Form of Convertible Note

Exhibit 10.7

THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS (i) SOLD PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS AND (ii) AT THE OPTION OF THE COMPANY, AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED HAS BEEN DELIVERED TO THE COMPANY.

CYREN LTD.

December 5, 2018

FOR VALUE RECEIVED, Cyren Ltd., an Israeli company (“Company”), promises to pay to ___________ (“Investor”), the principal sum of _______ US Dollars ($_______), or such lesser amount as shall then equal the outstanding principal amount hereof, together with interest below all on the terms set forth below. This Note is issued pursuant to the Convertible Note Subscription Agreement of even date herewith (as amended, modified or supplemented, the “Subscription Agreement”) between Company and the Investor.

The following is a statement of the rights of Investor and the conditions to which this Note is subject, and to which the Investor hereof, by the acceptance of this Note, agrees:

For purposes of this Section 2, "The Determining Date" means the date seven days prior to each applicable interest payment. “VWAP” shall mean the daily share volume-weighted average closing price for the Company’s ordinary shares on the Nasdaq Stock Market on each trading day during the 30 trading days prior to the Determining Date. The VWAP will be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.

For the foregoing case set forth in this section f(i), the formula can be expressed algebraically as follows:

where:

P =  The Conversion Price prior to the New Issuance.

P’ =   New Conversion Price after the New Issuance.

N =   Total number of Company ordinary shares issued and outstanding immediately prior to New Issuance.

n =   Number of ordinary shares issued in the New Issuance.

C =  Total amount of consideration received by the Company for the New Issuance.

If at any time following the execution of this Note but prior to its full conversion, the Company consummates an M&A Transaction (as defined below), then immediately prior to the closing of such M&A Transaction, the remaining due and unpaid principal amount together with any accrued and unpaid interest shall be converted into an amount of Note Shares in accordance with Section ‎3(f). However, if the consideration in an M&A Transaction is at a price less than the Conversion Price, then the remaining due and unpaid principal amount together with any accrued and unpaid interest through the closing date of the M&A Transaction shall be repaid immediately prior to the closing of such M&A Transaction. For the purposes of this Note, the term "M&A Transaction" shall mean the occurrence of: (i) a merger (except where the holders of equity interests or the voting rights of the Company prior to the consummation of such transaction hold (directly or indirectly) more than 50% of the equity interests or the voting rights of the surviving entity following such transaction), or (ii) a sale of all or substantially all of the Company’s assets or shares, or (iii) a transfer of - or grant of an exclusive license to - all or substantially all of the Company’s intellectual property to, any other company, or any other entity or person, other than a wholly-owned subsidiary of the Company, (iv) in the event that pursuant to a transaction or series of transactions a person or entity acquires fifty percent (50%) or more of the issued and outstanding shares of the Company or the right to appoint or elect at least fifty percent (50%) or more of the members of the Board (excluding any person or entity that owns greater than 50% of the issued and outstanding shares of the Company on the date hereof); or (v) any transaction which results in the company going private (whether by tender offer, merger, or otherwise).

For purposes of this Section 4, “Registrable Securities” mean the Note Shares; provided, however, that Registrable Securities shall not include:  (i) any Note Shares that have already been registered under the Securities Act; (ii) any Shares that have been sold or transferred by the Investor thereof; (iii) any Note Shares that are eligible to be freely resold without restriction pursuant to Rule 144 or another applicable exemption. The registration rights in this Section 4 shall be subject to the priority rights of WP XII Investments B.V. (“WP”) as set forth in the Registration Rights Agreement between WP and the Company dated November 6, 2017 and filed as Exhibit 4.11 to the Company’s Form 20-F filed on April 27, 2018.

For the purpose of this Section 5, "Debt" means any obligation for the repayment of money in respect of or pursuant to moneys borrowed and amounts raised pursuant to any note, facility or the issue of bonds, debentures, or any similar instrument having the commercial effect of borrowing; provided, however, that Debt shall not include: the Note, hedging transactions, standby letters of credit or bank guarantees, the acquisition cost of assets or services to the extent payable on deferred payment terms, and the amount of any liability in respect of any inter-company guarantee, indemnity or other legally binding instrument to assure payment of, or against loss in respect of non-payment. Notwithstanding the provisions above, and subject to the investor's right of first offer (which shall be held open for up to 10 days), the Company may effect one or more additional note closings with additional investors in an additional aggregate principal amount of up to $5 million which additional closing(s) shall be completed only following the execution by any subsequent investor(s) of a subscription agreement and note in form and substance similar to Investor’s subscription agreement and note, respectively, but in any event on no more preferable terms than Investor’s subscription agreement and note.

IN WITNESS WHEREOF, Company has caused this Note to be issued as of the date first written above.

Acknowledged and Agreed:

SCHEDULE I – INVESTOR WIRE INSTRUCTIONS

SCHEDULE II - SUBSCRIPTION FORM

Cyren Ltd.

10 Ha-Menofim St., 5th Floor

Herzliya, 4672561 Israel

Attention: General Counsel

The undersigned holder of the enclosed Note (the “Investor”) hereby subscribes for ____ ordinary shares (the “Shares”) of Cyren Ltd. (the “Company”) at a conversion price of $[3.90¹] per Share on the terms and conditions of the enclosed Note. The Investor represents that, at the time of conversion of the Note, all of the representations and warranties contained in the Convertible Note Subscription Agreement between the Company and the Investor pursuant to which the Note was issued are true and accurate.  

The undersigned acknowledges that the Shares shall bear such restrictive legends as may be required by applicable securities law.

The Investor hereby directs that the Shares hereby subscribed for be registered in its name and delivered to the following address.

DATED this _____ day of ______________________, 20___.

In the presence of:

Name and Signature of Witness

Name and Signature of Investor

Please print below your name and address in full.

Name:

Address:

¹ Subject to adjustment as set forth in the Note

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