Exhibit 3.3
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THE COMPANIES LAW- 1999
A COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
VIRYANET LTD.
PRELIMINARY
1. In these Articles, unless the context otherwise requires:
"these Articles" shall mean these Articles of Association of the Company as
shall be amended from time to time;
"Auditors" shall mean the auditors of the Company, from time to time;
The "Board" shall mean the Company's board of directors;
The "Company" shall mean ViryaNet Ltd.;
"Director" shall mean a director of the Company, form time to time;
"External Directors" shall mean directors appointed and serving in
accordance with Sections 239 through 249 of the Law;
The "Law" shall mean the Companies Law, 5759-1999, as it may be amended
from time to time, and any regulations promulgated thereunder;
"Month" shall mean a Gregorian month;
The "Office" shall mean the registered Office of the Company as it shall be
from time to time;
"Office Holder" shall mean every director and every other person defined,
under the Law as a "Nosei Misra," including specified executive officers of
the Company;
The "Ordinance" shall mean the Companies Ordinance [New Version] 1983, as
amended, and any regulations promulgated thereunder, and those provisions
of the Ordinance which are still in effect from time to time;
The "Register" shall mean the Register of Shareholders that is to be kept
pursuant to Section 127 of the Law or, if the Company shall keep branch
registers, any such branch register, as the case may be;
A "Shareholder" shall mean any person or entity that is the owner of at
least one share, or any fraction thereof, in the Company, as registered in
the Register;
"Writing" shall mean handwriting, typewriting, facsimile, print,
lithographic printing and any other mode or modes of presenting or
reproducing words in visible form;
"Year" shall mean a Gregorian year.
In these Articles, subject to this Article and unless the context otherwise
requires, expressions defined in the Law or any modification thereof in
force at the date on which these Articles become binding on the Company,
shall have the meaning so defined; and words importing the singular shall
include the plural, and vice versa; words importing the masculine gender
shall include the feminine; and words importing persons shall include
companies, partnerships, associations and all other legal entities. The
titles of the Articles or of a chapter containing a number of Articles are
not part of the Article.
In the event that an Article has been added to these Articles which
contradicts an original Article found in these Articles, the Articles added
shall take precedence.
LIMITED LIABILITY AND COMPANY OBJECTIVES
2. The Company is a public company as such term is defined in Section 1 of the
Law. The liability of the Company's shareholders is limited and accordingly
each shareholder's responsibility for the Company's obligations shall be
limited to the payment of the par value of the shares held by such
shareholder, subject to the provisions of these Articles and the Law.
3. The Company's objectives are to carry on any business and do any act which
are not prohibited by law. The Company may also make contributions of
reasonable sums to worthy purposes even if such contributions are not made
on the basis of business considerations.
CAPITAL
4. The share capital of the Company shall consist of NIS 3,500,000 consisting
of 35,000,000 Ordinary Shares (the "Ordinary Shares"), each having a
nominal value of NIS 0.1. The powers, preferences, rights, restrictions,
and other matters relating to the Ordinary Shares are as set forth in the
following Articles. Warrants and options shall not be considered as shares
for purposes of these Articles. The Ordinary Shares all rank pari passu in
all respects except as set forth in the warrant itself.
5. Subject to the Law and these Articles and to the terms of any resolution
creating new shares, the unissued shares from time to time shall be under
the control of the Board which may, subject as aforesaid, allot the same to
such persons, against cash, or for such other considerations which is not
cash, with such restrictions and conditions, in excess of their nominal
value, or at their nominal value, or at a discount to their nominal value,
and at such times as the Board shall deem appropriate. Subject as
aforesaid, the Board shall have the power to cause the Company to grant to
any person the option to acquire from the Company any unissued shares or
issue to any person other securities convertible or exercisable to or
rights to acquire shares or other securities of the Company, and on such
terms as the Board shall deem appropriate.
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6. The Board shall have the power, to the extent permitted under the Law and
these Articles, to cause the Company to purchase shares of the Company
during such period, for such consideration and on such terms as the Board
shall deem fit.
7. The Company shall not issue bearer shares or exchange a share certificate
for a bearer share certificate.
8. Subject to the Law and these Articles, and without prejudice to any special
rights previously conferred upon the holders of any existing shares or
class of shares, the Company may, from time to time, create shares with
such preferential, deferred, qualified or other special rights, privileges,
restrictions or conditions, whether in regard to dividend, voting,
repayment of capital of otherwise as may be stipulated in the resolution or
other instrument authorizing such new shares.
9. The Company shall have the power to issue redeemable shares and redeem the
same all in accordance with, and subject to, the provisions of the Law.
SHAREHOLDERS
10. If two or more persons are registered in the Register 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, power of attorney and furnishing of notices, the one registered
first in the Registers shall be deemed to be the sole owner of the share,
unless all the registered joint holders notify the Company in writing to
treat another one of them as the sole owner of the share, unless
registered, subject to the provisions of Article 68 hereof.
If two 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 monies or property received from the Company
in connection with the share and the Company shall be permitted to pay all
the dividend or other monies or property due with respect to the share to
one or more of the joint holders, as it shall choose.
11. Except upon court order so directing, the Company shall not recognize the
holder of a share as a trustee, and shall not be obligated to recognize a
right based upon the rules of equity or a right dependent upon a condition
or a future right or a partial right in a share, or any other right
whatsoever with respect to the share, except for the exclusive right of the
registered holder with respect to the share.
SHARE CERTIFICATES
12.
12.1. A shareholder shall be entitled to receive from the Company without
payment, one or more certificate(s) that shall state the number of
shares owned by him, their serial numbers and the amount paid on
account of their par value. However, in the event of more than one
person holding a share, the Company shall not be obligated to issue
more than one certificate to all of the joint holders, and the
delivery of such a certificate to one of the joint holders shall be
deemed to be a delivery to all of the partners.
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Where a shareholder has transferred only a part of the shares
represented in a certificate, the old certificate shall be cancelled
and he shall be entitled, without charge, to a new certificate
representing the balance of shares.
12.2. Each certificate shall carry the signature or signatures of those
persons appointed by the Board for this purpose and the stamp or
seal of the Company.
A Registration Company (as such term is defined in the Securities
Law 5728-1968) shall be entitled, without payment, to receive,
within such time as may be prescribed under the Statutes or, if not
prescribed as aforesaid, within such time period as the Board may
deem fit, a certificate that specifies the number and class of
shares, together with any other details the Company is required,
under the Law, for inclusion therein that are registered in its name
in the Register.
If a share certificate is defaced, lost or destroyed, it may be
renewed on payment of such fee, if any, not exceeding one United
States dollar or the New Israeli Shekel equivalent thereof on the
date of payment and on such terms, if any, as to evidence and
indemnity as the Board thinks fit.
PLEDGE
13. The Company shall have a lien and first pledge on any share that is
registered in the name of any Shareholder (whether registered in the
Shareholder's name only or together with another or others), but not fully
paid, for any amount still outstanding with respect to that share, whether
or not presently payable. Any such pledge shall apply to all dividends and
other moneys, if any payable in connection with such share. The Board may
at any time release any share, wholly or in part, temporarily or
permanently, from the provisions of this Article. Unless otherwise
provided, registration by the Company of a share transfer shall be deemed
to be a waiver by the Company of its lien and pledge on those shares.
14. The Company may sell, in such manner and at such time as the Board thinks
fit, any pledged shares when the debt, liability or other obligation giving
rise to the lien has matured, but no sale shall be made unless a written
request has been furnished to the Shareholder or person who has acquired a
right in the shares, setting out the amount or obligation or commitment due
and demanding payment or, fulfillment of the debt, liability or other
obligation within seven days of service of the notice, and the person fails
to fulfill his obligation pursuant to the notice within such seven days
period.
15. The net proceeds of any such sale of pledged shares shall be applied in
satisfaction of the debt, liability or other obligation relating to the
pledged share, and the remainder (if any) shall be paid to the Shareholder
or to the person who had acquired a right in the share sold, pursuant to
the above.
16. After execution of a sale of pledged shares as provided for in Articles 13
and 14, the Board shall be permitted to sign or to appoint any person to
sign a deed of transfer of the shares sold and to register the buyer's name
in the Register as the owner of the shares. Such buyer shall not be
obligated to supervise the application of monies nor will his right in the
shares be affected by a defect or illegality in the sale proceedings after
his name has been registered in the Register with respect to those shares.
The sole remedy of any person aggrieved by the sale shall be in damages
only and against the Company exclusively.
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TRANSFER OF SHARES AND THE MANAGEMENT THEREOF
17. The shares of the Company are transferable subject to the restrictions
contained in these Articles and the Law. Each transfer shall be made in
writing in any usual or common form, or in any form approved by the Board
from time to time. Such form shall be delivered to the office, or such
other place that the Board may from time to time approve, together with the
transferred share certificates, if share certificates have been issued with
respect to the shares to be delivered, and any other proof of the
transferor's title that the Board may require under the Law. The Board may,
in its absolute discretion, refuse to register a transfer of any share
which is not fully paid.
18. The share transfer deed shall be executed both by the transferor and
transferee, and the transferor shall be deemed to remain a holder of the
share until the name of the transferee is entered into the Register in
respect thereof. The share transfer deed with respect to a share that has
been fully paid may be signed by the transferor only.
19. Every instrument of transfer of a share must be in respect of only one
class of share.
20. Subject to Article 23, all instruments of transfer which shall be
registered in the Register shall (except in case of fraud) be retained by
the Company, but any instrument of transfer which the Board may refuse to
register in the Register shall (except in case of fraud) be returned to the
party presenting the same.
21. No fee shall be charged:
21.1. for registration of a transfer; or
21.2. on the registration of any probate, letters of administration,
certificate of death or marriage, power of attorney, notice or other
instrument relating to or affecting the title any shares.
22. The Company shall maintain a Register and, if applicable, a register
of Substantial Shareholders (as defined in the Law) as required by
the Law. Subject to and in accordance with the provisions of the
Law, the Company may cause branch registers to be kept in any other
country, and to exercise all the other powers mentioned in the Law
relating to such branch registers. The Company shall also be
entitled to appoint a transfer agent, whose records shall be deemed
a branch register.
23. The Company shall be entitled to destroy: (a) all instruments of transfer
of shares and all other documents on the faith of which entries are made in
the Register at any time after the expiration of six (6) years from the
date of registration of the same; (b) all dividend mandates and
notifications of change of name or address at any time after the expiration
of two (2) years from the date of recording; and (c) all share certificates
which have been cancelled at any time after the expiration of one (1) year
from the date of cancellation. If the Company destroys a document in good
faith and without notice of any claim (regardless of the parties) to which
the document might be relevant, it shall conclusively be presumed in favor
of the Company that every instrument of transfer so destroyed was a valid
and effective instrument duly and properly registered, every share
certificate so destroyed was a valid and effective document duly and
properly cancelled and every other document mentioned above so destroyed
was a valid and effective document in accordance with the recorded
particulars in the books or records of the Company. Nothing in this Article
shall be
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construed as imposing upon the Company any liability in respect of the
destruction of any document at an earlier date than that provided above or
if the condition as to good faith and absence of notice is not met.
References in these Articles to the destruction of any document include
references to its disposal in any manner.
TRANSMISSION OF SHARES
24. Upon the death of a Shareholder, the remaining partners (in the event that
the deceased was a partner in 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 herein shall release the
estate of a deceased holder (whether sole or joint) of a share from any
obligation to the Company with respect to any share held by the deceased.
25. Any person becoming entitled to a share as a 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 the share upon the
consent of the Board or, to transfer such share to another person, subject
to the provisions contained in these Articles with respect to transfers.
26. A person becoming entitled to a share because of the death, bankruptcy or
liquidation of a Shareholder shall be entitled to receive, and to give
receipts for, dividends or other payments paid with respect to the share
but shall not be entitled to exercise any of the rights or privileges of
Shareholder unless and until such person becomes a Shareholder in respect
of the share.
CALLS
27. Subject to the provisions of these Article and to the terms of allotment of
any shares, the Board may from time to time make such calls on the
Shareholders in respect of all moneys unpaid on their shares (whether on
account of the nominal amount of the shares or by way of premium or, if the
shares shall have been issued at a discount to their nominal value, on
account of all moneys unpaid on such shares) as it may think fit, provided
that at least 14 (fourteen) days' notice is given of each call. Each
Shareholder shall be liable to pay the amount of every call so made on him
to the Board. A call may be wholly or in part revoked or the time fixed for
its payment postponed by the Board. A Shareholder upon whom a call is made
shall remain liable for calls made upon him notwithstanding the subsequent
transfer of the shares in respect of which the call was made. Unless
otherwise stipulated by the Board in the notice given in respect of the
call, each payment in response to a call shall be deemed to constitute a
pro rata payment on account of all the shares in respect of which such call
was made.
28. A call shall be deemed to have been made at the time when the resolution of
the Board authorizing such call was passed.
29. The joint holders of a share shall be jointly and severally liable for the
payment of all calls and installments in respect hereof.
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30. If a call or installment payable in respect of a share is not paid before
or on the day appointed for payment thereof, the Shareholder from whom the
call or installment is due shall pay interest on the amount of the call or
installment from the day such call or installment is payable to the time of
actual payment at such rate as the Board shall fix, but the Board may waive
payment of such interest wholly or in part. The provisions of this Articles
shall not deprive the Company of, or derogate from, any other rights or
remedies the Company may have against such person pursuant to these
Articles or applicable law.
31. No Shareholder shall be entitled to receive any dividend or other payment
or distribution or be present or vote at any General Meeting either
personally or (save as proxy for another Shareholder) by proxy, or by any
other means as may be permitted under the Law, or be reckoned in a quorum,
or to exercise any other privilege as a Shareholder until such Shareholder
shall have paid all calls then due and payable on every share registered in
such Shareholder's name, whether registered alone or jointly with any other
person, (as referred to in Article 29), together with interest and
expenses.
32. Any sum which by the terms of issue of a share is made payable upon
allotment or at any fixed date, whether on account of the nominal value of
the share or by way of premium, or, if such share shall have been issued at
a discount to its nominal value, on account of the amount payable in
respect of such share, shall for all purposes of these Articles be deemed
to be a call duly made and payable on the date fixed for payment, and in
case of non-payment all the relevant provisions of these Articles as to
payment of interest and expenses, forfeiture or otherwise shall apply as if
such sum were a call duly made and notified.
33. The Board may, at its discretion, receive from any Shareholder willing to
pay in advance all or a part of the amounts then due on account of such
Shareholder's shares, in addition to any amounts requested for payment. The
Board shall be permitted to pay such Shareholder: (1) interest at such rate
as the Board and the Shareholder shall agree upon for the amounts paid in
advance as aforesaid, or upon the part thereof which is in excess of the
amounts whose payment was at the time requested on account of the
Shareholder's shares, and (2) any dividends that may be paid for that part
of the shares for which the Shareholder has paid in advance.
34. The Board may at any time cause the Company to repay the amount so advanced
upon the least three (3) months' written notice to such Shareholder of its
instruction to do so, unless before the expiration of such notice the
amount so advanced shall have been called up on the share in respect of
which it was advanced.
FORFEITURE OF SHARES
35. If a Shareholder fails to pay all or any part of a call or installment of a
call on or prior to the day appointed for payment thereof, the Board may,
so long as such amount remains unpaid, serve notice on the Shareholder
requiring payment of such unpaid amount, together with any interest which
may have accrued and any expenses that were incurred as a result of such
non-payment.
36. The notice shall specify a date not less than seven (7) 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. The notice shall also state the place the
payment is to be made and that in the event of non-payment at or
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before the time appointed, the share in respect of which the call was made
will be liable to forfeiture.
37. If the requirements of any such notice as aforesaid are not complied with,
any share in respect of which the notice has been given may at any time
thereafter, before the payment required by the notice has been made, be
forfeited by a resolution of the Board to that effect. Any such forfeiture
shall apply to dividends that were declared but not yet distributed with
respect to the forfeited shares.
38. Forfeited shares shall be deemed the property of the Company and may be
sold or otherwise disposed of, on such terms and in such manner as the
Board sees fit. At any time prior to the sale or disposition of forfeited
shares, the forfeiture may be canceled on such terms as the Board sees fit.
Notwithstanding the foregoing, no such cancellation shall stop the Board
from adopting a subsequent resolution of forfeiture in respect of a failure
to amounts due in respect of the shares.
39. The Company may, by resolution of the Board, accept a surrender of any
share liable to be forfeited hereunder. A surrendered share shall be
treated as if it has been forfeited.
40. A person whose shares have been forfeited or surrendered shall cease to be
a shareholder in respect of them but shall notwithstanding the forfeiture
or surrender remain liable to pay to the Company all calls made and not
paid on such shares at the time of forfeiture or surrender, and interest
thereon to the date of payment in the same manner in all respects as if the
shares had not been forfeited or surrendered, and to satisfy all (if any)
claims and demands which the Company might have enforced in respect of the
shares at the time of forfeiture or surrender without any reduction or
allowance for the value of the shares at the time of forfeiture. In the
event of any such forfeiture or surrender, the Company, by resolution of
the Board, may accelerate the date(s) of payment of any or all amounts then
owing to the Company by the shareholder in question (but not yet due) in
respect of shares, whether registered in his name or registered jointly
with any other person forfeited or surrendered as aforesaid.
41. The forfeiture or surrender of a share shall involve the extinction at the
time forfeiture or surrender of all interest in and all claims and demands
against the Company in respect of the share as between the Shareholder
whose share is forfeited or surrendered and the Company, except only such
of those rights and liabilities as are by these Articles expressly saved,
or as are by the Law given or imposed in the case of past Shareholders.
42. A declaration in writing by a director or secretary of the Company that a
share in the Company has been duly forfeited on the date stated in the
declaration shall be conclusive evidence of the facts therein stated
against all persons claiming to be entitled to the share. That declaration,
together with the receipt of the Company for the consideration, if any,
given for the share on the sale or disposition thereof and specifying the
place of payment of the consideration, shall constitute good title to the
share. The person to whom the share is sold or disposed of shall be
registered as the holder of the share and shall not be bound to see to the
application of the purchase money, if any, nor shall his title to the share
be affected by any irregularity or invalidity in the proceedings in
reference to the forfeiture, sale or disposal of the share.
43. 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
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on account of the amount of the share, or by way of premium, as if the same
had been payable by virtue of a call duly made and notified.
ALTERATION OF CAPITAL
44. With regard to its capital the Company may:
44.1. From time to time, by resolution of its Shareholders subject to
these Articles and the Law:
44.1.1. Consolidate and divide all or any of its issued or unissued
share capital into shares of larger nominal value than its
existing shares;
44.1.2. Cancel any shares which at the date of the adoption of such
resolution have not been taken or agreed to be taken by any
person, and diminish the amount of its share capital by the
amount of the shares so cancelled;
44.1.3. Subject to applicable laws, subdivide its shares (issued or
outstanding) or any of them, into shares of smaller nominal
value than is fixed by the Memorandum of Association (if
applicable) or these Articles. The resolution whereby any
share is subdivided may determine that, as among the
holders of the shares resulting from such subdivision, one
or more of the share may, as compared with the others, have
special rights, or be subject to any such restrictions, as
the Company has power to attach to unissued or new share;
44.1.4. Reduce its share capital and any capital redemption reserve
fund in any way that may be considered expedient and, in
particular, exercise any or all of the powers conferred
under the Law in relation to such reduction of share
capital or capital redemption reserve.
44.2. Upon any consolidation or subdivision of shares, settle any
difficulty which may arise with regard thereto, as it deems fit,
including (but without prejudice to the generality of the
foregoing), in the event of a consolidation or any action which may
result in fractional shares:
44.2.1. Allotting, in contemplation of, or subsequent to, such
consolidation or other action, such shares or fractional
shares sufficient to preclude or remove fractional
shareholdings;
44.2.2. Subject to Section 295 of the Law, making such arrangements
for the sale or transfer of the fractional shares to such
person or persons at such times and at such price as the
Board thinks fit so as to most expeditiously preclude or
remove any fractional shareholdings. The Board shall cause
the Company to distribute the net proceeds of any such sale
in due proportion among the Shareholders who would have
been entitled to the fractional shares so sold or
transferred;
44.2.3. To the extent as may be permitted under the law redeem or
purchase such fractional shares sufficient to preclude and
remove such fractional shareholding and the Board shall
cause the Company to distribute the net
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proceeds payable in connection with such redemption or
purchase in due proportion among the shareholders who would
have been entitled to such fractional shares; and
44.2.4. Determining, as to the holders of shares so consolidated,
which issued shares shall be consolidated into each share
of a larger nominal value.
INCREASE OF CAPITAL
45. The Company may from time to time, whether or not all the shares then
authorized have been issued, and whether or not all the shares theretofore
issued have been fully called up for payment, increase its share capital by
the creation of new shares. Any such new share capital shall be of such
amount and divided into shares of such nominal amounts and (subject to any
special rights then attached to any existing class of shares) bear such
rights or preferences or be subject to such conditions or restrictions (if
any) as the resolution approving such share capital increase shall provide.
46. Except so far as otherwise provided in such resolution or pursuant to these
Articles, such new shares shall be subject to all the provisions applicable
to the shares of the original capital of the same class and par value.
VARIATION OF CLASS RIGHTS
47. If at any time the share capital of the Company is divided into different
classes of shares, the right attached to any class (unless otherwise
provided by the terms of issue of the shares of that class) may be varied
only upon consent of a separate General Meeting of the holders of the
shares of that class. The provisions of these Articles relating to General
Meetings shall mutatis mutandis apply to every such separate General
Meeting.
48. Unless otherwise provided by these Articles, the enlargement of an
authorized class of shares, or the issuance of additional shares thereof
out of the authorized and unissued share capital, shall not be deemed, for
the purposes of Article 47 to vary, modify or abrogate the rights attached
to previously issued shares of such class or of any other class of shares.
BORROWING POWERS
49. Subject to these Articles and the Law the Board may from time to time,
cause the Company to borrow or secure the payment of any sum of money for
the purposes of the Company and raise or secure the repayment of any such
sum upon such terms and conditions as it sees fit, and, in particular,
issue bonds, perpetual or redeemable debentures, or other securities or
mortgage, charge, its undertaking property and assets of the property of
the Company, both present and future, including its uncalled capital and
its called but unpaid capital whether outright or as collateral security
for any debt, liability or obligation of the Company or of any third party.
GENERAL MEETINGS
50.
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50.1. An Annual General Meeting shall be held once in every calendar
year at such time (within a period of not more than fifteen (15)
months after the last preceding Annual General Meeting) and at
such place, either within or without the State of Israel, as may
be determined by the Board.
50.2. Subject to the provisions of these Articles, the function of the
Annual General Meeting shall be to elect the members of the
Board; to receive and discuss the Financial Statements, the
ordinary reports and accounts of the Company's Directors and
Auditors; to appoint the Company's Auditors and to fix their
remunerations and to transact any other business which under
these Articles or the Law are to be transacted at a General
Meeting.
51. All General Meetings other than Annual General Meeting shall be called
Extraordinary General Meetings. The Board, whenever it sees fit, may, and
upon a demand in writing as provided for in Section 63(b) of the Law, shall
convene an Extraordinary General Meeting. Every such demand shall include
the purposes for which the meeting is called, shall be signed by those
making the demand (the "Petitioners") and shall be sent to the Office. Any
such demand may consist of several documents in like form, each signed by
one or more Petitioners. The date of a meeting called by the Board pursuant
hereto must be no later than 56 days from the date of submission of the
demand. If the Board does not call a meeting within 21 days from the date
of submission of the demand, the Petitioners, or any of them representing
more than one half of the voting rights held by the Petitioners, may
convene the meeting by themselves. However, any such meeting shall not be
held after three months have passed since the date of the submission of the
demand.
52. Subject to these Articles, applicable law and regulations, prior notice of
at least 21 days of any General Meeting, specifying the place, date and
hour of the meeting, shall be given as, hereinafter provided, to the
Shareholders thereunto entitled pursuant to these Articles and the Law.
Non-receipt of any such notice shall not invalidate any resolution passed
or the proceedings held at that meeting. With the consent of all the
Shareholders entitled to receive notice thereof, a meeting may be convened
upon shorter notice or without any notice and in such manner, generally, as
shall be approved by such Shareholders.
53. Notice of a General Meeting shall include:
53.1. The agenda for such meeting. The contents of such agenda shall
include, among other things as determined by the Board and
subject to the Law and these Articles, the following:
53.1.1. if such meeting is being held pursuant to a requisition
of Shareholders or Directors in the manner as provided
by the Law, particulars of the objectives for which
such meeting has been called;
53.1.2. any subject as may be requested for inclusion in the
manner referred to in Article 54;
53.1.3. the methods or mechanisms available for submitting
written votes; and
53.1.4. any other particulars as may be required under the Law.
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53.2. The text of any resolution which is proposed to be put and voted
upon at such meeting, unless the Law permits a general
description of the text; and
53.3. Any other matter as so required, under the Law, for inclusion in
any such notice.
54.
54.1. Notwithstanding any provision of these Articles to the contrary,
and to allow the Company to determine the Shareholders entitled
to notice of, or to vote at, any Annual or Extraordinary General
Meeting or any adjournment thereof, or to express consent to or
dissent from any corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise
any rights in respect of, or to take or be the subject to, any
other action, the Board may fix, a record date, which shall not
be more than forty (40), or any longer period permitted under the
Law, nor less than four (4) days before the date of such meeting
or other action. A determination of holders of record entitled to
notice of or to vote at a meeting shall apply to any adjournment
of the meeting: provided, however, that the Board may fix a new
record date for the adjourned meeting.
54.2. Any Shareholder or Shareholders of the Company holding, at least,
one percent (1%) of the voting rights in the issued share capital
of the Company may, pursuant to the Law, request that the Board
include a subject in the agenda of a General Meeting to be held
in the future. Any such request must be in writing, give
particulars of the subject which is requested to be included in
such agenda, be signed by the Shareholder or Shareholders making
such request and must be deposited at the Office and addressed to
the Board. In addition subject to the Law and the provisions of
Article 89, the Board shall be required to include such subject
in the agenda of the meeting only if the request has been
delivered to the Secretary of the Company not later than (i) with
respect to an Annual General Meeting of Shareholders, not less
than ninety (90) days and not more than one hundred and twenty
(120) days prior to the anniversary date of the immediately
preceding annual meeting and (ii) with respect to an
Extraordinary General Meeting of Shareholders, not less than
ninety (90) days and not more than one hundred and twenty (120)
days prior to the proposed date of such meeting, provided,
however, that in the event that less than ninety (90) days notice
or prior public disclosure of the date of any such meeting is
given, such request must have been delivered to the Secretary of
the Company not later than the close of business on the 10th day
following the day on which notice or prior public disclosure of
the meeting was given, provided that the preceding provision
shall not derogate from the Company's obligations pursuant to
Section 69(b) of the Law. Each such request shall also set forth:
(a) the name and address of the Shareholder making the request;
(b) a representation that the Shareholder is a holder of record
of shares of the Company entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting; (c) a
description of all arrangements or understandings between the
Shareholder and any other person or persons (naming such person
or persons) in connection with the subject which is requested to
be included in the agenda; and (d) a declaration that all the
information that is required under the Law and any other
applicable law to be provided to the Company in connection with
such subject, if any, has been provided. The Chairman of the
General Meeting may
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refuse to acknowledge the nomination of any person not made in
compliance with the foregoing procedure. The Board will include
in the agenda for a General Meeting a subject as requested if the
Board deems that subject suitable for discussion at a General
Meeting.
55. Subject to the Law, all General Meetings shall be held at such time
and place as the Board may determine. The Board may, in its absolute
discretion, resolve to enable persons entitled to attend a General
Meeting to do so by simultaneous attendance and participation at the
principal meeting place and a satellite meeting place or places
anywhere in the world and the Shareholders present in person, by proxy
or by written ballot at satellite meeting places shall be counted in
the quorum for and entitled to vote at the General Meeting in
question, and that meeting shall be duly constituted and its
proceedings valid, provided that the Chairman of the General Meeting
is satisfied that adequate facilities are available throughout the
General Meeting to ensure that Shareholders attending at all the
meeting place able to:
55.1. participate in the business for which the meeting has been
convened;
55.2. hear all persons who speak (whether by the use of
microphones, loudspeakers audio-visual communications
equipment or otherwise) in the principal meeting place and
any satellite meeting place, and
55.3. be heard by all other persons so present in the same way.
56. The Chairman of the General Meeting shall be present at, and the
meeting shall be deemed to take place at, the principal meeting place.
57. The officer of the Company who has charge of the Register shall
prepare and make, at least ten (10) days before every meeting of the
Shareholders, a complete list of the Shareholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address
of each Shareholder and the number of shares registered in the name of
each Shareholder. Such list shall be open to the examination of any
Shareholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten (10) days prior to the
meeting at a place specified in the notice of the meeting or at the
place where the meeting is to be held. The list shall also be present
at the meeting during the whole time thereof, and may be inspected by
any Shareholder who is present.
PROCEEDINGS AT GENERAL MEETINGS
58. No business shall be transacted at any General Meeting unless a quorum
is present when the meeting proceeds to business. For all purposes,
the quorum shall not be less than two (2) Shareholders present in
person, or by proxy, or deemed by the Law, to be present at such
meeting, holding, in the aggregate, at least, thirty-three and one-
third percent (33 1/3%) of the voting rights in the issued share
capital of the Company.
59. If within half an hour from the time appointed for the meeting a
quorum is not present (or within such longer time not exceeding one
(1) hour as the Chairman of the meeting may decide), the meeting, if
convened upon the requisition of the Shareholders, shall be dissolved;
in any other case, it shall stand adjourned to the same day in the
next week at the same place and time (unless such day shall fall on a
public holiday either in Israel or the
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United States, in which case the meeting will be adjourned to the
first day, not being a Friday, Saturday or Sunday, which follows such
public holiday), or any other day, hour and/or place as the Directors
shall notify the Shareholders in the notice of General Meeting
delivered by the Company pursuant to Article 52 in connection with the
meeting from which the adjournment occurred. If a quorum is not
present at the second meeting within half an hour from the time
appointed for the meeting, any two Shareholders present personally or
by proxy or any other valid instrument shall Constitute a quorum, and
shall be entitled to deliberate and to resolve in respect of the
matters for which the meeting was convened.
60. The Chairman (if any) of the Board shall preside as Chairman at every
General Meeting of the Company. If there is no Chairman or if at any
meeting he is not present within fifteen (15) minutes from the time
appointed for the meeting, or if he refuses to preside as Chairman of
the meeting, the deputy Chairman (if any) shall, if present and
willing to act, preside at the meeting but if neither the Chairman and
deputy Chairman are present and willing to preside, the Directors
present shall choose a Director to preside, or if there is only one
director present he shall preside if willing to act. If there is no
Director present and willing to preside, the Shareholders present and
entitled to vote shall choose a Shareholder to be Chairman of the
meeting. The Chairman of any General Meeting shall not, by virtue of
such office, be entitled to vote at any General Meeting nor shall the
Chairman of a meeting have a second or casting vote (without
derogation, however from the rights of such Chairman to vote as a
Shareholder or proxy of a Shareholder if, in fact, he is also a
Shareholder or a duly appointed proxy).
61. The Chairman may, with the consent of any meeting at which a quorum is
present, and shall if so directed by the meeting, adjourn the meeting
from time to time and from place to place, as the meeting shall
decide. The Chairman may, at his sole discretion and without the
requirement for the consent of the meeting, adjourn or otherwise make
alternative appropriate arrangements for any General Meeting at which
in his opinion the venue arrangements cannot cater in an orderly
fashion so as to enable the shareholders present adequately to hear,
speak and vote on the matters before the meeting. Without prejudice to
the generality of the foregoing, the Chairman may in such
circumstances direct that the meeting be held simultaneously in two or
more venues connected for the duration of the meeting by audio or
audio-visual links or in two or more consecutive sessions with the
votes taken being aggregated or that it be adjourned to a later time
on the same day or a later date at the same or any other venue.
62. Notwithstanding anything in these Articles to the contrary, if a
meeting shall be adjourned for twenty-one (21) days or more, a notice
shall be given of the adjourned meeting as in the case of an original
meeting. Except as aforesaid no Shareholder shall be entitled to
receive any notice of an adjournment or of the business to be
transacted at the adjourned meeting. At an adjourned meeting no
matters shall be discussed except for those which could properly have
been discussed at the meeting from which the adjournment occurred.
63. Subject to these Articles and the Law, a resolution of the Company in
a General Meeting shall be deemed adopted if passed by Shareholders
present, in person, by proxy, or by written ballot, or deemed under
the Law to be present, holding greater than fifty percent (50%) of the
total voting power attached to the shares whose holders were present,
in person, by proxy, or by written ballot, or deemed under the Law to
be present, at such General Meeting, and voted thereon. Every vote at
a General Meeting shall be conducted
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according to the number of votes to which each Shareholder is entitled
on the basis of the number of shares held by him which confer on him a
right to vote at a General Meeting.
64. At any General Meeting, a resolution, in respect of any business, put
to vote of the meeting shall be decided by a poll. Such poll shall be
held in the manner, at the time and place as the Chairman of the
General Meeting directs (including the use of ballots or tickets),
whether immediately or after an interval or postponement, or in any
other way, and, subject to the other provisions of these Articles and
the Law, the results of the poll shall be deemed to be a resolution of
the General Meeting. The holding of a poll shall not prevent the
continued business of the General Meeting.
65. A resolution in writing signed by all Shareholders of the Company then
entitled to attend and vote at General Meetings or to which all such
Shareholders have given their written consent (by letter, facsimile
telecopier, telegram, telex or otherwise), or their oral consent by
telephone (provided that a written summary thereof has been approved
and signed by the Chairman of the meeting) shall be deemed to have
been unanimously adopted by a General Meeting duly commenced and held.
66. A declaration by the Chairman of the meeting that a resolution has
been passed, or has been passed unanimously or by a particular
majority, lost, or not passed by a particular majority shall be
conclusive and entry to that effect in the minute book of the Company
signed by the Chairman of the meeting shall be conclusive evidence
thereof, without proof of the number or proportion of the votes
recorded in favor of or against such resolution. Without derogating
from the generality of the foregoing, if:
(a) any objection shall be raised to the qualification of any voter;
or
(b) any votes have been counted which ought not to have been counted
or which might have been rejected; or
(c) any votes are not counted which ought to have been counted,
the objection or error shall not vitiate the decision of the meeting
or adjourned meeting on any resolution unless it is raised or pointed
out at the meeting or, as the case may be, the adjourned meeting at
which the vote objected to is given or tendered or at which the error
occurs. Any objection or error shall be referred to the Chairman of
the meeting; and shall only vitiate the decision of the meeting on any
resolution if the Chairman decides that it may have affected the
decision of the meeting. The decision of the Chairman on such matters
shall be final and conclusive.
VOTES OF SHAREHOLDERS
67. Subject to any rights or restrictions then attached to any class or
classes of shares and to these Articles, every Shareholder who is
present, in person, by proxy, or by written ballot or is deemed under
the Law to be present shall be entitled to one vote for each share of
which he is the holder.
68. In the case of joint holders the vote of the senior who tenders a
vote, whether in person or by proxy, shall be accepted to the
exclusion of the votes of the other joint holders. For the
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purpose of this Article seniority shall be determined by the order in
which the names appear in the Register. 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.
69. A Shareholder in respect of whom an order has been made by any court
having jurisdiction in matters concerning a mental disability may vote
in person, by proxy or by written ballot, through the person
authorized by such court or by law to act on such Shareholder's
behalf, provided that such evidence as the Board, or some other person
who may be authorized by the Board for such purpose, may require of
the authority of the person claiming such authorization shall have
been deposited at the Office, or at such other place as is specified
in accordance with these Articles for the lodgment of instruments of
proxy, not less than forty-eight (48) hours before the time appointed
for holding the meeting or adjourned meeting.
70. No Shareholder shall, unless the Board otherwise determines, be
entitled in respect of any share held by that Shareholder, to vote at
any General Meeting, personally or by proxy or by any other lawful
means, or at any separate meeting of the holders of any class of
shares, or to exercise any other right conferred by virtue of being a
Shareholder in relation to any such meeting if any call or other sum
presently payable by the Shareholder in respect of that share remains
unpaid.
71. Subject to the Law and the other provisions of these Articles, shares
may be voted personally, by proxy, by ballot or by any other manner
that the Company is required to recognize and a Shareholder entitled
to more than one vote need not use all his votes or cast all the votes
he uses in the same way. Any person (whether a Shareholder or not) may
be appointed to act as a proxy.
72. A Shareholder that is a corporation shall be entitled by a decision of
its board of directors or by a decision of a person or other body,
according to a resolution of its board of directors, to appoint a
person who it shall deem fit to be its representative at every meeting
of the Company. The representative appointed as aforesaid shall be
entitled to perform on behalf of the corporation he represents all the
powers that the corporation itself might perform as if it were an
individual Shareholder.
73. 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 the death,
becoming of unsound mind, cancellation or transfer was received at the
Office at least twenty-four (24) hours before the commencement of the
meeting or adjourned meeting.
74. 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 containing the serial number of the share(s)
with respect to which the proxy is entitled to vote. Where valid but
differing instruments of proxy or other instrument which the Company
is required, under the Law, to recognize in relation to the exercise
of the voting rights in respect of a share, are delivered in respect
of the same share for use at the same meeting, the instrument which is
delivered last (regardless of its date or of the date of its
execution) shall be treated as replacing and revoking the others as
regards that share. However, if the Board, or some other person as may
be authorized by the Board for such purpose, is unable to determine
which was the last delivered, none of them shall be treated as valid
in respect of that share.
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Delivery of an instrument appointing a proxy or any other instrument,
as aforesaid, shall not preclude a Shareholder from attending and
voting in person at the meeting.
75. The Board may cause the Company to send, by mail or otherwise,
instruments of proxy to Shareholders for use at any General Meeting.
76. A letter of appointment of a proxy, power of attorney or other
instrument pursuant to which a person is acting shall be in writing,
and the signature of the appointor shall be confirmed by an advocate
or notary or bank or in any other manner acceptable to the directors.
Unless such confirmed instrument or a copy thereof is deposited in the
Office, or at such other place in Israel or abroad as the directors
may direct from time to time, at least twenty-four (24) hours before
the time appointed for the meeting or adjourned meeting wherein the
person referred to in the instrument is appointed to vote, that person
shall not be entitled to vote that share. An instrument appointing a
proxy and which is not limited in time shall expire 12 months after
the date of its execution. If the appointment shall be for a limited
period, whether in excess of 12 months or not, the instrument shall be
valid for the period stated therein.
77. An instrument appointing a proxy
(i) shall:
(a) be in writing under the hand of the appointor or of his
attorney duly authorized in writing, or if such appointor is
a corporation, either under its seal or under the hand of
some officer or attorney duly authorized in that behalf;
(b) be deemed to include the power to vote on any amendment of a
resolution put to the meeting for which it is given as the
proxy thinks fit; and
(c) unless the contrary is stated therein, be valid as well for
any adjournment of the meeting as for the meeting to which
it relates;
(ii) (whether for a specific meeting or otherwise) may be in the
following form or in any other similar form which is appropriate under
the circumstances.
Letter of Appointment of Proxy
"I, ___________________, of ________________________, holding shares
in _________________ and entitled to _________ votes hereby appoint
__________________ of ________________________________ or in his place
___________________________ of ____________________ to vote in my name
and in my place at the general meeting (regular, extraordinary,
adjourned - as the case may be) of the Company to be held on the
_____________ day of _________________ __ and at any adjournment
thereof.
In witness whereof, I have hereby affixed my signature the _________
day of _____________, __.
_____________
Appointor's Signature
I hereby confirm that the foregoing instrument was signed before me by
the Appointor
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_________________________
(name, profession and address)
DIRECTORS
78. The Board shall be composed of not more than nine (9) members and not
less than three (3) members.
79. Subject to the Law, no person shall be disqualified to serve as a
director by reason of his not holding shares in the Company or by
reason of his having served as a director in the past.
80. Subject to the Law, the remuneration of a director shall be such sum
(if any) as shall from time to time be approved by the Company in
General Meeting. The directors and their alternates shall be entitled
to be repaid all reasonable travelling, hotel and other expenses
incurred by them arising from their travelling to and from Board
meetings or meetings of any committee of the Board. If by any
arrangement, approved by the Board, any director shall perform or
render any special duties or services outside his ordinary duties as a
director, the Board may cause the Company to pay him special
remuneration, in addition to his ordinary remuneration, and such
special remuneration may be by way of salary, commission,
participation in profits, or otherwise as may be arranged, all subject
to the provisions of the Law with regard to all such matters,
including Shareholder and audit committee approvals required under the
Law for various arrangements relating to director remuneration.
81. The office of a director shall be vacated, ipso facto:
(a) if he becomes bankrupt or suspends payment or colludes or
compounds with his creditors;
(b) if he be declared legally incompetent;
(c) if by notice in writing given to the Company he resigns his
office;
(d) if he is removed from office by a resolution of the General
Meeting of the Company approved by Shareholders holding more than
50% of the outstanding share capital of the Company;
(e) if, under the Law, his term otherwise automatically terminates;
or
(f) upon his death.
82. Subject to the provisions of the Law, no director shall be
disqualified by virtue of his office from holding any office or place
of profit in the Company or in any company in which the Company shall
be a shareholder or otherwise interested, or from contracting with the
Company as vendor, purchaser or otherwise, nor shall any such
contract, or any contract or arrangement entered into by or on behalf
of the Company in which any director shall be in any way interested be
avoided, nor, other than as required by the Law, shall any director be
liable to account to the Company for any profit arising from any such
office or place of profit or realized by any such contract or
arrangement by reason only of such director's
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holding that office or of the fiduciary relations thereby established,
but the nature of his interest, as well as any material fact or
document, must be disclosed by him at the meeting of the Board at
which the contract or arrangement is first considered, if his interest
then exists, or, in any other case, at no later than the first meeting
of the Board after the acquisition of his interest.
83. The entering into of a transaction by the Company with an Office
Holder or a third party in which an Office Holder has a personal
interest (as more fully described in Section 270(1) of the Law), which
is not an Extraordinary Transaction (as defined in the Law) shall, if
such Office Holder is a director or the General Manager, be approved
in such manner as may be prescribed by the Board, from time to time,
or otherwise by the Board itself. If such Office Holder is not a
director, then such transaction shall be approved in such manner as
may be prescribed by the General Manager from time to time and in the
absence of any such determination, by the General Manager.
POWERS AND DUTIES OF DIRECTORS
84.
84.1. The business of the Company shall be managed by the Board,
which may exercise all such powers of the Company and
perform on behalf of the Company all such acts as may be
exercised and performed by the Company as are not by the Law
or by these Articles required to be exercised or done by the
Company through a General Meeting or, if the Company is
under an obligation under the Law to appoint a General
Manager, the General Manager, subject to the provisions of
the Law and of these Articles and to such regulations (not
being inconsistent with such aforesaid provisions) as may be
prescribed by the Company in General Meeting.
Notwithstanding the foregoing, no regulation made by the
Company in a General Meeting shall invalidate any prior act
of the Board which would have been valid if such regulation
had not been made. The general powers given by this Article
shall not be limited or restricted by any special authority
or power given to the Board by any other Article.
84.2. The Board may from time to time, at its discretion, cause
the Company to borrow or secure the payment of any sum or
sums of money for the purposes of the Company, and may
secure or provide for the repayment of such sum or sums in
such manner, at such times and upon such terms and
conditions as it deems fit, and, in particular, by the
issuance of bonds, perpetual or redeemable debentures,
debenture stock, or any mortgages, charges, or other
securities on the undertaking or the whole or any part of
the property of the Company, both present and future,
including its uncalled or called but unpaid capital for the
time being.
84.3. The Board may, from time to time, set aside any amount(s)
out of the profits of the Company as a reserve or reserves
for any purpose(s) which the Board, in its absolute
discretion, shall deem fit, including without limitation,
capitalization and distribution of bonus shares, and may
invest any sum so set aside in any manner and from time to
time deal with and vary such investments and dispose of all
or any part thereof, and employ any such reserve or any part
thereof in the business of the Company without being bound
to keep the same separate from other assets of the Company,
and may subdivide or redesignate any reserve or cancel the
same or
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apply the funds therein for another purpose, all as the
Board may from time to time think fit.
85. Subject to the provisions of these Articles and the Law, the Board may
at any time and from time to time, by power of attorney or otherwise,
appoint any person to be the attorney or attorneys of the Company for
such purposes and with such powers, authorities and responsibilities
(not exceeding those vested in or exercisable by the Board under these
Articles) and for such period and subject to such conditions as it may
think fit, and any such power of attorney may contain such provisions
for the protection and convenience of persons dealing with any such
attorney as the Board may think fit, and may also authorize any such
attorney to sub-delegate all or any of the powers, authorities and
responsibilities vested in him.
86. The Board may act at any time notwithstanding any vacancy in its body
provided that in the event that the number of directors shall at any
time be less than the minimum number prescribed by or in accordance
with these Articles it shall be lawful for them to act as a Board for
the purpose of filling any vacancies in their body or for summoning a
General Meeting of the Company, but not for any other purpose.
87. The Board may delegate all or any of its powers, authorities and
responsibilities (except for those powers, authorities and
responsibilities which, under the Law (including, but not limited to,
those listed in Section 112 of the Law), the Board is unable to
delegate) to any committee consisting of such members of the Board as
the Board may, from time to time, think fit, subject to applicable
requirements of the Law (the "Committee of the Board"). The Board may,
subject to the Law, widen, curtail or revoke such delegation of
powers, authorities and responsibilities. To the fullest extent
permitted by law, the Board, after determining a number of shares
reserved for the issuance of shares, options or warrants to the
Company's employees, directors, and consultants, may delegate the
power to issue such options and shares to a committee of the Board.
Any committee of the Board so formed shall in the exercise of the
power, authorities and responsibilities so delegated conform to any
regulations that may be lawfully imposed on it by the Board. The
meetings and proceedings of a Committee of the Board shall be governed
by the provisions herein contained for regulating the meetings and
proceedings of the Board, so far as the same are applicable thereto
and are not lawfully suspended or superseded by any regulations
imposed by the Board. The Board shall appoint an audit committee
consisting of at least three (3) members, the members of which and the
authorities, powers and responsibilities of which shall be governed by
the Law and any other applicable law or rule.
ELECTION OR REMOVAL OF DIRECTORS
88. The members of the Board shall be elected and appointed at the
Company's Annual General Meetings. At each Annual General Meeting of
the Shareholders, successors to the Directors shall be elected for a
one-year term (until the next Annual General Meeting) by a resolution
of the General Meeting.
89. (a) Nominations for the election of Directors may be made by the
Board or a committee appointed by the Board or by any Shareholder
holding at least 1% of the outstanding voting power in the
Company. However, any Shareholder entitled to vote in the
election of directors generally may nominate one or more persons
for election as
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directors at a meeting only if written notice of such
Shareholder's intent to make such nomination or nominations has
been given to the Secretary of the Company not later than (i)
with respect to an election to be held at an Annual General
Meeting of Shareholders, not less than ninety (90) days and not
more than one hundred and twenty (120) days prior to the
anniversary date of the immediately preceding annual meeting and
(ii) with respect to an election to be held at an extraordinary
meeting of Shareholders, not less than ninety (90) days and not
more than one hundred and twenty (120) days prior to the proposed
date of such meeting, provided, however, that in the event that
less than ninety (90) days notice or prior public disclosure of
the date of any such meeting is given, such request must have
been delivered to the Secretary of the Company not later than the
close of business on the 10th day following the day on which
notice or prior public disclosure of the meeting was given,
provided that the preceding provision shall not derogate from the
Company's obligations pursuant to Section 69(b) of the Law. Each
such notice shall set forth: (a) the name and address of the
Shareholder who intends to make the nomination and of the person
or persons to be nominated; (b) a representation that the
Shareholder is a holder of record of shares of the Company
entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements or
understandings between the Shareholder and each nominee and any
other person or persons (naming such person or persons) pursuant
to which the nomination or nominations are to be made by the
Shareholder; and (d) the consent of each nominee to serve as a
director of the Company if so elected and a declaration signed by
each of the nominees declaring that there is no limitation under
the Law or any other applicable law for the appointment of such a
nominee and that all the information that is required under the
Law to provided to the Company in connection with such an
appointment has been provided. The Chairman of the meeting may
refuse to acknowledge the nomination of any person not made in
compliance with the foregoing procedure.
(b) To the extent required under the Law, the Company shall appoint
or arrange the election of two (2) persons as External Directors.
The appointment or election and removal of such directors shall
be made in accordance with the Law, notwithstanding the
provisions of these Articles. The provisions of Article 88 shall
not apply to a Director who is an External Director.
(c) Notwithstanding the provisions of paragraphs (a) and (b) of this
Article, no person shall be nominated or appointed to the office
of a Director if such person is disqualified, under the Law, from
being appointed as a director.
90. Subject to the provisions of Articles 88, the Board may at any time
appoint any other person as a director, whether to fill a vacancy or
as an addition to the then current number of directors, provided that
the total number of directors shall not at any time exceed any maximum
number (if any) fixed by or in accordance with these Articles. Any
director so appointed shall hold office until the Annual General
Meeting of Shareholders at which the term for the other directors of
his class expires, unless otherwise stated in the appointing
resolution.
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ALTERNATE DIRECTORS
91. (a) A director may, by written notice to the Company given in the manner
set forth in Article 89(a), appoint any individual who is qualified to
serve as a director, to act as alternate director (an "Alternate
Director") at meetings of the Board or any committee of the Board of
which the appointor is a member in his place during his absence (and,
at his discretion, to revoke such nomination) provided that such
individual is not a director or is a person acting as an Alternate
Director for any other director or any other person disqualified by
law.
(b) Any Director appointing an Altetrnate Director may remove such
Alternate Director and appoint another Alternate Director in place of
any Alternate Director appointed by him whose office has been vacated
for any reason whatsoever. The appointment of an Alternate Director
shall be subject to the consent of the Board. Unless the appointing
Director, by the instrument appointing an Alternate Director or by
written notice to the Company, limits such appointment to a specified
period of time or restricts it to a specified meeting or action of the
Borad, or otherwise restricts its scope, the appointment shall be for
all purposes, and for a period of time concurrent with the term of the
appointing Director.
(c) Any appointment or removal of an Alternate Director shall be effected
by an instrument in writing delivered at the Office and signed by the
appointor or by such other method as may be approved by the Board.
(d) An Alternate Director shall be entitled to receive notice of meetings
of the Board and of any committee of the Board of which the appointor
is a member, to attend and to vote at any such meeting at which his
appointor is not personally present and generally to perform all the
functions of his appointor (except as regards power to appoint an
alternate, unless the instrument of his appointment states otherwise)
as a director in his absence. Save as otherwise provided in these
Articles, an Alternate Director shall be deemed for all purposes to be
a director and shall be responsible for his or her own acts and
defaults.
(e) An Alternate Director shall not be entitled to receive from the
Company in respect of his appointment as Alternate Director any
remuneration.
(f) An Alternate Director shall ipso facto cease to be an Alternate
Director if his appointor ceases for any reason to be a Director or on
the happening of any event which, if he were a director, would cause
him to vacate the office of Director.
PROCEEDINGS OF DIRECTORS
92. Meetings of the Board will be convened in accordance with the needs of the
Company and, in any event, shall be convened at least once every three (3)
months. Save as aforesaid, the Board may meet, adjourn and otherwise
regulate its meetings as it thinks fit. Board meetings may be convened at
any time by the Chairman of the Board. The Chairman of the Board shall
convene a Board meeting upon the request of any two directors as soon as
practicable after receiving such request and shall otherwise convene a
Board meeting as provided by the Law. If the Chairman of the Board does
not, within fourteen (14) days after
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the date of receiving a request from two directors as aforesaid, convene a
Board meeting, then the directors requesting the convening of such Board
meeting may convene the Board meeting. If the Chairman of the Board does
not, within fourteen (14) days after being obliged to convene a Board
meeting as provided under the Law, convene a Board meeting, the person who,
as provided in the Law in such circumstances, is entitled to convene the
Board meeting, may convene such meeting. Notice of a Board meeting shall
contain the information required by the Law and shall be delivered to the
directors not less than seven (7) days before such meeting.
93. Notice of a meeting of the Board may be given orally or in writing, and if
given in writing, may be sent by hand, post, facsimile or electronic mail
to a director at the address, facsimile number or electronic mail address
given by such director to the Company for such purpose. Any such notice
shall be deemed duly received, if sent by post, three (3) days following
the day when any such notice was duly posted and if delivered by hand or
transmitted by facsimile transmission or electronic mail, such notice shall
be deemed duly received by the director on the date of delivery or, as the
case may be, transmission of the same. Notwithstanding anything contained
to the contrary herein, 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 notwithstanding such
defective notice if such failure or defect is waived prior to action being
taken at such meeting, by all directors entitled to participate at such
meeting to whom notice was not duly given as aforesaid.
94. Any director may participate in a meeting of the Board by means of
telephone or similar communication equipment whereby all the directors
participating in the meeting can hear each other and the directors
participating in this manner shall be deemed to be present in person at
such meeting and shall be entitled to vote or be counted in a quorum
accordingly. Such a meeting shall be deemed to take place where the largest
group of those participating is assembled or, if there is no such group,
where the Chairman of the meeting is then located.
95. Until otherwise decided by the Board, a quorum at a meeting of the Board
shall be constituted by the presence in person, by alternate or by
telephone or similar communication equipment of a majority of the directors
then in office who are lawfully entitled to participate and vote at the
meeting. If within one-half an hour (or within such longer time not
exceeding one (1) hour as the Chairman of the meeting may decide) from the
time appointed for the holding of the Board meeting a quorum is not
present, the Board meeting shall stand adjourned to the same day in the
next week at the same time and place (unless such day shall fall on a
public holiday either in Israel or the United States, in which case the
meeting will be adjourned to the first day, not being a Friday, Saturday or
Sunday, which follows such public holiday). If at such adjourned Board
meeting a quorum is not present within half an hour from the time appointed
for holding the meeting, the directors present, in person, by alternate or
by telephone or similar communication equipment (as referred to in Article
94) who are lawfully entitled to participate and vote at such meeting shall
be a quorum. No business shall be transacted at a meeting of the Board
unless the requisite quorum is present (in person, by alternate or by
telephone as aforesaid) when the meeting proceeds to business. For the
purpose of these Articles an Alternate Director shall be counted in a
quorum if the director who appointed him is not present.
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96. A resolution proposed at a meeting of the Board at which there is a quorum
shall be deemed adopted if supported by a majority of the number of
directors present at the meeting and lawfully entitled to vote on such
resolution.
97. The Chairman of the Board shall not have a second or casting vote at any
Board meeting.
98. A resolution in writing signed by all the directors then in office lawfully
entitled to vote thereon, shall be as effective for all purposes as a
resolution passed at a meeting of the Board duly convened, held and
constituted and may consist of several documents in like form each signed
by one or more of the directors. For the purpose of this Article, the
signature of an Alternate Director, the appointer of which is entitled to
vote on such resolution, shall suffice in lieu of the signature of the
director appointing him.
99. The Board may from time to time elect by resolution or otherwise appoint a
director to be Chairman or deputy Chairman and determine the period for
which each of them is to hold office.
100. The Chairman of the Board, or in his absence the deputy Chairman, shall
preside at meetings of the Board, but if no such Chairman or deputy
Chairman shall be elected or appointed, or if at any meeting the Chairman
or deputy Chairman shall not be present within fifteen (15) minutes after
the time appointed for holding such meeting, or if the Chairman, or, if
applicable, deputy Chairman, is unwilling or unable to chair such meeting,
the directors present shall choose one of their number to be Chairman of
such meeting.
101. Subject to the provisions of the Law, all bona fide actions of any meeting
of the Board, or of a committee of the Board, or of any person acting as a
director or Alternate Director or a member of such committee shall,
notwithstanding that it be afterwards discovered that there was some defect
in the appointment of any such director or such committee or person acting
as aforesaid, or that they or any of them were disqualified, or had vacated
office or were not entitled to vote, be as valid as if every such person
had been duly appointed or had duly continued in office and was qualified
and had continued to be a director or, as the case may be, an Alternate
Director and had been entitled to vote.
GENERAL MANAGER
102. Subject to these Articles and the Law, the Board may from time to time
appoint one or more persons, whether or not directors, as the General
Manager, Chief Executive Officer, and/or President of the Company. Subject
to the Law, the powers, authorities and responsibilities any such General
Manager, Chief Executive Officer and/or President shall have shall be those
that the Board may, at its discretion, lawfully confer on the same. The
Board may, from time to time, as the Board may deem fit, modify or revoke,
such title(s), duties and authorities the Board conferred as aforesaid.
Subject to these Articles and the Law, any such appointment(s) and any such
powers, authorities and responsibilities, conferred as aforesaid may be
either for a fixed term or without any limitation of time, and may be made
upon such conditions and subject to such limitations and restrictions as
the Board may, from time to time, determine and the Board may from time to
time (subject to the provisions of the Law and of any contract between any
such person and the Company) fix his or their salaries and remove or
dismiss him or them from office and appoint another or others in his or
their place.
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MINUTES
103. The Company shall cause minutes to be made of all General Meetings of the
Company and also of all appointments of directors and Office Holders and of
the proceedings of all meetings by the Board and any committees thereof,
and of the persons present at any such meetings, and all business
transacted at such meetings, (which shall include any written resolution of
the directors pursuant to Article 98 above). Any such minute of any
meeting, if purporting to be signed by the Chairman of such meeting, or by
the Chairman of the Board, shall be prima facie evidence of the facts
therein stated. Minutes of a meeting shall be kept at the Office for the
period, and in the manner, prescribed in the Law.
STAMP AND SIGNATURES
104. (a) The Company may have one or more official stamps.
(b) The Company may keep an official stamp for documents made for foreign
jurisdictional purposes, and may authorize, from time to time, a
person appointed for this purpose to make use of such stamp.
(c) A document shall be deemed signed by the Company upon the fulfillment
of all of the following:
(1) The Company's stamp was stamped on the document by a person
authorized therefor by the Board, or the document bears the name
of the Company in print;
(2) It bears the signature of one or more persons authorized,
generally or in the specific instance, to sign such document by
the Board.
(d) An authorization of one or more persons by the Board to sign a
document on behalf of the Company shall be deemed to include the
authority to stamp the Company's stamp thereon, unless otherwise
provided by the Board.
(e) An authorization by the Board as provided in Article 104(d) may be for
a specific document or for a certain sort of document or for all the
Company's documents or for a definite period of time or for an
unlimited period of time, provided that any such authority may be
terminated by the Board, at any time.
(f) The provisions of this Article shall apply both to the Company's
documents executed in Israel and the Company's documents executed
abroad.
SECRETARY
105. The Board shall appoint a Secretary of the Company on any terms it thinks
proper. The Board may from time to time by resolution appoint a temporary
substitute for the Secretary.
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LOCAL MANAGEMENT
106. The directors 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 they shall see fit, and the provisions of the next
section shall not derogate from the general powers granted to the Board
pursuant to this Article.
107. The Board may from time to time convene any local management or agency to
conduct the business of the Company in any particular place, whether in
Israel or abroad, and may appoint any person to be a member of such local
management, or to be a director or agent, and may decide his manner of
compensation. The Board may from time to time grant a person so appointed
any power, authority, or discretion that the Board has at that time, and
may authorize any person acting at that time as a member of a local
management to continue in his position notwithstanding that some position
has been vacated there, and any such appointment or authorization may be
made upon such conditions as the Board deems fit. The Board may from time
to time relieve any person so appointed or revoke or change any such
authorization.
DIVIDENDS AND RESERVES
108. Subject to these Articles, the Company may declare and pay any dividend
permitted under the Law.
109. The Board may, before declaring any dividend, set aside, out of the
profits of the Company, such sums as it thinks proper as a reserve or
reserves, which shall, at the discretion of the Board, be applicable for
any purpose to which the profits of the Company may be properly applied
and pending such application may be employed in the business of the
Company as the Board may, from time to time, deem fit. The Board may,
alternatively, carry forward any profits which it may deem prudent not to
distribute as a dividend.
110. The Company may, by a resolution of the Board, declare a dividend in
accordance with the respective rights of the Shareholders.
111. The Board may, from time to time, cause the Company to pay to the
Shareholders such interim dividends as appear to the Board to be justified
by the profits of the Company. The validity of any interim dividend shall
not be affected by the subsequent failure of the Board to declare a
dividend.
112. No dividend shall bear interest or linkage against the Company.
113. All dividends unclaimed for one year, after having been declared, may be
invested or otherwise made use of by the Company as the Board shall see
fit, until the same is claimed. The Company shall not be deemed a trustee
in respect of any such unclaimed dividends.
Any dividend or other sum remaining unclaimed for a period of seven (7)
years after having been declared shall be forfeited and shall revert to
the Company.
114. Subject to any special or restricted rights conferred upon the holders of
shares as to dividends, all dividends shall be declared by the Board and
paid in proportion to the amount paid up on account of the nominal value
of the shares in respect of which the dividend is being paid. As regards
shares not fully paid throughout the period in respect of which the
dividend is paid, dividends in respect thereto shall be apportioned and
paid pro rata
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according to amounts deemed under this Article to be paid up on account of
the nominal value of such shares during any portion or portions of the
period in respect of which the dividend is paid. For this purpose, the
amount deemed to be paid on account on the nominal value of such partly
paid shares shall be such proportion of the nominal value as the amount
paid to the Company with respect to the share bears to its full issuance
price. Subject to the terms of article 33 above, no amount paid on a
share, in advance of a call, shall be treated as paid up on a share.
115. Subject to the terms of any share issuance regarding the date or the
occurrence of an event from which such shares are to be eligible for
dividends, the persons registered in the Register as Shareholders on the
record date for the declaration of a 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.
116. The Board may deduct from any dividend payable to any Shareholder all sums
of money (if any) presently payable by such Shareholder to the Company on
account of calls or otherwise in relation to the shares of the Company.
The Board may retain any dividend or other moneys payable on or in respect
of a share on which the Company has a lien, and may apply the same in or
toward the satisfaction of the debts, liabilities or engagement in respect
of which the lien exists.
117. Subject to the provisions of the Law, any resolution of the Board
declaring a dividend may, direct payment of such dividend wholly or partly
by the distribution of specific assets of the Company, or by distribution
of paid up shares, debentures, or debenture stock of the Company or any
other companies or in any one or more of such ways, and the Board shall
give effect to such resolution, and where any difficulty arises in regard
to such distribution, the Board may settle the same as it thinks
expedient, and in particular may fix the value for distribution of such
specific assets or any part thereof and may determine that cash payments
shall be made to any Shareholders on the basis of the value so fixed in
order to adjust the rights of all parties, and may vest any such specific
assets in trustees as may seem expedient to the Board.
118. The Board may cause the Company to pay the dividends, interest or other
moneys payable on shares in respect of which any person is by transmission
entitled to be registered as holder to such person upon production of such
certificate and evidence as would be required if such person desired to be
registered as a Shareholder in respect of such shares.
119. Any dividend, interest or other moneys payable in cash on or in respect of
a share may be paid by check or money order sent through the post to the
registered address of the holder or person entitled thereto and in the
case of two or more persons being registered as joint holders of such
share, to the registered address of that one of the joint holders who is
first named on the Register, or to such person and to such address or by
such other means offered by the Company as the holder or joint holders or
person entitled thereto, as applicable, may agree in writing with the
Company. Every such check or money order shall be made payable to the
order of the person to whom it is sent or to such person as the
Shareholder, person entitled or joint holders direct. Any one of two or
more persons registered as joint holders of a share may give effectual
receipts for any dividends or other moneys payable in respect of the
shares held by them as joint holders. The Company shall not be responsible
nor shall have any liability for any check or money order lost in
transmission or in respect of sums lost or delayed in the course of
payment by a method offered by the Company as aforesaid.
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CAPITALIZATION OF RESERVE FUNDS
120. The Board may from time to time resolve that any sum, investment or
property not required as a source for payment of fixed preferential
dividends and (a) 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
(b) being net profits not distributed and remaining in the Company, shall
be capitalized, and that such investment sum or property be released for
distribution and be distributed as capital among the Shareholders
according to the proportion to which they would be entitled if such amount
were distributed as dividends on shares, in the manner so directed by such
resolution. The Board shall 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 up shares among those Shareholders according
to the pro rata rate for payment of the value of the shares and their
rights in the amount capitalized, or as full payment of shares to be
issued upon the exercise of warrants on a net issuance basis. The Board
may also use such investment sum or property or any part thereof for the
aforesaid Shareholders for full payment of those shares not issued, in
proportion to such shares of the Company's capital issued and held by such
Shareholders, or use 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 organize the distribution as it deems
desirable. They shall particularly be permitted to determine the value of
the property or investment for the purpose of distribution of all fully
paid up shares, to pay money to any such Shareholder according to the
value determined in this manner in order to coordinate and adjust the
Shareholders' rights. The Board shall also be permitted to decide that
parts with a value of less than one New Israel Shekel shall not be taken
into account in order to adjust the rights of all parties, to give all
such shares, cash or property to trustees to hold in escrow for such
persons entitled to part of the allocation and the distribution in
accordance with and against such securities as the Board deems desirable.
ACCOUNTS AND AUDIT
121. The Board shall cause accounting records to be kept in accordance with
applicable law. The books of account shall be kept at the Office, or at
such other place or places as the Board shall deem fit (either within the
State of Israel or elsewhere in the world) and shall be open for
inspection by directors. No Shareholder (not being a director) shall have
any right to inspect any account or book or document of the Company,
except as conferred by applicable law or as authorized by the Board or a
resolution of the Company's General Meeting.
122. At least once every fiscal year, the accounts of the Company shall be
examined and audited and the correctness of the profit and loss account
and balance sheet certified by one or more duly qualified auditors.
123. The appointment, authorities, rights and duties of the Auditors shall be
regulated by applicable law, provided, however, that in exercising its
authority to fix the remuneration of the Auditors, the Company's General
Meeting may, act (and in the absence of any action in connection
therewith, shall be deemed to have so acted) to authorize the Board to fix
such remuneration, subject to such criteria or standards, if any, as may
be provided in such
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resolution, and if no such criteria or standards are so provided, such
remuneration shall be fixed in an amount commensurate with the volume and
nature of the services rendered by such Auditors.
NOTICES
124. Subject to the Law, notice to a Shareholder may be served, as general
notice to all Shareholders, by publication in one of the daily Hebrew
newspapers appearing in Israel and in one daily English language newspaper
appearing in the City of New York, and otherwise in such manner as may be
required under the Law, but in place of the publication of general notice
as aforesaid, notice may be served on each Shareholder individually or by
hand or by post to the registered address of each Shareholder. The date of
such publication in the newspaper shall be deemed to be the date of
service on all Shareholders. A notice served on a Shareholder not sent by
post but left at the Shareholder's registered address shall be deemed duly
served on the day it was left there. A notice served on a Shareholder
through the post shall be deemed duly served on the third day following
the day when the envelope containing it was posted. Proof that an envelope
containing a notice was properly addressed, stamped and posted shall be
conclusive evidence that notice was given.
125. A notice may be given by the Company to the joint holders of a share by
giving notice to the joint holder named in the Register in respect of the
shares.
126. Subject to the Law, where a given number of days' notice extending over
any period is required to be given, the day of service shall be counted in
such number of days or other period.
127. Any Shareholder whose address is not contained in the Register and who
shall not have designated in writing an address for receipt of notices
shall not be entitled to receive any notice from the Company.
128. Apart from the publication of any advertisement in the press, as mentioned
in Article 124, a person entitled to a share in consequence of the death
or bankruptcy of a Shareholder upon supplying to the Company such evidence
as the Board may reasonably require as evidence of his title to the share,
and upon supplying also an address in Israel or the United States for the
service of notices, shall be entitled to have served upon or delivered to
him at such address any notice or document to which the Shareholder but
for his death or bankruptcy would be entitled, and such service or
delivery shall for all purposes be deemed to be sufficient service for
delivery of such notice or document on all persons interested (whether
jointly with or as claiming through or under him) in the share. Save as
aforesaid any notice or document delivered or sent by post to or left at
the address of any Shareholder shall, notwithstanding that such
Shareholder be then dead or bankrupt, and whether or not the Company shall
have notice of his death or bankruptcy, be deemed to have been duly served
or delivered in respect of any share registered in the name of such
Shareholder as sole or first-named joint holder.
129. Any notice or other document (including, but not limited to, a share
certificate) may be served or delivered by the Company to the Shareholders
listed in the Register as it stands at any time, as may be determined by
the Board from time to time, provided that the date so determined by the
Board shall not be more than fifteen (15) days prior to the date of
posting (where the notice or other document is posted) or otherwise not
more than fifteen (15) days
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before the date of service. No change in the Register after the time
determined by the Board shall invalidate any such service or delivery.
Every person who becomes entitled to a share shall be bound by any notice
in respect of that share which, before his name is entered in the
Register, has been duly given, or deemed to be duly given to the person
from whom he received or became entitled to receive the share.
INSURANCE AND INDEMNITY OF OFFICERS
130. Subject to the provisions of the Law with regard to such matters:
130.1. the Company may enter into a contract for the insurance of all or
part of the liability of an Office Holder with respect to an
obligation imposed on such Office Holder due to an act performed
by him in his capacity as an Office Holder of the Company arising
from any of the following:
130.1.1. a breach of his duty of care to the Company or to
another person;
130.1.2. a breach of his duty of loyalty to the Company,
provided that the Office Holder acted in good faith and
had reasonable cause to assume that such act would not
prejudice the interests of the Company;
130.1.3. a financial liability imposed on such Office Holder in
favor of another person;
130.2. (a) the Company may undertake, in advance, to indemnify, or may
indemnify, an Office Holder in respect of, a liability or expense
(as referred to in subparagraph 130.2(b) below) that may be
imposed on such Office Holder (due to an act performed by him in
his capacity as an Office Holder):
(1) that arises from those types of events which the
Board deems to be forseeable, and limited to those
amounts determind by the Board to be reasonable
under the circumstances; or
(2) that arises from an event that took place prior to
the Company's giving such indemnity;
(b) the liability and expense referred to in sub-paragraph
130.2(a) above are as follows:
(1) a financial liability imposed on an Office Holder
in favor of another person by a court judgment,
including a compromise judgment given as a result
of a settlement or an arbitrator's award which has
been confirmed by a court;
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(2) reasonable litigation expences, including
attorneys' fees, expended by an Office Holder or
which were imposed on an Office Holder by a court
in proceedings instituted against him by the
Company or in its name or by any other person or
in a criminal charge from which he was acquitted
or in a criminal charge in which he was convicted
for a criminal offense that does not require proof
of criminal thought (as such term is defined by
the Penal Law, 5737-1977);
130.3. the Company may release exculpate and exempt, in advance, all or
part of an Office Holder's liability to the Company for damage
which arises from the breach of his duty of care to the Company
(as such term is understood by Sections 252 and 253 of the Law).
(iv) The provisions of Articles 130.1, 130.2 and 130.3 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 (i) 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, and/or (ii) in connection with any Office
Holder to the extent that such insurance and/or indemnification
is not specifically prohibited under law; provided that the
procurement of any such insurance and/or the provision of any
such indemnification shall be approved by the Board or in such
manner as may be required by the Law.
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