EXHIBIT 3.2
ARTICLES OF ASSOCIATION
OF
MARNETICS BROADBAND TECHNOLOGIES LTD.
AMENDED AND RESTATED AS OF 8 DECEMBER, 2000
ARTICLES OF ASSOCIATION
OF
MARNETICS BROADBAND TECHNOLOGIES LTD.
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1. INTERPRETATION
In these Articles, the words in the first column of the following table
shall bear the meanings set opposite them respectively in the second
column thereof, if not inconsistent with the subject or context:
WORDS MEANINGS
The Company Marnetics Broadband Technologies Ltd.
The Board The Board of Directors of the Company
Companies Law The Companies Law 1999 (the
"Companies Law") and all orders and
regulations issued thereunder as
amended from time to time, including
any law or statute replacing it.
The Statutes The Companies Law, the Securities Law
of 1968 and every other ordinance or
law for the time being in force
concerning companies and affecting the
Company.
These Articles These Articles of Association, as
shall be amended from time to time.
Officer A "NOSEH MISRA", as defined in the
Companies Law, to wit, a Director,
General Manager, chief business
manager, deputy General Manager, vice
General Manager, or any other manager
directly subordinate to the managing
director or any other person assuming
the responsibiltities of any of the
foregoing positions without regard to
such person's title.
Audit Committee As defined in the Companies Law.
The Office The registered office of the Company.
The Seal Any of (i) the rubber stamp of the
Company, (ii) the facsimile signature
of the Company, or (iii) the
electronic signature of the Company as
approved by the Board.
Shareholders Register The shareholders register required to
be kept according to the Companies Law
and any other shareholders register
permitted to be kept by the Company
according to the Companies Law.
Month A Gregorian month.
NIS New Israeli Shekel
Writing Printing, lithography, photography and
any other mode or modes of
representing or reproducing words in a
visible form.
Words denoting the singular number shall include the plural number and
vice versa; words denoting the masculine gender shall include the
feminine and neuter genders; words denoting persons shall include any
individual, company, corporation, partnership, trust, unincorporated
association or other entity or any combination of the foregoing.
Subject as aforesaid, any words or expressions defined in the Statutes
shall, except where the subject or context forbids, bear the same
meanings in these Articles.
2. PUBLIC COMPANY
The Company is a public company which may have an unlimited number of
Shareholders and may offer Securities to the public. The liability of a
Shareholder for debts of the Company is limited to the unpaid portion of the
consideration (including any premium) in exchange for which the Shareholder's
Ordinary Shares were issued. The Company may not alter the liability of a
Shareholder or require the acquisition of Securities without his consent.
THE COMPANY'S PURPOSE
3. The Company's purpose is to operate according to business considerations
for the production of profits.
4. SHARE CAPITAL
(One) The registered share capital of the Company is NIS 2,000,000 (Two
Million New Israeli Shekel), divided into 25,000,000 (Twenty-five Million)
Ordinary Shares of NIS 0.08 nominal value each (the "Ordinary Shares").
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(Two) Each Ordinary Share shall rank pari passu. The Ordinary Shares shall
entitle their holders the right to participate and vote in all General
Meetings of the Company, the right to receive dividends and the right to
participate in the distribution of surplus assets of the Company in the
event of the winding up of the Company, and all other rights generally
conveyed to the holders of ordinary shares.
AMENDMENT OF ARTICLES
5. These Articles (with the exception of Article 101 which may be amended as
provided therein) may be amended by a majority vote at a meeting of
shareholders of the Company, with the exception of Article 101 which may
be amended only by the affirmative vote of two - thirds of the
shareholders present (in person or by proxy) and voting on such resolution
at a General Meeting.
Notwithstanding the provisions of this Article , a change of these
Articles that obligates a shareholder to acquire additional shares or to
increase the extent of his liability shall not obligate the shareholder
without his consent.
SHARES
6. Subject to these Articles or to the terms of any resolution creating new
shares, the unissued shares in the registered share capital of the Company
from time to time shall be under the control of the Board, which shall
have the power to allot shares or otherwise dispose of them to such
persons, on such terms and conditions, and either at par or at a premium
or, subject to the provisions of the Statutes, at a discount, and at such
times as the Board may think fit, and the power to give to any person the
option to acquire from the Company any shares, either at nominal value or
at a premium or, subject as aforesaid, at a discount, during such time and
for such consideration as the Board may determine.
7. If two or more persons are registered as joint holders of any share, any
one of such persons may give effectual receipts for any dividends or other
monies in respect of such share. A share certificate registered in the
names of two or more persons shall be delivered to the person first named
in the Register of Members in respect of such co-ownership.
8. Every shareholder registered in the Shareholders' Register shall be
entitled, without payment, to receive within thirty days after allotment
or registration of transfer (unless the conditions of issuance provide for
a longer interval), one certificate under the Seal for all the shares
registered in his name, and if the Board so approves, several
certificates, each for one or more of such shares. Each certificate shall
specify the number and denoting numbers of the shares in respect of which
it is issued and may also specify the amount paid up thereon; provided
that, in the case of joint holders, the Company shall not be bound to
issue more than one certificate to all the joint holders, and delivery of
such certificate to one of them shall be sufficient delivery to all. Every
certificate
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shall be signed by one Director and countersigned by the Secretary or some
other person nominated by the Board for this purpose.
9. If any share certificate shall be defaced, worn out, destroyed or lost, it
may be renewed on such evidence being produced, and such indemnity (if
any) being given as the Board shall require and (in the case of defacement
or wearing out) upon delivery of the old certificate and, in any case,
upon payment of such sum not exceeding NIS 50 (Fifty New Israeli Shekels)
as the Board may from time to time require.
10. The Company may, directly or indirectly, purchase its own shares subject
to the provisions of the Companies Law. If the Company purchases its own
shares, such shares will not have any rights as long as they are owned by
the Company.
11. (a) A subsidiary or some other corporate body under the Company's control
in this Article: "ACQUIRING CORPORATE BODY") may acquire shares of the
Company subject to the provisions of the Companies Law, on condition that
the subsidiary's Board or the Directors of the acquiring corporate body
determined that - had the acquisition been made by the Company - it would
have been permitted by the provisions of the Companies Law.
(b) If the Company's shares are acquired by a subsidiary or by an
acquiring corporate body, such shares shall not grant voting rights so
long as they are owned by the subsidiary or by the acquiring corporate
body.
(c) If a prohibited distribution (as defined in Section 301 to the
Companies Law) was made, then the refund specified in Section 310 to the
Companies Law shall be made to the subsidiary or to the acquiring body
corporate and the provisions of Section 311 shall apply, mutatis mutandis,
to the Directors of the subsidiary and to the Directors of the acquiring
body corporate. However, if the Company's Board determined that the
distribution is permitted, then the responsibility shall be that of the
Company's Directors, as provided in Section 311 to the Companies Law.
(d) Notwithstanding the provisions of Sub-article (a), acquisition by a
subsidiary or by an acquiring corporate body that is not wholly owned by
the Company constitutes a distribution in an amount equal to the amount of
the acquisition, multiplied by the proportion of rights in the
subsidiary's capital or in the capital of the acquiring corporate body
held by the Company.
TRANSFER OF SHARES
12. No transfer of shares shall be registered unless a proper writing or
instrument of transfer (in any customary form or any other form
satisfactory to the Board) has been submitted to the Company (or its
transfer agent), together with the share certificate(s) and such other
evidence of title as the Board may reasonably require. Until the
transferee has been registered in the Shareholders Register (which the
Company shall perform promptly from submission to it of the foregoing) in
respect of the shares so transferred, the Company may continue to
regard the transferor as the owner thereof.
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13. The Board may refuse, without giving any reasons therefor, to register
any transfer of shares where the Company has a lien on the shares,
constituting the subject matter of the transfer, but fully paid-up
shares may be transferred freely and such transfers do not require the
approval of the Board.
All instruments of transfer shall remain in the custody of the Company,
but any such instrument which the Board refused to register shall be
returned to the person from whom it was received, if such request be made
by him.
14. The Transfer Records and the Shareholders Register and Debenture Holders
(if any) Register and Debenture Stock Holders (if any) Register and other
securities (if any) Register of the Company may be closed during such time
as the Board may deem fit, not exceeding, in the aggregate, thirty (30)
days in each year.
TRANSMISSION OF SHARES
15. In the case of the death of a shareholder, or a holder of a debenture, the
survivor or survivors, where the deceased was a joint holder, and the
executors and/or administrators and/or the legal heirs of the deceased
where he was a sole or only surviving holder, shall be the only persons
recognized by the Company as having any title to his shares or his
debentures, but nothing herein contained shall release the estate of a
deceased joint holder from any liability in respect of any share or any
debenture jointly held by him.
16. Any person who becomes entitled to a share or a debenture in consequence
of the death or bankruptcy or any shareholder may, upon producing such
evidence of title as the Board shall require, with the consent of the
Board, be registered himself as holder of the share or the debenture or,
subject to the provisions as to transfers herein contained, transfer the
same to some other person.
17. A person entitled to a share or a debenture by transmission shall be
entitled to receive, and may give a discharge for, any dividends or
interest or other monies payable in respect of the share or debenture, but
he shall not be entitled in respect of it to receive notices of, or to
attend or vote at meetings of the Company or, save as aforesaid, to
exercise any of the rights or privileges of a shareholder or a holder of a
debenture unless and until he shall become a shareholder in respect of the
share or a holder of the debenture.
ALTERATIONS OF CAPITAL
18. Subject to the provisions of the Companies Law, the Company may from time
to time by a majority vote at a General Meeting of shareholders of the
Company:
(a) consolidate and divide all or any of its share capital into shares of
larger amount than its existing shares; or
(b) cancel registered share capital that has not yet been issued, on
condition that there are no undertakings of the Company - including
conditional undertakings - to issue such shares; or
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(c) divide its share capital or any part thereof into shares of smaller
amount than is fixed by its Articles of Association by sub-division
of its existing shares or any of them , and so that as between the
resulting shares, one or more of such shares may, by the Resolution
by which such sub-division is effected, be given any preference or
advantage as regards dividend, return of capital, voting or otherwise
over the others or any other shares; or
(d) reduce its share capital and any capital redemption reserve fund in
any way that may be considered expedient. 19. The Company may,
subject to the Companies Law, issue redeemable shares and redeem the
same according to the terms and conditions which the Company shall
determine.
INCREASE IN CAPITAL
20. The Company may from time to time by a majority vote at a meeting of
shareholders, whether all the shares for the time being authorized
shall have been issued or all the shares for the time being issued
shall have been fully called up or not, increase its share capital by
the creation of new shares; such new capital to be of such amount and
to be divided into shares of such respective amounts and (subject to
any special rights for the time being attached to any existing class
of shares) to carry such preferential, deferred or other special
rights (if any) or to be subject to such conditions or restrictions
(if any) in regard to dividend, return of capital, voting or
otherwise as the General Meeting deciding upon such increase directs.
21. Except so far as otherwise provided by or pursuant to these Articles
or by the conditions of issuance, any new share capital shall be
considered as part of the original ordinary share capital of the
Company, and shall be subject to the same provisions with reference
to liens, transfer, transmission and otherwise as the original share
capital.
MODIFICATION OF CLASS RIGHTS
22. If, at any time, the share capital is divided into different classes
of shares, the rights attached to any class (unless otherwise
provided by the terms of issuance of the shares of that class) may be
varied with the sanction of a majority vote at a meeting of the
shareholders passed at a separate meeting of the holders of the
shares of the class. The provisions of these Articles relating to
General Meetings shall apply, mutatis mutandis, to every such
separate General Meeting. Any holder of shares of the class present
in person or by proxy may demand a secret poll.
23. Unless otherwise provided by the conditions of issuance, the
enlargement of an existing class of shares, or the issuance of
additional shares thereof, shall not be deemed to modify or abrogate
the rights attached to the previously issued shares of such class or
of any other class.
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BORROWING POWERS
24. The Board may from time to time, in 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 in
all respects as it sees 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 units
uncalled or called but unpaid capital for the time being.
POWERS OF THE GENERAL MEETING
25. Without derogating from the authority of the General Meeting pursuant to
these Articles, the Company's decisions on the following matters shall be
adopted at a General Meeting:
(1) any changes in these Articles;
(2) exercise of the powers of the Board in accordance with the provisions
of Section 52(a) of the Companies Law;
(3) appointment of the Company's Auditor;
(4) appointment of External Directors, in accordance with the provisions
of the Companies Law;
(5) approval of acts and transactions that require approval by the
General Meeting under the provisions of Articles 255 and 268 to 275
of the Companies Law;
(6) the increase and reduction of the registered share capital, in
accordance with the provisions of Articles 286 and 287 to the
Companies Law;
(7) a merger, as specified in Article 320(a) to the Companies Law.
GENERAL MEETING
26. (a) An Annual General Meeting shall be held at least once in every
calendar year at such time, not being more than fifteen months after the
holding of the last preceding Annual General Meeting, and at such time and
place as may be determined by the Board. Such Annual General Meetings
shall be called "Annual Meetings", and all other Meetings of the
shareholders shall be called "Extraordinary Meetings". The Annual Meeting
shall receive and consider the Directors' Report, the Financial
Statements, appoint auditors, elect directors, and transact any other
business which, under these Articles or by the Companies Law, may be
transacted at a General Meeting of the Company, provided that notice of
such other business was given to shareholders in accordance with the
provisions of these Articles.
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At a General Meeting, decisions shall be adopted only on matters that were
specified on the agenda.
(b) Any reference in these Articles to a "General Meeting" will be either
a Annual General Meeting or a Extraordinary Meeting, according to the
context.
27. The Board may, whenever it deems necessary, and shall upon such
requisition in writing as is provided by Section 63(b) of the Companies
Law, convene a General Meeting. Any such request must state the purposes
for which the meeting is to be called, be signed by the requesting
shareholders, and must be deposited at the Office. Such request may
consist of several documents in like form, each signed by one or more
requesting shareholder.
28. Except as otherwise prescribed by the Companies Law, at least ten (10)
days and not more than sixty (60) days notice of any General Meeting shall
be given, specifying the place, the day and the hour of meeting and, in
the case of special business, the nature of such business, shall be given
in the manner hereinafter mentioned, to such shareholders as are under the
provisions of these Articles, entitled to receive notices from the
Company. Notices shall be given by mail or by personal delivery to every
registered shareholder of the Company, to his address as described in the
Shareholders Register of the Company or such other address as designated
by him in writing for this purpose. Provided that the accidental omission
to give such notice to, or the non-receipt of such notice by, any such
shareholder shall not invalidate any resolution passed or proceeding held
at any such meeting and, with the consent of all the shareholders for the
time being entitled to receive notice of meetings, a meeting may be
convened upon a shorter notice or without notice, and generally in such
manner as such shareholders may approve. Such consent may be given at the
meeting or retrospectively after the meeting. If the shareholder did not
provide the Company any address for the delivery of notices, the
shareholder shall be deemed to have waived his right to receive notices.
29. Only shareholders of record as reflected on the Company's Share Register
at the close of business on the date fixed by the Board as the record date
determining the then shareholders who will be entitled to vote, shall be
entitled to notice of, and to vote, in person or by proxy, at a General
Meeting and any postponement or adjournment thereof. The Board will fix
the record date of not less than four (4) nor more than twenty-one (21)
days before the date of the General Meeting.
PROCEEDINGS AT GENERAL MEETINGS
30. No business shall be transacted at any General Meeting, or at an
adjournment thereof, unless a quorum is present when the meeting proceeds
to business. The quorum at any Meeting shall be two shareholders present
in person or by proxy, holding or representing at least thirty three and a
third percent (33 1/3%) of the total voting rights in the Company. A
company being a shareholder shall be deemed to be personally present for
the purpose of this Article if represented by its representative duly
authorized in accordance with Article 42.
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31. If, within fifteen minutes from the time appointed for the holding of a
General Meeting, a quorum is not present, the meeting shall stand
adjourned to the same day in the next week at the same time and place, or
any time and hour as the Board shall designate and state in a notice to
the shareholders entitled to vote at the original meeting, and if, at such
adjourned meeting, a quorum is not present within half an hour from the
time appointed for holding the meeting any two shareholders present in
person or by proxy shall constitute a quorum. Notwithstanding the
aforesaid, if a General Meeting was convened at the demand of shareholders
as permitted by Section 63(b) of the Companies Law, then a quorum at such
adjourned meeting shall be present only if one or more shareholders are
present who held in the aggregate at least 5% of the issued share capital
of the Company and at least 1% of the voting rights in the Company or one
or more shareholders who hold in the aggregate at least 5% of the voting
rights in the Company.
32. The President of the Company or in his absence any other person nominated
for that purpose by the Board, shall preside as chairman at every General
Meeting of the Company. If there is no such President or other person, or
if at any General Meeting neither the President nor the other person is
present, or if at any General Meeting neither the President nor the other
person is present within fifteen (15) minutes after the time fixed for
holding the General Meeting or is willing to act as Chairman of the
General Meeting, the Directors present shall choose one of themselves or
if no Director is present, or if all the Directors present decline to take
the chair, the members present shall choose one of themselves to be
chairman of the General Meeting. The chairman of the General Meeting shall
have no second or casting vote (without derogating 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 such proxy).
33. The chairman may, with the consent of any meeting at which a quorum is
present, and shall, if so directed by the meeting, adjourn any meeting
from time to time and from place to place as the meeting shall determine.
Whenever a meeting is adjourned pursuant to the provisions of this Article
for more than seven days, notice of the adjourned meeting shall be given
in the same manner as in the case of an original meeting. Save as
aforesaid, no shareholder shall be entitled to any notice of an
adjournment, or of the business to be transacted at an adjourned meeting.
No business shall be transacted at any adjourned meeting other than the
business which might have been transacted at the meeting from which the
adjournment took place.
VOTES OF THE SHAREHOLDERS
34. Except as otherwise provided in these Articles, any resolution at a
General Meeting shall be deemed adopted if approved by the holders of a
majority of the voting rights in the Company represented at the meeting in
person or by proxy and voting thereon. In the case of an equality of
votes, either on a show of hands or a poll, the chairman of the meeting
shall not be entitled to a further or casting vote.
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35. At all General Meetings, a resolution put to a vote at the meeting shall
be decided on a show of hands unless, before or upon the declaration of
the result of the show of hands, a poll in writing be demanded by the
chairman (being a person entitled to vote), or by at least two
shareholders present, in person or by proxy, holding at least 5% of the
issued share capital of the Company and, unless a poll be so demanded, a
declaration by the chairman of the meeting that a resolution has been
carried, or has been carried unanimously or by a particular vote, or lost,
or not carried by a particular vote, shall be conclusive, and an entry to
that effect in the Minute Book of the Company shall be conclusive evidence
thereof, without proof of the number or proportion of the votes recorded
in favor of or against such resolution.
36. If a poll be demanded in manner aforesaid, it shall be taken forthwith,
and the result of the poll shall be deemed to be the resolution of the
meeting at which the poll was demanded. The demand of a poll shall not
prevent the continuance of a meeting for the transaction of any business
other than the question on which a poll has been demanded.
37. Any shareholder which is not a natural person may, by resolution of its
directors or other governing body, authorize such person as it thinks fit
to act as its representative at any General Meeting, and the person so
authorized to the satisfaction of the Company shall be entitled to
exercise the same powers on behalf of such company, which he represents as
that company could exercise if it were an individual shareholder.
38. Subject to any rights or restrictions for the time being attached to any
class or classes of shares, every shareholder shall have one vote for each
share of which he is the holder, whether on a show of hands or on a poll.
39. If any shareholder be a lunatic, idiot, or non compos mentis, he may vote
by his committee, receiver, curator bonis or other legal curator, and such
last-mentioned persons may give their votes either personally or by proxy.
40. If two or more persons are jointly entitled to a share then, in voting
upon any question, the vote of the senior person who tenders a vote,
whether in person or by proxy, shall be accepted to the exclusion of the
votes of the other registered holders of the share and, for this purpose,
seniority shall be determined by the order in which the names stand in the
Shareholders Register.
41. Votes may be given either personally or by proxy. A proxy need not be a
shareholder of the Company.
42. (a) The instrument appointing a proxy shall be in writing in the usual
common form, or such form as may be approved by the Board, and shall be
signed by the appointor or by his attorney duly authorized in writing or,
if the appointor is a corporation, the corporation shall vote by its
representative, appointed by an instrument duly signed by the corporation.
(b) The instrument appointing a proxy shall be deemed to include
authorization to demand a poll or to vote on a poll on behalf of the
appointor.
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43. A vote given in accordance with the terms of an instrument of proxy shall
be valid notwithstanding the previous death or insanity of the principal,
or revocation of the proxy, or transfer of the share in respect of which
the vote is given, unless an intimation in writing of the death,
revocation or transfer shall have been received at the Office before the
commencement of the meeting or adjourned meetings at which the proxy is
used.
44. The instrument appointing a proxy shall be deposited at the Office or at
such other place or places, whether in Israel or elsewhere, as the Board
may from time to time, either generally or in a particular case or class
of cases prescribe, at least twenty-four (24) hours before the time
appointed for holding the meeting or adjourned meeting at which the person
named in such instrument proposes to vote; otherwise, the person so named
shall not be entitled to vote in respect thereof; but no instrument
appointing a proxy shall be valid after the expiration of twelve months
from the date of its execution.
45. A shareholder will be entitled to vote at the Meetings of the Company by
several proxies appointed by him, provided that each proxy shall be
appointed with respect to different shares held by the appointing
shareholder. Every proxy so appointed on behalf of the same shareholder
shall be entitled to vote as he sees fit.
46. No person shall be entitled to vote at any General Meeting (or be counted
as a part of the quorum thereof) unless all calls then payable by him in
respect of his shares in the Company shall have been paid.
DIRECTORS POWERS AND RESPONSIBILITIES OF THE BOARD
47. (a) Without derogating from the authority of the General Meeting pursuant
to these Articles and the Companies Law, the Board shall formulate the
Company's policy and shall supervise the exercise of the General Manager's
office and his acts, and as part thereof it -
(1) shall determine the Company's plans of activity, the principles
for financing such plans and the order of priority among them;
(2) shall examine the Company's financial situation and set the
framework of credit which the Company may take;
(3) shall determine the organizational structure and the compensation
policy of employees;
(4) may decide to issue a series of debentures;
(5) is responsible for the preparation and approval of the financial
reports according to Section 171 to the Companies Law;
(6) shall report to the Annual Meeting about the state of the
Company's affairs and on its business results, as required by
Section 173 to the Companies Law;
(7) shall appoint and dismiss the General Manager, as provided by
Section 250 to the Companies Law;
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(8) shall decide on the acts and transactions that require its
approval in accordance with these articles or under the provisions
of Sections 255 and 268 to 275 to the Companies Law;
(9) may issue shares and securities convertible into shares up to the
limit of the Company's registered share capital, under the
provisions of Section 288 to the Companies Law;
(10) may decide on a distribution according to Sections 307 and 308 to
the Companies Law;
(11) shall express its opinion on a special purchase offer, according
to Section 329 to the Companies Law.
(b) The powers of the Board under this Article cannot be delegated to the
General Manager.
DIRECTORS
48. The Board of the Company shall consist of a minimum of two (2) and a
maximum of eleven (11) Directors. Each Director shall be appointed by the
Annual General Meeting unless appointed according to Section 57, and shall
serve as Director from the time of appointment until the next Annual
General Meeting unless such Director is disqualified for whatever reason.
49. (a) Any director or directors may be removed from office at any time, but
only for cause and only by the affirmative vote of the holders of the
majority of the Ordinary Shares present in person or by proxy and voting
thereon. For purposes of this clause (a): "cause" shall mean the willful
and continuous failure of a director substantially to perform such
director's duties to the Company (other than any such failure resulting
from incapacity due to physical or mental illness) or the willful engaging
by a director in gross misconduct materially and demonstrably injurious to
the Company.
(b) The General Meeting shall appoint External Directors as and to the
extent required by, and they shall hold office according to, the Companies
Law, as long as the Company is required by the Companies Law to appoint
such External Directors.
50. A Director may appoint, dismiss and/or replace an individual as a
substitute for himself as a Director (an "ALTERNATE DIRECTOR"). The person
appointed as an Alternate Director must be qualified to serve as a
Director and may not already be acting as a Director or an Alternate
Director. The appointment, replacement and/or dismissal of an Alternate
Director shall be by written notice by the appointing Director either to
the Company or to the Chairman of the Board. Upon expiration or
termination of the term of an appointing Director, the term of his
Alternate Director will also expire. An Alternate Director will not be
entitled to participate or vote at a Board Meeting at which the appointing
Director is present. An Alternate Director shall have all the powers and
obligations of the appointing Director, except the power to appoint an
Alternate Director.
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51. (a) No person shall be nominated for the office of a director at a General
Meeting except for persons nominated for the office of a director as
provided for in Article 51(b).
(b) Any shareholder entitled to receive notice of and vote at a General
Meeting desiring to propose a nominee for director to be elected at an
Annual General Meeting of Shareholders has to deliver notice to the
Secretary, at the Company's principal offices, not later than forty-five
(45) days prior to the date of the annual General Meeting at which meeting
such election is to occur, whichever date is later. The notice shall set
forth: (i) the name and address, as they appear on the Company's share
register, of the shareholder proposing such nominee, (ii) the identity and
background of the nominee, (iii) the class and number of shares of the
Company beneficially owned by such shareholder, (iv) a representation that
such shareholder is a shareholder of record and intends to appear by
person or by proxy at such General Meeting to bring the General Meeting
the nominee specified in the notice, (v) a brief description of the
reasons for wanting to nominate such nominee as a director, (vi) any
material interest that the shareholder has in the election of such nominee
and (vii) the written consent of the nominee to be elected as a director
of the Company.
52. The Directors in their capacity as such, shall be entitled to receive
remuneration and reimbursement of expenses incurred by them in the course
of carrying out their duties as Directors.
53. The office of a Director shall be vacated, ipso facto:
(a) upon his resignation by written notice signed by him and delivered to
the Office;
(b) if he becomes bankrupt or enters into an arrangement with his
creditors;
(c) if he is or becomes of unsound mind;
(d) if he be relieved of his office as provided in Article 50(b) hereof;
(e) if he is prevented by applicable law from serving as a director of the
Company.
(f) if the Board terminate his office according to Section 231 of the
Companies Law;
(g) if court order is given according to Section 233 of the Companies Law.
54. (a) Subject to the provisions of the Companies Law, no Director shall be
disqualified by virtue of his office from holding any office, or deriving
any profit from any other office in the Company or from any company in
which the Company shall be a shareholder or otherwise interested, or from
contracting with the Company as a vendor, purchaser or otherwise.
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(b) Transactions entered into by the Company in which an Officer of the
Company has a personal interest, directly or indirectly, will be valid
in respect of the Company and the Officer only if approved by the
Company's Board in accordance with the requirements of the Companies
Law.
55. A Director who has a personal interest in a matter which is brought for
discussion before the Board may participate in said discussion, provided
that he shall neither vote in nor attend discussions concerning the
approval of the activities or the arrangements. If said Director did vote
or attend as aforesaid, the approval given to the aforesaid activity or
arrangements shall be invalid.
56. In the event of one or more vacancies on the Board, the continuing
Directors may continue to act as long as the Board consists of at least a
majority of the total number of Directors elected. However, in the event
that the remaining Directors are not a majority of the total number of
Directors elected, the remaining Director or Directors may call for the
convening of a General Meeting for the purpose of the election of
Directors.
57. Subject to the limitation on the number of Directors as specified in
Article 49, the Board may, at any time and from time to time, appoint any
other person as a Director, whether to fill a vacancy or to add to their
number. Any Director so appointed shall hold office until the next Annual
Meeting at which the term of the class to which they have been elected
expires, and may be re-elected.
58. In case of any increase in the number of directors, the additional
director or directors, and in case of any vacancy in the Board due to a
death, resignation, removal, disqualification or any other cause, the
successors appointed according to Article 57 to fill the vacancies shall
be elected by a majority of the directors then in office.
CONVENING THE BOARD
59. (a) The Chairman of the Board may convene a meeting of the Board at any
time.
(b) The Board shall hold a meeting on a specified subject on the demand of
two Directors, or if the Board consists of up to five Directors - one
Director;
(c) The Chairman of the Board shall convene the Board upon a demand said
in Sub-article (b) of this Article 59 or if Section 122(d) to the
Companies Law applies, due to a notice or report from the General Manager
or due to a notice from the Auditor of the Company under Section 169 to
the Companies Law.
(d) If a meeting of the Board was not convened within 14 days after the
date of a demand pursuant to Sub-article (b) of this Article 59, or after
the date of a notice or report of the General Manager according to Section
122(d) to the Companies Law, or after notice of the Auditor under Section
169 to the Companies Law, then each of those persons enumerated in
Sub-articles (b) and (c) may convene a meeting of the Board, which shall
discuss the subject specified in the demand, notice or report, as the case
may be.
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MEETINGS OF THE BOARD AND THEIR CONDUCT
60. The agenda of a meeting of the Board shall be set by the Chairman of the
Board, and it shall include:
(1) subjects determined by the Chairman of the Board;
(2) subjects determined as said in Section 98 to the Companies Law;
(3) any subject which a Director or the General Manager requested at a
reasonable time before the meeting was convened - of the Chairman of
the Board to include in the agenda
61. Notice of a meeting of the Board shall be delivered to all its members at
a reasonable time before the meeting, but not later than forty eight (48)
hours prior to the time set for any such meeting.
62. A notice under Section 61 may be given orally, by telephone, in writing or
by mail, electronic mail, telex or facsimile. Notwithstanding anything 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.
63. Any person, either a Director or not, may be substitute member of the
Board, and one person may substitute several members of the Board. Any
substitute member of the Board who is also a member of the Board shall
have, in addition to his own vote, a number of votes equal to the number
of members of the Board that he substitutes. A substitute member of the
Board shall have, subject to his letter of appointment, all authorities
vested to the member of the Board he substitutes, and if and as long as
such substitute member is, for himself, a member of the Board, the
aforesaid authorities as substitute member shall be in addition to his
authorities as a member of the Board. The tenure of office of a substitute
member of the Board shall automatically be terminated upon the dismissal
of such member, or upon the office of the member of the Board he
substitutes being vacated for any reason, or upon the occurrence of one of
the situations stated in Article 53 above in relation with such substitute
member.
GENERAL MANAGER
64. The Board will appoint one or more persons as General Manager, and they
will be titled as President or Chief Executive Officer (CEO) or Chief
Operating Officer (COO). The Board may from time to time remove or
discharge him or them from office (subject to the provisions of any
agreement between any such person and the Company) and appoint another or
others in his or their place or places.
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65. The Board may from time to time appoint one or more Vice Presidents for
certain functions, to carry out duties delegated to him (them) by the
President, CEO or COO.
66. To the extent permitted by the Companies Law, the Board may from time to
time confer upon and delegate to a President, CEO, COO or other Executive
Officer then holding office, such authorities and duties of the Board as
they may deem fit, and they may delegate such authorities and duties for
such period and for such purposes and subject to such conditions and
restrictions which they consider in the bests interests of the Company,
and they may delegate such authorities and duties without waiving the
authorities of the Board with respect thereto and it may from time to time
revoke, cancel and alter such authorities and duties in whole or in part.
67. The remuneration of a President, CEO, COO or other Executive Officer shall
be fixed by the Board, taking into consideration any agreement between him
and the Company, and it may be in whole or in part, in the form of salary,
share options, or commissions or profit sharing or a combination thereof.
DIRECTOR'S ACTS AND AUTHORITIES
68. The management of the business of the Company shall be vested in the
Board, which may exercise all such powers and do all such acts and things
as the Company is authorized to exercise and do, and are not hereby or by
law required to be exercised or done by the Company in a General Meeting.
The authority conferred on the Board by this Article 68 shall be subject
to the provisions of the Companies Law, of these Articles and any
regulation or resolution consistent with these Articles adopted from time
to time by the Company in a General Meeting, provided, however that no
such regulation or resolution shall invalidate any prior act done by or
pursuant to a decision of the Board which would have been valid if such
regulation or resolution had not been adopted.
69. The Directors may postpone their meetings and otherwise regulate them as
they shall deem fit. The quorum for the dispatch of business by the Board
shall be determined by the Directors and, if not so determined, shall be
the majority of the Directors then holding office.
70. A resolution in writing signed or otherwise approved in writing (by
letter, telegram, telex, facsimile, electronic mail or otherwise) by all
the Directors then in office shall be as valid and as effectual as a
resolution adopted by the Board at a meeting of the Board duly convened
and held.
71. Members of the Board, or of any committee designated by the Board, may
participate in a meeting of the Board, or of any committee, by means of a
telephone conference or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute attendance in person at the
meeting.
72. (a) The Board shall elect a Chairman for the meeting and fix the term of
his office. The CEO shall not serve as Chairman of the Board and vice
versa unless the holders of two thirds of the voting rights in the Company
represented in
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person or by proxy and voting on such resolution at a General Meeting, who
are not controlling shareholders of the Company or their representatives
and who are present at the vote, adopt a decision to appoint the Chairman
of the Board as the CEO, for a period not exceeding three years after the
date of the adoption of the decision.
(b) In the event that a Chairman was not elected or if the Chairman should
fail to be present at a meeting fifteen (15) minutes after the time set
for its convening, the remaining Directors shall elect one of those
present to be Chairman of the meeting.
(c) All questions that arise at meetings of the Board shall be decided by
a majority of votes. In the event of a tie vote, the Chairman of the Board
shall not have a casting vote.
73. Any meeting of the Board at which a quorum is present shall have the
authority to exercise all or part of the authorities, powers of attorney
and discretion invested at such time in the Directors or regularly
exercised by them.
74. Subject to the Companies Law, the Board may delegate its authorities in
whole or in part to committees as it shall deem fit, and it may from time
to time revoke such delegation. Any committee so created must, in
exercising the authorities granted to it, adhere to all the instructions
of the Board given from time to time and/or to the provisions of the
Companies Law.
75. All acts done bona fide at any meeting of the Board, or of a committee of
the Board or by any person(s) acting as Director(s) shall, notwithstanding
that it may afterwards be discovered that there was some defect in the
appointment of the participants in such meeting or any of them or any
person(s) acting as aforesaid, or that they or any of them or any
person(s) acting as aforesaid, or that they or any of them were
disqualified, be as valid as if there were no such defect or
disqualification.
76. The Board shall cause proper Minutes to be kept of the following:
(a) the names of all the Directors present at any meeting of the Board and
at any meeting of a committee of the Board;
(b) all proceedings and resolutions of General Meetings of the Company,
Board meetings and Committees of the Board meetings.
Any Minutes as aforesaid, if purporting to be signed by the Chairman of
such meeting or by the Chairman of the next succeeding meeting, shall be
accepted as prima facie evidence of the matters therein recorded.
77. [Reserved.]
SHAREHOLDER REGISTERS
78. Subject to, and in accordance with, the provisions of the Companies
Law, the Company may cause the Shareholder Register to be kept at any
place in Israel
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and may cause a copy of the Shareholder Register to be kept outside Israel
as the Board may think fit and, subject to all applicable legal
requirements, the Board may from time to time adopt such rules and
procedures as it may think fit in connection with the keeping of such
registers. In addition to the Shareholders Register, the Company shall
also keep a Register of Substantial Shareholders as defined in the
Companies Law.
SECRETARY
79. The Board may from time to time appoint a Secretary to the Company as it
deems fit, and may appoint a temporary Assistant Secretary who shall act
as Secretary for the term of his appointment.
RIGHTS OF SIGNATURE - STAMP AND SEAL
80. (a) Authorization to sign on behalf of the Company and thereby bind it
shall be made and granted from time to time by the Board. The Company
shall have at least one rubber stamp. The Company shall be bound by the
signature of the aforesaid appointees if appearing together after its
stamp or printed name.
(b) The Board may provide for a seal. If the Board so provides, it shall
also provide for the safe custody thereof. Such seal shall not be used
except by the authority of the Board and in the presence of the person(s)
authorized to sign on behalf of the Company, who shall sign every
instrument to which such seal is affixed.
DIVIDENDS
81. Subject to any preferential, deferred, qualified or other rights,
privileges or conditions attached to any special class of shares with
regard to dividends, the profits of the Company available for dividend and
resolved to be distributed shall be applied in payment of dividends upon
the shares of the Company in proportion to the amount paid up or credited
as paid up per the nominal value thereon respectively. Unless not
otherwise specified in the conditions of issuance of the shares, all
dividends with respect to shares which were not fully paid up within a
certain period, for which dividends were paid, shall be paid
proportionally to the amounts paid or credited as paid on the nominal
value of the shares during any portion of the above-mentioned period.
82. The Board may declare a dividend to be paid to the shareholders according
to their rights and interests in the profits, and may fix the record date
for eligibility and the time for payment.
83. The Directors may from time to time pay to the shareholders on account of
the next forthcoming dividend such interim dividends as, in their
judgment, the position of the Company justifies.
84. A transfer of shares shall not pass the right to any dividend declared
thereon after such transfer and before the registration of the transfer.
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85. Notice of the declaration of any dividend, whether interim or otherwise,
shall be given to the holders of registered shares in the manner
hereinafter provided.
86. Unless otherwise directed, any dividend may be paid by check, bank
transfer or warrant, sent through the post to the registered address of
the shareholder or person entitled or, in the case of joint registered
holders, to that one of them first named in the register in respect of the
joint holding. Every such check shall be made payable to the order of the
person to whom it is sent. The receipt by the person whose name, at the
date of the declaration of the dividend, appears in the register of
shareholders as the owner of any share or, in the case of joint holders,
of any one of such joint holders, shall be a good discharge to the Company
of all payments made in respect of such share. All dividends unclaimed for
one year after having been declared may be invested or otherwise used by
the Directors for the benefit of the Company until claimed. No unpaid
dividend or interest shall bear interest as against the Company.
87. The Board may determine that, a dividend may be paid, wholly or partly, by
the distribution of specific assets of the Company or by distribution of
paid-up shares, debentures or debenture stock or any other securities of
the Company or of any other companies or in any one or more of such ways
in the manner and to the extent permitted by the Companies Law.
PROHIBITED DISTRIBUTION
88. (a) If the Company made a prohibited distribution as defined in the
Companies Law, then the shareholder must return to the Company whatever he
received, unless he did not know and did not need to know that the
distribution carried out was prohibited.
(b) It is assumed that a shareholder in the Company, who at the time of
the distribution is not a Director, General Manager or controlling member
of the Company, did not know and did not need to know that the
distribution carried out was a prohibited distribution.
89. If the Company carried out a prohibited distribution, then every person
who was a Director at the time of the distribution shall be treated as a
person who thereby committed breach of trust against the Company, unless
he proved one of the following:
(1) that he opposed the prohibited distribution and took all reasonable
steps to prevent it;
(2) that he exercised reasonable reliance on information under which -
had it not been misleading - the distribution would have permitted;
(3) that under the circumstances of the case he did not know and did not
need to know of the distribution.
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MERGER
90. A merger requires approval by the Board and by the General Meeting, in
accordance with the provisions of the Companies Law.
91. (a) The Board of the Company, while considering whether to approve the
merger, shall discuss and determine taking the Company's financial
situation into account - whether in its opinion there is a reasonable
suspicion that in consequence of the merger the merged Company will not be
able to meet the Company's obligations to its creditors.
(b) If the Board determined that there is a suspicion as said in
Sub-article (a), then it shall not approve the merger.
92. If each of the Boards of Directors of the merging companies approved the
merger, then they shall jointly draw up a proposal for the approval of the
merger (hereafter: merger proposal) and sign it.
93. (a) The Company shall deliver the merger proposal to the Companies
Registrar within three days after the General Meeting was called.
(b) The Company shall inform the Companies Registrar of the General
Meetings decision within three days after the decision was adopted, shall
inform him that the notice was given to the creditors under Section 318 to
the Companies Law, and shall also deliver to the Registrar a copy of the
Court decision under Sections 319 to 321 to the Companies Law within three
days after the said decision was given.
ACCOUNTS
94. The Board shall cause accurate books of account to be kept in accordance
with the provisions of the Companies Law and of any other applicable law.
Such books of account shall be kept at the Registered Office of the
Company, or at such other place or places as the Board may think fit, and
they shall always be open to inspection by all Directors. No shareholder
not being a Director shall have any right to inspect any account or book
or other similar document of the Company, except as conferred by law or
authorized by the Board of the Company.
95. At least once in every fiscal year the accounts of the Company shall be
audited and the correctness of the profit and loss account and balance
sheet certified by one or more duly qualified auditors.
96. The appointment, authorities, rights and duties of the auditor(s) of the
Company shall be regulated by the applicable law.
NOTICES
97. (a) A notice or any other document may be served by the Company upon any
shareholder either personally or by sending it by prepaid mail in Israel
(by prepaid air mail if sent to a place outside Israel other than the U.S,
or by first
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class mail if sent within the U.S.) addressed to such shareholder at his
address as recorded in the Company's Shareholder Register or such other
address as he may have designated in writing for the receipt of notices
and other documents. Any written notice or other document shall be deemed
to have been served forty-eight (48) hours after it has been mailed (seven
(7) days if mailed to a place outside of Israel or forty-eight (48) hours
if mailed from within the U.S. to a location within the U.S.), or when
actually received by the addressee if sooner than forty-eight (48) hours
or seven (7) days, as the case may be, after it has been mailed, or when
actually tendered in person to such shareholder (or to the Secretary or
the President of the Company, as the case may be); provided, however, that
such notice or other document mentioned above may be sent by facsimile and
confirmed by registered mail as aforesaid, and such notice shall be deemed
to have been given twenty-four (24) hours after such facsimile has been
sent or when actually received by such shareholder (or by the Company),
whichever is earlier. If a notice is, in fact, received by the addressee,
it shall be deemed to have been duly served when received, notwithstanding
that it was defectively addressed or failed in some respect to comply with
the provisions of this Article.
(b) Unless otherwise specified in bearer share warrants, the holders of
such warrants shall not be entitled to receive notice of any General
Meeting of the Company, and the Company is under no obligation to give
notice of General Meetings to a person entitled to a share by virtue of
its delivery to him, unless he is duly registered as a shareholder.
(c) All notices to be given to the shareholders shall, with respect to any
shares to which persons are jointly entitled, be given to whichever of
such persons is named first in the Shareholders Register, and any notice
so given shall be sufficient notice to the holders of such shares.
(d) Any shareholder whose address is not described in the Shareholders
Register, and who shall not have designated in writing an address for the
receipt of notices, shall not be entitled to receive any notice from the
Company.
(e) Any notice or other document served upon or sent to any shareholder by
publication in accordance with these Articles shall, notwithstanding that
he be then deceased or bankrupt, and whether or not the Company has notice
of his death or bankruptcy, be deemed to be duly served or sent in respect
of any shares held by him (either alone or jointly with others) until some
other person is registered in his stead as the holder or joint holder of
such shares, and such service or sending shall be a sufficient service on
or sending to his heirs, executors, administrators or assigns and all
other persons (if any) interested in such share.
(f) Where a given number of days' notice, or 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.
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RECONSTRUCTION
98. On any sale of the undertaking of the Company, the Board or the
liquidators on a winding-up may, if authorized by a majority vote at a
meeting of shareholders, accept fully paid up shares, debentures or
securities of any other company, whether Israeli or foreign, either then
existing or to be formed, for the purchase, in whole or in part, of the
property of the Company, and the Board (if the profits of the Company
permit), or the liquidators (on a winding-up), may distribute such shares
or securities, or any other property of the Company, amongst the
shareholders without realization, or vest the same in trustees for them,
and the shareholders of the Company at any General Meeting may provide for
the distribution or appropriation of the cash, shares or other securities,
benefits or property, in accordance with the legal rights of the
shareholders or contributors of the Company, and for the valuation of any
such securities or property at such price and in such manner as the
meeting may approve, and all holders of shares shall be bound to accept
and shall be bound by any valuation or distribution so authorized, and
waive all rights in relation thereto, save only in the case the Company is
proposed to be, or is, in the course of being wound up, such statutory
rights (if any) under the provisions of the Statutes as are incapable of
being varied or excluded by these presents.
INDEMNITY AND INSURANCE OF OFFICERS
99. The Company may, to the maximum extent permitted by the Companies Law:
(a) enter into a contract for the insurance of the liability, in whole or
in part, of any of its Officers,
(b) may indemnify an Officer of the Company post factum; and
(c) may indemnify an Officer of the Company in advance for the following
events:
(i) Any financial obligation imposed on an Officer in favor of a third
party by a court judgment, including a compromise judgment
approved by court (provided that the Company approved the
compromise in advance) or an arbitrator's award approved by court
(provided that it was given pursuant to arbitration agreed to by
the Company in advance), for an act or omission performed by an
Officer in his capacity as an Officer.; and
(ii) reasonable legal expenses, including attorneys' fees, expended by
or charged to an Officer or adjudicated against an Officer by a
court in a proceeding commenced against an Officer by the Company
or on its behalf or by another person, or in a criminal charge
from which an Officer was acquitted, or in a criminal charge that
does not require intent, in which an Officer was convicted, all
for an act or omission performed in his capacity as an Officer .
Such indemnity shall apply in certain forseeable events and up to a
feasible amount under the circumstances, as determined by the Board.
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WINDING-UP
100. If the Company shall be wound up, whether voluntarily or otherwise, the
liquidators may, subject to the provision of the Statutes, divide among
the shareholders in specie any part of the assets of the Company and may,
with like sanction, vest any part of the assets of the Company in trustees
upon such trusts, for the benefit of the shareholders, as the liquidators
with like sanction shall think fit.
BUSINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS
101. Notwithstanding any other provision of these Articles, the Company shall
not engage in any business combination with any interested shareholder for
a period of three years following the time that such shareholder became an
interested shareholder, unless:
(a) prior to such time the Board of the Company approved either the
business combination or the transaction which resulted in the shareholder
becoming an interested shareholder, or
(b) upon consummation of the transaction which resulted in the shareholder
becoming an interested shareholder, the interested shareholder owned at
least 85% of the voting shares of the Company outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares outstanding those shares owned (i) by persons who are directors and
also officers and (ii) employee share plans in which employee participants
do not have the right to determine confidentially whether shares held
subject to the plan will be tendered in a tender or exchange offer, or
(c) at or subsequent to such time the business combination is approved by
the Board and authorized at a General Meeting, and not by written consent,
by the affirmative vote of at least 66 2/3% of the oustanding voting
shares which is not owned by the interested shareholder.
(d) A shareholder becomes an interested shareholder inadvertently and (i)
as soon as practicable diverts itself of ownership of sufficient shares so
that the shareholder ceases to be an interested shareholder; and (ii)
would not, at any time within the three - year period immediately prior to
a business combination between the Company and such shareholder, have been
an interested shareholder but for the inadvertent acquisition of
ownership; or
(e) The business combination is proposed prior to consummation or
abandonment of and subsequent to the earlier of the public announcement or
the notice required hereunder of a proposed transaction which (i)
constitutes one of the transactions described in the second sentence of
this paragraph; (ii) is with or by a person who either was not an
interested shareholder during the previous three years or who became an
interested shareholder with the approval of the Company's Board; and (iii)
is approved or not opposed by a majority of the members of the Boards of
Directors then in office who were directors prior to any person becoming
an interested shareholder during the previous three years or were
recommended for election or were elected to
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succeed such directors by a majority of such directors. The proposed
transactions referred to in the preceding sentences are limited to (x) a
merger or consolidation of Company (except for merger in respect of which
no vote of shareholders of the Company is required according to the
Companies Law); (y) a sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions),
whether as part of a dissolution or otherwise of assets of the Company or
of any direct or indirect majority-owned subsidiary of the Company (other
than to any direct or indirect wholly owned subsidiary or to the Company)
having an aggregate market value equal to 50% or more of either that
aggregate market value of all of the assets of the Company determined on a
consolidated basis or the aggregate market of all the outstanding shares
of the Company; or (z) a proposed tender or exchange offer for 50% or more
of the outstanding voting shares of the Company. The Company shall give
not less than 20 days notice to all interested shareholders prior to the
consummation of any of the transaction described in clause (x) or (y) of
the second sentence of this paragraph.
As used in this Article only, the term:
(1) "affiliate" means a person that directly, or indirectly through
one or more intermediaries, controls, is controlled by or is under
common control with another person.
(2) "associate" when used to indicate a relationship with any person,
means (I) any corporation, partnership, unincorporated association
or other entity of which such person is a director, officer or
partner or is, directly or indirectly, the owner of 20% or more of
any class of voting shares, (ii) any trust or other estate in
which such person has at least a 20% beneficial interest or as to
which such person serves as trustee or in a similar fiduciary
capacity, and (iii) any relative or spouse of such person, or any
relative of such spouse, who has the same residence as such
person.
(3) "business combination" when used in reference to the Company and
any interested shareholder of the Company, means:
(i) any merger or consolidation of the Company or any direct or
indirect majority owned subsidiary of the Company with (A)
an interested shareholder, or (B) with any other
corporation, partnership, unincorporated association or
other entity if the merger or consolidation is caused by an
interested shareholder and as a result of such merger or
consolidation Sub-article (a) of this Article 101 is not
applicable to the surviving entity;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of
transactions), except proportionately as a shareholder of
such Company to or with the interested shareholder,
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whether as part of a dissolution or otherwise, of assets of
the Company or of any direct or indirect majority owner
subsidiary of the Company, which assets have an aggregate
market value equal to 10% or more of either the aggregate
market value of all of the assets of the Company determined
on a consolidated basis or the aggregate market value of all
of the outstanding shares of the Company.
(iii) any transaction which results in the issuance or transfer by
the Company or by any direct or indirect majority-owned
subsidiary of the Company of any shares of the Company or of
such subsidiary to the interested shareholder, except (A)
pursuant to the exercise, exchange or conversion of
securities exercisable for or convertible into shares of the
Company or any such subsidiary, which securities were
outstanding prior to the time that the interested
shareholder became such, (B) pursuant to a dividend or
distribution paid or made, or the exercise, exchange or
conversion of securities exercisable for, exchangeable for
or convertible into shares of the Company or any such
subsidiary, which security is distributed pro rata to all
holders of a class or series of shares of the Company
subsequent to the time the interested shareholder became
such, (C) pursuant to an exchange offer by the Company to
purchase shares made on the same terms to all holders of
said shares or (D) any issuance or transfer of shares by the
Company; PROVIDED, that in no case under (B)-(D) above shall
there be an increase in the interested shareholder's
proportionate share of the shares of any class or series of
the Company or of the voting shares of the Company.
(iv) any transaction involving the Company or any direct or
indirect majority owned subsidiary of the Company which has
the effect directly or indirectly of increasing the
proportionate share of the shares of any class or series or
securities convertible into the shares of any class or
series of the Company or of any such subsidiary which is
owned by the interested shareholder except as a result of
immaterial changes due to fractional share adjustments or as
a result of any purchase or redemption of any shares not
caused, directly or indirectly, by the interested
shareholder; or
(v) any receipt by the interested shareholder of the benefit,
directly or indirectly (except proportionately as a
shareholder of such Company), of any loans, advances,
guarantees, pledges or any other financial benefits (other
than those expressly permitted in subparagraphs (i)-(iv)
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above) provided by or through the Company or any direct or
indirect majority owned subsidiary.
(4) "control" including the term "controlling," "controlled by" and
"under common control with," means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership
of voting shares, by contract or otherwise. A person who is the
owner of 20% or more of the outstanding voting shares of any
company, partnership, unincorporated association or other entity
shall be presumed to have control of such entity. Notwithstanding
the foregoing, a presumption of control shall not apply where such
person holds voting shares in good faith and not for the purpose
of circumventing this Article as an agent, bank, broker, nominee,
custodian or trustee for one or more owners who do not
individually or as a group have control of such entity.
(5) "interested shareholder" means any person (other than the Company
and any direct or indirect majority owner subsidiary of the
Company) that (i) is the owner of 15% or more of the outstanding
voting shares of the Company, or (ii) is an affiliate or associate
of the Company and was the owner of 15% or more of the outstanding
voting shares of the Company at any time within the three year
period immediately prior to that date on which it is sought to be
determined whether such person is an interested shareholder and
the affiliates and associates of such person, or (iii) any person
whose ownership of shares in excess of the 15% limitation set
forth herein is the result of action taken solely by the Company
provided that such person shall be an interested shareholder if
thereafter such person acquires additional voting shares of the
Company, except as a result of further corporate action not
caused, directly or indirectly, by such person. For the purpose of
determining whether a person is an interested shareholder, the
voting shares of the Company deemed to be outstanding shall
include shares deemed to be owned by the person through
application of paragraph (8) of this Sub-article but shall not
include any other unissued shares of the Company which may be
issuable pursuant to any agreement, arrangement or understanding,
or upon exercise of conversion rights, warrants or options, or
otherwise.
(6) "share" means with respect to the Company shares of its capital
and with respect to any other entity any equity interest.
(7) "voting shares" means any class or series entitled to vote
generally in the election of directors of the Company and
generally.
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(8) "owner" including the terms "own" and "owned," when used with
respect to any share, means a person that individually or with or
through any of its affiliates or associates:
(i) beneficially owns such share, directly or indirectly; or
(ii) has (A) the right to acquire such share (whether such right
is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights,
warrants or options, or otherwise, PROVIDED, HOWEVER, that a
person shall not be deemed the owner of share tendered
pursuant to a tender or exchange; or (B) the right to vote
such share pursuant to any agreement, arrangement or
understanding; PROVIDED, HOWEVER, that a person shall not be
deemed the owner of any share because of such person's right
to vote such share if the agreement, arrangement, or
understanding to vote such share arises solely from a
revocable proxy or consent given in response to a proxy or
consent solicitation made to 10 or more persons: or
(iii) has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting (except voting
pursuant to a revocable proxy or consent as described in
item (b) of clause (ii) of this paragraph) or disposing of
such share with any other person that beneficially owns or
whose affiliates or associates beneficially own, directly or
indirectly, such share.
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