Civil Case (Center) 54687-02-26 Murchinson Ltd., Canadian Comp v. Nano Dimension Ltd. - part 2

According to the Applicants, they have no objection in principle to the protection plan and they are not petitioning for its cancellation.  Their argument focuses on the applicability of the protection plan to the joint application of two or more shareholders in a request to convene a special shareholders' meeting.  According to them, section 63 of the Companies Law allows shareholders to jointly apply for a special meeting, the clause is cogent and reflects a basic right of shareholders that cannot be stipulated or restricted.  For this reason, according to the Applicants' approach, it is not possible to make use of the conditions of the poison pill in order to prevent two shareholders from coordinating between them and agreeing to jointly apply for such a meeting or to impose restrictions on them in this matter.

The company refers to the terms of the protection plan, in which there are two alternative ways to approach the company for the purpose of convening a meeting: first, an advance application to the board of directors that will approve the requested connection between the shareholders; and the second, an application through a public solicitation process of the shareholders in accordance with the rules of the US Securities and Exchange Commission.  Where there is a possibility of convening a special meeting and this possibility has not been denied to the Applicants, it is not a matter of non-compliance with the provisions of section 63 of the Companies Law, but rather the determination of a certain procedure that must be followed in order to convene a meeting in accordance with it.  According to the company, the logic and the reasons for the defense plan are not as high as the applicants claim, and even if it is hundreds of thousands of dollars, these are resilient applicants who will have no difficulty in bearing the said amount.  At most, the company is of the opinion that the Applicants are liable to suffer irreparable financial damage.

1. The Ottoman Settlement [Old Version] 1916Relevant Factual Background

12-34-56-78 Chekhov v.  State of Israel, P.D.  51 (2)

1. The Applicants, Murchinson Ltd., Canadian Comp and Nomis Bay Ltd., Bermuda Corp., are foreign legal entities acting as investment advisors and investment funds holding 7.4% of the Company's issued share capital.
2. The Respondent is an Israeli public company engaged in 3D printing technology. Its shares are traded on NASDAQ and are subject to Israeli law and US securities laws.  The company lacks a controlling core, and it is alleged that it holds a significant cash pool that exceeds its market capitalization.
3. A number of legal proceedings were conducted between the company and the applicants in this court, including before me. Among other things, disputes were discussed regarding the status of the company's ADS certificates (Civil Case 57198-03-23, judgment of November 21, 2024), and declaratory claims for the issuance of injunctions were filed (Civil Case 70343-08-23) [Nevo].  Additional proceedings between the parties were deleted by agreement during the year 2025 (Civil Case 15670-02-23, 64458-02-23, 42255-03-24) [Nevo].
4. The focus of the current dispute is the protection plan that the company called a "rights agreement", which was adopted by the company's board of directors on February 2, 2026 and reported to the US Securities and Exchange Commission. As part of the protection plan, each shareholder was allocated, as of February 13, 2026, a special purchase right, which will become exerciseable at a nominal price of $0.01 per unit, in the event that an entity, person or group reaches a "beneficial ownership" rate of 9.99% or more of the company's issued share capital, in a transaction that has not been approved in advance by the board of directors.  According to the company, this mechanism is intended to prevent a hostile takeover in the dark, protect the long-term interests of shareholders, and encourage parties interested in significant influence to negotiate directly with the board of directors.  The Plan applies to any joint venture of shareholders and for any purpose.
5. The plan was set for a limited period and includes an explicit exclusion in the framework of which the dilution mechanism will not be activated in one of two ways: first, shareholders should contact the board of directors in advance and present the requested connection between them, so that the board of directors can examine the connection itself and present its position; The second is the publication of a notice, through the US Securities and Exchange Commission's website, regarding the intention to reach agreements and a call for additional shareholders to join the application. To the extent that in the framework of this public solicitation process, the shareholding of the shareholders seeking to reach an agreement is 10% or more of the company's capital, they will be able to apply for a special meeting without the protection plan being activated.
6. On February 11, 2026, the Applicants submitted a request to the Company's Board of Directors to clarify whether joining forces with other shareholders for the purpose of requiring a special shareholders' meeting would activate the poison pill. On February 17, 2026, before the company responded before it, the main claim was filed, along with the application before me for temporary relief.  After receiving the company's response and the applicants' response to the response, an oral hearing was held before me, on March 18, 2026.
7. Quoted from NevoDuring the hearing, it emerged that the Applicants were concerned that the mere fact of contacting other shareholders (even without them contacting the company together) would activate the protection plan. Therefore, no other shareholders were contacted, and at the time of the hearing, it is not known whether there are other shareholders who are interested in approaching the company in order to request a special meeting.
8. In view of the fact that the Applicants themselves hold only 7.4% of the Company's shares, and in order not to hold a hearing on a theoretical application, the Company was asked to clarify whether a preliminary application to other shareholders, obtaining their consent to a joint application to the Company for the purpose of convening a special meeting, and notifying the Court thereof, will lead to the activation of the defense plan and the dilution of the Applicants, in order to enable the Applicants to examine whether there are shareholders who will contact the Company with them and whose total holdings exceed 10%. After the access checks, on April 9, 2026, the company clarified that the applicants' approach to other shareholders, receiving an indication in principle from them that they are interested in contacting the company with such an application and notifying the court thereof, will not activate the protection plan, subject to the fact that there will be no binding agreement between those shareholders and the applicants.
9. On April 14, 2026, the Applicants announced that they and other shareholders, whose holdings when combined exceeded 10% of the company's issued and paid up share capital, were considering approaching the company together with a demand to convene a special meeting on various issues (with clarification that at this stage no binding agreement had been reached between them due to the concern that the "poison pill" would be activated).
10. From here I decided.
11. Summary of the parties' arguments

B.1.  Summary of the Applicants' Arguments

11. According to the applicants, the poison pill mechanism sets a holding threshold of 9.99% of the company's shares, the crossing of which by one shareholder or a group of shareholders operating together, leads to the dilution of that shareholder (and for them, the activation of the poison pill will lead to the dilution of about 47% of their holdings). According to them, setting a threshold lower than the statutory threshold required for convening a shareholders' meeting, 10% according to the Relief Regulations, is intended to de facto thwart their ability to exercise their cogent right to apply for a meeting of shareholders.
12. It was argued that in accordance with section 63 of the Companies Law, the right to demand the convening of a meeting is a basic corporate right that cannot be stipulated, and it should not be subject to the prior approval of the board of directors ("veto right") or to the substantial costs of a public solicitation proceeding ("public proxy or consent solicitation - hereinafter and hereinafter: a public solicitation proceeding"). According to the applicants, there is legal justification for granting the order, since the core of the application relates to the protection of cogent rights that cannot be conditioned or negotiated.  They refer to sections 63-65 of the Companies Law and the Relief Regulations, according to which shareholders holding 10% of the share capital have a statutory right to demand the convening of a special meeting, to convene it themselves or to apply to the court for this purpose.  According to them, the poison pill mechanism adopted by the board of directors sets a lower threshold of 9.99%, the crossing of which triggers a predatory dilution sanction.  Where any attempt by the shareholders to incorporate in order to reach the required statutory threshold (10%) triggers the poison pill, this constitutes an improper attempt to make use of a contractual or statutory tool in order to nullify the provision of section 63 of the Companies Law.  According to them, it is clear that the protection plan set by the board of directors (and not even approved by the shareholders) cannot override a cogent provision of the law.
13. Therefore, they wish to determine, inter alia, that a declaratory relief will be granted, according to which the company is not permitted to operate the poison pill mechanism due to a request by one or more shareholders, who hold 10% or more of the company's shares, demanding that a special meeting be convened, in order to prevent illegal infringement of their rights and proper corporate governance in the company. As part of the interim relief, they requested that until a decision is made on the main proceeding, they will be able to apply together with others to convene a special meeting without the defense plan leading to the dilution of their holdings.
14. The Applicants reject the company's argument that there is no impediment to requesting a meeting to be convened and that the two options for convening it in accordance with the protection plan do not constitute a limitation but rather a procedure for exercising the right; The first option - a request for approval from the board of directors to exclude the shareholders from the poison pill constitutes a subordination of a cogent right to the approval of the audited body (the board of directors), grants it a "right of veto" and nullifies clause 63 of content. The second option, of conducting a public solicitation proceeding as a condition for a partnership between shareholders, is a monetary and procedural "fine".  The real costs of such a proceeding are about $300,000, and imposing such an economic barrier on a shareholder seeking to exercise a cogent right is clearly illegal.  In any event, it cannot be argued that the damage caused to them by not receiving the order is monetary damage, since they insist on exercising their right in accordance with section 63 of the Companies Law, and the realization of this right, to the extent that the order is not granted, will lead to irreparable dilution and not to financial damage.
15. With regard to the balance of convenience, it was argued that if the order is not granted, the Applicants will face an irreversible proprietary risk of diluting their holdings. On the other hand, the company will not be harmed, since the exercise of voting rights and dialogue between shareholders cannot constitute damage to the company, and the company cannot claim that compliance with the provisions of the law causes it damage.
16. On the level of the chances of the lawsuit and the cleanliness of the hands, the Applicants claim that the chances of the lawsuit are absolute, since this is a purely legal question of the preference of cogent legal provisions over the decisions of the Board of Directors. They claim that they are acting with complete cleanliness, without delay, and with a sincere attempt to exhaust the proceedings against the company before turning to the courts.  According to them, granting the request is necessary in order for them to be able to bring issues to a special shareholders' meeting without fear of predatory economic sanctions.
17. The Petitioners further attack the Company's attempt to rely on the judgments in the Stahl Apple (hereinafter: the "Stahl Case") and Unocal Corp v.  Mesa (hereinafter: the "Unocal Matter"), to which the Company referred in its reply.  According to them, the rulings have no relevance to the proceeding here since the company is an Israeli company, and the companies laws in Israel, which are different from the law in Delaware, explicitly state that the right to convene a meeting is cogent.  In addition, the judgments on which the company relied dealt with hostile takeover situations by the large shareholders (30%), whereas in our case we are dealing with shareholders seeking to exercise a basic right to convene a meeting, without the intention of takeover.
18. They further claim that the temporary relief is not an "injunction that changes the existing situation", but rather an injunction intended to preserve the supremacy of the law over the decisions of the board of directors until the claim is clarified.
19. With regard to the company's claim that the board of directors has a presumption of integrity, the applicants claim that no indication was given as to the manner in which the decision regarding the implementation of the protection plan was made, and the alleged presumption of integrity is inconsistent with the fact that the shareholders had previously rejected a proposal to adopt a poison pill program.
20. At the hearing, the Applicants addressed the company's argument that the public solicitation process is required in order to fulfill its disclosure and transparency obligations in accordance with the requirements of the New York law. They argue that the protection plan should not be used to enforce reporting or disclosure obligations under American law.  Insofar as there are reporting obligations on shareholders by virtue of foreign law, their enforcement is not within the company's authority and certainly does not justify infringement of their cogent rights under Israeli law (Minutes, p.  12, lines 9-12).
21. With regard to the respondent's claim of lack of good faith and lack of cleanliness in view of the circumstances of the verification of the affidavit of the applicants' representative, they argued that the declarant was present at the hearing, was available for questioning and could have confirmed his signature. The certain difference in his signatures on the various documents stems from the use of digital signature software, and this does not justify the deletion of the application in an ongoing legal dispute that is familiar to the parties (Protocol, page 35, lines 1-7).  In any event, for the sake of caution, on March 18, 2026, an affidavit of the applicants' representative was submitted to the file when it was certified by a notary.

B.2.  Summary of the Respondent's Arguments

22. According to the respondent, the poison pill is a legitimate defense plan, intended to prevent a hostile takeover of the company's cash coffers in the dark. The plan does not deny the right to convene a special meeting, but rather outlines a transparent way to implement it, through a public solicitation process in accordance with the rules of the SEC (US Securities and Exchange Commission).  Shareholders who wish to convene a general meeting and act in the manner set out in the protection plan, i.e., to address the general public in the manner set out in the plan, to present their position and reasons while requesting the support of other shareholders, will be able to do so without diluting their holdings and in the language of the clause (quoted by the respondent - but without the protection plan being presented in full):

"provided however, that, a Person shall not be deemed the Beneficial Owner ...  if the ,agreement, arrangement or understanding to vote such security (1) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation "...

23. On the substantive level, the Respondent argues that as a company traded in the United States, it must enforce the strict disclosure norms specified in American law, while referring to SCHEDULE 13D under the Securities Exchange Act of 1934 (hereinafter: "SCHEDULE 13D. According to her, dialogue and coordination between shareholders for the purpose of joint action constitute the basis and sometimes cover for secret agreements.  The company has a cash reserve that exceeds its traded value and is a convenient source of takeover, and for this reason, the requirement for transparency and reporting is doubly important in order to prevent secret agreements.  In light of this, the protection plan stipulates that where there is an agreement, in any matter, including an agreement to apply for a meeting, the company considers the shareholders to be joint holders in accordance with the definition of a beneficial owner in the Defense Plan Regulations and the US securities laws.  As a result, such consent activates the defense plan.  The Respondent also referred to the Stahl case, according to which the definition of "ownership" that includes voting agreements is legal and reasonable in the face of a threat posed by an activist shareholder and does not constitute a violation of the fundamental voting rights of the shareholders.
24. The company further argued that the application was preliminary and theoretical, since the applicants had not yet actually joined forces with another party and had not yet submitted a request to convene a shareholders' meeting. In addition, it argued that this is a request for an injunction that changes the existing situation, since the poison pill has already come into effect and applies to the consent of shareholders to convene a special shareholders' meeting, and it is a well-known rule that an injunction will be granted sparingly.  Moreover, according to the company, the applicants themselves claim that they do not object to the protection plan and do not request that it be activated.  In this situation, it is not possible to grant their request, which means, de facto, a change in the defense plan or a request that will not be activated, contrary to the statements made by the applicants in their application.
25. The company further claims that the applicants acted in a lack of cleanliness, inter alia, due to defects in the verification of the affidavit of the witness on their behalf, Mr. Sarfaty. The applicants did not note that the affidavit was not verified by an Israeli attorney, but a review of Mr. Sarfaty's various affidavits revealed that the affidavit was authenticated by a foreign lawyer who cannot verify an affidavit in a proceeding in Israel.  Given that the Applicants are seeking honest relief, this is a defect that goes to the root of the application, and the signs of failure to disclose the truth from a procedural perspective have a direct impact on the reliability of the Applicants' other statements (Transcript, page 28, lines 19-39; page 29, lines 1-12).
26. 00In the hearing that took place before me, the Respondent added that since it is a company traded in the United States, it is subject to disclosure requirements under the law in the United States, and that the poison pill is intended to enforce norms of disclosure of intentions and arrangements, similar to what is customary in the decentralized American market (Minutes, page 1, lines 9-23; page 2, lines 8-11). In its view, the strict disclosure requirements of US law should be applied to shareholders, since the purpose of the easing regulations is to narrow the regulatory gap between Israel and the United States and to ensure full transparency regarding the intentions and arrangements of the stakeholders beyond the information published in the regular agenda of the meeting (Minutes, page 3, lines 36-39; page 4, lines 1-24).

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27. The dispute, according to the respondent, does not relate to the question of whether section 63 of the Companies Law is cogent, since there is no dispute about this, but rather the question of how the right set forth therein can be exercised. According to her, the public solicitation does not constitute a negation of the provisions of the section (Minutes, page 2, lines 12-39; page 3, lines 3-5; page 4, lines 5-11).
28. The Respondent further argued that the defense plan is based on life experience, which shows that coordination between two shareholders for the purpose of joint action, even if it is presented as an innocent request to convene a meeting, constitutes, for the most part, a cover for secret agreements that are forged in the dark (Minutes, page 22, lines 19-39; page 23, lines 11-29). Therefore, the company requires the shareholders to make a public declaration regarding their intentions and strategic plans as a condition for joining forces between them, in order to protect the value of the company and the right of all investors in the company to know who wishes to take over the decision-making centers and what their goals are (minutes, page 3, lines 15-31, page 10, lines 33-39, page 23, lines 30-39; page 24, lines 1-2).
29. According to the company, in this spirit, the balance of convenience and the damage that will be caused to the company should also be examined (Minutes, page 19, lines 31-39). If the shareholders act transparently through the public channels (the SEC website), the pill will not be activated at all, therefore, it is not a matter of blocking the right to convene a meeting, but rather of obligating the applicants to act in accordance with the rules of the protection plan (Minutes, page 5, lines 18-22).  The damage claimed by the Applicants is purely monetary and such damage does not justify temporary relief, since it can be repaired with monetary compensation in the future.  On the other hand, the order will cause irreparable damage to the company, as it will neutralize the ability of the board of directors to protect the company from a creeping takeover that will drain its resources.

• Discussion and Decision

C.1.  The Normative Framework - Granting Temporary Remedies

30. Regulation 94 of the Civil Procedure Regulations, 5779-2018 (hereinafter: the "Regulations") determines the purpose of the temporary relief and the purpose of granting it:

"The purpose of the interim relief is to ensure a prima facie right during the legal proceedings and the proper and efficient conduct of the proceeding or the proper execution of the judgment."

31. In other words, the purpose of the temporary relief is to ensure the realization of the judgment where a prima facie right was presented and when it has not been proven that without the granting of the order, the applicant may find himself unable to exercise the judgment.
32. Subsequently, and in accordance with Regulation 95 of the Regulations, the court will also examine the balance of convenience, considerations of honesty and justice, good faith and the absence of delay (see Civil Appeal Authority 7895/21 Company M.   v.  Dimentman Doors Ltd., paragraph 15 of the judgment of the Honorable Judge A.  Grosskopf [Nevo] (November 25, 2021)).
33. On the basis of these, and as has already been determined in case law, when the court decides on a request for interim relief, it must examine the existence of two main conditions: first, prima facie evidence that establishes the cause of action and together testifies that the chances of the claim being accepted are good; The second, the balance of convenience tilted in favor of the applicant of the order, which substantiates the applicant's claim that the damage caused by the failure to grant the order exceeds the damage that will be caused to the respondents or third parties if the order is granted. See, for example, Civil Appeal Authority 3569/10 Alu Oz Ltd.    Klil Industries Ltd., paragraph 10 of the decision [Nevo] (June 28, 2010); Civil Appeal Authority 8716/15 Emilio Maimon v.  Dan David Reiter, paragraph 22 of the judgment of the Honorable Judge v.  Sohlberg [Nevo] (December 28, 2015); Civil Appeal Authority 4417/18 Dan Balfour v.  Israel Discount Bank Ltd., paragraph 25 of the judgment of the Honorable Justice A.  Grosskopf and the ruling cited there [Nevo] (03.12.18):

"First, he must show that the failure to provide relief will cause him damages, and secondly, he must show that, taking into account the chances of the claim, the damages that will be caused to him are more significant than those of the other party."

34. The case law also held that there is a "parallel of powers" relationship between the two considerations (prima facie evidence and the balance of convenience), while it is customary in case law to view the considerations of the balance of convenience as having priority status (see, Mini-Many: Civil Appeal Authority 605/19 Yadan v. Israel Land Authority, paragraph 9 of the judgment of the Honorable Justice A.  Grosskopf [Nevo] (April 18, 2019); Civil Appeal Authority 2701/20 Yedid v.  Yedid, paragraph 16 of the judgment of the Honorable Judge A.  Grosskopf [Nevo] (05.05.20)).
35. In addition to all of these, the court is also required to consider considerations of justice and honesty, including whether the application was filed in good faith, and whether the granting of relief is just and proper.
36. With regard to a valid order, the hand should be even more clenched, since an injunction brings about a change in the existing situation (see Civil Appeal Authority 5843/05 Association of Cities for the Environment of Southern Judea v. Sharon Dan Investments Ltd., paragraph 5 of the judgment of the Honorable Justice A.  Grunis [Nevo] (13 December 2005).

C.2.  From the General to the Individual