTS AND CONTINGENCIES (Note 9)
REDEEMABLE CONVERTIBLE PREFERRED SHARES:
Series A preferred shares of NIS 0.01 par value: 15,000,000 preferred shares authorized at December 31, 2017 and 2018; 11,389,207 preferred shares issued and outstanding at December 31, 2017 and 2018; no preferred shares issued and outstanding pro forma (unaudited)	5,073		5,073		—
Series B preferred shares of NIS 0.01 par value: 5,000,000 preferred shares authorized at December 31, 2017 and 2018; 4,002,500 preferred shares issued and outstanding at December 31, 2017 and 2018; no preferred shares issued and outstanding pro forma (unaudited)	4,310		4,310		—
Series C preferred shares of NIS 0.01 par value: 7,000,000 preferred shares authorized at December 31, 2017 and 2018; 6,932,387 preferred shares issued and outstanding at December 31, 2017 and 2018; no preferred shares issued and outstanding pro forma (unaudited)	12,416		12,416		—
Series D preferred shares of NIS 0.01 par value: 2,301,032 preferred shares authorized at December 31, 2017 and 2018; 2,301,032 preferred shares issued and outstanding at December 31, 2017 and 2018; no preferred shares issued and outstanding pro forma (unaudited)	4,900		4,900		—
TOTAL REDEEMABLE CONVERTIBLE PREFERRED SHARES	26,699		26,699		—

F-4



SHAREHOLDERS’ DEFICIT :
Ordinary shares of NIS 0.01 par value; 79,000,068 shares authorized at December 31, 2017 and 2018; 11,949,915 and 12,398,978 shares issued and outstanding at December 31, 2017 and 2018; 37,024,104 shares issued and outstanding pro forma (unaudited)	29			30			96
Additional paid-in capital	6,994			10,337			36,970
Accumulated deficit	(36,051		)	(40,313		)	(40,313		)
TOTAL SHAREHOLDERS’ DEFICIT	(29,028		)	(29,946		)	(3,247		)
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ DEFICIT	$	35,126		$	47,133		$	47,133

The accompanying notes are an integral part of the consolidated financial statements.

F-5

TUFIN SOFTWARE TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands (except share and per share data)



	Year Ended December 31,
	2017			2018
Revenues:
Product	$	30,855		$	42,554
Maintenance and professional services	33,685			42,427
Total revenues	64,540			84,981
Cost of revenues:
Product	1,702			2,324
Maintenance and professional services	7,778			11,112
Total cost of revenues	9,480			13,436
Gross profit	55,060			71,545
Operating expenses:
Research and development	17,672			21,363
Sales and marketing	35,042			46,092
General and administrative	4,608			6,022
Total operating expenses	57,322			73,477
Operating loss	$	(2,262	)	$	(1,932	)
Financial income (loss), net	267			(1,047		)
Loss before taxes on income	$	(1,995	)	$	(2,979	)
Taxes on income	(797		)	(1,283		)
Net loss	$	(2,792	)	$	(4,262	)
Basic and diluted net loss per ordinary share	$	(0.24	)	$	(0.35	)
Weighted average number of shares used in computing net loss per ordinary share, basic and diluted	11,808,817			12,068,470
Pro forma net loss per share attributable to common stockholders, basic and diluted (unaudited)				$	(0.12	)
Weighted-average shares used in computing pro forma net loss per share attributable to common stockholders, basic and diluted (unaudited)				36,693,596

The accompanying notes are an integral part of the consolidated financial statements.

F-6

TUFIN SOFTWARE TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED SHARES AND CHANGES IN SHAREHOLDERS’ DEFICIT

U.S. dollars in thousands (except share data)



			Redeemable Convertible Preferred Shares			Ordinary shares				Additional paid-in capital		Accumulated deficit			Total capital deficiency
	Number of Shares			Amount		Number of Shares		Amount
Balance as of January 1, 2017	(*)		24,625,126	$	26,699	11,447,527		$	28	$	4,352	$	(36,748	)	$	(32,368	)
Cumulative effect adjustment resulting from adoption of new accounting principles (see note 2)										138		3,489			3,627
Issuance of ordinary shares upon exercise of options						502,388		1		394					395
Compensation related to options granted to employees and service providers										2,110					2,110
Net loss												(2,792		)	(2,792		)
Balance as of December 31, 2017	24,625,126			26,699		11,949,915		29		6,994		(36,051		)	(29,028		)
Issuance of ordinary shares upon exercise of options						449,063		1		162					163
Compensation related to options granted to employees and service providers										3,181					3,181
Net loss												(4,262		)	(4,262		)
Balance as of December 31, 2018	$	24,625,126		$	26,699	$	12,398,978	$	30	$	10,337	$	(40,313	)	$	(29,946	)


(*)	The total number of redeemable convertible preferred shares includes 41,667 shares representing receipt on account of preferred A shares.

The accompanying notes are an integral part of the consolidated financial statements.

F-7

TUFIN SOFTWARE TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands



	Year Ended December 31,
	2017			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,792	)	$	(4,262	)
Adjustment to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation	368			956
Bad debt expense	63			34
Compensation related to options granted to employees and service providers	2,110			3,181
Liability for employee rights upon retirement	(65		)	(67		)
Other	—			380
Change in operating assets and liability items:
Accounts receivable	(7,354		)	(3,258		)
Prepaid expenses and other current assets	36			(3,895		)
Deferred costs	(449		)	(1,352		)
Deferred taxes and other non-current assets	(905		)	(149		)
Trade payables	(253		)	2,456
Employee and payroll accrued expenses	3,380			729
Other accounts payable and non-current liabilities	(43		)	2,367
Deferred revenues	5,476			7,507
Net cash provided by (used in) operating activities	(428		)	4,627
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets	(889		)	(1,690		)
Amounts withdrawn from severance fund	50			55
Net cash used in investing activities	(839		)	(1,635		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	395			163
Deferred offering costs	—			(130		)
Payment of long-term loan	(668		)	(667		)
Net cash used in financing activities	(273		)	(634		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(4		)	(380		)
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(1,544		)	1,978
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR	17,164			15,620
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR	$	15,620		$	17,598

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:



Property and equipment purchased but not yet paid	$	315
Unpaid offering costs	$	600

The accompanying notes are an integral part of the consolidated financial statements.

F-8

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1:	GENERAL

Tufin Software Technologies Ltd. (together with its subsidiaries, “Tufin” or the “Company”) is an Israeli company that develops, markets and sells software-based solutions that help organizations visualize, define and enforce a unified security policy across complex, heterogeneous network environments. Tufin’s solutions automate security policy management, and allow organizations to gain visibility and control over their IT and cloud environments. Substantially all of the Company’s sales of products and services worldwide are made through a global network of distributors and resellers, which sell the products and services to their end-user customers.

Tufin Software Technologies Ltd. (the “Company”) was incorporated as an Israeli company on January 2, 2005 and commenced operations on that date. The Company has incorporated wholly owned subsidiaries in the United States, the United Kingdom, Germany, France and Australia, primarily for marketing or distribution of its products.

The Company has an accumulated deficit of $40 million. The Company expects its operating expenses to increase significantly as it continues to expand sales and marketing efforts, invest in research and development and continue to expand its operations in existing and new geographies and vertical markets. It also expects to continue to devote significant research and development resources to its on-premise and cloud solutions. There can be no assurance that the Company will achieve profitability in the future or that, if the Company does become profitable, it will be able to sustain profitability.

The Company has one operating segment. Entity-wide disclosures on revenues and property, plant and equipment are presented in Note 16.


NOTE 2:	SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).


a.	Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, income taxes, deferred taxes, share-based compensation, as well as in estimates used in applying the revenue recognition policy. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.


b.	Principles of consolidation

The consolidated financial statements comprise the financial statements of Tufin Software Technologies Ltd. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation.


c.	Functional currency

A majority of the Company’s revenues is generated in U.S. dollars. In addition, the investments in the Company have been in U.S. dollars and the substantial majority of the Company’s costs are incurred in U.S. dollars and New Israeli Shekels (“NIS”). The Company’s management believes that the U.S. dollar is the currency of the primary economic environment in which the Company and each of its subsidiaries operates. Thus, the functional currency of the Company is the U.S. dollar.

F-9

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accordingly, monetary balances maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with Statement of the Accounting Standard Codification (“ASC”) No. 830 “Foreign Currency Matters” (“ASC No. 830”). All transaction gains and losses of the re-measured monetary balance sheet items are reflected in the statement of operations as financial income or expenses, as appropriate.


d.	Cash and cash equivalents

Cash equivalents are short-term highly liquid deposits that are readily convertible to cash with original maturities of three months or less, at the date acquired.


e.	Restricted bank deposits

As of December 31, 2017 and 2018, the Company’s bank deposits were denominated in U.S. dollars and NIS and bore yearly interest at weighted average deposits rates of 0.14%. Bank deposits are presented at their cost, including accrued interest. These deposits are used as security for the rental of premises, credit cards and for the Company's hedging activities.


f.	Accounts Receivable

Accounts receivable are presented in the Company’s consolidated balance sheet net of allowance for doubtful accounts. The Company estimates the collectability of its accounts receivable balances and adjusts its allowance for doubtful accounts accordingly.

On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on past write-offs and collections, current credit conditions and the age of the balances. The Company evaluates a number of factors to assess collectability, including an evaluation of the creditworthiness of the specific customer, past due amounts, payment history, and current economic conditions.

When revenue recognition criteria are not met for a sale transaction that has been billed, the Company does not recognize deferred revenues on the balance sheet or the related account receivable. Accordingly, as of December 31, 2017 and 2018, an amount of $16,375 thousand and $25,165 thousand, respectively, were offset from accounts receivable.


g.	Property and equipment

Property and equipment is stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the residual value of the related assets at the following annual rates:



	%
Furniture and fixtures	2-6
Computers and software	33
Leasehold improvements	10-33
Electronic equipment	15-33

Leasehold improvements are depreciated by the straight-line method over the term of the lease (including reasonably assured option periods, if applicable), or the estimated useful life of the improvements, whichever is shorter.


h.	Long-lived assets

The long-lived assets of the Company are reviewed for impairment in accordance with ASC No. 360, “Property, Plant and Equipment” (“ASC No. 360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and

F-10

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the years ended December 31, 2017 and 2018, no impairment triggering events were identified.


i.	Severance pay

Israeli labor law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. Pursuant to section 14 of the Severance Compensation Act, 1963 ("Section 14"), all of the Company’s employees in Israel are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, made in their name with insurance companies.

Payments under Section 14 relieve the Company from any future severance payment obligation with respect to those employees and, as such, the Company may only utilize the insurance policies for the purpose of disbursement of severance pay. As a result, the Company does not recognize an asset nor liability for these employees.

As of December 31, 2017 and 2018, all the Company’s employees in Israel are subject to Section 14.

The accrued severance fund presented an asset and the liability for severance pay presented in the balance sheet reflects employees that began employment prior to Section 14.


j.	Revenue recognition

Effective January 1, 2017, the Company elected to early adopt the requirements of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (“Topic 606”) on a modified retrospective basis and applied the new standard only to contracts that were not completed contracts as of January 1, 2017.

The Company follows five steps to record revenue under Topic 606: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies its performance obligations.

For each arrangement the Company assesses whether it is acting as the principal that has promised to provide goods or services to its customers or an agent which arranges for goods or services to be provided by the principal to an end customer. The Company has determined that for its contracts it is the principal since it is primarily responsible for fulfilling the promise to provide the specified good or service. The Company’s revenue is reported net of discounts, sales tax, value added tax and related surcharges.

The Company generates revenues from selling (i) software license (perpetual and term-based), (ii) maintenance, (iii) hardware and (iv) professional services. The Company sells its products and services primarily through distributors and resellers and also through its direct sales force.

The Company determines the appropriate revenue recognition for its contracts with customers by analyzing the type, terms and conditions of each contract or arrangement with a customer. The Company classifies the components of revenue as product or services revenue based on the attributes of the underlying performance obligations. Accordingly, software license and hardware are classified as product revenues.

The most significant impact of Topic 606 related to the accounting treatment for term license arrangements and costs to obtain customer contracts. Under the previous revenue recognition standard, the Company recognized term license revenues ratably over the contract period whereas under the new revenue standard term license revenues are recognized upfront, upon delivery, and the associated maintenance revenues are deferred and recognized over the contract period. As a result, upon adoption of Topic 606 on January 1, 2017, the Company recognized a decrease in its deferred revenues amounting to $1,139 thousand with a corresponding adjustment to retained earnings (which decreased the

F-11

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

accumulated deficit). The Company has considered the impact of the guidance in ASC 340-40, “Other Assets and Deferred Costs” under the new standard. Under the Company’s previous accounting policy, sales commissions were expensed as incurred. The new standard requires the capitalization of all incremental costs that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained, provided the Company expects to recover the costs. Amortization expense is included in sales and marketing expenses in the accompanying consolidated statements of operations and recorded on a straight-line basis over the expected period of benefit, which is the customer relationship period. Additionally, these costs are periodically reviewed for impairment. As a result, upon adoption of Topic 606 on January 1, 2017, the Company recognized a deferred cost asset amounting to $3,512 thousand with a corresponding adjustment to retained earnings (which decreased the accumulated deficit). Furthermore, as a result of the adoption of Topic 606, the Company recognized on January 1, 2017 the related tax effect of $1,024 thousand as an adjustment to retained earnings (which increased the accumulated deficit).

The Company’s contract payment terms typically range between 30 and 120 days. The Company assesses collectability based on several factors, including collection history.

The Company elected to disregard the effects of a financing component when the period between when the entity transfers a promised good or service to the customer and when the customer pays for that good or service is one year or less.

Nature of Products and Services

The Company’s on-premise software licenses are sold through both perpetual and term-based license agreements. These licensing arrangements provide customers with the same product functionality and differ mainly in the duration over which the customer benefits from the software. The Company delivers its software licenses electronically. Electronic delivery occurs when the Company provides the customer with access to the software and license key via a secure portal. Revenue from on-premise software licenses is generally recognized upfront at the point in time when the software is made available to the customer. Hardware revenue is recognized upon delivery which is the point in time at which control has passed.

The Company’s contracts with customers for on-premise software licenses include maintenance services and may also include training and professional services. Maintenance services agreements consist of fees for providing software updates on an if and when available basis and for providing technical support for software products for a specified term. Both software updates and technical support have the same pattern of transfer to the customer. Revenues related to training services are billed on a fixed fee basis and are recognized as the services are performed. Payments received in advance of services performed are deferred and recognized when the related services are performed. Revenues related to professional services are billed on a time and materials basis and are recognized as the services are performed.

In contracts with multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct. The Company allocates the transaction price to each performance obligation based on its relative standalone selling price out of total consideration of the contract. For maintenance and support, the Company determines the standalone selling price based on the price at which the Company separately sells a renewal contract. The Company determines the standalone selling price for sales of licenses using the residual approach. For professional services, the Company determines the standalone selling prices based on the price at which the Company separately sells those services.


k.	Cost of Revenues

Cost of product revenues consist primarily of costs associated with the processing and the delivery of the Company’s software licenses to the customers as well as third-party hardware and related shipping costs. Cost of maintenance and professional services revenues consist primarily of personnel costs responsible for providing maintenance and support and professional services. The Company sources its hardware from a single third-party provider based in the U.S.

F-12

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


l.	Accounting for Share-Based Compensation

The Company accounts for share-based compensation in accordance with ASC No. 718, “Compensation-Stock Compensation” (“ASC 718”). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an Option-Pricing Model (“OPM”). The grant date fair value of the award is recognized as an expense in the Company’s consolidated statements of operations based on the graded vesting attribution method over the related requisite service period.

Effective January 1, 2017, the Company applies the requirements of Accounting Standards Update (ASU) 2018-07, Improvements to Nonemployee Share-Based Payment Accounting . Accordingly, share based payment transactions with non-employees are accounted for similarly to employees accounted for under ASC 718.

The Company selected the Black-Scholes-Merton option pricing model as the most appropriate fair value method for its stock options awards. The Company’s option pricing model requires the input of highly subjective assumptions, including estimated fair value of ordinary share price, the expected share price volatility and expected term. Any changes in these highly subjective assumptions would significantly impact the share-based compensation expense.

The fair value of options granted to employees and non-employee is estimated at the date of grant using the following assumptions:

The risk-free interest rate assumption is the implied yield currently available on United States treasury zero-coupon issues with a remaining term equal to the expected life of the Company’s options. The dividend yield assumption is based on the Company’s historical experience and expectation of no future dividend payouts and may be subject to substantial changes in the future. The Company has historically not paid cash dividends and has no foreseeable plans to pay cash dividends in the future. The expected share price volatility is based on the historical volatility of the ordinary shares of comparable companies that are publicly traded. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The fair value of the Company’s ordinary shares underlying the share-based awards as of December 31, 2017 and 2018 were estimated using the hybrid method which takes into consideration a probability-weighted of a non-IPO scenario (which is based on the income approach) and an IPO scenario.

Effective as of January 1, 2017, the Company adopted Accounting Standards Update 2016-09, “Compensation—Stock Compensation (Topic 718)” (“ASU 2016-09”) on a modified retrospective basis. ASU 2016-09 permits entities to make an accounting policy election related to how forfeitures will impact the recognition of compensation cost for share-based compensation, which is to estimate the total number of awards for which the requisite service period will not be rendered or to account for forfeitures as they occur. Upon adoption of ASU 2016-09, the Company elected to change its accounting policy to account for forfeitures as they occur. The change was applied on a modified retrospective basis with a cumulative-effect adjustment to retained earnings of $138 thousand (which increased the accumulated deficit) as of January 1, 2017.


m.	Research and development costs

ASC 985 requires capitalization of certain software development costs subsequent to the establishment of technological feasibility.

Based on the Company’s product development process, technological feasibility is established upon completion of a working model. The Company does not incur material costs between the completion of the working model and the point at which the products are ready for general release. Therefore, research and development costs are charged to the statement of operations as incurred.

F-13

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


n.	Sales and marketing

Marketing expenses consist primarily of marketing campaigns and tradeshows. Marketing expenses are charged to the statement of operations, as incurred. Marketing expenses for the years ended December 31, 2017 and 2018, amounted to $5,883 thousand and $8,093 thousand, respectively.


o.	Income taxes

Income taxes are accounted for using the asset and liability approach under ASC-740, “Income Taxes” (“ASC-740”). The asset and liability approach require the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns.

The measurement of current and deferred tax liabilities and assets is based on provisions of the relevant tax law. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized.

ASC-740 also clarifies the accounting and reporting for uncertainties in income tax. ASC-740 prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns.

The Company classifies interest and penalties recognized in the financial statements relating to uncertain tax positions within taxes on income.


p.	Basic and diluted net loss per share:

Basic net loss per ordinary share is computed by dividing net loss for each reporting period by the weighted-average number of ordinary shares outstanding during the year. Diluted loss per ordinary share is computed by dividing net loss for each reporting period by the weighted average number of ordinary shares outstanding during the period, plus dilutive potential ordinary shares considered outstanding during the period, in accordance with ASC 260-10 “Earnings Per Share”.

The calculation of diluted net loss per share excludes potential share issuances of ordinary shares upon the exercise of share option, warrants to purchase ordinary shares and redeemable preferred shares as the effect is anti-dilutive.

The total number of shares related to outstanding options, warrants to purchase ordinary shares and redeemable preferred shares that have been excluded from the calculation of diluted net loss per share for the years ended December 31, 2017 and 2018 were 9,153,717, 40,000 and 24,625,126 (out of which 41,667 shares represent receipt on account of preferred A shares) and 10,125,201, 40,000 and 24,625,126 (out of which 41,667 shares represent receipt on account of preferred A shares), respectively.


q.	Concentration of credit risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted bank deposits, trade receivables and derivative instruments.

The Company's cash and cash equivalents and restricted bank deposits are invested with major banks in Europe, Israel and the United States. Generally, these investments may be redeemed upon demand and the Company believes that the financial institutions that hold the Company’s cash deposits are financially sound and, accordingly, bear minimal risk.

The trade receivables of the Company are mainly derived from sales to a diverse set of customers located primarily in the United States, Europe and Asia. The Company performs credit evaluations of its customers and, to date, has not experienced any significant losses from bad debts.

F-14

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2017 and 2018, each of the following distributors comprised more than 10% of the Company’s accounts receivable:



	December 31,
	2017		2018
Customer A	17	%	8	%
Customer B	13	%	11	%
Customer C	12	%	2	%
Customer D	10	%	1	%
Customer E	10	%	—
Customer F	3	%	12	%
Customer G	—		13	%

For purposes of this calculation, the Company assessed distributors by aggregating distributors within the same holding group.

The Company has entered into foreign currency exchange derivatives with major banks to protect against the risk of changes in exchange rates. The derivative instruments hedge a portion of the Company’s non-dollar currency exposure.


r.	Derivative Instruments and Hedging activities

The Company is exposed to global market risks and to the risk that its earnings, cash flows and equity could be adversely impacted by fluctuations in foreign exchange rates. As part of the Company’s risk management strategy, it uses foreign currency exchange forward contracts and other derivative to hedge against certain foreign currency exposures. The Company does not enter into derivative transactions for trading purposes. The Company recognizes these derivative instruments as either assets or liabilities in the consolidated balance sheets at their fair value. Derivatives in a gain position are reported in other current assets in the consolidated balance sheets and derivatives in a loss position are recorded in other accounts payables in the consolidated balance sheets, on a gross basis.

All derivative contracts enter into by the Company are classified as non-hedging instruments and accordingly the Company records the changes in fair value of derivative instruments in financial income, net in the consolidated statements of operations.


s.	Comprehensive loss

There are no items of other comprehensive income or loss generated or incurred by the Company other than net loss. Thus, there are no differences between net loss and comprehensive loss.


t.	Statement of Cash Flows

On January 1, 2017, the Company early adopted ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash”, which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows.


u.	Fair value of financial instruments

The Company applies ASC No. 820, “Fair Value Measurements and Disclosures” (“ASC 820”), with respect to fair value measurements of all financial assets and liabilities.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

F-15

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The fair value of foreign currency contracts (used for hedging purposes) is estimated by obtaining current quotes from banks.

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date.

Level 2 - Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.

Level 3 - Inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

In accordance with ASC 820, the Company measures its foreign currency derivative instruments, at fair value using the market approach valuation technique. Foreign currency derivative contracts as detailed in note 3 are classified within the Level 2 value hierarchy, as the valuation inputs are based on quoted prices and market observable data of similar instruments.


v.	Legal contingencies

From time to time, the Company becomes involved in legal proceedings or is subject to claims arising in its ordinary course of business. Such matters are generally subject to many uncertainties and outcomes are not predictable with assurance. The Company accrues for contingencies when the loss is probable, and it can reasonably estimate the amount of any such loss. The Company is currently not a party to any material legal or administrative proceedings and, is not aware of any material pending or threatened material legal or administrative proceedings against the Company.


w.	Unaudited Pro Forma Consolidated Balance Sheet

The unaudited pro forma consolidated balance sheet information has been prepared assuming the automatic conversion of all of the outstanding shares of redeemable convertible preferred stock into 24,625,126 ordinary shares upon the closing of an initial public offering contemplated by the Company (“IPO”). The unaudited pro forma consolidated balance sheet as of December 31, 2018 (unaudited) has been prepared as though the conversion and reclassification had occurred as of that date.


x.	Unaudited Pro Forma Net Loss Per Share Attributable to Common Stockholders

In contemplation of an IPO, the unaudited pro forma net loss per share attributable to common stockholders, basic and diluted, have been calculated assuming the automatic conversion of all series of the Company’s outstanding redeemable convertible preferred stock (using the as-if converted method) into ordinary shares.


y.	Recently Issued Accounting Pronouncements Not Yet Adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-12, Leases (Topic 842) including following updates and amendments which were issued during 2017 and 2018 (the standard and its amendments - “ASC 842” or “The new standard”). The new standard requires the lessees to put most leases on their balance sheet. The new standard states that the lessee will recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. Expenses related to leases determined to be operating leases will be recognized on a straight-line basis, while those determined to be financing leases will be recognized

F-16

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

following a front-loaded expense profile in which interest and amortization are presented separately in the income statement. The new standard also enhances the disclosures about leasing arrangements.

The new standard is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company will adopt the new standard on January 1, 2019, using the modified retrospective approach, at the effective date, without adjusting the comparative periods.

The new standard provides a number of optional practical expedients and the Company expects to elect the following:

Transition practical expedients: The Company expects to elect the package of practical expedients that permits it not reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs, as well as the practical expedient that permits it not to assess existing land elements under the new standard. In addition, the Company expects to apply the practical expedient that allows using hindsight with respect to determining the lease term and in assessing any impairment of right-of-use assets for existing leases.


b.	Ongoing accounting policy expedients - The Company expects to elect the following expedients:


a.	the short-term lease recognition exemption whereby right-of-use (“ROU”) assets and lease liabilities will not be recognized for leasing arrangements with terms less than one year, and


b.	not separating lease and non-lease components for all real estate assets.

In addition, the Company expects to apply the portfolio approach under the new standard, mainly with respect to determination of incremental borrowing rate.

Under all of the Company’s lease arrangements, the Company is the lessee (for assets such as real estates and vehicles), in an operating lease.

The Company currently expects to recognize on January 1, 2019 additional operating lease liabilities ranging from $14 million to $15 million, with corresponding ROU assets. Furthermore, the ROU assets will be adjusted and reduced for accrued rent liability amounting to $700 thousand.

In June 2016, the FASB Issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard requires financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard will be effective for the Company beginning January 1, 2020, with early adoption permitted. The Company is evaluating the impact of adopting this new accounting standard on its consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities.” The standard better aligns an entity’s hedging activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. The standard will prospectively make hedge accounting easier to apply to hedging activities and also enhances disclosure requirements for how hedge transactions are reflected in the financial statements when hedge accounting is elected. The standard is effective for fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact of adopting this new accounting standard on its consolidated financial statements; however, such impact, if any, is not expected to be material.

F-17

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3:	FAIR VALUE MEASUREMENT

The following tables summarize the Company’s financial assets and liabilities that are carried at fair value on a recurring basis, by fair value hierarchy, on the consolidated balance sheet:



	December 31,
	2017		2018
	(U.S. $ in thousands)
	Level 2		Level 2
Assets:
Foreign exchange contracts not designated as hedging instruments	$	40	$	90
Liabilities:
Foreign exchange contracts not designated as hedging instruments	$	1	$	388
	$	39	$	(298	)

The Company’s foreign exchange forward contracts are classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs, including interest rate curves and both forward and spot prices for currencies (Level 2 inputs).

Other financial instruments consist mainly of cash and cash equivalents, restricted bank deposits, accounts receivable, bank loan, accounts payable and other accounts payables. The fair value of these financial instruments approximates their carrying values.


NOTE 4:	CASH, CASH EQUIVALENTS AND RESTRICTED CASH

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows.



	December 31,
	2017		2018
	(U.S. $ in thousands)
Cash and cash equivalents	$	14,700	$	15,248
Restricted bank deposits	159		561
Long-term restricted bank deposits	761		1,789
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	15,620	$	17,598

Amounts included in restricted cash represent those required to be set aside by a contractual agreement with lease, hedging and credit card transactions.

Total interest paid for the years ended December 31, 2017 and 2018 were $137 thousand and $95 thousand, respectively.

Total taxes paid for the years ended December 31, 2017 and 2018 were $1,386 thousand and $1,027 thousand, respectively.

F-18

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5:	PROPERTY AND EQUIPMENT, NET



	December 31,
	2017		2018
	(U.S. $ in thousands)
Property and equipment, net:
Cost:
Furniture and fixtures	$	471	$	1,057
Computers and software	2,531		3,175
Leasehold improvements	684		852
Electronic equipment	1,127		1,419
	4,813		6,503
Less - Accumulated depreciation	2,984		3,940
	$	1,829	$	2,563

In July 2018, the Company entered into a long-term lease agreement for new offices in Israel until January 31, 2029 with an option to extend until January 31, 2034 (note 9c). As a result, the Company recognized accelerated depreciation for furniture and fixtures and leasehold improvements that belong to the old offices. The start date of the accelerated depreciation applied at July 1, 2018 until March 31, 2019, which reflects the remaining useful life of those assets.


NOTE 6:	OTHER ACCOUNTS PAYABLES



	December 31,
	2017		2018
	(U.S. $ in thousands)
Accrued expenses	$	1,622	$	4,116
Accrued taxes	369		468
Other	23		306
	$	2,014	$	4,890

As of December 31, 2018 accrued expenses included an amount of $2,816 thousand related to the Company’s lease agreement for new offices as described in note 9c.

F-19

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7:	DEFERRED REVENUES AND DEFERRED COSTS



	December 31,
	2017			2018
	(U.S. $ in thousands)
Deferred revenues:
Deferred product revenues	$	1,281		$	917
Deferred maintenance and professional services revenues	39,051			55,712
	40,332			56,629
Less - amounts offset from accounts receivable	(16,375		)	(25,165		)
Deferred revenues	23,957			31,464
The change in deferred revenues:
Balance at beginning of year	30,061			40,332
Adoption of ASC 606	(1,139		)	—
Deferred revenue relating to new sales	34,393			44,667
Revenue recognition during the year	(22,983		)	(28,370		)
Balance at end of year	40,332			56,629
Less - amounts offset from accounts receivable	(16,375		)	(25,165		)
Deferred revenues	$	23,957		$	31,464

As of December 31, 2017 and 2018, the total remaining performance obligation amounted to $40,332 thousand and $56,629 thousand, respectively. The Company expects that it will satisfy its remaining performance obligations over a period of three years during which, on December 31, 2017 and 2018, an amount of $27,504 thousand and $31,461 thousand, respectively, will be recognized in the next twelve months, which constitutes 68% and 56%, respectively, of total deferred revenues.

Assets Recognized from the Costs to Obtain a Contract with a Customer

The Company determined that certain costs related to its sales incentive programs meet the requirements to be capitalized and deferred. These assets are recorded as current and non-current assets. The Company amortizes these deferred costs over the benefit period, currently estimated to be four years. The Company considers the benefit period to exceed the initial contract term for certain costs because of anticipated renewals and because sales commission rates for renewal contracts are not commensurate with sales commissions for initial contracts.



	December 31,
	2017			2018
	(U.S. $ in thousands)
Balance at beginning of year	$	—		$	3,961
Adoption of ASC 606	3,512			—
Additional costs deferred	2,634			3,111
Amortization of deferred costs	(2,185		)	(1,759		)
Balance at end of year	$	3,961		$	5,313

F-20

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8:	LOAN AND CREDIT LINE

On August 4, 2015, the Company and its wholly owned US subsidiary entered into a Loan and Credit Agreement (hereafter, the “Agreements").

The Agreements provided the Company the following:

A loan in the amount of $2 million accruing interest at a floating per annum rate equal to the Wall Street Journal prime rate plus 2.75%, and to be repaid in 36 equal monthly installments of principal plus the accrued interest. As of December 31, 2017, the total outstanding amount of the principal amount was $889 thousand, out of which $667 thousand were presented as current to be repaid in 2018 and $222 thousand presented as a long-term loan to be repaid in 2019. Total interest expenses in respect to the loan during 2017 and 2018 amounted to approximately $137 thousand and $218 thousand, respectively.

An accounts receivable revolving line of credit of up to $6 million (the “Credit Line”). Based on several conditions the Company may draw under the Credit Line amounts of up to 80% of its eligible receivables, but not more than $6 million. Effective interest rates on the used credit line vary between 4.5% and 7.125% annually, based on meeting certain covenants set in the Credit Line agreements.

In January 2017, the Company increased the Credit Line to an amount of up to $10 million along with a one-year term extension to January 2018.

Upon expiration of the Credit Line term, the principal sum of any outstanding Credit Line, together with accrued and unpaid interest payable, will become due and payable. As of December 31, 2017 and 2018, the Company has not drawn any credit from this Credit Line facility.


3)	In 2018, the Company increased its available accounts receivable Credit Line facility to $15 million and extended its term through September 2019. Applicable interest rates have substantially remained the same.


4)	The agreements are subject to meeting certain covenants. As of December 31, 2017 and 2018, the Company was in compliance with these covenants.


NOTE 9:	COMMITMENTS AND CONTINGENT LIABILITIES

Liens and Pledges : Against the Credit Line facilities described in Note 8, to secure the repayment of all amounts due or which may become due in connection with the Credit Line by the Company, the Company and its US subsidiary created a fixed and floating first-priority security interest on all assets of the Company and its subsidiaries (including non-tangible assets), as well as share pledges on the Company’s holdings in its subsidiaries. Furthermore, in accordance with the Agreements, the Company shall not pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock or shares.


b.	The Company has various liens granted to financial institutions to secure various operating lease agreements in connection with its office space.


c.	Lease commitments : The Company leases its facilities under various lease agreements which expire through 2029. In addition, the Company leases certain motor vehicles under certain car operating lease agreements which expire through 2020.

F-21

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In 2018, the Company entered into a long-term lease agreement for new offices in Israel until January 31, 2029 with an option to extend until January 31, 2034. The Company granted an additional lien to a financial institution to secure this operating lease agreement in an amount of $1,467 thousand. The aggregate minimum lease commitments under such new lease agreement are as follows:



	(U.S. $ in thousands)
Year ending December 31:
2019	$	1,013
2020	2,025
2021	2,025
2022	2,025
2023 and thereafter	12,320
	$	19,408

The aggregate minimum lease commitments under operating leases as of December 31, 2018 (including the amounts presented in the table above) are as follows:



	(U.S. $ in thousands)
Year ending December 31:
2019	$	1,457
2020	2,478
2021	2,486
2022	2,495
2023 and thereafter	12,528
	$	21,444

Rent expense for the years ended December 31, 2017 and 2018 was approximately $1,251 thousand and $2,396 thousand, respectively.


NOTE 10:	HEDGING ACTIVITIES

The Company carries out transactions involving foreign currency exchange derivative financial instruments. The transactions are designed to hedge the Company’s exposure in currencies other than the U.S. dollar, but are not designated as an accounting hedge. The Company is primarily exposed to foreign exchange risk with respect to recognized assets and liabilities and forecasted transactions denominated in NIS, Euro and GBP.

F-22

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2017 and 2018, the notional amounts of the Company’s outstanding exchange forward and zero cost collar contracts and other derivatives, not designated as accounting hedging instruments, were $2.9 million and $29.34 million, respectively, and were used to reduce foreign currency exposures of the NIS, Euro and GBP. With respect to such derivatives, for the years ended December 31, 2017 and 2018, losses of $1 thousand and $388 thousand, respectively, and gains of $40 thousand and $90 thousand, respectively, were recognized under financial expense, net .



	Balance sheet location	Notional Amount	Fair Value
	Balance sheet location	December 31, 2018	December 31, 2018
		(U.S. $ in thousands)
Assets derivatives - Foreign exchange contracts	Other current assets	17,081	$	90
Liability derivatives - Foreign exchange contracts	Other accounts payables	12,265	$	388



	Balance sheet location	Notional Amount		Fair Value
	Balance sheet location	December 31, 2017		December 31, 2017
		(U.S. $ in thousands)
Assets derivatives - Foreign exchange contracts	Other current assets	$	2,307	40
Liability derivatives - Foreign exchange contracts	Other accounts payables	$	631	1


NOTE 11:	REDEEMABLE CONVERTIBLE PREFERRED SHARES


a.	Between December 2007 and September 2014, the Company entered into four Preferred Share Purchase Agreements with certain investors.

As of December 31, 2017 and 2018, the Company’s redeemable convertible preferred shares of NIS 0.01 par value, amounted to $26,699 thousand.

Shares of redeemable convertible preferred stock are not mandatorily or currently redeemable. However, a liquidation or deemed liquidation events would constitute a redemption event that is outside of the Company’s control. As such, all shares of redeemable convertible preferred stock have been presented outside of permanent equity. The Company has not adjusted the carrying values of the redeemable convertible preferred stock to the deemed liquidation values of such shares since a liquidation event was not probable at any of the balance sheet dates. Subsequent adjustments to increase or decrease the carrying values to the ultimate liquidation values will be made only if and when it becomes probable that such a liquidation event will occur.


b.	The rights, preferences and privileges with respect to the preferred shares are stipulated in the Company’s Articles of Association and a summary of significant provisions are as follows:


i.	Right of First Refusal : Until an IPO, each preferred shareholder shall have a right of first refusal with respect to a transfer of all or any of the shares or other securities of the Company by any shareholder with certain specified exceptions.


ii.	Bring Along: If, at any time prior to an IPO, shareholders holding at least 70% of the total preferred shares of all series (“Preferred Majority”) accept an offer to sell all of their shares to a third party pursuant to a purchase offer from such third party, and such offer is conditioned upon

F-23

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the sale of all remaining outstanding shares to such third party, then all remaining shareholders, including the founders of the Company, shall be required to sell their shares in such transaction, on the same terms and conditions of such purchase offer, provided that such purchase offer shall be allocated in accordance with the liquidation preferences.


iii.	Liquidation Preference: Until a qualified IPO, in the event of any liquidation or deemed liquidation, the assets shall be distributed among the shareholders as follows:

The holders of preferred D shares shall be entitled to receive from the distributable proceeds an amount equal to 1.5 times their investment reduced by any amounts already paid to such holders in respect of their preferred D shares. In the event that the distributable proceeds shall be insufficient for such distribution as described above, then the distributable proceeds shall be distributed or allocated to the holders of preferred D shares on a pro-rata basis.


ii.	The holders of preferred C shares shall be entitled to receive from the remaining distributable proceeds (if any) their investment plus any declared but unpaid dividends, reduced by any amounts already paid to such holders in respect of their preferred C shares;


iii.	The holders of preferred B shares shall be entitled to receive from the remaining distributable proceeds (if any) an amount equal to 1.55 times their investment plus any declared but unpaid dividends, reduced by any amounts already paid to such holders in respect of their preferred B shares;


iv.	The holders of preferred A shares shall be entitled to receive from the remaining distributable proceeds (if any) an amount equal to 1.33 times their investment plus any declared but unpaid dividends, reduced by any amounts already paid to such holders in respect of their preferred A shares.


v.	Any remaining distributable proceeds available for distribution, if any, shall be distributed among all the holders of ordinary shares of the Company, including holders of preferred shares.

vi.

In the event the distributable proceeds in a liquidation or deemed liquidation shall equal or exceed $136.9 million then the foregoing liquidation preferences for preferred A, B and C shares shall be disregarded, and in the event the distributable proceeds in a liquidation or deemed liquidation shall provide the holders of the preferred D shares an amount per each preferred D share equal to three (3) times their investment then the liquidation preference shall also be disregarded with respect to the preferred D shares.


iv.	Dividend Preference: The preferred shareholders will be entitled to receive, at a dividend distribution, an amount equal to the total amount paid by each preferred shareholder in consideration of its preferred shares according to the order of preference and ratio specified in the liquidation reference section above.


v.	Protective provisions : In addition, until a qualified IPO, the Preferred Majority will have certain protective provision in decisions with regard to the amendment of the Articles of Association of the Company, the recapitalization of its shares, effecting a liquidation event, declaring dividends, or performing a merger or IPO.

vi.

Conversion and conversion price adjustment: Each preferred share shall be convertible, at the option of the holder of such share, at any time after the purchase date of such share, into such number of fully paid and nonassessable ordinary shares of the Company as is determined by dividing the applicable original issue price for such class of shares by the conversion price at the time in effect for such class of shares. The initial conversion price per each preferred share shall be the original issue price for such class of shares, such that the initial conversion rate shall be one to one; provided, however, that the conversion price for each preferred share shall be subject

F-24

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

to adjustment in accordance with any recapitalization event and pursuant to the anti-dilution provisions set forth herein.

Notwithstanding anything to the contrary herein, each preferred share shall automatically be converted into fully paid and non-assessable ordinary shares at the then applicable conversion rate, upon: (i) a qualified IPO which is defined in the Company’s Articles of Association as an IPO at a minimum pre-money valuation of $250 million and resulting in minimum gross proceeds to the Company of $50 million, or (ii) upon the consent in writing of the majority of the outstanding preferred shares (including the holders of two thirds or more of the preferred D shares).


NOTE 12:	SHAREHOLDERS' EQUITY

As of December 31, 2017 and 2018, the Company had 11,949,915 and 12,398,978 ordinary shares, respectively, of NIS 0.01 par value issued and outstanding and 40,000 warrants to purchase ordinary shares. Each ordinary share is entitled to one vote and to receive dividends as declared by the Board of Directors, subject to the priority rights of holders of preferred shares.


NOTE 13:	STOCK OPTION PLAN


a.	Under the Company’s 2007 Stock Option Plan, as amended in August 2014, September 2015 and July 2017, and its 2008 and 2018 US Equity Incentive Plans (collectively, the “Plans”), stock options exercisable for an ordinary share of NIS 0.01 par value, may be granted to employees, officers, non-employee consultants and directors of the Company.

In April 2018, the Board of Directors of the Company approved an increase in the number of unissued ordinary shares reserved for issuance to the Company’s employees, officers, consultants and directors under the Plans by 1,000,000 ordinary shares.

Under the Plans, as of December 31, 2017 and 2018, total stock options outstanding were 9,153,717 and 10,125,201, respectively, and an aggregate of 751,321 and 201,523, respectively, stock options were still available for future grant. Each option granted under the Plans expires no later than 10-20 years from the date of grant. The vesting period of the options is generally four years vesting either quarterly or annually, unless the Board of Directors or the Compensation Committee of the Board determines otherwise. Any stock option which is forfeited or cancelled before expiration becomes available for future grants.

A summary of the Company’s options activity for the year ended December 31, 2017 and 2018 is as follows:



	December 31,
	2017		2018
	(U.S. $ in thousands)
Cost of revenues	$	332	$	634
Research and development	660		731
Sales and marketing	765		1,458
General and administrative	353		358
Total share-based compensation expense	$	2,110	$	3,181

In May 2017, the board of directors of the Company approved a 10-year extension of the remaining contractual term of 5,210,273 options originally granted to approximately 240 employees. The total incremental compensation cost resulting from this modification amounted to $895 thousand, out of which $783 thousand was recorded as compensation expense during the year ended December 31, 2017.

As of December 31, 2017 and 2018, the Company had 4,459,540 and 4,539,777 unvested options, respectively. As of December 31, 2017 and 2018, the unrecognized compensation cost related to all

F-25

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

unvested, equity-classified stock options of $2,583 thousand and $4,842 thousand is expected to be recognized as an expense over a weighted-average period of 2.78 and 2.66 years, respectively.

For the years ended December 31, 2017 and 2018, the weighted average grant date fair value of options granted was $1.19 per option and $2.72 per option, respectively. For the years ended December 31, 2017 and 2018, the total intrinsic value of the options exercised was $144 thousand and $1,772 thousand, respectively.


b.	A summary of the activity in options granted to employees for the year ended December 31, 2017 is as follows:



	Amount of Options		Weighted average exercise price		Weighted average remaining contractual term (in years)	Aggregate intrinsic value
						(U.S. $ in thousands)
Balance as of January 1, 2017	7,617,129		$	0.85	13
Granted	2,833,351		$	0.94	13
Exercised	(502,388	)	$	0.79	6
Forfeited	(794,375	)	$	0.93	11
Balance as of December 31, 2017	9,153,717		$	0.86	13	$	11,555
Exercisable as of December 31, 2017	4,694,177		$	0.78	13	$	6,279

The fair value of stock options granted was estimated using the Black-Scholes option-pricing model. The assumptions used to value options granted during 2017 were as follows:



Risk-free interest rate	2.08%-2.21%
Fair value of ordinary shares	$0.9-2.12
Expected term (in years)	6-11
Dividend yield	0%
Volatility	70%


c.	A summary of the activity in options granted to employees for the year ended December 31, 2018 is as follows:



	Amount of Options		Weighted average exercise price		Weighted average remaining contractual term (in years)	Aggregate intrinsic value
						(U.S. $ in thousands)
Balance as of January 1, 2018	9,153,717		$	0.86	13
Granted	2,215,000		$	2.30	16
Exercised	(449,063	)	$	0.36	9
Forfeited	(794,453	)	$	1.06	15
Balance as of December 31, 2018	10,125,201		$	1.18	13	$	45,461
Exercisable as of December 31, 2018	5,585,424		$	0.86	12	$	26,880

F-26

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The fair value of stock options granted was estimated using the Black-Scholes option-pricing model. The assumptions used to value options granted during 2018 were as follows:



Risk-free interest rate	2.68%-3.03%
Fair value of ordinary shares	$2.6-5.22
Expected term (in years)	6
Dividend yield	0%
Volatility	65%-66%


d.	The following table summarizes the Company’s outstanding and exercisable options granted as of December 31, 2017 and 2018:



Exercise Price		Options outstanding as of December 31, 2017	Weighted average remaining contractual term	Options exercisable as of December 31, 2017	Weighted average remaining contractual term
			(years)		(years)
$	0.003	284,000	9	284,000	9
$	0.40	171,876	9	171,876	9
$	0.427	464,750	12	464,750	12
$	0.53	260,000	12	260,000	12
$	0.594	75,000	13	75,000	13
$	0.937	7,898,091	14	3,438,551	13
		9,153,717		4,694,177



Exercise Price		Options outstanding as of December 31, 2018	Weighted average remaining contractual term	Options exercisable as of December 31, 2018	Weighted average remaining contractual term
			(years)		(years)
$	0.003	34,000	8	34,000	8
$	0.40	146,876	10	146,876	10
$	0.427	464,750	11	464,750	11
$	0.53	225,000	11	225,000	11
$	0.594	75,000	12	75,000	12
$	0.937	7,071,575	12	4,549,985	12
$	1.170	1,477,000	15	89,813	16
$	5.03	631,000	17	—	—
		10,125,201		5,585,424

F-27

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14:	INCOME TAXES


a.	Deferred Tax Assets and Liabilities

The components of the Company’s deferred tax assets and liabilities as of December 31, 2017 and 2018 were as follows:



	As of December 31,
	2017			2018
	(U.S. $ in thousands)
Deferred tax assets:
Tax loss carryforwards	$	5,454		$	4,703
Research and development	3,741			4,216
Deferred revenue	847			1,334
Employee and payroll accrued expenses	975			684
Other	36			—
Total deferred tax assets	11,053			10,937
Deferred tax liabilities:
Depreciation	(31		)	(129		)
Deferred costs	(971		)	(1,352		)
Other	—			(5		)
Total deferred tax liabilities	(1,002		)	(1,486		)
Total deferred tax assets, net	10,051			9,451
Less valuation allowance for deferred tax assets	(9,511		)	(8,762		)
Deferred tax assets	$	540		$	689

The Company’s deferred tax assets are classified entirely in the consolidated balance sheet as non-current assets.

Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, the Company considered all available evidence, including past operating results, the most recent projections for taxable income, and prudent and feasible tax planning strategies. The Company reassess its valuation allowance periodically and if future evidence allows for a partial or full release of the valuation allowance, a tax benefit will be recorded accordingly.

As of December 31, 2017 and 2018, the Company had recorded a full valuation allowance of $9,511 thousand and $8,762 thousand, respectively, with regard to its deferred taxes, consisting primarily of tax loss carryforwards generated in Israel.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted into law. The new legislation represents fundamental modifications to the U.S. tax system. The Act contains several key tax provisions that will impact the Company’s U.S. subsidiary, including the reduction of the maximum U.S. federal corporate income tax rate from 35% to 21%, effective January 1, 2018. The Act also repeals the corporate alternative minimum tax for tax years beginning after December 31, 2017.

U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. The Company revalued its deferred tax assets at the statutory rate of 21% as of December 31, 2017 that will be in effect in 2018 and forward.

F-28

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company believes that all future profits of its subsidiaries will be indefinitely reinvested or that there is no expectation to distribute any taxable dividends from these subsidiaries.


b.	Provision for Income Taxes

Loss (Income) before taxes on income for the years ended December 31, 2017 and 2018 were as follows:



	December 31,
	2017			2018
	(U.S. $ in thousands)
Israeli	$	3,319		$	4,879
Non-Israeli	(1,324		)	(1,900		)
	$	1,995		$	2,979

The components of taxes on income for the years ended December 31, 2017 and 2018 were as follows:



	December 31,
	2017			2018
	(U.S. $ in thousands)
Current
Israeli	$	109		$	105
Non-Israeli	1,277			1,328
	1,386			1,433
Deferred
Israeli	88			(1		)
Non-Israeli	(677		)	(149		)
	(589		)	(150		)
Total taxes on income	$	797		$	1,283

F-29

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the theoretical tax benefit and actual taxes on income for the years ended December 31, 2017 and 2018 is set forth below:



	December 31,
	2017			2018
	(U.S. $ in thousands)
Loss before taxes on income	$	1,995		$	2,979
Statutory tax rate in Israel	24		%	23		%
Theoretical tax benefit	479			685
Increase (decrease) in taxes resulting from:
Effect of different tax rates applicable in foreign jurisdictions	185			(399		)
Changes in valuation allowance	(546		)	(708		)
Permanent differences	(462		)	(756		)
Uncertain tax position	(91		)	(91		)
Change in tax rate	(255		)	—
Non-recoverable taxes for excessive expenses	(89		)	1
Other	(18		)	(15		)
Actual taxes on income	$	(797	)	$	(1,283	)

Uncertain tax positions

Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are transactions and calculations for which the ultimate tax determination is uncertain. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when the Company believes that certain positions might be challenged despite its belief that its tax return positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of a tax audit or changes in the tax law. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate.



	Year ended December 31,
	2017		2018
	(U.S. $ in thousands)
Balance at beginning of year	$	330	$	421
Additions for tax positions related to the current year	91		91
Balance at end of year	$	421	$	512

The Company is subject to income taxes in the U.S., Israel and certain other foreign jurisdictions. The Company files income tax returns in various jurisdictions with varying statutes of limitations. Tax returns of the U.S. subsidiary submitted in the United States through 2014 tax year are considered to be final following the completion of an Internal Revenue Service examination. Tax returns of the Israel entity submitted in Israel through the 2013 tax year are considered to be final following the completion of an Israeli Tax Authorities examination. The expiration of the statute of limitations related to the various other foreign and state income tax returns that the Company and its subsidiaries file vary by state and foreign jurisdiction.

F-30

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


c.	Basis of taxation

Company incorporated in the U.S. — tax rate of 35% through December 31, 2017 and 21% beginning 2018.

Company incorporated in Germany — tax rate of 33%.

Company incorporated in UK — tax rate of 19%.

Company incorporated in France — tax rate of 33%.

Tax rates in Israel

Company incorporated in Israel — tax rate of 24% for 2017 and 23% beginning in 2018.

Tax benefits in Israel

Under Israel law, including Amendment No. 60 to the Israel law, the Company may be entitled to various tax benefits such as "approved enterprise" or “benefited enterprise” status, subject to meeting certain conditions, including generating taxable income. As of December 31, 2018, the Company does not anticipate taxable income in the foreseeable future.

The main potential tax benefits available are the following:


1)	In respect of income derived from the benefited enterprises, the Company is entitled to tax exempt during a period of two years from the year in which the Company first earns taxable income (limited to twelve years from the commencement date).


2)	In the event of distribution of a cash dividend from income which was tax exempt as above, the Company would have to pay 25% tax in respect of the amount distributed.

Entitlement to the above benefits is conditioned upon the Company’s fulfilling the conditions stipulated by the above law, regulations published thereunder and the certificate of approval for the specific investments in approved enterprises or benefited enterprises. In the event of failure to comply with these conditions, the benefits may be cancelled, and the Company may be required to refund the amount of the benefits, in whole or in part, with the addition of linkage differences to the Israeli CPI and interest.

Israel tax loss carryforwards

Accumulated losses for tax purposes as of December 31, 2018 amounted to $20,449 thousand, and were generated in Israel. These losses may be carried forward and offset against taxable income in the future for an indefinite period. A full valuation allowance was created against the Company’s deferred tax assets generated in Israel, consisting mostly of net operating loss carryovers. Management currently believes that it is more likely than not that the deferred taxes generated in Israel will not be realized in the foreseeable future.

F-31

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 15:	FINANCIAL INCOME (LOSS), NET



	Year ended December 31,
	2017			2018
	(U.S. $ in thousands)
Hedging instrument gains (loss), net	$	88		$	(337	)
Bank charges	(18		)	(89		)
Exchange rate gain (loss), net	336			(418		)
Interest expense	(137		)	(218		)
Other, net	(2		)	15
Total financial income (expenses), net	$	267		$	(1,047	)


NOTE 16:	ENTITY WIDE DISCLOSURES

ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments. The Company manages its business based on one operating segment and derives revenues from licensing of software, sales of hardware, providing maintenance and technical support and sales of professional services.

The following is a summary of revenues within geographic areas:



	Year ended December 31,
	2017		2018
	(U.S. $ in thousands)
Geography:
Americas:
United States	$	34,718	$	47,860
Other	302		407
	35,020		48,267
Israel	757		1,161
EMEA (excluding Germany)	18,380		23,181
Germany	6,962		8,253
APAC	3,421		4,119
Total	$	64,540	$	84,981

Net sales are attributed to geographic areas based on the location of customer.

As of December 31, 2017 and 2018, each of the following distributors comprised more than 10% of the Company’s revenue:



	December 31,
	2017		2018
Customer A	16	%	13	%
Customer B	13	%	10	%

F-32

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Disaggregation of Revenue

The Company generates revenue from the sale of software products, hardware products, maintenance and support, and professional services. All revenue recognized in the consolidated statement of operations is considered to be revenue from contracts with customers. The following table sets for the disaggregated revenue by revenue type and is consistent with how the Company evaluates its performance obligations:



	Year ended December 31,
	2017		2018
	(U.S. $ in thousands)
Revenues:
Software products	$	28,655	$	39,300
Hardware products	2,200		3,254
Support and maintenance	27,966		37,155
Professional services	5,719		5,272
Total revenues	$	64,540	$	84,981

Property, plant and equipment, net by geographical area were as follows as of December 31, 2017:



	December 31,
	2017		2018
	(U.S. $ in thousands)
Americas (primarily the United States)	$	210	$	496
EMEA	46		81
Israel	1,573		1,986
	$	1,829	$	2,563


NOTE 17:	SUBSEQUENT EVENTS


a)	In 2019, the Company entered into a long-term lease agreement for additional office and parking space in Tel Aviv, Israel until January 31, 2029 with an option to extend until January 31, 2034.The Company granted an additional lien to a financial institution to secure this operating lease agreement. The aggregate minimum lease commitments under such new lease agreement are as follows:

2019: $34

2020: $815

2021: $815

2022: $815

2023 and thereafter: $4,960


b)	In 2019, the Company signed an extension of the lease of its offices in Ramat Gan for an additional three months in an amount of $373 thousand.


c)	In February 2019, the Shareholders of the Company approved an increase in the number of unissued ordinary shares reserved for issuance to the Company’s employees, officers, consultants and directors under the Plans by 1,500,000 ordinary shares.

F-33

TUFIN SOFTWARE TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


d)	In January 2019, the Company granted a total of 582 thousand stock options with an exercise price of $5.67 per share to employees and service providers.


e)	On February 28, 2019, the Board of Directors of the Company approved a 1.5:1 reverse share split, which remains subject to shareholder approval.


f)	Subsequent events were evaluated until March 6, 2019, which is the issuance date of the financial statements.

F-34

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 6. Indemnification of Directors and Officers

Under the Israeli Companies Law, a company may not exculpate an office holder from liability for a breach of the duty of loyalty. An Israeli company may exculpate an office holder in advance from liability to the company, in whole or in part, for damages caused to the company as a result of a breach of duty of care but only if a provision authorizing such exculpation is included in its articles of association. Our amended and restated articles of association to be effective immediately prior to the closing of this offering include such a provision. The company may not exculpate in advance a director from liability arising from a breach of his or her duty of care in connection with a prohibited dividend or distribution to shareholders.

•

a monetary liability incurred by or imposed on the office holder in favor of another person pursuant to a court judgment, including pursuant to a settlement confirmed as judgment or arbitrator’s decision approved by a competent court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to 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 foreseen events and amount or criteria;

•


•	expenses he or she incurs as a result of administrative proceedings that may be instituted against him or her under Israeli securities laws if applicable, and payments made to injured persons under specific circumstances thereunder; and


•	any other matter in respect of which it is permitted or will be permitted under applicable law to insure the liability of an office holder in the company.

II-1

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


•	a breach of the duty of loyalty to the company, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm the company;


•	a breach of duty of care to the company or to another person, to the extent such a breach arises out of the negligent conduct of the office holder; and


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

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


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


•	a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;


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


•	a fine or forfeit levied against the office holder.

II-2

Item 7. Recent Sales of Unregistered Securities

The following is a summary of transactions during the preceding three years involving sales of our securities that were not registered under the Securities Act:

•

Since November 20, 2015, we have granted share options to employees, directors and consultants under our share option plans covering an aggregate of 7,004,502 shares, with a weighted average exercise price of $1.37 per share. As of the date of this registration statement, 64,438 of these options have been exercised, while 1,181,437 of these options have been forfeited and canceled without being exercised. Options that are forfeited or canceled are returned to the option pool and become eligible for reallocation. Such issuances were exempt from registration under the Securities Act in reliance on Section 4(a)(2), Rule 701 and/or Regulation S under the Securities Act.

No underwriter or underwriting discount or commission was involved in any of the transactions set forth in Item 7.

Item 8. Exhibits and Financial Statement Schedules


(a)	Exhibits .

See the Exhibit Index attached to this registration statement, which is incorporated by reference herein.


(b)	Financial Statement Schedules.

Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.

Item 9. Undertakings

The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

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

The undersigned Registrant hereby undertakes:

(1)

For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.


(2)	For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus 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.

II-3

EXHIBIT INDEX



Exhibit No.		Description
1.1		Form of Underwriting Agreement*
3.1		Amended and Restated Articles of Association of the Registrant
3.2		Form of Amended and Restated Articles of Association of the Registrant, which will become effective upon the closing of this offering*
4.1		Specimen share certificate*
5.1		Opinion of Gross, Kleinhendler, Hodak, Halevy, Greenberg, Shenhav & Co., Israeli counsel to the Registrant, as to the validity of the ordinary shares (including consent)*
10.1		Amended and Restated Investors’ Rights Agreement, dated , 2019, by and among the Registrant and the other parties thereto*
10.2		Form of Letter of Indemnification
10.3		Office Lease Agreement, dated July 2, 2018, by and between the Registrant and Amot Investment Ltd. and Bayside Land Corporation Ltd, and amendments thereto∞
10.4		Office Lease Agreement, dated September 18, 2007, by and between the Registrant and Mazal and Bracha (1970) Ltd, and amendments thereto∞
10.5		Office Lease Agreement, dated August 22, 2017, by and between Tufin Software North America, Inc. and NS Two Oliver LLC
10.6		Commencement Agreement, dated December 18, 2017, by and between Tufin Software North America, Inc. and NS Two Oliver LLC
10.7		2007 Israeli Share Option Plan
10.8		Global Addendum (Non-Israeli and Non-U.S. Taxpayers) to the 2007 Israeli Share Option Plan
10.9		2008 U.S. Stock Plan
10.10		2018 Equity-Based Incentive Plan
10.11		2019 Equity-Based Incentive Plan*
10.12		Amended and Restated Loan and Security Agreement, dated September 27, 2018, by and among the Registrant, Silicon Valley Bank, and Tufin Software North America, Inc.
10.13		Compensation Policy*
21.1		List of subsidiaries of the Registrant
23.1		Consent of Kesselman & Kesselman, a member of PricewaterhouseCoopers International Limited
23.2		Consent of Gross, Kleinhendler, Hodak, Halevy, Greenberg, Shenhav & Co. (included in Exhibit 5.1)*
24.1		Power of Attorney (included in signature page to Registration Statement)


*	To be filed by amendment.


**	Previously filed.


∞	English summary of original Hebrew document.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F‑1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Ramat-Gan, Israel on this 6th day of March , 2019 .



TUFIN SOFTWARE TECHNOLOGIES LTD.

By:	/s/ Reuven Kitov
	Name: Reuven Kitov
	Title: Chief Executive Officer, Co-Founder and Chairman of the Board

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that each person whose signature appears below hereby constitutes and appoints Reuven Kitov and Jack Wakileh, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power to act separately and full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto each said attorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or either of them or his or her or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on March 6, 2019 in the capacities indicated:



Signatures	Title

/s/ Reuven Kitov	Chief Executive Officer, Co-Founder, Chairman of the Board (Principal Executive Officer)
Reuven Kitov

/s/ Jack Wakileh	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
Jack Wakileh

/s/ Reuven Harrison	Chief Technology Officer, Co-Founder and Director
Reuven Harrison	Chief Technology Officer, Co-Founder and Director

/s/ Ohad Finkelstein	Director
Ohad Finkelstein	Director

/s/ Edouard Cukierman	Director
Edouard Cukierman	Director

/s/ Yair Shamir	Director
Yair Shamir	Director

/s/ Ronni Zehavi	Director
Ronni Zehavi	Director

/s/ Yuval Shachar	Director
Yuval Shachar	Director



TUFIN SOFTWARE NORTH AMERICA, INC.		Authorized Representative in the United States

By:	/s/ Reuven Kitov
	Name: Reuven Kitov
	Title: Chief Executive Officer, Co-Founder and Chairman of the Board

Exhibit 3.1

Amended and Restated Articles

Tufin Software Technologies Ltd.

Company Number 513627398

A Company Limited By Shares

Preliminary, Definitions And Interpretation


1.	The following articles shall, subject to repeal, addition and alteration as provided by the Companies Law (as defined in Article 2 below) or these Articles (as defined in Article 2 below).


2.	In these Articles, if not inconsistent with the context, the words standing in the first column of the following table shall bear the meanings set opposite them.



Words	Meanings

Affiliate	With respect to any Person, any other Person, directly or indirectly, through one or more intermediary Persons, (i) which Controls or is Controlled by or is under common Control with such Person, (ii) in respect of any Person which is a limited or general partnership, its partners, affiliated partnerships managed by the same management company or managing (general) partner or by an entity which Controls, is Controlled by, or is under common Control with, such management company or managing (general) partner.

Articles	These Articles, as amended from time to time according to the provisions of the Companies Law and the provisions herein.

Auditors	The Company’s accounting auditors appointed according to the provisions of the Companies Law and the provisions herein.

Board	The Company’s board of directors lawfully appointed in accordance with the provisions of Article 32 below.

Business Day(s)	A day, or days, on which customer services are provided by the majority of the major commercial banks in Israel (including, for the avoidance of doubt, Fridays).

CEO	The chief executive officer of the Company lawfully appointed in accordance with the provisions of Article 38 below.

Chairman	The chairman of the Board.

Companies Law	The Israeli Companies Law, 5759-1999, any provisions of the Companies Ordinance [New Version], 1983 still in effect, and any rules and regulations promulgated pursuant thereto, as the same shall be in effect from time to time.

Company	Tufin Software Technologies Ltd., corporate registration number 513627398.



Control	The possession directly or indirectly of more than 50% (fifty percent) of the voting power, the right to appoint at least 50% of the members of the Board, or the right to receive more than 50% of the distributed profits of such shareholder.

Conversion Price	The applicable conversion price of the Preferred Shares, as described in Article 12.4 below.

Conversion Rate	The quotient obtained by dividing the Original Issue Price of each class of Preferred Shares by the Conversion Price of each corresponding class of Preferred Shares then in effect.

Conversion Rights	The conversion rights of the Preferred Shares as detailed in Article 12.4 below.

Conversion Shares	The Ordinary Shares issued or issuable pursuant to the conversion or reclassification of the Preferred A Shares, Preferred B Shares, Preferred C Shares, Preferred C-1 Shares and the Preferred D Shares.

Convertible Securities	Options, warrants and rights to purchase or rights to subscribe for Ordinary Shares or convertible loans or debentures and any other securities by their terms convertible into or exchangeable for Ordinary Shares, or options or rights to purchase or subscribe for such convertible or exchangeable securities.

Dividend	Any asset transferred by the Company to a Shareholder in respect of such Shareholder's Shares, whether in cash or in any other way, including a transfer without valuable consideration, but excluding bonus shares.

Deemed Liquidation	Unless otherwise agreed by: (i) the holders of the Preferred Majority (ii) the holders of 75% of all issued and outstanding Preferred C Shares; and (iii) the holders of two-thirds or more of the Preferred D Shares, any sale of voting control, acquisition, merger of the Company with or into another entity in which the shareholders of the Company do not own (by virtue of their pre-merger shares) a majority of the shares of the surviving entity, consolidation, sale of all or substantially all of the Company’s assets or shares, license of all or substantially all of the Company’s intellectual property in a transaction which is economically similar to a sale of such intellectual property or any other transaction in which the shareholders do not retain a majority of the voting power in the surviving or acquiring corporation (other than an IPO), all of the foregoing, whether in a single transaction or a series of related transactions.

Director	A Person duly appointed as a member of the Board in accordance with the provisions of these Articles and holding office from time to time.



ESOP	One or more share options or purchase plans approved by the Board in accordance with the provisions of these Articles or any other agreement to which the Company is subject in connection therewith, for the purpose of issuing options to purchase Shares or issuing Shares to employees, officers, consultants, directors and other service providers of the Company, all from the ESOP Pool.

ESOP Pool	All Ordinary Shares reserved for issuance under the ESOP. Subject to the terms of Article 36.3, the Board may increase the total number of shares reserved under the ESOP Pool, provided that prior to any such increase, the Company and the Preferred Investors (as defined below) shall confer on whether such an increase is warranted.

Founder	Each of Reuven Kitov and Reuven Harrison.

General Meetings: Annual General Meeting, Special General Meeting and Class Meeting	Annual General Meeting : the annual general meeting of the Company’s Shareholders held once every calendar year at such time, being not more than 15 months after the holding of the last preceding general meeting at a place determined by the Board. Special General Meeting : any other general meeting of the Company’s Shareholders called by the Directors or any of the Shareholders pursuant to these Articles or the Companies Law, other than the Annual General Meeting. Class Meeting : a separate Special General Meeting of the holders of a particular class of Shares. The Annual and Special General Meeting may each be referred to as a General Meeting.

Interested Party Transaction	Any transaction between the Company and any “ Interested Party ” (as defined in the Israeli Securities Law, 5723-1968).

IPO	The closing of a sale of the Company’s Ordinary Shares to the public in a bona fide, underwritten, public offering pursuant to a registration statement under the U.S. Securities Act of 1933, as amended, the Israel Securities Law or similar securities laws of another jurisdiction and the listing of such Ordinary Shares for trading on a recognized international stock exchange, or the listing thereof on NASDAQ or another recognized, automated quotation system.

Liquidation	(a) any dissolution, winding-up or liquidation of the Company, and (b) any foreclosure by creditors of the Company on substantially all assets of, or equity interests in the Company, all whether voluntarily or involuntarily;

Majority Preferred A Shareholders	The holders of a majority of the issued and outstanding Preferred A Shares, on an as converted basis.



Month	A Gregorian calendar month.

Office	The registered office of the Company.

Office Holder	As such term is defined in the Companies Law.

Ordinary Share(s)	The Company’s Ordinary Shares of nominal value NIS 0.01 each.

Ordinary Resolution	A resolution adopted by a simple majority of the votes of the holders of the issued and outstanding share capital of the Company, present in person or by proxy, at a duly convened General Meeting and which are entitled to vote thereat.

Original Issue Price	The price at which a Share was issued by the Company, for each Preferred A Share: US$0.4; for each Preferred B Share: US$1.1242973; for each Preferred C Share: US$1.76706814; for each Preferred C-1 Share: US$1.94377495; for each Preferred D Share: US$ $2.86827895; all subject to appropriate adjustments for any Recapitalization Event (as defined below).

Permitted Transferee	(a) a transferee by operation of law; (b) in the case of an individual Shareholder - a spouse, child, brother, sister or trustee of the Shareholder and any corporate entity which is Controlled by the Shareholder; (c) in the case of any incorporated Shareholder (whether a company or a partnership or any other legal entity) an Affiliate of such Shareholder; and (d) a trust which does not permit any of the settled property or the income therefrom to be applied other than for the benefit of the relevant Shareholder and no power or control over the voting powers conferred by any shares are subject to the consent of any Person other than the trustees of such Shareholder; provided that , (A) the Permitted Transferee agrees in writing to be bound by and subject to the terms and conditions of (i) these Articles, and (ii) any agreement (except for employment related agreements) between the transferor and the Company, whether or not with other parties, and (B) all Permitted Transferees of the same transferor shall designate in writing one entity to be their sole and exclusive representative and to act on their behalf and in their name for any and all purposes relating to these Articles and to any other agreement between the transferor and the Company including without limitation for the purpose of receiving notices of General Meetings and such sole representative will receive an irrevocable proxy to vote all shares held by such Permitted Transferees, and (C) the number of Shareholders of the Company following such proposed transfer does not exceed fifty (50).



Person	An individual, corporation, partnership, joint venture, trust, and any other body corporate or unincorporated organization.

Preferred A Investors	Each of, Catalyst Private Equity Partners (Israel II LP) (“ Catalyst ”), Regev Law Firm, and Mark Gershinson, each individually referred to as a “ Preferred A Investor ”.

Preferred B Investor	Marker TF Investments Ltd.

Preferred C Investors	Marker Lantern II Ltd., SBT Venture Fund I, L.P. and CAIVS 1 (Compartiment 2).

Preferred D Investors	Vintage Investment Partners V (Cayman), L.P., Vintage Investment Partners V (Israel) L.P., Vintage Investment Partners VI (Cayman), L.P., and Vintage Investment Partners VI (Israel) L.P.

Preferred Investors	Preferred A Investors, the Preferred B Investor, the Preferred C Investors and the Preferred D Investors.

Preferred A Shares	The Company’s Series A Preferred Shares of nominal value NIS 0.01 each.

Preferred A Shareholder(s)	Holder(s) of Preferred A Shares.

Preferred B Shares	The Company’s Series B Preferred Shares of nominal value NIS 0.01 each.

Preferred B Shareholder(s)	Holder(s) of Preferred B Shares.

Preferred C Shares	The Company’s Series C Preferred Shares and Series C-1 Preferred Shares of nominal value NIS 0.01 each.

Preferred C Shareholder(s)	Holder(s) of Preferred C Shares and/or Preferred C-1 Shares.

Preferred C-1 Shares	The Company’s Series C-1 Preferred Shares of nominal value NIS 0.01 each.

Preferred D Shares	The Company’s Series D Preferred Shares of nominal value NIS 0.01 each.

Preferred D Shareholder(s)	Holder(s) of Preferred D Shares.

Preferred Majority:	Holders of at least 70% of the issued and outstanding Preferred Shares, on an as-converted basis, voting as a single class.

Preferred Shares	Preferred A Shares, Preferred B Shares, Preferred C Shares, Preferred C-1 Shares and Preferred D Shares.

Preferred Shareholder(s)	Holder(s) of Preferred A Shares, Preferred B Shares, Preferred C Shares, Preferred C-1 Shares and Preferred D Shares.




Purchase Date (of a Share)	As to each Share, the date on which such Share was issued by the Company.

QIPO or Qualified IPO	An IPO at a minimum Company pre-money valuation of $250,000,000 and resulting in minimum gross proceeds to the Company of $50,000,000 (before deductions for underwriters commissions and expenses).

Qualified Shareholder	Each Shareholder holding at least (i) five percent (5%) of the Company’s issued and outstanding share capital (on an as-converted basis); (ii) each Preferred C Shareholder holding either (a) at least one and thirty eight one hundredths of one percent (1.38%) of the Company’s issued and outstanding share capital (on an as-converted basis) or (b) at least 1,500,000 Preferred C Shares; and (iii) each Preferred D Shareholder holding at least 1,600,000 Preferred D Shares.

Recapitalization Event	Any event of share split, share subdivision or combination, distribution of a share dividend or bonus shares or any other reclassification, reorganization or recapitalization of the Company’s share capital.

Securities	Securities of the Company of any kind, including shares of any class, and Convertible Securities.

Share(s) and Shareholder(s)	Each of the Ordinary Share(s), Preferred A Share(s), Preferred B Shares, Preferred C Shares, Preferred C-1 Shares and Preferred D Shares; and the holder of a Share or Shares, respectively.

Shareholders Register	The register of Shareholders of the Company administered in accordance with the Companies Law, or if the Company shall have any branch register(s) - any such branch register(s), as the case may be.

Transfer	Any sale, transfer, assignment, pledge, encumbrance, or other disposition (with or without consideration, voluntarily or involuntarily by operation of law) of any transferable, assignable or disposable interest.

in writing	Refers to written, printed, photocopied, typed, sent via facsimile, e-mail or produced by any visible substitute for writing, or partly one and partly another, and “signed” shall be construed accordingly.

Year	Refers to twelve (12) consecutive Months.


3.	In these Articles and unless the context otherwise requires:


3.1	Expressions defined in the Companies Law, shall have the meanings so defined.


3.2	Words importing the singular shall include the plural, and vice versa; Words importing the masculine gender shall include the female and neuter genders; Words importing persons shall include bodies corporate and other legal entities.


3.3	The titles of these Articles are for ease of reference only and shall not be deemed to be part thereof. The word "including" shall imply including without limitation.


3.4	All references to number of days mean calendar days, unless expressly indicated otherwise.


3.5	All references to dollars, Dollars, U.S. Dollars, $ or US$ means the lawful currency of the United States of America; All references to New Israeli Shekel or NIS means the lawful currency of the State of Israel.


4.	The provisions of Sections 3 to and including Section 10 of the Interpretation Law, 5741-1981, will apply to the interpretation of these Articles with the necessary adaptations, unless a logical interpretation of the context clearly requires otherwise.


5.	To the extent that these Articles make reference to a provision of law that has been amended or replaced, such provision will be deemed enforceable as if it was included and made part of these Articles as amended or replaced, unless and to the extent explicitly repealed by law.

Limited Liability

The liability of each Shareholder for the Company’s obligations is limited to the payment of the consideration (including the premium) for the Shares which were issued to it, but not less than the nominal value of the Company’s Shares held thereby, except in the event that said Shares have been lawfully issued for a consideration which is below the nominal value, in which event the Shareholder’s liability will be limited to the payment of the consideration for which said Shares were issued.

Purposes Of The Company And Contributions


7.	Subject to any limitations contained herein, the Company shall engage in any legal occupation or business and conduct its business according to business considerations and for the purpose of making profits. The Company may make reasonable contributions for worthy causes regardless of business considerations.

Office


8.	The Office of the Company shall be at such place as the Board shall determine from time to time.

Private Company


9.	The Company is a private company and accordingly:

9.1

The number of Shareholders of the Company (exclusive of persons who are in the employment of the Company and of former employees of the Company who became Shareholders of the Company while so employed) shall not exceed fifty (50), provided that where two (2) or more persons hold one (1) or more Share(s) in the Company jointly, they shall, for the purposes of these Articles, be treated as a single Shareholder;


9.2	Any invitation to the public to subscribe for any Shares, debentures, debenture stock or any other securities of the Company is hereby prohibited;


9.3	The right of Transfer of Shares and Securities shall be restricted as hereinafter provided.


10.	Share Capital

The authorized and registered share capital of the Company is NIS 1,083,011 (one million eighty three thousand and eleven New Israeli Shekels), divided into: (a) 79,000,068 (seventy nine million and sixty eight) Ordinary Shares; (b) 15,000,000 (fifteen million) Preferred A Shares; (c) 5,000,000 (five million Preferred B Shares; (d) 5,000,000 (five million) Preferred C Shares; (e) 2,000,000 (two million) Preferred C-1 Shares; and (f) 2,301,032 (two million, three hundred one thousand, and thirty two) Preferred D Shares.


11.	Ordinary Shares

Subject to the rights and privileges of the Preferred Shares, the Ordinary Shares shall rank pari passu between them and shall have all residual rights not specifically associated with the Preferred Shares and shall, including without limitation, entitle their holders:


11.1	To receive notices of, and to attend, General Meetings where each Ordinary Share shall have one (1) vote for all purposes;


11.2	To share, on a per Share basis, in the distribution by the Company of any bonus shares, bonuses, profits or other distributions as may be declared by the Board and approved by the Shareholders, if required, out of funds legally available therefore, subject to Article 12.2 below;


11.3	Upon occurrence of a Liquidation or a Deemed Liquidation Event - to participate in the distribution of the assets of the Company legally available for distribution to Shareholders after payment of all debts and other liabilities of the Company, in accordance with the terms of these Articles;


11.4	To appoint, dismiss, and replace Directors pursuant to the provisions of these Articles; and


11.5	To examine and receive copies of any register, document, report, or account of the Company as prescribed and conferred by the Companies Law.

The holders of Ordinary Shares shall not be entitled to any class vote on a Class Meeting, except with respect to direct changes to the rights attached exclusively to Ordinary Shares under these Articles.


12.	Preferred Shares

The Preferred Shares confer on the holders thereof all rights accruing to holders of Ordinary Shares in the Company on an as converted basis, and in addition the Preferred Shares are entitled to the following rights:


12.1	Liquidation Preference . Until a Qualified IPO, in the event of any Liquidation, or Deemed Liquidation, then the assets or proceeds available for distribution to the Shareholders or otherwise payable to them in their capacity as such (the “ Distributable Proceeds ”) shall be distributed or allocated among the Shareholders according to the

following order of preference:

12.1.1

First, each of the holders of Preferred D Shares shall be entitled to receive, from the Distributable Proceeds, prior and in preference to the holders of Preferred C Shares, the holders of Preferred B Shares, the holders of Preferred A Shares and the holders of Ordinary Shares, an amount equal to 1.5 times the Original Issue Price of the Preferred D Shares (whether or not such consideration was paid directly to the Company), plus any declared but unpaid dividends, reduced by any amounts paid to such holders in respect of the Preferred D Dividend Preference (the “ Preferred D Preference Amount ”). In the event that the Distributable Proceeds shall be insufficient for the distribution and satisfaction of the Preferred D Preference Amount in full to all of the holders of Preferred D Shares, then the Distributable Proceeds shall be distributed or allocated among the holders of Preferred D Shares on a pro rata pari passu basis in proportion to the amounts such holders would have received had the Distributable Proceeds been sufficient for the distribution in full of the Preferred D Preference Amount.

12.1.2

Second, after payment in full of the Preferred D Preference Amount, each of the holders of Preferred C Shares shall be entitled to receive, from the remaining Distributable Proceeds (if any), on a pro rata basis amongst themselves, prior and in preference to the holders of Preferred B Shares, the holders of Preferred A Shares and the holders of Ordinary Shares, an amount equal to one (1) time the total amount paid by the Preferred C Shareholder in consideration of its Preferred C Shares, plus any declared but unpaid dividends, reduced by any amounts paid to such holders in respect of the Preferred C Dividend Preference (the “ Preferred C Preference Amount ”). In the event that the Distributable Proceeds following the distribution of the Preferred D Preference Amount shall be insufficient for the distribution and satisfaction of the Preferred C Preference Amount in full to all of the holders of Preferred C Shares, then the Distributable Proceeds shall be distributed or allocated among the holders of Preferred C Shares on a pro rata pari passu basis in proportion to the amounts such holders would have received had the Distributable Proceeds been sufficient for the distribution in full of the Preferred C Preference Amount.

12.1.3

Third, after payment in full of the Preferred D Preference Amount and the Preferred C Preference Amount, each of the holders of Preferred B Shares shall be entitled to receive, from the remaining Distributable Proceeds (if any), prior and in preference to the holders of Preferred A Shares and the holders of Ordinary Shares, an amount equal to 1.55 times the total amount paid by the Preferred B Shareholder in consideration of its Preferred B Shares, plus any declared but unpaid dividends, reduced by any amounts paid to such holders in respect of the Preferred B Dividend Preference (the “ Preferred B Preference Amount ”). In the event that the remaining Distributable Proceeds following the distribution of the Preferred D Preference Amount and the Preferred C Preference Amount shall be insufficient for the distribution and satisfaction of the Preferred B Preference Amount in full to all of the holders of Preferred B Shares, then the remaining Distributable Proceeds shall be distributed or allocated among the holders of Preferred B Shares on a pro rata

pari passu basis in proportion to the amounts such holders would have received had the Distributable Proceeds been sufficient for the distribution in full of the Preferred B Preference Amount.

12.1.4

Fourth, after payment in full of the Preferred D Preference Amount, the Preferred C Preference Amount and the Preferred B Preference Amount, each of the holders of Preferred A Shares shall be entitled to receive, from the remaining Distributable Proceeds (if any), prior and in preference to any other securities of the Company except for the Preferred D Shares, the Preferred C Shares and the Preferred B Shares, an amount equal to 1.33 times the total amount paid by such Preferred A Shareholder in consideration of its Preferred A Shares, plus any declared but unpaid dividends, reduced by any amounts paid to such holders in respect of the Preferred A Dividend Preference (the “ Preferred A Preference Amount and together with Preferred B Preference Amount, the Preferred C Preference Amount and the Preferred D Preference Amount, the " Liquidation Preference "). In the event that the remaining Distributable Proceeds following the distribution of the Preferred D Preference Amount, the Preferred C Preference Amount and the Preferred B Preference Amount shall be insufficient for the distribution and satisfaction of the Preferred A Preference Amount in full to all of the holders of Preferred A Shares, then the remaining Distributable Proceeds shall be distributed or allocated among the holders of Preferred A Shares on a pro rata pari passu basis in proportion to the amounts such holders would have received had the Distributable Proceeds been sufficient for the distribution in full of the Preferred A Preference Amount.


12.1.5	Fifth, after payment of the full Liquidation Preference, any remaining Distributable Proceeds available for distribution, if any, shall be distributed or allocated pro rata among all the holders of Ordinary Shares of the Company, including holders of Preferred Shares (on an as converted basis).

Notwithstanding the Liquidation Preferences stated in Articles 12.1.1 to 12.1.4 above, in the event the Distributable Proceeds in a Liquidation or Deemed Liquidation shall equal or exceed US$136,900,000, then the foregoing Liquidation Preferences shall be disregarded with respect to the Preferred C Shares, the Preferred B Shares and the Preferred A Shares and the Distributable Proceeds shall be distributed or allocated to all holders of Shares of the Company (other than the Preferred D Shares) on a pro rata (as converted) basis, provided however that in the event the Distributable Proceeds in a Liquidation or Deemed Liquidation shall provide the holders of the Preferred D Shares an amount per each Preferred D Share equal to three (3) times the Original Issue Price of the Preferred D Shares in consideration of its Preferred D Shares (the " Preferred D Hurdle "), or more, then the Liquidation Preference shall also be disregarded with respect to the Preferred D Shares, and each Preferred D Shareholder shall instead receive for each Preferred D Share the greater of (x) its pro rata portion of any distribution and (y) the Preferred D Hurdle.


12.2	Dividend Preference . In the event of any declaration of a Dividend by the Company (a “ Dividend Declaration ”), then the cash or property legally available for distribution to the Shareholders (the " Dividend Distribution ") shall be distributed or allocated

among the Shareholders according to the following order of preference:

12.2.1

First, each of the holders of Preferred D Shares shall be entitled to receive, from the Dividend Distribution, prior and in preference to the holders of the Preferred C Shares, the holders of the Preferred B Shares, the holders of Preferred A Shares and the holders of the Ordinary Shares, an amount equal to 1.5 times, the Original Issue Price of the Preferred D Shares (whether or not such consideration was paid directly to the Company) (the “ Preferred D Dividend Preference ”). In the event that the Dividend Distribution shall be insufficient for the distribution and satisfaction of the Preferred D Dividend Preference in full to all of the holders of Preferred D Shares, then the Dividend Distribution shall be distributed among the holders of Preferred D Shares on a pro rata pari passu basis in proportion to the amounts such holders would have received had the Dividend Distribution been sufficient for the distribution in full of the Preferred D Dividend Preference.

12.2.2

Second, after payment in full of the Preferred D Dividend Preference, each of the holders of Preferred C Shares shall be entitled to receive, from the Dividend Distribution, prior and in preference to the holders of Preferred B Shares, the holders of Preferred A Shares and the holders of Ordinary Shares, an amount equal to one (1) time the total amount paid by the Preferred C Shareholder in consideration of its Preferred C Shares (the “ Preferred C Dividend Preference ”). In the event that the Dividend Distribution shall be insufficient for the distribution and satisfaction of the Preferred C Dividend Preference in full to all of the holders of Preferred C Shares, then the Dividend Distribution shall be distributed among the holders of Preferred C Shares on a pro rata pari passu basis in proportion to the amounts such holders would have received had the Dividend Distribution been sufficient for the distribution in full of the Preferred C Dividend Preference.

12.2.3

Third, after payment in full of the Preferred D Dividend Preference and the Preferred C Dividend Preference, each of the holders of Preferred B Shares shall be entitled to receive, from the remaining Dividend Distribution, prior and in preference to the holders of Preferred A Shares and the holders of Ordinary Shares, an amount equal to 1.55 times the total amount paid by such Preferred B Shareholder in consideration of its Preferred B Shares (the “ Preferred B Dividend Preference ”). In the event that the remaining Dividend Distribution following the distribution of the Preferred D Dividend Preference and the Preferred C Dividend Preference shall be insufficient for the distribution and satisfaction of the Preferred B Dividend Preference in full to all of the holders of Preferred B Shares, then the Dividend Distribution shall be distributed among the holders of Preferred B Shares on a pro rata pari passu basis in proportion to the amounts such holders would have received had the Dividend Distribution been sufficient for the distribution in full of the Preferred B Dividend Preference.


12.2.4	Fourth, after payment in full of the Preferred D Dividend Preference, the Preferred C Dividend Preference and the Preferred B Dividend Preference, each of the holders of Preferred A Shares shall be entitled to receive, from the

remaining Dividend Distribution, prior and in preference to any other securities of the Company except for the Preferred C Shares and the Preferred B Shares, an amount equal to 1.33 times the total amount paid by such Preferred A Shareholder in consideration for its Preferred A Shares (the “ Preferred A Dividend Preference ” and together with the Preferred B Dividend Preference, the Preferred C Dividend Preference and the Preferred D Dividend Preference, the " Preferred Dividend Preference "). In the event that the remaining Dividend Distribution following the distribution of the Preferred D Dividend Preference, the Preferred C Dividend Preference and the Preferred B Dividend Preference shall be insufficient for the distribution of the Preferred A Dividend Preference in full to all of the holders of Preferred A Shares, then the Dividend Distribution shall be distributed among the holders of Preferred A Shares on a pro rata pari passu basis in proportion to the amounts such holders would have received had the Dividend Distribution been sufficient for the distribution in full of the Preferred A Dividend Preference.


12.2.5	Fifth, after payment in full of the Preferred Dividend Preference, the remaining Dividend Distribution available for distribution, if any, shall be distributed pro rata among all the holders of Ordinary Shares and Preferred Shares of the Company (treating all Preferred Shares on an as converted basis).

Notwithstanding the Preferred Dividend Preferences stated in Articles 12.2.1 through 12.2.4 above, in the event that the aggregate Dividend Distributions shall equal or exceed US$136,900,000, then the foregoing Preferred Dividend Preference shall be disregarded with respect to the Preferred C Shares, the Preferred B Shares and the Preferred A Shares and the Dividend Distribution shall be distributed or allocated to all holders of Shares of the Company (other than the Preferred D Shares) on a pro rata (as converted) basis provided however that in the event that the aggregate Dividend Distributions shall provide the holders of the Preferred D Shares an amount per each Preferred D Share equal to the Preferred D Hurdle, or more, then the Preferred Dividend Preference shall also be disregarded with respect to the Preferred D Shares, and each Preferred D Shareholder shall instead receive for each Preferred D Share the greater of (x) its pro rata portion of any distribution and (y) the Preferred D Hurdle.

12.3

The Company shall give each holder of record of Preferred Shares written notice of any impending Liquidation, Distribution of Dividends or Deemed Liquidation event not later than ten (10) Business Days prior to the General Meeting called to approve such event or transaction, as applicable, or ten (10) Business Days prior to the closing of such event or transaction, as applicable, whichever is earlier, and shall also notify such holders in writing of the final approval of such event or transaction, as applicable. The first of such notices shall describe the material terms and conditions of the impending event or transaction, as applicable, and the provisions of this Article 12, and the Company shall thereafter give such holders prompt notice of any material changes. The event or transaction, as applicable, shall in no event take place sooner than ten (10) Business Days after the Company has given the first notice provided for herein or sooner than ten (10) Business Days after the Company has given notice of any material changes to the information provided in a notice provided for herein; provided, however, that such periods may be shortened upon the written consent of the Preferred Majority.

For the avoidance of doubt, the Preferred Shareholders may at any time prior to such distribution convert their shares into Ordinary Shares.


12.4	Conversion . The Preferred Shareholders shall have the Conversion Rights as follows:

12.4.1

Right to Convert . Each Preferred Share shall be convertible, at the option of the holder of such share, at any time after the Purchase Date of such Share, into such number of fully paid and nonassessable Ordinary Shares of the Company as is determined by dividing the applicable Original Issue Price for such class of Shares by the Conversion Price at the time in effect for such class of Shares. The initial Conversion Price per each Preferred Share shall be the Original Issue Price for such class of Shares, such that the initial Conversion Rate shall be one to one; provided, however , that the Conversion Price for each Preferred Share shall be subject to adjustment in accordance with any Recapitalization Event and pursuant to the anti-dilution provisions set forth herein.

12.4.2

Automatic Conversion . Notwithstanding anything to the contrary herein, each Preferred Share shall automatically be converted into fully paid and non-assessable Ordinary Shares at the then applicable Conversion Rate, upon: (i) a Qualified IPO, or (ii) upon the consent in writing of the majority of the outstanding Preferred Shares (including the holders of two thirds or more of the Preferred D Shares).

12.4.3

Mechanics of Conversion . Before any Preferred Shareholder shall be entitled to convert any Preferred Share into Ordinary Shares, the Preferred Shareholder shall surrender the certificate(s) thereof at the Office and shall give written notice to the Company of the election to convert the same. The Company shall, as soon as practicable thereafter, issue and deliver to such Preferred Shareholder a certificate(s) for the number of Ordinary Shares to which such Preferred Shareholder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the Preferred Shares to be converted, and the Person(s) entitled to receive the Ordinary Shares issuable upon such conversion shall be treated for all purposes as the record holder(s) of such Ordinary Shares as of such date. In the case of conversion pursuant to Article 12.4.2, such conversion shall be deemed to have been made immediately prior to the close of business on the date of the occurrence of any of the events listed in Article 12.4.2 and subject to the actual occurrence of such event, and the Person(s) entitled to receive the Ordinary Shares issuable upon such conversion shall be treated for all purposes as the record holder(s) of such Ordinary Shares as of such date; provided that the event does actually occur.

12.4.4

Conversion Price Adjustments of Preferred Shares . In the event that prior to the Qualified IPO, the Company issues any Additional Securities (as defined below) at a price per Share lower than the applicable Conversion Price of a class or series of Preferred Shares in effect immediately prior to such issuance, then upon each such issuance, the Conversion Price of such class shall be reduced, for no additional consideration, in accordance with the following

formula:

CP ₂ = CP ₁ * (A+B) / (A+C)

in which:



CP ₂	=	the new Conversion Price.

CP ₁	=	the Conversion Price, as applicable, in effect immediately prior to such issuance of Additional Securities.

A	=	the number of Ordinary Shares deemed to be outstanding immediately prior to such issuance of Additional Securities (includes all Ordinary Shares outstanding, all Preferred A Shares, all Preferred B Shares, all Preferred C Shares and all Preferred D Shares outstanding, on an as-converted basis).

B	=	the aggregate consideration received by the Company with respect to such issuance of Additional Securities, divided by CP _1.

C	=	the number of Additional Securities issued.


12.4.4.1	No adjustment of such Conversion Price pursuant to Article 12.4.4 above shall be made if it has the effect of increasing the Conversion Price above the Conversion Price in effect immediately prior to such adjustment.


12.4.4.2	In the case of the issuance of Additional Securities for cash, the consideration shall be deemed to be the amount of cash received therefor after giving effect to any discounts, finder’s fees, or underwriting commissions paid or incurred by the Company in connection with the issuance and sale thereof.


12.4.4.3	In the case of the issuance of Additional Securities for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair value thereof, as shall be determined in good faith by the Board.

12.4.4.4

In the case of the issuance of warrants or options to purchase, or rights to subscribe for, Additional Securities, or securities which by their terms are convertible into or exchangeable for Additional Securities or options to purchase or rights to subscribe for such convertible or exchangeable securities (collectively, “Options”), the Additional Securities deliverable upon exercise (assuming the satisfaction of any conditions to exercisability, including without limitation the passage of time, but without taking into account potential anti-dilution adjustments), conversion or exchange, as the case may be, of such Options, shall be deemed to have been issued at the time of

issuance of such Options at a consideration equal to the consideration (determined in the manner provided in Articles 12.4.4.2 and 12.4.4.3), if any, received by the Company for such Options upon the issuance of such Options plus any additional consideration payable to the Company pursuant to the terms of such Options (without taking into account potential anti-dilution adjustments) for the Additional Securities covered thereby provided, however, that if any options as to which an adjustment to the Conversion Price has been made pursuant to this Article 12.4.4.4 expire without having been exercised, then the Conversion Price shall be readjusted as if such Options had not been issued (without any effect, however, on adjustments to the Conversion Price as a result of other events described in this Article).


12.4.4.5	For purposes of Article 12.4.4, the consideration for any Additional Securities shall be taken into account at the U.S. dollar equivalent thereof, on the day such Additional Securities are issued or deemed to be issued pursuant to Article 12.4.4.4 above.

12.4.4.6

" Additional Securities " means any Securities issued by the Company following the Purchase Date of the Preferred D Shares, other than securities issued (the “ Excluded Securities ”): (i) pursuant to the ESOP and up to the ESOP Pool; (ii) upon conversion or reclassification of outstanding Preferred Shares; (iii) upon exercise of a warrant or other convertible security outstanding as at the date of adoption of these Articles, if any; and (iv) as dividend or bonus shares, distributed to all Shareholders on a pro-rata basis (provided that each Shareholder receives dividend shares of the same class and series as the class and series held by such Shareholder).

12.4.5

Recapitalization Event . If at any time or from time to time there shall be a Recapitalization Event (other than any actions under Article 12.4.4), and other than a Liquidation, Dividend Distribution or Deemed Liquidation under Articles 12.1 and 12.2 above, provision shall be made so that the Preferred Shareholders shall thereafter be entitled to receive upon conversion of the Preferred Shares the number of Ordinary Shares or other securities or property of the Company or otherwise, to which a holder of Ordinary Shares deliverable upon conversion of the Preferred Shares would have been entitled immediately prior to such Recapitalization Event. In any such case, appropriate adjustment shall be made in the application of the provisions of this Article 12.4 with respect to the rights of the Preferred Shareholders after the recapitalization to the end that the provisions of this Article 12.4 (including adjustment of the Conversion Price then in effect and the number of shares issuable upon conversion of the Preferred Shares) shall be applicable after that event as nearly equivalent as may be practicable.


12.4.6	No Fractional Shares and Certificates as to Adjustments . No fractional Shares shall be issued upon conversion of the Preferred Shares, and the number of Ordinary Shares to be issued shall be rounded to the nearest whole share.

12.4.7

Computation . Upon the occurrence of each adjustment of the Conversion Price pursuant to this Article 12.4, the Company, at its expense, shall promptly compute such adjustment in accordance with the terms hereof and prepare and furnish to each Preferred Shareholder a certificate setting forth each adjustment and showing in detail the facts upon which such adjustment is based. The Company shall furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustment, (ii) the Conversion Price at the time in effect, and (iii) the number of Ordinary Shares and the amount, if any, of other property which at the time would be received upon the conversion of a Preferred Share.

12.4.8

Notices of Record Date . In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any Dividend or other Distribution, any right to subscribe for, purchase or otherwise acquire any shares of any class or any other securities or property, or to receive any other right, the Company shall mail to each holder of shares, at least 15 Business Days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such Dividend Distribution or other right, and the amount and character of such Dividend Distribution or other right.

12.4.9

Reservation of Shares . The Company shall at all times reserve and keep available out of its authorized but un-issued Ordinary Shares, solely for the purpose of effecting the conversion of the Preferred Shares, such number of its Ordinary Shares as shall from time to time be sufficient to effect the conversion of all outstanding Preferred Shares; and if at any time the number of authorized but un-issued Ordinary Shares shall not be sufficient to effect the conversion of all then outstanding Preferred Shares, then the Company will take such corporate action as may be necessary to increase its authorized but un-issued Ordinary Shares to such number of shares as shall be sufficient for such purposes.

12.5

Voting Rights . Each Preferred Share shall initially have one (1) vote. The Preferred Shares shall vote together with the other Ordinary, and not as a separate class, in all General Meetings, except as required herein or by any applicable law, with each Preferred Share having votes in such number as if then converted into Ordinary Shares taking into account any adjustments under Article 12.4 (“on an as-converted basis”).


13.	General Provisions Regarding Shares

13.1

Subject to the rights of the Preferred Shareholders and of the Preferred Shares, and without prejudice to any special rights previously conferred by the issued outstanding Shares in the Company, the Company may issue Shares with such preferred or deferred rights of redemption or other special rights or such restrictions, whether concerning dividends, voting, repayment of share capital or otherwise, as may be determined by the Company from time to time.


13.2


13.2.1	Subject to the rights of the Preferred Shareholders and of the Preferred Shares,

with the exception of the rights granted in Articles 12, 14 and 16, the Company may change, convert, broaden, add to, vary, adversely affect or change in any other manner (“ Change ”) the rights, advantages, restrictions, and provisions attached to any class of the Company's Shares, only after receipt of the written consent of the holders of more than 75% of the issued and outstanding Shares, on an as-converted basis. Any Change to any provisions of Articles 12, 14 and 16 shall require the written consent of the holders of (i) more than 75% of the issued and outstanding Shares, on an as-converted basis, (ii) more than 75% of all issued and outstanding Preferred C Shares, and (iii) more than two-thirds of all issued and outstanding Preferred D Shares. Any changes to these Articles that would Change only one class of shares or class of Preferred Shares shall separately require written consent of the holders of more than 75% of the issued and outstanding Shares of the class so affected. It is hereby clarified that the creation or issuance of any class of shares with rights that are equal or superior to any existing class of the Company's shares shall not constitute a Change which requires any consent under this Article 13.2.1.

13.2.2

Notwithstanding anything to the contrary herein, in addition to the consents required under the Articles, consent of the holders of two-thirds or more of the Preferred D Shares shall be required for any amendment of these Articles (including an amendment effected by merger, consolidation and other reorganization) that (i) adversely affects the rights, preferences and privileges of the Preferred D Shares, provided however that the creation or issuance of new class of shares with rights that are equal or superior to the Preferred D Shares shall not constitute an adverse Change to the rights of the Preferred D Shares and shall not require the consent of the holders of two-thirds or more of the Preferred D Shares (ii) reclassifies any existing issued shares of the Company into shares with preference over the Preferred D Shares, or (iii) increases or decreases the number of authorized Preferred D Shares.

13.2.3

Notwithstanding anything to the contrary herein, in addition to the consents required under the Articles, consent of the holders of 75% of the issued and outstanding Preferred C Shares shall be required for any amendment of these Articles (including an amendment effected by merger, consolidation and other reorganization) that (i) adversely affects the rights, preferences and privileges of the Preferred C Shares, provided however that the creation or issuance of new class of shares with rights that are equal or superior to the Preferred C Shares shall not constitute an adverse Change to the rights of the Preferred C Shares and shall not require the consent of the holders of 75% of the issued and outstanding Preferred C Shares (ii) reclassifies any existing issued shares of the Company into shares with preference over the Preferred C Shares, or (iii) increases or decreases the number of authorized Preferred C Shares.

13.2.4

Nothing in these Articles of Association will be construed as granting the holders of Preferred C Shares or the holders of Preferred D Shares the right to prevent, block, restrict, or otherwise condition or limit a Deemed Liquidation, provided that the Distributable Proceeds in such Deemed Liquidation are distributed or allocated among the Shareholders (including the holders of Preferred C Shares and the holders of Preferred D Shares, as applicable)

according to the applicable order of preference set forth in Article 12.1, including without limitation the payment in full or in part of the Preferred D Preference Amount and the Preferred C Preference Amount, as and if applicable, all in accordance with Article 12.1.


13.2.5	Subject to the provisions of Articles 13.2.1, 13.2.2, 13.2.3 and 13.2.4 above and Article 36 below, the Company may from time to time amend these Articles by Ordinary Resolution.


13.3	Aggregation of Shares . All Shares held by two or more Shareholders who are Affiliates of one another shall be aggregated together for the purpose of determining the availability of any rights under these Articles for such Shareholders, including rights which are conditioned on the relevant Shareholder holding Shares representing a minimum percentage, etc.


13.4	Subject to the provisions of Articles 14 and 36 below and to the rights of the Preferred Shareholders and of the Preferred Shares, the un-issued Shares of the Company shall be at the disposal of the Board who may offer, allot, grant options over or otherwise dispose of Shares to such Persons, at such times and upon such terms and conditions as the Company may by resolution of Board determine.


13.5	The Company may, subject to applicable law, issue redeemable shares and redeem the same.


14.	Preemptive Rights


14.1	Until the consummation of a Qualified IPO, and except:


(i)	to the extent the right to receive such offer has or shall have been waived in writing by a Qualified Shareholder who would otherwise be entitled thereto (such waiver being effective only with respect to such Qualified Shareholder waiving such right);


(ii)	for the issuance of Excluded Securities;


(iii)	for securities offered to the public in an IPO;


(iv)	for securities issued in connection with or as part of a Deemed Liquidation,

- the following provisions shall govern the issuance of any Securities of the Company.

14.2

If the Company proposes to issue Securities (the “ Offered Securities ”), it shall give each Qualified Shareholder a written notice of its intention to do so (the “ Rights Notice ”), describing the Offered Securities, the price and the general terms upon which the Company proposes to issue them. Each Qualified Shareholder shall have twenty (20) Business Days from delivery of the Rights Notice (the “ Pre Emptive Period ”) to agree to purchase all or any part of its pro-rata share of such Offered Securities, which will enable it to maintain its shareholding percentage of the issued and outstanding share capital of the Company (calculated on an as-converted basis) immediately prior to such issuance, for the price and upon the terms specified in the Rights Notice, by giving written notice to the Company setting forth the quantity of Offered Securities which the Qualified Shareholder wishes to purchase.

14.3

If a Qualified Shareholder does not provide written notice of its intention to purchase its pro-rata share of the Offered Securities by the end of the Pre Emptive Period (a “ Non-Accepting Shareholder ”), each Qualified Shareholder that has notified the Company of its intention to purchase its pro-rata share of the Offered Securities (an “ Accepting Shareholder ”) shall have a right of over-allotment to purchase the Non-Accepting Shareholders portion of the Offered Securities (the “ Available Securities ”). The Company, within ten (10) days from end of the Pre Emptive Period, shall notify each Accepting Shareholder of its right to purchase the Available Securities. Each Accepting Shareholder shall then have ten (10) Business Days after such notice is delivered (the “ Over Allotment Period ”) to agree to purchase the Available Securities for the price and upon the terms specified in the Rights Notice, by giving written notice to the Company. If more than one Accepting Shareholder notifies the Company that it wishes to purchase the Available Securities, the Available Securities shall be allocated among such Accepting Shareholders pro-rata, according to the ratio of the number of issued shares owned by such Accepting Shareholder immediately prior to the issuance of Offered Securities (calculated on an as-converted basis), to the total number of shares owned by all Accepting Shareholders immediately prior to the issuance of Offered Securities, (calculated on an as-converted basis).


14.4	The pre-emptive rights set forth in this Article 14 may be waived only with the written consent of (i) the Preferred Majority; (ii) the holders of 75% of all of the issued and outstanding Preferred C Shares and (iii) more than two-thirds of all issued and outstanding Preferred D Shares.

14.5

If the Qualified Shareholders fail to exercise in full their preemptive right by the end of the Over Allotment Period, then the Company shall have ninety (90) days after delivery of the Rights Notice to sell the unsold Offered Securities at a price and upon general terms no more favorable to the purchasers thereof than specified in the Rights Notice. If the Company has not sold the Offered Securities within said ninety (90) day period the Company shall not thereafter issue or sell any Offered Securities without first offering such securities to the Preferred Shareholders in the manner provided above.


15.	Transfer, Transmission and Sale of Shares in the Company

Any Transfer of Securities in the Company shall be subject to the following provisions:


15.1	No Transfer of Shares shall be effective unless the Transfer is made in accordance with the provisions of this Article 15 and Articles 16, 17 and 20 below, provided , however , that the Board, at its discretion, may refuse to register any Transfer to any person or entity that is a competitor of the Company.

The Board shall not register or record a Transfer in the Shareholders Register, if such Transfer is effected in violation of these Articles.

Any purported Transfer in contravention of the provisions of these Articles relating to the Transfer of Shares shall be null and void.

Prior to the registration of a Transfer of Shares, the Board may require proof of compliance with the provisions of these Articles in respect of such Transfer. If the Board makes use of its powers under this Article 15.1 and refuses to register or otherwise record a Transfer of Shares, it must provide written notice to the contemplated transferee and to the transferor of such refusal within fourteen (14) days from the date the instrument or other deed of Transfer was furnished to the Company.


15.2	Each Transfer of Shares shall be made in writing in the form appearing below, or in a similar form, or in any form as may be determined by the Board from time to time. Such form of transfer shall be delivered to the Office together with the certificates representing the transferred Shares and any other reasonable proof the Board shall require.

Instrument/Deed of Transfer of Shares

I, _________ of __________ (the “ Transferor ”) do hereby transfer to ____________, of ________________ (the “ Transferee ”) _______ share(s) having nominal value of NIS ________ each one in Tufin Software Technologies Ltd. , to hold unto the Transferee, his executors, administrators, and assigns, subject to the several conditions on which I held the same at the time of the execution hereof; and I, the Transferee, do hereby agree to take said share(s) subject to the conditions aforesaid. As witness we have hereunto set our hands the ____ day of _____ 20__.




Transferee		Transferor

Address & Profession		Address & Profession

Witness to Transferee’s Signature		Witness to Transferor’s Signature

Address of Witness		Address of Witness


15.3	The instrument of Share transfer shall be executed by both the transferor and the contemplated transferee, and the transferor shall remain the registered holder of the Share until the name of the transferee is entered into the Shareholders Register in respect thereof.


15.4	The Board or whomever the Board shall appoint for this purpose, shall maintain a Shareholders Register. The ownership of Shares shall be in accordance with that appearing in the Shareholders Register.


15.5	The Shareholders Register may be closed at such dates and for such other periods as determined by the Board from time to time, provided that the Shareholders Register may not be closed for more than thirty (30) days per year.

15.6

Notwithstanding Article 16 below, upon the death of a Shareholder, the remaining holders (in the event that the deceased was a joint holder of a Share) or the administrators or executors or heirs of the deceased (in the event the deceased was the sole holder of the Share or was the only one of the joint holders of the Share to remain alive) shall be recognized by the Company as the sole holders of any title to the Shares

of the deceased. However, nothing aforesaid shall release the estate of a joint holder of a Share from any obligation with respect to the Share that the deceased held jointly with any other holder.

15.7

Any person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation of a Shareholder shall, upon such evidence being produced as may from time to time be required by the Board, have the right, either to be registered as a Shareholder in respect of such Share upon the consent of the Board (which has the authority to refuse pursuant to Article 15.1 above) or, instead of being registered himself, to transfer such Share to another person, subject to the provisions contained in Article 15.1 above and elsewhere in these Articles with respect to Transfers.

15.8

A person becoming entitled to a Share in consequence of the death of a Shareholder shall not be entitled to receive notices of General or Class Meetings, or to participate or vote thereat with respect to that Share, or to exercise any right of a Shareholder, until such person has notified the Company of his entitlement and has been recorded in the Shareholders Register as the registered holder of such Share. Subject to compliance with the foregoing provisions, the Company shall record such person in the Company’s Shareholders Register no later than 30 days following receipt of such notice.

15.9

Additionally, each Transfer of Shares shall be subject to and conditioned upon the transferee undertaking in writing and in advance, to be bound by such terms of any contractual obligations with respect to the transferred Shares by which the transferor was bound immediately prior to the Transfer, including under any agreements to which the Company is also a party, and the Company shall not record nor otherwise give any force or effect to any Transfer made not in violation of this Article 15.9.


16.	Right of First Refusal


16.1	Until an IPO, each Preferred Shareholder shall have a right of first refusal with respect to a Transfer of all or any of the Securities of the Company by any Shareholder (the " ROFR Transferor ").

16.2

Any ROFR Transferor proposing to Transfer all or any of its Securities (the “ Offered Shares ”) shall first provide the Preferred Shareholders with an offer stating the identity of the ROFR Transferor and of the transferee and the terms of the proposed Transfer (the “ Offer ”). Each Preferred Shareholder may accept such Offer in respect of any portion of the Offered Shares (“ Accepting Preferred Shareholder ") by giving the Company notice to that effect within fourteen (14) Business Days after being served with the Offer (the “ ROFR Period ”, and an “ Acceptance ”, respectively).

16.3

If the Acceptances, in the aggregate, are in respect of all of, or more than, the Offered Shares, then the Accepting Preferred Shareholders shall acquire the Offered Shares, on the terms aforementioned, in proportion to their respective holdings of the Company's issued and outstanding share capital (calculated on an as-converted basis), provided, however , that no Accepting Preferred Shareholder shall be entitled or shall be forced to acquire under the provisions of this Article 16 more than the number of Offered Shares initially accepted by such Accepting Preferred Shareholder under the Acceptance, and upon the allocation to it of the full number of Offered Shares so

accepted, such Accepting Preferred Shareholder shall be disregarded in any subsequent computations and allocations hereunder. Any Offered Shares remaining after the computation of such respective entitlements shall be re-allocated among the remaining Accepting Preferred Shareholders (other than those to be disregarded as aforesaid), in the same manner, until one hundred percent (100%) of the Offered Shares have been allocated as aforesaid.

16.4

If the Acceptances are in respect of less than all of the Offered Shares, then the Accepting Preferred Shareholders shall not be entitled to acquire the Offered Shares, and the ROFR Transferor, at the expiration of the aforementioned fourteen (14)-business day period, shall be entitled to Transfer all (but not less than all) of the Offered Shares to the proposed transferee(s) identified in the Offer, provided, however, that in no event shall the ROFR Transferor Transfer any of the Offered Shares to any transferee other than such proposed transferee(s) or Transfer the same on terms more favorable to the transferee(s) than those stated in the Offer, provided, further , that any Offered Shares not Transferred within ninety (90) days after the expiration of such ROFR Period, shall again be subject to the provisions of this Article 16.

16.5

The ROFR Transferor shall be bound, upon payment of the offer price, to Transfer to the Accepting Preferred Shareholders the Offered Shares which have been allocated to the Accepting Preferred Shareholders pursuant to this Article 16. If, after becoming so bound, the ROFR Transferor defaults in Transferring the Offered Shares, the Company may receive the purchase price therefor and the Transferor shall be deemed to have appointed any member of the Board as his agent to execute a Transfer of the Offered Shares to the Accepting Preferred Shareholders and, upon execution of such Transfer, the Company shall hold the purchase price therefor in trust for the ROFR Transferor.


17.	No Sale

Each Founder may Transfer up to 100,000 Shares held by such Founder in each twelve (12) month period, subject to the right of first refusal contained in Article 16 above and the Co-Sale rights contained in Article 20, provided that other than the foregoing Shares, neither Founder may Transfer any other Shares.


18.	Bring Along

18.1

Notwithstanding Articles 16 and 17 above and without limitation of any provision of applicable law, but subject to Article 36, if, at any time prior to an IPO, Shareholders holding the Preferred Majority accept (either by vote or in writing) an offer to sell all of their Shares to a third party, and such offer is conditioned upon the sale of all remaining outstanding Shares to such third party (the “ Purchase Offer ”), then all remaining Shareholders (including the Founders) shall be required to sell their Shares in such transaction, on the same terms and conditions of the Purchase Offer, provided that such Purchase Offer shall be distributed or allocated in accordance with Article 12.1 above.


18.2	The majority set forth in Article 18.1 above for Shareholders accepting the Purchase Offer shall be deemed the majority required under Section 341(d) of the Companies Law.


18.3	Each Shareholder hereby agrees to vote in favor of any resolution brought before a General and/or Class Meeting in order to consummate the transaction contemplated in the Purchase Offer, and to take all steps and actions, including signing all documents and delivery of Share certificates, as are required to fully effect such transaction and hereby waives any appraisal rights with respect thereto.

18.4

Without derogating from Article 18.3 above, all Shareholders shall be deemed to have given an irrevocable proxy to such person as shall be designated by the Shareholders who accepted the Purchase Offer to vote for, and sign all documents in connection with, the acceptance of such Purchase Offer and at the closing of such Purchase Offer all of the Shareholders will transfer all their Securities to such person or entity at the same price and terms as the Purchase Offer. If a Shareholder fails to surrender its Share certificate, or any other instrument evidencing its Securities in connection with the consummation of the Purchase Offer, such certificate or instrument shall be deemed canceled, the Company shall be authorized to issue a new certificate or instrument in the name of the person making the Purchase Offer, the Board shall be authorized to establish an escrow account into which the consideration for such canceled Securities shall be deposited and a trust to administer such account.


18.5	The Company shall not issue any Securities, or effect any Transfer of Securities by any Shareholder until it has satisfactory evidence that such subscriber or transferee (to the extent not a Shareholder prior to the issuance or Transfer) shall be bound by, and be subject to, the provisions of this Article 18.


19.	Exemptions

19.1

The right of first refusal and the right to bring along set forth in Articles 16 and 18 above, respectively, shall not apply to Transfers of Securities from a Shareholder to the Permitted Transferees of such Shareholder, back to the original Shareholder and/or to a Permitted Transferee of such Permitted Transferee , provided, that such Permitted Transferee remains within the definition of a Permitted Transferee of the Transferor .


19.2	In addition to and without derogating from the above, a Transfer of Shares held by any trustee pursuant to an ESOP to any participant of the ESOP, shall not be subject to the rights of first refusal set forth in these Articles.


20.	Right of Co-Sale

Notwithstanding any provision to the contrary herein, the Preferred Shareholders shall be entitled to participate, on a pro rata basis and on identical terms, in any Transfer of Shares (the " Transferred Shares ") by any Founder or other members of management (holding a title of vice president or higher) (the “ Co-sale Transferor ”), according to the following provisions:

20.1

Exercise of Right . If the Transferred Shares intended to be sold by the Co-sale Transferor are not acquired pursuant to the rights of first refusal set forth in these Articles, the Preferred Shareholders (hereinafter the “ Offerees ”), shall have the right, exercisable by written notice to the Co-sale Transferor within the ROFR Period, to require the Co-sale Transferor to provide as part of his proposed sale, that such Offeree

shall be given the right to participate in the sale in a pro rata proportion (the “ Offeree Pro-Rata Share ”) equal to the product obtained by multiplying (i) the aggregate number of Shares covered by the sale, by (ii) a fraction, the numerator of which is the number of Shares owned by such Offeree at the time of the sale and the denominator of which is the total number of Shares owned by all Preferred Shareholders at the time of sale, on the same terms and conditions as the Co-sale Transferor. If any Offeree exercises its rights hereunder, the Co-sale Transferor must cause the purchaser of the Offered Shares (the “ Buyer ”) to purchase, as part of the sale agreement, the Offeree Pro Rata Share (or any part thereof chosen by such Offeree to be sold, if it gave notice with respect to less than its Pro-Rata Share), and the Co-sale Transferor shall not proceed with such sale unless such Offeree is given the right to so participate in the sale.


20.2	If an Offeree does not respond to the Offer by the end of the ROFR Period clearly stating its wish to participate in the sale, such Offeree shall be deemed to have declined waived its co sale right under this Article 20.

20.3

The Co-sale Transferor shall be entitled to sell all, or the appropriate pro rata portion (together with the participating Offerees’ Shares), as applicable, of the Offered Shares, to the Buyer at any time within ninety (90) days after the lapse of the ROFR Period. Any such Transfer shall be on not less favorable terms and conditions to the Buyer than those specified in the Offer. Any of the Co-sale Transferor’s Shares in the Company not so sold within such 90-day period shall continue to be subject to the requirements of this Article 20.


20.4	The exercise or non-exercise of the right to participate hereunder with respect to a particular sale by a Co-sale Transferor shall not adversely affect the right of the Preferred Shareholders to participate in subsequent sales by shareholders pursuant to this Article 20.

20.5

Notwithstanding the aforesaid, if any Transfer proposed to be made by shareholder, in one or more related transactions, shall result in a change in Control of the Company, then the Co-sale Transferor shall, prior to effecting such Transfer, notify the Offerees of same, and the Offerees shall be entitled to participate in such transaction(s) and effect a Transfer of all of their Securities in the Company (on an as-converted basis) in accordance with the provisions of this Article 20.

20.6

If a shareholder purports to effect a Transfer of any Securities in contravention of the provisions of these Articles (the “ Defaulting Shareholder ” and a “ Prohibited Transfer ”, respectively), then: (i) the Company shall not record the sale and Transfer in the Shareholders Register nor otherwise give any force or effect to such Prohibited Transfer, and (ii) in addition to the Company’s obligation in (i) herein, the Offerees may proceed to protect and enforce their rights herein by suit in equity or by action at law against the Defaulting Shareholder, whether for the specific performance of any provision contained herein or for an injunction against the breach of any such provision, or to enforce any other legal or equitable right of the Offerees.


20.7	Notwithstanding anything to the contrary in this Article 20, for the purposes of this Article 20, reference to a Shareholder shall include the Shareholder’s Affiliates


21.	Modification of Capital

Subject to the rights of the Preferred Shareholders and further subject to the provisions of Article 13.2 above and Article 36 below, the Company may, from time to time, by Ordinary Resolution:


21.1	consolidate and divide its share capital or a part thereof into shares of greater value than its existing Shares;


21.2	cancel any Shares which have not been purchased or agreed to be purchased by any Person;

21.3

by subdivision of its existing Shares, or any of them, divide the whole, or any part, of its Share capital into shares of lesser value than is fixed by these Articles, and in a manner so that with respect to the shares created as a result of the division it will be possible to grant to one or more shares a right of priority, preference or advantage with respect to dividend, capital, voting or otherwise over the remaining or similar share;


21.4	reduce its Share capital, and any fund reserved for capital redemption, in the manner that it shall deem to be desirable under the provisions of Section 287 of the Companies Law;


21.5	reclassify all or any part of its share capital, regardless if such Shares are issued or not; or

21.6

increase its Share capital, regardless of whether or not all of its Shares have been issued, or whether the Shares issued have been paid in full, by the creation of new shares, divided into shares in such nominal value, and with such preferred or deferred or other special rights (subject always to the provisions of these Articles), and subject to any conditions and restrictions with respect to Dividends, return of capital, voting or otherwise, as shall be directed by the resolution.


22.	Registered Holder

22.1

If two (2) or more Persons are registered as joint holders of a Share, they shall be jointly and severally liable for any calls or any other liability with respect to such Share. However, with respect to voting, powers of attorney and furnishing notices, the joint holder registered first in the Shareholders Register shall be deemed to be the sole owner of the Share, unless all the registered joint holders of such Share shall notify the Company in writing that another one of them is to be treated by the Company as the sole owner of such Share, as aforesaid.

22.2

If two (2) or more Persons are registered together as holders of a Share, each one of them shall be permitted to give receipts binding all the joint holders for Dividends or other amounts and distributions made in connection with such Share(s), and the Company shall be permitted to pay all Dividends, distributions or other amounts due with respect to the Share(s) to one (1) or more of the joint holders, as it shall deem fit.


22.3	If, by the terms of issuance of any Share, the whole or any part of the price thereof shall be payable by installments, every such installment shall, when due, be paid to

the Company by the then registered holder of the Share or by his administrators.


22.4	The Company shall not be bound to recognize any equitable, contingent, future or partial interest in any share or any other right whatsoever in any share other than an absolute right to the entirety thereof of the registered holder.


23.	Share Certificates


23.1	Each Share certificate evidencing title to Shares shall carry the signature of at least one (1) Director and/or of any other Person(s) authorized thereto by the Board, together with the rubber stamp or printed name of the Company.

23.2

A Shareholder shall be entitled to receive from the Company, without payment, one (1) certificate for each class of Shares held by such Shareholder, containing the number of Shares registered in the name of such Shareholder, their class and serial numbering. Shares of different classes may not be included in the same certificate. A Shareholder who has Transferred a portion of his Shares shall be entitled to a certificate representing the balance of his Shares, without charge, against the surrender of the original Share certificate issued thereto or evidence of loss or destruction of such Share certificate, to the extent that a Share certificate was in fact originally issued.

23.3

For joint holders of a Share(s), the Company shall not be obligated to issue more than one (1) certificate to all such joint holders, and the delivery of such a certificate to one (1) of the joint holders shall be deemed to be a delivery to all of the joint holders. Delivery of the Share certificate to the joint holder first named on the Shareholders Register in respect of such joint ownership shall be deemed delivery to all joint holders.


23.4	If a Share certificate is defaced, lost or destroyed, it may be replaced upon payment of such fee, if any, and on such terms as to evidence and indemnity, if any, as the Board may deem fit.


24.	Calls


24.1	No Person shall be entitled to any right as a Shareholder of the Company (including without limitation the right to receive Dividends or to vote in the Company’s General or Class Meetings) with respect to Shares not fully paid for according to their terms of issuance, except as otherwise agreed to by the Company (following approval of the Board) and such Person.

24.2

The Board may make calls for payment from Shareholders of the amount due and not yet paid up on their shares as the Board shall deem fit, provided that the Company gives the Shareholders a prior notice of at least fourteen (14) days on every call. Each Shareholder shall pay the amount called to the Company on the date and at the place prescribed in the Company's notice. Unless otherwise stipulated in the resolution of the Board (and in the notice referred to above), each payment in response to a call shall be deemed to constitute a pro rata payment on account of all the shares of the Shareholder in respect of which such call was made


24.3	The joint holders of a share shall be jointly and severally liable to pay the calls for payment on such share and all interest payable thereon in full.


24.4	If the amount called is not paid by the prescribed date, the Person from whom it is due shall be liable to pay such linkage differentials and interest as the Board shall determine, from the date on which payment was prescribed until the day on which it is actually paid, but the Board may forego the payment of such linkage differentials or interest, in whole or in part.

24.5

Any amount that, according to the conditions of issuance of a Share, must be paid at the time of issuance or at a fixed date, whether on account of the par value of the share or premium, shall be deemed for the purposes of these Articles to be a call for payment that was duly made. In the event of non-payment of such amount all the provisions of these Articles shall apply in respect of such amount as if a proper call for its payment has been made and an appropriate notice thereof given.


24.6	At the time of issuance of shares the Board may make arrangements that differentiate between Shareholders, in respect of the amounts of calls for payment, their dates of payment or the rate of interest.

24.7

The Board may, if it deems fit, accept from any Shareholder for his Shares any amount of money not yet payable, and may approve the payment by the Company of (i) interest for that advance until the day on which such amount would be payable, at a rate agreed between the Company and such Shareholder, and (ii) any Dividends that may be paid for that part of the Shares for which the Shareholder has paid in advance from the date of such payment. The Board may at any time cause the Company to repay all or any part of the money so advanced, without premium or penalty.


25.	Forfeiture of Shares

25.1

If a Shareholder fails to pay any amount payable by virtue of a call, installment of a call, or interest thereon on the day appointed for payment thereof, the Board may, at any time thereafter so long as any part of such call, installment or interest remains unpaid, forfeit all or any of the Shares in respect of which such payment was called for. Any interest which may have accrued and any expenses that were incurred as a result of such non-payment (including without limitation attorneys' fees and costs of legal proceedings) shall be added to, and shall for all purposes (including the accrual of interest thereon) constitute part of the amount payable to the Company in respect of such call.

25.2

Following the adoption of a resolution as to the forfeiture of a Shareholder's Share, a notice which specifies a date not less than fourteen (14) days from the date of the notice, on or before which the payment of the call or installment or part thereof is to be made together with interest and any expenses incurred as a result of such non-payment shall be given to such Shareholder. The notice shall also state the place the payment is to be made and that in the event of non-payment at or before the time appointed, the share in respect of which the call was made will be de facto forfeited.


25.3	The forfeiture shall apply to those Dividends that were declared but not yet distributed with respect to the forfeited Shares.


25.4	A share so forfeited shall be deemed to be the property of the Company and can be sold or otherwise disposed of, on such terms and in such manner as the Board deems

fit. At any time before a sale or disposition the forfeiture may be canceled on such terms as the Board deems fit.

25.5

A Person whose Shares have been forfeited shall cease to be a Shareholder in respect of the forfeited Shares, but shall notwithstanding remain liable to pay, and shall promptly pay, to the Company all amounts which, at the date of forfeiture, were payable by him to the Company in respect of the shares, together with interest thereon from the time of forfeiture until actual payment at the rate prescribed above.


25.6	The forfeiture of a Share shall cause, at the time of forfeiture, the cancellation of all such Shareholder’s rights in the Company and of any claim or demand against the Company with respect to that Share, and of other obligations that the Company may have towards such Shareholder with respect to such Share.


25.7	The Person to whom the forfeited Share may be sold shall be registered as the holder of the Share and his title to the Share shall not be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the Share.


25.8	The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the par value of the Share or by way of a premium, as if the same had been payable by virtue of a call duly made and notified.


26.	Lien

26.1

The Company shall have a lien and first pledge on every Share that was not paid up in full, in respect of money due to the Company on calls for payment or payable at fixed times, whether or not presently payable, or the fulfillment and performance of the obligations and commitments to which the Company is entitled in respect of the Share. The lien on a Share shall also apply to Dividends and other distributions payable on it. The Board may exempt any Share, in full or in part, temporarily or permanently, from the provisions of this Article 26.

26.2

The Company may sell any Share on which it has a lien in any manner the Board deems fit, but such Share shall not be sold before the date of payment of the amount in respect of which the lien exists, or the date of fulfillment and performance of the obligations and commitments in consideration of which the lien exists, has arrived, and until fourteen (14) days have passed after written notice has been given to the registered holder at that time of the Share, demanding payment of the amount against which the lien exists, or the fulfillment and performance of the obligations and commitments in consideration of which the lien exists, and such payment or fulfillment and performance have not been made.

26.3

The net proceeds of the sale, after payment of the costs thereof, shall be applied in payment of the amount due to the Company or the fulfillment and performance of the obligations and commitments in respect of such Share as aforesaid in the preceding Article (whether or not the same have matured), and the remainder, if any, shall be paid to whoever is entitled to the Share on the day of the sale.


26.4	After the execution of a sale of pledged Shares as aforesaid, the Board shall be permitted

to sign or to appoint someone to sign a deed of transfer of the sold Shares and to register the purchaser's name in the Shareholders Register as the owner of the Shares so sold, and it shall not be the obligation of the purchaser to supervise the application of the purchase price nor will his right in the Shares be affected by any fault or error in the procedure of sale.

General Meetings

27.

The Company shall not have to hold an Annual General Meeting except to the extent necessary for purpose of appointing the Company’s Auditors. Any Annual General Meeting, to the extent convened, shall be held at least once every year, at such place and time as may be prescribed by the Board, but in any event not more than fifteen (15) months after the preceding General Meeting. The Company shall hold an Annual General Meeting at such time and place as prescribed by the Board. The Company shall hold Special General Meetings and Class Meetings if and when called.


28.	A General Meeting may be convened in the manner provided by the Companies Law.


29.	Notices of General Meetings .

Notices of General Meetings shall be given as follows:


29.1	A prior notice of at least seven (7) days and no more than 45 days of any General Meeting shall be given with respect to the place, date and hour of the meeting and the nature of every subject on its agenda.


29.2	The notice shall be given to Shareholders entitled pursuant to these Articles to receive notices from the Company, as hereinafter provided.


29.3	Non-receipt of a notice, given as aforesaid, or the accidental omission to give notice of a meeting to any Shareholder, shall not invalidate the resolution passed or the proceedings held at the relevant meeting.


29.4	With the consent of all the Shareholders who are entitled at such time to receive notices, the Company shall be permitted to convene General Meetings and to resolve any resolution, upon shorter notice or without any notice and in such manner, generally, as shall be approved by the Shareholders.


30.	Proceedings At General Meetings .


30.1	The General Meeting shall have the right to discuss and vote on such matters as set forth in these Articles and the Companies Law.

30.2

Quorum . No matter shall be discussed at a General Meeting unless a quorum is present at the time when the General Meeting starts its discussions. Subject to the provisions of these Articles, two or more Shareholders present, personally or by proxy, who hold or represent in the aggregate the majority of the voting rights in the Company, on an as converted basis, shall constitute a quorum for General Meetings.


30.3	If within half an hour from the time appointed for the General Meeting a quorum is not present, the General Meeting, shall stand adjourned to the same place and time two (2) Business Days from the date of the original General Meeting. If a notice of

the adjourned General Meeting has been given to the Shareholders, and a quorum is not present at the adjourned General Meeting within half an hour from the time appointed for the General Meeting, one or more Shareholder(s) present personally or by proxy, shall constitute a quorum, and shall be entitled to deliberate and to resolve in respect of the matters for which the General Meeting was convened.

30.4

The Chairman or a director appointed by the Board for such purpose shall open all General Meetings and shall preside as chairman at the General Meeting. If there is no such Chairman, or if at any General Meeting such Chairman is not present within fifteen (15) minutes after the time fixed for holding the General Meeting or is unwilling to act as chairman, the Shareholders present shall choose someone of the Shareholders present to be chairman.


30.5	The provisions of these Articles relating to General Meetings shall, mutatis mutandis, apply to any Class Meeting, provided, however , that the requisite quorum at any such Class Meeting shall be one or more Shareholders present in person or proxy and holding not less than fifty percent (50%) of the issued and outstanding shares of such class.


31.	Vote By Shareholders .

31.1

Every resolution put to the vote at a General Meeting shall be decided by a count of votes. Subject to any provision in the Companies Law or in these Articles requiring a higher or other specified majority, all resolutions shall be passed as Ordinary Resolutions (calculated on an as-converted basis). A declaration by the chairman that a resolution has been carried unanimously, or carried by a particular majority, or lost, and an entry to that effect in the minute book of the Company, shall be prima facie evidence of the fact without proof of the number or proportion of the votes recorded in favor of or against such resolution.

31.2

Subject to the provisions of these Articles, in a count of votes, each Shareholder present at a General Meeting, personally or by proxy, shall be entitled to one (1) vote for each Share held by it on an as converted basis; provided that , no Shareholder shall be permitted to vote at a General Meeting or to appoint a proxy to vote thereat unless he has paid all calls for payment and all amounts then due to the Company from him with respect to his Shares.


31.3	If the number of votes for and against is equal, the chairman of the General Meeting shall not have a casting vote, and the resolution proposed shall be deemed rejected.

31.4

In the case of joint holders of a Share, the vote of the senior holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders. The appointment of a proxy to vote on behalf of a Share held by joint holders shall be executed by the signature of the senior of the joint holders. For the purposes of this Article, seniority shall be determined by the order in which the names of the joint holders stand in the Shareholders Register.


31.5	An objection to the right of a Shareholder or a proxy to vote in a General Meeting must be raised at such General Meeting or at such adjourned General Meeting wherein that Person was supposed to vote, and every vote not disqualified at such a General Meeting shall be valid for each and every matter. The chairman of the General Meeting

shall decide whether to accept or reject any objection raised at the appointed time with regard to the vote of a Shareholder or proxy, and his decision shall be final.


31.6	A Shareholder of unsound mind, or in respect of whom an order to that effect has been made by any court having jurisdiction, may vote, only through his legal guardian or such other Person, appointed by the aforesaid court, who performs the function of a representative or guardian. Such representative, guardian, or other Person may vote by proxy.


31.7	A Shareholder which is a corporation shall appoint a person who it shall deem fit to be its representative at every General Meeting of the Company. The representative appointed as aforesaid shall be entitled to exercise on behalf of the Shareholder he represents all the powers that the Shareholder itself could have exercised as if it were a natural person.


31.8	In every vote, a Shareholder entitled to vote as set forth in these Articles, shall be entitled to vote either personally or by proxy. A proxy need not be a Shareholder.


31.9	Shareholders may participate in a General Meeting by means of a conference telephone call or similar communications equipment by means of which all Persons participating in the General Meeting can hear each other and participation in a General Meeting pursuant to this Article shall constitute presence in person at such General Meeting.


31.10	Shareholders may also vote in writing, by delivery to the Company, prior to a General Meeting, of a written notice stating their affirmative or negative vote on an issue to be considered by such General Meeting.


31.11	A letter of appointment of a proxy, power of attorney or other instrument pursuant to which the appointee is acting shall be in writing. An instrument appointing a proxy, whether for a specific General Meeting or otherwise, may be in the following form or in any other similar form prescribed by the Board:

"I, [Name of Shareholder] , of [Address of Shareholder] , a Shareholder holding shares in ______________ Ltd. hereby appoint [Name of Proxy] of [Address of Proxy] as my proxy to vote in my name and place at the General Meeting of the Company to be held on _________, and at any adjournment thereof.

In witness whereof signed by me this day of ______,____

Appointor's Signature"

31.12

Such instrument or a copy thereof shall be deposited at the Office, or at such other place as the Board may direct from time to time, not less than 24 hours before the time appointed for the General Meeting or adjourned General Meeting wherein the Person referred to in the instrument is appointed to vote, or presented to the chairman at the General Meeting in which such Person shall vote that Share. An instrument appointing a proxy which is not limited in time shall expire twelve (12) months after the date of its execution; if the appointment shall be for a limited period (whether limited by time or until the occurrence of a certain event), whether in excess of twelve (12) month or not, the instrument shall be for the period stated therein.

31.13

A vote pursuant to an instrument appointing a proxy shall be valid notwithstanding the death of the appointor, or the appointor becoming of unsound mind, or the cancellation of the proxy or its expiration in accordance with any law, or the Transfer of the Shares with respect to which the proxy was given, unless a notice in writing of any such event was received at the Office not less than 24 hours before the General Meeting took place. A facsimile transmission of the letter of appointment or power of attorney or other certificate shall be sufficient for the purpose of the General Meeting(s) for which it is intended.


31.14	A Shareholder is entitled to vote by a separate proxy with respect to each Share held by him, provided that each proxy shall have a separate letter of appointment specifying the number of Share(s) with respect to which such proxy is entitled to vote.

31.15

Subject to the provisions of any law, a resolution in writing signed by all Shareholders entitled to vote with respect to such Shares at General Meetings, or a resolution as aforesaid agreed upon by facsimile or e-mail, shall have the same validity as any resolution carried in a General Meeting of the Company duly convened and conducted for the purpose of passing such a resolution. If all the Shareholders shall consent in writing, or by facsimile or e-mail to any action to be taken by the Shareholders, such action shall be as valid as though it had been unanimously authorized at a duly convened General Meeting.

Board Of Directors


32.	Composition of the Board


32.1	Number of Directors . The number of Directors shall consist of no less than one (1) directors and no more than seven (7) directors to be appointed and/or nominated as follows:


32.1.1	two (2) Directors shall be appointed, removed and replaced by the Majority Preferred A Shareholders (the “ Preferred A Director(s) ”);


32.1.2	one (1) Director shall be appointed, removed and replaced by the Preferred B Investor (the “ Preferred B Director ”);


32.1.3	two (2) Directors shall be appointed, removed and replaced by the holders of a majority of the Ordinary Shares (the “ Ordinary Director(s) ”); and


32.1.4	two (2) Director shall be an industry expert appointed, removed and replaced by unanimous consent of the other members of the Board.


32.2	Chairman of the Board . The Chairman shall be designated and appointed by a majority of the Directors.


32.3	Appointment Instrument . Appointment, removal and replacement of Directors shall be effected by furnishing written notification to the Company, and shall become effective on the date fixed in such notice, or if not date is fixed, then on the date of receipt of such notification by the Company.


32.4	If any Director is not designated or appointed, or if the office of any Director is vacated,

the other Directors may act in every way and manner provided for under these Articles and the Companies Law as long as their number does not fall below the quorum required by these Articles for a Board meeting.

32.5

Alternate Director . Any Director is entitled, to appoint an alternate director, subject to the provisions of the Companies Law. Any Person, including a Director or an alternate director, may be such alternate Director (an “ Alternate Director ”), if such Person is qualified to serve as a director of the Company. Any Alternate Director shall have a vote equal to the votes of the Directors that he substitutes. An Alternate Director shall have, subject to his letter of appointment, all authorities vested in the Directors he substitutes. The tenure of office of an Alternate Director shall automatically be terminated upon the dismissal of the Director, or upon the vacation of office, for any reason, of, the Directors he substitutes, or upon the occurrence of one of the situations stated in Article 32.8 below in relation to such Alternate Director. Notwithstanding the foregoing, the appointment of an Alternative Director by the Preferred B Director shall not be effective unless approved by Marker TF Investments Ltd. in advance.


32.6	A Director shall not be required to hold Shares in the Company.

32.7

A Director may hold another paid position or function, except as accountant-auditor, in the Company, or in any other company of which the Company is a shareholder or in which the Company has some other interest, or that has an interest in the Company, together with his position as a Director, upon such conditions with respect to salary and other matters as determined by the Board and approved by the General Meeting.


32.8	Subject to the provisions of the Companies Law or these Articles, the tenure of office of a Director shall automatically be terminated upon the occurrence of one of the following:


32.8.1	if the Director becomes bankrupt;


32.8.2	if the Director is declared insane or becomes of unsound mind;


32.8.3	if the Director resigns by an instrument in writing delivered to the Company; or


32.8.4	upon the death of the Director, and if the Director is a corporation or other entity, upon the liquidation of such corporation or other entity.

32.9

Directors shall not receive any remuneration from the Company's funds, unless otherwise resolved by the General Meeting, and at a rate decided by such resolution. The Directors shall be entitled to reimbursement of their expenses in the course of their performance of their duties as Directors, including expenses in relation of participating in Board meetings, all as shall be determined by the Board.


32.10	The Preferred D Investors shall be entitled to appoint one non-voting board observer to the Board and to the board of directors of each material subsidiary (the " Preferred D Designee "). The Preferred D Designee shall be invited to all Board meetings and receive all notices, minutes consents and other information provided to members of the Board.


32.11	The Preferred D Designee will be reimbursed for the reasonable costs and expenses of transportation and accommodations associated with attending each Board meeting.


33.	Powers and Duties of Directors

33.1

The Board shall determine and direct the Company's policy and shall supervise and inspect the performance of the CEO or General Manager and his or her actions and responsibilities. The Board shall be entitled to exercise the Company's powers and authorities pursuant to the applicable provisions of the Companies Law and these Articles. For the avoidance of doubt, all decisions regarding appointment or dismissal of the Company's senior management may be made by the CEO or other management members.

33.2

Without limiting the generality of the preceding provision, the Board may from time to time, in its discretion, cause the Company to borrow or secure the payment of any sum of money for the purposes of the Company, and it may cause the Company raise or secure the repayment of such sum in such manner, at such times and upon such terms and conditions in all respects as it thinks fit, and, in particular, by the issue of bonds, perpetual or redeemable debentures, debenture stock, or any mortgages, charges, or other securities on the whole or any part of the property of the Company, both present and future, including its uncalled capital for the time being and its called but unpaid capital.


34.	Proceedings and Functions of the Board of Directors


34.1	The Board may meet in order to transact business, to adjourn its meetings or to organize them otherwise as it shall deem fit, in accordance with these Articles. The Board will meet at least once in each fiscal quarter.

34.2

Quorum . The presence of a majority of the Directors then in office at the opening of a Board meeting, one of whom must be a Preferred A Director, one of whom must be a Preferred B Director, and one of whom must be an Ordinary Director, shall constitute a quorum for meetings of the Board. Notwithstanding the aforesaid, if within half an hour of the time arranged for the Board meeting no quorum is present, such meeting shall stand adjourned to the same place and time three (3) Business Days from the date of the original meeting, and in such adjourned meeting if no quorum is present within half an hour of the time arranged, the presence of at least two (2) Directors then in office at such adjourned meeting, one of whom must be a Preferred Director, and one of whom must be an Ordinary Director, shall be deemed a quorum.

34.3

The Board may delegate any of its powers to committees and may from time to time revoke such delegation; provided that such delegation does not contradict Section 112 of the Companies Law; and provided further that the Preferred B Director shall be a member of every such committee if he/she elects to do so. Each committee to which any powers of the Board have been delegated shall abide by any regulations enacted by the Board with respect to the exercise of such delegated powers. In the absence of such regulations or if such regulations are incomplete in any respect, the committee shall conduct its business in accordance with the provisions of these Articles relating to the Board.


34.4	Directors or members of a committee of the Board may participate in a meeting of the Board or the committee, as applicable, by means of a conference telephone call or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Article shall constitute presence in person at such meeting.


34.5	Each director may at any time request that a Board meeting be called and the Chairman shall call such a meeting upon such request.

34.6

Any notice of a Board meeting shall be given in writing in accordance with the notice provisions of these Articles, and shall include reasonable detail of the issues of such meeting. Notice shall be given at least three (3) Business Days before the time appointed for the meeting, unless all Directors at that time agree to a shorter notice, or waive notice altogether. Despite anything to the contrary in these Articles, failure to deliver notice to a Director of any such meeting in the manner required hereby may be waived by such Director, and a meeting shall be deemed to have been duly convened despite such defective notice following such waiver.


34.7	Subject to the provisions of Article 36 below, issues raised before all meetings of the Board shall be decided by the majority of the Directors present and entitled to vote at the meeting of the Board.


34.8	A resolution in writing signed or agreed to in writing (including by facsimile or e-mail) by all of the Directors entitled to participate and vote on the issue at stake (or any respective Alternate Directors) shall be valid for any purpose as a resolution adopted at a Board meeting that was duly convened and held.

34.9

Subject to the provisions of applicable Law, all actions performed bona fide by the Board or by any Person acting as Director or as an Alternate Director shall be as valid as if each and every such Person were duly and validly appointed and fit to serve as a Director or an Alternate Director, as the case may be, even if at a later date a flaw shall be discovered in the appointment of such a Director or such a Person acting as aforesaid, or in his qualifications so to serve.

34.10

The Board shall cause minutes of all General Meetings of the Company, Board meetings and meetings of any committee of the Board, to be taken which minutes shall include at least the following items, if applicable: the names of the Persons present; the matters discussed at the meeting; the results of votes taken; resolutions adopted at the meeting; and directives given by the meeting. The minutes of any meeting, signed or appearing to be signed by the chairman of the meeting, shall serve as prima facie evidence of the accuracy of the contents of the minutes.


35.	Personal Interest


35.1	All transactions and actions in which an Office Holder in the Company has a personal interest shall be approved in accordance with the provisions of the Companies Law and Article 36 below.


35.2	Prior to the approval of any such transaction with an Officer Holder, the Office Holder having a personal interest in a transaction with the Company or in a transaction with

another Person in which the Office Holder has a personal interest, shall disclose to the Company in advance all of the relevant facts of his personal interest in the proposed transaction.


36.	Protective Provisions


36.1	Except as otherwise provided in these Articles, until a Qualified IPO, the Company shall not, without the consent of the Preferred Majority, or, if the decision is taken solely at the Board level under applicable Law, the consent of one (1) Preferred A Director and the Preferred B Director to take any action that:


36.1.1	subject to Articles 13.2.1, 13.2.2, 13.2.3, and 13.2.4 amends or otherwise modifies or waives any rights under these Articles or recapitalizes any of the Company’s Shares, other than share splits, share dividends, and other technical changes in the Company's share capital;


36.1.2	subject to Articles 13.2.1, 13.2.2, 13.2.3, and 13.2.4 alters or changes the rights, preferences, or privileges of any class or series of the Preferred Shares, in any manner whatsoever, including, without limitation, by merger, consolidation or acquisition of the Company;


36.1.3	subject to Articles 13.2.1, 13.2.2, 13.2.3, and 13.2.4 creates (by reclassification or otherwise) or issues any class or series of shares or other Securities of the Company, having rights, preferences or privileges senior to or on parity with any class of the Preferred Shares in any respect;


36.1.4	increases or decreases the authorized number of Ordinary or Preferred Shares or any series of Preferred Shares;


36.1.5	effects a Liquidation, Deemed Liquidation, or other winding up of the Company or the cessation of all or substantially all of the business of the Company;


36.1.6	results in the payment or declaration of any dividend on any Ordinary Shares or Preferred Shares.


36.1.7	results in the redemption of any Preferred Shares or Ordinary Shares (other than pursuant to equity incentive agreements with service providers giving the Company the right to repurchase Shares upon the termination of services);


36.1.8	results in any merger, other corporate reorganization, sale of control, or any transaction in which all or substantially all of the assets of the Company are sold;


36.1.9	effects an IPO other than a Qualified IPO;


36.1.10	involves any transaction with an Interested Party;


36.1.11	effects any material change in the business of the Company;


36.1.12	without derogating from sub-parts 36.1.5 and 36.1.8 above, for so long as the outstanding Preferred Shares represent at least seven percent (7%) of

the issued and outstanding Shares on a fully diluted basis, involves the Transfer or license of any material asset in excess of $50,000 including intellectual property rights of the Company, or any substantial part thereof, other than in the ordinary course of business;


36.1.13	effects an acquisition of assets, other than acquisitions for less than US$300,000 per acquisition;


36.1.14	approves any loans or advances to employees or other than in the ordinary course of business as travel advances;


36.1.15	increases or decreases the authorized size of the Board as provided hereunder; and


36.1.16	guaranties an obligation of another or creates or approves any mortgage, pledge or other security interest on any material asset, other than in the ordinary course of business, of the Company or a subsidiary.


36.2	The same consents as set out in Article 36.1 above shall be required, mutatis mutandis, for any of the actions listed therein taken by, or with respect to, any subsidiary of the Company.

36.3

The ESOP Pool may not be increased by more than 1,000,000 Ordinary Shares per calendar year in the aggregate (" Annual Increase ") (i.e. any unutilized portion of the Annual Increase may be carried over to subsequent calendar years) without the consent of the holders of: (i) the Preferred Majority; (ii) the holders of 75% of all of the issued and outstanding Preferred C Shares; and (iii) at least two-thirds of the issued and outstanding Preferred D Shares, on an as-converted basis, and provided that any increase of the ESOP Pool shall be subject to the approval of the Board.


36.4	The definition of "Deemed Liquidation" in these Articles may not be amended without the written consent of: (i) the holders of the Preferred Majority; (ii) the holders of 75% of all issued and outstanding Preferred C Shares; and (iii) the holders of two-thirds or more of the Preferred D Shares.

General Provisions Relating To Management Of The Company


37.	Local Management


37.1	The Board may organize from time to time arrangements for the management of the Company's business in any particular place, whether in Israel or abroad, as it shall deem fit.


37.2	The Board may appoint any Person to be a member of such local management, or to be an agent, terminate such Person’s appointment at any time, and decide such Person’s manner of compensation and scope of authority.


38.	CEO, General Manager, President, Secretary, Other Officers And Attorneys


38.1	The Board may from time to time appoint one or more Persons, whether

or not he is a Director, as the CEO of the Company. The appointment may be either for a fixed period of time or without limiting the time that the CEO will stay in office. The Board may, from time to time, subject to any provision in these Articles and any contract between the CEO and the Company, release him from his office and appoint another or others in his or their place. The CEO shall be responsible for the current operation of the Company's affairs within the bounds of the policy determined by the Board and subject to its directions. In addition, the Board may from time to time, subject to the provisions of applicable law, grant and bestow upon the CEO those powers and authorities that it exercises pursuant to these Articles and under the provisions of Section 92 of the Companies Law, as it shall deem fit, and may grant those powers and authorities for such period, and to be exercised for such objectives and purposes, in such time and conditions, and on such restrictions, as it shall decide; and it can from time to time revoke, repeal, or change any one or all of those powers or authorities.

38.2

Subject to the provisions of these Articles, the Board may from time to time appoint a Secretary to the Company, a Treasurer and/or Comptroller or Chief Financial Officer as well as other officers, personnel, agents and servants, including management companies, for fixed, provisional or special duties, as the Board may from time to time deem fit, and may from time to time, in its discretion, suspend and/or dismiss any one or more of such Persons. The Board may determine the powers and duties of such Persons, and may demand security in such cases and in such amounts as it deems fit.

38.3

Subject to the provisions of these Articles, the wages and any other compensation of the CEO and other managers, or officers shall be determined from time to time by the Board, and it may be paid by way of a fixed salary or commission, or a percentage of profits or of the Company's turnover or of any other company in which the Company has an interest, or by participation in such profits, or in any combination of the aforementioned methods, or such other method as the Board shall determine.

38.4

The Board may from time to time directly or indirectly authorize any company, firm, Person or group of people to be the attorneys in fact of the Company for purposes and with powers and discretion which shall not exceed those conferred upon the Board or which the Board can exercise pursuant to these Articles, and for such a period of time and upon such conditions as the Board may deem proper. Every such authorization may contain such directives as the Board deems proper for the protection and benefit of the Persons dealing with such attorneys. The Board may also grant such an attorney the right to transfer to others, in part or in whole, the powers, authorities and discretions granted to him, and may terminate and revoke the appointments or revoke all or any part of the powers granted to them.


39.	Registers


39.1	The Company shall keep such registers as required by the Companies Law, including but not limited to the Shareholders Register and a register of Directors.


39.2	The Company may, subject to and in accordance with the provisions of the Companies Law and these Articles, keep in every other country where those provisions shall apply, branch register(s) of Shareholders and/or directors living in that other country as aforesaid, and exercise any other powers referred to in the Companies Law with respect to such branch registers.


40.	Stamp and Signatory Rights


40.1	The Company shall have at least one stamp.


40.2	Subject to the provisions of these Articles, the Board may designate any Person(s) (even if they are not members of the Board) to act and sign in the name of the Company, and to apply the Company's stamp; the acts and signature of such a Person(s) shall bind the Company, insofar as such Person(s) have acted and signed within the limits of their authority.


40.3	The printed or typed name of the Company by any means next to the signatures of the authorized signatories of the Company, as aforesaid, shall be valid as if the stamp of the Company was affixed.


41.	Books of Account, Accounts and Audit


41.1	The Board shall, to the extent required under applicable law or by these Articles, cause correct accounts to be kept:


41.1.1	of the assets and liabilities of the Company;


41.1.2	of moneys received or expended by the Company and the matters for which such moneys are expended or received; and


41.1.3	of all purchases and sales made by the Company.


41.2	Subject to these Articles, the account books shall be kept in the Office or at such other place as the Board deems fit, and they shall be open for inspection by the Directors.

41.3

Subject to these Articles, the Board shall determine from time to time, in any specific case or type of cases, or generally, whether and to what extent, and at what times and places, and under what conditions or regulations, the accounts and books of the Company, or any of them, shall be open for inspection by the Shareholders and no Shareholder other than a Director shall have any right to inspect any account book or document of the Company except as conferred by the Companies Law or authorized by the Board and provided that such Shareholder has entered into confidentiality

undertakings reasonably satisfactory to the Board.


41.4	Auditors shall be appointed and their function shall be set out in accordance with applicable Law.


41.5	The Company shall prepare annual financial reports that shall include a balance sheet, a profit and loss account and cash flow statement for the period after the preceding financial year, all as required by applicable Law.


42.	Notices


42.1	A notice or any other document may be served by the Company upon any Shareholder either personally or by sending it by first class mail, facsimile or electronic mail, addressed to such Shareholder at its address, wherever situated, as appearing in the Shareholders Register.


42.2	A notice or any other document may be served by any Shareholder or other Security holder upon the Company either personally or by sending it by first class mail, facsimile or electronic mail, addressed to the Company at its Office.


42.3	All notices directed to be given to the Shareholders shall, with respect to any Shares to which Persons are jointly entitled, be given to one of the joint holders, and any notice so given shall be sufficient notice to all joint holders of such Share.

42.4

A notice may be given by the Company to the Persons entitled to a Share in consequence of the death or bankruptcy of a Shareholder by sending it by first class mail, postage prepaid, by facsimile or electronic mail, addressed to them by name, at the address, if any, furnished for the purpose by the Persons claiming to be so entitled or, until such an address has been so furnished, by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred.

42.5

A Shareholder registered in the Shareholders Register who shall from time to time furnish the Company with an address at which notices may be served, shall be entitled to receive all notices he is entitled to receive according to these Articles at that address. However, except for the aforesaid, no Shareholder whose address is not registered in the Shareholders Register shall be entitled to receive any notice from the Company.

42.6

Any notice or other document, (i) if delivered personally, shall be deemed to have been served on the next Business Day after delivery, (ii) if sent by internationally recognized overnight courier, freight prepaid, shall be deemed to have been served on the next Business Day after delivery; (iii) if sent by facsimile, shall be deemed to have been served on the next Business Day after delivery, if facsimile transmission is confirmed; and (iv) if sent by electronic mail, shall be deemed to have been served on the date of written acknowledgment of receipt of such e-mail by the recipient,

provided that, if no written or electronic mail confirmation is delivered by the recipient of such notice to the sender thereof within 24 hours following the delivery of such notice, such notice shall have to be resent via facsimile and shall be deemed to have been served or delivered on the next Business Day following the date that such notice was resent via facsimile. A notice that is defectively addressed or that otherwise fails to comply with the provisions of this Article 42.6 shall nevertheless be deemed to have been served if and when actually received by the addressee.


42.7	In any case where it is necessary to give prior notice of a certain number of days or a notice valid for a certain period, the date of delivery shall be taken into account in the number of days or period.


42.8	In addition to furnishing a notice pursuant to the above Article, and without derogating from such obligation, the Company may furnish a notice to the Shareholders entitled to receive notice, or to part of them, by publication of a notice in a newspaper distributed in the area wherein the Office is located, or any other place, in Israel or abroad, as the Board shall determine from time to time.


43.	Dividends

43.1

Subject to these Articles and the provisions of Sections 301 through 311 (inclusive) of the Companies Law, the Company, at a General Meeting and upon the recommendation of the Board, may declare a Dividend to be paid to the Shareholders, according to their rights and benefits under these Articles, and to decide the time of payment. A Dividend may not be declared in excess of that recommended by the Board, although the Company at a General Meeting may declare a smaller Dividend.


43.2	A notice of the declaration of a Dividend shall be given to the Shareholders registered in the Shareholders Register, in the manner provided for in these Articles.

43.3

Subject to the provisions of these Articles, and subject to any 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, the profits of the Company which shall be declared as Dividends shall be distributed according to the proportion of the nominal value paid up to account of the Shares held at the record date fixed by the Company, without regard to premium paid in excess of the nominal value, if any. No amount paid or credited as paid on a Share in advance of calls shall be treated for purposes of this Article as paid on a Share.


43.4	The Board may issue any Share upon the condition that a Dividend shall be paid at a certain date, or that a portion of the declared Dividend for a certain period shall be paid, or that the period for which a Dividend shall be paid shall commence at a certain date, or any similar condition; in any such case, subject to the Companies Law and these Articles, the Dividend

shall be paid in respect of such a Share in accordance with such a condition.

43.5

At the time of declaration of a Dividend the Company’s Shareholders may decide that such a Dividend shall be paid in whole or in part by way of distribution of certain properties, including by means of distribution of fully paid up shares or debentures or debenture stock of the Company, or by means of distribution of fully paid up shares or debentures or debenture stock of any other company, or in one or more of the aforesaid ways.


43.6	The Company shall have a lien on any Dividend paid in respect of a Share on which the Company has a charge, and may use it to pay any debts, obligations or commitments to which the charge applies.


43.7	The Persons registered in the Shareholders Register as Shareholders on the record date for declaration of the Dividend shall be entitled to receive the Dividend. A Transfer of shares shall not transfer the right to a Dividend, which has been declared after the Transfer but before the registration of the Transfer.

43.8

A Dividend may be paid by, inter alia, check or payment order to be mailed to the address of a Shareholder or Person entitled thereto as registered in the Shareholders Register, or in the case of joint owners, to the address of one of the joint owners as registered in the Shareholders Register. Every such check shall be made out to the Person to whom it is sent. The receipt of the Person who on the record date in respect of the Dividend is registered as the holder of any Share or, in the case of joint holders, of one of the joint holders, shall serve as a release with respect to payments made in connection with that Share.


43.9	If at any time the share capital is divided into different classes of shares, the distribution by way of Dividend of fully paid up shares or from funds shall be made in one of the following manners, as shall be determined by the Board:


43.9.1	all holders of Shares entitled to fully paid up Shares shall receive one uniform class of Shares; or


43.9.2	each holder of shares entitled to fully paid up shares shall receive shares of the class of shares held by such holder and entitling him to fully paid up shares.

43.10

In order to give effect to any resolution in connection with a Dividend Distribution, the Board may resolve any difficulty that shall arise with respect to such Dividend Distribution in such way as it shall deem proper, including in connection with fractional shares issuable in such Dividend Distribution and the determination of the value of certain property for purposes of Dividend Distribution. The Board may further decide that payment in cash shall be made to a Shareholder on the basis of value decided for that purpose, or that a fraction of the value which is less than one NIS shall not be taken into account for the purpose of adjusting the rights of all

the parties. The Board shall be permitted in this regard to grant cash or property to trustees in escrow for the benefit of Persons entitled thereto, as the Board shall see fit. Wherever required, an agreement shall be submitted to the Registrar of Companies and the Board may appoint a Person to execute such an agreement in the name of the Persons entitled to any Dividend, property, fully paid-up shares or debentures as aforesaid, and such an appointment shall be valid and binding on the Company.


43.11	The Board may, with respect to all Dividends not demanded within thirty (30) days after their declaration, invest or use them in another way for the benefit of the Company, until they shall be demanded. The payment by the Board of any unclaimed dividend or such other moneys into a separate account shall not constitute the Company a trustee in respect thereof.


43.12	The Company shall not be obligated to pay interest on any Dividend, including in the circumstances set forth in the preceding Article 43.11.


43.13	All Articles relating to Dividends, shall apply, mutatis mutandis , to any other distribution by the Company of any of its assets, shares or the like.


44.	Reserves

44.1

The Board may set aside from the profits of the Company the sums it deems proper, as a reserve fund or reserve funds for extraordinary uses, or for special dividends or other funds or for the purpose of preparing, improving or maintaining any property of the Company, and for such other purposes as shall, in the discretion of the Board, be beneficial to the Company, and the Board may invest the various sums so set aside in such investments as they deem proper, and from time to time deal in, change, or transfer such investments, in part or in whole, for the benefit of the Company. The Board may also divide any reserve liability fund to special funds as it shall deem proper, transfer moneys from fund to fund and use every fund or any part thereof in the business of the Company, without being required to keep such sums separate from the rest of the Company's property. The Board may generally create funds as it deems necessary, either those resulting from profits of the Company or from re-evaluation of property, or from premiums paid for shares or from any other source, and use them in its discretion as it deems fit so long as the creation, changes or uses of such funds does not violate any provision of the Companies Law or accepted accounting principles and practices.

44.2

All premiums received from the issue of Shares shall be capital funds, and shall be treated for every purpose as capital and not as profits distributable as Dividends. The Board may organize a reserve capital liability account and transfer from time to time all such premiums to the reserve capital liability account, or use such premiums and moneys to cover depreciation or doubtful loss. The Board may use moneys credited to the capital reserve liability account in any manner that these Articles or the Companies Law permit.

44.3

Any amounts transferred and credited to the account of income and expense fund or general reserve liability account or capital liability reserve account, may, until otherwise used in accordance with these Articles, be invested together with such other moneys of the Company in the day to day business of the Company, without having to differentiate between these investments and the investment of other moneys of the Company.


45.	Capitalization of Reserves

The Company may from time to time resolve at a General Meeting that any amount, investment or property not required as a source for payment of fixed preferential Dividends and (i) standing credited at that time to any fund or to any reserve liability account of the Company, including also premiums received from issuance of shares, debentures, or debenture stock of the Company, or (ii) being net profits not distributed and remaining in the Company, shall be capitalized, and that such amount shall be distributed as bonus shares, in the manner so directed by such resolution. The Board may use such investment, sum or property, according to such a resolution, for full payment of such shares of the Company's capital not issued to the Shareholders, and to issue such shares and to distribute them as fully paid shares among the Shareholders according to their pro rata right for payment of the value of the shares and their rights in the amount capitalized. The Board may also use such investment, sum or property, or any part thereof, for the full payment of the Company's capital issued and held by such Shareholders, or such investment, sum or property in any other manner permitted by such a resolution. If any difficulty shall arise with respect to such a distribution, the Board may act, and shall have all the powers and authorities, as set forth in Article 43.11 above, mutatis mutandis

Exemption, Insurance and Indemnity Of Office Holders


46.	Insurance of Office Holders .

Subject to the provisions of the Companies Law and any other applicable law, the Company may enter into a contract to insure against the liabilities of its Office Holders for an obligation imposed on an Office Holder in consequence of an act done by the Office Holder in his capacity as an Office Holder of the Company, in any of the following cases:


46.1	A breach of the duty of care owed to the Company or to any other person;


46.2	A breach of the fiduciary duty owed to the Company, provided that, the Office Holder acted in good faith and had reasonable grounds to assume that such act would not injure the Company;


46.3	A monetary liability imposed on him in favor of another person.


47.	Indemnification of Office Holders .

Subject to the provisions of the Companies law, including the receipt of all approvals as required therein or under any other applicable Law, the Company may indemnify any of its Office Holders to the fullest extent permitted by the Companies Law as follows:


47.1	retrospectively; and


47.2	undertake in advance to indemnify the Office Holders with respect to liabilities or expenses, imposed on such Officer or incurred by him in consequence of an act which he has performed by virtue of being an Officer, as listed below:

47.2.1

A monetary obligation imposed on the Office Holder in favor of another Person pursuant to a judgment, including a judgment given in settlement or a court-approved arbitration award, provided that the undertaking to indemnify will be limited to: (1) those categories of events which the Board resolves that in its opinion can be foreseen at the time the undertaking to indemnify is given in light of the Company’s then current activities; and (2) such amounts or criteria which the Board sets as reasonable under the circumstances;

47.2.2

Reasonable litigation expenses, including attorney’s legal fees, actually paid by the Office Holder in consequence of an investigation or proceeding instituted against the Office Holder by an authority that is authorized to conduct such investigation or proceeding, and which was concluded without an indictment against the Office Holder and without any monetary obligation in lieu of criminal proceedings, or which was concluded without an indictment against the Office Holder but with imposing on such Office Holder a monetary obligation in lieu of criminal proceedings in respect of an offense that does not require the proof of criminal intent;

For the purposes hereof: (i) “a proceeding that ended without an indictment in a matter in respect of which an investigation was conducted”; and (ii) “financial obligation in lieu of a criminal proceeding”, shall have the meanings specified in Section 260(a)(1A) of the Companies Law.

47.2.3

Reasonable litigation costs, including attorney’s legal fees incurred by the Office Holder or which the Office Holder is ordered to pay by a court, in a proceeding instituted against the Office Holder by the Company or on its behalf or by another person, or in a criminal charge of which the Office Holder is acquitted, or in a criminal charge of which the Office Holder is convicted of an offense that does not require criminal intent.


48.	Exemption of Office Holders .

Subject to the provisions of the Companies Law, the Company may exempt its Office Holders in advance for all or any of such Office Holders’ liability for damage in consequence of a breach of the duty of care vis-à-vis the Company, other than for a breach of duty of care stemming from a distribution (as such term is defined in the Companies Law) and for a willful or reckless breach of duty of care, excluding a breach of duty of care due to negligence.


49.	General .

The provisions of Articles 46, 47 and 48 above are not intended, and shall not be interpreted, to restrict the Company in any manner in respect of the procurement of insurance and/or in respect of indemnification and/or exemption from liability in connection with 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, or in connection with any Office

Holder to the extent that such insurance and/or indemnification and/or exemption from liability is permitted under the Companies Law.


50.	Translation of Articles.

In the event that a Hebrew version of these Articles is filed with any regulatory or governmental agency, including the Israeli Registrar of Companies, then such Hebrew version shall be considered solely a convenience translation and shall have no binding effect, as between the Shareholders of the Company and with respect to any third party. The English version shall be the only binding version of these Articles, and in the event of any contradiction or inconsistency between the meaning of the English version and the meaning of the Hebrew version of these Articles, the Hebrew version shall be disregarded, shall have no binding effect and shall have no impact on the interpretation of these Articles or any provision hereof.

Exhibit 10.2



Date:

TUFIN SOFTWARE TECHNOLOGIES LTD.

(the “ Company ”)

Letter of Indemnification

(the “ Letter ” or the “ Indemnification Letter ”)

Whereas, on [•], 2019 the Company’s board of directors (the “ Board ”) determined it wishes to indemnify and advance expenses to the Officers of the Company in accordance with the Companies Law, 5759-1999 (the “Companies Law” ), and wishes to indemnify and advance expenses to director nominees of the Company, each as set forth in this Letter; and

Whereas, on [•], 2019, at the General Meeting of the Company, the Company, following the approval of the Board, determined it wishes to indemnify and advance expenses to the Officers of the Company in accordance with the Companies Law, and wishes to indemnify and advance expenses to director nominees of the Company, each as set forth in this Letter.

WE HEREBY DECLARE THAT:


1.	Obligation to indemnify :

The Company hereby undertakes:

1.1.

To indemnify you for any liability or expense, as detailed below, imposed upon you for actions taken (including actions preceding the date of this Letter) and/or actions that will be taken, by virtue of your service as an Officer of the Company or an Officer on behalf of the Company in a company controlled by the Company or in which the Company has an interest (such companies being referred to herein as the “ Subsidiaries ”), as follows:


1.1.1.	A monetary liability that you incur or that is imposed on you in favor of another person pursuant to a court judgment, including a judgment given in a settlement entered into consistent with the terms of this Letter or a decision of an arbitrator that is enforceable against you and approved by

a competent court, provided that such acts pertain to one or more of the events set out in the Schedule hereto (the “Schedule” );


1.1.2.	Reasonable litigation expenses, including legal fees that you incur or which are ordered to pay by a court in connection with proceedings filed against you by or on behalf of the Company or by a third party, or in a criminal proceeding in which you are acquitted, or in a criminal proceeding in which you are convicted of a felony but which does not require criminal intent;

1.1.3.

Reasonable litigation expenses, including reasonable legal fees that you incur in connection with an investigation or proceeding conducted against you by an authority authorized to conduct such investigation or proceeding and which concluded without the filing of an indictment against you and without you being subject to a financial obligation as a substitute for a criminal proceeding, or that concluded without the filing of an indictment against you but with the imposition of a financial obligation as a substitute for a criminal proceeding relating to an offence which does not require proof of criminal intent, or in connection with a monetary sanction, within the meaning of the relevant terms in the Companies Law;

1.1.4.

A financial liability that you incur for payment to persons or entities harmed as a result of violations in Administrative Proceedings, as detailed in section 52(54)(A)(1)(a) of the Israeli Securities Law, 1965 (the “ Securities Law ”). For this purpose “ Administrative Proceeding ” shall mean a proceeding pursuant to Chapters H3 (Imposition of Monetary Sanction by the Israel Securities Authority), H4 (Imposition of Administrative Enforcement Means by the Administrative Enforcement Committee) or I1 (Settlement for the Avoidance of Commencing Proceedings or Cessation of Proceedings, Conditioned upon Conditions) of the Securities Law, as shall be amended from time to time;


1.1.5.	Expenses that you incur in connection with Administrative Proceedings (as defined above) you were involved in, including reasonable litigation fees and attorneys’ fees;


1.1.6.	Any other matter in respect of which it is permitted or will be permitted under applicable law to indemnify an Officer of the Company.

For the avoidance of doubt, any reference to “expenses” shall include all reasonable attorneys’ fees, court costs, transcript costs, fees of experts, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other out-of-pocket disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise

participating in, a proceeding enumerated above or an appeal resulting from a proceeding to which you are a party.

1.2.

The aggregate and accumulated indemnification amount that the Company may pay to its Officers and its director nominees (in addition to sums that may be received from insurance companies in connection with insurance policies that the Company has purchased as set forth in Section 1.3 below) pursuant to all the letters of indemnification issued and/or that shall be issued by the Company pursuant to the indemnification decisions (including in connection with an offering to the public of the Company's securities), shall not exceed the greatest of (i) in relation to indemnity in connection with an offering to the public of the Company's securities, the aggregate amount of proceeds from the sale by the Company and/or any shareholder of the Company in connection with such public offering; (ii) 25% of the Company’s total shareholders’ equity pursuant to the Company’s most recent financial statements as of the time of the actual payment of indemnification, and (iii) $40 million (as may be increased from time to time by shareholders’ approval) (the “Maximum Indemnification Amount” ).

1.3.

The Maximum Indemnification Amount shall not be affected in any way by the existence of, or payment under, insurance policies. Payment of indemnification shall not affect your right to receive insurance payments, if you receive the same (either personally or through the Company); however, the Company will not be required to indemnify you for any sums that were, in fact, already paid to you or paid on your behalf (in each case, without any obligation for you to repay any such amount) in respect of insurance or any other indemnification obligations made to you or on your behalf by any third party, except with respect to any excess beyond the amount paid. In the event there is any payment made to you or on your behalf (in each case, without any obligation for you to repay any such amount) under this Letter and such payment is covered by an insurance policy, the Company shall be entitled to collect such amount of payment from the insurance proceeds and you shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

1.4.

In the event the indemnification amount the Company is required to pay to its Officers and its director nominees, as set forth in Section 1.1 above, exceeds at a certain time the Maximum Indemnification Amount (or the balance thereof after deducting any indemnification amounts paid or payable by the Company to any of its Officers or director nominees at such time) in accordance with Section 1.2 above, the Maximum Indemnification Amount or its remaining balance will be allocated between the Officers and director nominees entitled to indemnification, in the manner that the amount of indemnification that each of the Officers and director nominees will actually receive will be calculated in accordance with the ratio between the amount each individual Officer may be indemnified for, and the aggregate amount that all

of the relevant Officers and director nominees involved in the event may be indemnified for.

1.5.

Upon the occurrence of a proceeding of the type set forth in Section 1.1 above, the Company shall place at your disposal, on the date on which such amounts are first payable by you, the funds required to cover the expenditures and payments in connection with such proceeding, in a manner such that you shall not be required to pay for, or personally finance the legal expenses, subject to the conditions and instructions in this Indemnification Letter. Advances shall be unsecured and interest free. Advances shall be made without regard to your ability to repay the expenses and, subject to Section 4 below, without regard to your ultimate entitlement to indemnification under the provisions of this Letter. The payments of any such amounts shall be made by the Company directly to you (if you actually made the payment of such amount) or the relevant third party (if you have not yet made payment of such amount), as soon as practicable, but in any event no later than seven days after written demand by you therefor to the Company, and any such payment shall be deemed to constitute indemnification hereunder. As part of the aforementioned undertaking, the Company will make available to you any security or guarantee that you may be required to post in accordance with an interim decision given by a court, governmental or administrative body, or an arbitrator, including for the purpose of substituting liens imposed on your assets.


2.	The Company’s obligation to indemnify you in accordance with this Letter is subject to the statements set forth in this Section 2 and the permissibility of any such indemnification under applicable law .

2.1.

You shall inform the Company in writing of the commencement of any legal proceeding brought against you in connection with any event that may entitle you to indemnification, and of the receipt of any written notice or written threat that any such legal proceeding may be commenced against you, and shall do so as promptly as practicable upon first becoming so aware, and you shall provide the Company, in the manner set forth in Section 14 below, all documents in connection with such proceedings as reasonably requested by the Company. If, at the time of receipt of notice from you, the Company has Officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in any such policy. The failure to notify the Company pursuant to this Section 2.2 will not relieve the Company from any liability it may have to you under this Letter unless and only to the extent such failure to provide notice materially prejudices the Company’s ability to defend such action.

2.2.

Other than with respect to proceedings that have been initiated against you by the Company or in its name, the Company, alone or jointly with any other indemnifying party, is entitled to assume the defense thereof, with counsel selected by the Company and reasonably acceptable to you provided that the Company shall inform you within 45 days from the date of receiving notice pursuant to Section 2.2 above (or within a shorter period of time if the matter requires filing a statement of defense or a

response to a proceeding), that it has assumed the defense thereof and shall indemnify you according to this Letter. Notwithstanding the foregoing (i) you shall have the right to employ separate counsel in any such proceeding at your expense and (ii) if (A) the employment of separate counsel by you has been previously authorized by the Company, (B) you shall have reasonably concluded that there may be a conflict of interest between the Company and you in the conduct of such defense, or (C) the Company shall not continue to retain such counsel to defend such proceeding, then the fees and expenses actually and reasonably incurred by you with respect to his or her separate counsel shall be subject to indemnification hereunder. The Company and/or the aforementioned counsel shall have the right to conduct the defense as it or they see fit (provided that the Company shall conduct the defense in good faith and in a diligent manner); the appointed counsel shall act and shall owe its duty of loyalty to the Company and to you. In the event that the Company decides to settle a monetary obligation or to decide a monetary obligation by arbitration, mediation or settlement, the Company shall be entitled to do so as long as (a) the lawsuit or the threat of a lawsuit against you shall be fully withdrawn; (b) the amount of such obligation or settlement is fully indemnifiable pursuant to this Letter and/or applicable law; and (c) any such obligation or settlement does not impose any penalty or limitation on you or require the admission of wrongdoing by you. In the event that clause (c) is not met, the Company may only settle a monetary obligation or decide a monetary obligation by arbitration, mediation or settlement after obtaining your prior written consent.


2.3.	You shall cooperate with the Company and/or with any counsel appointed by the Company as set forth above in every reasonable manner that shall be required from you by any of them in connection with the handling of such legal proceedings, all in accordance with Section 1.2 above. You shall not bear any additional legal expenses due to such cooperation.


2.4.	Subject to the provisions of this Indemnification Letter, whether or not the Company shall act in accordance with Section 2.3 above, the Company shall cover litigation expenses in a manner such that you shall not be required to pay or finance such litigation expenses yourself.


2.5.	Your indemnification in connection with the legal proceedings against you, as set forth in this Letter, will not be enforceable in connection with amounts that you shall be required to pay as a result of a settlement or arbitration effected without the Company’s prior written consent.


2.6.	In addition, in the event of the indemnification hereunder is being paid in respect of your serving as an Officer in any Subsidiary, such indemnification will only be paid after all your rights to insurance and indemnification from such Subsidiary will have been exhausted, if and to the extent they exist.


2.7.	(A) Upon your written request for payment in connection with any event pursuant to this Letter, the Company shall take all necessary steps according to any applicable

law to pay such payment and will do all that is required to obtain any approval that is required. If a determination with respect to your entitlement to indemnification pursuant to this Letter is required by applicable law, indemnification hereunder shall be made in the specific case by one of the following methods: (x) if no Change in Control has occurred, (i) by a majority vote of the Disinterested Directors, even if the number of such Disinterested Directors is less than a quorum of the Board (the “ Majority Disinterested Directors ”), (ii) by a committee of Disinterested Directors designated by the Majority Disinterested Directors or (iii) if there are no such Disinterested Directors, by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to you; or (y) if a Change in Control shall have occurred, (i) if you so request in writing, by the Majority Disinterested Directors or (ii) otherwise, by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to you.

(B) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 2.8(A) above, the Independent Counsel shall be selected by the Board, provided that if a Change in Control shall have occurred, you shall select the Independent Counsel. You or the Company, as the case may be, may, within five days after written notice of such selection, deliver to you or the Company, as the case may be, a written objection to such selection, provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” set forth in Section 15 below, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within 20 days after the later of (a) your submission of a written request for indemnification pursuant to Section 2.2 above, and (ii) the final disposition of the proceeding, including any appeal therein, no Independent Counsel shall have been selected without objection, either you or the Company may petition the court for resolution of any objection which shall have been made by you or the Company to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a Person selected by the court or by such other Person as the court shall designate. The person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 2.8(A) above. Upon the due commencement of any judicial proceeding pursuant to Section 2.8(E) below, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

(C) If the Person empowered or selected under this Section 2.8 to determine whether you are entitled to indemnification shall not have made a determination within 60 days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made, and you shall

be entitled to such indemnification absent (i) your misstatement of a material fact, or an omission of a material fact necessary to make your statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law, provided, however, that such 60 day period may be extended for a reasonable time, not to exceed an additional 30 days, if the Person making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto.

(D) You shall cooperate with the Person making such determination with respect to your entitlement to indemnification, including providing to such Person upon reasonable advance request any documentation or information, which is not privileged or otherwise protected from disclosure and which is reasonably available to you and reasonably necessary to such determination. Any Independent Counsel, member of the Board or shareholder of the Company shall act reasonably and in good faith in making a determination regarding your entitlement to indemnification pursuant to this Letter. Any costs or expenses (including attorneys’ fees and disbursements) you incur in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to your entitlement to indemnification), and the Company hereby indemnifies and agrees to hold you harmless therefrom.

(E) If any approval is required for payment in connection with any event pursuant to this Letter and that payment shall not be approved for any reason (including if it is determined that you are not entitled to indemnification pursuant to Section 2.8(A) above), such payment, or any part of it, that will not be approved, as said above, shall be subject to the approval of a court.

(F) The Company shall not be obligated under this Letter to indemnify you:

(i) for an accounting or disgorgement of profits made from your purchase and sale (or sale and purchase) of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state or local statutory law or common law if you are held liable therefor (including pursuant to any settlement arrangements);

(ii) for any reimbursement of, or payment to, the Company of any bonus or other incentive-based or equity-based compensation or of any profits realized by you from the sale of securities of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley Act ”), the payment to the Company of profits arising from the purchase and sale by such person of securities in violation of Section 306 of the Sarbanes-Oxley Act, if you are held liable therefor (including pursuant to any settlement arrangements) or any formal policy of the Company adopted by the Board (or a committee thereof), or any other remuneration paid to you if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law; or

(iii) with respect to any proceeding, or part thereof, brought by you against the Company, any legal entity which it controls, any director or officer thereof or any third party, unless (i) the Board has consented to the initiation of such proceeding or part thereof and (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law; provided , however , that this Section 2.8(F)(iii) shall not apply to (A) counterclaims or affirmative defenses asserted by you in an action brought against you or (B) any action brought by you for indemnification or advancement from the Company under this Letter or under any Officers’ liability insurance policies maintained by the Company in the suit for which indemnification or advancement is being sought.

The obligations of the Company according to this Letter shall remain valid even if you have ceased to be an Officer of the Company, provided that acts for which you are given a commitment of indemnification were performed or shall be performed during your service as an Officer of the Company. This Letter shall be binding upon the Company and its successors and assigns. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to you, expressly to assume and agree to perform this Letter in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

In the event the Company pays to you, or in your place, any amount pertaining to this Letter in connection with a legal proceeding as stated above, and afterwards it shall be determined that you are not entitled to any indemnification from the Company for any reason whatsoever, the sums paid by the Company shall be considered a loan that was granted to you by the Company, and shall be linked to the Consumer Price Index and accrue interest in accordance with the Income Tax Regulations (Determination of the Interest Rate), 1985, as amended from time to time. You will be required to repay these sums to the Company when requested to do so in writing by the Company and in accordance with a payment schedule that the Company shall determine.


5.	Exculpation

Subject to the provisions of the Companies Law, the Company hereby releases you, in advance, as an Officer of the Company from liability to the Company for any damage that arises from the breach of your duty of care to the Company (within the meaning of such terms under Sections 252 and 253 of the Companies Law), other than breach of the duty of care towards the Company in a distribution (as such term is defined in the Companies Law).


6.	The terms contained in this Letter will be construed in accordance with the Companies Law.


7.	The obligations of the Company according to this Indemnification Letter shall be interpreted broadly and in a manner that shall facilitate its execution, to the extent permitted by law, and for the purposes for which it was intended. In the event of a conflict between any provision of this Letter and any provision of the law, said provision of the law shall supersede

the specific provision in this Letter, but shall not limit or diminish the validity of the remaining provisions of this Letter.

The indemnification under this Letter will enter into effect upon your signing a copy of the same in the appropriate place, and the delivery of such signed copy to the Company. Upon its effectiveness, this Indemnification Letter revokes any previous undertaking for indemnification, if and insofar as offered and granted to you by the Company. Notwithstanding the foregoing, if this Indemnification Letter shall be declared or found void for any reason whatsoever, then any previous undertaking by the Company for indemnification towards you, to the extent granted, shall remain in full force and effect, subject to any applicable law.

The Company may, at its sole discretion and at any time, revoke its undertaking to indemnify you hereunder, or reduce the Maximum Indemnification Amount, or limit the events to which it applies, either in regard to all the Officers and director nominees or to some of them, to the extent it relates only, to events that will apply after the date of such change, provided that prior notice has been given to the Officer of the Company’s intention to do so, in writing at least 60 days before the date on which such decision will enter into effect. For the avoidance of doubt, it is hereby clarified that any such decision will not have retroactive effect of any kind whatsoever and the Indemnification Letter, prior to such change or revocation, as the case may be, will continue to apply and be in full force and effect for all purposes in relation to any event that has preceded such change or revocation, even if the proceeding in respect thereof has been filed against the Officer after the change or revocation of the Indemnification Letter. In all other cases, this Indemnification Letter may not be changed, unless the Company and yourself have signed it.


9.	This Letter does not constitute a contract for the benefit of any third party and is not assignable. For the avoidance of doubt, in the event of death (God forbids), this Letter will apply to you and your estate.

10.

No waiver, delay, forbearance to act or extension granted by the Company or by you shall be binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Letter will be construed in any circumstances as a waiver of the rights hereunder or by law, and will not prevent any such party from taking all legal and other steps as will be required in order to enforce such rights. No supplement, modification or amendment of this Letter or any provision hereof shall limit your right under this Letter in respect of any action you take or omit to take prior to such supplement, modification or amendment.


11.	The foregoing does not derogate from the Company’s right to indemnify you retroactively in accordance with the amended and restated articles of association of the Company and subject to any applicable law.


12.	The laws of the State of Israel shall govern this Letter and all issues related thereto, without giving effect to any conflicts of law principles. You and the Company hereby (i) irrevocably consent to the exclusive jurisdiction of the courts in Tel Aviv, Israel in connection with this

Indemnification Letter, except if an indemnification claim is related to a legal proceeding already filed by a third party in a different court and (ii) irrevocably consent to service of process at the address set forth in Section 14 of this Letter.


13.	Enforcement

The Company expressly confirms and agrees that it has entered into this Letter and assumed the obligations imposed on it hereby in order to induce you to serve or continue to serve as an Officer of the Company, and the Company acknowledges that you are relying upon this Letter in serving as an Officer of the Company.

This Letter constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Letter is a supplement to and in furtherance of the Amended and Restated Articles of Association of the Company and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any of your rights thereunder.


14.	Notices

All notices, requests, demands and other communications under this Letter shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed; (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed; (iii) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed; or (iv) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

(a) If to you, at such address as you shall provide the Company.

(b) If to the Company to:

Jack Wakileh

Tufin Software Technologies Ltd.

5 Shoham Street

Ramat-Gan 52521, Israel

or to any other address as may have been furnished to you by the Company.


15.	In this Indemnification Letter-

“Action” or any derivative of it – including a decision or a failure to act and including your Actions before the date of this Indemnification Letter that were made during your term of service as an Officer in the Company.

“Change in Control” – (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power and outstanding shares immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding shares or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, (iii) the sale of all of the share capital of the Company to an unrelated person, entity or group thereof acting in concert, or (iv) any other transaction in which the owners of the Company’s outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company.

“Disinterested Directors” – members of the Board who are not parties to the action, suit or proceeding in respect of which indemnification is sought.

“Enterprise” – any corporation (other than the Company), partnership, joint venture, trust, employee benefit plan, limited liability company, or other legal entity you are or were serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee.

“Independent Counsel” – a law firm, or a partner (or, if applicable, member or shareholder) of such a law firm, that is experienced in matters of applicable law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company, any subsidiary of the Company, any Enterprise or you in any matter material to any such party; or (ii) any other party to the proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or you in an action to determine your rights under this Letter. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all expenses, claims, liabilities and damages arising out of or relating to this Letter or its engagement pursuant hereto.

“Officer” – in accordance with its meaning in the Companies Law, including a senior employee of the Company.

“Person” – any individual, corporation, partnership (limited or general), limited liability company, limited liability partnership, association, trust, joint venture, unincorporated organization or any similar entity.

This Letter shall be neutral with regard to gender.


16.	The rights of indemnification and to receive advancement as provided by this Letter shall not be deemed exclusive of any other rights to which you may at any time be entitled under applicable law, the Amended and Restated Articles of Association of the Company, any

agreement, a vote of shareholders or a resolution of directors, or otherwise. To the extent that a change in Israeli law, whether by statute or judicial decision, permits greater indemnification or advancement than would be afforded currently under the Amended and Restated Articles of Association of the Company or this Letter, it is the intent of the parties hereto that you shall enjoy by this Letter the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.


17.	The Schedule to this Letter is an integral and inseparable part of it.

In witness whereof, the Company shall execute this Indemnification Letter by its authorized signatories that have been duly appointed.




	Tufin Software Technologies Ltd.

I hereby confirm receiving this Letter and consent to all its terms.

Officer



Date:

SCHEDULE

Subject to any provision of the law, the events are as follows:


1.	Any issuance of the Company’s securities and/or listing of the Company’s securities for trading on a stock exchange in the U.S., Israel or any other country, including without limitation, a public offering pursuant to a prospectus, a private offering, an offer for sale, the issuance of bonus shares or any offer of securities in any other manner;


2.	An event arising from the Company being a public company or arising from the fact that its shares were offered to the public or arising from the fact that the Company's shares are traded on a stock exchange in the U.S., Israel or any other country;


3.	Conducting tender offers and anything related thereto;

A “Transaction” within the meaning of Section 1 of the Companies Law ¹ , including without limitation negotiations for entering into a transaction, the transfer, sale or purchase or charge of assets or liabilities, including securities, or the grant or receipt of a right to any of the foregoing, receiving credit and the grant of collateral and any act directly or indirectly involved in such “Transaction” and including disclosure of information and documents with respect to such “Transaction”;


5.	Resolutions and/or acts relating to approval of transactions with stakeholders, as such transactions are defined in Chapter 5 of Part VI of the Companies Law;

Report or notice filed in accordance with (a) any applicable law, including the Companies Law, the Israeli Securities Law of 1968, the Securities Act of 1933 and/or the Securities Exchange Act of 1934, including regulations promulgated thereunder; (b) any tax laws, antitrust laws and labor laws; and (c) any rules or instructions prevailing on an Israeli stock exchange, a U.S. stock exchange, or a stock exchange in any other country or any law of another country regulating similar matters and/or the omission to act accordingly;


7.	Adoption of the findings of external opinions for the purpose of the issuance of an immediate report, prospectus, financial statements or any other disclosure document;


8.	Discussion and passing resolutions and discovery and disclosure in the Company's reports, including an evaluation with respect to the effectiveness of internal controls and other issues incorporated in the report of the Board, as well as the issuance of statements and references to the Company’s financial statements;


9.	Preparation, editing, approval and execution of the financial statements, including the passing of resolutions as to the application of accounting principles and any restatement of the Company’s financial statements;

________________________


¹	Article 1 of the Companies Law defines “Transaction” as a contract or engagement or a unilateral decision of the company regarding a grant of a right or another benefit.”


10.	Adoption of financial reporting in accordance with Generally Accepted Accounting Principles (US GAAP), and any act in connection therewith;


11.	Events relating to the effecting of investments on the part of the Company in any corporation;


12.	Any resolution with respect to distribution, as defined in the Companies Law, including a distribution with the court's approval;


13.	Amendment to the Company’s structure or its reorganization, a change in the Company's ownership, or any resolution with respect to such matters, including without limitation, a merger, split, change in the Company’s capital structure, incorporation of subsidiaries, dissolution or sale thereof, issuance or distribution;


14.	Consolidation, change or revision of arrangements between the Company and the shareholders and/or holders of bonds and/or banks and/or creditors of the Company or of any entities affiliated with the Company, including the preparation or revision of the trust deeds, bonds and outline and arrangement documents in general;


15.	Acts relating to the issuance of licenses, permits or approvals, including approvals and/or exemptions in respect of restrictive trade practices;


16.	Taking part in and preparation of tenders;


17.	The making of any statement, including a bona fide statement or opinion, vote and/or abstaining from voting, made by an Officer of the Company in such capacity, such as in negotiations and contractual engagements with suppliers and customers, including during meetings of management, the Board or any committee thereof;


18.	An act in contradiction to the articles or memorandum of association of the Company then in effect;


19.	Any action or decision in relation to employer-employee relations, including the negotiation for, signing and performance of individual or collective employment agreements, other employee benefits (including allocation of securities to employees) and harassment suits;


20.	Any action or decision in relation to work safety and/or working conditions;


21.	Acts in connection with the sale, distribution, licensing or use of Company's products;


22.	Any act or omission undertaken in negotiating, signing and performing any insurance policy or any claim relating to a failure to maintain appropriate insurance and/or adequate safety matters;


23.	Formulating working programs, including pricing, marketing, distribution, directives to employees, customers and suppliers and collaborations with competitors;


24.	Decisions and/or acts pertaining to the environment and to public health, including dangerous substances;


25.	Decisions and/or acts pertaining to the Consumer Protection Law, 5741-1981, and/or orders and/or Regulations thereunder;


26.	Acts relating to the Company's intellectual property and the protection thereof, including the registration or enforcement of intellectual property rights and their protection within claims in connection therewith;


27.	Infringement of intellectual property rights of third parties, including, without limitation, patents, designs, breeders' rights, trademarks, and copyrights;


28.	Negotiating, making and performing contracts of any kind and type with suppliers, distributors, agents, franchisees and the like of the products that are marketed and/or sold by, or by those serving, the Company;


29.	Negotiating, making and performing agreements with manpower contractors, service contractors, building contractors, renovations contractors, etc.;


30.	Reporting and/or filing applications to state and other authorities;


31.	Investigations on the part of state and other authorities;

32.

Management of the bank accounts which the Company operates and performance of transactions in such bank accounts, including with respect to transactions in foreign currencies (including foreign currency deposits), securities (including resale transactions in securities and lending and borrowing of securities), loans and credit facilities, debit cards, bank guarantees, letters of credit, and consultation agreements concerning investments, including with portfolio managers, hedging transactions, options, futures contracts, derivatives, swap transactions, etc.;


33.	Realization of personal guarantees provided by the Officer to the Company, as security for the Company's obligations and/or declarations;


34.	Failure to maintain complete and/or proper due diligence procedures over the Company's investments, resulting in a loss of the investments in whole or in part and/or an adverse effect to the Company's businesses and/or breach of an undertaking vis-à-vis a third party;


35.	Events and acts in connection with investments performed by the Company in various corporations, before or after effecting the investment, including for the purpose of entering into a transaction, its implementation, development, follow up and supervision;


36.	Financial liability imposed on an Officer in connection with acts in which he took part on behalf of the Company, vis-à-vis the various state institutions;


37.	Financial liability imposed on an Officer in connection with a claim by third parties against the Officer due to deficient or misleading disclosure, in writing or verbally, to existing and/or potential investors in the Company, including in the event of the merger of the Company with another company;


38.	Covering the excess insurance in the event of the activation of Officers’ liability insurance;


39.	Breach of the provisions of any agreement whatsoever to which the Company is a party;


40.	An act relating to a tax liability of the Company and/or a subsidiary and/or shareholders of any of them;


41.	Any of the foregoing events, in connection with the capacity of the Officer in the Company by virtue of his capacity as an Officer and/or employee and/or observer at meetings of competent organs of a related corporation;


42.	Acts and omissions not covered by a product insurance policy;


43.	Acts and omissions in connection with bodily injuries or property damage attributed to the Company and/or to an Officer who has acted on its behalf;


44.	Acts and omissions arising from failure to purchase appropriate insurance and/or to take sufficiently secure measures and/or negligence in risk management;


45.	Any of the foregoing events relating to the capacity of such Officer as an Officer of a corporation controlled by the Company or otherwise affiliated therewith; and


46.	Any event or action for which indemnification is allowed to be granted under the Efficiency of Enforcement Proceedings in the Israel Securities Authority Law (Legislation Amendments) of 2011.

* * *

Exhibit 10.3



ENGLISH SUMMARY: The Office Lease Agreement dated as of July 2, 2018 by and between Amot Investment Ltd. and Bayside Land Corporation Ltd. (the “ Landlord ”) and Tufin Software Technologies Ltd. (the “ Company ”) (the “ Lease Agreement ”)
Subject	Description
Subject Matter of the Lease	Unprotected lease of premises located in Tel Aviv-Yaffo, Israel.
Term of Lease	Start Date : February 1, 2019. Extension Option : The Company has one option to extend the term of the lease for 60 months from the end of the original term, which, subject to certain conditions, shall automatically be activated unless the Company notifies otherwise at least seven months prior to the end of the original term. Termination : The Company can terminate the Lease Agreement on the 72 ^nd month anniversary of the original term, subject to specified conditions including seven months’ prior written notice and a penalty of NIS 1,500 per square meter of the premises.
Premises Covered by the Lease Agreement	Premises : 4,162 square meters (gross) consisting of the entire 24 ^th floor and part of the 25 ^th floor in the ToHa building located between Totzeret HaAretz, Yigal Alon and Derech HaShalom Streets, Tel Aviv. Share in Common Areas : 8.25% of the premises constitutes tenant’s share in common areas. Parking : Six allocated parking spaces and 40 non-allocated parking spaces in the building’s parking lot. The Company has certain rights to reduce or increase the number of parking spaces.
Additional Space/Parking	First Addendum : The first addendum to the Lease Agreement added the following terms: - Added additional 1680 square meters (gross) to the premises constituting the remainder of the 25 ^th floor (“Additional Space”), and 19 non-allocated parking spaces in the building’s parking lot. The terms of the Lease Agreement apply to the Additional Space/Parking subject to changes specified in the addendum. - Estimated handover date for fit-out of the Additional Space is April 1, 2019, subject to 60 days' notice and the terms of the lease agreement including the Landlord permitted delays. - Estimated lease start date for the Additional Space/Parking is upon the earlier of either October 10, 2019, assuming handover for fit-out on April 1, 2019 (i.e., will be delayed accordingly if handover for fit-out is delayed), or actual occupancy of the Additional Space. Lease term for Additional Space/parking will end together with the other parts of the premises. - Payments for Additional Space/Parking will be per lease agreement, subject to the following: Company will be exempt from (i) rent and maintenance fees during the fit-out period; and (ii) from rent (only) for an additional period ending December 15, 2019 (assuming lease term commences as scheduled). - Company will provide an additional bank guaranty equal to six months of rent payment, management and parking fees in respect to the Additional Space with price linkage and Israeli and VAT. The Bank Guaranty is assignable upon written notice to the Company. - A new fit-out appendix relating to the fit out of the Additional space was attached to the addendum in lieu of the appendix attached to the lease agreement. According to the new fit-out appendix, Company undertakes to perform the fit-out of the Additional Space during the fit-out period, provide fit-out plans by specified dates and complete all works by the agreed occupancy date. The Landlord will participate in the cost of the fit-out of the Additional Space in an amount of NIS 3,300 square meters + VAT of the gross area of the Additional Space subject to specified conditions. Company must pay a supervisor fee in an amount of NIS 70 per square meter of the Additional Space, which will be deducted from said Landlord fit-out budget.



Rental Fees	Base Rent : NIS 138 per month for every square meter, plus linkage differential and value added tax. During the fit-out period the Company will only have to pay certain supervision fees; and from the beginning of the original term for a period of five months, the Company will not have to pay the base rent or the parking fee (but will pay management fees, electricity, water, municipal taxes, licenses, phone, sewage fee, business tax and parking fines, as applicable.). Parking Fees : NIS 1,200 per month for every non-allocated parking space and NIS 1,700 per month for every allocated parking space; in each case, plus linkage differential and value added tax. Date of Payment of Fees : Three months payment in advance, to be paid no later than the first business day of the beginning of such period. Management Fees and Other Building Fees : The Company must pay its share of these as specified in the Lease Agreement and in the management and Maintenance Agreement. Extension Option : Under the extension option, the monthly rent will increase 7% from the amount paid for the last month of the original term.
Permitted Use	Business Use : Offices for managing the Company's business and ancillary uses. Not to be used as a co-working business.
Securities	Bank Guarantee : An amount equal to six months of fees (including base fees, management fees and parking fees) for the first three years of the term of the lease, and an amount equal to four months of fees (including base fees, management fees and parking fees) from the fourth year of the term of the lease.
Other Terms under the Lease Agreement	Fit-out : Company can perform its fit-out prior to the occupancy date, provided that it completes its fit-out obligations by a specified date to enable Landlord to obtain an occupancy certificate for the building. Failure to complete by such date will constitute a material breach of contract and will entitle Landlord to damages resulting from such delay. Taxes/Utilities : The Company assumes responsibility for all fees, utility payments and taxes that apply to those who use or possess properties. Damages : The Company assumes sole responsibility for any damage, injury or loss resulting from the use of the premises by the Company or any action of the Company or those acting on its behalf including fit-out works. Renovations : Generally, the Company may not perform any major renovations on the premises without prior written authorization from the Landlord. However, the Company is permitted to make certain changes without prior consent, including changes that are not structural or changes that do not require a building permit. Company shall have access during the period starting August 1, 2018 until the Start Date for customization of the Premises. Should the Company fail to comply with the customizations schedule it shall be liable for all delays commencing as of December 15, 2018. Assignments : The Company cannot assign any of its rights under the Lease Agreement, without advanced written consent from the Landlord. Change of control in the Company (as such term is defined in Israeli Securities Law (1968)) requires written notice to the Landlord within the earlier of either 14 days of the change of control event and/or the signing of such agreement that would lead to such event. The Landlord can refuse to accept the change of control for specified reasons (e.g., criminal record) and if the Landlord refuses, then such change of control will constitute a material breach of contract and Landlord must notify the Company of such refusal within 10 days and can terminate the Lease Agreement with 12 months’ notice. Transfer to certain affiliates of the Company and in context of an IPO will not constitute a transfer, subject to specified conditions. Remedies : For the failure to remedy material breaches within 14 days of the receipt of notice of such material breach, the Landlord will have the right to terminate the Lease Agreement with 30 days advance notice (including said 14 days), the Company will be liable for all fees until the end of the term of the Lease Agreement, and there are agreed liquidated damages equal to three months’ of base fees, management fees and parking fees. Additionally, in the event of payments which are made more than seven days late, the Company will be required to pay the Landlord interest at Bank Leumi’s rate for non-preferential clients on such late payment amount. Securities : Bank guaranty equal to six months of rent payment, management fees and parking fees with price linkage and Israeli VAT to be paid within 14 days of the execution of the Lease Agreement. Upon commencement of the fourth lease year the guaranty will be reduced to four months of rent payment, management fees and parking fees with price linkage and Israeli VAT. The bank guaranty is assignable upon written notice to the Company. Ground Lease : The property is owned by the municipality of Tel Aviv-Yaffo, pursuant to a ground lease of 49 years ending on August 31, 2059, and the Lease Agreement is subject to such ground lease.

Exhibit 10.4



ENGLISH SUMMARY: The Office Lease Agreement dated as of September 18, 2007 by and between Mazal and Bracha (1970) Ltd. (the “ Landlord ”) and Tufin Software Technologies Ltd. (the “ Company ”) including addendums thereto (the “ Lease Agreement ”)
Subject	Description
Subject Matter of the Lease	Unprotected lease of premises located in Ramat Gan, Israel.
Term of Lease	Start Date : January 1, 2019. End Date : April 7, 2019.
Premises Covered by the Lease Agreement	Premises : Total of 3,372.9 square meters in the Paz Tower located at 1 Shoham Street, Ramat Gan, Israel, consisting of: – 888.75 square meters (gross) on the 10 ^th floor; – 744.15 square meters (gross) on the 11 ^th floor; – 866 square meters (gross) on the 13 ^th floor; and – 874 square meters (gross) on the 14 ^th floor.
Lease Payments	Rent and Maintenance Fees for Final Term (not including ancillary costs, utilities and taxes): – NIS 1,316,442.8 + VAT for the offices space (consisting of rent - NIS 110/sq. meter + Maintenance Fees – NIS 203,385.87); and – NIS 79, 800 + VAT for parking spaces (NIS 700/parking space) (to be paid in advance; no refund even if term ends early).
Vacating Obligation	Failing to Vacate : Failing to vacate by April 7, 2019 will constitute a fundamental breach of the lease agreement and will permit the Landlord to claim remedies per the lease agreement, including without limitation liquidated damages or holdover penalty, equal to three times the monthly rent, but not both. No Reinstatement : The Company cannot be required to reinstatement the premises.

Exhibit 10.5

OFFICE

LEASE AGREEMENT

Between

NS Two Oliver LLC,

a Massachusetts limited liability company,

as Landlord

and

Tufin Software North America, Inc.,

a Delaware corporation,

as Tenant

with respect to

2 OLIVER STREET, BOSTON, MASSACHUSETTS

THIS OFFICE LEASE AGREEMENT (this “ Lease ”) is entered into by and between Landlord and Tenant as of the Effective Date. The parties to this Lease hereby agree as follows:

1. BASIC DATA .

As further supplemented in the balance of this Lease and the Exhibits attached hereto, this Basic Data sets forth the basic terms of this Lease and, where appropriate, constitutes definitions of certain terms used in this Lease. This Basic Data is incorporated into and made a part of this Lease. If any conflict exists between any Basic Data and other provisions of this Lease, then this Basic Data shall control.



Effective Date:		, 2017

Landlord:	NS Two Oliver LLC, a Massachusetts limited liability company

Tenant:	Tufin Software North America, Inc., a Delaware corporation

Building:	The building commonly known and numbered as 2 Oliver Street, Boston, MA.

Building Rentable Area:	Agreed to be 217,435 rentable square feet.

Land:	The parcel of land on which the Building is located, as further described in the legal description attached hereto as Exhibit A .

Property:	Collectively, the Building and the Land.

Premises:	The portion of the seventh (7 ^th ) floor of the Building, substantially as shown on the plan of premises attached hereto as Exhibit B .

Premises Rentable Area:	Agreed to be 3,214 rentable square feet.

Permitted Use:	General office use and no other use or purpose.

Term:	The period commencing on the date upon which Landlord delivers exclusive possession of the Premises to Tenant free and clear of all occupants with Landlord’s Work (as hereinafter defined) Substantially Complete (as hereinafter defined) (such date, the “ Commencement Date ”) and expiring on the day immediately preceding the sixty-three (63) month anniversary of the Commencement Date, except that if the Commencement Date does not occur on the first day of a calender month, then the Term shall expire on the last day of the calender month in which such anniversary falls, unless terminated or extended as provided for herein. Notwithstanding the foregoing, the Commencement Date shall not occur prior to the expiration of the Early Access Period (as hereinafter defined). Notwithstanding the foregoing, Tenant acknowledges and agrees that if Tenant’s personnel shall occupy all or any part of the Premises for the conduct of Tenant’s business prior to the Commencement Date, such date of occupancy shall, for all purposes of this Lease, be the Commencement Date.

Expiration Date:	The last day of the Term.



Rent Commencement Date:	The date which is three (3) months, which shall be deemed to mean ninety (90) days, after the Commencement Date.

Base Rent:	Base Rent shall be the following amounts for the following periods of time:

	Rental Period	Annual Base Rent		Monthly Base Rent

	Commencement Date - Month 3	$	0.00	$	0.00

	Month 4 - 15	$	141,416.00	$	11,784.67

	Month 16 - 27	$	144,630.00	$	12,052.50

	Month 28 - 39	$	147,844.00	$	12,320.33

	Month 40 - 51	$	151,058.00	$	12,588.17

	Month 52 - 63	$	154,272.00	$	12,856.00

Base Tax Year:	Fiscal Year 2018 (i.e., July 1, 2017 - June 30, 2018).

Base Expense Year:	Calender Year 2017 (i.e., January 1, 2017 - December 31, 2017).

Tenant’s Proportionate Share:	1.48%, which is the percentage obtained by dividing the Premises Rentable Area by the Building Rentable Area.

Security Deposit:	$30,000.00.

Guarantor(s):	None.

Broker(s):	Avision Young (representing Landlord) and Cushman and Wakefield (representing Tenant).

Additionally, the following terms shall have the following meanings when used in this Lease: “ Affiliate ” means any person or entity which, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the party in question; “ Building Standard ” means improvements made in the manner and with the materials selected by Landlord as the standard for the Building subject to availability and Landlord’s right to select alternative types, models, brands, grades, designs, manufacturers and suppliers from time to time as the standard for the Building; “ Building Structure ” means the Building’s exterior walls, roof, elevator shafts, footings, foundations, structural portions of load-bearing walls, structural floors and subfloors, and structural columns and beams; “ Building Systems ” means the Building’s mechanical, electrical, plumbing, heating, ventilation and air conditioning (“ HVAC ”), telecommunication, life safety, security and other common service systems of the Building, including the distribution portions of such systems which exclusively serve the Premises (whether located in the Premises or in other areas of the Building); “ Business Days ” means those days of the week which are not a Saturday, Sunday, or federal, state or local holiday; “ including ” means including, without limitation; “ Laws ” means all present and future statutes, laws, codes, regulations, ordinances, orders, rules, bylaws, administrative

guidelines, requirements, directives and actions of any federal, state or local governmental or quasi-governmental authority, and other legal requirements of whatever kind or nature, including all Environmental Requirements (as hereinafter defined) and the Americans with Disabilities Act of 1990 (including the Americans with Disabilities Act Accessibility Guidelines for Buildings and Facilities), and any amendments, modifications or changes to any of the foregoing, and “ Law ” means any of the foregoing; and “ Tenant Parties ” means, collectively, Tenant; any assignees claiming by, through or under Tenant; any subtenants claiming by, through or under Tenant; and any of their respective agents, employees, contractors, licensees, and invitees, and “ Tenant Party ” means any of the foregoing.

2. LEASE GRANT; COMMON AREAS; RESERVATION OF RIGHTS .

2.1 Subject to the terms of this Lease, Landlord leases to Tenant, and Tenant leases from Landlord, the Premises, for the Term.

2.2 Landlord hereby grants to Tenant during the Term of this Lease, the non- exclusive right to use, in common with others entitled to such use, the Common Areas (as hereinafter defined) as they from time to time exist, subject to the rights, powers and privileges herein reserved to Landlord. The term “ Common Areas ” as used herein will include all areas and facilities located outside the Premises on the Property that are provided and designated by Landlord for the general non-exclusive use and convenience of Tenant and other tenants.

2.3 Landlord reserves all rights of ownership of the Property and use of the Property outside the Premises, except that, at all times during the Term of this Lease, Tenant shall have a reasonable means of access to the Premises. Without limiting the foregoing reservation of rights by Landlord, it is understood that, Landlord, in its sole discretion, shall have the right to change, add, relocate and eliminate facilities, structures and improvements in and to the Building and the Property (including the Common Areas); to permit the use of or lease all or part thereof for exhibitions and displays; and to sell, lease, or dedicate all or part thereof for public use; provided, however, that Landlord shall use commercially reasonable efforts to avoid undue disturbance of Tenant’s use and occupancy of the Premises in connection with its exercise of any rights as provided herein. In addition, without unreasonable interference and upon reasonable prior notice, Landlord shall have the right to install, use, maintain, repair, replace and relocate for service to the Premises and other parts of the Building and the Property, pipes, ducts, conduits, wires and appurtenant fixtures, wherever located in the Premises or the Building; provided, however, that to the extent such pipes, ducts, conduits, wires and appurtenant fixtures are located within the Premises, Landlord shall (to the extent practicable) make all such installations, replacements and relocations above the ceiling surfaces, below the floor surfaces, or within the perimeter walls of the Premises.

3. CONDITION OF PREMISES; POSSESSION PRIOR TO COMMENCEMENT DATE .

3.1 Condition of Premises .

(1) Except as expressly set forth in this Lease, including (a) Landlord’s representations and warranties set forth in Section 3.1(2) below and (b) the work letter attached hereto as Exhibit C , Tenant shall accept the Premises in “AS IS, WHERE IS, WITH ALL FAULTS” condition, and without any representations or warranties by Landlord to Tenant as to the condition of the Premises, the Building, the Property, or the suitability thereof for Tenant’s use. Landlord and Tenant expressly disclaim any implied warranty that the Premises are suitable for Tenant’s intended commercial purpose.

(2) Landlord represents and warrants to Tenant that Landlord’s Work shall be (a) performed in a good and workmanlike manner and (b) in compliance with all applicable Laws.

3.2 Possession Prior to Commencement Date . Landlord agrees to allow Tenant access to the Premises for the purpose of installing Tenant’s Systems (as hereinafter defined) fifteen (15) days prior to the Commencement Date (“ Early Access Period ”). Such access shall be at the sole risk of Tenant and without liability to Landlord, and subject to all of the terms, covenants and conditions of this Lease (including the insurance provisions of this Lease), except that Tenant shall not be required to pay Base Rent, or charges on account of Taxes or Operating Expenses, with respect to the period of time prior to the Commencement Date; provided, however, that if Tenant’s personnel shall occupy all or any part of the Premises for the conduct of Tenant’s business prior to the Commencement Date, such date of occupancy shall, for all purposes of this Lease, be the Commencement Date.

4. TERM; COMMENCEMENT AGREEMENT .

The Term shall be as set forth in Section 1 above. When the Commencement Date, Rent Commencement Date and Expiration Date have been determined in accordance with the provisions set forth in this Lease, then, upon request of Landlord, the parties hereto shall execute a commencement agreement (“ Commencement Agreement ”), in the form of Exhibit F attached hereto, setting forth such dates and such Commencement Agreement shall be deemed a supplement to and part of this Lease; provided, however, that the failure of the parties to execute and deliver such Commencement Agreement shall not defer the Commencement Date or otherwise invalidate this Lease.

5. USE .

Tenant shall use and occupy the Premises only for the Permitted Use and shall comply with all Laws relating to the particular use and occupancy of the Premises by Tenant (as opposed to general office use) and shall not commit waste, overload the Building Structure or the Building Systems, or subject the Premises to use that would damage the Premises. Tenant shall not use or occupy, or permit the use or occupancy of, the Premises (or any portion thereof) (1) in any manner that, in Landlord’s judgment, would adversely affect, or interfere with, any services required to be furnished by Landlord to Tenant or by Landlord to any other tenant or occupant of the Building, or with the proper and economical rendition of any such service; (2) for any use which is disreputable, creates extraordinary fire hazards, or results in an increased rate of insurance on the Building or its contents; (3) for governmental or quasi-governmental offices, medical or dental offices, call centers or telemarketing purposes, employment agencies or any other offices which solicit or accept “off the street” clients or customers to the Premises; or (4) in any manner that, in Landlord’s judgment, would be disruptive or create any nuisance or unreasonably interfere with other tenants or occupants of the Building or with Landlord in its management of the Building. Landlord and Tenant acknowledge and agree that (a) Tenant shall be permitted to have a population density within the Premises of no more than one person per 100 square feet of usable area, and (b) Landlord’s obligation to provide HVAC service to the Premises pursuant to Section 9.1(2) below shall be based on a population density within the Premises of no more than one person per 100 square feet of usable area.

6. BASE RENT AND ADDITIONAL RENT .

6.1 General Payment Provisions .

(1) Tenant shall pay Base Rent in equal monthly installments as set forth in Section 1 above in advance on the first day of each calendar month occurring during the Term. Tenant shall pay a proportionate share of such monthly installment for any fraction of a calendar month that occurs at the beginning or end of the Term of this Lease. Tenant shall pay the full amount of all Base Rent and Additional Rent due hereunder and the full amount of all such other sums of money as shall become due under this Lease, all of which hereinafter may be collectively called “ Rent ,” without notice or demand (with regard to

payments of Base Rent or regularly scheduled payments on account of Taxes or Operating Expenses), and without deduction, offset or abatement (except as expressly set forth herein), to Landlord at such place as Landlord shall from time to time designate by notice, in lawful money of the United States. The first monthly installment of Base Rent shall be payable upon Tenant’s execution and delivery of this Lease; subsequent monthly installments of Base Rent shall be payable on the first day of each calendar month following the Rent Commencement Date.

(2) Landlord and Tenant hereby confirm that the Base Rent is not based on Tenant’s income or profit derived from the Premises.

(3) If Tenant fails to pay Base Rent or Additional Rent on the date when due, Tenant shall pay to Landlord (a) a late payment fee of five percent (5%) of the unpaid amount (“ Late Payment Fee ”) and (b) interest at the lesser of the annual rate of twelve percent (12%) or the maximum lawful rate of interest (such lesser rate, the “ Default Rate ”) on the unpaid amount from the date when due until the date when paid, provided that Tenant shall be entitled to a grace period of five (5) Business Days for the first late payment of Rent in any calendar year. All charges other than Base Rent which Tenant is required to pay in accordance with this Lease shall be deemed to be “ Additional Rent ” and, in the event of non-payment thereof by Tenant, Landlord shall have all the rights and remedies as would accrue to Landlord for non-payment of Base Rent.

6.2 Payment of Taxes .

(1) For purposes of Section 6.2 , the following definitions shall apply:

“ Tax Year ”: The twelve (12) month period adopted by the City of Boston or other applicable governmental authority for the purpose of determining Taxes (currently, the fiscal year starting on July I and ending on June 30).

“ Base Tax Year ”: As set forth in Section 1 .

“ Base Taxes ”: The Taxes paid or incurred during the Base Tax Year.

“ Tax Increases ”: The excess, if any, of the Taxes paid or incurred during any Tax Year over the Taxes paid or incurred during the Base Tax Year.

“ Taxes ”: Without limitation, (a) all taxes, assessments (special or otherwise), levies, fees and all other government levies, exactions and charges of every kind and nature, general and special, ordinary and extraordinary, foreseen and unforeseen, which are, at any time prior to or during the Term, imposed or levied upon or assessed against the Property or any portion thereof, or against any Base Rent, Additional Rent or other rent of any kind or nature payable to Landlord by anyone on account of the ownership, leasing or operation of the Property, or which arise on account of or in respect of the ownership, leasing, or operation of the Property or any portion thereof; (b) all gross receipts taxes or similar taxes imposed or levied upon, assessed against or measured by any Base Rent, Additional Rent or other rent of any kind or nature or other sum payable to Landlord by anyone on account of the ownership, leasing, or operation of the Property or any portion thereof; (c) [intentionally omitted]; and (d) reasonable expenses of any proceeding for abatement of any of the foregoing items included in Taxes; but the amount of special taxes or special assessments included in Taxes shall be limited to the amount of the installment (plus any interest, other than penalty interest, payable thereon) of such special tax or special assessment required to be paid during the year in respect of which such Taxes are being determined. Without limitation, there shall be excluded from Taxes all income, estate, succession, inheritance and transfer taxes of Landlord; provided, however, that if at any time during the Term the present system of ad valorem taxation of real property shall be changed so

that a capital levy, franchise, income, profits, sales, rental, use and occupancy, or other new or additional tax or charge shall in whole or in part be substituted for, or added to, such ad valorem tax and levied against, or be payable by, Landlord with respect to the Property or any portion thereof, such tax or charge shall be included in the term “Taxes” for the purposes of this Section.

(2) In the event that Taxes during any Tax Year shall exceed Taxes incurred with respect to the Base Tax Year, Tenant shall pay to Landlord, as Additional Rent, Tenant’s Proportionate Share of Tax Increases, which be an amount equal to (a) Tenant’s Proportionate Share multiplied by (b) the Tax Increases, such amount to be apportioned for any portion of a Tax Year in which the Commencement Date falls or the Term expires. Landlord shall endeavor to provide Tenant with a statement of projected Tax Increases prior to the commencement of any Tax Year. If Landlord fails to provide Tenant with a statement of projected Tax Increases prior to the commencement of any Tax Year, Tenant shall continue to pay Taxes in accordance with the previous statement, until Tenant receives a new statement from Landlord. If and to the extent the Building is part of a larger project or development and Taxes are not separately allocated by the taxing authority among the various buildings in such project or development, Landlord shall, in accordance with its good faith business judgment and generally accepted accounting principles consistently applied, allocate to the Building for each Tax Year or portion thereof during the Term an equitable portion of such Taxes.

(3) Estimated payments by Tenant on account of Taxes shall be made on the first day of each and every calendar month during the Term of this Lease, in the fashion herein provided for the payment of Base Rent. The monthly amount to be paid to Landlord shall be sufficient to provide Landlord by the time real estate tax payments are due with a sum equal to Tenant’s required payment, as reasonably estimated by Landlord from time to time, on account of Taxes for the then current Tax Year. Within a reasonable amount of time after receipt by Landlord of bills for such Taxes, Landlord shall advise Tenant of (a) the amount thereof and (b) the computation of Tenant’s payment on account thereof (and certify to the accuracy of clauses (a) and (b)). If estimated payments theretofore made by Tenant for the Tax Year covered by such bills are greater than the required payment on account thereof for such Tax Year, Landlord shall credit the amount of overpayment against subsequent obligations of Tenant on account of Taxes (or refund such overpayment within thirty (30) days after Landlord’s annual reconciliation of Taxes if the Term of this Lease has ended and Tenant has no further obligation to Landlord), and the obligation to make such credit (or refund) for any period within the Term shall survive expiration or earlier termination of the Term. If estimated payments theretofore made by Tenant for the Tax Year covered by such bills are less than the required payment on account thereof for such Tax Year, Tenant shall pay the difference to Landlord within thirty (30) days after being so advised by Landlord, and the obligation to make such payment for any period within the Term shall survive expiration or earlier termination of the Term.

(4) If Landlord shall receive any tax refund or reimbursement of Taxes or sum in lieu thereof with respect to any Tax Year all or any portion of which falls within the Term, then out of any balance remaining thereof after deducting Landlord’s expenses in obtaining such refund, Landlord shall, provided there does not then exist an Event of Default, credit an amount equal to such refund or reimbursement or sum in lieu thereof (exclusive of any interest, and apportioned if such refund is for a Tax Year a portion of which falls outside the Term) multiplied by Tenant’s Proportionate Share against the monthly installments of Tax Increases next due under this Lease (or, provided there does not then exist an Event of Default, refund such amount if the Term of this Lease has ended and Tenant has no further obligation to Landlord); provided, however, that in no event shall Tenant be entitled (a) to a credit in excess of the payments made by Tenant on account of Taxes for such Tax Year or (b) to receive any payments or abatement of Base Rent if Taxes for any Tax Year are less than Base Taxes or if Base Taxes are abated. If the Taxes comprising Base Taxes are reduced as a result of an appropriate proceeding or otherwise, the Taxes as so reduced shall for all purposes be deemed to be the Base Taxes and Landlord shall give notice to Tenant of the corrected amount of Base

Taxes and the amount of any additional payments due from Tenant under Section 6.2 ; provided, however, that if the Base Taxes are reduced because the assessed value for the Base Tax Year set forth in Section 1 reflects a Market Rate Vacancy Adjustment Factor (“ MVAF ”) granted by the City of Boston Assessing Department and as shown on Page 2 of the Property Record Card issued by the Assessing Department for the Base Tax Year, then Landlord and Tenant acknowledge and agree that the assessed value for the Base Tax Year shall be adjusted to the assessed value that would have been established by the Assessing Department if the MVAF were not granted.

6.3 Payment of Operating Expenses .

(1) For purposes of Section 6.3 , the following definitions shall apply

“ Expense Year ”: The twelve (12) month period adopted by Landlord for the purpose of determining Operating Expenses (currently, the calendar year starting on January I and ending on December 31).

“ Base Expense Year ”: As set forth in Section l .

“ Base Expenses ”: The Operating Expenses paid or incurred during the Base Expense Year; provided, however, that if less than ninety-five percent (95%) of the Building Rentable Area is occupied during the Base Expense Year, Operating Expenses shall be equitably adjusted to the amount such Operating Expenses would have been if ninety-five percent (95%) of the Building Rentable Area had been occupied during the Base Expense Year. Only those component expenses that are affected by variation in occupancy levels shall be “grossed up.”

“ Expense Increases ”: The excess, if any, of the Operating Expenses paid or incurred during any Expense Year over the Operating Expenses paid or incurred during the Base Expense Year; provided, however, that if less than ninety-five percent (95%) of the Building Rentable Area is occupied during any Expense Year, Operating Expenses shall be equitably adjusted to the amount such Operating Expenses would have been if ninety-five percent (95%) of the Building Rentable Area had been occupied during such Expense Year. Only those component expenses that are affected by variation in occupancy levels shall be “grossed up.”

“ Operating Expenses ”: The aggregate reasonable costs and expenses actually incurred by Landlord which arise on account of or in respect of the ownership, leasing, or operation of the Property or any portion thereof, including, without limitation, (a) all expenses incurred by Landlord which shall be directly related to employment of personnel, including amounts incurred for wages, salaries and other compensation for services, payroll, social security, unemployment and similar taxes, workmen’s compensation insurance, disability benefits, pensions, hospitalization, retirement plans and group insurance, uniforms and working clothes and the cleaning thereof, and expenses imposed on Landlord pursuant to any collective bargaining agreement for the services of employees of Landlord or Landlord’s agents in connection with the operation, repair, maintenance, cleaning, management and protection of the Property, including day and night supervisors, managers, accountants, bookkeepers, janitors, carpenters, engineers, mechanics, electricians and plumbers (and personnel engaged in supervision of any of the persons mentioned above); provided, however, that, if any such employee is also employed on other properties of Landlord, such compensation shall be suitably prorated among the Property and such other properties; but excluding all of the foregoing with regard to executives or principals or other employees of Landlord above the level of Senior Property Manager; (b) the cost of services, utilities, materials and supplies furnished or used in the operation, repair, maintenance, cleaning, management and protection of the Property; (c) the cost of replacements for tools and other similar equipment used in the operation, repair, maintenance, cleaning,

management and protection of the Property, provided that, in the case of any such equipment used jointly on other properties of Landlord, such costs shall be suitably prorated among the Property and such other properties; (d) management fees at reasonable rates for buildings consistent with the class of building and the services rendered, which management fees shall not exceed three percent (3%) of the Property’s gross annual income, whether or not actually paid; (e) premiums for insurance against damage or loss to the Property from such hazards as Landlord shall determine in its sole but commercially reasonable discretion, including insurance covering loss of rent attributable to any such hazards, and commercial general liability insurance; (f) if, during the Term of this Lease, Landlord shall install a new or replacement capital item for the purpose of reducing Operating Expenses or complying with any applicable Law first enacted after the Commencement Date (all such expenditures being hereinafter referred to as “ Permitted Capital Expenditures ”), there shall be included in such Operating Expenses for the Expense Year in which it was made and in Operating Expenses for each succeeding Expense Year the annual charge-off of such capital expenditure (annual charge-off shall be determined by dividing the original capital expenditure (plus, if Landlord financed such capital expenditure, the interest rate provided for in the applicable financing agreement) by the number of years of useful life of the capital expenditure, and the useful life shall be determined reasonably by Landlord in accordance with generally accepted accounting principles and practices in effect at the time of making such expenditure); (g) costs for electricity, gas, water and sewer use charges, and other utilities supplied to the Property and not paid for directly by tenants (other than as a payment for Operating Expenses); (h) betterment assessments, provided the same are apportioned equally over the longest period permitted by Law, and to the extent, if any, not included (or prohibited from being included) in Taxes; and (i) amounts paid to independent contractors for services, materials and supplies furnished for the operation, repair, maintenance, cleaning, management and protection of the Property. Notwithstanding anything to the contrary contained herein, Operating Expenses shall not include : (i) any cost or expense to the extent to which Landlord is paid or reimbursed (other than as a payment for Operating Expenses), including work or services performed for any tenant (including Tenant) at such tenant’s cost, or the cost of any item for which Landlord has been paid or reimbursed by insurance, warranties, service contracts, condemnation proceeds or otherwise; (ii) the cost of any work or services performed for any other property other than the Property; (iii) marketing costs, including leasing commissions, attorneys’ fees, space planning costs, and other costs and expenses incurred in connection with lease, sublease and/or assignment negotiations and transactions with present or prospective tenants or other occupants of the Property; (iv) costs associated with the operation of the business of the entity which constitutes Landlord as the same are distinguished from the costs of operation of the Property; (v) Taxes; (vi) costs (including permit, license, and inspection fees) incurred in renovating, improving, decorating, painting or redecorating vacant leasable space or space for tenants; (vii) depreciation and amortization on the Building, except as expressly permitted elsewhere in this Lease; (viii) amounts paid to subsidiaries or Affiliates of Landlord for management or other services on or to the Property or for supplies or other materials, to the extent that the costs of the services, supplies or materials exceed the competitive costs of the services, supplies or materials were they not provided by a subsidiary or Affiliate; (ix) interest on debt or amortization payments on mortgages or deeds of trust or any other debt for borrowed money; (x) items and services which Tenant is not entitled to receive under this Lease but which a Landlord provides selectively to one or more tenants of the Property other than Tenant or for which Landlord is separately reimbursed; (xi) costs incurred, in excess of the deductible, in connection with repairs or other work needed to the Property because of fire or other casualty or cause insured against by Landlord; (xii) any costs, fines or penalties incurred because Landlord violated any applicable Laws; (xiii) any management fee or administrative costs except for that provided in subsection (d) above; (xiv) reserves of any kind; (xv) cost of alterations, capital improvements, equipment replacement and other items which under generally accepted accounting principles are properly classified as capital expenditures except to the extent the same qualify as Permitted Capital Expenditures; (xvi) payments for rented equipment, the cost of which equipment would constitute a capital expenditure if the equipment were purchased to the extent that such rent payments exceed the amount which otherwise would have been includible as a Permitted

Capital Expenditure had such equipment been purchased rather than rented; (xvii) fixed and percentage ground rent pursuant to any ground lease; (xviii) any advertising, promotional or marketing expenditures; (xix) penalties, fines and other costs incurred due to violation by the Landlord of any lease or applicable Laws and any interest or penalties due for late payment by Landlord; (xx) contributions to charitable or political organizations; (xxi) costs and expenses of investigating, monitoring and remediating Hazardous Matter on, under or about the Property and the cost of defending against claims in regard to the existence or release of Hazardous Matter (except to the extent caused by Tenant or any Tenant Party); (xxii) expenses incurred by Landlord to resolve disputes, enforce or negotiate lease terms with prospective or existing tenants or in connection with any financing, sale or syndication of the Property; (xxiii) costs of purchasing or leasing major sculptures, paintings or other major works or objects of art (as opposed to minor decorations purchased or leased by Landlord for display in the Common Areas); (xxiv) costs incurred by the negligence or other misconduct of Landlord or any Landlord Agent; or (xxv) any actual or imputed cost of any space in the Building occupied by Landlord or any Landlord Agent.

(2) In the event that Operating Expenses during any Expense Year shall exceed Operating Expenses incurred with respect to the Base Expense Year, Tenant shall pay to Landlord, as Additional Rent, Tenant’s Proportionate Share of Expense Increases, which be an amount equal to (a) Tenant’s Proportionate Share multiplied by (b) the Expense Increases, such amount to be apportioned for any portion of an Expense Year in which the Commencement Date falls or the Term expires. Landlord shall endeavor to provide Tenant with a statement of projected Expense Increases prior to the commencement of any Expense Year. If Landlord fails to provide Tenant with a statement of projected Expense Increases prior to the commencement of any Expense Year, Tenant shall continue to pay Operating Expenses in accordance with the previous statement, until Tenant receives a new statement from Landlord. If and to the extent the Building is part of a larger project or development and Operating Expenses are not separately allocated by Landlord among the various buildings in such project or development, Landlord shall, in accordance with its good faith business judgment and generally accepted accounting principles consistently applied, allocate to the Building for each Expense Year or portion thereof during the Term an equitable portion of such Operating Expenses.

(3) Estimated payments by Tenant on account of Operating Expenses shall be made on the first day of each and every calendar month during the Term of this Lease, in the fashion herein provided for the payment of Base Rent. The monthly amount to be paid to Landlord shall be sufficient to provide Landlord by the end of each Expense Year with a sum equal to Tenant’s required payment, as reasonably estimated by Landlord from time to time, on account of Operating Expenses for the then current Expense Year. Within a reasonable amount of time after the end of each Expense Year, Landlord shall submit to Tenant a reasonably detailed statement of Operating Expenses for such Expense Year, and Landlord shall certify to the accuracy thereof. If estimated payments theretofore made by Tenant for the Expense Year covered by such statement are greater than the required payment on account thereof for such Expense Year, Landlord shall credit the amount of overpayment against subsequent obligations of Tenant on account of Operating Expenses (or refund such overpayment within thirty (30) days after Landlord’s annual reconciliation of Operating Expenses if the Term of this Lease has ended and Tenant has no further obligation to Landlord), and the obligation to make such credit (or refund) for any period within the Term shall survive expiration or earlier termination of the Term. If estimated payments theretofore made by Tenant for the Expense Year covered by such statement are less than the required payment on account thereof for such Expense Year, Tenant shall pay the difference to Landlord within thirty (30) days after being so advised by Landlord, and the obligation to make such payment for any period within the Term shall survive expiration or earlier termination of the Term.

(4) Any such statement by Landlord shall be binding and conclusive upon Tenant unless within sixty (60) days after the giving by Landlord of such statement Tenant shall notify Landlord that Tenant disputes the correctness of such statement, specifying the particular respects in which the statement is claimed to be incorrect. If Tenant timely sends a notice to Landlord disputing the statement received from Landlord, Tenant may, at Tenant’s sole cost and expense, undertake an audit of such of Landlord’s books as are directly relevant to the Operating Expense statement for the Expense Year in question (which may include an audit of the Base Expense Year provided Tenant’s request to undertake an audit of the Base Expense Year is received by Landlord within sixty (60) days after the end of the Base Expense Year), provided and on condition that (a) there is then no uncured Event of Default under this Lease, (b) Tenant has made all payments of Expense Increases billed or invoiced by Landlord as of the date of the audit, (c) the audit is performed only by Tenant’s employees, internal accounting department or an independent certified public accounting firm or commercial real estate brokerage firm reasonably approved by Landlord and whose fee or other compensation is fixed by contract and is in no manner computed or determined based upon the results of the audit, (d) both Tenant and its examiners execute and deliver to Landlord a confidentiality agreement in form and substance reasonably acceptable to Landlord whereby such parties expressly agree to maintain the results of such audit in strict confidence, and (e) such audit is commenced and completed and the results thereof delivered to Landlord within sixty (60) days following the date Landlord makes its books available to Tenant. If Tenant fails to timely deliver a dispute notice to Landlord, or fails to complete its audit and deliver the results thereof to Landlord within the applicable sixty (60) day period, then, in either of such events, Landlord’s statement shall be binding and conclusive upon Tenant for all purposes of this Lease. If it is finally determined and agreed by the parties that Landlord has overstated Tenant’s Proportionate Share of Expense Increases, Landlord shall credit the amount of such overstatement against the monthly installments of Expense Increases next due under this Lease (or refund such amount if the Term of this Lease has ended and Tenant has no further obligation to Landlord). If it is finally determined and agreed by the parties that Landlord has not overstated Tenant’s Proportionate Share of Expense Increases, then Landlord may invoice Tenant for any amount by which Tenant’s Expense Increases were understated, which invoice shall be payable by Tenant within thirty (30) days after receipt. Notwithstanding anything to the contrary contained herein, if Tenant’s audit conclusively demonstrates that Landlord has overstated Tenant’s Proportionate Share of Expense Increases by more than five percent (5%), then Landlord shall reimburse Tenant for the costs of Tenant’s audit, up to a maximum of $2,500.00 per audit.

7. RESPONSIBILITY FOR REPAIRS AND CONDITION OF PREMISES .

7.1 Landlord Repairs . Except as expressly set forth herein, Landlord agrees to keep in good order, condition and repair the Building Structure and the Building Systems; provided, however, that Landlord shall in no event be responsible for (1) any supplemental HVAC equipment installed by Tenant, or other equipment and systems installed by Tenant, whether the same are located within or outside the Premises, (2) the repair of interior glass in the Premises (not including exterior windows of the Building) or the doors (or related glass and finish work) leading to the Premises, or (3) the repair of any condition in the Premises or the Building caused by any act or neglect of Tenant or any Tenant Party. Landlord shall also keep and maintain all Common Areas neat and clean and in good order, condition and repair, including maintenance of landscaped areas and treatment of snow and ice on driveways and pedestrian walkways. Landlord shall not be responsible to make any improvements or repairs to the Building or the Property other than as set forth in this Section 7.1 unless expressly provided otherwise in this Lease.

7.2 Tenant Repairs; Compliance with Laws .

(1) Tenant shall keep and maintain the interior, non-structural portions of the Premises and the improvements, fixtures and appurtenances therein or thereon (excluding Landlord’s Work, but

including any Tenant’s Work, Alterations, or Tenant’s Systems), neat and clean and in good order, condition and repair, excepting only those repairs for which Landlord is responsible under the terms of this Lease, reasonable wear and tear, casualty and condemnation; and Tenant shall surrender the Premises, at the end of the Term, in such condition. Subject to the waiver of subrogation set forth in Section 19.4 below, Tenant shall be responsible for the cost of repairs which may be made necessary by reason of damage to the Building caused by any act or neglect of Tenant or any Tenant Party (including any damage by fire or other casualty arising therefrom).

(2) Tenant shall comply with all applicable Laws, and the standards recommended by the local Board of Fire Underwriters applicable to the Premises and Tenant’s use and occupancy thereof and its business and operations therein, and shall, at Tenant’s sole cost and expense, obtain all permits, licenses and the like required thereby. Notwithstanding the foregoing, Tenant shall not be obligated to make structural repairs or alterations to the Premises in order to comply with any Laws unless the need for such repairs or alterations arises from (a) the specific manner and nature of Tenant’s use or occupancy of the Premises, as distinguished from mere general office use, (b) the manner of conduct of Tenant’s business or operation of its installations, equipment or other property therein, (c) any cause or condition created by or at the instance of Tenant (excluding Landlord’s Work, but including any Tenant’s Work, Alterations, or Tenant’s Systems), or (d) the breach by Tenant of any provisions of this Lease. Any of the foregoing conditions caused by any Tenant Party shall be attributable to Tenant for purposes of this Lease. Tenant shall also be responsible for the cost of compliance with all applicable Laws in respect of the Building to the extent arising from any of the causes set forth in clauses (a) through (d) above, in which event Tenant shall be responsible to perform, at Tenant’s sole cost and expense, such repairs or alterations, whether or not such compliance requires work which is structural or non-structural, ordinary or extraordinary, foreseen or unforeseen.

(3) If repairs are required to be made by Tenant pursuant to the terms hereof, and Tenant fails to make such repairs, upon not less than ten (I 0) Business Days’ prior written notice (except that no notice shall be required in the event of an emergency), Landlord may make or cause such repairs to be made (but shall not be required to do so), and the provisions of Section 25.3 shall be applicable to the costs thereof. Landlord shall not be responsible to Tenant for any loss or damage whatsoever that may accrue to Tenant’s stock or business by reason of Landlord’s making such repairs.

8. FLOOR LOAD; HEAVY MACHINERY; MOVING .

8.1 Tenant shall not place a load upon any floor in the Premises exceeding fifty (50) pounds live load per square foot of usable area of the Premises, or such lower limit as may be required by applicable Law or reasonably required by Landlord. Landlord reserves the right to reasonably prescribe the weight and position of all business machines and mechanical equipment, including safes and filing systems, which shall be placed so as to distribute the weight. Business machines and mechanical equipment shall be placed and maintained by Tenant at Tenant’s sole cost and expense in settings sufficient, in Landlord’s reasonable judgment, to absorb and prevent vibration, noise and annoyance. Tenant shall not move any safe, filing system, heavy machinery, heavy equipment, freight, bulky matter or fixtures into or out of the Building without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Tenant acknowledges and agrees that (1) all moves described in the immediately preceding sentence shall be coordinated with Landlord and subject to Landlord supervision, and (2) Tenant shall reimburse Landlord, within thirty (30) days after demand therefor, for the reasonable cost of Landlord’s supervisory personnel overseeing such moves to the extent such costs are incurred.

8.2 If any safe, filing system, heavy machinery, heavy equipment, freight, bulky matter or fixtures require special handling, Tenant agrees to employ only persons holding a Master Rigger’s license to do such work, and that all work in connection therewith shall comply with applicable Laws.

8.3 In addition to the requirements set forth above relating to heavy machinery, Tenant’s general move into or out of the Building must take place outside of Normal Business Hours. Tenant acknowledges and agrees that (1) all moves described in this Section 8.3 shall be coordinated with Landlord and subject to Landlord supervision, and (2) Tenant shall reimburse Landlord, within thirty (30) days after demand therefor, for the reasonable cost of Landlord’s supervisory personnel overseeing such moves to the extent such costs are incurred.

8.4 In connection with any of the moves described in Section 8 , Tenant agrees to provide insurance in such amounts as Landlord may reasonably require, naming Landlord, together with (l) Landlord’s managing agent and (2) Landlord’s mortgagee (if any) ((I) and (2), collectively, “ Landlord’s Insured Parties ”), as additional insureds on a primary non-contributing basis. All such moves shall be at the sole risk and hazard of Tenant, and except to the extent caused by the negligence or willful misconduct of Landlord or Landlord’s Agents (as hereinafter defined), Tenant shall exonerate, indemnify and save Landlord and Landlord’s Insured Parties harmless from and against any liability, loss, injury, claim or suit resulting directly or indirectly from such moves.

9. SERVICES .

9.1 Landlord shall furnish the following utilities and other services:

(1) Normal business hours for the Building are 8:00 a.m. to 6:00 p.m. Monday through Friday (federal, state and local holidays excepted) (“ Normal Business Hours ”). At all other times, that is, twenty-four (24) hours per day, seven (7) days per week, Landlord shall provide access to the Premises and the Building in accordance with the standard entry system as shall from time to time be in effect for the Building. As of the Commencement Date, access to the Building at other than Normal Business Hours shall be through either a hard key, key card, or personnel identification pin station system. Tenant shall be entitled to one (1) key for each of Tenant’s employees at no cost to Tenant. Additional and replacement keys shall be provided to Tenant at the cost of $15.00 each. Upon the expiration or earlier termination of this Lease, Tenant shall return all keys and shall pay to Landlord $15.00 for each key originally issued at no cost to Tenant and not so returned, which payment shall be deemed Additional Rent and may be withheld from any security deposit or letter of credit hereunder or otherwise collected in accordance with applicable Law. Landlord reserves the right to alter the standard entry system for the Building from time to time as it sees fit and to provide replacement keys to Tenant at no cost to Tenant following such alteration.

(2) HVAC service to the Premises and the Common Areas during Normal Business Hours and under normal business operation at a level comparable to similar commercial properties located in Downtown Boston where the Building is located (but specifically excluding (a) specialized temperature and humidity control for computers, printers, copiers and other equipment and (b) instances where Tenant has exceeded the population density limits set forth in Section 5 ). In the event Tenant requires HVAC service to the Premises outside of Normal Business Hours, Tenant agrees to pay Landlord for such HVAC service at the then current Building rate, which is currently $75.00 per hour. Such hourly rate shall be subject to reasonable adjustments from time to time to reflect increases in Landlord’s costs for providing such additional service.

(3) Janitorial services to the Premises and the Common Areas on Business Days at a level comparable to similar commercial properties located in Downtown Boston where the Building is located.

If any additional janitorial services are required because of any improvements in the Premises that are not Building Standard, the nature of Tenant’s business, or the carelessness of Tenant, in addition to any other rights Landlord may have hereunder, Tenant shall, upon demand, reimburse Landlord for the cost of such additional janitorial services, as determined by Landlord, as Additional Rent. Tenant shall not arrange for any third-party janitorial services to the Premises without Landlord’s prior written consent.

(4) Tempered and cold running water for restrooms and break rooms associated with general office use. If Tenant uses water excessively, or for any purpose other than for restrooms and break rooms associated with general office use, Landlord may assess a reasonable charge for the additional water so used, or install a water meter and thereby measure Tenant’s water consumption for all purposes. In the latter event, Tenant shall pay the cost of such meter and the cost of installation thereof as Additional Rent upon demand and shall keep such meter and installation equipment in good working order and repair. Tenant agrees to pay for water consumed, as shown on such meter, together with the sewer charge based on such meter charges, as and when bills are rendered, and in the event Tenant fails timely to make any such payment, Landlord may pay such charges and collect the same from Tenant as Additional Rent upon demand.

(5) Electricity to the Premises for lights and outlets in amounts suitable for standard office equipment, all as further described in Section 10 below.

(6) Passenger elevator service from the existing passenger elevator system in common with Landlord and others entitled thereto.

9.2 Costs and expenses associated with the foregoing, except to the extent Landlord is otherwise paid or reimbursed for the same (other than as a payment for Operating Expenses), shall be included in Operating Expenses.

10. UTILITIES .

10.1 Electricity . Landlord shall deliver the Premises with electricity separately metered. Tenant shall pay for all electricity used by Tenant in the Premises based on the utility provider’s reading of one or more direct meters, and payable by Tenant to the utility provider upon demand. Tenant’s use of electrical services shall not exceed in voltage, rated capacity, or overall load that which is standard for the Building, which Tenant acknowledges is 208/120 volts and 6,000 amps.

10.2 Utilities Other Than Electricity . Any utilities (other than electricity, which shall be paid for in accordance with Section 10.1 above) which are furnished directly to the Premises by a utility provider and separately metered shall be registered in Tenant’s name and Tenant shall cooperate with Landlord to have the utility bills sent directly to and paid directly by Tenant. Any utilities (other than electricity, which shall be paid for in accordance with Section 10.1 above) which are sub-metered or check metered shall be payable by Tenant to Landlord as Additional Rent within thirty (30) days after billing.

10.3 Landlord’s Right to Select Utility Providers . Landlord shall have the right at any time and from time to time during the Term of this Lease to contract for utilities from such providers of such services as Landlord shall elect. Tenant shall cooperate with Landlord and the utility provider at all times and, as reasonably necessary, shall allow Landlord and the utility provider reasonable access to the Building’s electric lines, feeders, risers, wiring, and any other machinery within the Premises. Landlord agrees to furnish or cause to be furnished to the Premises the utilities and services described herein, subject to the terms and conditions and in accordance with the standards set forth herein.

11. ADDITIONAL PROVISIONS RELATING TO SERVICES .

11.1 Landlord reserves the right to curtail, suspend, interrupt and/or stop the supply of HVAC, janitorial, water/sewer, electricity, elevator and other services, and to curtail, suspend, interrupt and/or stop the use of entrances and/or lobbies serving access to the Building, or other portions of the Property, without thereby incurring any liability to Tenant, when necessary by reason of accident or emergency, or for repairs, replacements, alterations, or renovations desirable or necessary (in the judgment of Landlord reasonably exercised), or when prevented from supplying such services or use due to any act or neglect of Tenant or any Tenant Party, or due to an event of Force Majeure (as hereinafter defined). In no event shall any of the foregoing subject Landlord to (1) liability for any loss, injury or damage to property, (2) direct, indirect or consequential damages, or (3) other monetary damages (including diminution or abatement of rent or other compensation), nor shall this Lease or any of the obligations of Tenant be affected or reduced as a result of any curtailment, suspension, interruption and/or stoppage in the furnishing of the foregoing services, regardless of the cause of such curtailment, suspension, interruption and/or stoppage; provided, however, that (a) the same shall not relieve Landlord of any applicable obligation to perform repairs to the Building Structure and the Building Systems to the extent, and subject to the limitations, provided for in this Lease, and (b) in each instance in which curtailment, suspension, interruption and/or stoppage of services is required or otherwise occurs, Landlord shall use commercially reasonable efforts to restore such services, and shall give Tenant reasonable notice (to the extent feasible) of the commencement and anticipated duration of any such curtailment, suspension, interruption and/or stoppage of services). To the fullest extent permitted by Law, Tenant hereby waives all rights to make repairs at the expense of Landlord.

11.2 Notwithstanding the foregoing, or any provision of this Lease to the contrary, if (1) a curtailment, suspension, interruption and/or stoppage of an Essential Service (as hereinafter defined) shall occur, except any of the same due to any act or neglect of Tenant or any Tenant Party (any such interruption of an Essential Service being hereinafter referred to as a “ Service Interruption ”), (2) such Service Interruption occurs or continues as a result of the negligence or willful misconduct of Landlord or Landlord’s agents, servants, employees or contractors, (3) such Service Interruption continues for more than five (5) consecutive Business Days after Landlord shall have received written notice thereof from Tenant, and (4) as a result of such Service Interruption, the conduct of Tenant’s normal business operations in the Premises are materially and adversely affected, then there shall be an abatement of one day’s Base Rent, and charges on account of Taxes and Operating Expenses, for each day during which such Service Interruption continues after such five (5) Business Day period; provided, however, that if any part of the Premises is reasonably useable for Tenant’s normal business operations or if Tenant conducts all or any part of its business operations in any part of the Premises notwithstanding such Service Interruption, then the amount of each daily abatement of Base Rent, and charges on account of Taxes and Operating Expenses, shall only be proportionate to the nature and extent of the interruption of Tenant’s normal business operations or ability to use the Premises. The rights granted to Tenant under this Section 11.2 shall be Tenant’s sole and exclusive remedy resulting from a failure of Landlord to provide services, and Landlord shall not otherwise be liable for any loss or damage suffered or sustained by Tenant resulting from any failure or cessation of services. For purposes hereof, the term “ Essential Services ” shall mean (a) access to the Premises, (b) HVAC service, (c) water/sewer service, and (d) electricity; provided, however, only to the extent that Landlord has an obligation to provide the foregoing items to Tenant under this Lease. Any abatement of Base Rent, and charges on account of Taxes and Operating Expenses, under this Section 11.2 shall apply only with respect to Base Rent, and charges on account of Taxes and Operating Expenses, allocable to the period after each of the conditions set forth in clauses (1) through (4) above shall have been satisfied and only during such times as each of such conditions shall exist.

12. ALTERATIONS; TENANT’S SYSTEMS .

12.1 Alterations . Except as expressly set forth in the work letter attached hereto as Exhibit C , Tenant shall not make, or permit to be made, any alterations, additions, improvements or other changes in or to the Premises (“ Alterations ”), other than the installation of typical office decorations which are not affixed to the realty, without Landlord’s prior written consent. Tenant agrees to submit plans, drawings and specifications for any proposed Alterations to Landlord for Landlord’s prior written consent. Provided the proposed Alterations (1) meet or exceed Landlord’s Building Standard specifications, (2) will not adversely affect the Common Areas of the Building or be visible from the Common Areas or the exterior of the Building, (3) will not impact the space of any other tenant or occupant of the Building, (4) will not adversely affect the Building Structure or the Building Systems, and (5) will not require Landlord to make improvements to the Building or the Property (or undertake special maintenance, repair or replacement obligations with respect to the Building or the Property) not within the scope of those expressly provided for herein, unless Tenant agrees to pay all costs associated with such improvements or obligations, then Landlord’s consent to such proposed Alterations shall not be unreasonably withheld, conditioned or delayed. Notwithstanding anything to the contrary contained in this Section 12.1 , Tenant may make non-structural Alterations costing less than $15.00 per rentable square foot of the Premises without the prior written consent of Landlord (but with written notice to Landlord), provided said Alterations are otherwise in compliance with clauses (1) through (5) of this Section 12.1 .

12.2 Tenant’s Systems . In addition, Tenant shall not install, or permit to be installed, (1) any voice, data, Internet, audio-visual, security, or access systems, or the related wiring within the Building necessary for the operation thereof (“ Tenant’s Communications Systems ”) or (2) any furniture systems (“ Tenant’s Furniture Systems ”) ((1) and (2) collectively, “ Tenant’s Systems ”) for Tenant’s business operations without Landlord’s prior written consent. Tenant agrees to submit plans, drawings and specifications for Tenant’s Systems (including the locations and connections of Tenant’s Communications Systems from within the Premises to the Building risers, conduits and systems) to Landlord for Landlord’s prior written consent. Provided Tenant’s Systems (1) meet or exceed Landlord’s Building Standard specifications, (2) will not affect or be visible from the Common Areas or the exterior of the Building, (3) will not impact the space of any other tenant or occupant of the Building, (4) will not adversely affect the Building Structure or the Building Systems, and (5) will not require Landlord to make improvements to the Building or the Property (or undertake special maintenance, repair or replacement obligations with respect to the Building or the Property) not within the scope of those expressly provided for herein, unless Tenant agrees to pay all costs associated with such improvements or obligations, then Landlord’s consent to Tenant’s Systems shall not be unreasonably withheld, conditioned or delayed.

12.3 Construction Standards . All work performed by or on behalf of Tenant under this Lease (whether constituting part of Tenant’s Work (if any), Alterations, or Tenant’s Systems) shall be made and performed (1) pursuant to plans, drawings and specifications which have been reviewed and approved by Landlord prior to the commencement of the work, (2) pursuant to permitting materials (including applications, plans, narratives and calculations) which have been (a) reviewed and approved by Landlord prior to submission to the applicable government authorities and (b) reviewed, approved by, and filed with, all applicable governmental authorities, (3) by contractors reasonably approved by Landlord, who shall carry insurance of such types and in such amounts as Landlord shall reasonably require, naming Landlord and Landlord’s Insured Parties as additional insureds on a primary non-contributing basis, (4) in a good and workmanlike manner, (5) so that the same shall be at least equal in quality, value, and utility to the original work or installation and shall be in conformity with Landlord’s then current Building Standard specifications as provided by Landlord to Tenant upon Tenant’s request and as the same may be amended by Landlord from time to time, (6) in accordance with the Rules and Regulations (as hereinafter defined) and other

provisions of this Lease, and (7) in accordance with all applicable Laws (collectively, the “ Construction Standards ”).

12.4 Cost of Work; Priority of Work; After-Hours Work .

(1) Cost of Work . Except for Landlord’s Work set forth in the work letter attached hereto as Exhibit C , all work performed by or on behalf of Tenant under this Lease (whether constituting part of Tenant’s Work (if any), Alterations, or Tenant’s Systems) shall be performed at Tenant’s sole cost and expense.

(2) Priority of Work . If Landlord and Tenant are each performing work pursuant to the terms and conditions of this Lease, Landlord and Tenant shall each take commercially reasonable measures to ensure that Landlord’s architects, engineers, contractors, sub-contractors, vendors, service providers and consultants (collectively, “ Landlord’s Contractors ”) and Tenant’s architects, engineers, contractors, sub-contractors, suppliers, vendors, service providers and consultants (collectively, “ Tenant’s Contractors ”) cooperate in commercially reasonable ways with each other to avoid any delay in either the work being performed by Landlord or the work being performed by Tenant or any conflict with the performance of either the work being performed by Landlord or the work being performed by Tenant, Tenant acknowledging, however, that in the case of conflict that is not reasonably avoidable, the work being performed by Landlord shall have priority.

(3) After-Hours Work . All work performed by or on behalf of Tenant under this Lease (whether constituting part of Tenant’s Work (if any), Alterations, or Tenant’s Systems) shall be performed during Normal Business Hours; provided, however, that Landlord reserves the right to require that any work which may potentially disturb other tenants in the Building, or conflict with the performance of any work being performed by Landlord in the Building, be performed outside of Normal Business Hours. If Tenant desires to perform any work outside of Normal Business Hours (such work, “ After-Hours Work ”), Tenant acknowledges and agrees that (l) such After-Hours Work shall be coordinated with Landlord and subject to Landlord supervision, and (2) Tenant shall reimburse Landlord, within thirty (30) days after demand therefor, for the cost of Landlord’s supervisory personnel overseeing the After-Hours Work to the extent such costs are incurred.

12.5 Additional Covenants . In addition, the following additional covenants shall apply to Tenant’s Alterations and Tenant’s Systems:

(1) In consideration of Landlord’s costs associated with the review and supervision of Tenant’s Alterations (but not Tenant’s Systems), Tenant shall pay to Landlord a construction management fee equal to two and one-half percent (2.5%) of the total project cost of Tenant’s Alterations. In addition, Tenant agrees to reimburse Landlord for any third-party out of-pocket expenses reasonably incurred by Landlord in connection with the review, supervision, and Building operational requirements of Tenant’s Alterations and/or Tenant’s Systems within thirty (30) days after receipt of Landlord’s invoice therefor. The provisions of this Section 12.5(1) shall not apply to Landlord’s Work.

(2) Tenant shall provide Landlord with “as built” plans for any Alterations for which plans are used.

(3) Tenant shall provide Landlord with copies of any warranties for Alterations (including materials and equipment), and either assign to Landlord, or enforce on Landlord’s behalf, all such warranties to the extent repairs and/or maintenance on warranted items would be covered by such warranties and are otherwise Landlord’s responsibility under this Lease.

(4) Tenant acknowledges and agrees that Landlord shall have the right to examine and inspect all work performed by Tenant under this Lease; provided, however, that no such examination or inspection shall constitute an approval or warranty or give rise to any liability of Landlord with respect thereto.

(5) All work shall be performed in such a manner as to maintain harmonious labor relations. Tenant shall not use (and upon notice from Landlord shall cease using) labor and employment practices that, in Landlord’s good faith judgment, may cause strikes, picketing, boycotts or disturb labor harmony with the workforce or trades engaged in performing other work, labor or services in or about the Property. If picket lines or boycotts or other visible activities objectionable to Landlord are established, conducted or carried out against Tenant, its employees, agents, contractors, subcontractors or suppliers, in or about the Property, and such activities are not ended within two (2) days after notice to Tenant, Tenant shall immediately cease the work Tenant is performing and remove or cause to be removed all such employees, agents, contractors, subcontractors and suppliers until the dispute has been settled.

(6) Tenant and Tenant’s Contractors shall keep all construction areas clean and free of trash and debris, and not impair or congregate in the Common Areas. Tenant and Tenant’s Contractors shall abide by any reasonable construction rules and regulations from time to time established by Landlord.

12.6 Notices Relating to Tenant’s Initial Work . Notwithstanding the notice provisions contained in Section 29 below, Landlord and Tenant acknowledge and agree that any written notices relating Tenant’s performance of the initial work necessary to prepare the Premises for Tenant’s occupancy thereof (such as the installation of Tenant’s Systems) may be sent via email as follows:

If to Landlord, then to Landlord’s construction representative: Kevin Kiley, kkiley@synergy-inv.com .

If to Tenant, then to Tenant’s construction representative: Pat Walsh, Chief Marketing Officer, pat.walsh@tufin.com .

12.7 Removal of Alterations and Tenant’s Systems . Landlord reserves the right to require that Tenant remove any Alterations and/or Tenant’s Systems installed by or for Tenant within or serving the Premises upon the expiration or earlier termination of this Lease. If, at the time Tenant submits its proposed Alterations and/or Tenant’s Systems to Landlord for approval, Tenant expressly requests (by notice to Landlord) permission to leave said Alterations and/or Tenant’s Systems in place at the end of the Term, Landlord shall notify Tenant in writing at the same time Landlord consents to such Alterations and/or Tenant’s Systems (assuming consent is provided) whether or not such Alterations and/or Tenant’s Systems will be required to be removed by Tenant at the end of the Term. If Tenant fails to remove any Alterations and/or Tenant’s Systems so required, such failure shall be an Event of Default hereunder, and Landlord shall have all rights and remedies available under this Lease, at law or in equity. Tenant acknowledges and agrees that any Alterations and/or Tenant’s Systems installed by or for Tenant within or serving the Premises shall be the property of Tenant during the Term. Any Alterations and/or Tenant’s Systems not removed by Tenant shall, at Landlord’s option, become the property of Landlord (without payment by Landlord) at the expiration or earlier termination of this Lease.

12.8 Special Provisions Relating to Telecommunications . Tenant and its telecommunications companies, including local exchange telecommunications companies and alternative access vendor services companies, shall have no right of access to and within the Building, for the installation and operation of telecommunications systems, including voice, data, Internet, audio-visual, and any other services provided over wire, fiber optic, microwave, wireless, and any other transmission systems (“ Telecommunications

Services ”), for part or all of Tenant’s telecommunications within the Building and from the Building to any other location without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. All providers of Telecommunications Services shall be required to comply with the Rules and Regulations, applicable Laws and Landlord’s reasonable policies and practices for the Building. Tenant acknowledges that Landlord shall not be required to provide or arrange for any Telecommunications Services, or enter into any new agreements with telecommunications companies, and that Landlord shall have no liability to any Tenant Party in connection with the installation, operation or maintenance of Telecommunications Services or any equipment or facilities relating thereto. Tenant, at its cost and for its own account, shall be solely responsible for obtaining all Telecommunications Services.

13. INSPECTION .

Landlord and Landlord’s Insured Parties, and their representatives, shall have the right at all reasonable times and upon reasonable notice (except in the event of an emergency, when no notice shall be required) to enter the Premises to (1) show the same to existing or prospective lenders or purchasers and/or (2) inspect the same and perform maintenance or make repairs or replacements therein as permitted and required by this Lease; provided, however, that Landlord shall use commercially reasonable efforts to avoid undue disturbance of Tenant’s use and occupancy of the Premises in connection with its exercise of any access rights as provided herein. During the last twelve (12) months of the Term, or any extension thereof, Landlord and its representatives may, upon twenty-four (24) hours advance notice to Tenant, gain access to the Premises for the purpose of showing the same to prospective tenants; provided, however, that Landlord shall use commercially reasonable efforts to avoid undue disturbance of Tenant’s use and occupancy of the Premises in connection with its exercise of any access rights as provided herein. Entry hereunder shall not constitute a constructive eviction or entitle Tenant to an abatement of Rent. Notwithstanding the notice provisions contained in this Lease, Landlord and Tenant acknowledge and agree that any notices required under this Section may be given by telephone or email.

14. FIRE OR OTHER CASUALTY .

14.1 In the event of damage to or destruction of the Premises or the Building caused by fire or other casualty (“ Event of Casualty ”), Landlord shall undertake to make repairs and restorations with reasonable diligence, unless this Lease has been terminated by Landlord or Tenant as hereinafter provided, or unless any mortgagee which is entitled to receive casualty insurance proceeds fails to make available to Landlord a sufficient amount of such proceeds to cover the cost of such repairs and restorations. Landlord shall, within sixty (60) days after the Event of Casualty, provide Tenant with a good faith estimate of the time required to repair the damage to the Premises or the Building, as the case may be. If, in Landlord’s reasonable judgment, the damage is of such nature or extent that (1) more than two hundred-seventy (270) days after the Event of Casualty would be required (with normal work crews and normal work hours) to repair and restore the Premises or the Building, or (2) less than one (1) year remains on the then current Term of this Lease and more than ninety (90) days after the Event of Casualty would be required (with normal work crews and normal work hours) to repair and restore the Premises or the Building, then the Premises or the Building, as the case may be, shall be deemed “substantially damaged.” If the Premises or the Building are deemed “substantially damaged,” Landlord may elect to terminate this Lease by giving Tenant written notice of such termination within ninety (90) days after the Event of Casualty. In addition, if the Premises or the Building are deemed “substantially damaged,” and if as a result of the same the Premises are rendered untenantable for the Permitted Use, then Tenant may elect to terminate this Lease by giving Landlord written notice of such termination within fifteen (15) Business Days after receipt from Landlord of the estimated period of repair and restoration. If either party elects to terminate this Lease as set forth above, then the Term of this Lease shall expire thirty (30) days after the date such written notice is given, Base Rent, and charges

on account of Taxes and Operating Expenses, shall be equitably abated from the date of the Event of Casualty for any portion of the Premises that is unusable (and unused) by Tenant, and Tenant shall thereafter vacate the Premises and surrender the same to Landlord in accordance with the terms, covenants and conditions of this Lease.

14.2 In the event this Lease is not terminated pursuant to the terms of Section 14.1 above and is otherwise in full force and effect, and sufficient casualty insurance proceeds are available for application to such repair and restoration and Landlord’s mortgagee (if any) releases the same for such repair and restoration, Landlord shall repair and restore the Premises or the Building, as the case may be (including Landlord’s Work, if any) to substantially the same condition in which it was immediately prior to the Event of Casualty, subject to applicable Laws; provided, however, that Landlord shall not be obligated to repair or restore (1) any Tenant’s Work (if any), Alterations, or Tenant’s Systems, even if such work was performed by Landlord’s contractors (and regardless of whether or not Tenant is required to remove or leave the same at the expiration or earlier termination of this Lease), or (2) any of Tenant’s Property (as hereinafter defined), unless Tenant, in a manner satisfactory to Landlord, assures payment in full of all costs as may be incurred by Landlord in connection therewith. In the event sufficient casualty insurance proceeds are not available for application to such repair and restoration or Landlord’s mortgagee (if any) does not release the same for such repair and restoration, Landlord shall promptly provide notice thereof to Tenant and Tenant may, within thirty (30) days after receipt thereof, elect to terminate this Lease by giving Landlord written notice thereof. If Tenant so elects to terminate this Lease as set forth above, then the Term of this Lease shall expire thirty (30) days after the date such written notice is given, Base Rent, and charges on account of Taxes and Operating Expenses, shall be equitably abated from the date of the Event of Casualty for any portion of the Premises that is unusable (and unused) by Tenant, and Tenant shall thereafter vacate the Premises and surrender the same to Landlord in accordance with the terms, covenants and conditions of this Lease.

14.3 When Landlord’s repair and restoration work has been completed, Tenant shall complete the restoration of (1) all of Tenant’s Work (if any), Alterations, and Tenant’s Systems and (2) all of Tenant’s Property which are necessary to permit Tenant’s re-occupancy of the Premises. Landlord shall not be liable for any inconvenience or annoyance to Tenant or injury to the business of Tenant resulting in any way from such damage or the repair thereof, except that Base Rent, and charges on account of Taxes and Operating Expenses, shall be equitably abated from the date of the Event of Casualty until the Premises has been substantially restored to the extent of Landlord’s obligations above. Notwithstanding the foregoing, if the Event of Casualty was due to the negligence or willful misconduct of Tenant or any Tenant Party, such abatement or reduction shall be made only if and to the extent of any proceeds of rental interruption insurance actually received by Landlord and allocated to the Premises.

15. EMINENT DOMAIN .

If (1) the whole or a material portion of the Premises shall be taken or condemned by a governmental or quasi-governmental authority for any public or quasi-public use or purpose (including sale under threat of such a taking), or (2) if the owner elects to convey title to the condemnor by a deed in lieu of condemnation, or (3) if all or any portion of the Property are so taken, condemned or conveyed and as a result thereof, in Landlord’s reasonable judgment, the Premises are rendered untenantable for the Permitted Use, then this Lease shall cease and terminate as of the date when title vests in such governmental or quasi-governmental authority and Base Rent, and charges on account of Taxes and Operating Expenses, shall be abated on the date when such title vests in such governmental or quasi-governmental authority. If less than a material portion of the Premises shall be taken or condemned by a governmental or quasi governmental authority for any public or quasi-public use or purpose (including sale under threat of such a taking), then this Lease shall continue in full force and effect; provided, however, that Base Rent, and charges on account of Taxes and

Operating Expenses, shall be equitably abated on the date when such title vests in such governmental or quasi-governmental authority. In any case, Tenant shall have no claim against Landlord for any portion of the amount that may be awarded as damages as a result of any governmental or quasi-governmental taking or condemnation (or sale under threat or such taking or condemnation); and all rights of Tenant to damages therefor are hereby assigned by Tenant to Landlord. The foregoing shall not, however, deprive Tenant of any separate award for moving expenses, dislocation damages or for any other award which would not reduce the award payable to Landlord. As used herein, “material portion of the Premises” shall mean such amount that, in Landlord’s reasonable judgment, would render the Premises untenantable for the Permitted Use.

16. TENANT’S PROPERTY .

Tenant shall pay, prior to delinquency, all taxes assessed against and levied upon Tenant’s Property. If any of Tenant’s Property shall be assessed with Landlord’s real or personal property, Tenant shall pay to Landlord the taxes attributable to Tenant’s Property within thirty (30) days after receipt of a written statement from Landlord (including reasonable documentation and evidence thereof) setting forth the taxes attributable to Tenant’s Property. As used herein, “ Tenant’s Property ” includes, but is not limited to, all inventory, merchandise, furniture, fixtures, equipment (including computer equipment and any data stored thereon), and personal property placed in the Premises by Tenant and all computer, telecommunications or other cabling and wiring installed in the Premises or elsewhere in the Building by or for the benefit of Tenant. Tenant hereby acknowledges and agrees that Landlord’s insurance policies do not cover Tenant’s Property.

17. ASSIGNMENT AND SUBLETTING .

17.1 Prohibition .

(1) Tenant covenants and agrees that neither this Lease nor the term and estate hereby granted, nor any interest herein or therein, will be mortgaged, pledged or encumbered, whether voluntarily, involuntarily, by operation of law or otherwise. In addition, Tenant covenants and agrees that neither this Lease nor the term and estate hereby granted, nor any interest herein or therein, will be assigned or otherwise transferred, whether voluntarily, involuntarily, by operation of law or otherwise, and that neither the Premises nor any part thereof will be encumbered in any manner by reason of any act or omission on the part of Tenant, or used or occupied or permitted to be used or occupied, by anyone other than Tenant, or for any use or purpose other than the Permitted Use, or be sublet (which term shall include, without limitation, granting of concessions, licenses and the like) in whole or in part, without, in each case, the prior written consent of Landlord (all of the foregoing actions described in this sentence are hereinafter sometimes referred to collectively as ” Transfers ” and any person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a “ Transferee ”). Without limiting the foregoing, any agreement pursuant to which: (a) Tenant is relieved from the obligation to pay, or a third party agrees to pay on Tenant’s behalf, all or any portion of the Base Rent or Additional Rent under this Lease; and/or (b) a third party undertakes or is granted by or on behalf of Tenant the right to assign this Lease or sublet all or any portion of the Premises, shall for all purposes hereof be deemed to be a Transfer of this Lease and subject to the provisions of Section 17 . A Transfer under Section 17 shall also include a sale or other transfer (by one or more transfers) of any of the following: the voting stock, partnership interests, membership or other equity interests in Tenant (or any other mechanism such as the issuance of additional stock or the creation of additional partnership or membership interests) which results in a change of control of Tenant or a sale or other transfer (in one or more transfers) of fifty percent (50%) or more of the assets of Tenant, as if such transfer were an assignment of this Lease. Notwithstanding the foregoing, if equity interests in Tenant at any time are or become traded on a national securities exchange (as defined in the Securities Exchange Act of 1934), the transfer of equity

interests in Tenant on a national securities exchange shall not be deemed an assignment within the meaning of this Section.

(2) Notwithstanding the foregoing, Landlord's consent shall not be required under Section 17.1(1) (and Section 17.4 and Section 17.5 shall not apply) to either (a) transactions with an entity into or with which Tenant is merged or consolidated, or to which all or substantially all of Tenant’s assets or stock (or other indicia of ownership) are transferred, or (a) transactions with any entity which controls or is controlled by Tenant or is under common control with Tenant; provided, however, that (i) the successor to Tenant has a Tangible Net Worth (as hereinafter defined) at least equal to the Tangible Net Worth of Tenant on the date of this Lease, (ii) proof satisfactory to Landlord of the Tangible Net Worth of both the Transferee and Tenant shall have been delivered to Landlord at least ten (10) days prior to the effective date of any such transaction (or if such prior notice is prohibited by applicable Laws, Tenant provides such notice within ten (10) days after the effective date of such transaction), (iii) the Transfer is for a valid business purpose of Tenant and is not a subterfuge for the provisions of Section 17 , and (iv) Tenant and Transferee execute an agreement in form and substance satisfactory to Landlord in its reasonable discretion, which agreement shall require Transferee to be bound by all the obligations of Tenant hereunder, including the covenant against further assignment and subletting, and include Transferee’s representation and warranty that it is not listed, owned or controlled by, or acting for or on behalf of, any person or entity on the OFAC List (as hereinafter defined). As used herein, “ Tangible Net Worth ” shall mean total assets minus intangible assets (including goodwill, patents, trademarks and copyrights) and total liabilities, all as calculated in accordance with generally accepted accounting principles consistently applied.

17.2 Landlord’s Consent .

(1) If Tenant desires Landlord’s consent to any Transfer, Tenant shall notify Landlord in writing, which notice (the “ Transfer Notice ”) shall include (a) the proposed effective date of the Transfer, which shall not be less than twenty (20) days nor more than one hundred eighty (180) days after the date of delivery of the Transfer Notice, (b) all of the terms of the proposed Transfer, which shall include the consideration therefor and a description of the portion of the Premises to be transferred (if a proposed sublease), (c) fully-negotiated drafts of all documentation effectuating the proposed Transfer, including all operative documents to evidence such Transfer and all agreements incidental or related to such Transfer, and (d) the name and address of the proposed Transferee, current financial statements of the proposed Transferee certified by an officer, partner or owner thereof, business credit and personal references and history of the proposed Transferee, and any other information required by Landlord which will enable Landlord to determine the financial responsibility, character, and reputation of the proposed Transferee, nature of such Transferee’s business, and proposed use of the Premises.

(2) In the event Landlord does not exercise its options pursuant to Section 17.5 below to recapture the Premises or terminate this Lease in whole or in part, Landlord shall, by notice to Tenant within twenty (20) days after receipt of Tenant’s Transfer Notice, either consent or not consent to the proposed Transfer. Landlord’s consent to a proposed Transfer shall not be unreasonably withheld, conditioned or delayed; provided, however, that (a) there shall not be an Event of Default that remains uncured; (b) in Landlord’s reasonable judgment the proposed Transferee is engaged in a business which is in keeping with the then standards of the Building and the Property and the proposed use is limited to the Permitted Use; (c) the proposed Transferee is a reputable entity and has sufficient financial worth and stability in light of the responsibilities to be undertaken, based on evidence provided by Tenant (and others) to Landlord, as determined by Landlord in its reasonable discretion; (d) if Landlord shall have comparable space available for rent for a comparable length of term, then neither (i) the proposed Transferee nor (ii) any person or entity which, directly or indirectly, controls, is controlled by, or is under common control with, the proposed

Transferee, shall be an occupant of any part of the Property; (e) if Landlord shall have comparable space available for rent for a comparable length of term, then the proposed Transferee shall not be a person or entity with whom Landlord is then, or during the preceding six (6) months has been, actively negotiating to lease space at the Property; (f) the proposed Transfer shall be in form reasonably satisfactory to Landlord and shall comply with the applicable provisions of Section 17 ; (g) [intentionally omitted]; (h) with respect to a proposed sublease, the proposed sublease involves, in Landlord’s reasonable judgment, a portion of the Premises which is independently leasable space; (i) with respect to and after taking into account a proposed sublease, there will not be more than two (2) different entities (including Tenant) occupying the Premises; (j) the character of the business to be conducted or the proposed use of the Premises by the proposed Transferee or the identity of the proposed Transferee will not create or increase the likelihood of any labor disputes, disharmony, strikes or any other form of protests occurring at the Property; (k) the proposed Transfer shall not have (or reasonably potentially have) any adverse effect on any real estate investment trust qualification requirements of Landlord or any of its Affiliates or otherwise cause Landlord or any of its Affiliates to be in violation of any Laws to which Landlord or such Affiliate is subject, including the Employment Retirement Income Security Act of 1974; (1) the holder of any Superior Mortgage and/or Superior Lease, as applicable, consents to such Transfer if such consent is in fact required under the Superior Mortgage and/or Superior Lease or documents applicable thereto; and (m) neither the identity nor business of the proposed Transferee would cause Landlord to be in violation of any covenant or restriction contained in another lease at the Property.

17.3 Acceptance of Rent . If this Lease is assigned, or if the Premises or any part thereof is sublet or occupied by anyone other than Tenant, whether or not in violation of the terms and conditions of this Lease, Landlord may, at any time and from time to time while there exists an uncured Event of Default, collect rent and other charges from the Transferee, and apply the net amount collected to the rent and other charges herein reserved, but no such Transfer, collection or modification of any provisions of this Lease shall be deemed a waiver of this covenant, or the acceptance of the Transferee as a tenant or a release of Tenant from the further performance of covenants on the part of Tenant to be performed hereunder. Any consent by Landlord to a particular Transfer or other act for which Landlord’s consent is required under Section 17.l(1) shall not in any way diminish the prohibition stated in Section 17.1(1) as to any further such Transfer or other act or the continuing liability of the original named Tenant. No Transfer hereunder shall relieve Tenant from its obligations hereunder, and Tenant shall remain fully and primarily liable therefor.

17.4 Excess Payments . If Tenant assigns this Lease or sublets the Premises or any portion thereof, Tenant shall pay to Landlord as Additional Rent fifty percent (50%) of the amount, if any, by which (1) any and all compensation received by Tenant as a result of such Transfer, net only of reasonable expenses actually incurred by Tenant in connection with such Transfer for brokerage commissions, rental concessions, improvement expenses and allowances (prorated over the term of the Transfer), exceeds (2) in the case of an assignment, the Base Rent and Additional Rent under this Lease, and in the case of a subletting, the portion of the Base Rent and Additional Rent allocable to the portion of the Premises subject to such subletting. Such payments shall be made on the date the corresponding payments under this Lease are due. Notwithstanding the foregoing, the provisions of this Section shall impose no obligation on Landlord to consent to an assignment of this Lease or a subletting of all or a portion of the Premises.

17.5 Landlord’s Recapture Right . Notwithstanding anything herein to the contrary, in addition to withholding or granting consent with respect to any proposed Transfer, Landlord shall have the right, to be exercised in writing within twenty (20) days after receipt of a Transfer Notice, (1) to terminate this Lease (in the event of a proposed assignment), (2) to terminate this Lease (in the event of a proposed sublease comprising all or substantially all of the Premises for all or substantially all of the then-remaining Term of this Lease), or (3) to recapture that portion of the Premises to be subleased (in the event of a proposed sublease

comprising less than all or substantially all of the Premises for all or substantially all of the then-remaining Term of this Lease). If Landlord elects to terminate this Lease, this Lease shall terminate as of the date (the “ Recapture Date ”) which is the proposed effective date of such Transfer, as if such date were the last day of the Term of this Lease. If Landlord elects to recapture only that portion of the Premises to be subleased, this Lease shall be deemed amended to eliminate the proposed sublease premises from the Premises as of the Recapture Date, and thereafter all Base Rent and Additional Rent shall be appropriately prorated to reflect the reduction of the Premises as of the Recapture Date.

17.6 Further Requirements . Tenant shall reimburse Landlord on demand, as Additional Rent, for any out-of-pocket costs (including reasonable attorneys’ fees and expenses) incurred by Landlord in connection with any actual or proposed assignment or sublease or other act described in Section 17.l(l) . whether or not consummated, including the costs of making investigations as to the acceptability of the proposed assignee or subtenant. Any Transfer to which Landlord gives its consent shall not be valid unless and until Tenant and Transferee execute a consent agreement in form and substance satisfactory to Landlord in its reasonable discretion, which consent agreement shall require Transferee to be bound by all the obligations of Tenant hereunder, including the covenant against further assignment and subletting, and include Transferee’s representation and warranty that it is not listed, owned or controlled by, or acting for or on behalf of, any person or entity on the OFAC List. Any sublease shall provide that: (1) the term of the sublease ends no later than the last day of the Term of this Lease; (2) such sublease is subject and subordinate to this Lease; (3) Landlord may enforce the provisions of the sublease, including collection of rents; and (4) in the event of termination of this Lease or reentry or repossession of the Premises by Landlord, Landlord may, at its sole discretion and option, take over all of the right, title and interest of Tenant, as sublessor, under such sublease, and such subtenant shall, at Landlord’s option, attorn to Landlord, but nevertheless Landlord shall not (a) be liable for any previous act or omission of Tenant under such sublease; (b) be subject to any defense or offset previously accrued in favor of the subtenant against Tenant; or (a) be bound by any previous modification of such sublease made without Landlord’s written consent or by any previous prepayment of more than one month’s rent.

18. SIGNAGE; DIRECTORIES .

18.1 Tenant may not place on the interior or exterior of the Premises (including on both the interior and exterior surfaces of doors and windows) or on any part of the Building outside of the Premises, any awnings, canopies or other projections; any signs, symbols, flyers, notices or advertisements; or any other items visible to public view from outside of the Premises. Tenant may install its own blinds (or other window treatments) in the Premises only if the same shall not in any way interfere with the standard blinds (or other window treatments) for the Building, subject to (a) Landlord's prior written consent and (b) the Construction Standards set forth in Section 12.3 .

18.2 Landlord shall provide and maintain (1) in the main lobby of the Building, an alphabetical directory board or other directory device listing all tenants in the Building, including a single directory listing for Tenant, and (2) in the elevator lobby of the floor on which the Premises are located, an alphabetical directory board or other directory device listing all tenants on the floor, including a single directory listing for Tenant. Tenant shall have the option to install identification signage using Tenant's corporate name and/or logo at the entrance of the Premises, subject to (a) Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed and (b) the Construction Standards set forth in Section 12.3 .

19. INSURANCE .

19.1 Landlord’s Insurance . Landlord shall, at all times during the Term of this Lease, procure and maintain:

(1) Property . Property insurance the equivalent of “causes of loss - special form” on the Property. Landlord shall not be obligated to insure any furniture, equipment, trade fixtures, machinery, goods, or supplies which Tenant may keep or maintain in the Premises or any alteration, addition, or improvement which Tenant may make upon the Premises. In addition, Landlord may elect to secure and maintain rental income insurance. If the annual cost to Landlord for such property or rental income insurance exceeds the standard rates because of the nature of Tenant’s operations, Tenant shall, upon receipt of appropriate invoices, reimburse Landlord for such increased cost.

(2) Commercial General Liability . Commercial general liability insurance, which shall be in addition to, and not in lieu of, insurance required to be maintained by Tenant. Tenant shall not be included as an additional insured on any policy of liability insurance maintained by Landlord. Such insurance shall have the following minimum limits:



Each Occurrence	$5,000,000
Annual Aggregate	5,000,000

(3) Landlord’s insurance coverage may be effected directly and/or through the use of blanket insurance coverage covering more than one location and may contain such commercially reasonable deductibles as Landlord may elect in its discretion. The cost of such insurance shall be included as part of Operating Expenses.

19.2 Tenant’s Insurance . Tenant shall, at all times during the Term of this Lease (or such earlier or later period as Tenant is in possession of the Premises or any portion thereof), procure and maintain at its sole cost and expense:

(1) Property . Property insurance the equivalent of “causes of loss - special form” including flood, earthquake, windstorm, theft, sprinkler leakage and boiler and machinery coverage on all of Tenant’s trade fixtures, furniture, inventory and other personal property in the Premises, and on any alterations, additions, or improvements made by Tenant upon the Premises all for the full replacement cost thereof. Tenant shall use the proceeds from such insurance for the replacement of Tenant’s trade fixtures, furniture, inventory and other personal property in the Premises, and for the restoration of Tenant’s alterations, additions, or improvements to the Premises. Landlord shall be named as loss payee with respect to alterations, additions, or improvements to the Premises which Tenant cannot remove at the expiration or earlier termination of this Lease wherein ownership then reverts to Landlord.

(2) Business Income and Extra Expense . Business income and extra expense insurance with limits not less than one hundred percent (100%) of all income and charges payable by Tenant under this Lease for a period of twelve (12) months.

(3) Commercial General Liability . Commercial general liability insurance which insures against claims for bodily injury, personal injury, advertising injury, and property damage based upon, involving, or arising out of the use, occupancy, or maintenance of the Premises and the Property. Such insurance shall afford, at a minimum, the following limits:



Each Occurrence		$1,000,000
General Aggregate	3,000,000
Products/Completed Operations Aggregate	1,000,000
Personal and Advertising Injury Liability	1,000,000
Fire Damage Legal Liability	100,000
Medical Payments	5,000

Any general aggregate limit shall apply on a per location basis. Tenant’s commercial general liability coverage shall be written on the most current ISO CGL form (or its equivalent), shall include contractual liability (to specifically include coverage for the indemnification provisions of this Lease), premises-operations and products-completed operations and shall contain an exception to any pollution exclusion which insures damage or injury arising out of heat, smoke, or fumes from a hostile fire. Such insurance shall be written on an occurrence basis and contain a standard separation of insureds provision.

(4) Business Automobile Liability . If parking is provided for pursuant to the terms and conditions of this Lease (or another agreement by and between Landlord and Tenant), business automobile liability insurance covering owned, hired and non-owned vehicles with minimum limits of$1,000,000 combined single limit per occurrence.

(5) Workers’ Compensation and Employer’s Liability . Workers’ compensation insurance in accordance with the Laws of the state in which the Premises are located with employer’s liability insurance in an amount not less than $1,000,000.

(6) Umbrella/Excess Liability . Umbrella/excess liability insurance, on an occurrence basis, that applies in excess of the required commercial general liability, business automobile liability, and employer’s liability policies with the following minimum limits:



Each Occurrence	$2,000,000
Annual Aggregate	2,000,000

Umbrella/excess liability policies shall contain an endorsement stating that any entity qualifying as an additional insured on the insurance stated in the Schedule of Underlying Insurance shall be an additional insured on the umbrella/excess liability policies, and that they apply immediately upon exhaustion of the insurance stated in the Schedule of Underlying Insurance as respects the coverage afforded to any additional insured. The umbrella/excess liability policies shall also provide that they apply before any other insurance, whether primary, excess, contingent or on any other basis, available to an additional insured on which the additional insured is a named insured (which shall include any self-insurance), and that the insurer will not seek contribution from such insurance.

19.3 Insurer Rating; Certificates of Insurance; Additional Insureds . All policies required to be carried by Tenant hereunder shall be issued by and binding upon an insurance company licensed or authorized

to do business in the state in which the Property is located with a rating of at least “A-: X” or better as set forth in the most current issue of Best’s Insurance Reports, unless otherwise approved by Landlord. Tenant shall not do or permit anything to be done that would invalidate the insurance policies required herein. The liability policies required to be maintained by Tenant hereunder shall name Landlord and Landlord’s Insured Parties as additional insureds on a primary non-contributing basis. Certificates of insurance, acceptable to Landlord, evidencing the existence and amount of each insurance policy required hereunder shall be delivered to Landlord prior to delivery or possession of the Premises, and thereafter during the Term within ten (10) Business Days following Landlord’s request thereof. Certificates of insurance shall evidence that Landlord and Landlord’s Insured Parties are included as additional insureds on a primary non-contributing basis on liability policies, and that Landlord is included as loss payee on the property insurance set forth in Section 19.2(1) above. Further, each policy shall contain provisions giving Landlord and each of the other additional insureds at least ten (10) Business Days’ prior written notice of any cancellation or non-renewal.

(1) In the event that Tenant fails to provide evidence of insurance required to be provided by Tenant in this Lease, prior to delivery or possession of the Premises, and thereafter during the Term within ten (10) Business Days following Landlord’s request thereof, and ten (10) Business Days prior to the expiration of any such coverage, Landlord shall be authorized (but not required) to procure such coverage in the amount stated with all costs thereof to be chargeable to Tenant and payable upon written invoice thereof.

(2) The limits of insurance required by this Lease, or as carried by Tenant, shall not limit the liability of Tenant or relieve Tenant of any obligation thereunder, except to the extent provided for under Section 19.4 below. Any deductibles selected by Tenant shall be the sole responsibility of Tenant, and any liability policies required to be maintained by Tenant hereunder shall not contain a deductible in excess of $50,000.00.

(3) Tenant insurance requirements stipulated in Section 19.2 are based upon current industry standards. Landlord reserves the right to require additional coverage or to increase limits as industry standards change.

(4) Should Tenant engage the services of any contractor to perform work in the Premises, Tenant shall ensure that such contractor carries commercial general liability, business automobile liability, workers’ compensation and employer’s liability, and umbrella/excess liability coverages in substantially the same forms as required of Tenant under this Lease and in amounts approved by Landlord. The liability policies required to be maintained by contractor hereunder shall name Landlord and Landlord’s Insured Parties as additional insureds on a primary non-contributing basis.

(5) All policies required to be carried by any contractor shall be issued by and binding upon an insurance company licensed or authorized to do business in the state in which the Property is located with a rating of at least “A-: X” or better as set forth in the most current issue of Best’s Insurance Reports, unless otherwise approved by Landlord. Certificates of insurance, acceptable to Landlord, evidencing the existence and amount of each insurance policy required hereunder shall be delivered to Landlord prior to the commencement of any work in the Premises. Further, each policy shall contain provisions giving Landlord and each of the other additional insureds at least ten (I 0) Business Days’ prior written notice of any cancellation or non-renewal. The above requirements shall apply equally to any subcontractor engaged by contractor.

19.4 Waiver of Subrogation . Landlord and Tenant hereby release each other from any and all liability or responsibility to the other or anyone claiming by, through or under them by way of subrogation

or otherwise for any loss or damage to property caused by fire or other casualty, even if such fire or other casualty shall have been caused by the fault or negligence of the other party, or anyone for whom such party may be responsible; provided, however, that this release shall be applicable and in full force and effect only to the extent permitted by applicable Law and only to the extent that the cost of repairing such damage is covered by insurance or would have been covered by insurance proceeds payable under any policy (including the deductible and/or uninsured portion thereof) required to be maintained under this Lease, but not so maintained. Each policy of such insurance shall contain a waiver of subrogation by the insurer against Landlord or Tenant, as the case may be.

19.5 Additional Limitations. In addition, notwithstanding anything contained herein or elsewhere in this Lease to the contrary, Landlord will not be responsible for or liable to Tenant for any loss or damage that may be occasioned by or through the acts or omissions of persons occupying adjoining premises or any part of the premises adjacent to or connected with the Premises or any part of the Building or for any loss or damage resulting to Tenant or its property from burst, stopped or leaking water, gas, sewer or steam pipes or falling plaster, or electrical wiring or for any damage or loss of property within the Premises from any causes whatsoever, including theft and/or acts or threatened acts of terrorism, damage or injury due to mold, excepting only losses or damages resulting from the negligence or willful misconduct of Landlord.

20. INDEMNIFICATION .

20.1 Indemnification of Landlord . To the maximum extent enforceable by Law, Tenant covenants and agrees to exonerate, indemnify, defend (with counsel selected by Tenant or Tenant’s insurance carrier and reasonably approved by Landlord), protect and save Landlord, together with (1) Landlord’s members and managers, and their respective members and managers, partners, shareholders, officers, directors, agents and employees (each a “Landlord Agent” and collectively, “ Landlord’s Agents ”) and (2) Landlord’s Insured Parties, from and against any and all claims, demands, expenses, losses, suits and damages (including reasonable attorneys’ fees) to the extent occasioned by reason of (a) any accident, injury or damage occurring in or on the Premises (excepting only losses or damages resulting from the negligence or willful misconduct of Landlord or the breach or default by Landlord of any representation, covenant, or other term contained in this Lease, including the breach of any applicable Laws); (b) the omission, fault, willful act, negligence or other misconduct of Tenant or any Tenant Party; or (c) the breach or default by Tenant or any Tenant Party of any representation, covenant, or other term contained in this Lease, including the breach of any Laws. Landlord shall promptly notify Tenant of any claim, provide Tenant with all the relevant infom1ation with respect thereto, and cooperate with Tenant in good faith in the defense thereof. Landlord shall grant Tenant (or its insurer) sole control of the defense of any such claim and of all negotiations for its settlement or compromise, subject to Landlord’s prior written consent (which shall not be unreasonably withheld, conditioned or delayed); provided, however, that Tenant (or its insurer) agrees in writing to defend and indemnify Landlord, Landlord’s Agents and Landlord’s Insured Parties fully for the claim, without any reservation of rights.

20.2 Indemnification of Tenant . To the maximum extent enforceable by Law, Landlord covenants and agrees to exonerate, indemnify, defend (with counsel selected by Landlord or Landlord’s insurance carrier and reasonably approved by Tenant), protect and save Tenant from and against any and all claims, demands, expenses, losses, suits and damages (including reasonable attorneys’ fees) to the extent occasioned by reason of (a) the negligence or willful misconduct of Landlord or any Landlord Agent; or (b) the breach or default by Landlord or any Landlord Agent of any representation, covenant, or other term contained in this Lease, including the breach of any Laws. Tenant shall promptly notify Landlord of any claim, provide Landlord with all the relevant information with respect thereto, and cooperate with Landlord in good faith in the defense thereof.

20.3 The provisions of this Section 20 shall survive the expiration or earlier termination of this Lease.

21. NOISE; VIBRATIONS; ODORS .

Tenant shall conduct Tenant’s operations so as to minimize, to the greatest extent reasonably practicable, the emanation of noises, vibrations, odors, fumes, vapors and gases of any kind from the Premises. If Landlord reasonably determines that Tenant is not sufficiently minimizing the emanation of noises, vibrations, odors, fumes, vapors and gases of any kind from the Premises, Landlord reserves the right to require Tenant to install, at Tenant’s sole cost and expense, such commercially reasonable insulation, partitions, equipment and systems (including ventilation and exhaust systems) as may be reasonably required by Landlord to achieve that end.

22. HAZARDOUS MATTER .

22.1 Except for customary office and cleaning supplies used in accordance with all applicable Laws, Tenant and Tenant Parties shall not generate, use or store any Hazardous Matter (as hereinafter defined) in or on the Property (including the Premises) or introduce any Hazardous Matter in any manner into the Property (including the Premises). Tenant and Tenant Parties shall not dump, flush, release or dispose of any Hazardous Matter in, on or from the Property (including the Premises) whether by sewer, septic system, ground, air or otherwise.

22.2 Tenant shall promptly notify Landlord in writing of any incident in or on the Property (including the Premises) involving the presence of Hazardous Matter or violation (or possible violation) of Environmental Requirements by Tenant. Tenant shall promptly deliver to Landlord copies of any notices, orders or other communications received from any government agency or official concerning the presence of Hazardous Matter or violation (or alleged violation) of Environmental Requirements.

22.3 To the maximum extent enforceable by Law, Tenant covenants and agrees to exonerate, indemnify, defend (with counsel reasonably acceptable to Landlord), protect and save Landlord, together with (1) Landlord's Agents and (2) Landlord's Insured Parties, from and against any and all Environmental Damages (as hereinafter defined) which may be asserted by any person or entity, or government agency, or which the indemnified parties may sustain or be put to on account of (a) the presence or release of any Hazardous Matter in, on or from the Premises, the Building or the Property caused by Tenant or Tenant Parties; (b) the violation of any Environmental Requirements by Tenant or Tenant Parties; and (c) the breach or default by Tenant or Tenant Parties of any of Tenant's obligations under Section 22 .

22.4 The provisions of this Section shall be in addition to any other obligations and liabilities Tenant may have to Landlord under this Lease or otherwise at law or in equity, and in the case of conflict between Section 22 and any other provision of this Lease, the provision imposing the most stringent requirement on Tenant shall control. The provisions of Section 22 shall survive the expiration or earlier termination of this Lease.

22.5 The following terms as used herein shall have the meanings set forth below:

(1) “ Hazardous Matter ” shall mean any substance: (a) which is or becomes defined as ‘’hazardous waste,” “hazardous material,” “hazardous substance,” “toxic substance,” “oil,” “infectious medical waste,” “hazardous medical waste” or similar in any Law; or (b) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous to health or

the environment and which is or becomes regulated and the presence of which requires investigation or remediation pursuant to all applicable Law.

(2) “ Environmental Requirements ” shall mean all applicable Laws, the provisions of any and all approvals, and the terms, covenants and conditions of this Lease insofar as the same relate to the release, maintenance, use, keeping in place, transportation, disposal or generation of Hazardous Matter, including those pertaining to reporting, licensing, permitting, health and safety of persons, investigation, containment, remediation, and disposal.

(3) “ Environmental Damages ” shall mean all liabilities, injuries, losses, claims, damages (whether punitive, special, consequential or otherwise), settlements, attorneys’ and consultants’ fees, fines and penalties, interest and expenses, and costs of environmental site investigations, reports and cleanup, including costs incurred in connection with any investigation or assessment of site conditions or of health of persons using the Building or the Property; risk assessment and monitoring; any cleanup, remedial, removal or restoration work required by any governmental agency or recommended by Landlord’s environmental consultant; any decrease in value of the Property; any damage caused by loss or restriction of rentable or usable space in the Property; or any damage caused by adverse impact on marketing or financing of the Property.

23. TENANT ESTOPPEL CERTIFICATES .

23.1 Upon request, and within ten (10) Business Days after written notice given by or on behalf of Landlord, Tenant shall furnish Landlord with a tenant estoppel certificate signed by Tenant certifying as to such matters relating to the then current status of this Lease as may be reasonably requested by Landlord (or any Superior Lessor (as hereinafter defined), Superior Mortgagee (as hereinafter defined), prospective lessor, prospective mortgagee, prospective purchaser or other party), including:

(1) The Commencement Date and Expiration Date of this Lease;

(2) That this Lease is unmodified and in full force and effect or, if there has been a modification, that the same is in full force and effect, as modified, and stating such modification;

(3) Whether there are any defaults by Landlord or Tenant hereunder;

(4) Whether there are any existing setoffs or defenses against the enforcement of any of the terms, covenants and conditions of this Lease and whether there are any obligations of Landlord or Tenant to be performed or complied with and, if so, specifying the same;

(5) The date to which Base Rent, Additional Rent and all other charges have been paid;

(6) The amount of any security deposit or letter of credit hereunder; and

(7) Any other matters reasonably requested.

23.2 Any statement furnished pursuant to this Section may be relied upon by Landlord (or any Superior Lessor, Superior Mortgagee, prospective lessor, prospective mortgagee, prospective purchaser or other party). If Tenant fails to execute any tenant estoppel certificate within the time-frame required by this Section, Landlord shall have the right to deliver to Tenant a notice in accordance with the terms of this Lease stating that Tenant has failed to timely deliver the tenant estoppel certificate pursuant to this Section, and if

Tenant fails to deliver to Landlord an executed tenant estoppel certificate within five (5) Business Days after the delivery of such notice, such failure shall, at Landlord’s option, be deemed an Event of Default hereunder. In addition, if Tenant fails to execute any tenant estoppel certificate within the time-frame required by this Section, Tenant shall pay to Landlord a fee in the amount of $100.00 per day for each day beyond the applicable time period that Tenant fails to execute and deliver such certificate. Such fee shall be in addition to Landlord’s other remedies hereunder.

23.3 No tenant estoppel certificate delivered pursuant to this Section shall have the effect of amending this Lease. In the case of any conflict between the terms of this Lease and the content of any such certificate, then the terms of this Lease shall control.

24. SUBORDINATION .

24.1 This Lease, and all rights of Tenant hereunder, are and shall be subject and subordinate to all ground leases, overriding leases and underlying leases, now or hereafter affecting the Building or the Property, and each of the terms, covenants and conditions thereto (the ” Superior Leases ”), and to all mortgages and deeds of trust, now or hereafter affecting the Building or the Property or the Superior Leases, and each of the terms, covenants and conditions thereto (the “ Superior Mortgages ”), whether or not such Superior Mortgages shall also cover other land, buildings or leases, to each and every advance made or hereafter to be made under such Superior Mortgages, and to all renewals, modifications, replacements and extensions of such Superior Leases and Superior Mortgages. This Section shall be self-operative and no further instrument of subordination shall be required. However, should any such Superior Lessor or Superior Mortgagee request that this Lease be made superior, rather than subordinate, to any such ground or underlying lease and/or mortgage, then Tenant, within ten ( 10) Business Days following Landlord’s written request therefor, agrees to execute and deliver, without charge, any and all documents (in form acceptable to Landlord and such Superior Lessor or Superior Mortgagee) effectuating such priority.

24.2 Upon request, and within ten (10) Business Days after written notice given by or on behalf of Landlord, Tenant shall execute, acknowledge and deliver to Landlord any reasonable instrument of subordination that Landlord (or any Superior Lessor, Superior Mortgagee, prospective lessor, prospective mortgagee, prospective purchaser or other party) may reasonably request. If Tenant fails to execute any instrument of subordination within the time frame required by this Section, Landlord shall have the right to deliver to Tenant a notice in accordance with the terms of this Lease stating that Tenant has failed to timely deliver the instrument of subordination pursuant to this Section, and if Tenant fails to deliver to Landlord an executed instrument of subordination within five (5) Business Days after the delivery of such notice, such failure shall, at Landlord’s option, be deemed an Event of Default hereunder. In addition, if Tenant fails to execute any instrument of subordination within the time-frame required by this Section, Tenant shall pay to Landlord a fee in the amount of $100.00 per day for each day beyond the applicable time period that Tenant fails to execute and deliver such instrument. Such fee shall be in addition to Landlord’s other remedies hereunder.

24.3 As used herein, ” Superior Lessor ” shall mean the lessor of a Superior Lease or its successor in interest. As used herein, “ Superior Mortgagee ” shall mean the holder of a Superior Mortgage or its successor in interest. If any Superior Lessor or Superior Mortgagee shall succeed to the rights of Landlord under this Lease, whether through possession or foreclosure action or delivery of a new lease or deed (such party so succeeding to Landlord’s rights herein called the “ Successor Landlord ”), then Tenant shall attorn to and recognize such Successor Landlord as Tenant’s landlord under this Lease (without the need for further agreement) and shall promptly execute and deliver any reasonable instrument that such Successor Landlord may reasonably request to evidence such attornment. If any Superior Lessor or Superior Mortgagee shall

succeed to the rights of Landlord under this Lease, then this Lease shall continue in full force and effect as a direct lease between the Successor Landlord and Tenant upon all of the terms, covenants and conditions as are set forth in this Lease, except that the Successor Landlord shall not(1) be liable for any previous act or omission of Landlord under this Lease, except to the extent such act or omission shall constitute a continuing Landlord default hereunder, in which event Successor Landlord’s responsibility for such act or omission shall be determined as if the act or omission had first arisen upon the vesting of record title in Successor Landlord; (2) be subject to any offsets, counterclaims or defenses which have accrued to Tenant against Landlord prior to the date upon which such Successor Landlord shall obtain record title to the Property; (3) be bound by any rent or other charges which Tenant may have paid to Landlord more than thirty (30) days in advance of the due date thereof; (4) be bound by any security deposit, tax escrow or insurance escrow which Tenant may have paid to Landlord, except to the extent such security deposit and escrowed funds are received by the Successor Landlord; or (5) be bound by any amendment or modification of this Lease or any consent by Landlord under this Lease to any sublease or assignment of Tenant’s interest in this Lease made without the Successor Landlord’s prior written consent; provided, however, that the foregoing clauses (1) through (5) shall in no way modify, limit or impair any obligation of Successor Landlord to perform maintenance and repair obligations to existing improvements and to provide services as set forth in this Lease, and if Successor Landlord fails to perform any such maintenance or repair obligations or fails to provide services as set forth in this Lease, then Tenant shall have all rights and remedies available to it in this Lease.

24.4 Tenant shall not seek to enforce any remedy it may have for any default on the part of Landlord without first giving written notice by certified mail, return receipt requested, specifying the default in reasonable detail, to any Superior Lessor and Superior Mortgagee whose address has been given to Tenant, and affording such Superior Lessor and Superior Mortgagee a reasonable opportunity to perform Landlord’s obligations hereunder.

25. EVENTS OF DEFAULT; REMEDIES .

25.1 Events of Default . If, at any time subsequent to the Effective Date of this Lease, any one or more of the following events (each an “ Event of Default ”) shall occur:

(1) Failure by Tenant to pay any installment of Base Rent, Additional Rent or any other amount, deposit, reimbursement or sum due and payable hereunder, upon the date when said payment is due; provided, however, that on the first occasion only during any calendar year, Landlord shall furnish Tenant with written notice of such failure and permit Tenant a five (5) Business Day period to cure such failure;

(2) Failure by Tenant to perform or observe any other covenant, condition or agreement of this Lease and such failure continues, after written notice given by or on behalf of Landlord to Tenant, for more than thirty (30) days (or such longer period as may be necessary to cure such default, provided that Tenant commences such cure within the thirty (30) day period and thereafter diligently pursues the same to completion); provided, however, that if the applicable covenant, condition or agreement of this Lease provides for a shorter time period for performance, the shorter time period for performance shall apply;

(3) Tenant’s leasehold interest in the Premises shall be taken on execution or by other process of law directed against Tenant;

(4) Tenant or any Guarantor shall (a) make an assignment for the benefit of creditors, (b) acquiesce in a petition in any court in any bankruptcy, reorganization, composition, extension or insolvency proceedings, (c) seek, consent to or acquiesce in the appointment of any trustee, receiver or

liquidator of Tenant or of any Guarantor or of all or any part of Tenant's or Guarantor's property. (d) file a petition seeking an order for relief under Title 11 of the United States Code, as now or hereafter amended or supplemented (the ” Bankruptcy Code ”), or by filing any petition under any other Law for the same or similar relief, or (e) fail to win the dismissal, discontinuation or vacating of any involuntary bankruptcy proceeding filed under the Bankruptcy Code, or under any other Law for the same or similar relief, within sixty (60) days after such proceeding is initiated;

(5) Any lien has been filed against the Property, or any portion thereof, as a result of Tenant’s acts, omissions or breach of this Lease, and Tenant fails, within thirty (30) days after written notice given by or on behalf of Landlord to Tenant that the lien is filed, either (a) to cause such lien to be removed from the Property, or (b) to furnish a bond sufficient to remove such lien or cause a title insurance endorsement to be issued with respect to such lien, which endorsement shall be satisfactory, in form and substance to Landlord, in Landlord’s sole discretion; or

(6) Tenant fails to procure and maintain, at all times during the Term of this Lease (or such earlier or later period as Tenant is in possession of the Premises or any portion thereof), the insurance policies and coverages it is required to maintain under Section 19 above; then in any such case Landlord may exercise any of Landlord’s rights or remedies available under this Lease, at law or in equity.

25.2 Remedies .

(1) Upon the occurrence of an Event of Default, Landlord shall have the following remedies, in addition to any and all other rights and remedies available at law or in equity or otherwise provided in this Lease, any one or more of which Landlord may resort to cumulatively, consecutively, or in the alternative:

(a) Landlord may continue this Lease in full force and effect, and collect Rent and other charges as and when due, without prejudice to Landlord’s right to subsequently elect to terminate this Lease on account of such Event of Default;

(b) Landlord may terminate this Lease upon written notice to Tenant to such effect, in which event this Lease (and all of Tenant's rights hereunder) shall immediately terminate, but such termination shall not affect those obligations of Tenant which are intended by their terms to survive the expiration or earlier termination of this Lease, and Tenant shall remain liable for damages as hereinafter set forth in this Section 25.2 . This Lease may also be terminated by a judgment specifically providing for termination;

(c) Landlord may terminate Tenant's right of possession without terminating this Lease upon written notice to Tenant to such effect, in which event Tenant's right of possession of the Premises shall immediately terminate, but this Lease shall continue subject to the effect of this Section 25.2 ;

(d) Landlord may, but shall not be obligated to, perform any defaulted obligation of Tenant, and recover from Tenant, as Additional Rent, the costs incurred by Landlord in performing such obligation. Notwithstanding the foregoing, or any other notice and cure period set forth herein, Landlord may exercise its rights under this Section 25.2(1)(d) without prior notice or upon shorter notice than otherwise required hereunder (and as may be reasonable under the circumstances) in the event of any one or more of the following circumstances is present: (i) there exists a reasonable risk of prosecution of Landlord unless such obligation is performed sooner than the stated cure period; (ii) there exists an emergency arising out of the defaulted obligation; or (iii) Tenant has failed to obtain insurance required by

this Lease, or such insurance has been canceled by the insurer without being timely replaced by Tenant, as required herein; and

(e) Landlord shall have the right to recover damages from Tenant, as set forth in this Section 25.2 .

(2) Upon any termination of this Lease or of Tenant’s right of possession, Landlord, at its sole election, may (a) re-enter the Premises, either by summary proceedings, ejectment or otherwise, and remove and dispossess Tenant and all other persons and any and all property from the same, as if this Lease had not been made, (b) remove all property from the Premises and store the same in a public warehouse or elsewhere at Tenant’s expense, and/or (c) deem such property to be abandoned, and, in such event, Landlord may dispose of such property at Tenant’s expense, free from any claim by Tenant or anyone claiming by, through or under Tenant. It shall not constitute a constructive or other termination of this Lease or Tenant’s right of possession if Landlord (i) performs maintenance or makes repairs or replacements in the Premises, (ii) performs any unperformed obligations of Tenant, (iii) stores or removes Tenant’s property from the Premises after Tenant’s dispossession, (iv) attempts to relet, or, in fact, does relet, the Premises, or (v) seeks the appointment of a receiver to protect Landlord’s interest under this Lease.

(3) If this Lease shall have been terminated as provided in this Section, Tenant shall pay Base Rent, Additional Rent and all other sums payable hereunder up to the time of such termination, and thereafter Tenant, until the end of what would have been the Term of this Lease in the absence of such termination, and whether or not the Premises shall have been relet, shall be liable to Landlord for, and shall pay to Landlord, as liquidated current damages: (a) Base Rent, Additional Rent and all other sums that would be payable hereunder if such termination had not occurred, less the net proceeds, if any, of any reletting of the Premises, after deducting all expenses incurred by Landlord in connection with such reletting, including all repossession costs, brokerage commissions, attorneys’ fees, advertising expenses, cleaning expenses, alteration expenses, tenant improvement allowances, rental and other economic concessions; and (b) if, in accordance with the terms, covenants and conditions of this Lease, Tenant commenced payment of the full amount of Base Rent on any day other than the Commencement Date, the then unamortized portion of the amount of Base Rent that would have been payable during the period beginning on the Commencement Date and ending on the day Tenant commenced payment of the full amount of Base Rent hereunder. Tenant shall pay the portion of such current damages referred to in clause (a) above to Landlord monthly on the days which the Base Rent would have been payable hereunder if this Lease had not been terminated, and Tenant shall pay the portion of such current damages referred to in clause (b) above to Landlord upon such termination.

(4) At any time after termination of this Lease as provided in this Section, whether or not Landlord shall have collected any such current damages, as liquidated final damages and in lieu of all such current damages beyond the date of such demand, at Landlord’s election Tenant shall pay to Landlord an amount equal to the excess, if any, of the present value of the Base Rent, Additional Rent and all other sums as hereinbefore provided which would be payable hereunder from the date of such demand assuming that, for the purposes of this paragraph, annual payments by Tenant on account of Taxes and Operating Expenses would be the same as the payments required for the immediately preceding Tax Year or Expense Year plus a three percent (3%) annual increase per year for what would be the then unexpired Term of this Lease if the same remained in effect, over the present value of the then fair market rental value of the Premises for the same period, such present value to be computed in each case on the basis of an eight percent (8%) per annum discount from the respective dates upon which such aggregate rent would have been payable hereunder had this Lease not been terminated.

(5) In the alternative, so long as at least twelve (12) months of the Term remain unexpired at the time of termination of this Lease, at any time after termination of this Lease as provided in this Section, whether or not Landlord shall have collected any such current damages, as liquidated final damages and in lieu of full recovery by Landlord of all sums payable under all the foregoing provisions of this Section 25.2 , at Landlord’s election Tenant shall pay to Landlord an amount equal to the sum of the Base Rent and all Additional Rent payable for the twelve (12) months ended next prior to such termination, plus (a) the amount of the Base Rent and all Additional Rent of any kind accrued and unpaid at the time of such termination, and (b) any and all expenses which the Landlord may have incurred for and with respect to the termination of this Lease and collection of any of such rent.

(6) In case of any Event of Default, re-entry, expiration and dispossession by summary proceedings or otherwise, Landlord may (a) relet the Premises or any part or parts thereof, either in the name of Landlord or otherwise, for a term or terms which may at Landlord’s option be equal to, shorter than, or longer than the period which would otherwise have constituted the balance of the Term of this Lease, and may grant rental and other economic concessions to the extent that Landlord considers advisable and necessary to relet the same, and (b) make such alterations, repairs and decorations in the Premises as Landlord considers advisable and necessary for the purpose of reletting the Premises; and the making of such alterations, repairs and decorations shall not operate or be construed to release Tenant from liability hereunder as aforesaid. Tenant, for itself and any and all persons claiming by, through or under Tenant, including its creditors, upon the termination of this Lease and of the Term of this Lease in accordance with the terms hereof, or in the event of entry of judgment for the recovery of the possession of the Premises in any action or proceeding, or if Landlord shall enter the Premises by process of law or otherwise, hereby waives any right of redemption provided or permitted by any Law or decision now or hereafter in force, and does hereby waive, surrender and give up all rights or privileges which it or they may or might have under and by reason of any present or future Law or decision, to redeem the Premises or for a continuation of this Lease for the Term of this Lease hereby demised after having been dispossessed or ejected therefrom by process of law, or otherwise.

(7) In addition to any other remedies under Section 25 , Tenant shall immediately become liable to Landlord for all damages proximately caused by Tenant’s breach of its obligations under this Lease, including all costs Landlord incurs in reletting (or attempting to relet) the Premises or any part thereof, including all repossession costs, brokerage commissions, attorneys’ fees, advertising expenses, cleaning expenses, alteration expenses, tenant improvement allowances, rental and other economic concessions, and all other like expenses properly chargeable against the Premises and the rental received therefrom and like costs, provided that nothing set forth in this Section 25.2(7) shall be construed to impose upon Landlord any obligation to relet the Premises or to mitigate its damages hereunder, except that Landlord shall use commercially reasonable efforts to relet the Premises. If Landlord does elect to relet the Premises (or any portion thereot), such reletting may be for a period equal to, shorter than, or longer than the remaining Term, and upon such terms and conditions as Landlord deems appropriate, in its sole discretion, and Tenant shall have no interest in any sums collected by Landlord in connection with such reletting except to the extent expressly set forth herein. If the Premises or any part thereof shall be relet in combination with any other space, then proper apportionment on a per-square foot basis shall be made of the rent received from such reletting and of the expenses of such reletting. If Landlord shall succeed in reletting the Premises during the period in which Tenant is paying monthly rent damages as described in Section 25.2(3) . Landlord shall credit Tenant with the net rents collected by Landlord from such reletting, after first deducting from the gross rents, as and when collected by Landlord, (a) all expenses incurred or paid by Landlord in collecting such rents, and (b) any theretofore unrecovered costs associated with the termination of this Lease or Landlord’s reentry into the Premises, including any theretofore unrecovered expenses of reletting or other damages payable hereunder. If the Premises or any portion thereof be relet by Landlord for the unexpired portion of the Term

before presentation of proof of such damages to any court, commission or tribunal, the amount of rent reserved upon such reletting shall, prima facie, constitute the fair and reasonable rental value for the Premises, or part thereof, so relet for the term of the reletting. Landlord shall not be liable in any way whatsoever for its failure or refusal to relet the Premises or, if the Premises or any part are relet, for its failure to collect the rent under such reletting, and no such refusal or failure to relet or failure to collect rent shall release or affect Tenant’s liability for damages or otherwise under this Lease.

(8) If the trustee or the debtor in possession assumes this Lease under applicable bankruptcy law, it may assume and assign its interest in this Lease only if the proposed assignee first provides Landlord with (a) notice of such proposed assignment, setting forth (i) the name and address of the proposed assignee, its proposed use of the Premises, reasonably detailed character and financial references for such proposed assignee (including its most recent balance sheet and income statements, audited, if available, or otherwise certified as being true and correct) and any other information reasonably requested by Landlord, and (ii) the terms and conditions of such offer, all of which shall be given to Landlord by Tenant or such trustee no later than twenty (20) days after receipt by Tenant or such trustee of such offer, but in any event no later than ten (10) days prior to the date that Tenant or such trustee shall make application to a court of competent jurisdiction for authority and approval to assume this Lease and enter into such assignment; (b) Adequate Assurance of Future Performance (as hereinafter defined) of all of Tenant’s obligations under this Lease; and (c) Landlord determines, in the exercise of its reasonable business judgment, that the assignment of this Lease will not breach any lease, mortgage, financing agreement, or other agreement relating to the Property by which Landlord or the Property is then bound (and Landlord shall not be required to obtain consents or waivers from any third party required under any lease, mortgage, financing agreement, or other agreement relating to the Property by which Landlord or the Property is then bound). Landlord shall have the option, to be exercised by notice to Tenant or such trustee given at any time prior to the date the application is filed for court approval of the assignment and assumption of this Lease to the proposed assignee, to accept an assignment of this Lease upon the same terms and conditions and for the same consideration, if any, as the bona fide offer made by such proposed assignee, less any brokerage commissions which may be payable out of the consideration to be paid by such proposed assignee for the assignment of this Lease.

(9) For purposes of Section 25.2(8) above, and in addition to any other requirements under the Bankruptcy Code, any future federal bankruptcy law and applicable case law, “ Adequate Assurance of Future Performance ” means at least the satisfaction of the following conditions, which Landlord and Tenant acknowledge to be commercially reasonable:

(a) The proposed assignee submitting a current financial statement, audited by a certified public accountant, that allows a net worth and working capital in amounts determined in the reasonable business judgment of Landlord to be sufficient to assure the future performance by the assignee of Tenant’s obligation under this Lease;

(b) If requested by Landlord in the exercise of its reasonable business judgment, the proposed assignee obtaining a guaranty (in form and substance satisfactory to Landlord) from one or more persons who satisfy Landlord’s standards of creditworthiness; and

(c) The proposed assignee is of a character and financial worth such as is in keeping with the standards of Landlord in those respects for the Property, the assignee’s tenancy is of the same quality as other tenants at the Property, and the purposes for which the proposed assignee intends to use the Premises are uses expressly permitted by and not prohibited by this Lease or prohibited by any other lease at the Property.

25.3 Remedying Defaults . Landlord shall have the right, but shall not be required, to pay such sums or perform such acts which require the expenditure of monies which may be necessary or appropriate by reason of the failure or neglect of Tenant to perform any of the provisions of this Lease, and in the event of the exercise of such right by Landlord, Tenant agrees to pay to Landlord forthwith upon demand all such sums, together with interest thereon at the Default Rate, as Additional Rent.

25.4 Waiver .

(1) Failure on the part of Landlord or Tenant to complain of any action or inaction on the part of the other, no matter how long the same may continue, shall never be a waiver by Landlord or Tenant, respectively, of any of the other’s rights hereunder. Further, no waiver at any time of any of the provisions hereof by Landlord or Tenant shall be construed as a waiver of any of the other provisions hereof, and a waiver at any time of any of the provisions hereof shall not be construed as a waiver at any subsequent time of the same provisions. The consent or approval of Landlord or Tenant to or of any action by the other requiring such consent or approval shall not be construed to waive or render unnecessary Landlord’s or Tenant’s consent or approval to or of any subsequent similar act by the other.

(2) Any waiver of any provisions of this Lease must be in a writing signed by the party against whom the waiver is sought. In addition, Landlord’s acceptance of any payment from Tenant after a termination of this Lease due to an Event of Default by Tenant shall not have the effect of reinstating this Lease, nor estop Landlord from exercising any of the rights and remedies granted to Landlord hereunder arising out of such Event of Default. No payment by Tenant or acceptance by Landlord of a lesser amount than the Base Rent, Additional Rent and all other sums due hereunder shall be deemed to be other than on account of the total amount due from Tenant to Landlord, to be applied in such order as Landlord deems appropriate. In no event shall any endorsement or statement on any check or accompanying any check or payment be deemed an accord and satisfaction; and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Base Rent, Additional Rent or other sum and to pursue any other remedy provided in this Lease.

25.5 Waiver of Jury Trial; Counterclaims . IN THE INTEREST OF SAVING TIME AND EXPENSE, LANDLORD AND TENANT HEREBY CONSENT TO TRIAL WITHOUT A JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES ANY SUMMARY PROCEEDING OR ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE RELEGATED TO AN INDEPENDENT ACTION AT LAW.

26. SECURITY DEPOSIT .

Simultaneously with Tenant’s execution and delivery of this Lease, Tenant shall deliver to Landlord the sum identified in Section 1 of this Lease in the form of a check or wire transfer (the “ Security Deposit ”). During the Term of this Lease, including any extensions thereof, and for forty-five (45) days after the expiration of the Term of this Lease, or for so long thereafter as Tenant is in possession of the Premises (or any portion thereof) or has unsatisfied obligations hereunder to Landlord, the Security Deposit shall be held by Landlord

without liability for interest and as security for the full and timely performance by Tenant of Tenant’s covenants and obligations under this Lease, it being expressly understood that the Security Deposit shall not be considered an advance payment of Rent or a measure of Tenant’s liability for damages in case of any failure by Tenant to perform any of Tenant’s covenants or obligations hereunder. Landlord shall not be required to keep the Security Deposit separate from its other accounts, and shall have no fiduciary responsibilities or trust obligations whatsoever with regard to the Security Deposit. Tenant shall have no right to require Landlord to so draw and apply the Security Deposit, nor shall Tenant be entitled to credit the same against Rent or other sums payable hereunder. Landlord may, at any time and from time to time, without prejudice to any other rights or remedies, apply the Security Deposit to the extent necessary to cure or attempt to cure, in whole or in part, any failure by Tenant to perform any of Tenant’s covenants or obligations hereunder. Following any such application of the Security Deposit, Tenant shall pay to Landlord within five (5) Business Days after demand the amount so applied in order to restore the Security Deposit to its original amount, and failure to so restore within such time period shall constitute an uncurable Event of Default by Tenant hereunder. The balance of the Security Deposit remaining after any such application shall be returned by Landlord to Tenant within forty-five (45) days thereafter. If Landlord transfers its interest in the Premises during the Term of this Lease, Landlord shall assign the Security Deposit to the transferee, provide notice thereof to Tenant (including reasonable contact information for such transferee), and thereafter shall have no further liability for the return of such Security Deposit.

27. NO LIENS .

Tenant agrees to promptly, and within thirty (30) days after written notice given by or on behalf of Landlord to Tenant that the lien is filed, discharge (either by payment or by filing of the necessary bond or otherwise) any mechanic’s, materialman’s or other lien or encumbrance against the Premises or the Property which arises out of any payment due for, or purported to be due for, any labor, services, materials, supplies or equipment furnished, or alleged to have been furnished, to or for Tenant. If Tenant shall fail to so discharge such lien or encumbrance then, in addition to any other right or remedy of Landlord, Landlord may, but shall not be obligated to, discharge the same (either by payment or by filing of the necessary bond or otherwise), and any payment, costs and expenses incurred by Landlord in connection therewith, including reasonable attorneys’ fees, shall be repaid by Tenant to Landlord on demand, together with interest thereon at the Default Rate. Any claim to, or lien upon, the Premises or the Property described herein shall accrue only against the leasehold estate of Tenant and shall be subject and subordinate to the paramount title and rights of Landlord in and to the Premises and the Property.

28. FINANCIAL STATEMENTS .

Tenant acknowledges that the capability of Tenant to perform its financial obligations under this Lease is material to Landlord, and that Landlord would not enter into this Lease but for its belief, based on its review of Tenant’s financial statements, that Tenant is capable of performing such financial obligations. Tenant hereby represents and warrants to Landlord that any financial statements previously furnished to Landlord were at the time given true and correct in all material respects, and that there have been no material changes thereto as of the date of this Lease. In addition, upon request, and within ten (10) Business Days after written notice given by or on behalf of Landlord, Tenant shall furnish Landlord with current financial statements (audited, if available, or otherwise certified as being true and correct by Tenant) reflecting Tenant’s current financial condition. Tenant shall not be required to provide Landlord with (i) any financial statements which Tenant has previously provided to Landlord, or (ii) any financial statements required under this Section if Tenant is a publicly traded corporation and Tenant’s financial statements are publicly available. In addition, Tenant shall not be required to provide Landlord with the financial statements required under this Section

more than once in any twelve (12)-month period unless Landlord sells, finances, refinances or recapitalizes any part of the Property or Landlord’s interest therein.

29. NOTICES .

All notices or other communications hereunder shall be in writing and shall be deemed to have been given (1) if delivered by hand, by messenger or by an express delivery service (FedEx, UPS, etc.), then if and when delivered (or if delivery is refused, when refused) to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby), or (2) if mailed, then on the third Business Day following the date on which such communication is deposited in the United States mails, by first class registered or certified mail, return receipt requested, postage prepaid, and addressed to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby). Notice by counsel to a party shall be deemed notice from such party.



If to Landlord:	NS Two Oliver LLC c/o Synergy Investments 100 Franklin Street, Suite 200 Boston, MA 02110 Attention: Senior Director of Leasing

with a copy to:	Rubin and Rudman LLP 50 Rowes Wharf Boston, MA 02110 Attention: Paul L. Baccari, Esq.

If to Tenant:	And before the Commencement Date, then to:

	Tufin Software North America, Inc. 745 Atlantic Avenue Boston, MA 02111

with a copy to:	Langer & McLaughlin, LLP 535 Boylston Street, Suite 3 Boston, MA 02116 Attention: Tufin Leasing

and an email copy to: legal@tufin.com

If to Tenant:	And on or after the Commencement Date, then to:

	Tufin Software North America, Inc. 2 Oliver Street, 7 ^th Floor Boston, MA 02109

with a copy to:	Langer & McLaughlin, LLP 535 Boylston Street, Suite 3 Boston, MA 02116 Attention: Tufin Leasing

and an email copy to: legal@tufin.com

30. RULES AND REGULATIONS .

Tenant and Tenant Parties shall abide by the “ Rules and Regulations ” from time to time established by Landlord, it being agreed that Landlord shall have the right from time to time during the Term to make

reasonable changes in and additions to the Rules and Regulations as Landlord deems necessary for the management, safety, care, cleanliness, conservation and sustainability of the Building and the Property and for the preservation of good order therein. The Rules and Regulations shall be generally applicable to all tenants of the Building of similar nature to the Tenant named herein. Landlord agrees that any such Rules and Regulations will be uniformly enforced; provided, however, that Landlord may waive any one or more of the Rules and Regulations for the benefit of any particular tenant if Landlord reasonably deems such waiver appropriate, but no such waiver shall be construed as a waiver of such Rules and Regulations in favor of any other tenant, nor prevent Landlord from enforcing such Rules and Regulations against any or all tenants of the Building. In addition, Landlord shall not be liable to Tenant for violation of any such Rules and Regulations by any other tenant, its assignees, subtenants, agents, employees, contractors, licensees, invitees and guests. In the event that there shall be a conflict between such Rules and Regulations and the provisions of this Lease, the provisions of this Lease shall control. The Rules and Regulations in effect as of the Effective Date are attached hereto as Exhibit D .

31. QUIET ENJOYMENT .

Subject to the terms, covenants and conditions of this Lease, on paying Base Rent and Additional Rent, and observing, keeping and performing all of the other terms, covenants and conditions of this Lease on Tenant’s part to be observed, kept and performed, Tenant shall and may lawfully, peaceably and quietly enjoy the Premises during the Term and any extension thereof, without hindrance or ejection by any persons lawfully claiming under Landlord to have title to the Premises superior to Tenant. The foregoing covenant of quiet enjoyment is in lieu of any other covenant, express or implied.

32. LANDLORD DEFAULT .

Landlord shall in no event be in default under this Lease unless and until Landlord shall neglect or fail to perform or observe any of its obligations under this Lease and such neglect or failure continues, after written notice given by or on behalf of Tenant to Landlord, for more than thirty (30) days (or such longer period as may be necessary to cure such default, provided that Landlord commences such cure within the thirty (30) day period and thereafter diligently pursues the same to completion).

33. LIMITATION OF LIABILITY .

33.1 Tenant agrees to look solely to Landlord’s then equity interest in the Property at the time of recovery for recovery of any judgment against Landlord, and agrees that neither Landlord nor Landlord’s Agents nor any successor of Landlord nor any beneficiary, trustee, member, manager, partner, shareholder, officer, director, agent or employee of Landlord, Landlord’s Agents or any successor of Landlord shall ever be personally liable for any such judgment, or for the payment of any monetary obligation to Tenant. The provision contained in the foregoing sentence is not intended to, and shall not, limit any right that Tenant might otherwise have (1) to obtain injunctive relief against Landlord, Landlord’s Agents or any successor of Landlord, or (2) to take any action not involving the personal liability of Landlord, Landlord’s Agents or any successor of Landlord to respond in monetary damages from Landlord’s assets other than Landlord’s then equity interest in the Property.

33.2 In no event shall Landlord ever be liable to Tenant for any loss of profits, rents or other revenues, loss of business opportunity, loss of goodwill, loss of use, or for any form of punitive, special or other indirect or consequential damages, in each case however occurring.

33.3 In no event shall Tenant ever be liable to Landlord for any loss of profits, rents or other revenues, loss of business opportunity, loss of goodwill, loss of use, or for any form of punitive, special or

other indirect or consequential damages, except as set forth in Section 22 (Hazardous Matter) and Section 39 (Surrender of Premises; Holding Over).

34. INDEPENDENT COVENANTS .

Tenant acknowledges and agrees that the obligations of Tenant hereunder (including the obligation to pay Base Rent, Additional Rent and other sums due hereunder) shall be separate and independent covenants and agreements, and shall continue unaffected, unless the requirement to pay or perform the same shall have been terminated or abated pursuant to an express provision of this Lease. In no event shall Tenant have the right to terminate this Lease due to a default by Landlord except pursuant to an express provision of this Lease. Such waiver and acknowledgements by Tenant are a material inducement to Landlord entering into this Lease. To the extent of any conflicts or inconsistencies between the terms and provisions of this Section 34 and the terms and provisions of the remainder of this Lease, the terms and provisions of this Section 34 shall control.

35. SEVERABILITY .

If any provision of this Lease, or the application thereof, shall to any extent be invalid, illegal or otherwise unenforceable, the remainder of this Lease, and the application of such provisions other than as invalid, illegal or unenforceable, shall not be affected thereby; and such provisions of this Lease shall be valid and enforceable to the fullest extent permitted by applicable Laws.

36. COSTS AND EXPENSES .

In the event of any litigation between Landlord and Tenant to enforce or interpret any provision of this Lease or to enforce any right of either party hereto, the unsuccessful party to such litigation shall pay to the successful party all reasonable costs and expenses incurred in connection therewith, including reasonable attorneys’ fees, through all appeals and in any bankruptcy proceedings.

37. CONSENTS .

Where provision is made in this Lease for Landlord’s consent, and Tenant shall request such consent, and Landlord shall fail or refuse to give such consent, Tenant shall not be entitled to any damages for any withholding by Landlord of its consent, it being intended that Tenant’s sole remedy shall be an action for specific performance or injunction, and that such remedy shall be available only in those cases where Landlord has expressly agreed in writing not to unreasonably withhold its consent. Furthermore, whenever Tenant requests Landlord’s consent or approval (whether or not provided for herein), Tenant shall pay to Landlord, within thirty (30) days of demand, as Additional Rent, any reasonable expenses incurred by Landlord (including reasonable attorneys’ fees and costs, if any) in connection therewith.

38. INTENTIONALLY OMITTED .

39. SURRENDER OF PREMISES; HOLDING OVER .

39.1 Upon the expiration or earlier termination of this Lease, Tenant shall promptly surrender possession of the Premises to Landlord in good order, condition and repair and in conformity with the applicable provisions of this Lease, excepting only reasonable wear and tear, casualty and condemnation. Tenant shall surrender to Landlord all keys, key cards, security and access codes to the Premises and make known to Landlord the combination of all combination locks which Tenant is required to leave on the Premises. For purposes of this Lease, the phrase “reasonable wear and tear” constitutes that normal,

gradual deterioration which occurs due to aging and ordinary use of the Premises despite reasonable and timely maintenance and repair, but in no event shall the aforementioned phrase excuse Tenant from its duty to keep the Premises in good order, condition and repair and otherwise usable, serviceable and tenantable as required by this Lease.

39.2 Upon the expiration or earlier termination of this Lease, Tenant shall, at its sole cost and expense, remove (1) any Tenant’s Work, Alterations, and Tenant’s Systems that Tenant is required to remove pursuant to the terms, covenants and conditions of this Lease, and (2) all of Tenant’s Property. Tenant shall not remove, or be required to remove, Landlord’s Work (if any). Tenant shall, at its sole cost and expense, repair any damage caused by the removal of said Tenant’s Work, Alterations, Tenant’s Systems, and Tenant’s Property, and perform such other work as is reasonably necessary to restore the Premises to neat and clean condition and good order, condition and repair, excepting only reasonable wear and tear, casualty and condemnation. If Tenant fails to remove any of the foregoing items, such items shall be deemed conclusively to have been abandoned, and Landlord may either retain such items as its property or dispose of such items in such manner as Landlord may see fit, at Tenant’s sole cost and expense.

39.3 If, after the expiration or earlier termination of this Lease, Tenant fails to surrender the Premises (or any portion of the Premises) in accordance with the provisions of this Lease, such occupancy shall be that of a tenancy at sufferance, in which event Tenant shall pay Landlord (1) as liquidated damages for such holding over alone, an amount, calculated on a per diem basis for each day of such unlawful retention, equal to the greater of (a) one hundred fifty percent (150%) of the then current Annual Base Rent, or (b) one hundred fifty percent (150%) of the then current fair market rental for the Premises, for the time Tenant thus remains in possession, (2) all Additional Rent and other sums payable hereunder, and (3) all other damages, costs and expenses sustained by Landlord by reason of Tenant's holding over. Without limiting any rights and remedies of Landlord resulting by reason of the wrongful holding over by Tenant, or creating any right in Tenant to continue in possession of the Premises, all Tenant's obligations with respect to the use, occupancy and maintenance of the Premises shall continue during such period of unlawful retention. To the maximum extent enforceable by law, Tenant covenants and agrees to exonerate, indemnify, defend, protect and save Landlord, together with (i) Landlord's Agents and (ii) Landlord's Insured Parties, from and against any and all claims, demands, expenses, losses, suits and damages (including reasonable attorneys' fees) as may be occasioned by reason of Tenant's holding over, including, without limiting the generality of the foregoing, any claims made by any succeeding tenant founded upon such failure to surrender and any lost profits to Landlord resulting therefrom. The provisions of Section 39 shall survive the expiration or earlier termination of this Lease.

40. BROKERS .

Except for the Broker(s) listed in Section 1 of this Lease, each party represents and warrants to the other that they have not made any agreement or taken any action which may cause anyone to become entitled to a commission as a result of the transactions contemplated by this Lease, and each will indemnify and defend the other from any and all claims, actual or threatened, for compensation by any such third person by reason of such party’s breach of their representation or warranty contained in this Lease. Landlord will pay any commission due to the Broker(s) hereunder pursuant to its separate agreement with the Broker(s) hereunder subject to execution and delivery of this Lease by Landlord and Tenant. The provisions of this Section 40 shall survive the expiration or earlier termination of this Lease.

41. OFAC LIST .

Tenant represents and warrants that it is not listed, nor is it owned or controlled by, or acting for or on behalf of any person or entity, on the list of Specially Designated Nationals and Blocked Persons maintained by the Office of Foreign Assets Control of the United States Department of the Treasury, or any other list of persons or entities with whom Landlord is restricted from doing business with (“ OFAC List ”). Notwithstanding anything to the contrary herein contained, Tenant shall not pennit the Premises or any portion thereof to be used, occupied or operated by or for the benefit of any person or entity that is on the OFAC List. Tenant shall provide documentary and other evidence of Tenant’s identity and ownership as may be reasonably requested by Landlord at any time to enable Landlord to verify Tenant’s identity in order to comply with any legal requirement or applicable Laws. Tenant acknowledges and agrees that as a condition to the requirement or effectiveness of any consent to any Transfer by Landlord pursuant to Section 17 , Tenant shall cause the Transferee, for the benefit of Landlord, to reaffirm, on behalf of such Transferee, the representations of, and to otherwise comply with the obligations set forth in, this Section 41 , and it shall be reasonable for Landlord to refuse to approve a Transfer in the absence of such reaffirmation and compliance. Tenant agrees that breach of the representations and warranties set forth in this Section 41 shall at Landlord’s election be an immediate Event of Default, without any notice and cure period. The provisions of this Section 41 shall survive the expiration or earlier termination of this Lease.

42. GOVERNING LAW; JURISDICTION .

This Lease and the rights and obligations of the parties hereto shall be interpreted, construed, and enforced in accordance with the Laws of the state in which the Property is located. Tenant hereby consents to the exclusive jurisdiction of the courts of the state in which the Property is located in any and all actions or proceedings arising under this Lease, and irrevocably agrees to service of process in accordance with Section 29 above.

43. FORCE MAJEURE .

In the event that either party shall be delayed or hindered in or prevented from performing any acts required under this Lease, by reason of strikes, lockouts, labor troubles, inability to procure materials, fuel or power (which inability is not unique to the performing party), failure of power, restrictive Laws, riots, insurrection, acts of terrorism, war, fire or other casualty, flood, earthquake or other natural disaster, unusually adverse weather conditions, acts of God, or other reasons of a like nature not the fault of the performing party (each an event of “ Force Majeure ”), then performance of such act shall be excused for the period of the delay and the period for such party’s performance of such act shall be extended for a period equivalent to the period of the delay. The provisions of this Section 43 shall in no event operate to excuse Tenant from the prompt payment of Base Rent or Additional Rent or excuse performance by either party due to lack of funds. In any case where work is to be paid for out of insurance proceeds or condemnation awards, due allowance shall be made, both to the party required to perform such work and to the party required to make such payments, for delays in the collection of such proceeds or awards.

44. LEASE NOT TO BE RECORDED .

44.1 Tenant agrees not to record this Lease, but, if allowed by applicable Law in order to protect Tenant’s interest in the Premises, each party hereto agrees, on the request of the other, to execute a so-called notice of lease or memorandum of lease in recordable form and complying with applicable Law and reasonably satisfactory to Landlord’s attorneys. In no event shall such document set forth the Rent or other charges payable by Tenant under this Lease; and any such document shall expressly state that it is executed

pursuant to the provisions contained in this Lease and is not intended to vary the terms, covenants and conditions of this Lease.

44.2 Within ten (10) Business Days following Landlord's written request therefor, Tenant agrees to execute and deliver, without charge, (a) a release of any document recorded in the real property records for the location of the Property evidencing this Lease or (b) a notice of termination of this Lease in recordable form, which shall be held in escrow by Landlord until the expiration or earlier termination of this Lease. The obligations of Tenant under Section 44 shall survive the expiration or earlier termination of this Lease.

45. LEASE NOT BINDING UNTIL EXECUTED AND DELIVERED .

The submission of this Lease for examination and negotiation does not constitute an offer to lease, a reservation of the Premises, or an option for the Premises. The submission of this Lease for examination and negotiation shall vest no rights in any party. This Lease shall become effective only upon execution and delivery thereof by Landlord and Tenant, regardless of any written or verbal representation of any agent, manager or employee of Landlord to the contrary.

46. COUNTERPARTS; ELECTRONIC SIGNATURE .

This Lease may be executed in two (2) or more counterparts, which when taken together shall constitute one and the same instrument. The parties contemplate that they may be executing counterparts of this Lease by facsimile or PDF or other electronic means and agree and intend that a signature by facsimile or PDF or other electronic means shall bind the party so signing with the same effect as though the signature were an original signature.

47. ENTIRE AGREEMENT; AMENDMENT AND MODIFICATION .

This Lease, including all Exhibits attached hereto, constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings between the parties, including all lease proposals, letters of intent and similar documents. This Lease may be modified only by a written agreement signed by both Landlord and Tenant.

48. JOINT AND SEVERAL LIABILITY .

If Tenant is comprised of more than one party, each such party shall be jointly and severally liable for Tenant’s obligations under this Lease.

49. SUCCESSORS AND ASSIGNS .

Subject to the restrictions on Transfers set forth herein, the obligations of this Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that Landlord and each successive owner of the Property shall be liable only for obligations accruing during the period of its ownership or interest in the Property, and from and after the transfer by Landlord or such successive owner of its ownership or other interest in the Property, Tenant shall look solely to the successors in title for the performance of Landlord’s obligations hereunder arising thereafter.

50. AUTHORITY .

Tenant represents, warrants and covenants to Landlord that (1) Tenant is duly formed, has legal existence, is in good standing, and is qualified to do business in the state in which the Building is located, (2) Tenant

has full right, power and authority to enter into this Lease and has taken all corporate or partnership action, as the case may be, necessary to carry out the transaction contemplated herein, so that when executed, this Lease constitutes a valid and binding obligation enforceable in accordance with its terms, and (3) the person or persons executing this Lease on behalf of Tenant are duly authorized to do so. Landlord reserves the right to require Tenant to provide Landlord with certificates of legal existence and good standing, corporate resolutions, authority documents, and such other documents as Landlord may reasonably require evidencing the foregoing.

51. EXHIBITS .

Additional terms to this Lease, if any, are set forth in the Exhibits attached hereto, which are incorporated herein by reference as follows:



Exhibit A		Legal Description
Exhibit B		Plan of Premises
Exhibit C		Work Letter
Exhibit D		Rules and Regulations
Exhibit E		Intentionally Omitted
Exhibit F		Form of Commencement Agreement
Exhibit G		Intentionally Omitted

52. INTENTIONALLY OMITTED .

53. EXTENSION OPTION .

53.1 Extension Option . Provided that (1) Tenant shall not be in an Event of Default either at the time of the Extension Notice (as hereinafter defined) or at the commencement of the Extension Term (as hereinafter defined), and (2) Tenant has not assigned this Lease or sublet the Premises (or any portion thereof), except with respect to a permitted Transfer in accordance with Section 17.1(2) above, Tenant shall have one (1) option (the “ Extension Option ”) to extend the Term of this Lease for an additional sixty (60) months (the “ Extension Term ”). Tenant must exercise the Extension Option by providing written notice of election to Landlord (the “ Extension Notice ”) no less than twelve (12) months prior to the scheduled expiration of the Term of this Lease. The Annual Base Rent for the Extension Term shall be one hundred percent (100%) of the Fair Market Base Rent (as hereinafter defined). All other terms of this Lease shall apply during the Extension Term. If Tenant shall fail to send the Extension Notice within the time period herein provided, the Extension Option shall cease to exist and terminate, and Tenant shall have no further opportunity to exercise the Extension Option.

53.2 Fair Market Base Rent . As used herein, “ Fair Market Base Rent ” shall mean the Annual Base Rent which a landlord could reasonably expect to obtain from a third party for the Premises if the same were put on the market for lease for a term corresponding to the term offered hereunder, taking into account all relevant factors, including, without limitation, adjustments (if any) to the base years for Operating Expenses and Taxes, and the presence or absence of tenant fit-up costs, tenant improvement allowances, rent concessions, brokerage commissions, reasonable attorneys’ fees, and the like.

53.3 Rent Proposal . Fair Market Base Rent shall be determined as follows: Landlord shall, within thirty (30) days after receipt of the Extension Notice propose in writing to Tenant the Fair Market Base Rent

to be paid by Tenant during the Extension Term (the “ Rent Proposal ”). Tenant shall have thirty (30) days from receipt of Landlord’s Rent Proposal to either accept or reject Landlord’s Rent Proposal. If Tenant objects to Landlord’s Rent Proposal, Tenant shall notify Landlord of such objection in writing (the “ Objection Notice ”). If Tenant shall fail to send the Objection Notice within the thirty (30) day time period herein provided, Tenant shall be deemed to have accepted Landlord’s Rent Proposal.

53.4 Arbitration Process . If Tenant delivers the Objection Notice, Landlord and Tenant shall engage in discussions regarding the Fair Market Base Rent for a period of up to thirty (30) days. If Landlord and Tenant cannot agree within thirty (30) days, each party shall appoint a licensed real estate broker having at least ten (10) years’ experience leasing comparable commercial properties located in Downtown Boston (and upon the failure or refusal of Landlord or Tenant to make such appointment within twenty (20) days after the expiration of the thirty (30) day discussion period referenced above, the broker appointed by the other party shall determine the Fair Market Base Rent). The two brokers so appointed shall endeavor to reach an agreement as to what the Fair Market Base Rent should be; and if the two brokers cannot agree in writing as to what the Fair Market Base Rent should be at least thirty (30) days prior to the beginning of the applicable Extension Term, they shall appoint a third person who is a licensed real estate broker having at least ten (10) years’ experience leasing comparable commercial properties located in Downtown Boston, mutually acceptable to them, to act as the third broker. Landlord and Tenant shall each bear the cost of their respectively appointed brokers. Landlord and Tenant shall equally bear the cost of the third broker. The third broker shall be disinterested and shall not have represented Landlord or Tenant within the past five (5) years. The brokers selected by Landlord and Tenant shall each prepare their own determination of the figure that should be the Fair Market Base Rent (the “ Proposed Determination ”) and submit their respective Proposed Determinations in writing to the third broker promptly after the third broker is chosen. The third broker shall meet with the first two brokers to review and discuss the Proposed Determination submitted by each of them, and promptly thereafter issue his or her own determination in writing to Landlord and Tenant. The determination of the third broker shall be made on the basis of which Proposed Determination submitted by the first two brokers is closest to what the third broker believes the Fair Market Base Rent should be, and such determination of the third broker must be made only by his or her selecting one of the Proposed Determinations previously submitted in writing by the first two brokers. The determination of the third broker (or the determination mutually agreed to by the first two brokers, if such written agreement is reached by them before the selection of a third broker is required) shall be binding and conclusive on Landlord and Tenant.

53.5 Lease Amendment . In the event Tenant properly exercises its Extension Option as described herein, Landlord and Tenant agree to enter into an amendment to this Lease incorporating the Extension Term into this Lease, but the failure of the parties to execute such an amendment shall have no effect on the effectiveness of the extension of the Term to include the Extension Term or the Fair Market Base Rent associated therewith.

53.6 No Transfer . Except with respect to a permitted Transfer in accordance with Section 17.1(2) above, Tenant may not assign or otherwise transfer its interest or rights under Section 53 , and any such purported transfer or attempted transfer shall be null and void, without effect, and shall terminate Tenant’s rights under Section 53 .

[SIGNATURE PAGE FOLLOWS]

EXHIBIT A

LEGAL DESCRIPTION

(ATTACHED, CONSISTING OF 2 PAGES)

A-1

IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed, as a document under seal, as of the date set forth above.

LANDLORD :



NS Two Oliver LLC, a Massachusetts limited liability company

By:	Synergy Financial LLC, a Massachusetts limited liability company, Property Manager and Authorized Agent



By:
	David Greaney, Manager Hereunto duly authorized

TENANT :

Tufin Software North America, Inc.,

a Delaware corporation



By:	/s/Ruvi Kitov
Name:	Ruvi Kitov
Title:	CEO and President
	Hereunto duly authorized

[COUNTERPART SIGNATURE PAGE]

A-2

EXHIBIT “A”

PARCEL ONE

The land and buildings located thereon in Boston, Suffolk County, Massachusetts, the buildings being numbered 6, 8 and 10 Oliver Street, 132-145 Milk Street, both inclusive, on Milk Street and 32-49, both inclusive, on Batterymarch Sreet, said premises being bounded and described as follows:

Beginning at the corner formed by the intersection of the easterly side of Oliver Street and the southerly side of Milk Street and and running thence, the following courses and distances: North 79 ^○ 33’44” East, 90.05 feet along the Southerly side of Milk Street to the Northereasterly side of an 18 inch wall;

Thence South 08 ^○ 17’45” East, 53.04 feet along said wall;

Thence North 01 ^○ 41’25” East, 18.75 feet;

Thence South 01 ^○ 10’55” West, 30.47 feet;

Thence South 72 ^○ 02’48” East, 4.59 feet;

Thence South 01 ^○ 10’10” East 25.07 feet to the North side of a 16 inch wall;

Thence North 04 ^○ 24’ 18” East 63.43 feet along said last mentioned wall to a point on the Westerly side of Batterymarch Street;

Thence along the Westerly side of Batterymarch Street the following four courses and distances:


(1)	South 16 ^○ 22’45” East, 36.97 feet;


(2)	South 08 ^○ 08’52” East, 32.99 feet;


(3)	North 80 ^○ 44’35” East, 20.19 feet; and


(4)	South 12 ^○ 23’53” East, 69.75 feet to a point on the Northerly side of Hamilton Alley;

Thence North 88 ^○ 19’09” West, 66.17 feet along the Northerly side of Hamilton Alley;

Thence North 09 ^○ 58’09” West, 35.68 feet;

Thence South 71 ^○ 31’01” West, 19.83 feet;

Thence South 84 ^○ 43’ 51” West, 13.37 feet;

Thence North 01 ^○ 57’59” West, 15.75 feet;

Thence South 86 ^○ 41’17” West, 86.35 feet; along the wall of a nine story brick building on the premises to the South to a point on the Easterly side of Oliver Street;

Thence North 10 ^○ 09’02 West, 98.46 feet along the Easterly side of Oliver Street;

Thence continuing along the Easterly side of Oliver Street North 08 ^○ 16’12” West, 61.73 feet to the point or place of beginning.

All as shown on a certain survey dated May 4, 1959, revised January 25, 1983, prepared by New England Survey Science, Inc., Civil Engineers and Surveyors No. 21803 recorded with the Suffolk County Registry of Deeds at Book 8010, Page 151.

Together with the benefit of the following:

a. Right and easements referred to in a deed from George W. Grealey et al, to Richard H. Dana, et al, Trustees of the Oliver Building Trust, dated April 27, 1905 and recorded in Book 3038, Page 425;

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b. Easement for air, light and way and grants set forth or referred to in deed from Lucinda E. Mason et al, to Richard H. Dana et al, Trustees of the Oliver Building Trust, dated April 26, 1905 and recorded in Book 3036, Page 428.

c. Terms and provisions of an agreement by and between Richard H. Dana, et al, Trustees of Oliver Building Trust, and John Druker, Trustee of Oliver Street Trust, dated August 12, 1921 and recorded in Book 4313, Page 504.

d. Grant of Easements dated January 26, 1984, recorded in Book 10791, Page 288; and

e. Rights, easements, terms and provisions as set forth in Grant and Release of Easements between Ferdinand Collorado-Mansfeld, James V. Young, and John M. Hines, Trustees of CC&F - F&O Property Trust, and 2 Oliver Incorporated, dated as of January 27, 1984 and recorded in Book 11100, Page 1.

PARCEL TWO

Also one-half undivided part of a certain parcel of land situated in said Boston and bounded Southeasterly in part on said Hamilton Alley and in part on land now or formerly on Burrage;

Southwesterly on land now of formerly of Burrage;

Northwesterly on the parcel above described; and

Northeasterly on the parcel above described; or however otherwise said parcels or either of them may be bounded or described and be all of any of said measurements more or less.

Also being shown as Lot C on a plan by Frank E. Sherry C.E. dated January 5, 1920 and recorded with Suffolk County Registry of Deeds at Book 4193, Page 612.

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EXHIBIT B

PLAN OF PREMISES

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EXHIBIT C

WORK LETTER

1. Definition of Landlord’s Work; Concept Plan . This Exhibit C sets forth the obligations of Landlord and Tenant with respect to the initial improvements to be performed in the Premises by Landlord. Landlord and Tenant have approved the concept plan (the “ Concept Plan ”) attached hereto as Schedule A . Subject to the terms and conditions contained herein, Landlord, at Landlord’s sole cost and expense, shall perform the work necessary in order to deliver the Premises in accordance with the Concept Plan (such work, “ Landlord’s Work ”).

2. Building Standard; Finish Selections . Landlord shall perform Landlord's Work pursuant to Landlord's Building Standard specifications. If Tenant has not already done so, Tenant agrees to make its finish selections from Landlord's Building Standard specifications within two (2) Business Days after the Effective Date of this Lease. Tenant's failure to make its finish selections within two (2) Business Days after the Effective Date of this Lease shall be deemed a Tenant Delay (as hereinafter defined) without the need for further notice from Landlord. If there are any additional actions required to be taken by Tenant in order for Landlord to commence and complete Landlord's Work, Landlord shall furnish Tenant with a construction schedule setting forth such additional actions, and the corresponding deadlines therefor, and Landlord may from time to time during the construction of Landlord's Work modify such construction schedule as needed.

3. Substantial Completion of Landlord’s Work . Landlord's Work shall be deemed " Substantially Complete ” when Landlord’s construction representative confirms that Landlord’s Work has been completed in accordance with the Concept Plan, subject only to minor incomplete items that do not prevent or interfere with Tenant lawfully occupying the entire Premises for the Permitted Use, and which items can reasonably be completed within thirty (30) days (the “ Punchlist Items ”). Subject to delays due to events of Force Majeure and Tenant Delay, Landlord shall use commercially reasonable efforts to Substantially Complete Landlord’s Work within thirty (30) days after the Effective Date of this Lease (the “ Target Delivery Date ”), but Tenant shall have no claim against Landlord for failure to complete Landlord’s Work by such date.

4. Extra Work . If, after Tenant executes and delivers this Lease to Landlord, (1) Tenant requests any changes to the Concept Plan, or (2) Tenant requests that Landlord perform or supply any additional work or non-Building Standard work, installations, materials or finishes over and above, or in lieu of, Landlord's Work (each, " Extra Work ”), Tenant, at Tenant’s sole cost and expense, shall submit to Landlord all information, plans and specifications necessary for Landlord to review the proposed Extra Work (the “ Change Request ”). Landlord shall review such Change Request, and provided such Change Request (a) is reasonably acceptable to Landlord, (b) will not affect or be visible from the Common Areas or the exterior of the Building, (c) will not impact the space of any other tenant or occupant of the Building, (d) will not adversely affect the Building Structure or the Building Systems, (e) will not require Landlord to make improvements to the Building or the Property (or undertake special maintenance, repair or replacement obligations with respect to the Building or the Property) not within the scope of those expressly provided for herein, unless Tenant agrees to pay all costs associated with such improvements or obligations, and (f) will not unreasonably delay Landlord’s Work (clauses (a) through (f) being determined in Landlord’s sole discretion), then Landlord shall submit to Tenant a proposed change order therefor (the “ Change Order ”), in the standard form then in use by Landlord, which Change Order shall set forth Landlord’s good faith estimate of (i) the additional cost of such Extra Work and (ii) the time necessary to complete such Extra Work. Tenant shall have two (2) Business Days following the submission of the Change Order to execute and deliver to Landlord the Change Order, along with payment for the entire cost of the Extra Work (which cost shall include, without limitation, Landlord’s architectural and design fees, construction management fee, and contractor’s price for effecting

C-1

the change). If Tenant fails to execute and deliver to Landlord the Change Order, along with payment for the entire cost of the Extra Work, within the time period required herein, then Landlord shall not be obligated to perform any of the work set forth on such Change Order, and Landlord may proceed to perform only Landlord’s Work as set forth on the Concept Plan.

5. Tenant Delay . A “ Tenant Delay ” shall mean any actual delay in the substantial completion of Landlord’s Work resulting from: (1) Tenant’s failure to comply with any of the delivery dates or approval dates relative to the design, planning, pricing, and selection of finishes for Landlord’s Work, (2) Tenant’s failure to provide responses to requests for information, approvals or disapprovals regarding Landlord’s Work within the time periods established in this Work Letter or any construction schedule provided by Landlord (or if not so stated, then within two (2) Business Days after requested by Landlord), (3) Tenant’s requests for Extra Work (even if Tenant elects not to proceed with the Extra Work requested), (4) Tenant’s failure to pay any amounts when due hereunder, (5) any delay resulting from Tenant’s early access to the Premises, or work being performed by Tenant in the Premises, while Landlord is performing Landlord’s Work (provided, however, that with respect to this clause (5) only, no event shall be deemed to be a Tenant Delay unless and until Landlord has given Tenant written notice (the “ Tenant Delay Notice ”) advising Tenant: (x) that a Tenant Delay is occurring, and (y) of the actions that Tenant must take to eliminate the Tenant Delay, and Tenant thereafter fails to correct the Tenant Delay within two (2) Business Days after receipt of the Tenant Delay Notice), or (6) any other act or failure to act by Tenant, Tenant’s employees, agents, architects, engineers, contractors, consultants and/or any other person performing or required to perform services on behalf of Tenant. Notwithstanding anything contained herein or elsewhere in this Lease to the contrary, if there is any increase in the cost of Landlord’s Work as a result of a Tenant Delay or if Landlord is delayed in substantial completion of Landlord’s Work as a result of a Tenant Delay, then (a) Tenant shall be responsible for the increase in the cost of Landlord’s Work, and (b) the Commencement Date shall be deemed to be the date on which Landlord’s Work would have been Substantially Complete but for the Tenant Delay as determined by Landlord.

6. Punchlist Items . Promptly following delivery of the Premises to Tenant with Landlord's Work with respect thereto Substantially Complete, Landlord, Tenant and their respective construction representatives shall inspect the Premises and prepare a list (the “ Punchlist ”) of the Punchlist Items. Subject to delays due to events of Force Majeure and Tenant Delay, Landlord shall use commercially reasonable efforts to complete all Punchlist Items within thirty (30) days of the date of the Punchlist.

7. Notices Relating to Landlord’s Work . Notwithstanding the notice provisions contained in the Lease, Landlord and Tenant acknowledge and agree that any written notices (including any Tenant Delay Notice) relating to Landlord’s Work may be sent via email as follows:

If to Landlord, then to Landlord’s construction representative: Kevin Kiley, kkiley@-synergy-inv.com.

If to Tenant, then to Tenant’s construction representative: Pat Walsh, Chief Marketing Officer, pat.walsh@tufin.com.

C-2

SCHEDULE A TO EXHIBIT C

CONCEPT PLAN

C-3

EXHIBIT D

RULES AND REGULATIONS


1.	The sidewalks, entrances, lobbies, passages, courts, elevators, stairways, corridors, hallways and vestibules of the Building shall not be obstructed or encumbered or used for any purpose other than ingress to and egress from the premises demised to any tenant or occupant. Loitering is strictly prohibited.

Except as expressly permitted elsewhere in this Lease, no sign, signal, advertisement, object, notice or other lettering shall be exhibited, inscribed, painted or affixed by Tenant outside of the Premises without the prior written consent of Landlord. In the event of the violation of the foregoing by Tenant, Landlord may remove the same without any liability and may charge the expense incurred by such removal to Tenant. Interior signs on doors and directory tablets shall be inscribed, painted, or affixed for Tenant by Landlord at Tenant’s expense, and shall be of a size, color and style acceptable to or prescribed by Landlord.


3.	The sashes, sash doors, skylights, windows, transoms and doors that reflect or admit light and air into the hallways, passageways or other public places in the Building shall not be covered or obstructed by Tenant, nor shall any bottles, parcels, paper or other articles be placed on the window sills.


4.	The water and wash closets and other plumbing fixtures shall not be used for any purposes other than those for which they were designed and constructed, and no sweepings, rubbish, rags or other substances shall be thrown therein. Any damage caused by any act or neglect of Tenant or any Tenant Party shall be borne by Tenant.


5.	All waste, rubbish and refuse shall be kept in proper receptacles upon the Premises and nothing shall be thrown or swept into or upon the corridors, passageways, stairways or other parts of the Building. Tenant shall comply with any recycling programs undertaken by Landlord, including sorting of recyclable waste.


6.	Tenant shall not waste electricity, water or air conditioning and agrees to cooperate fully with Landlord to ensure the most effective operation of the Building’s heating and air conditioning system, and shall refrain from attempting to adjust any controls.


7.	There is no smoking permitted in the Building, and tenants shall not smoke or carry lighted pipes, cigars or cigarettes therein. All tenants leaving the Building to smoke must stand at least 25 feet from entryways and Building ventilation systems. If Landlord is required under ordinance to adopt a written smoking policy, a copy of said policy shall be on file in the office of the Building.

Tenant shall not mark, paint, drill into, or in any way deface any part of the Premises or the Building of which it forms a part. No boring, cutting or stringing of wires shall be permitted, except with the prior written consent of Landlord and as Landlord may direct. Tenant shall not lay linoleum or other similar adhesive floor covering so that the same shall come in direct contact with the floor of the Premises.

No bicycles or man-powered vehicles of any kind shall be brought into or kept in or about the Premises. If the Building has a designated bicycle storage area, tenants may keep bicycles in such storage area as directed by Landlord. Landlord does not assume any responsibility for, and shall not be liable for, any damage, loss or theft (of any nature whatsoever) to or of any bicycles, or any contents or other personal property located in or about any designated bicycle storage area.


10.	No animals of any kind shall be brought into or kept in or about the Premises, except for service animals as defined by the Americans with Disabilities Act of 1990. All service animals shall be free from disease and have a valid vaccination/immunization record and license documentation certified by the applicable state or federal organizations approved by Landlord.


11.	Except as expressly permitted elsewhere in this Lease, no open flame cooking shall be done or permitted by Tenant within the Premises.


12.	Except as expressly permitted elsewhere in this Lease, no space in the Building shall be used for manufacturing, for the storage of merchandise, or for the sale of merchandise, goods or property of any kind at auction.

13.

No additional locks, bolts or other closing or locking devices shall be placed upon any of the doors, windows, transoms or other openings by Tenant without Landlord’s prior written consent. Upon termination of this Lease, Tenant shall return to Landlord all keys to offices, toilets or other rooms furnished to or otherwise procured by Tenant. In the event of the loss of any keys furnished by Landlord, Tenant shall pay to Landlord the cost thereof.


14.	Tenant shall not use any method of heating or air conditioning other than any dedicated system approved by Landlord or as provided by Landlord.


15.	Tenant shall comply with all safety, fire protection and evacuation regulations established by Landlord or any applicable governmental agency.


16.	Tenant assumes all risks from theft or vandalism to the Premises and agrees to keep the Premises locked as may be required, and before closing and leaving the Premises at any time. All doors opening to public corridors shall be kept closed at all times except for normal ingress to and egress from the Premises.


17.	Tenant shall not engage or pay any employees in the Building, except those actually working for Tenant in the Building, nor advertise for laborers giving any address at the Building. Tenant shall not contract for any work or services to be performed in the Building without Landlord’s prior written consent.


18.	Tenant shall, at its expense, provide artificial light in the Premises for Landlord’s agents, contractors, and employees while performing janitorial or other cleaning services and making repairs or alterations in the Premises.


19.	The Premises shall not be used, or permitted to be used, for lodging or sleeping, or for any immoral or illegal purpose. Canvassing, soliciting and peddling in the Building are prohibited and Tenant shall cooperate in seeking their prevention.

20.

Tenant shall properly dispose of edible refuse in sealed containers and encourage cleanliness among employees to prevent infestation of vermin. If the Premises become infested with vermin due to the act or neglect of Tenant or any Tenant Party, Tenant, at its sole cost and expense, shall cause the Premises to be exterminated to the satisfaction of Landlord, and shall employ such exterminators as shall be approved by Landlord.


21.	Tenant shall receive and deliver goods and merchandise only in such manner and at such times and locations as may be reasonably designated by Landlord. There shall not be used in any space, or in the Common Areas of the Property, any equipment which may damage or deface the Building, either by Tenant or by jobbers or others under Tenant’s control, in the delivery of merchandise or otherwise.


22.	Tenant shall comply with all reasonable requests of Landlord or its agents as such requests pertain to safety and security in the Building.


23.	The requirements of Tenant and any complaints of Tenant will be attended to by notice to Landlord or upon application at the office of Landlord. Employees of Landlord have no authority and shall perform no work or do anything outside of their regular duties, unless under special instruction of Landlord. Tenant shall make repair/maintenance requests through Landlord’s online work order system.


24.	In order that the good will and reputation of the Building may be maintained, no newspaper, magazine or other kind of advertising shall be issued by any Tenant wherein any office or other space in the Building is given as an address unless Tenant reasonably determines in good faith that such advertising shall not have any adverse impact on the character of the Building or Landlord.


25.	No Tenant shall do, or permit or suffer anything to be done, in, on or about the Premises, the Building, or the Property which will interfere with the rights, privileges and conveniences of any other tenant or which will conflict with the provisions of any insurance policy covering the Building or any part thereof, or which will violate any Law.


26.	Landlord has the right, but not the obligation, to restrict tenants from bringing into the Premises, the Building, or the Property, any weapon, including firearms, knives and similar items.

EXHIBIT E

INTENTIONALLY OMITTED

E-1

EXHIBIT F

FORM OF COMMENCEMENT AGREEMENT

THIS COMMENCEMENT AGREEMENT (this “ Commencement Agreement ”) is entered into by and between NS Two Oliver LLC, a Massachusetts limited liability company (“ Landlord ”) and Tufin Software North America, Inc., a Delaware corporation (“ Tenant ”) as of ________________________, 2017.

WI T N E S S E T H TH A T:

WHEREAS, Landlord and Tenant entered into that certain Office Lease Agreement dated as of ________________________, 2017 (the “ Lease ”);

WHEREAS, the Lease relates to the premises (the “ Premises ”) measuring approximately 3,214 rentable square feet located on the seventh (7 ^th floor of the building commonly known and numbered as 2 Oliver Street, Boston, MA (the “ Building ”); and

WHEREAS, Landlord and Tenant wish to memorialize their understanding with respect to the Commencement Date and certain other terms set forth in the Lease.

NOW, THEREFORE, in consideration of the covenants herein reserved and contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:


1.	The Commencement Date is [insert date].


2.	The Rent Commencement Date is [insert date].


3.	The Expiration Date is [insert date].


4.	This Commencement Agreement, each and all of the provisions hereof, shall inure to the benefit, or bind, as the case may require, the parties hereto, and their respective successors and assigns, subject to the restrictions upon assignment and subletting contained in the Lease.


5.	Unless otherwise defined herein, all capitalized terms shall have the same meaning ascribed to them in the Lease.

[SIGNATURE PAGE FOLLOWS]

F-1

IN WITNESS WHEREOF, Landlord and Tenant have caused this Commencement Agreement to be executed, as a document under seal, as of the date set forth above.



LANDLORD :

NS Two Oliver LLC, a Massachusetts limited liability company

By:	Synergy Financial LLC, a Massachusetts limited liability company, Property Manager and Authorized Agent


By:
	David Greaney, Manager
	Hereunto duly authorized


TENANT :

Tufin Software North America, Inc., a Delaware corporation


By:
Name:
Title:
	Hereunto duly authorized

[COUNTERPART SIGNATURE PAGE]

F-2

EXHIBIT G

INTENTIONALLY OMITTED

G-1

Exhibit 10.6

COMMENCEMENT AGREEMENT

THIS COMMENCEMENT AGREEMENT (thi s "Comme ncem ent Agreement") is entered into by and between NS Two Oliver LLC , a Massachusetts limited liability company (" Landlord ") and Tufin Software North America, Inc ., a Delaware corporation ("Tenant") as of Dec. 18 , 2017.

WITNESSETH THAT:

WHEREAS , Landlord and Tenant entered into that certain Office Lease Agreement dated as of August 22, 2017 (the "Lease");

WHEREAS, the Lease relates to the premises (the "Pre mises" ) measuring approximately 3,214 rentable square feet located on the seventh (7 ^th ) floor of the building commonly known and numbered as 2 Oliver Street, Boston , MA (the "Building"); and

WHEREAS , Landlord and Tenant wish to memorialize their understanding with respect to the Comme ncement Date and certain other term s set forth in the Lease.

NOW, THEREFORE, in consideration of the covenants herein reserved and contained, and other good and valuable consideration, the rec eipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:


1.	The Commencement Date is October 1, 2017.


2.	The Rent Commencement Date is January 1, 2018.


3.	The Expiration Date is December 31, 2023.


4.	This Comme ncemen t Agreement, each and all of the provisions hereof, shall inure to the benefit, or bind, as the case may require, the parties hereto , and their respective successors and assigns, subject to the restrictions upon assignment and subletting contained in the Lease.


5.	Unless otherwise defined herein, all cap italiz ed terms sha ll have the same meaning ascribed to them in the Lease.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF , Landlord and Tenant have caused this Commencement Agreement to be

executed, as a document under se al , as of the date set forth ab o ve .

LANDLORD:

NS Two Oliver LLC ,

a Massachusetts limited liability company



By:	Synergy Financia l LLC .
	a Massachusetts limited liability compan y,
	Property Manager and Authorized Agent

By:	/s/ David Greaney
	David Greaney , Manag er
	Hereunto duly authorized

TENANT:

Tufin Software North America., Inc .,

a Delaware corporation



By:	/s/ Ruvi Kitov
Name:	Ruvi Kitov
Title:	CEO & President
	Hereunto duly authorized

[COUNTERPART SIGNATURE PAGE]

Exhibit 10.7

TUFIN SOFTWARE TECHNOLOGIES LTD.

2007 ISRAELI SHARE OPTION PLAN


1.	PURPOSE

I. The purpose of this Share Option Plan is to secure for Tufin Software Technologies Ltd. and its shareholders the benefits arising from ownership of share capital by employees, officers directors and consultants of the Company and its Affiliates (as defined below), who are expected to contribute to the Company’s future growth and success.


2.	DEFINITIONS

2.1 DEFINED TERMS

Initially capitalized terms, as used in this Plan, shall have the meaning ascribed thereto as set forth below:



“Administrator”	means the Board of Directors of the Company, or a committee to which the Board of Directors shall have delegated power to act on its behalf with respect to the Plan. Subject to the Articles of Association of the Company, as may be amended from time to time, the Administrator, if it is a committee, shall consist of such number of members (but not less than two (2)) as may be determined by the Board.

“Affiliate(s)”	means a present or future company that either (i) Controls Tufin Software Technologies Ltd. or is Controlled by Tufin Software Technologies Ltd. ; or (ii) is Controlled by the same person or entity that Controls Tufin Software Technologies Ltd..

“Allocate” or “Allocated”	with respect to Options, means the allocation of Options by the Company to the Trustee on behalf of a Participant.

“Cause”	means, when used in connection with the termination of a Participant's employment with, or service to the Company or an Affiliate, as a result of a basis for termination, including, but not limited to: dishonesty toward the Company or Affiliate, insubordination, substantial malfeasance or nonfeasance of duty, unauthorized disclosure of confidential information, and conduct substantially prejudicial to the business of the Company or Affiliate; or, any substantial breach by the Participant of (i) his or her employment or service agreement or (ii) any other obligations toward Company or Affiliate.

“Commencement Date”	means the date of commencement of the vesting schedule with respect to a Grant of Options which, unless otherwise determined by the Administrator, shall be the date on which such Grant of Options shall be Allocated.

“Company”	means Tufin Software Technologies Ltd., a company incorporated under the laws of the State of Israel.



“Consultant”	means an Israeli resident who is not entitled to receive Options under Section 102, on behalf of whom an Option is Granted under Section 3i.

“Control” or “Controlled”	shall have the meaning ascribed thereto in Section 102.

“Disability”	means physical or mental impairment or sickness of a Participant, making it impossible for the Participant to continue such Participant’s employment with or service to the Company or Affiliate.

“Exercise Price”	means, the price determined by the Administrator in accordance with Section 7.1 below which is to be paid to the Company in order to exercise a Granted Option and convert such Option into an Underlying Share.

“Grant Letter”	means a letter from the Company or Affiliate to a Participant in which the Participant is notified of the decision to Grant to the Participant Options according to the terms of the Plan. The Grant Letter shall specify (i) the Tax Provision under which the Option is Granted; (ii) the Tax Track that the Company chose according to Section 11 of the Plan (if applicable); (iii) the Exercise Price; and (iv) the number of Options Granted to the Participant.

“Grant of Options”	with respect to Options, means the grant of Options by the Company to a Participant pursuant to a Letter of Grant

“Holding Period”	means with regard to Options Granted under Section 102, the period in which the Allocated Options granted to a Participant or, upon exercise thereof the Underlying Shares, are to be held by the Trustee on behalf of the Participant, in accordance with Section 102, and pursuant to the Tax Track which the Company selects.

“IPO”	means the initial public offering of shares of the Company and the listing of such shares for trading on any recognized stock exchange or over-the- counter or computerized securities trading system.

“Law”	means the laws of the State of Israel as are in effect from time to time.

“Merger Transaction”	(i) a sale of all or substantially all of the assets of the Company; or (ii) a sale (including an exchange) of all or substantially all of the shares of the capital stock of the Company; or (iii) a merger, consolidation or like transaction of the Company with or into another corporation.

“Notice of Exercise”	shall have the meaning set forth in Section 7.4 below.

“Option”	means an option to purchase one Share of the Company.

“Non-Qualified Participant”	means an Israeli resident who is not qualified to receive Options under the provisions of Section 102, on behalf of whom an Option is Granted pursuant to Section 3i.

“Participant”	means an Israeli Participant, or a Non-Qualified Israeli Participant, or a Consultant.



“Plan” or “Option Plan”	means this Share Option Plan, as may be amended from time to time.

“Retirement”	means the termination of a Participant's employment as a result of his or her reaching the earlier of (i) the age of retirement as defined by Law; or (ii) the age of retirement specified in the Participant’s employment agreement.

“Section 102”	means Section 102 of the Tax Ordinance.

“Section 102 Rules”	means the Income Tax Rules (Tax Relief for Issuance of Shares to Employees), 2003.

“Section 3(i)” or “Section 3(i) Rules”	means section 3(i) of the Israeli Tax Ordinance and the applicable rules thereto or under applicable regulations.

“Share(s)”	means an ordinary share of the Company, having a par value of NIS 0.01

“Tax Ordinance”	means the Israeli Income Tax Ordinance [New Version], 1961, as amended, and any regulations, rules, orders or procedures promulgated thereunder.

“Tax Track”	means one of the three tax tracks described under Section 102, specifically: (1) the “Capital Gains Track Through a Trustee”; (2) “Income Tax Track Through a Trustee”; or (3) the “Income Tax Track Without a Trustee”; each as defined in Sections 11.1-11.2 of this Plan, respectively.

“Tax Provision”	means, with respect to the Grant of Options, the provisions of one of the three Tax Tracks in Section 102, or the provisions of 3i.

“Term of the Options”	means, with respect to Granted but unexercised Options, the time period set forth in Section 9 below.

“Trustee”	means a Trustee appointed by the Company to hold in trust, Allocated Options and the Underlying Shares issued upon exercise of such Options, on behalf of Participants.

“Underlying Shares”	means Shares issued or to be issued upon exercise of Granted Options all in accordance with the Plan.

2.2 GENERAL

II.


III.	Without derogating from the meanings ascribed to the capitalized terms above, all singular references in this Plan shall include the plural and vice versa, and reference to one gender shall include the other, unless otherwise required by the context.


3.	SHARES AVAILABLE FOR OPTIONS

IV. The total number of Underlying Shares reserved for issuance under the Plan and any modification thereof, shall be determined from time to time by the Board of Directors of the

Company. Such number of Shares shall be subject to adjustment as required for the implementation of the provisions of the Plan, in accordance with Section 4 below.

V. In the event that Options Allocated under the Plan expire or otherwise terminate in accordance with the provisions of the Plan, such expired or terminated Options shall become available for future Grants and Allocations under the Plan.


4.	ADJUSTMENTS

In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, may (in its sole discretion) adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Option or Share Purchase Right. Upon the occurrence of any such adjustment, references in this Plan to Shares and Underlying Shares shall be construed to mean the Shares of the Company subject to the Plan as so determined by the Administrator, following such adjustment.

If the Change in Capitalization is the distribution of a cash dividend, the Company shall transfer to the Trustee the amount of dividend resulting from the Underlying Shares held by the Trustee for the benefit of Participants in accordance with the provisions of this Plan. The Trustee shall deduct all applicable taxes from the dividend amount and transfer the remaining dividend amount to such Participants.


5.	ADMINISTRATION OF THE PLAN

5.1 POWER

Subject to the Law, the Articles of Association of the Company, and any resolution to the contrary by the Company’s Board of Directors, the Administrator is authorized, in its sole and absolute discretion, to exercise all powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan; including, without limitation,


(A)	to determine:


(i)	the Participants in the Plan, the number of Options to be Granted for each Participant’s benefit and the Exercise Price (subject to the approval of the Board of Directors if such approval is required by Law);


(ii)	the time or times at which Options shall be Granted;


(iii)	whether, to what extent, and under what circumstances an Option may be settled, canceled, forfeited, exchanged, or surrendered;


(iv)	any terms and conditions in addition to those specified in the Plan under which an Option may be Granted; and


(v)	any measures, and to take actions, as deemed necessary or advisable for the administration and implementation of the Plan.


(B)	to interpret the provisions of the Plan and to take all actions resulting therefrom including without limitation;


(i)	subject to Section 7, to accelerate the date on which any Allocated Option under the Plan becomes exercisable;


(ii)	to waive or amend Plan provisions relating to exercise of Options, including exercise of Options after termination of employment, for any reason; and


(iii)	to amend any of the terms of the Plan, or any prior determinations of the Administrator;

5.2 LIMITATIONS

Notwithstanding the provisions of Section 5.1 above, no interpretations, determinations or actions of the Administrator shall contradict the provisions of applicable Law, and no waiver or amendment with respect to the Plan shall have a material adverse affect on any Participant's rights in connection with any Granted Option under the Plan without receiving the consent of such Participant.


6.	GRANT AND ALLOCATION OF OPTIONS

6.1 CONDITIONS FOR GRANT OF OPTIONS


VI.	Options may be Granted at any time after:


(A)	the grant has been approved by the necessary corporate bodies of the Company; and


(B)	all other approvals, consents or requirements necessary by Law have been received or met.

6.2 CONDITIONS FOR ALLOCATION OF OPTIONS


VII.	Options may be Allocated at any time after:


(A)	the Plan has been approved by the necessary corporate bodies of the Company; and


(B)	30 days after a request for approval of the Plan has been submitted for approval to the Israeli Income Tax Authorities pursuant to the requirements of the Tax Ordinance; and


(C)	all other approvals, consents or requirements necessary by Law have been received or met.

6.3 DATE OF GRANT OR ALLOCATION


(a)	The date on which Options shall be deemed Granted under the Plan shall be the date on which the Company shall notify the Participant in a Grant Letter that such Options have been Granted to the Participant (“Date of Grant”).


(b)	The date on which Options shall be deemed Allocated under the Plan shall be the date on which the Company shall notify the Trustee that such Options have been Allocated in the name of the Trustee on behalf of a Participant (“Date of Allocation”).


7.	EXERCISE OF OPTIONS

7.1 EXERCISE PRICE


VIII.	The Exercise Price per Underlying Share deliverable upon the exercise of an Option shall be determined by the Administrator. The Exercise Price shall be set forth in the Grant Letter.

7.2 VESTING SCHEDULE


IX.	Unless otherwise determined by the Administrator, all Options Granted on a certain date shall, subject to continued employment with or service to the Company or Affiliate by the Participant, become vested and exercisable in accordance with the following vesting schedule:


(A)	25% of the Options shall vest on the first anniversary of the Commencement Date.


(B)	1/3 of the remaining Options shall vest on each subsequent anniversary of the Commencement Date.


(C)	In accordance with the above, all Options shall become fully vested by the fourth anniversary of the Commencement Date.

7.3 MINIMUM EXERCISE


XI.	No exercise of Options by any Participant shall be for the lower of: (1) an aggregate Exercise Price of less than $100, or such other minimum sum determined by the Administrator, unless the exercise is of all of the Participant’s Options that are vested as of the date of exercise; or (2) a quantity of 1000 Options.

XII.

XIII. An Option may not be exercised for fractional shares.

XIV.


XV.	The exercise of a portion of the Options Granted shall not cause the expiration, termination or cancellation of the remaining unexercised Options held by the Trustee on behalf of the Participant.

XVI.

7.4 MANNER OF EXERCISE

An Option may be exercised by and upon the fulfillment of the following:


(A)	Notice of Exercise

The signing by the Participant, and delivery to both the Company (at its principal office) and the Trustee (if the Options are held by a Trustee), of an exercise notice form as prescribed by the Administrator, including but not limited to: (i) the identity of the Participant, (ii) the number of Options to be exercised, and (iii) the Exercise Price to be paid (the “Notice of Exercise”).


(B)	Exercise Price

The payment by the Participant to the Company, in such manner as shall be determined by the Administrator, of the Exercise Price with respect to all the Options exercised, as set forth in the Notice of Exercise.


(C)	Allocation of Shares

Upon the delivery of a duly signed Notice of Exercise and the payment to the Company of the Exercise Price with respect to all the Options specified therein, the Company shall issue the Underlying Shares to the Trustee (according to the applicable Holding Period) or to the Participant, as the case may be.


(D)	Expenses

All costs and expenses including broker fees and bank commissions, derived from the exercise of Options or Underlying Shares, shall be borne solely on the Participant.


8.	WAIVER OF OPTION RIGHTS

XVII. At any time prior to the expiration of any Granted (but unexercised) Option, a Participant may waive his rights to such Option by a written notice to the Company's principal office. Such notice shall specify the number of Options Granted, which the Participant waives, and shall be signed by the Participant.

XVIII. Upon receipt by the Company of a notice of waiver of such rights, such Options shall expire and shall become available for future Grants and Allocations under the Plan.


9.	TERM OF THE OPTIONS

XIX. Unless earlier terminated pursuant to the provisions of this Plan, all Granted but unexercised Options shall expire and cease to be exercisable at 5:00 p.m. Israel time on the 10 ^th anniversary of the Commencement Date of such Options.


10.	TERMINATION OF EMPLOYMENT

10.1 TERMINATION OF EMPLOYMENT

XX. If a Participant ceases to be an employee, director, officer or Consultant of the Company or Affiliate for any reason (“Termination of Employment”) other than death,

Retirement, Disability or Cause, then any vested but unexercised Options on the date of Termination of Employment (as shall be determined by the Company or Affiliate, in its sole discretion), Allocated on the Participant’s behalf (“Exercisable Options”) may be exercised, if not previously expired, not later than the earlier of (i) 90 days after the date of Termination of Employment; or (ii) the Term of the Options.

XXI. All other Granted Options for the benefit of Participant shall expire upon the date of Termination of Employment.

10.2 TERMINATION FOR CAUSE

In the event of Termination of Employment of a Participant for Cause, the Participant's right to exercise any unexercised Options, Granted to such Participant, whether vested or not on the date of Termination of Employment, shall cease as of such date of Termination of Employment, and the Options shall thereupon expire.

If subsequent to the Participant's Termination of Employment, but prior to the exercise of Options Granted to such Participant, the Administrator determines that either prior or subsequent to the Participant's Termination of Employment, the Participant engaged in conduct which would constitute Cause, then the Participant’s right to exercise the Options Granted to such Participant shall immediately cease upon such determination and the Options shall thereupon expire.

The determination by the Administrator as to the occurrence of Cause shall be final and conclusive for all purposes of this Plan.

10.3 TERMINATION BY REASON OF DEATH, RETIREMENT, OR DISABILITY

In the event of Termination of Employment of a Participant by reason of death, Retirement, or Disability, any vested but unexercised Options shall be exercisable in the case of death, by his or her estate, personal representative or beneficiary, or in the case of Retirement or Disability, by the Participant or his or her personal representative (as the case may be), until the earlier of (i) 180 days after the date of Termination of Employment; or (ii) the Term of the Options.

All other Granted Options for the benefit of Participant shall expire upon the date of Termination of Employment.

10.4 EXCEPTIONS

In special circumstances, pertaining to the Termination of Employment of a certain Participant, the Administrator may in its discretion decide to extend any of the periods stated above in Sections 10.1- 10.3.

10.5 TRANSFER OF EMPLOYMENT OR SERVICE

Subject to the receipt of appropriate approvals from the Israeli Tax Authorities, if applicable, a Participant’s right to Options or the exercise thereof that were Granted to him or her under this Plan, shall not be terminated or expire solely as a result of the fact that the Participant’s employment or service as an employee, officer, director or Consultant changes from the Company to an Affiliate or vice versa.


11.	OPTIONS AND TAX PROVISIONS

All Options under this Plan shall be Granted in accordance with one of the Tax Provisions as follows:


•	The Company may Grant Options to Israeli Participants in accordance with the provisions of Section 102 and the Rules.


•	The Company may Grant Options to Non-Qualified Israeli Participants in accordance with the provisions of Section 3(i).

11.1 TAX PROVISION SELECTION

XXII. The Company shall elect under which Tax Provision each Option is Granted in accordance with any applicable Law and its sole discretion – i.e. the Company shall elect if to Grant Options to Participants under one of the three Section 102 Tax Tracks, or under the provisions of Section 3i. The Company shall notify each Participant in the Grant Letter, under which Tax Provision the Options are Granted and, if applicable, under which Section 102 Tax Track, each Option is Granted.

11.2 SECTION 102 TRUSTEE TAX TRACKS

If the Company elects to Grant Options to Israeli Participants through (i) the Capital Gains Track Through a Trustee, or (ii) the Income Tax Track Through a Trustee, then, in accordance with the requirements of Section 102, the Company shall appoint a Trustee who will hold in trust on behalf of each Israeli Participant the Allocated Options and the Underlying Shares issued upon exercise of such Options in trust on behalf of each Israeli Participant.

XXIII. The Holding Period for the Options will be as follows:

XXIV. (A) The Capital Gains Tax Track Through a Trustee – if the Company elects to Allocate the Options according to the provisions of this track, then the Holding Period will be: 24 months from the date of Allocation; or such period as may be determined in any amendment of Section 102.

XXV. (B) Income Tax Track Through a Trustee – if the Company elects to Allocate Options according to the provisions of this track, then the Holding Period will be 12 months from the date of Allocation; or such period as may be determined in any amendment of Section 102.

Subject to Section 102 and the Rules, Israeli Participants shall not be able to receive from the Trustee, nor shall they be able to sell or dispose of Underlying Shares before the end of the applicable Holding Period. If a Participant sells or removes the Underlying Shares from the Trustee before the end of the applicable Holding Period (“Breach”), the Participant shall pay all applicable taxes imposed on such Breach by Section 7 of the Rules.

In the event of a distribution of rights, including an issuance of bonus shares, in connection with Options originally Allocated (the "Additional Rights"), all such Additional Rights shall be Allocated and/or issued to the Trustee for the benefit of Israeli Participants, and shall be held by the Trustee for the remainder of the Holding Period applicable to the Options originally Allocated. Such Additional Rights shall be treated in accordance with the provisions of the applicable Tax Track.

11.3 INCOME TAX TRACK WITHOUT A TRUSTEE

XXVI. If the Company elects to Grant Options to Israeli Participants according to the provisions of this track, then the Options will not be subject to a Holding Period. However, upon exercise of Options under this Tax Track, the Trustee shall hold such Underlying Shares for the benefit of the Israeli Participant in accordance with the provisions of Section 15 of this Plan.

11.4 CONCURRENT CONDITIONS

XXVII. The Holding Period of Section 102, if any, is in addition to the vesting period as specified in Section 7.2 of the Plan. The Holding Period and vesting period may run concurrently, but neither is a substitute for the other, and each are independent terms and conditions for Options Granted.

11.5 TRUST AGREEMENT

XXVIII. The terms and conditions applicable to the trust relating to the Tax Track selected by the Company, as appropriate, shall be set forth in an agreement signed by the Company and the Trustee (the “Trust Agreement”).


12.	TERM OF SHARES HELD IN TRUST

XXIX. No Underlying Shares or Additional Rights issued by the Company to the Trustee, shall be held by the Trustee on behalf of a Participant for a period longer than ten (10) years after the end of the Term of the Options. The Administrator shall instruct the Trustee as to the transfer of these Shares.


13.	RIGHTS AS A SHAREHOLDER

XXX. Unless otherwise specified in the Plan, a Participant shall not have any rights as a shareholder with respect to Shares issued under this Plan, until such time as the Shares shall be registered in the name of the Participant or in the name of the Trustee for the benefit of the Participant, as the case may be, in the Company’s register of shareholders.


14.	NO SPECIAL EMPLOYMENT RIGHTS

XXXI. Nothing contained in this Plan shall confer upon any Participant any right with respect to the continuation of employment by or service to the Company or Affiliate or to interfere in any way with the right of the Company or Affiliate, to terminate such employment or service or to increase or decrease the compensation of the Israeli Participant.

XXXII.

XXXIII.

XXXIV.


15.	RESTRICTIONS ON SALE OF OPTIONS AND SHARES

15.1 OPTIONS

XXXV. Options may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent.

15.2 SHARES

XXXVI. Unless otherwise determined by the Administrator, prior to the Company’s IPO, the Shares may not be sold assigned, transferred, pledged, hypothecated or otherwise disposed of, except as stated below in this Section 15. Unless otherwise determined by the Administrator, any Underlying Shares issued upon exercise of Options, Granted under any of the tax tracks detailed in Section 11 above, will be held by the Trustee until the earlier to occur of a Merger, as detailed in Section 15.3 below, or an IPO.

15.3 MERGERS

XXXVII. In the event of a Merger Transaction, then, the Administrator in its sole discretion, shall decide:

XXXVIII. (A) if and how the unvested Options shall be canceled, replaced or accelerated;

XXXIX. (B) if and how vested Options (including Options with respect to which the vesting period has been accelerated according to Section 15.3.(a) shall be exercised, replaced and/or sold by the Trustee or the Company (as the case may be) on the behalf of Israeli Participants; and

XL. (C) how Underlying Shares issued upon exercise of the Options and held by the Trustee on behalf of Israeli Participants shall be replaced and/or sold by the Trustee on behalf of the Israeli Participant.

15.4 ACCELERATION PROVISION

The Administrator, in its sole discretion, may decide to add a provision in certain Grant Letters, according to which in case of a Merger, all or some of the unvested Options, shall automatically accelerate.

15.5 LOCK UP

Notwithstanding the Holding Period, following the Company’s IPO, at the request of the underwriter, the Administrator may determine that the Underlying Shares issued pursuant to the exercise of Options may be subject to a lock-up period of 180 days, or such longer period of time as may be recommended by the Company’s Board of Directors, during which time Participants shall not be allowed to sell Shares.


16.	VOTING

Until consummation of the Company’s IPO, Shares issued to a Participant or to the Trustee for the benefit of a Participant, shall be voted by an irrevocable proxy assigned to Mr. Reuven Kitov, who has been appointed by the Company’s Board of Directors as a representative (the “Representative”).


(A)	The Company’s Board of Directors may, at its discretion, replace the Representative from time to time.

(B)

Shares subject to proxy shall be voted by the Representative on any issue or resolution brought before the shareholders of the Company in the same proportion as the vote of the other outstanding Shares of the Company (i.e. if 80% of the other outstanding Shares of the Company will be voted in favor of certain resolution, and 20% will be voted against, the Shares subject to proxy will be voted in the same manner).


(C)	Each Participant, upon execution of the irrevocable proxy specified above, undertakes to hold the Representative harmless from any and all claims related or connected to said proxy.

(D)

The Representative shall be indemnified and held harmless by the Company against any cost or expense (including attorneys’ fees) reasonably incurred by the Representative, or any liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the voting of the Shares subject to proxy, unless arising out of the Representative’s own fraud or gross negligence, to the extent permitted by applicable law. In the event the Representative shall have indemnification by virtue of other functions or services he or she performs for the Company or Affiliate (whether by agreement, insurance policy or decision of the appropriate corporate body(ies) of the Company and/or Affiliate) , this indemnification shall be in addition to any such other indemnification.


17.	TAX MATTERS

This Plan shall be governed by, and shall conform with and be interpreted so as to comply with, the requirements of the Ordinance and any written approval from any relevant Tax Authorities. All tax consequences under any applicable law (other than stamp duty) which may arise from the Grant or Allocation of Options, from the exercise thereof or from the holding or sale of Underlying Shares (or other securities issued under the Plan) by or on behalf of the Participant, shall be borne solely by the Participant. The Participant shall indemnify the Company and/or Affiliate, as the case may be, and hold them harmless, against and from any liability for any such tax or any penalty, interest or indexing.

If the Company elects to Allocate Options according to the provisions of the Income Tax Track Without a Trustee (Section 11.3 of this Plan), and if prior to the exercise of any and/or all of these Options, such Israeli Participant ceases to be an employee, director, or officer of the Company or Affiliate, the Israeli Participant shall deposit with the Company a guarantee or other security as required by law, in order to ensure the payment of applicable taxes upon the Exercise of such Options.


18.	WITHHOLDING TAXES

Whenever an amount with respect to withholding tax relating to Options Granted to a Participant and/or Underlying Shares issued upon the exercise thereof is due from the Participant and/or the Company and/or an Affiliate, the Company and/or an Affiliate shall have the right to demand from a Participant such amount sufficient to satisfy any applicable withholding tax requirements related thereto, and whenever Shares or any other non-cash assets are to be delivered pursuant to the exercise of an Option, or transferred thereafter, the Company and/or an Affiliate shall have the right to require the Participant to remit to the Company and/or to the Affiliate, or to the Trustee an amount in cash sufficient to satisfy any applicable withholding tax requirements related thereto. If such amount is not timely remitted, the Company and/or the Affiliate shall have the right to withhold or set-off (subject to Law) such Shares or any other non-cash assets pending payment by the Participant of such amounts.

XLI. With regard to Options Granted to Israeli Participants - until all taxes have been paid in accordance with Rule 7 of the Section 102 Rules, Options and/or Underlying Shares may not be

sold, transferred, assigned, pledged, encumbered, or otherwise willfully hypothecated or disposed of, and no power of attorney or deed of transfer, whether for immediate or future use may be validly given.

Notwithstanding the foregoing, the Options and/or Underlying Shares may be validly transferred in accordance with Section 20 below, provided that the transferee thereof shall be subject to the provisions of Section 102 and the Section 102 Rules as would have been applicable to the deceased Israeli Participant were he or she to have survived.


19.	NO TRANSFER OF OPTIONS

The Trustee shall not transfer Options to any third party, including a Participant, except in accordance with instructions received from the Administrator.


20.	TRANSFER OF RIGHTS UPON DEATH

No transfer of any right to an Option or Underlying Share issued upon the exercise thereof by will or by the laws of descent shall be effective to bind the Company unless the Company shall have been furnished with the following signed and notarized documents:


(A)	A written request for such transfer and a copy of the legal documents creating and confirming the right of the person acting with respect to the Participant’s estate and of the transferee;


(B)	A written consent by the transferee to pay any amounts in connection with the Options and Underlying Shares any payment due according to the provisions of the Plan and otherwise abide by all the terms of the Plan; and


(C)	any such other evidence as the Administrator may deem necessary to establish the right to the transfer of the Option or Underlying Share issued upon the exercise thereof and the validity of the transfer.


21.	NO RIGHT OF OTHERS TO OPTIONS

XLII. Subject to the provisions of the Plan, no person other than the Participant shall have any right with respect to Options Granted to the Participant’s under the Plan.


22.	EXPENSES AND RECEIPTS

XLIII. The expenses incurred in connection with the administration and implementation of the Plan (including any applicable stamp duty) shall be borne by the Company. Any proceeds received by the Company in connection with the exercise of any Option may be used for general corporate purposes.


23.	REQUIRED APPROVALS

XLIV. The Plan is subject to the receipt of all approvals required under the Ordinance, the Code and the Law.


24.	APPLICABLE LAW

XLV. This Plan and all documents delivered or executed by the Company or Affiliate in connection herewith shall be governed by, and construed and administered in accordance with the Law.


25.	TREATMENT OF PARTICIPANTS

XLVI. There is no obligation for uniformity of treatment of Participants.


26.	NO CONFLICTS

XLVII.In the event of any conflict between the terms of the Plan and the Grant Letter, the Plan shall prevail, unless the Grant Letter stated specifically that the conflicting provision in the Grant Letter shall prevail.

XLVIII.


27.	PARTICIPANT UNDERTAKINGS

XLIX. By entering into this Plan, the Participant shall (1) agree and acknowledge that he or she have received and read the Plan and the Grant Letter; (2) undertake all the provisions set forth in: Section 3i or Section 102 as applicable (including provisions regarding the applicable Tax Track that the Company has selected), the Plan, the Grant Letter and the Trust Agreement (if applicable); and (3) if the Options are Granted under Section 102, the Israeli Participant shall undertake that subject to the provisions of Section 102 and the Rules, he or she shall not to sell or release the Underlying Shares from trust before the end of the Holding Period (if any).

* * *

Exhibit 10.8

Tufin Software Technologies Ltd.

GLOBAL ADDENDUM- NON-ISRAELI AND NON-US TAXPAYERS

to the 2007 Israeli Share Option Plan

ADOPTED BY ITS BOARD OF DIRECTORS

ON December 28, 2011

Tufin Software Technologies Ltd

G LOBAL A DDENDUM – N ON -I SRAELI AND N ON -US T AXPAYERS

To 2007 ISRAELI SHARE OPTION PLAN


1.	Purpose.

(a) This addendum (the “Addendum”) is part of the 2007 Israeli Share Option Plan (the “Plan”) to Tufin Software Technologies, Ltd. (the “Company”) is effective as of Dec 28, 2012 (the “Effective Date”).

(b) The Addendum governs grants of Award by the Company to Eligible Participants who are not subject to taxation on their worldwide income in the State of Israel and/or in the United States of America.

(c) This Addendum applies with respect to an Award under the Plan. The purpose of this Addendum is to establish certain rules and limitations applicable to an Award that may be granted to Eligible Participants from time to time, in compliance with the Applicable Law (including securities law). Except as otherwise provided by this Addendum, all Awards made pursuant to this Addendum shall be governed by the terms of the Plan. This Addendum is applicable only to Awards made after the Effective Date.

(d) The provisions of the Addendum shall supersede and govern in the case of any inconsistency between the provisions of the Addendum and the provisions of the Plan, provided, however, that this Addendum shall not be construed to grant any rights not consistent with the terms of the Plan, unless specifically provided herein.

(e) The titles and headings of the sections in the Addendum are for convenience of reference only, and in the event of any conflict, the text of the Addendum, rather than such titles or headings, shall prevail.


2.	Definitions.

Capitalized terms not otherwise defined herein shall have the meaning assigned to them in the Plan. The following additional definitions will apply to Awards made pursuant to this Addendum:

“ Affiliate ” means (i) any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, provided each corporation in the unbroken chain (other than the Company) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain, and (ii) any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. The Board of Directors of the Company (the “Board”) shall have the authority to determine (i) the time or times at which the ownership tests are applied, and (ii) whether “Affiliate” includes entities other than corporations within the foregoing definition.

“ Applicable Law ” means the laws, statutes or regulation of any govermental authority of the State of Israel and the state in which the Eligible Participant resides or any other applicable law, as are in effect from time to time.

“ Award ” or “ Awards ” means, among others, a grant of Options under the Plan.

“ Eligible Participant ” means (i) selected employees, officers and directors of the Company or any parent or subsidiary of the Company and (ii) selected consultants, advisers and independent contractors of the Company or any parent or subsidiary of the Company, to whom Awards shall be granted, under the Plan and the Addendum, by the Administrator.

“ Underlying Shares ” means common shares of the Company issued or to be issued upon exercise of Awards in accordance with the Plan and the Addendum.


3.	Grant of Award.

(a) Every Award granted to an Eligible Participant shall be evidenced by a Grant Letter in such form as the Administrator shall approve from time to time, specifying the date in which the Awards have been granted, number of Shares that may be purchased pursuant to the Award, the time or times at which the Option shall become exercisable in whole or in part, the exercise price of such Options and such other terms and conditions as the Administrator shall approve.

(b) Awards may be granted at any time after the Plan and the Addendum have been approved by the necessary corpororate bodies of the Company, and all others approvals, consents or requirements necessary by the Applicable Law have been received or met.

(c) Nothing in the Plan and the Addendum shall be construed as an obligation of the company to grant the Awards under any specific tax track or the entitlement of the Eligible Participnat to any tax benefits in connection of the Awards under the Applicable Law.


4.	Transferability.

Each Award granted under the Addendum will not be transferable or assignable by the Eligible Participant, and may not be made subject to execution, attachment or similar procedures, other than by will or the laws of descent and distribution or as determined by the Administrator pursuant to the terms of any Award Agreement in accordance with the Applicable Law.


5.	Voting Rights.

Until the consummation of the Company’s IPO, Underlying Shares issued to the Eligible Participant shall be voted by an irrevocable proxy assigned to a representative who has been appointed by the Board as a representative or any other representative designated by the Board in accordance with Section 16 of the Plan.


6.	Tax Consequences.

Any tax consequences (including any stamp duty) arising from the grant or exercise of any Award, from the issuance of the Underlying Shares by the Company, from the sale of the Underlying Shares by the Eligible Participant or from any other event or act (of the Company, and/or its Affiliates, and the Eligible Participant), hereunder, shall be borne solely by the Eligible Participant. The Company and/or its Affiliates or any other person on their behalf, shall be entitled to withhold taxes according to the requirements under the Applicable Law including withholding taxes at source. Furthermore, the Eligible Participant shall agree to indemnify the Company and/or its Affiliates or any other person on their behalf and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Eligible Participant. The Company or any of its Affiliates or any other person on their behalf may make such provisions and take such steps as it may deem necessary or appropriate for the withholding of all taxes required by the Applicable Law to be withheld with respect to Awards granted under the Plan and the exercise or vesting or sale thereof, including, but not limited,

to (i) deducting the amount so required to be withheld from any other amount then or thereafter payable to an Eligible Participant, and/or (ii) requiring an Eligible Participant to pay to the Company or any of its Affiliates or any other person on their behalf the amount so required to be withheld as a condition of the issuance, delivery, distribution or release of any Underlying Shares, and/or (iii) by causing the exercise of Award and/or the sale of Underlying Shares held by or on behalf of an Eligible Participant to cover such liability, up to the amount required to satisfy minimum statuary withholding requirements. In addition, the Eligible Participant will be required to pay any amount that exceeds the tax to be withheld and remitted to the tax authorities, pursuant to the Applicable Law.


7.	Rights and Privileges as a Shareholder.

Except as otherwise specifically provided in the Plan and the Addendum, no Eligible Participant shall be entitled to the rights and privileges of share ownership in respect of the Underlying Shares that are subject to Awards hereunder until such shares have been issued to that person.


8.	Governing Law and Jurisdiction.

The Plan shall be governed by and construed in accordance with the internal laws of the State of Israel without reference to the principles or conflicts of laws thereof.


9.	Compliance with the Applicable Law.

The obligation of the Company to deliver Underlying Shares upon vesting and/or exercise of any Award shall be subject to the Applicable Law and to such approvals by governmental agencies as may be required.


10.	Securities Law.

Without derogation from any provisions of the Plan and the Addendum, all grants pursuant to this Addendum shall be subject to compliance with the applicable Securities Law of the State of Israel and the rules and regulations promulgated thereunder.

* * *

Exhibit 10.9

TUFIN SOFTWARE TECHNOLOGIES LTD.

TUFIN SOFTWARE TECHNOLOGIES LTD. 2008 U.S. STOCK PLAN

SECTION 1. ESTABLISHMENT AND PURPOSE .

The purpose of the Plan is to offer selected persons an opportunity to acquire a proprietary interest in the success of the Company, or to increase such interest, by purchasing Shares of the Company’s Stock. The Plan provides both for the direct award or sale of Shares and for the grant of Options to purchase Shares. Options granted under the Plan may include Nonstatutory Options as well as ISOs intended to qualify under Section 422 of the Code.

This Plan is intended (i) for Employees and Outside Directors of, and Consultants to, the US Subsidiary, as well as any other Subsidiaries or Parent of the Company or the US Subsidiary, and (ii) for those other Employees and Outside Directors of, and Consultants to, the Company itself for whom a grant of Options or an award of Shares is more appropriate under this Plan than under the Israeli Plan.

Capitalized terms are defined in Section 13.

SECTION 2. ADMINISTRATION .

(a) Committees of the Board of Directors. The Plan may be administered by one or more Committees. Each Committee shall consist of one or more members of the Board of Directors who have been appointed by the Board of Directors. Each Committee shall have such authority and be responsible for such functions as the Board of Directors has assigned to it. If no Committee has been appointed, the entire Board of Directors shall administer the Plan. Any reference to the Board of Directors in the Plan shall be construed as a reference to the Committee (if any) to whom the Board of Directors has assigned a particular function.

(b) Authority of the Board of Directors. Subject to the provisions of the Plan, the Board of Directors shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the Plan. All decisions, interpretations and other actions of the Board of Directors shall be final and binding on all Purchasers, all Optionees and all persons deriving their rights from a Purchaser or Optionee.

SECTION 3. ELIGIBILITY .

(a) General Rule . Only Employees, Outside Directors and Consultants shall be eligible for the grant of Nonstatutory Options or the direct award or sale of Shares. Only Employees shall be eligible for the grant of ISOs.

(b) Ten‑Percent Stockholders. A person who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries shall not be eligible for the grant of an ISO unless (i) the Exercise Price is at least 110% of the Fair Market Value of a Share on the date of grant and (ii) such ISO by its terms is not exercisable after the expiration of five years from the date of grant. For purposes of this Subsection (b), in determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied.

SECTION 4. STOCK SUBJECT TO PLAN .

(a) Basic Limitation. Not more than 600,000 Shares may be issued under the Plan. All of these Shares may be issued upon the exercise of Options. The number of Shares that are subject to Options or other rights outstanding at any time under the Plan shall not exceed the number of Shares that then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. Shares offered under the Plan may be authorized but unissued Shares or treasury Shares.

(b) Additional Shares . In the event that Shares previously issued under the Plan are reacquired by the Company, to the extent permitted under applicable law, such Shares shall be added to the number of Shares then available for issuance under the Plan. In the event that an outstanding Option or other right for any reason expires or is canceled, the Shares allocable to the unexercised portion of such Option or other right shall be added to the number of Shares then available for issuance under the Plan.

SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES .

(a) Stock Purchase Agreement . Each award or sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser and the Company. Such award or sale shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Stock Purchase Agreement. The provisions of the various Stock Purchase Agreements entered into under the Plan need not be identical.

(b) Duration of Offers and Nontransferability of Rights. Any right to acquire Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Purchaser within 30 days after the grant of such right was communicated to the Purchaser by the Company. Such right shall not be transferable and shall be exercisable only by the Purchaser to whom such right was granted.

(c) Purchase Price . The Purchase Price of Shares to be offered under the Plan, if newly issued, shall not be less than the par value or nominal value of such Shares. Subject to the preceding sentence, the Board of Directors shall determine the Purchase Price at its sole discretion. The Purchase Price shall be payable in a form described in Section 7.

(d) Withholding Taxes. As a condition to the purchase of Shares, the Purchaser shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such purchase.

(e) Restrictions on Transfer of Shares. Any Shares awarded or sold under the Plan shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as detailed in the Company’s Articles of Association then in effect. Any Shares awarded or sold under the Plan shall also be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine which shall be set forth in the applicable Stock Purchase Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. Notwithstanding anything to the contrary in the Company’s Articles of Association, no Purchaser shall have a right of first refusal in relation to any sale of Stock by the Company or by any person. A Stock Purchase Agreement may provide for accelerated vesting in the event of the Purchaser’s death, disability or retirement or other events.

SECTION 6. TERMS AND CONDITIONS OF OPTIONS .

(a) Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.

(b) Number of Shares. Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 8. The Stock Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option.

(c) Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an Option shall not be less than 100% of the Fair Market Value of a Share on the date of grant, and a higher percentage may be required by Section 3(b). The Exercise Price of a Nonstatutory Option shall not be less than the par value or nominal value of a Share on the date of grant. Subject to the preceding two sentences, the Exercise Price under an Option shall be determined by the Board of Directors at its sole discretion. The Exercise Price shall be payable in a form described in Section 7.

(d) Special Rule for Incentive Options . Consistent with Section 422(d) of the Code and any regulations, notices or other official pronouncements of general applicability, to the extent the aggregate Fair Market Value (as of the time the Option is granted) of the Shares of Stock with respect to which ISOs are exercisable for the first time by an Optionee during any calendar year (under all plans of his employer corporation and its Parent and Subsidiary corporations) exceeds $100,000, such Options shall not be treated as ISO’s. Nothing in this special rule shall be construed

as limiting the exercisability of any Option, unless the Stock Option Agreement expressly provides for such a limitation.

(e) Exercisability . Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable. No Option shall be exercisable unless the Optionee has delivered an executed copy of the Stock Option Agreement to the Company. The Board of Directors shall determine the exercisability provisions of any Stock Option Agreement at its sole discretion.

(f) Term . The Stock Option Agreement shall specify the term of the Option. The term shall not exceed 10 years from the date of grant, and in the case of an ISO a shorter term may be required by Section 3(b). Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine when an Option is to expire. A Stock Option Agreement may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s Service or death.

(g) Restrictions on Transfer of Shares. Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as set forth in the Company’s Articles of Association then in effect. Any Shares issued upon exercise of an Option shall also be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine which shall be set forth in the applicable Stock Option Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. Notwithstanding anything to the contrary in the Company’s Articles of Association, no Optionee shall have a right of first refusal in relation to any sale of Stock by the Company or by any person.

(h) Transferability of Options. An Option shall be transferable by the Optionee only by (i) a beneficiary designation, (ii) a will or (iii) the laws of descent and distribution, except as provided in the next sentence. If the applicable Stock Option Agreement so provides, a Nonstatutory Option shall also be transferable by gift or domestic relations order to a Family Member of the Optionee. An ISO may be exercised during the lifetime of the Optionee only by the Optionee or by the Optionee’s guardian or legal representative.

(i) Withholding Taxes . As a condition to the exercise of an Option, the Optionee shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise. The Optionee shall also make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option.

(j) No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by the Optionee’s Option nor shall they be deemed to be a class of shareholders or creditors of the Company for purpose of the operation of the Israeli Companies Law or any applicable law until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the

terms of such Option and the registration of the Optionee as a holder of such Shares in the Company’s register of members.

(k) Modification, Extension and Assumption of Options. Within the limitations of the Plan, the Board of Directors may modify, extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or another issuer) in return for the grant of new Options for the same or a different number of Shares and at the same or a different Exercise Price. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair the Optionee’s rights or increase the Optionee’s obligations under such Option.

SECTION 7. PAYMENT FOR SHARES .

(a) General Rule. The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as otherwise provided in this Section 7.

(b) Surrender of Stock. At the discretion of the Board of Directors, all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value on the date when the Option is exercised. The Optionee shall not surrender, or attest to the ownership of, Shares in payment of the Exercise Price if such action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to the Option for financial reporting purposes.

(c) Services Rendered. At the discretion of the Board of Directors, Shares may be awarded under the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to the award.

(d) Promissory Note. Subject to applicable law, and at the discretion of the Board of Directors, all or a portion of the Exercise Price or Purchase Price (as the case may be) of Shares issued under the Plan may be paid with a full-recourse promissory note. The Shares shall be pledged as security for payment of the principal amount of the promissory note and interest thereon. The interest rate payable under the terms of the promissory note shall not be less than the minimum rate (if any) required to avoid (i) the imputation of additional interest under the Code or other applicable law and (ii) the recognition of compensation expense (or additional compensation expense) with respect to the Option for financial reporting purposes. Subject to the foregoing, the Board of Directors (at its sole discretion) shall specify the term, interest rate, amortization requirements (if any) and other provisions of such note.

(e) Exercise/Sale. To the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes.

(f) Exercise/Pledge. To the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes.

(g) Other Forms of Payment. At the discretion of the Board of Directors, the Purchase Price or Exercise Price of Shares issued under the Plan may be paid in any other form permitted by applicable law.

SECTION 8. ADJUSTMENT OF SHARES .

(a) General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares or a combination or consolidation of the outstanding Stock into a lesser number of Shares, corresponding adjustments shall automatically be made in each of (i) the number of Shares available for future grants under Section 4, (ii) the number of Shares covered by each outstanding Option and (iii) the Exercise Price under each outstanding Option. In the event of a declaration of an extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Stock, a recapitalization, a spin-off, a reclassification or a similar occurrence, the Board of Directors at its sole discretion may make appropriate adjustments in one or more of (i) the number of Shares available for future grants under Section 4, (ii) the number of Shares covered by each outstanding Option or (iii) the Exercise Price under each outstanding Option.

(b) Mergers and Consolidations. In the event that the Company is a party to a merger, consolidation, exchange of shares, sale of all or substantially all of its assets or like event (each being a “Transaction”), all outstanding Options shall be subject to the Transaction agreement. Such agreement shall provide for one or more of the following:

(i) The continuation of such outstanding Options by the Company (if the Company is the surviving corporation).

(ii) The assumption of such outstanding Options by the surviving corporation or its parent in a manner that complies with Section 424(a) of the Code (whether or not such Options are ISOs).

(iii) The substitution by the surviving corporation or its parent of new options for such outstanding Options in a manner that complies with Section 424(a) of the Code (whether or not such Options are ISOs).

(iv) The cancellation of such outstanding Options without the payment of any consideration.

Notwithstanding the foregoing, the Board of Directors of the Company may, but shall not be required to, include in any Stock Option Grant provisions relating to the treatment of an Optionee’s Options

following a Transaction and/or a provision according to which in the case of a Transaction, all or some of the unvested Options shall automatically accelerate and become exercisable.

SECTION 9. SECURITIES LAW REQUIREMENTS .

Shares shall not be issued under the Plan unless the issuance and delivery of such Shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the laws of the State of Israel, the U.S. Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded.

SECTION 10. NO RETENTION RIGHTS .

Nothing in the Plan or in any right or Option granted under the Plan shall confer upon the Purchaser or Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Purchaser or Optionee) or of the Purchaser or Optionee, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause.

SECTION 11. DURATION AND AMENDMENTS .

(a) Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its adoption by the Board of Directors, subject to the approval of the Company’s stockholders. If the stockholders fail to approve the Plan within 12 months after its adoption by the Board of Directors, then any grants, exercises or sales that have already occurred under the Plan shall be rescinded and no additional grants, exercises or sales shall thereafter be made under the Plan. The Plan shall terminate automatically 10 years after the later of (i) its adoption by the Board of Directors or (ii) the most recent increase in the number of Shares reserved under Section 4 that was approved by the Company’s stockholders. The Plan may be terminated on any earlier date pursuant to Subsection (b) below.

(b) Right to Amend or Terminate the Plan. The Board of Directors may amend, suspend or terminate the Plan at any time and for any reason; provided, however, that any amendment of the Plan shall be subject to the approval of the Company’s stockholders if it (i) increases the number of Shares available for issuance under the Plan (except as provided in Section 8) or (ii) materially changes the class of persons who are eligible for the grant of ISOs. Stockholder approval shall not be required for any other amendment of the Plan. If the stockholders fail to approve an increase in the number of Shares reserved under Section 4 within 12 months after its adoption by the Board of Directors, then any grants, exercises or sales that have already occurred in reliance on such increase shall be rescinded and no additional grants, exercises or sales shall thereafter be made in reliance on such increase.

(c) Effect of Amendment or Termination. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option granted prior to such

termination. The termination of the Plan, or any amendment thereof, shall not affect any Share previously issued or any Option previously granted under the Plan.

SECTION 12. VOTING.

(a) Until consummation of the Company’s IPO, Shares issued either pursuant to Section 5 or Section 6 hereof shall be voted by an irrevocable proxy assigned to Mr. Reuven Kitov, who has been appointed by the Company’s Board of Directors as a representative (the “Representative”).

(i) The Company’s Board of Directors may, at its discretion, replace the Representative from time to time.

(ii) Shares subject to proxy shall be voted by the Representative on any issue or resolution brought before the shareholders of the Company in the same proportion as the vote of the other outstanding Shares of the Company (i.e. if 80% of the other outstanding Shares of the Company will be voted in favor of certain resolution, and 20% will be voted against, the Shares subject to proxy will be voted in the same manner).

(iii) Any Purchaser or Optionee, by execution of a Stock Purchase Agreement or Stock Option Agreement, which shall be deemed to include the irrevocable proxy specified above, shall undertake to hold the Representative harmless from any and all claims related or connected to such proxy.

(iv) If required by the Company, a Purchaser or Optionee shall execute an additional form of irrevocable proxy each time the Purchaser or Optionee acquires Shares pursuant to the relevant Stock Purchase Agreement or Stock Option Agreement, in form reasonably satisfactory to the Company, as a condition of receiving Shares in accordance with such agreements.

(v) The Representative shall be indemnified and held harmless by the Company against any cost or expense (including attorneys’ fees) reasonably incurred by the Representative, or any liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the voting of the Shares subject to proxy, unless arising out of the Representative’s own fraud or gross negligence, to the extent permitted by applicable law. In the event the Representative shall have indemnification by virtue of other functions or services he or she performs for the Company or Affiliate (whether by agreement, insurance policy or decision of the appropriate corporate body(ies) of the Company and/or Affiliate), this indemnification shall be in addition to any such other indemnification.

SECTION 13. DEFINITIONS

(a) “ Affiliate ” means a present or future company that either (i) Controls Tufin Software Technologies Ltd. or is Controlled by Tufin Software Technologies Ltd.; or (ii) is Controlled by the same person or entity that Controls Tufin Software Technologies Ltd.

(b) “ Board of Directors ” shall mean the Board of Directors of the Company, as constituted from time to time.

(d) “ Committee ” shall mean a committee of the Board of Directors, as described in Section 2(a).

(e) “ Company ” shall mean Tufin Software Technologies Ltd., an Israeli corporation.

(f) “ Consultant ” shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding Employees and Outside Directors.

(g) “ Control ” or “ Controlled ” shall have the meaning ascribed thereto in Section 102 of the Israeli Income Tax Ordinance [New Version], 1961, as amended, and any regulations, rules, orders or procedures promulgated thereunder.

(h) “ Employee ” shall mean any individual who is a common‑law employee of the Company, a Parent or a Subsidiary.

(i) “ Exercise Price ” shall mean the amount for which one Share may be purchased upon exercise of an Option, as specified by the Board of Directors in the applicable Stock Option Agreement.

(j) “ Fair Market Value ” shall mean the fair market value of a Share, as determined by the Board of Directors in good faith. Such determination shall be conclusive and binding on all persons.

(k) “ Family Member ” shall mean (i) any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, (ii) any person sharing the Optionee’s household (other than a tenant or employee), (iii) a trust in which persons described in Clause (i) or (ii) have more than 50% of the beneficial interest, (iv) a foundation in which persons described in Clause (i) or (ii) or the Optionee control the management of assets and (v) any other entity in which persons described in Clause (i) or (ii) or the Optionee own more than 50% of the voting interests.

(l) “ IPO ” shall mean the initial public offering of shares of the Company and the listing of such shares for trading on any recognized stock exchange or over-the-counter or computerized securities trading system.

(m) “ ISO ” shall mean an employee incentive stock option described in Section 422(b) of the Code.

(n) “ Israeli Plan ” shall mean the Company’s 2007 Israeli Share Option Plan, as amended from time to time.

(o) “ Nonstatutory Option ” shall mean a stock option not described in Sections 422(b) or 423(b) of the Code.

(p) “ Option ” shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares.

(q) “ Optionee ” shall mean a person who holds an Option.

(r) “ Outside Director ” shall mean a member of the Board of Directors who is not an Employee.

(s) “ Parent ” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

(t) “ Plan ” shall mean this Tufin Software Technologies Ltd. 2008 U.S. Stock Plan.

(u) “ Purchase Price ” shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Board of Directors.

(v) “ Purchaser ” shall mean a person to whom the Board of Directors has offered the right to acquire Shares under the Plan (other than upon exercise of an Option).

(w) “ Service ” shall mean service as an Employee, Outside Director or Consultant.

(x) “ Share ” shall mean one share of Stock, as adjusted in accordance with Section 8 (if applicable).

(y) “ Stock ” shall mean the Ordinary Shares of the Company, with a nominal value of NIS 0.01 per Share.

(z) “ Stock Option Agreement ” shall mean the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to the Optionee’s Option.

(aa) “ Stock Purchase Agreement ” shall mean the agreement between the Company and a Purchaser who acquires Shares under the Plan that contains the terms, conditions and restrictions pertaining to the acquisition of such Shares.

(bb) “ Subsidiary ” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

(cc) “US Subsidiary” shall mean Tufin Software North America, Inc., a Delaware corporation that is currently a wholly-owned Subsidiary of the Company.

Exhibit 10.10

__________________________________

TUFIN SOFTWARE TECHNOLOGIES LTD

2018 EQUITY-BASED INCENTIVE PLAN

A PPROVED B Y B OARD O N : April 9 th , 2018


1.	PURPOSE; TYPES OF AWARDS; CONSTRUCTION.

1.1

Purpose. The purpose of this 2018 Equity-Based Incentive Plan (as may be amended, the "Plan") is to afford an incentive to eligible employees, directors, officers, consultants, advisors, and any other person or entity, who are United States citizens or who are resident aliens of the United States of America for United States federal income tax purposes, whose services are considered valuable to T UFIN S OFTWARE T ECHNOLOGIES L TD . an Israeli company (the "Company"), or any Affiliate of the Company, which now exists or hereafter is organized or acquired by the Company, to increase their efforts on behalf of the Company or an Affiliate and to promote the success of the Company's business, by providing such Grantees with opportunities to acquire a proprietary interest in the Company by the grant of Awards pursuant to the Plan.


1.2	Types of Grants. The Plan is intended to enable the Company to issue Nonqualified Stock Options and Incentive Stock Options under the provisions of sections 7 or 8 of this Plan.


1.3	Construction. To the extent any provision herein conflict with the conditions of any relevant tax law or regulation which are relied upon for tax relief in respect of a particular Award to a Grantee, the provisions of such law or regulation shall prevail over those of the Plan, and the Committee is empowered hereunder to interpret and enforce the said prevailing provisions.


2.	DEFINITIONS.

2.1

Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation." Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth therein or herein), (ii) references to any law, constitution, statute, treaty, regulation, rule or ordinance, including any section or other part thereof shall refer to it as amended from time to time and shall include any successor thereof, (iii) reference to a person shall means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof, (iv) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Plan in its entirety and not to any particular provision hereof and (v) all references herein to Sections shall be construed to refer to Sections of this Plan.


2.2	Defined Terms. The following terms shall have the meanings ascribed to them in this Section 2:


2.2.1	"Affiliate" means a present or future company that either (i) Controls the Company or is Controlled by the Company, or (ii) is Controlled by the same person or entity that Controls the Company.


2.2.2	"Applicable Law" shall mean any applicable law, rule, regulation, statute, pronouncement, policy, interpretation, judgment, order or decree of any federal, provincial, state or local governmental, regulatory or adjudicative authority or agency, of any jurisdiction, and the rules and regulations of any stock exchange or trading system on which the Shares are then traded or listed.


2.2.3	"Award" shall mean any Option and any Share issued pursuant to the exercise thereof.


2.2.4	"Board" shall mean the Board of Directors of the Company.


2.2.5	"Code" shall mean the United States Internal Revenue Code of 1986, as amended.


2.2.6	"Committee" shall mean a committee established by the Board to administer the Plan, subject to Section 3.1; the Compensation Committee or the Audit Committee of the Company may fulfill this role.


2.2.7	"Companies Law" shall mean the Israel Companies Law-1999 and the regulations promulgated thereunder, all as amended from time to time.


2.2.8	"Control" (including the terms controlling, controlled by and under common control with ) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

2.2.9

"Disability" shall mean (i) the inability of a Grantee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, as determined by a medical doctor satisfactory to the Committee or (ii) if applicable, a "permanent and total disability" as defined in Section 22(e)(3) of the Code, or Section 409A(a)(2)(c)(i) of the Code, as amended from time to time.


2.2.10	"Employee" shall mean a person who is employed by the Company or any of its Parent or a Subsidiary as of the date of grant of an Option, and who is an “employee” for the purposes of Section 422 of the Code. However, the provision of services solely as a director, or payment of a fee for such service, shall not cause the Director to be considered an “Employee” for the purposes of the Plan.


2.2.11	"Exercise Period" shall mean the period, commencing on the date of grant of an Option, during which an Option shall be exercisable, subject to any vesting provisions thereof and the termination provisions hereof.


2.2.12	"Exercise Price" shall mean the exercise price for each Share covered by an Option, which in any event shall not be less than such minimum exercise price as determined under Applicable Law and/or by a competent authority.

2.2.13

"Fair Market Value" per Share as of a particular date shall mean: (i) if the Shares are listed on any established stock exchange or a national market system, including without limitation the Tel-Aviv Stock Exchange Ltd., and the NASDAQ Stock Market, the average closing sales price for such shares (or the closing bid, if no sales were reported), as quoted on such exchange or system over the thirty (30) day calendar period preceding the subject date (utilizing all trading days during such 30 calendar day period), as reported in The Wall Street Journal or such other source as the Committee deems reliable; (ii) if the Shares are then quoted in an over-the-counter market, the average of the closing bid and asked prices for the Shares in that over-the-counter market during the thirty (30) day calendar period preceding the subject date; (iii) if the Shares are not then listed on a securities exchange or quoted in an over-the-counter market, such value as the Committee, in its sole discretion, shall determine, with full authority to determine the method for making such determination, and which determination shall be conclusive and binding on all parties, and shall be made after such consultations with outside legal, accounting and other experts as the Committee may deem advisable; provided, however, that with respect to Nonqualified Stock Options, the Fair Market Value of the Shares shall be determined in a manner that satisfies the applicable requirements of Section 409A of the Code, and with respect to Incentive Stock Options, the Fair Market Value shall be determined in a manner that satisfies the applicable requirements of Section 422 of the Code, subject to Code Section 422(c)(7). The Committee shall maintain a written record of its method of determining such value. If the Shares are listed or quoted on more than one established stock exchange or over-the- counter market, the Committee shall determine the principal such exchange or market and utilize the price of the Shares on that exchange or market (determined as per the method described in clauses (i) or (ii) above, as applicable) for the purpose of determining Fair Market Value.


2.2.14	"Grantee" shall mean an employee, director, officer, consultant, advisor, and any other person or entity who provides with services to the Company or to any Affiliate who was granted an Award under the Plan, and is a United States citizen or who is a resident alien of the United States of America for United States federal income tax purposes.


2.2.15	"Incentive Stock Options" means Options granted in accordance with the provisions of section 422 of the Code.


2.2.16	"Non-Employee" shall mean a Grantee who is not an Employee.


2.2.17	"Nonqualified Stock Option" shall mean any Option granted to a Grantee, which Option is not designated as, or does not meet the conditions for, an Incentive Stock Option.


2.2.18	"Options" shall mean all options to purchase Shares granted as Incentive Stock Options and Non- Qualified Stock Options.

2.2.19

"Parent" shall mean any company (other than the Company), which now exists or is hereafter organized, (i) in an unbroken chain of companies ending with the Company if, at the time of granting an Award, each of the companies (other than the Company) owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other companies in such chain, or (ii) if applicable, as defined in Section 424(e) of the Code.


2.2.20	"Retirement" shall mean a Grantee's retirement pursuant to applicable law or in accordance with the terms of any tax-qualified retirement plan maintained by the Company or any of its affiliates in which the Grantee participates.


2.2.21	"Securities Act" shall mean the U.S. Securities Act of 1933, as amended.


2.2.22	"Shares" shall mean Ordinary Shares of the Company at par value of NIS 0.01 per share, such other securities as may be substituted for such Share as set forth in this Plan, or shares of such other class of shares of the Company as shall be designated by the Board in respect of the relevant Award.

2.2.23

"Subsidiary" shall mean any company (other than the Company), which now exists or is hereafter organized or acquired by the Company, (i) in an unbroken chain of companies beginning with the Company if, at the time of granting an Award, each of the companies other than the last company in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other companies in such chain, or (ii) if applicable, as defined in Section 424(f) of the Code.


2.2.24	"Ten Percent Shareholder" shall mean a Grantee who, at the time an Option is granted, owns shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or any Parent or Subsidiary, within the meaning of Section 422 of the Code.


3.	ADMINISTRATION.

3.1

To the extent permitted under Applicable Law and the Memorandum of Association, and any other governing document of the Company, the Plan shall be administered by the Committee. In the event that the Board does not create a committee to administer the Plan, the Plan shall be administered by the Board in its entirety. In the event that an action necessary for the administration of the Plan is required under law to be taken by the Board, then such action shall be so taken by the Board. In any such event, all references herein to the Committee shall be construed as references to the Board.

3.2

The Committee shall consist of two or more directors of the Company, as determined by the Board. The Board shall appoint the members of the Committee, it may from time to time remove members from, or add members to, the Committee, and it shall fill vacancies on the Committee however caused, provided that the composition of the Committee shall at all times be in compliance with any mandatory requirements of Applicable Law. The Committee may select one of its members as its Chairman and shall hold its meetings at such times and places as it shall determine. The Committee may appoint a Secretary, who shall keep records of its meetings and shall make such

rules and regulations for the conduct of its business, as it shall deem advisable and subject to requirements of Applicable Law.

3.3

Subject to the terms and conditions of this Plan and any mandatory provisions of Applicable Law, and in addition to the Committee's powers contained elsewhere in this Plan, the Committee shall have full authority in its discretion, from time to time and at any time, to determine any of the following, or to recommend to the Board any of the following if it is not authorized to take such action according to Applicable Law:


(i)	the identity of eligible Grantees;


(ii)	grants of Awards and setting the terms and provisions of Option Agreements (which need not be identical) and any other agreements or instruments under which Awards are made, including, but not limited to, the number of Shares underlying each Award;


(iii)	the time or times at which Awards shall be granted;


(iv)	the vesting schedule, the vesting milestones (if applicable), the acceleration thereof and conditions on which Awards may be exercised;


(v)	the Exercise Price;


(vi)	the interpretation of the Plan;


(vii)	prescription, amendment and rescission of rules and regulations relating to and for carrying out the Plan, as it may deem appropriate;


(viii)	the Fair Market Value of the Shares; and


(ix)	any other matter which is necessary or desirable for, or incidental to, the administration of the Plan and any Award thereunder.


3.4	Grants of Awards shall be made pursuant to written notice to Grantees setting forth the terms of the Award. Such notice shall designate the type of Award and the applicable tax regime pursuant to which such Awards are granted.


3.5	Subject to the mandatory provisions of Applicable Law, the grant of any Award, whether by the Committee or the Board, shall be deemed to include an authorization of the issuance of Shares upon the due exercise thereof.

3.6

The authority granted hereunder includes the authority to modify Awards to eligible individuals who are foreign nationals or are individuals who are employed outside Israel to recognize differences in local law, tax policy or custom, in order to effectuate the purposes of the Plan but without amending the Plan. The Committee shall have the authority to grant, in its discretion, to the holder of an outstanding Award, in exchange for the surrender and cancellation of such Award, a new Award having an Exercise Price lower than that provided in the Award so surrendered and canceled and containing such other terms and conditions as the Committee may prescribe in accordance with the provisions of the Plan or to set a new Exercise Price for the same Award lower than that previously provided in the Award, provided that in any event the exercise price shall not be less than such minimum exercise price as determined

under Applicable Law and/or by a competent authority. All decisions, determination and interpretations of the Committee shall be final and binding on all Grantees of any Awards under this Plan, unless otherwise determined by the Board. No member of the Committee shall be liable for any action taken or determination made in good faith with respect to the Plan or any Award granted hereunder.


4.	ELIGIBILITY.

4.1

Awards may be granted to Grantees of the Company or any Affiliate thereof, taking into account the qualification under each tax regime pursuant to which such Awards are granted. A person who has been granted an Award hereunder may be granted additional Awards, if the Committee shall so determine, subject to the limitations herein. In determining the persons to whom Awards shall be granted and the number of Shares to be covered by each Award, the Committee shall take into account the duties of the respective persons, their present and potential contributions to the success of the Company and such other factors as the Committee shall deem relevant in connection with accomplishing the purpose of the Plan.


5.	SHARES.

The initial number of Shares reserved for the grant of Awards under the Plan shall be 350,000 Ordinary Shares at a nominal value of NIS 0.01 each. Any Share underlying an Award granted hereunder which has expired, or was cancelled or terminated or forfeited for any reason without having been exercised, shall be automatically, and without any further action on the part of the Company or any Grantee, returned to the "pool" of reserved Shares hereunder and shall again be available for grant for the purposes of this Plan (unless this Plan shall have been terminated) or unless the Board determines otherwise. Notwithstanding the other provisions of this Section 5, the Board may, subject to any other approvals required under any Applicable Law, increase or decrease the number of Shares to be reserved under the Plan. Such Shares may, in whole or in part, be authorized but unissued Shares or Shares that shall have been or may be reacquired by the Company (to the extent permitted pursuant to the Companies Law). Any Shares that are not subject to outstanding Awards at the termination of the Plan shall cease to be reserved for the purpose of the Plan, but until termination of the Plan, the Company shall at all times reserve a sufficient number of Shares to meet the requirements of the Plan.


6.	TERMS AND CONDITIONS OF OPTIONS.

Each Option granted pursuant to the Plan shall be evidenced by a written agreement between the Company and the Grantee or a written notice delivered by the Company and accepted by the Grantee (an "Option Agreement"), in such form and containing such terms and conditions as the Committee shall from time to time approve, which Option Agreement shall comply with and be subject to the following terms and conditions, unless otherwise specifically provided in such Option Agreement. For purposes of interpreting this Section 6, a director's service as a member of the Board or the services of an officer, as the case may be, shall be deemed to be employment with the Company or its Subsidiary or Affiliate. Number of Shares. Each Option Agreement shall state the number of Shares covered by the Option.


6.1	Type of Option. Each Option Agreement shall specifically state the type of Option granted thereunder and whether it constitutes an Incentive Stock Option or a Nonqualified Stock Option.

6.2

Exercise Price. Each Option Agreement shall state the Exercise Price. In the case of an Incentive Stock Option, the Exercise Price shall not be less than one hundred percent (100%) of the Fair Market Value of the Shares covered by the Option on the date of grant or such other price as may be required pursuant to the Code. For an Incentive Stock Option granted to any Ten-Percent Shareholder, the Exercise Price shall be no less than 110% of the Fair Market Value of the Shares covered by the Option on the date of grant. The Exercise Price of a Nonqualified Stock Option shall not be less than 100% of the Fair Market Value of the Shares on the date of grant unless the Committee specifically indicates that the Option will have a lower Exercise Price and the Option complies with Section 409A of the Code. In the case of any other Option, the per share Exercise Price shall be equal to the Fair Market Value of the Shares on the date of grant, or such other price as shall be determined by the Committee, provided, however, that in no event shall the Exercise Price of an Option be less than the par value of the shares for which such Option is exercisable. Subject to Section 3 and to the foregoing, the Committee may reduce the Exercise Price of any outstanding Option. The Exercise Price shall also be subject to adjustment as provided in Section 10 hereof. This Section 6.3 shall not apply to an Option granted pursuant to assumption of, or substitution for, another option in a manner that complies with Code Section 424(a), whether or not the Option is an Incentive Stock Option. In any event the exercise price shall not be less than such minimum exercise price as determined under Applicable Law and/or by a competent authority.

6.3

Manner of Exercise. An Option may be exercised, as to any or all Shares as to which the Option has become exercisable, by written notice delivered in person or by mail to the Secretary of the Company or to such other person as determined by the Committee, specifying the number of Shares with respect to which the Option is being exercised, accompanied by payment of the Exercise Price for such Shares in the manner specified in the following sentence. Payment for Shares acquired pursuant to Options granted hereunder shall be made in full, upon exercise of the Options: (i) in immediately available funds, or by certified or bank cashier’s check payable to the Company, (ii) solely to the extent permitted by Applicable Law and authorized by the Committee, by delivery of Shares to the Company (either by actual delivery or attestation) having a value equal to the Exercise Price, (iii) solely to the extent permitted by Applicable Law and authorized by the Committee, by a broker-assisted cashless exercise in accordance with procedures approved by the Committee under Regulation T as promulgated by the Federal Reserve Board, whereby payment of the Option exercise price or tax withholding obligations may be satisfied, in whole or in part, with Shares subject to the Option by delivery of an irrevocable direction to a securities broker (on a form prescribed by the Committee) to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate exercise price and, if applicable, the amount necessary to satisfy the Company’s withholding obligations prior to the issuance of the Shares subject to the Option, (iv) solely to the extent permitted by Applicable Law and authorized by the Committee, by delivery of a notice of “net exercise” to the Company, pursuant to which the Company will reduce the number of Shares issuable upon exercise by the largest whole number of Shares with a Fair Market Value that does not exceed the aggregate Exercise Price); provided, however, that the Company will accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate Exercise Price not satisfied by such reduction in the number of whole shares to be

issued or (v) by any other means approved by the Committee and specified in the Award Agreement, which may include procedures for cashless exercise.

6.4

Term and Vesting of Options. Each Option Agreement shall provide the vesting schedule for the Option as determined by the Committee. To the extent permitted under Applicable Law, the Committee shall have the authority to determine the vesting schedule and accelerate the vesting of any outstanding Option at such time and under such circumstances as it, in its sole discretion, deems appropriate, including, for avoidance of doubt, acceleration for change of control as such is defined in an agreement with the applicable Grantee. The Option Agreement may contain performance goals and measurements, and the provisions with respect to any Option need not be the same as the provisions with respect to any other Option. The Exercise Period of an Option will be 10 years from the date of grant of the Option unless otherwise determined by the Committee, but subject to the vesting provisions described above and the early termination provisions set forth in Sections 6.6 and 6.7 hereof; provided, however, that in the case of an Incentive Stock Option granted to a Ten Percent Shareholder, such Exercise Period shall not exceed five (5) years from the date of grant of such Option. At the expiration of the Exercise Period, all unexercised Options shall become null and void.


6.5	Termination.

6.5.1

Except as provided in this Section 6.6 and in Section 6.7 hereof, an Option may not be exercised unless the Grantee is then in the employ of or maintaining a director, officer, consultant, advisor or supplier relationship with the Company or a Subsidiary or Affiliate thereof or, in the case of an Incentive Stock Option, a company or a parent or subsidiary company of such company issuing or assuming the Option in a transaction to which Section 424(a) of the Code applies, and unless the Grantee has remained continuously so employed or in the director, officer, supplier, consultant, or advisor relationship since the date of grant of the Option. In the event that the employment or director, officer or consultant, advisor or supplier relationship of a Grantee shall terminate (other than by reason of death, Disability or Retirement), all Options of such Grantee that are vested and exercisable at the time of such termination may, unless earlier terminated in accordance with their terms, be exercised within up to twelve (12) months after the date of such termination (or such different period as the Committee shall prescribe); provided, however, that if the Company (or the Subsidiary or Affiliate, when applicable) shall terminate the Grantee’s employment or service for Cause (as defined below) or if, whether or not the Grantee’s employment is terminated by either party, circumstances arise or are discovered with respect to the Grantee that would have constituted Cause for termination of his or her employment or service, all Options theretofore granted to such Grantee (whether vested or not) shall, to the extent not theretofore exercised, terminate on the date of such termination (or on which such circumstances arise or are discovered, as the case may be) unless otherwise determined by the Committee.


6.5.2	In the case of a Grantee whose principal employer is a Subsidiary or Affiliate, the Grantee’s employment shall also be deemed terminated for purposes of this Section 6.6 as of the date on which such principal employer ceases to be such Subsidiary or Affiliate. Notwithstanding anything to the contrary, the Committee, in its absolute discretion may, on such terms and conditions as it

may determine appropriate, extend the periods for which the Options held by any individual may continue to vest and be exercisable; provided, that such Options may lose their status as Incentive Stock Options under applicable law and be deemed Nonqualified Stock Options as a result of the modification of the Option to extend the exercise period and/or in the event that the Option is exercised beyond the later of: (i) three (3) months after the date of termination of the employment relationship ; or (ii) the applicable period under Section 6.7 below with respect to a termination of the employment relationship because of the death, Disability or Retirement of Grantee.

6.5.3

For purposes of this Plan, the term "Cause" shall mean any of the following: (a) fraud, embezzlement or felony or similar act by the Grantee; (b) an act of moral turpitude by the Grantee, or any act that causes significant injury to the reputation, business, assets, operations or business relationship of the Company (or a Subsidiary or Affiliate, when applicable); (c) any material breach by the Grantee of an agreement between the Company or any Subsidiary or Affiliate and the Grantee (including material breach of confidentiality, non-competition or non-solicitation covenants) or of any duty of the Grantee to the Company or any Subsidiary or Affiliate thereof; or (d) any circumstances that constitute grounds for termination for cause under the Grantee’s employment, consulting or service agreement with the Company or Subsidiary or Affiliate, to the extent applicable.

6.6

Death, Disability or Retirement of Grantee. If a Grantee shall die while employed by, or performing service for, the Company or a Subsidiary, or within the three (3) month period after the date of termination of such Grantee's employment or service (or within such different period as the Committee may have provided pursuant to Section 6.6 hereof) or if the Grantee's employment or service shall terminate by reason of Disability, all Options theretofore granted to such Grantee may (to the extent otherwise vested and exercisable and unless earlier terminated in accordance with their terms), be exercised by the Grantee or by the Grantee's estate or by a person who acquired the right to exercise such Options by bequest or inheritance or otherwise by result of death or Disability of the Grantee, at any time within one (1) year after the death or Disability of the Grantee (or such different period as the Committee shall prescribe). In the event that an Option granted hereunder shall be exercised by the legal representatives of a deceased or former Grantee, written notice of such exercise shall be accompanied by a certified copy of letters testamentary or equivalent proof of the right of such legal representative to exercise such Option. In the event that the employment or service of a Grantee shall terminate on account of such Grantee's Retirement, all Options of such Grantee that are exercisable at the time of such Retirement may, unless earlier terminated in accordance with their terms, be exercised at any time within the three (3) month period after the date of such Retirement (or such different period as the Committee shall prescribe).

6.7

Suspension of Vesting. Unless the Board of Directors or the Committee provides otherwise, vesting of Options granted hereunder shall be suspended during any unpaid leave of absence, other than in the case of any (a) periods of legally protected leave of absence pursuant to Applicable Law, (b) leave of absence which was pre-approved by the Company for purposes of continuing the vesting of Options, or (c) transfers between locations of the Company or between the Company, any Affiliate, or any respective successor thereof.

6.8

Other Provisions. The Option Agreement evidencing Awards under the Plan shall contain such other terms and conditions not inconsistent with the Plan as the Committee may determine, at or after the date of grant, including without limitation, provisions in connection with the restrictions on transferring the Awards, which shall be binding upon the Grantees and other terms and conditions as the Committee shall deem appropriate.

6.9

Securities Law Restrictions. Except as otherwise provided in the applicable Option Agreement or other agreement between the Grantee and the Company, if the exercise of an Option following the termination of the Grantee’s employment or service (other than for Cause) would be prohibited at any time solely because the issuance of Shares would violate the registration requirements under any Applicable Law, then the Option shall terminate on the earlier of (i) the expiration of a period of six (6) months after the termination of the Grantee’s employment or service during which the exercise of the Option would not be in violation of such registration requirements, or (ii) the expiration of the term of the Option as set forth in the Option Agreement.


7.	NONQUALIFIED STOCK OPTIONS.

Options granted pursuant to this Section 7 are intended to constitute Nonqualified Stock Options and shall be subject to the general terms and conditions specified in Section 6 hereof and other provisions of the Plan, except for any provisions of the Plan applying to Options under different tax laws or regulations. Nonqualified Stock Options may not be granted to Grantees who are providing services only to a "parent" of the Company, as such term is defined in Rule 405 of Regulation C under the Securities Act, unless the Shares underlying such Awards are treated as "service recipient stock" under Section 409A of the Code because the Awards are granted pursuant to a corporate transaction (such as a spin off transaction) or unless such Awards comply with the distribution requirements of Section 409A of the Code.


8.	INCENTIVE STOCK OPTIONS.

Options granted pursuant to this Section 8 are intended to constitute Incentive Stock Options and shall be granted subject to the following special terms and conditions, the general terms and conditions specified in Section 6 hereof and other provisions of the Plan, except for any provisions of the Plan applying to Options under different tax laws or regulations:


8.1	Eligibility for Awards. Incentive Stock Options may be granted only to Employees of the Company, or to Employees of a Parent or Subsidiary corporation thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). No more than 350,000 Shares may be issued as a result of the exercise of Incentive Stock Options granted under the Plan.

8.2

Value of Shares. The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the Shares with respect to which all Incentive Stock Options granted under this Plan and all other option plans of any Parent or Subsidiary corporation become exercisable for the first time by each Grantee during any calendar year shall not exceed one hundred thousand United States dollars ($100,000) with respect to such Grantee. To the extent that the aggregate Fair Market Value of Shares with respect to which the Incentive Stock Options are exercisable for the first time by any Grantee during any calendar years exceeds one hundred thousand United States dollars ($100,000), such Options shall be treated as Nonqualified Stock Options. The foregoing shall be applied by taking Options into account in the order in which they were granted, with the Fair Market Value of any

Share to be determined at the time of the grant of the Option. In the event that the foregoing results in the portion of an Incentive Stock Option exceeding the one hundred thousand United States dollars ($100,000) limitation, only such excess shall be treated as a Nonqualified Stock Option. If the Code is amended to provide for a different limitation from that set forth in this Section, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code. If an Option is treated as an Incentive Stock Option in part and as a Nonqualified Stock Option in part by reason of the limitation set forth in this Section, the Grantee may designate which portion of such Option the Grantee is exercising. In the absence of such designation, the Grantee shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Separate certificates representing each such portion may be issued upon the exercise of the Option.


8.3	Ten Percent Shareholder. In the case of an Incentive Stock Option granted to a Ten Percent Shareholder, (i) the Exercise Price shall not be less than one hundred and ten percent (110%) of the Fair Market Value of the Shares on the date of grant of such Incentive Stock Option, and (ii) the Exercise Period shall not exceed five (5) years from the date of grant of such Incentive Stock Option.

8.4

Incentive Stock Option Lock-Up Period. No disposition of Shares received pursuant to the exercise of Incentive Stock Options ("ISO Shares"), shall be made by the Grantee within 2 years from the date of grant, nor within 1 year after the transfer of such ISO Shares to the Grantee. To the extent that the Grantee violates the aforementioned limitations, the disposition shall be considered as a disqualifying disposition. [A1]


8.5	Approval. The status of any ISO Shares shall be subject to approval of the Plan by the Company’s shareholders, for the purposes of qualifying the Plan with respect to the issuance of ISO Shares, and such approval to be provided 12 months before or after the date of adoption of the Plan by the Board .

8.6

Exercise Following Termination. Notwithstanding anything else in this Plan to the contrary, Incentive Stock Options that are not exercised within three (3) months following termination of a Grantee’s employment in the Company or its Parent or Subsidiary corporations, or within one year in case of termination of Grantee’s employment in the Company or its Parent or Subsidiary corporations due to a Disability or death (within the meaning of section 22(e)(3) of the Code), shall be deemed to be Nonqualified Stock Options.

8.7

Adjustments to Incentive Stock Options. Any Option Agreement providing for the grant of Incentive Stock Options shall indicate that adjustments made pursuant to the Plan with respect to Incentive Stock Options could constitute a "modification" of such Incentive Stock Options (as that term is defined in Section 424(h) of the Code) or could cause adverse tax consequences for the holder of such Incentive Stock Options and that the holder should consult with his or her tax advisor regarding the consequences of such "modification" on his or her income tax treatment with respect to the Incentive Stock Option.


8.8	Notice to Company of Disqualifying Disposition. Each Grantee who receives an Incentive Stock Option must agree to notify the Company in writing immediately after the Grantee makes a Disqualifying Disposition of any ISO Shares. A "Disqualifying Disposition" is any disposition (including any sale) of such ISO

Shares before the later of (i) two years after the date the Grantee was granted the Incentive Stock Option, or (ii) one year after the date the Grantee acquired Shares by exercising the Incentive Stock Option. If the Grantee dies before such ISO Shares are sold, these holding period requirements do not apply and no disposition of the ISO Shares will be deemed a Disqualifying Disposition.

8.9

The Board, at the written request of any Grantee, may in its discretion after verifying the implications of applicable tax law including the provisions of Section 409A of the Code and the regulations promulgated thereunder as now in effect or as hereafter amended, take such actions as may be necessary to convert such Grantee's Incentive Stock Options (or any portions thereof) that have not been exercised on the date of conversion into Nonqualified Stock Options at any time prior to the expiration of such Incentive Stock Options, regardless of whether the Grantee is an Employee of the Company or a Parent or a Subsidiary at the time of such conversion. Such actions may include, but not be limited to, extending the exercise period. At the time of such conversion, the Board (with the consent of the Grantee) may impose such conditions on the exercise of the resulting Nonqualified Stock Options as the Board in its discretion may determine, provided that such conditions shall not be inconsistent with the Plan. Nothing in the Plan shall be deemed to give any Grantee the right to have such Grantee's Incentive Stock Options converted into Nonqualified Stock Options, and no such conversion shall occur unless and until the Board takes appropriate action. The Board, with the consent of the Grantee, may also terminate any portion of any Incentive Stock Option that has not been exercised at the time of such conversion.


9.	EFFECT OF CERTAIN CHANGES.

10.

General. In the event of a subdivision of the outstanding share capital of the Company, , a recapitalization, a reorganization (which may include a combination or exchange of shares), a consolidation, a stock split, a reverse stock split, a spin-off or other corporate divestiture or division, a reclassification or other similar occurrence, the Committee shall make such adjustments as determined by it to be appropriate in order to adjust (i) the number of Shares available for grants of Awards, (ii) the number of Shares covered by outstanding Awards, and (iii) the exercise price per Share covered by any Award; provided, however, that any fractional Shares resulting from such adjustment shall be rounded down to the nearest whole Share, and the Company shall have no obligation to make any cash or other payment with respect to such fractional Shares, and provided that in any event the exercise price shall not be less than NIS 0.01 (or equivalent in other currency) or such other minimum exercise price as determined under applicable law and/or by a competent authority Merger and Sale of Company. In the event of (i) a sale of all or substantially all of the assets of the Company; or (ii) a sale (including an exchange) of all or substantially all of the shares of the Company, or an acquisition by a shareholder of the Company or by an Affiliate of such shareholder, of all of the shares of the Company held by other shareholders or by other shareholders who are not Affiliated with such acquiring party; (iii) a merger, consolidation, amalgamation or like transaction of the Company with or into another corporation; (iv) a scheme or arrangement for the purpose of effecting such sale, merger or amalgamation; or (v) such other transaction or set of circumstances that is determined by the Committee, in its discretion, to be a transaction having a similar effect (all such transactions being herein referred to as a "Merger/Sale"), then, without the Grantee’s consent and action and without any prior notice requirement.


10.1	:

10.1.1

Unless otherwise determined by the Committee in its sole and absolute discretion, any Award then outstanding shall be assumed or an equivalent Award shall be substituted by such successor corporation of the Merger/Sale or any Parent or Affiliate thereof as determined by the Board in its discretion (the "Successor Corporation"), under substantially the same terms as the Award. For the purposes of this Section 10.2.1, the Award shall be considered assumed if, following a Merger/Sale, the Award confers on the holder thereof the right to purchase or receive, for each Share underlying an Award immediately prior to the Merger/Sale, either (i) the consideration (whether stock, cash, or other securities or property) distributed to or received by holders of Shares in the Merger/Sale for each Share held on the effective date of the Merger/Sale (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares), which may be subject to vesting and other terms as determined by the Committee in its discretion, or (ii) regardless of the consideration received by the holders of Shares in the Merger/Sale, solely shares (or their equivalent) of the Successor Corporation at a value to be determined by the Committee in its discretion, which may be subject to vesting and other terms as determined by the Committee in its discretion. The foregoing shall not limit the Committee's authority to determine, in its sole discretion, that in lieu of such assumption or substitution of awards of the Successor Corporation for Awards, any other type of asset or property will be substituted for an Award, including under Section 9.2.2 hereunder.

10.1.2

In the event that Awards are not assumed or substituted for by equivalent awards, the Committee may (but shall not be obligated to), in lieu of such assumption of, or substitution for, an Award, and in its sole discretion, (i) provide for a Grantee to have the right to exercise an Award, or otherwise accelerate vesting of an Award, as to all or part of the Shares covered thereby, including Shares covered by the Award which would not otherwise be exercisable or vested, under such terms and conditions as the Committee shall determine, including the cancellation of all unexercised Awards upon closing of the Merger/Sale; and/or (ii) provide for the cancellation of each outstanding Award at the closing of such Merger/Sale, and payment to the Grantee of an amount in cash as determined by the Committee to be fair under the circumstances (with full authority to determine the method for making such determination, which may be the Black-Scholes model or any other method, and which determination shall be conclusive and binding on all parties, and which may be zero if the value of the Shares underlying an Option is determined to be less than the Exercise Price therefor), and subject to such terms and conditions as may be determined by the Committee. Payments under this provision may be delayed to the same extent that payment of consideration to the holders of the Company’s Shares in connection with the Merger/Sale is delayed as a result of escrows, earn outs, holdbacks or any other contingencies.


10.1.3	Notwithstanding the foregoing, in the event of a Merger/Sale, the Committee may determine, in its sole discretion, that upon completion of such Merger/Sale, the terms of any Award shall be otherwise amended, modified or terminated, as the Committee shall deem in good faith to be appropriate, and if an Option Award, that the Option Award shall confer the right to purchase

or receive any other security or asset, or any combination thereof, or that its terms be otherwise amended, modified or terminated, as the Committee shall deem in good faith to be appropriate. Neither the authorities and powers of the Committee under this Section 9.2, nor the exercise or implementation thereof, shall (i) be restricted or limited in any way by any adverse consequences (tax or otherwise) that may result to any holder of an Award, and (ii) as, inter alia , being a feature of the Award upon its grant, be deemed to constitute a change or an amendment of the rights of such holder under this Plan, nor shall any such adverse consequences (as well as any adverse tax consequences that may result from any tax ruling or other approval or determination of any relevant tax authority) be deemed to constitute a change or an amendment of the rights of such holder under this Plan.


10.1.4	The Committee need not take the same action with respect to all Awards or with respect to all Grantees. The Committee may take different actions with respect to the vested and unvested portions of an Award.


10.2	Effect of distributions and rights offerings.

10.2.1

In case of bonus share distribution in which the record date is prior to the exercise date of vested Options, then the quantity of shares to which the Grantee is entitled upon exercise of such Options will be increased by the number of shares to which the Grantee would have been entitled to receive as bonus shares, had such Grantee exercised such vested options no later than the trading day preceding the Ex-benefit date. The exercise price of the options will remain unchanged. The provisions applicable to Shares issued pursuant to the exercise of Options (including without limitation the provisions relating to the Required Holding Period pursuant to section 9.4 above) shall apply to all Shares issuable upon exercise of such Options.

10.2.2

In the event that the Company shall offer to its shareholders any securities by way of a rights issue, the exercise price of the Options and the quantity of Shares issuable upon exercise of the Options will not be adjusted, however the Company shall offer, or cause to be offered, rights to Grantees mutatis mutandis, in such quantity as the Grantees would have been entitled in the event that they had exercised their vested Options one day prior to the record date for the rights issuance. The provisions herein applicable to Shares issued pursuant to the exercise of Options shall apply to all securities issuable in such manner to Grantees pursuant to the rights offering (if any) - with the exception of such quantity of the securities with an Ex-rights value equal to the amount invested by the Grantee in exercising the rights, which securities shall be transferred (beneficially) to the Company's Nominee Company for the benefit of Grantee following issuance thereof.


10.2.3	Cash dividend distribution. No adjustments in the purchase price or quantity of options shall be implemented in the event of distribution of a cash dividend by the Company to its shareholders.

10.3

Reservation of Rights. Except as expressly provided in this Section 10, the Grantee of an Award hereunder shall have no rights by reason of any subdivision or consolidation of shares of any class or the payment of any stock dividend (bonus shares), any other increase or decrease in the number of shares of any class or by reason of any dissolution, liquidation, Merger/Sale, or consolidation, divestiture or

spin-off of assets or shares of another company. Any issue by the Company of shares of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number, type or price of shares subject to an Award. The grant of an Award pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes to its capital or business structures or to merge, consolidate, dissolve, liquidate, sell or transfer all or part of its business or assets or engage in any similar transactions.


11.	NON-TRANSFERABILITY OF AWARDS; SURVIVING BENEFICIARY.

11.1

All Awards granted under the Plan shall not be transferable otherwise than by will or by the laws of descent and distribution, unless otherwise determined by the Board or under this Plan, provided that with respect to Shares issued upon exercise of Options, the restrictions on transfer shall be the restrictions referred to in Section 15. Awards may be exercised or otherwise realized, during the lifetime of a Grantee, only by the Grantee or by his or her guardian or legal representative, to the extent provided herein. Any transfer of an Award not permitted hereunder (including transfers pursuant to any decree of divorce, dissolution or separate maintenance, any property settlement, separation agreement or any other agreement with a spouse) and any grant of any interest in any Award to, or creation in any way of any interest in any Award by, any party other than a Grantee shall be null and void and shall not confer upon any party or person, other than the Grantee, any rights. A Grantee may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Grantee, the executor or administrator of the Grantee's estate shall be deemed to be the Grantee's beneficiary. Notwithstanding the foregoing, upon the request of a Grantee and subject to Applicable Law, the Committee, at its sole discretion, may permit the Grantee to transfer an Award to a family trust.


12.	CONDITIONS UPON ISSUANCE OF SHARES

12.1

Legal Compliance. Shares shall not be issued pursuant to the exercise or settlement of an Award, unless the exercise or settlement of such Award and the issuance and delivery of such Shares shall comply with Applicable Laws as determined by counsel to the Company. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary for the lawful issuance and sale of any Shares hereunder, and the inability to issue Shares hereunder due to non-compliance with any Company policies with respect to the sale of Shares, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority or compliance shall not have been obtained or achieved. Shares issued pursuant to an Award shall be subject to the Amended and Restated Articles of Association of the Company and any other governing documents of the Company, including all policies, manuals and internal regulations adopted by the Company from time to time, as may be amended from time to time, including, without limitation, any provisions included therein concerning restrictions or limitations on transferability of Shares or grant of any rights with respect thereto and any provisions concerning restrictions on the use of inside information and other provisions deemed by the Company to be appropriate in order to ensure compliance with Applicable Law, statutes and regulations.

12.2

Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares, and to make other representations as may be required under applicable securities laws, if, in the opinion of counsel for the Company, such representations are required, all in form and content specified by the Company.


13.	MARKET STAND-OFF

13.1

In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under any Applicable Law, a Grantee shall not directly or indirectly, without the prior written consent of the Company or its underwriters, (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Shares acquired under this Plan or any securities of the Company (whether or not acquired under this Plan), or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Shares acquired under this Plan, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Shares acquired under this Plan or such other securities, in cash or otherwise. Such restriction (the "Market Stand-Off") shall be in effect for such period of time following the effective date of the registration statement relating to such offering as may be requested by the Company or such underwriters, provided, however, that in any event, such period shall not exceed 90 days following the effective date of such registration statement.

13.2

In the event of a subdivision of the outstanding share capital of the Company, the declaration and payment of a stock dividend (distribution of bonus shares), the declaration and payment of an extraordinary dividend payable in a form other than stock, a recapitalization, reorganization (which may include a combination or exchange of shares or a similar transaction affecting the Company’s outstanding securities without receipt of consideration), a consolidation, stock split, spin-off or other corporate divestiture or division, a reclassification or other similar occurrence, an adjustment in conversion ratio, any new, substituted or additional securities which are by reason of such transaction distributed with respect to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off.


13.3	In order to enforce the Market Stand-Off, the Company may impose stop-transfer instructions with respect to the Shares acquired under this Plan until the end of the applicable stand-off period.


13.4	The underwriters in connection with a registration statement so filed are intended to be third party beneficiaries of this Section 12 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.


14.	TAXES.


14.1	If the Committee shall so require, as a condition of exercise of an Award, a Grantee shall agree that, no later than the date of such occurrence, he or she will pay to the Company or make arrangements satisfactory to the Committee

regarding payment of any applicable taxes of any kind required by Applicable Law to be withheld or paid.


14.2	Each Option Agreement and each other agreement in connection with an Award under the Plan shall contain the following agreement and acknowledgment of the Grantee:

ALL TAX CONSEQUENCES UNDER ANY APPLICABLE LAW WHICH MAY ARISE FROM THE GRANT OF ANY AWARDS OR THE EXERCISE THEREOF, THE SALE OR DISPOSITION OF ANY SHARES GRANTED HEREUNDER OR ISSUED UPON EXERCISE OF ANY AWARD OR FROM ANY OTHER ACTION OF A GRANTEE IN CONNECTION WITH THE FOREGOING SHALL BE BORNE AND PAID SOLELY BY SUCH GRANTEE, AND THE GRANTEE SHALL INDEMNIFY THE COMPANY, ITS SUBSIDIARIES AND AFFILIATES AND THE TRUSTEE, AND SHALL HOLD THEM HARMLESS AGAINST AND FROM ANY LIABILITY FOR ANY SUCH TAX OR PENALTY, INTEREST OR INDEXATION THEREON. EACH GRANTEE AGREES TO, AND UNDERTAKES TO COMPLY WITH, ANY RULING, SETTLEMENT, CLOSING AGREEMENT OR OTHER SIMILAR AGREEMENT OR ARRANGEMENT WITH ANY TAX AUTHORITY IN CONNECTION WITH THE FOREGOING WHICH IS APPROVED BY THE COMPANY. EACH GRANTEE IS ADVISED TO CONSULT WITH A TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF RECEIVING OR EXERCISING AWARDS HEREUNDER. THE COMPANY DOES NOT ASSUME ANY RESPONSIBILITY TO ADVISE A GRANTEE ON SUCH MATTERS, WHICH SHALL REMAIN SOLELY THE RESPONSIBILITY OF SUCH GRANTEE.

14.3

The Company or any Subsidiary or Affiliate may take such action as it may deem necessary or appropriate, in its discretion, for the purpose of or in connection with withholding of any taxes which the Company or any Subsidiary or Affiliate is required by any Applicable Law to withhold in connection with any Awards (collectively, "Withholding Obligations"). Such actions may include, without limitation, (i) requiring a Grantee to remit to the Company in cash an amount sufficient to satisfy such Withholding Obligations; (ii) subject to Applicable Law, allowing a Grantee to surrender Shares to the Company, in an amount that at such time, reflects a value that the Committee determines to be sufficient to satisfy such Withholding Obligations; (iii) withholding Shares otherwise issuable upon the exercise of an Award at a value which is determined by the Committee to be sufficient to satisfy such Withholding Obligations; or (iv) any combination of the foregoing. The Company shall not be obligated to allow the exercise of any Award by or on behalf of a Grantee until all tax consequences arising from the exercise of such Award are resolved in a manner acceptable to the Company.

14.4

Each Grantee shall notify the Company in writing promptly and in any event within ten (10) days after the date on which such Grantee first obtains knowledge of any tax bureau inquiry, audit, assertion, determination, investigation, or question relating in any manner to the Awards granted or received hereunder or Shares issued hereunder and shall continuously inform the Company of any developments, proceedings, discussions and negotiations relating to such matter, and shall allow the Company and its representatives to participate in any proceedings and discussions concerning such matters. Upon request, a Grantee shall provide to the Company any information or document relating to any matter

described in the preceding sentence, which the Company, in its discretion, requires.


15.	RIGHTS AS A SHAREHOLDER; VOTING AND DIVIDENDS.

15.1

A Grantee shall have no rights as a shareholder of the Company with respect to any Shares covered by an Award until the Grantee shall have exercised the Award (in the case of an Option or similar Award), paid the exercise price (to the extent applicable) and become the record holder of the subject Shares. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distribution of other rights for which the record date is prior to the date on which the Grantee (as applicable) becomes the beneficial record holder of the Shares covered by an Award, except as provided in Section 10 hereof.


15.2	With respect to Shares issued upon the exercise of Awards hereunder, any and all voting rights attached to such Shares shall be subject to terms set under Section 6.9, and the Grantee shall be entitled to receive dividends distributed with respect to such Shares, subject to the provisions of the Company’s Articles of Association, as amended from time to time, and subject to any Applicable Law.


15.3	The Company may, but shall not be obligated to, register or qualify the sale of Shares under any applicable securities law or any other applicable law.

15.4

It is clarified that all Shares and other tradable securities of the Company are held by either the Company's Nominee Company acting as custodian for such securities, and accordingly all Shares and other tradable securities which may be issued to Grantee as a result of the exercise of Options shall be issued under the name of the Nominee Company with instructions that Grantee shall be listed as beneficial shareholder of record.


16.	NO REPRESENTATION BY COMPANY.

By granting Awards, the Company is not, and shall not be deemed as, making any representation or warranties to a Grantee regarding the Company, its business affairs, its prospects or the future value of its Shares.


17.	NO RETENTION RIGHTS.

Nothing in the Plan or in any Award granted or agreement entered into pursuant hereto shall confer upon any Grantee the right to continue in the employ of, or be in a consultant, advisor, director, officer or supplier relationship with, the Company or any Subsidiary or Affiliate or to be entitled to any remuneration or benefits not set forth in the Plan or such agreement or to interfere with or limit in any way the right of the Company or any such Subsidiary or Affiliate to terminate such Grantee's employment or service. Awards granted under the Plan shall not be affected by any change in duties or position of a Grantee as long as such Grantee continues to be employed by, or be in a consultant, advisor, director, officer or supplier relationship with, the Company or any Subsidiary or Affiliate.


18.	PERIOD DURING WHICH AWARDS MAY BE GRANTED.

Awards may be granted pursuant to the Plan from time to time within a period of ten (10) years from the Effective Date. From and after the tenth (10 th ) anniversary of the Effective Date no grants of Awards may be made and the Plan shall continue to be in full force and

effect solely with respect to such Awards that remain outstanding. The Plan shall terminate at such time after the tenth (10 th ) anniversary of the Effective Date as no Awards remain outstanding.


19.	TERM OF AWARD

Anything herein to the contrary notwithstanding, but without derogating from the provisions of Sections 6.6 or 6.7 hereof, if any Award, or any part thereof, has not been exercised and the Shares covered thereby not paid for within the term of the Award as determined by the Committee, which in any event shall not exceed ten (10) years after the date on which the Award was granted, as set forth in the Notice of Grant in the Grantee’s Award, such Award, or such part thereof, and the right to acquire such Shares, shall terminate, and all interests and rights of the Grantee in and to the same shall expire.


20.	AMENDMENT AND TERMINATION OF THE PLAN.

The Board at any time and from time to time may suspend, terminate, modify or amend the Plan, whether retroactively or prospectively; provided, however, that, unless otherwise determined by the Board, an amendment which requires shareholder approval in order for the Plan to continue to comply with any Applicable Law shall not be effective unless approved by the requisite vote of shareholders in accordance with the provisions of such Applicable Law, and provided further, that except as provided herein, no suspension, termination, modification or amendment of the Plan may adversely affect any Award previously granted, without the written consent of Grantees holding a majority in interest of the Awards so affected, and in the event that such consent is obtained, all Awards so affected shall be deemed amended, and the holders thereof shall be bound, as set forth in such consent.


21.	APPROVAL.

The Plan shall take effect upon its adoption by the Board (the "Effective Date"), except that solely with respect to grants of Incentive Stock Options the Plan shall also be subject to approval within one year of the Effective Date, by a majority of the votes cast on the proposal at a meeting or a written consent of shareholders. Failure to obtain approval by the shareholders shall not in any way derogate from the valid and binding effect of any grant of an Award that is not an Incentive Stock Option. Upon approval of the Plan by the shareholders of the Company as set forth above, all Incentive Stock Options granted under the Plan on or after the Effective Date shall be fully effective as if the shareholders of the Company had approved the Plan on the Effective Date. Notwithstanding the foregoing, in the event that approval of the Plan by the shareholders of the Company is required under Applicable Law, in connection with the application of certain tax treatment or pursuant to applicable stock exchange rules or regulations or otherwise, such approval shall be obtained within the time required under the Applicable Law.


22.	RULES PARTICULAR TO SPECIFIC TAX REGIMES; SECTION 409A

Notwithstanding anything herein to the contrary, the terms and conditions of the Plan may be amended with respect to a particular tax regime by means of an appendix to the Plan, and to the extent that the terms and conditions set forth in any appendix conflict with any provisions of the Plan, the provisions of the appendix shall govern. Terms and conditions set forth in the Appendix shall apply only to Awards granted to Grantees under the tax regime that is the subject of the appendix and shall not apply to Awards issued to Grantees not under such tax regime. The adoption of any such appendix shall be subject to the approval of the Board or Committee, and if required in connection with the application of certain tax treatment,

pursuant to applicable stock exchange rules or regulations, or otherwise, also the approval of the requisite majority of the shareholders of the Company. To the extent applicable, the Plan and any agreement hereunder shall be interpreted in accordance with Section 409A of the Code. Notwithstanding any provision of the Plan to the contrary, in the event that, following the Effective Date, the Board determines that any Award may be subject to Section 409A of the Code, the Board may adopt such amendments to the Plan and to the relevant agreement governing the Award or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Board determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award or (b) comply with the requirements of Section 409A of the Code.


23.	GOVERNING LAW; JURISDICTION.

The Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the State of Israel, except with respect to matters that are subject to tax laws, regulations and rules in any specific jurisdiction, which shall be governed by the respective laws, regulations and rules of such jurisdiction. Certain definitions, which refer to laws other than the laws of such jurisdiction, shall be construed in accordance with such other laws. The courts of competent jurisdiction located in Tel-Aviv-Jaffa, Israel shall have exclusive jurisdiction over any dispute arising out of or in connection with this Plan and any Award granted hereunder, and by signing any agreement relating to an Award hereunder each Grantee irrevocably submits to such exclusive jurisdiction.


24.	NON-EXCLUSIVITY OF THE PLAN.

Neither the adoption of the Plan by the Board nor the submission of the Plan to shareholders of the Company for approval (to the extent required under Applicable Law), shall be construed as creating any limitations on the power or authority of the Board to adopt such other or additional incentive or other compensation arrangements of whatever nature as the Board may deem necessary or desirable or preclude or limit the continuation of any other plan, practice or arrangement for the payment of compensation or fringe benefits to employees generally, or to any class or group of employees, which the Company or any Subsidiary now has lawfully put into effect, including, without limitation, any retirement, pension, savings and stock purchase plan, insurance, death and disability benefits and executive short-term or long-term incentive plans.


25.	MISCELLANEOUS.


25.1	Additional Terms. Each Award awarded under the Plan may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Committee, in its sole discretion.

25.2

Severability. If any provision of the Plan or any Option Agreement, t or any other agreement entered into in connection with an Award shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction. In addition, if any particular provision contained in the Plan or any Option Agreement, or any other agreement entered into in connection with an Award shall for any reason be held to be excessively broad as to duration, geographic scope, activity or subject, it shall be construed by limiting and reducing such provision as to such characteristic so that

the provision is enforceable to fullest extent compatible with the Applicable Law as it shall then appear.


25.3	Captions and Titles. The use of captions and titles in this Plan or any Option Agreement, or any other agreement entered into in connection with an Award is for the convenience of reference only and shall not affect the meaning of any provision of the Plan or such agreement.

Exhibit 10.12

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of September 27, 2018 (the “ Effective Date ”) between (a) SILICON VALLEY BANK , a California corporation (“ Bank ”), and (b) (i) TUFIN SOFTWARE TECHNOLOGIES LTD , a company organized under the laws of the State of Israel (“ ISR Borrower ”), and (ii) TUFIN SOFTWARE NORTH AMERICA, INC. , a Delaware corporation (“ US Borrower ”) ( ISR Borrower and US Borrower are hereinafter jointly and severally, individually and collectively, referred to as “ Borrower ”) , provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank. This Agreement further amends and restates in its entirety that certain Loan and Security Agreement dated as of August 4, 2015, between the Borrower and Bank, as amended by that certain First Loan Modification Agreement dated as of January 24, 2017, as further amended by that certain Second Loan Modification Agreement dated as of December 28, 2017, as further amended by that certain Third Loan Modification Agreement dated as of April 2, 2018 and as further amended by that certain Fourth Loan Modification Agreement dated as of July 19, 2018 (collectively, the “ Prior Agreement ”). The parties agree that the Prior Agreement is hereby superseded and replaced in its entirety by this Agreement, and the parties agree as follows:

RATIFICATION OF LOAN DOCUMENTS . Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security or other collateral granted to Bank pursuant to the Prior Agreement as amended and restated by this Agreement and its ancillary documents, and confirms that the indebtedness secured thereby including, without limitation, the Obligations is and remains in full force and effect. Without limiting the foregoing, any warrant(s) and all other loan documents issued in connection with the Prior Agreement (to the extent not yet exercised, terminated or amended and restated in connection with this Agreement) remain in full force and effect.


1	ACCOUNTING AND OTHER TERMS

Accounting terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP. Notwithstanding the foregoing, all financial covenant and other financial calculations shall be computed with respect to Borrower only, and not on a consolidated basis. Notwithstanding any terms in this Agreement to the contrary, for purposes of any financial covenant and other financial calculations in this Agreement (other than for purposes of updating the Borrowing Base) which are made in whole or in part based upon the Availability Amount as of the last day of a particular month, calculations relying on information from a Borrowing Base Report shall be derived from the Borrowing Base Report delivered within seven (7) days of month end pursuant to Section 6.2(a) (and not, for clarity, any more recent Borrowing Base Report delivered after such period), and the actual delivery date of such Borrowing Base Report shall be deemed to be the last day of the applicable month. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13. All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein.


2	LOAN AND TERMS OF PAYMENT

2.1 Promise to Pay. Subject to the terms of this Agreement, Borrower hereby unconditionally promises to pay Bank the outstanding principal amount of all Credit Extensions and accrued and unpaid interest thereon as and when due in accordance with this Agreement.

2.2 Revolving Line.

(a) Availability . Subject to the terms and conditions of this Agreement and to deduction of Reserves, Bank may, in its good faith business discretion, make Advances not exceeding the Availability Amount. Amounts borrowed under the Revolving Line may be repaid and, prior to the Revolving Line Maturity Date, reborrowed, subject to the applicable terms and conditions precedent herein.

(b) Termination; Repayment . The Revolving Line terminates on the Revolving Line Maturity Date, when the principal amount of all Advances, the unpaid interest thereon, and all other Obligations relating to the Revolving Line shall be immediately due and payable.

2.3 Term Loan.

(a) Availability . Bank has previously made term loan advance to Borrower in the amount of the Term Loan Amount (the “ Term Loan Advance ”). After repayment, the Term Loan Advance (or any portion thereof) may not be reborrowed.

(b) Interest Period . With respect to the Term Loan Advance, commencing on the Payment Date of the first month following the month in which the Funding Date occurs and continuing on the Payment Date of each month thereafter, until the full repayment of the Term Loan Advance in accordance with the provisions hereof, Borrower shall make monthly payments of interest, in arrears, on the principal amount of the Term Loan Advance at the rate set forth in Section 2.5(a)(ii).

(c) Repayment . Commencing on the Term Loan Amortization Date and continuing on the Payment Date of each month thereafter, Borrower shall repay the Term Loan Advance in (i) thirty-six (36) equal monthly installments of principal, plus (ii) monthly payments of accrued interest at the rate set forth in Section 2.5(a)(ii). All outstanding principal and accrued and unpaid interest under the Term Loan Advance, and all other outstanding Obligations with respect to the Term Loan Advance, are due and payable in full on the Term Loan Maturity Date.

(d) Permitted Prepayment . Borrower shall have the option to prepay all, but not less than all, of the Term Loan Advance, provided Borrower (i) delivers written notice to Bank of its election to prepay the Term Loan Advance at least thirty (30) days prior to such prepayment, provided however , that such notice period shall be decreased to 7 Business Days in connection with (A) a prepayment by Borrower in connection with or as a result of consummation of a Permitted Acquisition, (B) a prepayment by Borrower in connection with or as a result of consummation of a transaction whereby a third party acquires all or substantially all of the capital stock or property of Borrower (including by merger or consolidation of Borrower with any other Person), and (C) a prepayment by Borrower if Bank rejects Borrower's request to consummate a transaction whereby Borrower acquires or permits any of its Subsidiaries to acquire (including by merger or consolidation of such Subsidiary with any other Person), all or substantially all of the capital stock or property of another Person, which does not qualify as a “Permitted Acquisition”, in each case of (A) through (C) above, provided that such prepayment is contemporaneous with the closing of such transaction and further provided that such notice shall be deemed as election to terminate this Agreement in accordance with the provisions of Section 12.1 below, and (ii) pays, on the date of such prepayment (A) all outstanding principal plus accrued and unpaid interest with respect to the Term Loan Advance, and (B) all other sums, if any, that shall have become due and payable with respect to the Term Loan Advance, including interest at the Default Rate with respect to any past due amounts.

(e) Mandatory Prepayment Upon an Acceleration . If the Term Loan Advance is accelerated by Bank following the occurrence and during the continuance of an Event of Default, Borrower shall immediately pay to Bank an amount equal to the sum of (i) all outstanding principal plus accrued and unpaid interest with respect to the Term Loan Advance and (iii) all other sums, if any, that shall have become due and payable with respect to the Term Loan Advance, including interest at the Default Rate with respect to any past due amounts.

2.4 Overadvances. If, at any time, the outstanding principal amount of any Advances exceeds the lesser of either the Revolving Line or the Borrowing Base, Borrower shall immediately pay to Bank in cash the amount of such excess (such excess, the “ Overadvance ”). Without limiting Borrower’s obligation to repay Bank any Overadvance, Borrower agrees to pay Bank interest on the outstanding amount of any Overadvance, on demand, at a per annum rate equal to the rate that is otherwise applicable to Advances plus five percent (5%).

2.5 Payment of Interest on the Credit Extensions.

(a) Interest Rate .

(i) Advances . Subject to Section 2.5(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum rate equal to one and one quarter of one percent (1.25%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.5(d) below.

(ii) Term Loan Advances . Subject to Section 2.5(b), the principal amount outstanding under each Term Loan Advance shall accrue interest at a floating per annum rate equal to two and three quarters of one percent (2.75%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.5(d) below.

(b) Default Rate . Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall bear interest at a rate per annum which is five percent (5.0%) above the rate that is otherwise applicable thereto (the “ Default Rate ”). Fees and expenses which are required to be paid by Borrower pursuant to the Loan Documents (including, without limitation, Bank Expenses) but are not paid when due shall bear interest until paid at a rate equal to the highest rate applicable to the Obligations. Payment or acceptance of the increased interest rate provided in this Section 2.5(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Bank.

(c) Adjustment to Interest Rate . Changes to the interest rate of any Credit Extension based on changes to the Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of any such change.

(d) Payment; Interest Computation . Interest is payable monthly on the Payment Date of each month and shall be computed on the basis of a 360-day year for the actual number of days elapsed. In computing interest, (i) all payments received after 12:00 p.m. Eastern time on any day shall be deemed received at the opening of business on the next Business Day, and (ii) the date of the making of any Credit Extension shall be included and the date of payment shall be excluded; provided, however, that if any Credit Extension is repaid on the same day on which it is made, such day shall be included in computing interest on such Credit Extension.

2.6 Fees. Borrower shall pay to Bank:

(a) Revolving Line Commitment Fee . A fully earned, non-refundable commitment fee of Ninety Thousand Dollars ($90,000), on the Effective Date (the “ Revolving Line Commitment Fee ”);

(b) Unused Revolving Line Facility Fee . Payable quarterly in arrears on a calendar year basis, on the last day of each calendar quarter occurring thereafter prior to the Revolving Line Maturity Date, and on the Revolving Line Maturity Date, a fee (the “ Unused Revolving Line Facility Fee ”) in an amount equal to one quarter of one percent (0.25%) per annum of the average unused portion of the Revolving Line, as determined by Bank, computed on the basis of a year with the applicable number of days as set forth in Section 2.5(d). The unused portion of the Revolving Line, for purposes of this calculation, shall be calculated on a calendar year basis and shall equal the difference between (i) the Revolving Line, and (ii) the average for the period of the daily closing balance of the Revolving Line outstanding.

(c) Bank Expenses . All Bank Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this Agreement, which fees for the documentation and negotiation of this Agreement will not exceed Twenty Thousand Dollars ($20,000) as of the Effective Date) incurred through and after the Effective Date, when due (or, if no stated due date, upon demand by Bank).

(d) Fees Fully Earned . Unless otherwise provided in this Agreement or in a separate writing by Bank, Borrower shall not be entitled to any credit, rebate, or repayment of any fees earned by Bank pursuant to this Agreement notwithstanding any termination of this Agreement or the suspension or termination of Bank’s obligation to make loans and advances hereunder. Bank may deduct amounts owing by Borrower under the clauses of this Section 2.6 pursuant to the terms of Section 2.7(c). Bank shall provide Borrower written notice of deductions made from the Designated Deposit Account pursuant to the terms of the clauses of this Section 2.6.

2.7 Payments; Application of Payments; Debit of Accounts.

(a) All payments to be made by Borrower under any Loan Document shall be made in immediately available funds in Dollars, without setoff or counterclaim, before 12:00 p.m. Eastern time on the date

when due. Payments of principal and/or interest received after 12:00 p.m. Eastern time are considered received at the opening of business on the next Business Day. When a payment is due on a day that is not a Business Day, the payment shall be due the next Business Day, and additional fees or interest, as applicable, shall continue to accrue until paid.

(b) Bank has the exclusive right to determine the order and manner in which all payments with respect to the Obligations may be applied. Borrower shall have no right to specify the order or the accounts to which Bank shall allocate or apply any payments required to be made by Borrower to Bank or otherwise received by Bank under this Agreement when any such allocation or application is not specified elsewhere in this Agreement.

(c) Bank may debit any of Borrower’s deposit accounts, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes Bank when due. These debits shall not constitute a set-off.

2.8 Withholding.

(a) All payments by ISR Borrower on account of the Obligations shall be made subject to applicable withholding taxes under the Israeli Income Tax Ordinance and the Convention between the Government of the State of Israel and the Government of the United States of America with respect to taxes on income, provided however, that if Bank provides Borrower with a valid certificate of exemption from tax withholding or a determination applying a reduced withholding tax rate or any other instructions regarding the payment of withholding issued by the Israeli Tax Authority, then the withholding (if any) of any amounts from the payments to be made by the ISR Borrower to Bank shall be made only in accordance with the provisions of such certificate.

(b) Subject to Section 2.8(a) above, Payments received by Bank from Borrower under this Agreement will be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority (including any interest, additions to tax or penalties applicable thereto). Specifically, however, if at any time any Governmental Authority, applicable law, regulation or international agreement requires Borrower to make any withholding or deduction from any such payment or other sum payable hereunder to Bank, Borrower hereby covenants and agrees that the amount due from Borrower with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure that, after the making of such required withholding or deduction, Bank receives a net sum equal to the sum which it would have received had no withholding or deduction been required, and Borrower shall pay the full amount withheld or deducted to the relevant Governmental Authority. Borrower will, upon request, furnish Bank with proof reasonably satisfactory to Bank indicating that Borrower has made such withholding payment if and to the extent such withholding tax payment is required to be made in accordance with applicable law, and will reasonably cooperate with Bank in connection with any information and documentation required by Bank in connection with credits, exemptions, rebates, or other benefits to be obtained by Bank in connection with such withholding payments made by Borrower, which credits, exemptions, rebates, or other benefits shall be property of Bank, without payment to Borrower or application to any Obligations hereunder; provided, however, that Borrower need not make any withholding payment if the amount or validity of such withholding payment is contested in good faith by appropriate and timely proceedings and as to which payment in full is bonded or reserved against by Borrower.

(c) The agreements and obligations of Borrower contained in this Section 2.8 shall survive the termination of this Agreement.

3 CONDITIONS OF LOANS

3.1 Conditions Precedent to Initial Credit Extension. Bank’s obligation to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate, including, without limitation:

(a) establishment of the Cash Collateral Account;

(b) duly executed original signatures to the Loan Documents;

(c) duly executed original signatures of Borrower to the ISR Debentures and their translation to Hebrew, duly executed notices to the Israeli Registrar of Companies for the registration of the ISR Debentures and original confirmation of such translations’ compatibility, as required for the registration of the ISR Debentures;

(d) an officer certificate of ISR Borrower with respect to ISR Borrower’s articles, certificate of incorporation, incumbency and resolutions authorizing the execution and delivery of this Agreement and the other Loan Documents to which it is a party, together with the duly executed original signatures thereto;

(e) US Borrower’s Operating Documents and long-form good standing certificates of US Borrower certified by the Secretary of State (or equivalent agency) of US Borrower’s jurisdiction of organization or formation and each jurisdiction in which Borrower is qualified to conduct business, each as of a date no earlier than thirty (30) days prior to the Effective Date;

(f) a secretary’s certificate of US Borrower with respect to US Borrower’s Operating Documents, incumbency, specimen signatures and resolutions authorizing the execution and delivery of this Agreement and the other Loan Documents to which it is a party;

(g) duly executed original signatures to the completed Borrowing Resolutions for each Borrower;

(h) certified copies, dated as of a recent date, of financing statement and other lien filing searches, US Companies Registry searches and Israel Companies Registrar searches, as Bank shall request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements or other filings either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released, in each case with respect to each Borrower;

(i) the Perfection Certificate(s) of each Borrower, together with the duly executed original signatures thereto;

(j) Intellectual Property search results and completed exhibits to the IP Agreement;

(k) a legal opinion of ISR Borrower’s counsel dated as of the Effective Date together with the duly executed original signature thereto;

(l) evidence satisfactory to Bank that all filings required to have been made pursuant to the ISR Debentures and the other Loan Documents have been made to secure a first-ranking Lien in favor of the Bank on the Collateral, and all other actions required to have been taken by Borrower or any other party prior to the initial Credit Extension shall have been taken and all consents and other authorizations shall have been obtained prior to the initial Credit Extension, all in accordance with the terms of the ISR Debentures and the other Loan Documents; and that a first-ranking Liens have been registered in favor of the Bank pursuant to the ISR Debentures

(m) written approval from the NATI and Investment Center with respect to the creation of the security interest by Borrower over the Collateral in favor of Bank;

(n) the insurance policies and/or endorsements required pursuant to Section 6.7 hereof evidence satisfactory to Bank that the insurance policies and endorsements required by Section 6.7 hereof are in full force and effect, together with appropriate evidence showing lender loss payable and/or additional insured clauses or endorsements in favor of Bank;

(o) with respect to the initial Advance, a completed Borrowing Base Report (and any schedules related thereto and including any other information requested by Bank with respect to Borrower’s Accounts); and

(p) payment of the fees and Bank Expenses then due as specified in Section 2.6 hereof.

3.2 Conditions Precedent to all Credit Extensions. Bank’s obligations to make each Credit Extension, including the initial Credit Extension, is subject to the following conditions precedent:

(a) timely receipt of (i) the Credit Extension request and any materials and documents required by Section 3.4; and (ii) with respect to the request for Term Loan Advances, an executed Payment/Advance Form and any materials and documents required by Section 3.4;

(b) each of the representations and warranties in this Agreement, the Debentures and the IP Agreement shall be true, accurate, and complete on the date of the Advance Request and Invoice Transmittal and Payment/Advance Form and on the effective date of each Credit Extension and no Event of Default shall have occurred and be continuing, or result from the Credit Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in this Agreement, the Debentures and the IP Agreement remain true, accurate, and complete; and

(c) Bank determines to its satisfaction that there has not been any material impairment in the general affairs, management, results of operation, financial condition or the prospect of repayment of the Obligations, nor any material adverse deviation by Borrower from the most recent business plan of Borrower presented to and accepted by Bank.

3.3 Covenant to Deliver. Borrower agrees to deliver to Bank each item required to be delivered to Bank under this Agreement as a condition precedent to any Credit Extension. Borrower expressly agrees that a Credit Extension made prior to the receipt by Bank of any such item shall not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and the making of any Credit Extension in the absence of a required item shall be in Bank’s sole discretion.

3.4 Procedures for Borrowing.

(a) Advances . Subject to the prior satisfaction of all other applicable conditions to the making of an Advance set forth in this Agreement, to obtain an Advance, Borrower (via an individual duly authorized by an Administrator) shall notify Bank (which notice shall be irrevocable) by electronic mail by 12:00 p.m. Eastern time on the Funding Date of the Advance. Such notice shall be made by Borrower through Bank’s online banking program, provided, however, if Borrower is not utilizing Bank’s online banking program, then such notice shall be in a written format acceptable to Bank that is executed by an Authorized Signer. Bank shall have received satisfactory evidence that the Board has approved that such Authorized Signer may provide such notices and request Advances. In connection with any such notification, Borrower must promptly deliver to Bank by electronic mail or through Bank’s online banking program such reports and information, including without limitation, sales journals, cash receipts journals, accounts receivable aging reports, as Bank may request in its sole discretion. Bank shall credit proceeds of an Advance to the Designated Deposit Account. Bank may make Advances under this Agreement based on instructions from an Authorized Signer or without instructions if the Advances are necessary to meet Obligations which have become due.

(b) Term Loan Advances . Subject to the prior satisfaction of all other applicable conditions to the making of a Term Loan Advance set forth in this Agreement, to obtain a Term Loan Advance, Borrower (via an individual duly authorized by an Administrator) shall notify Bank (which notice shall be irrevocable) by electronic mail by 12:00 noon Eastern time on the Funding Date of the Term Loan Advance. Such notice shall be made by Borrower through Bank’s online banking program, provided, however, if Borrower is not utilizing Bank’s online banking program, then such notice shall be in a written format acceptable to Bank that is executed by an Authorized Signer. Bank shall have received satisfactory evidence that the Board has approved that such Authorized Signer may provide such notices and request Term Loan Advances. In connection with such notification, Borrower must promptly deliver to Bank by electronic mail or through Bank’s online banking program a completed Payment/Advance Form executed by an Authorized Signer together with such other reports and information, as Bank may request in its sole discretion. Bank shall credit proceeds of any Term Loan Advance to the Designated Deposit Account. Bank may make Term Loan

Advances under this Agreement based on instructions from an Authorized Signer or without instructions if the Term Loan Advances are necessary to meet Obligations which have become due.

4 CREATION OF SECURITY INTEREST

4.1 Grant of Security Interest. Borrower hereby grants Bank, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof.

Borrower acknowledges that it previously has entered, and/or may in the future enter, into Bank Services Agreements with Bank. Regardless of the terms of any Bank Services Agreement, Borrower agrees that any amounts Borrower owes Bank thereunder shall be deemed to be Obligations hereunder and that it is the intent of Borrower and Bank to have all such Obligations secured by the first priority perfected security interest in the Collateral granted herein and by the ISR Debentures and any and all other security agreements, mortgages or other collateral granted to Bank by Borrower as security for the Obligations, now or in the future (subject only to Permitted Liens that are permitted pursuant to the terms of this Agreement to have superior priority to Bank’s Lien in this Agreement).

If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations) and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at the sole cost and expense of Borrower, release its Liens in the Collateral and all rights therein shall revert to Borrower. In the event (x) all Obligations (other than inchoate indemnity obligations), except for Bank Services, are satisfied in full, and (y) this Agreement is terminated, Bank shall terminate Bank’s Liens granted herein upon Borrower providing cash collateral acceptable to Bank in its good faith business judgment consistent with Bank’s then current practice for Bank Services, if any. In the event such Bank Services consist of outstanding Letters of Credit, Borrower shall provide to Bank cash collateral in an amount equal to (x) if such Letters of Credit are denominated in Dollars, then at least one hundred five percent (105.0%); and (y) if such Letters of Credit are denominated in a Foreign Currency, then at least one hundred ten percent (110.0%), of the Dollar Equivalent of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment), to secure all of the Obligations relating to such Letters of Credit.

4.2 Debentures . Borrower undertakes to create, in favor of Bank, (i) a first ranking floating charge over all of the present and future assets of ISR Borrower whether now existing or hereafter created (including without limitation, Intellectual Property), (ii) a first ranking fixed charge over its registered and unissued share capital, its reputation and goodwill, Intellectual Property, equipment and other fixed assets and any tax benefit it may have, in accordance with a debentures of floating charge and fixed charge in the forms of Debenture attached as Exhibit E and Exhibit E-1 respectively, and (iii) a first ranking fixed charge over its equity holdings in the shares of the UK Subsidiary, in accordance with the applicable form of the Deed of Pledge attached hereto as Exhibit F (as amended, modified or restated from time to time, jointly, the “ ISR Debentures ” and each, an “ ISR Debenture ”). In addition, Borrower undertakes to create (a) within twenty (20) days of the end of each calendar year, and more often if requested at the sole and absolute discretion of Bank, a first ranking fixed charge over (i) each Account which is outstanding at such time, (ii) ISR Borrower’s rights, whether then existing or thereafter created, to receive funds from its customers, and (iii) any additional applications for registration of Intellectual Property of ISR Borrower or additional registered Intellectual Property of ISR Borrower (as described in Section 6.10 below) and any additional unregistered Intellectual Property developed by ISR Borrower, if any, and (iv) Borrower’s Equipment, all in accordance with a debenture of fixed charge in the form of the Debenture attached hereto as Exhibit E-1 ) (or in the form of an amendment to the existing ISR Debenture, at the Bank’s discretion as agreed by Borrower; (each such new and/or amended debenture and/or deed of pledge shall also be included in the definition of the term “ ISR Debenture ” herein). Borrower warrants and represents that the charges of the ISR Debentures, upon the filing thereof, shall be first priority fixed and floating charges (as provided therein) in the Collateral. In addition, Borrower undertakes to create, upon Bank’s written request to be made at Bank's sole discretion, a first ranking fixed charge over its equity holdings in the shares of each of its Subsidiaries, whether constituting Subsidiaries as of the Effective Date or thereafter becoming Subsidiaries of Borrower.

4.3 Priority of Security Interest. Borrower represents, warrants, and covenants that the security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral and a first priority fixed and floating charges as set forth in the ISR Debentures (subject only to Permitted Liens that are permitted pursuant to the terms of this Agreement to have superior priority to Bank’s Lien under this Agreement). If Borrower shall acquire a commercial tort claim, Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Bank.

4.4 Authorization to File Financing Statements. Borrower hereby authorizes Bank to file financing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of Bank under the Code. Such financing statements may indicate the Collateral as “all assets of the Debtor” or words of similar effect, or as being of an equal or lesser scope, or with greater detail, all in Bank’s discretion.

5 REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants as follows:

5.1 Due Organization, Authorization; Power and Authority. Borrower is duly existing and in good standing as a Registered Organization in its jurisdiction of formation and is qualified and licensed to do business and is in good standing in any jurisdiction in which the conduct of its business or its ownership of property requires that it be qualified except where the failure to do so could not reasonably be expected to have a material adverse effect on Borrower’s business. ISR Borrower is not in a status of a ' breaching company ' as such term is defined under the Israeli Companies Law 5759. In connection with this Agreement, Borrower has delivered to Bank completed certificates, each signed by Borrower, entitled “Perfection Certificate” (the “ Perfection Certificate ”). Borrower represents and warrants to Bank that (a) Borrower’s exact legal name is that indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an organization of the type and is organized in the jurisdiction set forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s organizational identification number or accurately states that Borrower has none; (d) the Perfection Certificate accurately sets forth Borrower’s place of business, or, if more than one, its chief executive office as well as Borrower’s mailing address (if different than its chief executive office); (e) Borrower (and each of its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction; and (f) all other information set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete (it being understood and agreed that Borrower may from time to time update certain information in the Perfection Certificate after the Effective Date to the extent permitted by one or more specific provisions in this Agreement). If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence and provide Bank with Borrower’s organizational identification number.

The execution, delivery and performance by Borrower of the Loan Documents to which it is a party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or any of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect), or (v) conflict with, contravene, constitute a default or breach under, or result in or permit the termination or acceleration of, any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which it is a party or by which it is bound in which the default could reasonably be expected to have a material adverse effect on Borrower’s business.

5.2 Collateral. Borrower has good title to, rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder and under the ISR Debentures, free and clear of any and all Liens except Permitted Liens. Borrower has no Collateral Accounts at or with any bank or financial institution other than

Bank or Bank’s Affiliates except for the Collateral Accounts described in the Perfection Certificate delivered to Bank in connection herewith and which Borrower has taken such actions as are necessary to give Bank a perfected security interest therein and, as provided in the ISR Debentures, fixed and floating charges thereon, pursuant to the terms of Section 6.8(b). The Accounts are bona fide, existing obligations of the Account Debtors.

The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2.

All Inventory is in all material respects of good and marketable quality, free from material defects.

Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not reasonably be expected to have a material adverse effect on Borrower’s business.

Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

5.3 Accounts Receivable; Inventory.

(a) For each Account with respect to which Advances are requested, on the date each Advance is requested and made, such Account shall be an Eligible Account.

(b) All statements made and all unpaid balances appearing in all invoices, instruments and other documents evidencing the Eligible Accounts are and shall be true and correct and all such invoices, instruments and other documents, and all of Borrower’s Books are genuine and in all respects what they purport to be. All sales and other transactions underlying or giving rise to each Eligible Account shall comply in all material respects with all applicable laws and governmental rules and regulations. Borrower has no knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor whose accounts are Eligible Accounts in any Borrowing Base Report. To Borrower’s knowledge, all signatures and endorsements on all documents, instruments, and agreements relating to all Eligible Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance with their terms.

5.4 Litigation. There are no actions or proceedings pending or, to the knowledge of any Responsible Officer, threatened in writing by or against Borrower or any of its Subsidiaries in which an adverse decision could reasonably be expected to cause a Material Adverse Change.

5.5 Financial Statements; Financial Condition. All consolidated financial statements for Borrower and any of its Subsidiaries delivered to Bank fairly present in all material respects Borrower’s consolidated financial condition and Borrower’s consolidated results of operations. There has not been any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial statements submitted to Bank.

5.6 Solvency. The fair salable value of Borrower’s assets (including goodwill minus disposition costs) exceeds the fair value of its liabilities; Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as they mature.

5.7 Regulatory Compliance. Borrower is not an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve

Board of Governors). Borrower has complied in all material respects with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to cause a Material Adverse Change. None of Borrower’s or any Subsidiary’s properties or assets have been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than legally. Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted.

5.8 Subsidiaries; Investments. Borrower does not own any stock, partnership, or other ownership interest or other equity securities except for Permitted Investments.

5.9 Tax Returns and Payments; Pension Contributions. Borrower has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except to the extent such taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor.

To the extent Borrower defers payment of any contested taxes, Borrower shall (i) notify Bank in writing of the commencement of, and any material development in, the proceedings, and (ii) post bonds or take any other steps required to prevent the Governmental Authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien.” Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior tax years which could result in additional taxes becoming due and payable by Borrower. Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.

5.10 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as working capital and to fund its general business requirements and not for personal, family, household or agricultural purposes.

5.11 Full Disclosure. No written representation, warranty or other statement of Borrower in any certificate or written statement given to Bank, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Bank, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized by Bank that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).

5.12 Definition of “Knowledge.” For purposes of the Loan Documents, whenever a representation or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the actual knowledge after reasonable investigation, of any Responsible Officer.

5.13 No Winding-Up . Borrower has not taken any corporate or other action nor has any application been made or any other steps been taken or legal proceedings been started or (to Borrower’s knowledge) threatened in writing against Borrower or any of its Subsidiaries for its winding-up or for the appointment of a liquidator, trustee, receiver, administrative receiver, administrator, examiner or similar officer of it or of any or all of its assets.

5.14 NATI and Investment Center. As of the Effective Date, Borrower did not receive any grants, funds or benefits (including, but not limited to, tax benefits) from NATI (formerly known as, the Israeli Office of Chief Scientist) or Investment Center, or the Binational Industrial Research and Development Foundation or any other Governmental Authority except as provided in Schedule 5.14 . Borrower is not obligated to pay any royalties or any other payments to the NATI or Investment Center or the Binational Industrial Research and Development Foundation

or any other Governmental Authority, except as provided in Schedule 5.14 . The transactions contemplated under this Agreement, the ISR Debentures and any other Loan Document (including the realization of the Charged Property) are not subject to any right and do not require the approval of the NATI or Investment Center or the Binational Industrial Research and Development Foundation or any other Governmental Authority, except as provided in Schedule 5.13 .

6 AFFIRMATIVE COVENANTS

Borrower shall do all of the following:

6.1 Government Compliance.

(a) Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on Borrower’s business or operations. Borrower shall comply, and have each Subsidiary comply, in all material respects, with all laws, ordinances and regulations to which it is subject.

(b) Obtain all of the Governmental Approvals necessary for the performance by Borrower of its obligations under the Loan Documents to which it is a party and the grant of a security interest to Bank in all of its property. Borrower shall promptly provide copies of any such obtained Governmental Approvals to Bank.

(c) Deliver to Bank, within five (5) days after the same are sent or received, copies of all correspondence, reports, documents and other filings with any Governmental Authority regarding compliance with or maintenance of Governmental Approvals or Requirements of Law or that could reasonably be expected to have a material adverse effect on any of the Governmental Approvals or otherwise on the operations of Borrower or any of its Subsidiaries.

6.2 Financial Statements, Reports, Certificates. Provide Bank with the following:

(a) a Borrowing Base Report (and any schedules related thereto and including any other information requested by Bank with respect to Borrower’s Accounts) (i) no later than Friday of each week when a Streamline Period is not in effect, and (ii) within seven (7) days after the end of each month when a Streamline Period is in effect;

(b) within seven (7) days after the end of each month, (A) monthly accounts receivable agings, aged by invoice date, (B) monthly accounts payable agings, aged by invoice date, and outstanding or held check registers, if any, (C) Deferred Revenue report, and (D) monthly reconciliations of accounts receivable agings (aged by invoice date), general ledger and customer debtor information;

(c) as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated balance sheet, income statement and cash flow covering Borrower’s consolidated operations for such month certified by a Responsible Officer and in a form acceptable to Bank (the “ Monthly Financial Statements ”);

(d) within thirty (30) days after the last day of each month and together with the Monthly Financial Statements, a duly completed Compliance Certificate signed by a Responsible Officer, certifying that as of the end of such month, Borrower was in full compliance with all of the terms and conditions of this Agreement, and setting forth calculations showing compliance with the financial covenants set forth in this Agreement and such other information as Bank may reasonably request, including, without limitation, a statement that at the end of such month there were no held checksas soon as available, and at least annually, within ten (10) days of approval by Borrower’s board of directors and contemporaneously with any updates or amendments thereto, (A) annual operating budgets (including income statements, balance sheets and cash flow statements, by month) for the upcoming fiscal year of Borrower, (B) annual financial projections for the following fiscal year (on a quarterly basis), in each case as approved by the Board, together with any related business forecasts used in the preparation of such annual financial projections, and (C) a capitalization table;

(e) as soon as available, and in any event within one hundred fifty (150) days following the end of Borrower’s fiscal year, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm reasonably acceptable to Bank (provided that any firm associated with the “Big Four” accounting firms or an affiliate thereof is deemed acceptable to Bank);

(f) in the event that Borrower becomes subject to the reporting requirements under the Exchange Act within five (5) days of filing, copies of all periodic and other reports, proxy statements and other materials filed by Borrower and/or any Guarantor with the SEC, any Governmental Authority succeeding to any or all of the functions of the SEC or with any national securities exchange, or distributed to its shareholders, as the case may be. Documents required to be delivered pursuant to the terms hereof (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower posts such documents, or provides a link thereto, on Borrower’s website on the internet at Borrower’s website address; provided, however, Borrower shall promptly notify Bank in writing (which may be by electronic mail) of the posting of any such documents;

(g) within five (5) days of delivery, copies of all statements, reports and notices made available to Borrower’s security holders or to any holders of Subordinated Debt;

(h) prompt report of any legal actions pending or threatened in writing against Borrower or any of its Subsidiaries that could result in damages or costs to Borrower or any of its Subsidiaries of, individually or in the aggregate, one hundred Thousand Dollars ($100,000) or more;

(i) promptly, from time to time, such other information regarding Borrower or compliance with the terms of any Loan Documents as reasonably requested by Bank.

(j) Provide Bank prompt written notice of (i) any material change in the composition of the Intellectual Property, (ii) the registration of any Copyright, including any subsequent ownership right of Borrower in or to any Copyright, Patent or Trademark not shown in the IP Agreement or the ISR Debentures and UK Debenture, and (iii) Borrower’s knowledge of an event that could reasonably be expected to materially and adversely affect the value of the Intellectual Property.

(k) Provide Bank with prompt written notice of any changes to the beneficial ownership information set out in items 2(d) through 2(g) of the Perfection Certificate. Borrower understands and acknowledges that Bank relies on such true, accurate and up-to-date beneficial ownership information to meet Bank’s regulatory obligations to obtain, verify and record information about the beneficial owners of its legal entity customers.

6.3 Accounts Receivable.

(a) Schedules and Documents Relating to Accounts . Borrower shall deliver to Bank transaction reports and schedules of collections, as provided in Section 6.2, on Bank’s standard forms; provided, however, that Borrower’s failure to execute and deliver the same shall not affect or limit Bank’s Lien and other rights in all of Borrower’s Accounts, nor shall Bank’s failure to advance or lend against a specific Account affect or limit Bank’s Lien and other rights therein. If requested by Bank, Borrower shall furnish Bank with copies (or, at Bank’s request, originals) of all contracts, orders, invoices, and other similar documents, and all shipping instructions, delivery receipts, bills of lading, and other evidence of delivery, for any goods the sale or disposition of which gave rise to such Accounts. In addition, Borrower shall deliver to Bank, on its request, the originals of all instruments, chattel paper, security agreements, guarantees and other documents and property evidencing or securing any Accounts, in the same form as received, with all necessary indorsements, and copies of all credit memos.

(b) Disputes . Borrower shall promptly notify Bank of all disputes or claims relating to Accounts. Borrower may forgive (completely or partially), compromise, or settle any Account for less than payment in full, or agree to do any of the foregoing so long as (i) Borrower does so in good faith, in a commercially reasonable manner, in the ordinary course of business, in arm’s-length transactions, and reports the same to Bank in the regular reports

provided to Bank; (ii) no Event of Default has occurred and is continuing; and (iii) after taking into account all such discounts, settlements and forgiveness, the total outstanding Advances will not exceed the lesser of the Revolving Line or the Borrowing Base.

(c) Collection of Accounts . Borrower shall direct Account Debtors to deliver or transmit all proceeds of Accounts into a lockbox account, or such other “blocked account” as specified by Bank (either such account, the “ Cash Collateral Account ”). Whether or not an Event of Default has occurred and is continuing, Borrower shall immediately deliver all payments on and proceeds of Accounts to the Cash Collateral Account. Subject to Bank’s right to maintain a reserve pursuant to Section 6.3(d), all amounts received in the Cash Collateral Account shall be (i) when a Streamline Period is not in effect, applied to immediately reduce the Obligations under the Revolving Line (unless Bank, in its sole discretion, at times when an Event of Default exists, elects not to so apply such amounts), or (ii) when a Streamline Period is in effect, transferred on a daily basis to Borrower’s operating account with Bank. Borrower hereby authorizes Bank to transfer to the Cash Collateral Account any amounts that Bank reasonably determines are proceeds of the Accounts (provided that Bank is under no obligation to do so and this allowance shall in no event relieve Borrower of its obligations hereunder).

(d) Reserves . Notwithstanding any terms in this Agreement to the contrary: (i) Bank may, at any time, in its sole discretion, hold any proceeds of the Accounts and any amounts in the Cash Collateral Account as a reserve to cover Borrower’s Obligations to Bank (and to pay such Obligations when due); and (ii) at times when an Event of Default exists or an event exists that, with notice or passage of time or both, Bank determines would constitute an Event of Default, Bank may hold any proceeds of the Accounts and any amounts in the Cash Collateral Account that are not applied to the Obligations pursuant to Section 6.3(c) above (including amounts otherwise required to be transferred to Borrower’s operating account with Bank when a Streamline Period is in effect) as a reserve to be applied to any Obligations regardless of whether such Obligations are then due and payable.

(e) Returns . Provided no Event of Default has occurred and is continuing, if any Account Debtor returns any Inventory to Borrower, Borrower shall promptly (i) determine the reason for such return, (ii) issue a credit memorandum to the Account Debtor in the appropriate amount, and (iii) provide a copy of such credit memorandum to Bank, upon request from Bank. In the event any attempted return occurs after the occurrence and during the continuance of any Event of Default, Borrower shall hold the returned Inventory in trust for Bank, and immediately notify Bank of the return of the Inventory.

(f) Verifications; Confirmations; Credit Quality; Notifications . Bank may, from time to time, (i) verify and confirm directly with the respective Account Debtors the validity, amount and other matters relating to the Accounts, either in the name of Borrower or Bank or such other name as Bank may choose, and notify any Account Debtor of Bank’s security interest in such Account and/or (ii) conduct a credit check of any Account Debtor to approve any such Account Debtor’s credit. In addition, Bank may notify Account Debtors to make payments in respect of Accounts directly to Bank. Notwithstanding the foregoing, prior to the occurrence and continuance of an Event of Default, Bank will notify Borrower prior to making any direct contact with Borrower’s Account Debtors

(g) No Liability . Bank shall not be responsible or liable for any shortage or discrepancy in, damage to, or loss or destruction of, any goods, the sale or other disposition of which gives rise to an Account, or for any error, act, omission, or delay of any kind occurring in the settlement, failure to settle, collection or failure to collect any Account, or for settling any Account in good faith for less than the full amount thereof, nor shall Bank be deemed to be responsible for any of Borrower’s obligations under any contract or agreement giving rise to an Account. Nothing herein shall, however, relieve Bank from liability for its own gross negligence or willful misconduct.

6.4 Remittance of Proceeds. Except as otherwise provided in Section 6.3(c), deliver, in kind, all proceeds arising from the disposition of any Collateral to Bank in the original form in which received by Borrower not later than the following Business Day after receipt by Borrower, to be applied to the Obligations (a) prior to an Event of Default, pursuant to the terms of Section 6.3(c) hereof, and (b) after the occurrence and during the continuance of an Event of Default, pursuant to the terms of Section 9.4 hereof; provided that, if no Event of Default has occurred and is continuing, Borrower shall not be obligated to remit to Bank the proceeds of the sale of worn out or obsolete Equipment disposed of by Borrower in good faith in an arm’s length transaction for an aggregate purchase price of Twenty Five Thousand

Dollars ($25,000.00) or less (for all such transactions in any fiscal year). Borrower agrees that it will not commingle proceeds of Collateral with any of Borrower’s other funds or property, but will hold such proceeds separate and apart from such other funds and property and in an express trust for Bank. Nothing in this Section 6.4 limits the restrictions on disposition of Collateral set forth elsewhere in this Agreement and/or in any other Loan Document.

6.5 Taxes; Pensions. Timely file, and require each of its Subsidiaries to timely file, all required tax returns and reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower and each of its Subsidiaries, except for deferred payment of any taxes contested pursuant to the terms of Section 5.9 hereof, and shall deliver to Bank, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms.

6.6 Access to Collateral; Books and Records. At reasonable times, on one (1) Business Day’s notice (provided no notice is required if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right to inspect the Collateral and the right to audit and copy Borrower’s Books. Such inspections and audits shall be conducted no more often than twice per each Borrower every twelve (12) months, unless an Event of Default has occurred and is continuing in which case such inspections and audits shall occur as often as Bank shall determine is necessary. The foregoing inspections and audits shall be conducted at Borrower’s expense and the charge for any one (1) such inspection or audit shall not exceed Five Thousand Dollars ($5,000.00), plus reasonable out-of-pocket expenses. In the event Borrower and Bank schedule an audit more than eight (8) days in advance, and Borrower cancels or seeks to or reschedules the audit with less than eight (8) days written notice to Bank, then (without limiting any of Bank’s rights or remedies) Borrower shall pay Bank a fee of Two Thousand Dollars ($2,000.00) plus any out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated costs and expenses of the cancellation or rescheduling.

6.7 Insurance.

(a) Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location and as Bank may reasonably request. Insurance policies shall be in a form, with financially sound and reputable insurance companies that are not Affiliates of Borrower, and in amounts that are satisfactory to Bank. All property policies shall have a lender’s loss payable endorsement showing Bank as the sole lender loss payee. All liability policies shall show, or have endorsements showing, Bank as an additional insured. Bank shall be named as lender loss payee and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral. With respect to any insurance policy of ISR Borrower, Bank shall be designated as a “Motav” in the meaning and for the purposes of the Israeli Insurance Contract Law 5741-1981.

(b) Ensure that proceeds payable under any property policy are, at Bank’s option, payable to Bank on account of the Obligations, provided however that in the event that such proceeds are payable to an additional insured of Borrower, solely as a result of or in connection with an insurance claim filed by such additional insured or together with Borrower (specifically excluding claim field solely by Borrower), then such proceeds shall be payable to such additional insured.

(c) At Bank’s request, Borrower shall deliver certified copies of insurance policies and evidence of all premium payments. Each provider of any such insurance required under this Section 6.7 shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to Bank, that it will give Bank thirty (30) days prior written notice before any such policy or policies shall be materially altered or canceled. If Borrower fails to obtain insurance as required under this Section 6.7 or to pay any amount or furnish any required proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain such insurance policies required in this Section 6.7, and take any action under the policies Bank deems prudent.

6.8 Accounts.

(a) Maintain all of Borrower’s and all of its Subsidiaries’ depository, operating and securities/investment accounts and cash with Bank and Bank’s Affiliates, provided, however , that Borrower may maintain (i) its Dollar account and cash denominated in Dollars with CitiBank, N.A, existing on the Effective Date, having account

numbers 9933184797 and 9960069786, provided that such account shall be containing an aggregate amount of funds not exceeding at any time $50,000, (ii) without derogating from and subject to the Subsidiaries Assets Threshold, (x) Borrower’s and/or its Subsidiaries’ account with 2013 CATALUNYA BANC, S.A, existing on the Effective Date, having account number IBAN ES2620130695100201051360, branch address 0695 Barcelona Marina Pujades, Spain, and (y) Borrower’s and/or its Subsidiaries’ account with Schwaebische-Bank AG, having account number 100 0000 220, branch address Z.H.Herrn Michelberger, Postfach 10 46 4270041 Stuttgart, Germany, and KBC Bank SA, Succursale Francaise 52 Rue de la Victoire, 75009 Paris, France, having account number FR76 2780 0400 0106 1682 8010 153 , in each case, as specified under the Perfection Certificate, provided that such accounts under sub-sections (x) and (y) above, shall be containing an aggregate amount of funds not exceeding at any time $1,500,000, and (iii) deposit and operating accounts with financial institutions in Israel, containing (x) any amount of funds in Shekels, (y) funds in Dollars in such amount not to exceed at any time $100,000, and (z) funds in Euros in such amount not to exceed at any time €50,000. Any Guarantor shall maintain all depository, operating and securities/investment accounts with Bank and Bank’s Affiliates.

(b) In addition to and without limiting the restrictions in (a), Borrower shall provide Bank five (5) days prior written notice before establishing any Collateral Account at or with any bank or financial institution other than Bank or Bank’s Affiliates. For each Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable bank or financial institution (other than Bank) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms hereunder which Control Agreement may not be terminated without the prior written consent of Bank. The provisions of the previous sentence shall not apply to deposit accounts exclusively used for payroll, payroll taxes, and other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such.

6.9 Financial Covenant – Adjusted Quick Ratio. Borrower shall have at all times, to be tested as of the last day of each month, an Adjusted Quick Ratio of at least 1.25.

6.10 Protection and Registration of Intellectual Property Rights.

(a) (i) Protect, defend and maintain the validity and enforceability of its Intellectual Property; (ii) promptly advise Bank in writing of material infringements of its Intellectual Property; and (iii) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s written consent.

(b) If Borrower (i) obtains any Patent, registered Trademark, registered Copyright, registered mask work, or any pending application for any of the foregoing, whether as owner, licensee or otherwise, or (ii) applies for any Patent or the registration of any Trademark, then Borrower shall immediately provide written notice thereof to Bank and shall execute such intellectual property security agreements and other documents and take such other actions as Bank shall request in its good faith business judgment to perfect and maintain a first priority perfected security interest in, and a first ranking fixed charge over, such property in favor of Bank. If Borrower decides to register any Copyrights or mask works in the United States Copyright Office, Borrower shall: (x) provide Bank with at least fifteen (15) days prior written notice of Borrower’s intent to register such Copyrights or mask works together with a copy of the application it intends to file with the United States Copyright Office (excluding exhibits thereto); (y) execute an intellectual property security agreement and such other documents and take such other actions as Bank may request in its good faith business judgment to perfect and maintain in favor of Bank a first priority perfected security interest in, and a first ranking fixed charge over, the Copyrights or mask works intended to be registered with the United States Copyright Office; and (z) record such intellectual property security agreement with the United States Copyright Office contemporaneously with filing the Copyright or mask work application(s) with the United States Copyright Office. Borrower shall promptly provide to Bank copies of all applications that it files for Patents or for the registration of Trademarks, Copyrights or mask works, together with evidence of the recording of the intellectual property security agreement necessary for Bank to perfect and maintain a first priority perfected security interest in, and a first ranking fixed charge over, such property.

(c) Provide written notice to Bank within ten (10) days of entering or becoming bound by any Restricted License (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (i) any Restricted License to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such Restricted License, whether now existing or entered into in the future, and (ii) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

6.11 Litigation Cooperation. From the date hereof and continuing through the termination of this Agreement, make available to Bank, without expense to Bank, Borrower and its officers, employees and agents and Borrower’s books and records, to the extent that Bank may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against Bank with respect to any Collateral or relating to Borrower.

6.12 Online Banking.

(a) Utilize Bank’s online banking platform for all matters requested by Bank which shall include, without limitation (and without request by Bank for the following matters), uploading information pertaining to Accounts and Account Debtors, requesting approval for exceptions, requesting Credit Extensions, and uploading financial statements and other reports required to be delivered by this Agreement (including, without limitation, those described in Section 6.2 of this Agreement).

(b) Comply with the terms of Bank’s Online Banking Agreement as in effect from time to time and ensure that all persons utilizing Bank’s online banking platform are duly authorized to do so by an Administrator. Bank shall be entitled to assume the authenticity, accuracy and completeness on any information, instruction or request for a Credit Extension submitted via Bank’s online banking platform and to further assume that any submissions or requests made via Bank’s online banking platform have been duly authorized by an Administrator.

6.13 Formation or Acquisition of Subsidiaries. Notwithstanding and without limiting the negative covenants contained in Sections 7.3 and 7.7 hereof, at the time that Borrower or any Guarantor forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary after the Effective Date, Borrower and such Guarantor shall (a) cause such new Subsidiary to provide to Bank a joinder to this Agreement to become a co-borrower hereunder or a Guaranty to become a Guarantor hereunder, together with such appropriate financing statements and/or Control Agreements, all in form and substance satisfactory to Bank (including being sufficient to grant Bank a first priority Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Subsidiary), (b) provide to Bank appropriate certificates and powers and financing statements, pledging all of the direct or beneficial ownership interest in such new Subsidiary, in form and substance satisfactory to Bank; and (c) provide to Bank all other documentation in form and substance satisfactory to Bank, including one or more opinions of counsel satisfactory to Bank, which in its opinion is appropriate with respect to the execution and delivery of the applicable documentation referred to above. Any document, agreement, or instrument executed or issued pursuant to this Section 6.13 shall be a Loan Document.

6.14 Further Assurances. Execute any further instruments and take further action as Bank reasonably requests to perfect or continue Bank’s Lien in the Collateral or to effect the purposes of this Agreement. Deliver to Bank, within ten (10) Business Days after the same are sent or received, copies of all correspondence, reports, documents and other filings with any Governmental Authority regarding compliance with or maintenance of Governmental Approvals or Requirements of Law or that could reasonably be expected to have a material effect on any of the Governmental Approvals or otherwise on the operations of Borrower or any of its Subsidiaries.

6.15 Grants . Obtain the prior written consent of Bank before receiving any grants, funds or benefits, or filing for an application to receive funding from NATI or the Investment Center or the Binational Industrial Research and Development Foundation or any other Governmental Authority.

7 NEGATIVE COVENANTS

Borrower shall not do any of the following without Bank’s prior written consent:

7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively a “ Transfer ”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out or obsolete Equipment; (c) in connection with Permitted Liens and Permitted Investments; and (d) of non-exclusive licenses for the use of the property of Borrower or its Subsidiaries in the ordinary course of business. In addition, Borrower or its Subsidiaries, may enter into escrow arrangements with their customers, solely within the framework of a transaction of Borrower or its Subsidiaries with such customers entered into in the ordinary course of business, providing such customers, solely upon the occurrence of liquidation, winding up or other dissolution of Borrower, with the right to use Borrower's source code so deposited in escrow, only as may be necessary to fulfill Borrower’s undertakings under the main transaction.

7.2 Changes in Business, Management, Control, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or dissolve; (c) fail to provide notice to Bank of any Key Persons departing from or ceasing to be employed by Borrower within five (5) Business Days after their departure from Borrower; or (d) permit or suffer any Change in Control.

Borrower shall not, without at least thirty (30) days prior written notice to Bank: (1) add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than Twenty Five Thousand Dollars ($25,000.00) in Borrower’s assets or property), or deliver any portion of the Collateral valued, individually or in the aggregate, in excess of Twenty Five Thousand Dollars ($25,000.00) to a bailee at a location other than to a bailee and at a location already disclosed in the Perfection Certificate, (2) change its jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization. If Borrower intends to add any new offices or business locations, including warehouses, containing in excess of Twenty Five Thousand Dollars ($25,000.00) of Borrower's assets or property, then Borrower will first receive the written consent of Bank, and the landlord of any such new offices or business locations, including warehouses, shall execute and deliver a landlord consent in form and substance satisfactory to Bank. If Borrower intends to deliver any portion of the Collateral valued, individually or in the aggregate, in excess of Twenty Five Thousand Dollars ($25,000.00) to a bailee, and Bank and such bailee are not already parties to a bailee agreement governing both the Collateral and the location to which Borrower intends to deliver the Collateral, then Borrower will first receive the written consent of Bank, and such bailee shall execute and deliver a bailee agreement in form and substance satisfactory to Bank.

7.3 Mergers or Acquisitions. Merge or consolidate or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person (including, without limitation, by the formation of any Subsidiary), other than in a Permitted Acquisition. A Subsidiary may merge or consolidate into another Subsidiary or into Borrower.

7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.

7.5 Encumbrance. Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries or the Pledged Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject to the first priority security interest granted herein or the charges granted under the ISR Debentures, or enter into any agreement, document, instrument or other arrangement (except with or in favor of Bank) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary or the Pledged Subsidiaries from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or any Subsidiary’s or the Pledged Subsidiaries’ Intellectual Property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens” herein.

7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to the terms of Section 6.8(b) hereof.

7.7 Distributions; Investments. (a) Pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock; or (b) directly or indirectly make any Investment (including, without limitation, by the formation of any Subsidiary) other than Permitted Investments, or permit any of its Subsidiaries to do so.

7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower, except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person.

Notwithstanding the foregoing, Borrower shall not, directly or indirectly, make any payments to Borrower's and/or any Subsidiary's current or former shareholders, but may pay and/or approve compensation payable in the ordinary course of business, to officers and directors (including if Affiliates of Borrower) in their capacity as such, in each case, under remuneration arrangements approved by Borrower's competent corporate organ (whether the board of directors or compensation committee).

7.9 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof, provide for earlier or greater principal, interest, or other payments thereon, or adversely affect the subordination thereof to Obligations owed to Bank.

7.10 Compliance. Become an “investment company” or a company controlled by an “investment company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a material adverse effect on Borrower’s business, or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.

8 EVENTS OF DEFAULT

Any one of the following shall constitute an event of default (an “ Event of Default ”) under this Agreement:

8.1 Payment Default. Borrower fails to (a) make any payment of principal, interest or Finance Charge on any Credit Extension, or any payment of any Facility Fees, in each case on its due date, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day cure period shall not apply to payments due on the Maturity Date or the Term Loan Maturity Date). During the cure period, the failure to make or pay any payment specified under clause (b) hereunder is not an Event of Default (but no Credit Extension will be made during the cure period);

8.2 Covenant Default. (a) If Borrower fails to perform any obligation under Sections 2.9, 6.2, 6.3, 6.4, 6.5, 6.7, 6.8, 6.9 or 6.12 of this Agreement or violates any of the covenants contained in Section 7 of this Agreement, or (b) If Borrower fails or neglects to perform, keep, or observe any other term, provision, condition, covenant, or agreement contained in this Agreement, in any of the Loan Documents and as to any default under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure such default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be

cured within a reasonable time, then Borrower shall have an additional reasonable period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to have cured such default shall not be deemed an Event of Default (provided that no Credit Extensions will be made during such cure period). Grace periods provided under this Section 8.2(b) shall not apply to financial covenants or any other covenants that are required to be satisfied, completed or tested by a date certain or as set forth in clause (a) above;

8.3 Material Adverse Change. A Material Adverse Change occurs;

8.4 Attachment; Levy; Restraint on Business.

(a) (i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or of any entity under the control of Borrower (including a Subsidiary), or (ii) a notice of lien or levy is filed against any of Borrower’s assets by any Governmental Authority, and the same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions shall be made during any ten (10) day cure period; or

(b) (i) any material portion of Borrower’s assets is attached, seized, levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower from conducting all or any material part of its business;

8.5 Insolvency. (a) Borrower or any of its Subsidiaries is unable to pay its debts (including trade debts) as they become due or otherwise becomes insolvent; (b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower or any of its Subsidiaries and is not dismissed or stayed within thirty (30) days (but no Credit Extensions shall be made while any of the conditions described in clause (a) exist and/or until any Insolvency Proceeding is dismissed);

8.6 Other Agreements. There is, under any agreement to which Borrower or any Guarantor is a party with a third party or parties, (a) any default resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount individually or in the aggregate in excess of One Hundred Fifty Thousand Dollars ($150,000.00); or (b) any breach or default by Borrower or Guarantor, the result of which could have a material adverse effect on Borrower’s or any Guarantor’s business;

8.7 Judgments; Penalties. One or more fines, penalties or final judgments, orders or decrees for the payment of money in an amount, individually or in the aggregate, of at least One Hundred Fifty Thousand Dollars ($150,000.00) (not covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against Borrower by any Governmental Authority, and the same are not, within ten (10) days after the entry, assessment or issuance thereof, discharged, satisfied, or paid, or after execution thereof, stayed or bonded pending appeal, or such judgments are not discharged prior to the expiration of any such stay (provided that no Credit Extensions will be made prior to the satisfaction, payment, discharge, stay, or bonding of such fine, penalty, judgment, order or decree);

8.8 Misrepresentations. Borrower or any Person acting for Borrower makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made;

8.9 Subordinated Debt. Any document, instrument, or agreement evidencing any Subordinated Debt shall for any reason be revoked or invalidated or otherwise cease to be in full force and effect, any Person shall be in breach thereof or contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations shall for any reason be subordinated or shall not have the priority contemplated by this Agreement or any applicable subordination or intercreditor agreement;

8.10 Guaranty. (a) Any guaranty of any Obligations terminates or ceases for any reason to be in full force and effect; (b) any Guarantor does not perform any obligation or covenant under any guaranty of the Obligations;

(c) any circumstance described in Sections 8.3, 8.4, 8.5, 8.6, 8.7, or 8.8 of this Agreement occurs with respect to any Guarantor, (d) the death, liquidation, winding up, or termination of existence of any Guarantor; or (e) (i) a material impairment in the perfection or priority of Bank’s Lien in the collateral provided by Guarantor or in the value of such collateral or (ii) a material adverse change in the general affairs, management, results of operation, condition (financial or otherwise) or the prospect of repayment of the Obligations occurs with respect to any Guarantor; or

8.11 Governmental Approvals. Any Governmental Approval shall have been (a) revoked, rescinded, suspended, modified in an adverse manner or not renewed in the ordinary course for a full term or (b) subject to any decision by a Governmental Authority that designates a hearing with respect to any applications for renewal of any of such Governmental Approval or that could result in the Governmental Authority taking any of the actions described in clause (a) above, and such decision or such revocation, rescission, suspension, modification or non-renewal (i) causes, or could reasonably be expected to cause, a Material Adverse Change, or (ii) adversely affects the legal qualifications of Borrower or any of its Subsidiaries to hold such Governmental Approval in any applicable jurisdiction and such revocation, rescission, suspension, modification or non-renewal could reasonably be expected to affect the status of or legal qualifications of Borrower or any of its Subsidiaries to hold any Governmental Approval in any other jurisdiction; and

8.12 Pledged Subsidiaries . The UK Subsidiary, the German Subsidiary and the French Subsidiary, at any time maintain, collectively, assets with an aggregate gross value exceeding $1,500,000 (the “ Subsidiaries Assets Threshold ”), provided however , that the foregoing threshold shall not include funds transferred to each such Pledged Subsidiary solely for the purpose of compensation expenses that are discharged within 5 days from the date of such transfer.

9 BANK’S RIGHTS AND REMEDIES

9.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, beyond any applicable cure or grace period provided herein (if any), Bank may, without notice or demand, do any or all of the following:

(a) declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations are immediately due and payable without any action by Bank);

(b) stop advancing money or extending credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Bank;

(c) demand that Borrower (i) deposit cash with Bank in an amount equal to at least (A) one hundred five percent (105.0%) of the Dollar Equivalent of the aggregate face amount of all Letters of Credit denominated in Dollars remaining undrawn, and (B) one hundred ten percent (110.0%) of the Dollar Equivalent of the aggregate face amount of all Letters of Credit denominated in a Foreign Currency remaining undrawn (plus, in each case, all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment)), to secure all of the Obligations relating to such Letters of Credit, as collateral security for the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in advance all letter of credit fees scheduled to be paid or payable over the remaining term of any Letters of Credit;

(d) verify the amount of, demand payment of and performance under, and collect any Accounts and General Intangibles, settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Bank considers advisable, and notify any Person owing Borrower money of Bank’s security interest in such funds. Borrower shall collect all payments in trust for Bank and, if requested by Bank, immediately deliver the payments to Bank in the form received from the Account Debtor, with proper endorsements for deposit;

(e) make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the Collateral. Borrower shall assemble the Collateral if Bank requests and make it available as Bank designates. Bank may enter premises where the Collateral is located, take and maintain

possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy any of its premises, without charge, to exercise any of Bank’s rights or remedies;

(f) apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) amount held by Bank owing to or for the credit or the account of Borrower;

(g) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral. Bank is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade names, Trademarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section 9.1, Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit;

(h) place a “hold” on any account maintained with Bank and/or deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral;

(i) demand and receive possession of Borrower’s Books; and

(j) exercise all rights and remedies available to Bank under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof) or any other applicable law, including realization of securities and the exercise of all of Bank’s rights and remedies with respect to the ISR Debentures.

9.2 Power of Attorney. Borrower hereby irrevocably appoints Bank as its lawful attorney-in-fact to: (a) exercisable following the occurrence of an Event of Default, (i) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account Debtors; (ii) demand, collect, sue, and give releases to any Account Debtor for monies due, settle and adjust disputes and claims about the Accounts directly with Account Debtors, and compromise, prosecute, or defend any action, claim, case, or proceeding about any Collateral (including filing a claim or voting a claim in any bankruptcy case in Bank’s or Borrower’s name, as Bank chooses); (iii) make, settle, and adjust all claims under Borrower’s insurance policies; (iv) pay, contest or settle any Lien, charge, encumbrance, security interest, or other claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; (v) transfer the Collateral into the name of Bank or a third party as the Code permits; and (vi) receive, open and dispose of mail addressed to Borrower; and (b) regardless of whether an Event of Default has occurred, (i (vii) endorse Borrower’s name on any checks, payment instruments, or other forms of payment or security; and (viii) notify all Account Debtors to pay Bank directly. Borrower hereby appoints Bank as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary to perfect or continue the perfection of Bank’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations have been satisfied in full and the Loan Documents have been terminated. Bank’s foregoing appointment as Borrower’s attorney in fact, and all of Bank’s rights and powers, coupled with an interest, are irrevocable until all Obligations have been fully repaid and performed and the Loan Documents have been terminated.

9.3 Protective Payments. If Borrower fails to obtain the insurance called for by Section 6.7 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document or which may be required to preserve the Collateral, Bank may obtain such insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing interest at the then highest rate applicable to the Obligations, and secured by the Collateral. Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable time thereafter. No payments by Bank are deemed an agreement to make similar payments in the future or Bank’s waiver of any Event of Default.

9.4 Application of Payments and Proceeds. If an Event of Default has occurred and is continuing (or at any time on the terms set forth in Section 6.3(c), regardless of whether an Event of Default exists), Bank shall have

the right to apply in any order any funds in its possession, whether from Borrower account balances, payments, proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations. Bank shall pay any surplus to Borrower by credit to the Designated Deposit Account or to other Persons legally entitled thereto; Borrower shall remain liable to Bank for any deficiency. If Bank, directly or indirectly, enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Bank shall have the option, exercisable at any time, in its good faith business discretion, of either reducing the Obligations by the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash therefor.

9.5 Bank’s Liability for Collateral. So long as Bank complies with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage or destruction of the Collateral.

9.6 No Waiver; Remedies Cumulative. Bank’s failure, at any time or times, to require strict performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by the party granting the waiver and then is only effective for the specific instance and purpose for which it is given. Bank’s rights and remedies under this Agreement and the other Loan Documents are cumulative. Bank has all rights and remedies provided under the Code, by law, or in equity. Bank’s exercise of one right or remedy is not an election and shall not preclude Bank from exercising any other remedy under this Agreement or other remedy available at law or in equity, and Bank’s waiver of any Event of Default is not a continuing waiver. Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence.

9.7 Demand Waiver. Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable.

9.8 Borrower Liability. Any Borrower may, acting singly, request Credit Extensions hereunder. Each Borrower hereby appoints each other as agent for the other for all purposes hereunder, including with respect to requesting Credit Extensions hereunder. Each Borrower hereunder shall be jointly and severally obligated to repay all Credit Extensions made hereunder, regardless of which Borrower actually receives said Credit Extension, as if each Borrower hereunder directly received all Credit Extensions. Each Borrower waives (a) any suretyship defenses available to it under the Code or any other applicable law, and (b) any right to require Bank to: (i) proceed against any Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy. Bank may exercise or not exercise any right or remedy it has against any Borrower or any security it holds (including the right to foreclose by judicial or non-judicial sale) without affecting any Borrower’s liability. Notwithstanding any other provision of this Agreement or other related document, each Borrower irrevocably waives all rights that it may have at law or in equity (including, without limitation, any law subrogating Borrower to the rights of Bank under this Agreement) to seek contribution, indemnification or any other form of reimbursement from any other Borrower, or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise and all rights that it might have to benefit from, or to participate in, any security for the Obligations as a result of any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise. Any agreement providing for indemnification, reimbursement or any other arrangement prohibited under this Section 9.8 shall be null and void. If any payment is made to a Borrower in contravention of this Section 9.8, such Borrower shall hold such payment in trust for Bank and such payment shall be promptly delivered to Bank for application to the Obligations, whether matured or unmatured.

Each Borrower is entering into this Agreement, and making all representations and warranties hereunder, on a joint and several basis, and all covenants, agreements and undertakings herein expressed or implied on the part of each Borrower shall be deemed to be joint and several.

10 NOTICES

All notices, consents, requests, approvals, demands, or other communication by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below. Bank or Borrower may change its mailing or electronic mail address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10.


If to Borrower:	Tufin Software Technologies Ltd.

5 Shoham St.,

Ramat Gan, 5251001, Israel

Attn: Jack Wakileh

Fax: 03-6005142

Email: Jack.Wakileh@tufin.com


If to Bank:	Silicon Valley Bank 275 Grove Street, Suite 2-200

Newton, Massachusetts 02466

Attn: Mr. Dave Reich

Fax: +(617) 527-0177

Email: Dreich@svb.com


with a copy to:	Shibolet with Raved Magriso Benkel & Co.

4 Berkowitz St.,

Tel-Aviv 6423806, Israel

Attn.: Einat Weidberg, adv.

Fax: +972-3-7778333

E-Mail: E.Weidberg@shibolet.com

11 CHOICE OF LAW, VENUE, JURY TRIAL WAIVER AND JUDICIAL REFERENCE

Except as otherwise expressly provided in any of the Loan Documents, New York law governs the Loan Documents without regard to principles of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in New York, NY; provided , however , that nothing in this Agreement shall be deemed to operate to preclude Bank from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of Bank. Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non-conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Borrower hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower at the address set forth in, or subsequently provided to Borrower in accordance with, Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid.

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS

WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

This Section 11 shall survive the termination of this Agreement.

12 GENERAL PROVISIONS

12.1 Termination Prior to Maturity Date; Survival. All covenants, representations and warranties made in this Agreement shall continue in full force until this Agreement has terminated pursuant to its terms and all Obligations have been satisfied. So long as Borrower has satisfied the Obligations (other than inchoate indemnity obligations, and any other obligations which, by their terms, are to survive the termination of this Agreement, and any Obligations under Bank Services Agreements that are cash collateralized in accordance with Section 4.1 of this Agreement), this Agreement may be terminated prior to the Revolving Line Maturity Date and the Term Loan Maturity Date by Borrower, effective three (3) Business Days after written notice of termination is given to Bank. Those obligations that are expressly specified in this Agreement as surviving this Agreement’s termination shall continue to survive notwithstanding this Agreement’s termination. Without limiting the foregoing, except as otherwise provided in Section 4.1, the grant of a security interest by Borrower in Section 4.1 and the charges granted under the ISR Debentures shall survive until the termination of this Agreement, the ISR Debentures and all Bank Services Agreements.

12.2 Successors and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may not assign this Agreement or any rights or obligations under it without Bank’s prior written consent (which may be granted or withheld in Bank’s discretion). Bank has the right, without the consent of or notice to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights, and benefits under this Agreement and the other Loan Documents.

12.3 Indemnification.

(a) General Indemnification . Borrower agrees to indemnify, defend and hold Bank and its directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing Bank (each, an “ Indemnified Person ”) harmless against: (i) all obligations, demands, claims, and liabilities (collectively, “ Claims ”) claimed or asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (ii) all losses or expenses (including Bank Expenses) in any way suffered, incurred, or paid by such Indemnified Person as a result of, following from, consequential to, or arising from transactions between Bank and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses directly caused by such Indemnified Person’s gross negligence or willful misconduct.

(b) This Section 12.3 shall survive until all statutes of limitation with respect to the Claims, losses, and expenses for which indemnity is given shall have run.

12.4 Time of Essence. Time is of the essence for the performance of all Obligations in this Agreement.

12.5 Severability of Provisions. Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.

12.6 Correction of Loan Documents. Bank may correct patent errors and fill in any blanks in the Loan Documents consistent with the agreement of the parties so long as Bank provides Borrower with written notice of such correction and allows Borrower at least ten (10) days to object to such correction. In the event of such objection, such correction shall not be made except by an amendment signed by both Bank and Borrower.

12.7 Amendments in Writing; Waiver; Integration. No purported amendment or modification of any Loan Document, or waiver, discharge or termination of any obligation under any Loan Document, shall be enforceable or admissible unless, and only to the extent, expressly set forth in a writing signed by the party against which enforcement or admission is sought. Without limiting the generality of the foregoing, no oral promise or statement, nor any action, inaction, delay, failure to require performance or course of conduct shall operate as, or evidence, an amendment,

supplement or waiver or have any other effect on any Loan Document. Any waiver granted shall be limited to the specific circumstance expressly described in it, and shall not apply to any subsequent or other circumstance, whether similar or dissimilar, or give rise to, or evidence, any obligation or commitment to grant any further waiver. The Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of the Loan Documents merge into the Loan Documents.

12.8 Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement.

12.9 Confidentiality. In handling any Borrower's confidential information (including any 3 ^rd party confidential information) provided to Bank by Borrower or to which Bank may be exposed (for avoidance of doubt, such Borrower's confidential information shall include, any information related to any Account disclosed to Bank under any contract, purchase order, shipping document, invoice or other underlying supporting documentation with respect to any Eligible Account provided by Borrower in accordance with the provisions hereof, Bank shall exercise the same degree of care that it exercises for its own proprietary information, and shall not use, communicate, disclose, reveal or convey (whether directly or indirectly, and whether orally, in writing or otherwise) any such Borrower's confidential information without Borrower's prior consent, but disclosure of information may be made: (a) to Bank’s Subsidiaries or Affiliates (such Subsidiaries and Affiliates, together with Bank, each a “ Bank Entity ” and collectively, the “ Bank Entities ”); (b) to prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, that any prospective transferee or purchaser shall have entered into an agreement containing provisions substantially the same as those in this Section 12.9; (c) as required by law, regulation, subpoena, or other order; (d) to Bank’s regulators or as otherwise required in connection with Bank’s examination or audit; (e) as Bank considers appropriate in exercising remedies under the Loan Documents, including without limitation, as part of the realization of any security interest or charge; (f) to any creditor of Borrower that signed a subordination, intercreditor, or other similar agreement with Bank, as required and in accordance with the provisions of such subordination, intercreditor, or other similar agreement; and (g) to third-party service providers of Bank so long as such service providers have executed a confidentiality agreement with Bank with terms no less restrictive than those contained herein. Confidential information does not include information that is: (i) either in the public domain other than as a result of Bank’s breach of this Section 12.9 or is in Bank’s possession when disclosed to Bank; or (ii) disclosed to Bank by a third party on a nonconfidential basis if Bank does not know that the third party is prohibited from disclosing the information.

Bank Entities may use anonymous forms of confidential information for aggregate datasets, for analyses or reporting, and for any other uses not expressly prohibited in writing by Borrower. The provisions of the immediately preceding sentence shall survive the termination of this Agreement.

12.10 Electronic Execution of Documents. The words “execution,” “signed,” “signature” and words of like import in any Loan Document, other than the ISR Debentures and related translations and report forms shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity and enforceability as a manually executed signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act. For the avoidance of doubt, this Section 12.10 shall not apply on the ISR Debentures and their translation to Hebrew, the notices to the Israeli Registrar of Companies for the registration of the ISR Debentures and the approval of the translation's compatibility.

12.11 Right of Setoff. Borrower hereby grants to Bank a Lien and a right of setoff as security for all Obligations to Bank, whether now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Bank or any entity under the control of Bank (including a subsidiary of Bank) or in transit to any of them. At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, Bank may setoff the same or any part thereof and apply the same to any liability or Obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS,

PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

12.12 Captions. The headings used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.

12.13 Construction of Agreement. The parties mutually acknowledge that they and their attorneys have participated in the preparation and negotiation of this Agreement. In cases of uncertainty this Agreement shall be construed without regard to which of the parties caused the uncertainty to exist.

12.14 Relationship. The relationship of the parties to this Agreement is determined solely by the provisions of this Agreement. The parties do not intend to create any agency, partnership, joint venture, trust, fiduciary or other relationship with duties or incidents different from those of parties to an arm’s-length contract.

12.15 Third Parties. Nothing in this Agreement, whether express or implied, is intended to: (a) confer any benefits, rights or remedies under or by reason of this Agreement on any persons other than the express parties to it and their respective permitted successors and assigns; (b) relieve or discharge the obligation or liability of any person not an express party to this Agreement; or (c) give any person not an express party to this Agreement any right of subrogation or action against any party to this Agreement.

13 DEFINITIONS

13.1 Definitions. As used in the Loan Documents, the word “shall” is mandatory, the word “may” is permissive, the word “or” is not exclusive, the words “includes” and “including” are not limiting, the singular includes the plural, and numbers denoting amounts that are set off in brackets are negative. As used in this Agreement, the following capitalized terms have the following meanings:

“ Account ” is, as to any Person, any “ account ” of such Person as “account” is defined in the Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to such Person.

“ Account Debtor ” is any “ account debtor ” as defined in the Code with such additions to such term as may hereafter be made.

“ Adjusted Quick Ratio ” is the ratio of (a) Quick Assets to (b) Current Liabilities minus Deferred Revenue.

“ Administrator ” is an individual that is named:

(a) as an “Administrator” in the “SVB Online Services” form completed by Borrower with the authority to determine who will be authorized to use SVB Online Services (as defined in Bank’s Online Banking Agreement as in effect from time to time) on behalf of Borrower; and

(b) as an Authorized Signer of Borrower in an approval by the Board.

“ Advance ” or “ Advances ” means a revolving credit loan (or revolving credit loans) under the Revolving Line.

“ Affiliate ” is, with respect to any Person, each other Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members. For purposes of the definition of Eligible Accounts, Affiliate shall include a Specified Affiliate.

“ Agreement ” is defined in the preamble hereof.

“ Authorized Signer ” is any individual listed in Borrower’s Borrowing Resolution who is authorized to execute the Loan Documents, including making (and executing if applicable) any Credit Extension request, on behalf of Borrower.

" Arrow Group A " means United States, Canada, Israel, United Kingdom, Republic of Ireland, Spain, Italy, Portugal, France, Germany, Switzerland, Belgium, The Netherlands, Norway, Sweden, Finland, Poland, Greece, Denmark, Austria, Czech Republic, Australia, Hong Kong, Japan, Korea, Luxembourg, New Zealand, Singapore, South Africa and Turkey.

" Arrow Group B " means Brazil, Bulgaria, Croatia, Hungary, Morocco, Romania and Slovenia.

“ Availability Amount ” is (a) the lesser of (i) the Revolving Line or (ii) the amount available under the Borrowing Base minus (b) the outstanding principal balance of any Advances.

“ Bank ” is defined in the preamble hereof.

“ Bank Entities ” is defined in Section 12.9.

“ Bank Expenses ” are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower or any Guarantor.

“ Bank Services ” are any products, credit services, and/or financial accommodations previously, now, or hereafter provided to Borrower or any of its Subsidiaries by Bank or any Bank Affiliate, including, without limitation, any letters of credit, cash management services (including, without limitation, merchant services, direct deposit of payroll, business credit cards, and check cashing services), interest rate swap arrangements, and foreign exchange services as any such products or services may be identified in Bank’s various agreements related thereto (each, a “Bank Services Agreement”) .

“ Bank Services Agreement ” is defined in the definition of Bank Services.

“ Board ” is Borrower’s board of directors.

“ Borrower ” is defined in the preamble hereof.

“ Borrower’s Books ” are all Borrower’s books and records including ledgers, federal and state tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.

“ Borrowing Base ” is 80% of Eligible Accounts, as determined by Bank from Borrower’s most recent Borrowing Base Report (and as may subsequently be updated by Bank in Bank’s sole discretion based upon information received by Bank including, without limitation, Accounts that are paid and/or billed following the date of the Borrowing Base Report); provided, however, that Bank has the right to decrease the foregoing percentage in its sole discretion to mitigate the impact of events, conditions, contingencies, or risks which may adversely affect the Collateral or its value. In the event that the Bank decrease the foregoing percentage pursuant to the preceding sentence, Bank shall provide to Borrower notice of such change.

“ Borrowing Base Report ” is that certain report of the value of certain Collateral in the form attached hereto as Exhibit D , or such other form as shall specified by Bank to Borrower from time to time.

“ Borrowing Resolutions ” are, with respect to any Person, those resolutions adopted by such Person’s board of directors (and, if required under the terms of such Person’s Operating Documents, stockholders) and delivered by such Person to Bank approving the Loan Documents to which such Person is a party and the transactions contemplated

thereby, together with a certificate executed by its secretary on behalf of such Person certifying (a) such Person has the authority to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party, (b) that set forth as a part of or attached as an exhibit to such certificate is a true, correct, and complete copy of the resolutions then in full force and effect authorizing and ratifying the execution, delivery, and performance by such Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the Loan Documents, including making (and executing if applicable) any Credit Extension request, on behalf of such Person, together with a sample of the true signature(s) of such Person(s), and (d) that Bank may conclusively rely on such certificate unless and until such Person shall have delivered to Bank a further certificate canceling or amending such prior certificate.

“ Business Day ” is any day that is not a Saturday, Sunday or a day on which Bank is closed.

“ Cash Collateral Account ” is defined in Section 6.3(c).

“ Cash Equivalents ” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; (c) Bank’s certificates of deposit issued maturing no more than one (1) year after issue; and (d) money market funds at least ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition.

“ Change in Control ” means the entering into any transaction or series of related transactions (A) which result in ISR Borrower owning less than one hundred percent (100.0%) of the equity interests in US Borrower or (B) in which the shareholders of ISR Borrower who were not shareholders immediately prior to the first such transaction own more than forty-nine percent (49.0%) of the voting share of ISR Borrower immediately after giving effect to such transaction or related series of such transactions (other than by the sale of ISR Borrower’s equity securities in a public offering or to venture capital investors so long as Borrower identifies to Bank the venture capital investors at least seven (7) Business Days prior to the closing of the transaction and provides to Bank a description of the material terms of the transaction).

“ Charged Property ” is defined in the ISR Debentures (specifically excluding any rights of Borrower under any Restricted Agreement; provided that any payment received by Borrower thereunder and/or in connection therewith shall be considered part of the Charged Property).

“ Claims ” is defined in Section 12.3.

“ Code ” is (a) the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of New York ; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions, and (b) with respect to ISR Borrower and or any assets located outside of the United States, any applicable law.

“ Collateral ” is (a) any and all properties, rights and assets of Borrower described on Exhibit A, and (b) any and all properties, rights and assets granted by ISR Borrower to Bank as set forth in the ISR Debentures, including, without limitation, the Charged Property and the Pledged Right (specifically excluding any rights of Borrower under any Restricted Agreement, except that any payment received by Borrower thereunder and/or in connection therewith shall be considered part of the Collateral).

“ Collateral Account ” is any Deposit Account, Securities Account, or Commodity Account.

“ Commodity Account ” is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made.

“ Compliance Certificate ” is that certain certificate in the form attached hereto as Exhibit B.

“ Contingent Obligation ” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation, in each case, directly or indirectly guaranteed, endorsed, co made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.

“ Control Agreement ” is any control agreement entered into among the depository institution at which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity Account, Borrower, and Bank pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity Account.

“ Copyrights ” are any and all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.

“ Credit Extension ” is any Advance, any Overadvance, or any other extension of credit by Bank for Borrower’s benefit.

“ Currency ” is coined money and such other banknotes or other paper money as are authorized by law and circulate as a medium of exchange.

“ Current Liabilities ” are all obligations and liabilities of Borrower to Bank, plus, without duplication, the aggregate amount of Borrower’s Total Liabilities that mature within one (1) year.

“ Default Rate ” is defined in Section 2.5(b).

“ Deferred Revenue ” is all amounts received or invoiced, as appropriate, in advance of performance under contracts and not yet recognized as revenue.

“ Deposit Account ” is any “ deposit account ” as defined in the Code with such additions to such term as may hereafter be made.

“ Designated Deposit Account ” any deposit account of Borrower maintained with Bank as chosen by Bank).

“ Dollars ,” “ dollars ” or use of the sign “$” means only lawful money of the United States and not any other currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into lawful money of the United States.

“ Dollar Equivalent ” is, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in a Foreign Currency, the equivalent amount therefor in Dollars as determined by Bank at such time on the basis of the then-prevailing rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to the country issuing such Foreign Currency.

“ Effective Date ” is defined in the preamble hereof.

“ Eligible Accounts ” means Accounts owing to Borrower which arise in the ordinary course of Borrower’s business that meet all Borrower’s representations and warranties in Section 5.3, that have been, at the option of Bank, confirmed in accordance with Section 6.3(f) of this Agreement, and are due and owing from Account Debtors deemed creditworthy by Bank in its sole discretion. Bank reserves the right, at any time after the Effective Date, in its sole discretion in each instance, to either (i) adjust any of the criteria set forth below and to establish new criteria or (ii) deem any Accounts owing from a particular Account Debtor or Account Debtors to not meet the criteria to be Eligible Accounts. Unless Bank otherwise agrees in writing, Eligible Accounts shall not include:

(a) Accounts (i) for which the Account Debtor is Borrower’s Affiliate, officer, employee, investor, or agent, or (ii) that are intercompany Accounts;

(b) Accounts that the Account Debtor has not paid within ninety (90) days of invoice date regardless of invoice payment period terms;

(d) Accounts owing from an Account Debtor if fifty percent (50%) or more of the Accounts owing from such Account Debtor have not been paid within ninety (90) days of invoice date;

(e) Accounts owing from an Account Debtor which does not have its principal place of business in the United States, Canada, Israel, the United Kingdom and Western Europe, other than Arrow entities from Arrow Group A and Arrow entities from Arrow Group B, provided, however , that (i) the aggregate amount of Advances outstanding at any time based on, and the aggregate amount of the Borrowing Base at any time attributable to, Accounts owing from Arrow entities from each of the countries specified in Arrow Group B may not at any time exceed Two Hundred Thousand Dollars ($200,000); and (ii) the aggregate amount of Advances outstanding at any time based on, and the aggregate amount of the Borrowing Base at any time attributable to , Accounts owing from Arrow entities from all of the countries specified in Arrow Group B may not at any time exceed, in the aggregate, Five Hundred Thousand Dollars ($500,000);

(f) Accounts billed from and/or payable to Borrower outside of the United States or Israel (sometimes called foreign invoiced accounts);

(g) Accounts in which Bank does not have a first priority, perfected security interest under all applicable laws;

(h) Accounts billed and/or payable in a Currency other than Dollars;

(i) Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise - sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts with the exception of customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the ordinary course of its business);

(j) Accounts with or in respect of accruals for marketing allowances, incentive rebates, price protection, cooperative advertising and other similar marketing credits, unless otherwise approved by Bank in writing;

(k) Accounts owing from an Account Debtor which is a United States government entity or any department, agency, or instrumentality thereof unless Borrower has assigned its payment rights to Bank and the assignment has been acknowledged under the Federal Assignment of Claims Act of 1940, as amended;

(l) Accounts owing from an Account Debtor which is a government entity or any department, agency, or instrumentality thereof;

(m) Accounts with customer deposits and/or with respect to which Borrower has received an upfront payment, to the extent of such customer deposit and/or upfront payment;

(n) Accounts for demonstration or promotional equipment, or in which goods are consigned, or sold on a “sale guaranteed”, “sale or return”, “sale on approval”, or other terms if Account Debtor’s payment may be conditional;

(o) Accounts owing from an Account Debtor where goods or services have not yet been rendered to the Account Debtor (sometimes called memo billings or pre-billings);

(p) Accounts subject to contractual arrangements between Borrower and an Account Debtor where payments shall be scheduled or due according to completion or fulfillment requirements (sometimes called contracts accounts receivable, progress billings, milestone billings, or fulfillment contracts);

(q) Accounts owing from an Account Debtor the amount of which may be subject to withholding based on the Account Debtor’s satisfaction of Borrower’s complete performance (but only to the extent of the amount withheld; sometimes called retainage billings);

(r) Accounts subject to trust provisions, subrogation rights of a bonding company, or a statutory trust;

(s) Accounts owing from an Account Debtor that has been invoiced for goods that have not been shipped to the Account Debtor unless Bank, Borrower, and the Account Debtor have entered into an agreement acceptable to Bank wherein the Account Debtor acknowledges that (i) it has title to and has ownership of the goods wherever located, (ii) a bona fide sale of the goods has occurred, and (iii) it owes payment for such goods in accordance with invoices from Borrower (sometimes called “bill and hold” accounts);

(t) Accounts for which the Account Debtor has not been invoiced;

(u) Accounts that represent non-trade receivables or that are derived by means other than in the ordinary course of Borrower’s business;

(v) Accounts for which Borrower has permitted Account Debtor’s payment to extend beyond ninety (90) days (including Accounts with a due date that is more than ninety (90) days from invoice date);

(w) Accounts arising from chargebacks, debit memos or other payment deductions taken by an Account Debtor;

(x) Accounts arising from product returns and/or exchanges (sometimes called “warranty” or “RMA” accounts);

(y) Accounts in which the Account Debtor disputes liability or makes any claim (but only up to the disputed or claimed amount), or if the Account Debtor is subject to an Insolvency Proceeding (whether voluntary or involuntary), or becomes insolvent, or goes out of business;

(z) Accounts owing from an Account Debtor with respect to which Borrower has received Deferred Revenue (but only to the extent of such Deferred Revenue other than Deferred Revenue related solely to license, support and maintenance);

(aa) (x) Accounts owing from an Account Debtor, including Affiliates, whose total obligations to Borrower exceed twenty five percent (25.0%) of all Accounts, for the amounts that exceed that percentage,

unless Bank otherwise approves in writing, other than Accounts owing from Arrow entities from Arrow Group A and Arrow Group B to which the applicable percentage shall be seventy five percent (75%) of all Accounts; and

(bb) Accounts for which Bank in its good faith business judgment determines collection to be doubtful, including, without limitation, accounts represented by “refreshed” or “recycled” invoices.

“ Equipment ” is all “ equipment ” as defined in the Code with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.

“ ERISA ” is the Employee Retirement Income Security Act of 1974, and its regulations.

“ Event of Default ” is defined in Section 8.

“ Exchange Act ” is the Securities Exchange Act of 1934, as amended.

“ Foreign Currency ” means lawful money of a country other than the United States.

“ French Subsidiary ” is Tufin Software France SARL.

“ Funding Date ” is any date on which a Credit Extension is made to or for the account of Borrower which shall be a Business Day.

“ GAAP ” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination.

“ General Intangibles ” is all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all Intellectual Property, claims, income and other tax refunds, security and other deposits, payment intangibles, contract rights, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.

“ German Subsidiary ” shall mean Tufin Software Germany GmbH.

“ Governmental Approval ” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.

“ Governmental Authority ” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization.

“ Guarantor ” is any Person providing a Guaranty in favor of Bank.

“ Guaranty ” is any guarantee of all or any part of the Obligations, as the same may from time to time be amended, restated, modified or otherwise supplemented.

“ Indebtedness ” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations, and (d) Contingent Obligations.

“ Indemnified Person ” is defined in Section 12.3.

“ Insolvency Proceeding ” is any proceeding by or against any Person under the United States Bankruptcy Code, the Israeli Companies Ordinance 5743-1983, the Israeli Companies Law 5759-1999, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

“ Intellectual Property ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following:

(a) its Copyrights, Trademarks and Patents;

(b) any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how and operating manuals;

(d) any and all design rights which may be available to such Person;

(e) any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and

(f) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.

“ Inventory ” is all “ inventory ” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above.

“ Investment ” is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any loan, advance or capital contribution to any Person.

“ IP Agreement ” is that certain Intellectual Property Security Agreement between each Borrower and Bank dated as of the Effective Date, as may be amended, modified or restated from time to time.

“ ISR Borrower ” is defined in the preamble of this Agreement.

“ ISR Debenture(s) ” is defined in Section 4.2.

“ Judgment Currency ” is defined in Section 12.3.

“ Key Person ” is Borrower’s Chief Executive Officer, who is Ruvi Kitov as of the Effective Date.

“ Lien ” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.

“ Loan Documents ” are, collectively, this Agreement and any schedules, exhibits, certificates, notices, and any other documents related to this Agreement, the IP Agreement, any Bank Services Agreement, the Perfection

Certificates, the ISR Debentures, any subordination agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other present or future agreement by Borrower and/or any Guarantor with or for the benefit of Bank, all as amended, restated, or otherwise modified.

“ Loan Fees ” shall mean, collectively, Revolving Line Commitment Fee and the Unused Revolving Line Facility Fee.

“ Material Adverse Change ” is (a) a material impairment in the perfection or priority of Bank’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; (c) a material impairment of the prospect of repayment of any portion of the Obligations; or (d) Bank determines, based upon information available to it and in its reasonable judgment, that there is a reasonable likelihood that Borrower shall fail to comply with one or more of the financial covenants in Section 6 during the next succeeding financial reporting period.

“ Monthly Financial Statements ” is defined in Section 6.2(c).

“ NATI ” is the National Authority for Technological Innovation of the Israeli Ministry of the Economy.

“ NIS ” means only lawful money of the State of Israel.

“ Obligations ” are Borrower’s obligations to pay when due any debts, principal, interest, fees, Bank Expenses, the Loan Fees and other amounts Borrower owes Bank now or later, whether under this Agreement, the other Loan Documents or otherwise, including, without limitation, all obligations relating to Bank Services and interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank, and to perform Borrower’s duties under the Loan Documents.

“ Operating Documents ” are, for any Person, such Person’s formation documents, as certified by the Secretary of State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective Date, if applicable, and, (a) if such Person is a corporation, its bylaws in certificate of incorporation or memorandum and/or articles of association (or similar document, as the case may be) current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.

“ Overadvance ” is defined in Section 2.4.

“ Patents ” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.

“ Payment/Advance Form ” is that certain form in the form attached hereto as Exhibit C.

“ Payment Date ” is (a) with respect to Term Loan Advances, the first (1st) calendar day of each month and (b) with respect to Advances, the last calendar day of each month.

“ Perfection Certificate ” is defined in Section 5.1.

“ Permitted Acquisition ” means a transaction whereby Borrower merges or consolidates, or permits any of its Subsidiaries to merge or consolidate, with any other Person, or acquires, or permits any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person, under all of the following conditions:

(a) the party or parties being acquired is in a similar line of business as Borrower;

(b) the acquisition costs (including the purchase price) expended by Borrower in the transaction are not paid with any Credit Extensions made hereunder;

(c) no Event of Default exists or is continuing at the closing of the transaction, and the transaction will not cause and Event of Default hereunder;

(d) the acquisition is approved by the board of directors (or equivalent control group) of all parties to the transaction;

(e) the total aggregate consideration to be paid by Borrower (including the value of Borrower’s stock issued by Borrower) in all of the contemplated transactions during the term of the Agreement does not exceed Two Million Dollars (US$2,000,000).

(f) Borrower provides Bank (i) written notice of the transaction at least ten (10) Business Days before the closing of the transaction, and (ii) copies of the acquisition or merger agreement and other material documents relative to the contemplated transaction, in each case in final or substantially final form, at least five (5) Business Days before the closing of the transaction;

(g) Borrower provides Bank at least ten (10) Business Days before the closing of the transaction written confirmation, supported by reasonably detailed calculations, that on a pro forma basis Borrower is projected to be in compliance with the financial covenants in Section 6.7 for each month of the twelve (12) month period ending after the proposed date of consummation of such contemplated transaction;

(h) Borrower is a surviving legal entity after completion of the contemplated transaction;

(i) the contemplated transaction is consensual and non-hostile;

(j) no Indebtedness will be incurred, assumed, or would exist with respect to Borrower or its Subsidiaries as a result of the contemplated transaction, other than Permitted Indebtedness, and no Liens will be incurred, assumed, or would exist with respect to the assets of Borrower or its Subsidiaries as a result of the contemplated transaction, other than Permitted Liens; and

(k) any Person whose capital stock is acquired or any Subsidiary that acquires assets in such contemplated transaction shall, contemporaneously with the consummation of the transaction, unless otherwise agreed to by Bank in writing in its sole discretion, become a co-borrower or guarantor (as determined by Bank in its sole discretion) hereunder and shall grant a Lien in all of its assets to Bank, all on documentation acceptable to Bank in its sole discretion.

“ Permitted Indebtedness ” is:

(a) Borrower’s Indebtedness to Bank under this Agreement and the other Loan Documents;

(b) Indebtedness existing on the Effective Date which is shown on the Perfection Certificate;

(d) unsecured Indebtedness to trade creditors incurred in the ordinary course of business; and

(e) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (d) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.

“ Permitted Investments ” are:

(a) Investments (including, without limitation, Subsidiaries) existing on the Effective Date which are shown on the Perfection Certificate (but specifically excluding any future Investments in any Subsidiaries unless otherwise permitted hereunder); and

(a) Investments consisting of Cash Equivalents;

“ Permitted Liens ” are:

(a) Liens existing on the Effective Date which are shown on the Perfection Certificate with respect to ISR Borrower only, as follows: (i) a charge in favor of Bank Leumi created by ISR Borrower on January 1, 2017, on a cash deposit, limited to the aggregate amount of NIS 900,000, securing (a) Borrower’s office lease obligation up to an amount of NIS 350,000, and (b) Borrower’s credit card activities up to an amount of NIS 550,000; and (ii) charge(s) in favor of Bank Leumi Ltd. created by ISR Borrower on January 1, 2017, on a cash deposit, limited to the aggregate amount of $460,000 in order to secure Borrower’s hedging contracts activities;

(b) Liens in favor of other financial institutions securing Borrower’s office lease obligations limited to the aggregate amount not to exceed at any time NIS 5,500,000;

(c) Liens for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii) being contested in good faith and for which Borrower maintains adequate reserves on Borrower’s Books, provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder; and

(d) Liens incurred in the extension, renewal or refinancing of the Indebtedness secured by Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase.

“ Person ” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.

“ Pledged Rights ” is defined in the Deeds of Pledge.

“ Pledged Subsidiaries ” shall mean the UK Subsidiary, the German Subsidiary and the French Subsidiary.

“ Prime Rate ” is the rate of interest per annum from time to time published in the money rates section of The Wall Street Journal or any successor publication thereto as the “prime rate” then in effect; provided that, in the event such rate of interest is less than zero, such rate shall be deemed to be zero for purposes of this Agreement; and provided further that if such rate of interest, as set forth from time to time in the money rates section of The Wall Street Journal, becomes unavailable for any reason as determined by Bank, the “Prime Rate” shall mean the rate of interest per annum announced by Bank as its prime rate in effect at its principal office in the State of California (such Bank announced Prime Rate not being intended to be the lowest rate of interest charged by Bank in connection with extensions of credit to debtors); provided that, in the event such rate of interest is less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“ Quick Assets ” is, on any date, Borrower’s unrestricted and unencumbered cash and net billed accounts receivable, determined according to GAAP.

“ Registered Organization ” is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made.

“ Regulatory Change ” means, with respect to Bank, any change on or after the date of this Agreement in United States federal, state, or foreign laws or regulations, including Regulation D, or the adoption or making on or after such date of any interpretations, directives, or requests applying to a class of lenders including Bank, of or under any United States federal or state, or any foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof.

“ Requirement of Law ” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“ Reserves ” means, as of any date of determination, such amounts as Bank may from time to time establish and revise in its good faith business judgment, reducing the amount of Advances and other financial accommodations which would otherwise be available to Borrower (a) to reflect events, conditions, contingencies or risks which, as determined by Bank in its good faith business judgment, do or may adversely affect (i) the Collateral or any other property which is security for the Obligations or its value (including without limitation any increase in delinquencies of Accounts), (ii) the assets, business or prospects of Borrower or any Guarantor, or (iii) the security interests and other rights of Bank in the Collateral (including the enforceability, perfection and priority thereof); or (b) to reflect Bank's reasonable belief that any collateral report or financial information furnished by or on behalf of Borrower or any Guarantor to Bank is or may have been incomplete, inaccurate or misleading in any material respect; or (c) in respect of any state of facts which Bank determines constitutes an Event of Default or may, with notice or passage of time or both, constitute an Event of Default.

“ Responsible Officer ” is any of the Chief Executive Officer, President, Chief Financial Officer and Controller of Borrower.

“ Restricted Agreement ” is any agreement to which Borrower is a party with respect to which Borrower is prohibited pursuant to transferability restrictions set forth under such agreement or under any applicable law, from granting a charge over Borrower’s interest in such agreement.

“ Restricted License ” is any material license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with Bank’s right to sell any Collateral.

“ Revolving Line ” is an aggregate principal amount equal to Fifteen Million Dollars ($15,000,000).

“ Revolving Line Maturity Date ” is September 26, 2019.

“ SEC ” shall mean the Securities and Exchange Commission, any successor thereto, and any analogous Governmental Authority.

“ Securities Account ” is any “ securities account ” as defined in the Code with such additions to such term as may hereafter be made.

“ Specified Affiliate ” is any Person (a) more than ten percent (10.0%) of whose aggregate issued and outstanding equity or ownership securities or interests, voting, non-voting or both, are owned or held directly or indirectly, beneficially or of record, by Borrower, and/or (b) whose equity or ownership securities or interests representing more than ten percent (10.0%) of such Person’s total outstanding combined voting power are owned or held directly or indirectly, beneficially or of record, by Borrower.

“ Streamline Balance ” is defined in the definition of Streamline Period.

“ Streamline Period ” is, on and after the Effective Date, provided no Event of Default has occurred and is continuing, the period (a) commencing on the first day of the month following the day that Borrower provides to Bank a written report that Borrower has, for each consecutive day in the immediately preceding month maintained an Adjusted Quick Ratio of greater than 1.45 ), as determined by Bank in its sole discretion (the “ Streamline Balance ”); and (b) terminating on the earlier to occur of (i) the occurrence of an Event of Default, and (ii) the first day thereafter in which Borrower fails to maintain the Streamline Balance, as determined by Bank in its discretion. Upon the termination of a Streamline Period, Borrower must maintain the Streamline Balance each consecutive day for one (1) fiscal quarter

as determined by Bank in its discretion, prior to entering into a subsequent Streamline Period. Borrower shall give Bank prior written notice of Borrower’s election to enter into any such Streamline Period, and each such Streamline Period shall commence on the first day of the monthly period following the date Bank determines, in its reasonable discretion, that the Streamline Balance has been achieved.

“ Subordinated Debt ” is indebtedness incurred by Borrower subordinated to all of Borrower’s now or hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Bank entered into between Bank and the other creditor), on terms acceptable to Bank.

“ Subsidiary ” is, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless the context otherwise requires, each reference to a Subsidiary herein shall be a reference to a Subsidiary of Borrower or Guarantor.

“ Subsidiaries Assets Thresholds ” is defined in Section 8.12 of this Agreement.

“ Term Loan Advance ” and “ Term Loan Advances ” are each defined in Section 2.3 of this Agreement.

“ Term Loan Amortization Date ” is the first Payment Date following the six (6) month anniversary of the Funding Date.

“ Term Loan Amount ” is an amount equal to Two Million Dollars ($2,000,000).

“ Term Loan Maturity Date ” is April 1, 2019.

“ Total Liabilities ” is on any day, obligations that should, under GAAP, be classified as liabilities on Borrower’s consolidated balance sheet, including all Indebtedness.

“ Trademarks ” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.

“ Transfer ” is defined in Section 7.1.

“ UK Subsidiary ” shall mean Tufin Software Europe Limited.

“ Unused Revolving Line Facility Fee ” is defined in Section 2.6(d).

“ US Borrower ” is defined in the preamble of this Agreement.

“ Western Europe ” means the Republic of Ireland, Spain, Italy, Portugal, France, Germany, Switzerland, Belgium, The Netherlands, Norway, Sweden, Finland, Poland, Greece and Denmark.

[Signature page follows.]

IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be executed as a sealed instrument as of the Effective Date.



BORROWER:

TUFIN SOFTWARE TECHNOLOGIES LTD
By:	/s/ Jack Wakileh
Name:	Jack Wakileh
Title:	CFO

TUFIN SOFTWARE NORTH AMERICA, INC.

By:	/s/ Jack Wakileh
Name:	Jack Wakileh
Title:	CFO


BANK:

SILICON VALLEY BANK

By:	/s/ Kate Leland
Name:	Kate Leland
Title:	MD

Signature Page to Loan and Security Agreement

Schedule 5.14

NATI and Investment Center

On June 24, 2009, Borrower filed a request for a pre-ruling from the Israeli Tax Authorities ("ITA") in order to determine: (i) that Borrower's activity will be considered as industrial within the scope of the Encouragement of Capital Investment Law; and (ii) that Borrower's income is benefited and that Borrower has completed the minimum investment in capital expenditures in order to be entitled to tax benefits. Borrower has yet to receive approval from the ITA to the above request.

In July 2012, Borrower notified the Israeli Tax Authorities that it elects tax year 2011 as its "expansion" year, as stipulated in applicable law.

Borrower had filed a request with the Investment Center in order to receive its approval to decrease the basis turnover of its benefited enterprise plans due to its periodical technological changes. On October 13, 2009, July 21, 2010 and January 24, 2013, Borrower received approvals to decrease the basis turnover of certain years, subject to the terms and conditions as stipulated in that approval. Borrower filed such request for the tax year 2012.

EXHIBIT A COLLATERAL DESCRIPTION

The Collateral consists of all of Borrower’s right, title and interest in and to the following:

All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (including payment intangibles), Intellectual Property, commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, all certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and any copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, now owned or later acquired; any patents, trademarks, service marks and applications therefor; trade styles, trade names, any trade secret rights, including any rights to unpatented inventions, know‑how, operating manuals, license rights and agreements and confidential information, now owned or hereafter acquired; or any claims for damages by way of any past, present and future infringement of any of the foregoing; and

all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.

EXHIBIT B

COMPLIANCE CERTIFICATE



TO:	SILICON VALLEY BANK	Date:
FROM:	TUFIN SOFTWARE TECHNOLOGIES LTD and TUFIN SOFTWARE NORTH AMERICA, INC.

The undersigned authorized officer of TUFIN SOFTWARE TECHNOLOGIES LTD and TUFIN SOFTWARE NORTH AMERICA, INC. (“ Borrower ”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “ Agreement ”), (1) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided , however , that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided , further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries, if any, relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents supporting the certification. The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.



Please indicate compliance status by circling Yes/No under “Complies” column.

Reporting Covenants	Required	Complies

Monthly financial statements with Compliance Certificate	Monthly within 30 days	Yes No
Annual financial statements (CPA Audited)	FYE within 150 days	Yes No
10-Q, 10-K and 8-K	Within 5 days after filing with SEC	Yes No
A/R & A/P Agings/Deferred Revenue Report-	Monthly within 7 days	Yes No
Borrowing Base Reports	Weekly on Friday of each monthly within 7 days of month end	Yes No
Board projections, capitalization table	within 10 days from board approval and as amended/updated	Yes No

The following Intellectual Property was registered after the Effective Date (if no registrations, state “None”)



Financial Covenant	Required	Actual	Complies

Maintain as indicated:
Minimum Adjusted Quick Ratio	1.25:1.0	_____:1.0	Yes No



Streamline Balance	Required	Actual	Complies

Maintain as indicated:
Minimum Adjusted Quick Ratio	1.45:1.0	_____:1.0	Yes No

The following financial covenant analyses and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.

The following are the exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions to note.”)

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



TUFIN SOFTWARE TECHNOLOGIES LTD	BANK USE ONLY

By:	Received By:
Name:			AUTHORIZED SIGNER
Title:	Date:

	Verified:
TUFIN SOFTWARE NORTH AMERICA, INC.		AUTHORIZED SIGNER
By:	Date:
Name:
Title:	Compliance Status:		Yes	No

Schedule 1 to Compliance Certificate

Financial Covenants and Streamline Balance of Borrower

In the event of a conflict between this Schedule and the Agreement, the terms of the Agreement shall govern.

Dated: ____________________

Actual:



A.	Aggregate value of the unrestricted and unencumbered cash of Borrower	$_____
B.	Aggregate value of the net billed accounts receivable of Borrower	$_____
C.	Quick Assets (the sum of lines A through B)	$_____
D.	Aggregate value of Obligations to Bank	$_____
E.	Aggregate value of liabilities of Borrower (including all Indebtedness) that matures within one (1) year	$_____
F.	Current Liabilities (the sum of lines D and E, without duplication)	$_____
G	Aggregate value of all amounts received or invoiced by Borrower in advance of performance under contracts and not yet recognized as revenue (Deferred Revenue)	$_____
H	Line F minus line G
I.	Quick Ratio (line C divided by line H)	_____


1.	Financial Covenant: Adjusted Quick Ratio (Section 6.9)


Required:	1.22:1.00


Actual:


No, not in compliance	Yes, in compliance


2.	Streamline Balance: Adjusted Quick Ratio (Section 13)


Required:	1.45:1.00


Actual:


No, not in compliance	Yes, in compliance

EXHIBIT C

LOAN PAYMENT/ADVANCE REQUEST FORM

DEADLINE FOR SAME DAY PROCESSING IS NOON EASTERN TIME



Fax To:	Date:



LOAN PAYMENT:
TUFIN SOFTWARE TECHNOLOGIES LTD and TUFIN SOFTWARE NORTH AMERICA, INC.
From Account #		To Account #
	(Deposit Account #)		(Loan Account #)
Principal $		and/or Interest $

Authorized Signature:		Phone Number:
Print Name/Title:



LOAN ADVANCE:

Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire.

From Account #		To Account #
	(Loan Account #)		(Deposit Account #)

Amount of Term Loan Advance $

All Borrower’s representations and warranties in the Loan and Security Agreement are true, correct and complete in all material respects on the date of the request for an advance; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date:

Authorized Signature:		Phone Number:
Print Name/Title:



OUTGOING WIRE REQUEST:
Complete only if all or a portion of funds from the loan advance above is to be wired.
Deadline for same day processing is noon, Eastern Time

Beneficiary Name:					Amount of Wire:
Beneficiary Bank:					Account Number:
City and State:

Beneficiary Bank Transit (ABA) #:					Beneficiary Bank Code (Swift, Sort, Chip, etc.):
					(For International Wire Only)

Intermediary Bank:					Transit (ABA) #:
For Further Credit to:

Special Instruction:

By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be processed in accordance with and subject to the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed by me (us).

Authorized Signature:					2 ^nd Signature (if required):
Print Name/Title:					Print Name/Title:
Telephone #:					Telephone #:

EXHIBIT D

BORROWING BASE CERTIFICATE

Borrower: TUFIN SOFTWARE TECHNOLOGIES LTD and TUFIN SOFTWARE NORTH AMERICA, INC.
Lender: Silicon Valley Bank
Commitment Amount: $15,000,000.00



ACCOUNTS RECEIVABLE
1.	Accounts Receivable (invoiced) Book Value as of ____________________	$
2.	Additions (please explain on next page)	$
3.	Less: Intercompany / Employee / Non-Trade Accounts	$
4.	NET TRADE ACCOUNTS RECEIVABLE	$

ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)		$
5.	Affiliate/Subsidiary/Intercompany/Employee Accounts/invoices	$
6.	90 Days Past Invoice Date	$
7.	Credit Balances over 90 Days	$
8.	Foreign Account Debtors (non-US/Israel) other than Accounts owing from Arrow entities specified in the Loan Agreement	$
9.	Accounts billed and/or payable outside the US	$
10.	Contra/Customer Deposit Accounts	$
11.	U.S. Government Accounts without assignment of claims	$
12.	Promotion or Demo Accounts; Guaranteed Sale or Consignment Sale Accounts	$
13.	Accounts with Memo or Pre-Billings	$
14.	Contract Accounts; Accounts with Progress/Milestone Billings	$
15.	Accounts for Retainage or Retention Billings	$
16.	Trust / Bonded Accounts	$
17.	Bill and Hold Accounts	$
18.	Unbilled Accounts	$
19.	Non-Trade Accounts (if not already deducted above)	$
20.	Accounts with Extended Term Invoices (Net 90+)	$
21.	Chargebacks Accounts / Debit Memos	$
22.	Product Returns/Exchanges	$
23.	Disputed Accounts; Insolvent Account Debtor Accounts	$
24.	Doubtful / Refreshed / Recycled Accounts	$
25.	Deferred Revenue (other than Deferred Revenue related solely to license, support and maintenance)	$
26.	Balance of 50% over 90 Day Accounts (cross-age or current affected)	$
27.	Concentration Limits (25%), other than Arrow entities specified in the Loan Agreement (75%).	$
28.	Accounts in which Bank doesn’t have perfected first security interest/fixed charge	$
29.	Other (please explain on next page)	$
30.	TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS	$
31.	Eligible Accounts (#4 minus #30)	$
32.	ELIGIBLE AMOUNT OF ACCOUNTS (80.0% of #31)	$

BALANCES
33.	Maximum Loan Amount	$	15,000,000.00
34.	Total Funds Available (lesser of #32 or #33)	$
35.	Present balance of Advances	$
36.	RESERVE POSITION (#34 minus #35)	$

[Continued on following page.]

Explanatory comments from previous page:

The undersigned represents and warrants that this is true, complete and correct, and that the information in this Borrowing Base Certificate complies with the representations and warranties in the Loan and Security Agreement between the undersigned and Silicon Valley Bank.



		BANK USE ONLY
COMMENTS:		Received by:
			AUTHORIZED SIGNER
TUFIN SOFTWARE TECHNOLOGIES LTD		Date:
		Verified:
By:			AUTHORIZED SIGNER
	Authorized Signer	Date:
Date:		Compliance Status:	Yes	No

TUFIN SOFTWARE NORTH AMERICA, INC.
By:
	Authorized Signer
Date:

EXHIBIT E

[Debenture (floating)]

EXHIBIT E-1

[Debenture (fixed)]

EXHIBIT F

[Deed of Pledge]

Exhibit 21.1

List of Subsidiaries of Tufin Software Technologies Ltd.



Name of Subsidiary		Place of Incorporation
Tufin Software North America, Inc.		Delaware, United States
Tufin Software Europe Limited		United Kingdom
Tufin Software Germany GmbH		Germany
Tufin Software France SARL		France

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form F-1 of Tufin Software Technologies Ltd. of our report dated March 6, 2019 relating to the financial statements, which appears in this Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.



Tel-Aviv, Israel	/s/ Kesselman & Kesselman
March 6, 2019	Certified Public Accountants (Isr.)
	A member firm of PricewaterhouseCoopers International Limited

Kesselman & Kesselman, Trade Tower, 25 Hamered Street, Tel-Aviv 6812508, Israel,

P.O Box 50005 Tel-Aviv 6150001 Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il