Companies Ordinance [New Version]

The Winding Up

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To the Official Receiver

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and Provisional Liquidator

1621(1)-(3),

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Audit

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352. Subject to the application of the law of Bankruptcy to insolvent companies, in every winding up all debts payable on a contingency, and all claims against the Company, present or future, certain or contingent, ascertained or sounding only in damages, may be proved against the Company, and a just estimate shall be made, so far as possible, of the value of such debts or claims as are subject to any contingency or are of uncertain value.

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Foreign Company

On Foreign Companies

841 Book of Laws 37 10th of Elul 5743, 19.08.1983

Chapter XIX: Registry Office, Implementation and Regulations

2431(1)]]

The Minister may direct the making of seals for the authentication of documents required for the registration of companies and all matters connected therewith.

Every document submitted to the Registrar under this Ordinance shall be in the prescribed form and shall be submitted in the prescribed manner, and the person submitting it shall certify by his signature that the particulars contained therein are correct and complete.

2431(2a)]]

Any person may, upon payment of the prescribed fee —

In Registered Documents and Obtaining Certificates

A copy certified by the Registrar of any document held and registered by him shall be received in any legal proceeding as evidence of equal weight to the original document; it shall not be necessary to prove the official status of the Registrar.

Status of Certified Copy

2431(4))

390. Any act which this Ordinance directs to be done to or by the Registrar shall, in his absence, be done to or by the person appointed by the Minister for that time, unless the Minister has directed otherwise; if the Minister changes the organisation of the Registry Office, the act shall be done to or by the official appointed by the Minister or at the place determined by the Minister.

Registry Office

2431a]]

The Minister may prescribe by Order categories of companies in respect of which the Registrar may defer the payment of a fee payable under this Ordinance, in whole or in part, for such period and subject to such conditions as the Registrar shall determine with the approval of the Minister in each and every case.

Deferral of Fees

Of the Registrar

842 Book of Laws 37 10th of Elul 5743, 19.08.1983

thereof, or its receiver or liquidator, to rectify the default within the time specified in the Order, without prejudice to any penalty applicable to them under any enactment for the default, and the Court may direct in the Order that the payment of all costs incurred in connection with the application shall be borne by the company, by any officer thereof responsible for the default, by the receiver or by the liquidator.

(1258]

843 Book of Laws 37 10 Elul 5743, 19.08.1983

(Section 5)

Forms of Memoranda of Association of Companies

Form A

Memorandum of Association of a Company Limited by Shares

Name of the Company . . . Ltd.

The objects for which it is established (state the principal objects).

The liability of the members is limited.

The share capital of the Company is . . . shekels, divided into . . . shares of . . . shekels each (of which . . . shares of . . . shekels each are redeemable).

We, the undersigned, wish to be incorporated into a Company pursuant to this Memorandum of Association, and agree each to take the number of shares in the capital of the Company set opposite our respective names.

Number of Shares Taken Signatures

Addresses and Descriptions

Names of Signatories and Identity Numbers

...

...

7 . .

Date . . .

Month

Total shares taken.

Witness to the above signatures..

Form B

Memorandum of Association of a Company Limited by Guarantee not having a Share Capital

Name of the Company . . . Ltd.

The objects for which it is established (state the principal objects).

The liability of the members is limited.

Every member of the Company undertakes to contribute to the assets of the Company, in the event of its being wound up while he is a member or within one year thereafter, such amount as may be required from him, not exceeding . . . shekels, for the payment of the Company's debts and liabilities contracted before he ceased to be a member, and of the costs, charges, and expenses of winding up the Company, and for the adjustment of the rights of the contributories among themselves.

We, the undersigned, wish to be incorporated into a Company pursuant to this Memorandum of Association.

Signatures

Addresses and Descriptions

6. . .

7 .

Date . . . Month 19

Witness to the above signatures.

844 Book of Laws 37 10 Elul 5743, 19.08.1983

Form C

Memorandum of Association of a Company Limited by Guarantee having a Share Capital

Name of the Company . . . Ltd.

The objects for which it is established (state the principal objects).

Every member of the Company undertakes to contribute to the assets of the Company, in the event of its being wound up while he is a member or within one year thereafter, such amount as may be required from him, not exceeding . . . shekels, for the payment of the Company's debts and liabilities contracted before he ceased to be a member, and of the costs, charges, and expenses of winding up the Company, and for the adjustment of the rights of the contributories among themselves.

The share capital of the Company is . . . shekels, divided into . . . shares of . . . shekels each (of which . . . shares of . . . shekels each are redeemable).

We, the undersigned, wish to be incorporated into a Company pursuant to this Memorandum of Association, and agree each to take the number of shares in the capital of the Company set opposite our respective names.

Signatures

Number of Shares Taken

Addresses and Descriptions

2 .

5 _

Total Shares Taken

Date . . . Month . . . 19.

Witness to the above signatures

Form D

Memorandum of Association of an Unlimited Company having a Share Capital

Name of the Company

The objects for which it is established (state the principal objects).

We, the undersigned, wish to be incorporated into a Company pursuant to this Memorandum of Association, and agree each to take the number of shares in the capital of the Company set opposite our respective names.

Signatures

Number of Shares Taken

Addresses and Descriptions

... ...

...

Total Shares Taken

Date . . . Month 19

Witness to the above signatures

845 Book of Laws 37 10 Elul 5743, 19.08.1983

(Section 10)

Articles of Association for the Management of a Company Limited by Shares

Interpretation

Terms used in these Articles shall have the meaning ascribed to them in the Companies Ordinance [New Version], 5743-1983 (hereinafter — the Ordinance), as in force on the day these Articles became binding upon the Company.

Shares

The Company may issue shares with preferential rights, deferred rights, redemption rights, or any other special rights, or with restrictions in respect of the distribution of dividends, voting rights, return of share capital, or other matters, all as the Company shall determine by special resolution, subject to the provisions of its memorandum and without prejudice to any special right previously conferred upon any shareholder.

The Company may pay any person a commission for subscribing or procuring subscriptions, or for agreeing to subscribe or to procure subscriptions, for shares of the Company, whether conditionally or unconditionally, provided that the rate or amount of the commission shall not exceed ten percent of the value of those shares, and the commission may be discharged in cash or in fully or partly paid shares of the Company, or partly in cash and partly in such shares.

The Company may vary the rights attached to any class of shares if it has obtained the written consent of the holders of three-quarters of the number of shares issued in that class, or if the matter has been approved by a special resolution passed at a separate general meeting of the holders of those shares, all provided that the terms of issue of that class of shares contain no other provision in this regard; the provisions of these Articles relating to general meetings shall apply, mutatis mutandis, to any such separate general meeting, except that the quorum required shall be at least two persons holding, or representing by proxy, one-third of the shares issued in that class.

No shares shall be offered to the public for subscription except on the condition that at least five percent of the nominal amount thereof is payable upon the submission of the application for the share, and the directors shall, upon the allotment of shares, comply with the provisions of the Ordinance in this regard.

A share certificate that has been defaced or lost may be renewed upon payment of a fee not exceeding 10 new agorot and subject to conditions regarding evidence and indemnification, all at the discretion of the directors.

No funds of the Company shall be expended on the purchase of its own shares.

Lien

The Company shall have a lien on every share that has not been fully paid up, in respect of moneys owed to the Company on account of that share pursuant to calls, or payable at fixed times, whether or not the time for payment thereof has arrived; the Company shall also have a lien on shares registered in the name of any individual that have not been fully paid up, in respect of moneys owed by him or by his Estate, provided however that the directors may exempt any particular share, in whole or in part, from the provisions of this Section; the lien on a share shall also extend to dividends payable thereon.

846 Book of Laws 37 10th of Elul 5743 — 19.08.1983

The Company may sell, in such manner as the directors shall think fit, any share on which the Company has a lien, but no such share shall be sold unless the time for payment of a sum in respect of which the lien exists has arrived and fourteen days have elapsed after notice in writing demanding payment of the sum against which the lien exists and the time for payment of which has arrived has been given to the person then registered as the holder of the share, or to the person entitled thereto by reason of the death or Bankruptcy of the registered holder.

The surplus of the proceeds of sale remaining after satisfaction of the sum whose time for payment has arrived shall be paid to the person entitled to the share at the date of sale, subject to a lien in respect of sums whose time for payment has not yet arrived similar to the lien that existed on the share before it was sold; the purchaser shall be registered as the holder of the share and shall not be bound to see to the application of the proceeds of sale, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings relating to the sale.

Calls on Shares

The directors may make calls upon the members in respect of moneys remaining unpaid on their shares, provided that no call shall exceed one-quarter of the nominal amount of each share and that the date for payment shall not be less than one month from the date of the last call; every member shall pay to the Company the amount called upon his shares at the time specified in the notice, provided that such notice was given to him at least fourteen days in advance.

Joint holders of a share shall be jointly and severally liable for all calls in respect thereof.

If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest thereon at the rate of five percent per annum from the day appointed for payment thereof to the day of actual payment, but the directors may waive payment of such interest.

The provisions of these Articles regarding payment of interest shall apply to any arrears in the payment of any sum of money which, by the terms of issue, is payable on a fixed date, whether on account of the amount of the share or in the form of a premium, as if such sum had become due and payable by virtue of a call duly made and notified.

The directors may, at the time of issue, make arrangements for differentiating between members as to the amounts of calls and the times of payment thereof.

The directors may accept from any member in respect of his shares any sum of money not yet called or payable, and may pay him interest on such advance until the day on which the sum would otherwise have become payable, at a rate agreed between them, provided that such rate shall not exceed six percent without the consent of a general meeting.

Transfer of Shares

The transfer of a share in the Company shall be by an instrument signed by both the transferor and the transferee, and until the name of the transferee has been entered in the register of members, the transferor shall be deemed to remain the holder of the share.

The form of transfer of shares shall be in the following form or in such other usual and common form as the directors may approve:

"I, A.B., of , do hereby transfer to Mr. N.M., of (hereinafter — the transferee), in consideration of the sum paid to me, the share numbered

847 Book of Laws 37 10th of Elul 5743 — 19.08.1983

of Ltd., to be held by the transferee, his executor and assignee, subject to the conditions upon which I held the same at the time of execution of this instrument, and I, the transferee, agree to accept the share subject to the conditions aforesaid.

In witness whereof we have hereunto set our hands this day of

Witness to signature".

The directors may —

The Company shall recognize no person as entitled to a share of a deceased individual member other than the administrator of his Estate, and if there is none — his heirs; and in respect of a share registered in the names of two or more persons, the Company shall recognize no person as entitled to the share other than the surviving partner, and if that partner has also died — the administrator of his Estate, and if there is none — his heirs.

A person who has become entitled to a share by reason of the death or Bankruptcy of a member shall be entitled, upon producing such evidence as the directors may require, to be registered as a member in respect of that share, or to transfer it to another person in such manner as the deceased or bankrupt person would have been entitled to transfer it; in either case the directors may refuse or delay registration in the same manner as they would have been entitled to do had the deceased or bankrupt person transferred the share before the death or Bankruptcy.

A person who has become entitled to a share by reason of the death or Bankruptcy of a shareholder shall also be entitled to the dividends and other rights to which he would have been entitled had he been the registered holder of the share, except that until he is registered as a member in respect of the share he shall not be entitled to exercise by virtue thereof the rights of a member in relation to meetings of the Company.

Forfeiture of Shares

If a member has not paid in full, by the appointed date, any sum required to be paid, the directors may serve on him a written notice demanding payment of the amount remaining unpaid together with any interest accrued thereon.

The notice shall specify a further date for payment, which shall be not earlier than fourteen days after the notice, and shall state that if the sum is not paid by that date, the share in respect of which payment is required is liable to forfeiture.

If the requirements of the notice are not complied with, the directors may, so long as the sum remains unpaid, resolve that the share be forfeited.

A forfeited share may be sold or otherwise disposed of upon such terms and in such manner as the directors think fit, and at any time before a sale or disposition the forfeiture may be cancelled by the directors on such terms as they may determine.

848 Statute Book 37 10 Elul 5743 19.08.1983

A person whose shares have been forfeited shall cease to be a member in respect thereof, but shall remain liable to pay the Company all moneys which were owing by him to the Company on the date of forfeiture in respect of those shares; such liability shall cease on the day the Company receives in full the nominal amount of the shares.

A declaration that the declarant is a director of the Company and that a specified share thereof has been duly forfeited on the date stated in the declaration shall serve as conclusive evidence of the matters stated therein as against any person claiming to be entitled to the share, and such declaration together with the Company's receipt for the consideration, if any, given for the share upon its sale or transfer shall vest title to the share, and the person to whom the share has been sold or transferred shall be registered as the holder of the share and shall not be accountable for the application of the proceeds of sale, if any, and his title to the share shall not be affected by any irregularity or invalidity in the proceedings relating to the forfeiture, sale or transfer.

The provisions of these Articles relating to forfeiture shall apply to the non-payment of any sum which is payable at a fixed date by virtue of the terms of issue of a share, whether on account of the share or in the form of a premium, as if it were a sum payable by reason of a call duly made and notice thereof duly given.

Conversion of Shares into Stock

The directors may, with the prior approval of the Company in general meeting —

A stockholder may transfer his stock, or any part thereof, in the same manner and subject to the same Regulations under which, or as nearly thereto as circumstances admit, the shares from which the stock arose might have been transferred prior to conversion; but the directors may fix the minimum amount of stock transferable and may prohibit or restrict the transfer of fractions of that minimum, provided that the minimum shall not exceed the nominal value of the shares from which the stock arose.

Stockholders shall, according to the amount of stock held by them, have the same privileges and advantages in relation to dividends, voting at meetings of the Company and other matters, as if they were the holders of the shares from which the stock arose; but no person whose stock is derived from shares that do not confer upon their holders a particular right shall be entitled to that right by virtue of the stock, provided that the right to dividends and profits of the Company shall be preserved.

The Regulations of the Company applicable to paid-up shares, except the Regulations relating to share warrants, shall apply to stock, and accordingly, "share" and "shareholder" shall include stock and stockholder.

Share Warrants

The Company may issue share warrants, and accordingly the directors may, at their discretion and upon the written application of a registered shareholder, issue in respect of fully paid-up shares a share warrant signed with the seal of the Company and duly stamped, stating that the bearer is entitled to the shares specified in the warrant, and provision may be made, by means of coupons or otherwise, for the payment of dividends or other moneys on the shares specified in the warrant; the application shall be accompanied by such evidence as the directors may prescribe to establish the identity of the applicant, the share certificates if any, the stamp duty required for the share warrant, and the fee as determined by the directors.

849 Statute Book 37 10 Elul 5743 19.08.1983

A share warrant entitles the bearer to the shares specified therein and the transfer of those shares is effected by delivery of the warrant, and the Regulations of the Company relating to the transfer of shares shall not apply to shares comprised in a share warrant.

The bearer of a share warrant who surrenders it to the Company for cancellation shall be entitled, upon payment of the fee determined by the directors, to have his name entered in the register of members as a member of the Company in respect of the shares comprised in the warrant.

The holder of a share warrant shall not by virtue thereof be entitled to sign a requisition for the convening of a meeting of the Company, or to attend and vote thereat, or to exercise any other privilege of a member at meetings of the Company, nor shall he be entitled to receive notices from the Company; but in every other respect he shall have all the privileges and advantages as if his name were registered in the register of members as the holder of the shares comprised in the warrant, and he shall be a member of the Company.

The holder of a share warrant may deposit the warrant at the Company's office, and so long as it remains so deposited the depositor shall be entitled to sign a requisition for the convening of a meeting of the Company, to attend and vote thereat and to exercise the other rights of a member at any meeting convened more than two full days after the deposit, as if his name were registered in the register of members as the holder of the shares comprised in the share warrant; only one person shall be recognized as the depositor of the warrant; the Company shall be obliged to return the warrant to the depositor if so requested in writing with two days' notice.

The directors may prescribe rules governing the conditions upon which a new share warrant or a new coupon shall be issued if the original warrant or coupon has been damaged or lost.

Redeemable Shares

The Company may, subject to the provisions of the Ordinance, issue redeemable shares and redeem them.

Alterations of Capital

The directors may, pursuant to a special resolution of the Company, increase the share capital by such amount as shall be divided into shares of such denominations as stated in the resolution.

Unless the resolution for the increase of capital otherwise provides —

850 Book of Laws 37 10th of Elul 5743 19.08.1983

The provisions applicable to the original share capital with respect to calls, lien, transfer, forfeiture and all other matters shall apply to the new shares.

The Company may by special resolution —

General Meetings

A general meeting shall be convened once a year, at the time and place determined by a general meeting, but not later than fifteen months after the last general meeting; if not so convened, it shall be convened in the month following the month in which the anniversary of the incorporation of the Company falls, at such time and place as the directors shall determine; if no such meeting has been convened, it shall be convened in the month following thereafter and any two members of the Company may convene it at the expense of the Company in the same manner, as nearly as possible, as that in which meetings are convened by directors.

The general meetings referred to above shall be called annual general meetings; all other general meetings shall be called extraordinary general meetings.

The directors may call an extraordinary general meeting whenever they see fit to do so, and it may be convened upon the requisition of members as provided in Section 109 of the Ordinance, and if the directors have not convened it, the requisitionists may convene it pursuant to Section 110 of the Ordinance; if there are not sufficient directors present in the country to form a quorum, any director or any two members may convene it in the same manner, as nearly as possible, as that in which meetings are convened by directors.

The Company is required to give notice of a general meeting only to the following:

851 Book of Laws 37 10th of Elul 5743 19.08.1983

As special business, of which notice must be given pursuant to Section 48, shall be deemed every matter transacted at an extraordinary general meeting, and also every matter transacted at an annual general meeting other than the following: the declaration of dividends, the consideration of the accounts, balance sheets and the ordinary report of the directors and of the auditor, the election of directors and other officers in place of those retiring by rotation, and the fixing of the remuneration of the auditor.

No business shall be transacted at a general meeting unless a quorum is present at the commencement of the meeting; subject to any other provision in this articles, a quorum shall consist of the personal presence of at least three members who, by themselves or together with members or their proxies for voting, hold one quarter of the voting power of the Company.

If within half an hour from the time appointed for the meeting a quorum is not present — the meeting shall be dissolved if it was called upon the requisition of members, and if it was not so called it shall stand adjourned to the same day in the next week, at the same time and place; if at the adjourned meeting also a quorum is not present within half an hour from the time appointed for it — the members present shall be deemed to constitute a quorum.

The chairperson of the board of directors pursuant to Section 93, or such other person as the board of directors may appoint for that purpose, shall preside as chairperson at every general meeting.

If there is no such chairperson, or if the chairperson is present at the meeting and declines to act as chairperson thereof, or if the chairperson does not attend within a quarter of an hour after the time appointed for the meeting, the members present shall choose one of their number to be chairperson.

The chairperson may, with the consent of a meeting at which a quorum is present, adjourn the meeting to another time or another place, and shall do so if so required by the meeting; no business shall be transacted at any adjourned meeting other than business left unfinished at the meeting at which the adjournment was decided upon; it shall not be necessary to give notice of the adjournment or of the business to be transacted at the adjourned meeting, but if the meeting is adjourned for ten days or more, notice of the adjourned meeting shall be given in the same manner as notice of an original meeting.

A resolution put to the vote of a general meeting shall be decided by a show of hands, unless a poll is demanded by at least three members before the voting or upon announcement of the result thereof; if no such demand is made, the declaration by the chairperson that a resolution has been carried by a show of hands, or carried unanimously or by a particular majority, or lost, and an entry to that effect recorded in the minute book of the Company, shall be conclusive evidence thereof, without proof of the number or proportion of votes recorded in favour of or against the resolution.

If a poll is duly demanded, it shall be taken in such manner as the chairperson directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.

In the case of an equality of votes, whether on a show of hands or on a poll, the chairperson of the meeting at which the vote is taken shall have a second or casting vote.

A poll demanded on the election of a chairperson or on a question of adjournment shall be taken immediately; and if demanded on any other question, it shall be taken at such time as the chairperson of the meeting directs.

852 Book of Laws 37 10th of Elul 5743 19.08.1983

Voting by Members

On a show of hands, every member present in person shall have one vote.

On a poll, every member shall have one vote for each share held by him, and he may vote either in person or by proxy.

On a vote by joint holders of a share, the vote of the senior joint holder present in person or by proxy shall be accepted, and the votes of the remaining joint holders shall not be accepted; seniority shall be determined by the order in which the joint holders are registered in the register of members.

A member who is mentally incapacitated or who has been declared legally incompetent by a competent court may vote, whether on a show of hands or on a poll, by his guardian or by another person appointed by the court, and such person may, on a poll, vote by proxy.

A member is not entitled to vote at a general meeting unless he has paid all calls and other sums then due and payable by him in respect of his shares in the Company.

The instrument appointing a proxy and the power of attorney or other authority under which it is made, or a copy thereof certified by a notary, shall be deposited at the registered office of the Company not less than 48 hours before the time appointed for holding the meeting at which the person named in the instrument proposes to vote, failing which the instrument shall not be valid at that meeting.

The instrument appointing a proxy may be in the following form or in such other form as the directors may determine:

".............. Company Ltd.

I, .............. of .............., a member of .............. Company Ltd., hereby appoint ..............

of .............. as my proxy to vote for me and on my behalf at the General Meeting (Annual / Extraordinary) of the Company, to be held on .............., and at any adjournment thereof.

Signed this .............. day of ..............

Signature .............."

Directors

The number of directors and the names of the first directors shall be determined in writing by a majority of votes of the subscribers to the memorandum.

The remuneration of the directors shall be determined from time to time at a general meeting of the Company.

The qualification of a director shall be the holding of at least one share in the Company, and he shall comply with the provisions of Section 82 of the Ordinance.

Powers and Duties of Directors

The directors shall manage the business of the Company and may pay all expenses incurred in promoting and registering the Company, and may exercise all powers of the Company not required to be exercised by the Company in general meeting, whether under the Ordinance or under these Articles, subject in all respects to the provisions of the Ordinance and these Articles and to such directions as may be given by the Company in general meeting, provided that such directions are not inconsistent with those provisions; but no direction given by the Company in general meeting shall invalidate any prior act of the directors which would have been valid but for such direction.

The directors may appoint from among themselves a managing director or manager for such period and on such remuneration as they think fit, whether by way of salary, commission, participation in profits, or any combination thereof, and a person so appointed shall not, while holding such office, be subject to retirement by rotation and shall not be taken into account in determining the rotation of retirement of directors; but his appointment shall be automatically terminated if for any reason he ceases to be a director or if the Company in general meeting resolves that his tenure of office be terminated.

The amount of money which the directors may raise for the purposes of the Company, otherwise than by the issue of shares, as an unpaid debt, shall not exceed the amount of the issued capital, except with the approval of a general meeting of the Company.

The directors shall comply with the provisions of the Ordinance, and in particular the provisions relating to —

Books of Account and Auditors

The directors shall cause proper books of account to be kept in accordance with the provisions of the Ordinance.

The directors shall determine the arrangements for making the books of account and records of the Company available for inspection by members who are not directors, including the manner, conditions, place and time of inspection, and no such member shall have any right of inspection of any books, accounts or documents of the Company except as provided by law or as authorised by the directors or by the Company in general meeting.

The appointment of an auditor and the determination of his duties shall be in accordance with the provisions of the Ordinance.

The Seal

The seal of the Company shall not be affixed to any document except by resolution of the Board of Directors and in the presence of at least two directors and the secretary or such other person as the directors may appoint for this purpose, and those three persons shall sign every document to which the seal of the Company is affixed in their presence.

Disqualification of a Director

A director's office shall be vacated in any of the following circumstances:

Rotation in the Retirement of Directors

The directors who shall retire each year shall be those who have served the longest period since their last election; if among them there are directors who have served an equal period and they have not reached an agreement among themselves as to retirement, the matter shall be determined by lot.

A retiring director is eligible for re-election.

The Company may, at a general meeting at which a director retires, appoint another person to the office that has been vacated.

If at a meeting convened for the election of directors not all the vacated offices have been filled, the meeting shall be adjourned to the same day of the following week and shall be convened at the same place and at the same time, and if at such adjourned meeting the vacated offices have still not been filled, the retiring directors whose offices have not been filled shall be deemed to have been re-elected at that meeting.

The Company may at a general meeting increase or reduce the number of directors and determine the rotation in which directors shall vacate offices in the increased or reduced number.

Where a vacancy on the board of directors has arisen by casual vacancy, the directors may appoint a person to fill the vacated office, provided that the person so appointed shall be required to retire on the day on which the director in whose place he was appointed would have been required to retire.

The directors may at any time appoint a person as an additional director, and such person shall be required to retire at the next following ordinary general meeting but may be re-elected thereat as an additional director.

The Company may, by extraordinary resolution, remove a director from office before the expiration of his term of office, and may, by ordinary resolution, appoint another person in his place, provided that the person so appointed shall be required to retire on the day on which the director in whose place he was appointed would have been required to retire.

Procedure in the Actions of Directors

The directors may determine the quorum required for the conduct of their business, and if they have not done so and their number exceeds three, the quorum shall be three.

The vacation of a director's seat does not impede the continued functioning of the board of directors; however, if the number of directors has fallen below the quorum prescribed in the articles of association as required for the conduct of business, the remaining directors may act only to increase their number to the required number, or to convene a general meeting of the Company.

The directors may elect a chairperson for their meetings and determine the period of his tenure; if no chairperson has been elected, or if the chairperson has not attended the meeting within five minutes of the time appointed for its opening, the directors present may elect one from among themselves to serve as chairperson of the meeting.

Any act done by a meeting of directors or a committee of directors or by any person acting as a director shall not be invalidated solely by reason of any defect in the appointment of those performing the act, or any one of them, or by reason of their not being qualified for their office.

Dividends and Reserve

The Company may at a general meeting declare dividends, provided that they shall not exceed the rates proposed by the directors.

The directors may pay to members an interim dividend at such rate as they consider justified in accordance with the profits of the Company.

Dividends shall be paid only out of profits.

The declaration of dividends and their payment shall be made according to the amounts paid up on account of the shares, subject to the rights of holders of shares carrying special rights with respect to dividends; however, if no amount has been paid up on account of any shares, dividends may be declared and paid according to the nominal amounts of the shares; amounts paid by shareholders on account of their shares prior to the issuance of calls thereon, which amounts bear interest, shall not be regarded, for the purposes of this Section, as amounts paid up on account of shares.

Before recommending the payment of any dividend, the directors shall set aside out of the profits of the Company such sum as they think proper, but not less than ten percent of the net profits of the Company for the preceding year, to a reserve or reserves which shall, at the discretion of the directors, be applicable for any purpose to which profits of the Company may be properly applied, including provision for unforeseen contingencies or for equalizing dividends; and pending such application shall, at the discretion of the directors from time to time, either be employed in the business of the Company or be invested in investments other than shares of the Company. Nothing in this provision shall compel the directors to set aside any sum to a reserve so long as the existing reserve of the Company equals its paid-up share capital.

If several persons are registered as joint holders of any share, any one of them may give effectual receipts for any dividends paid in respect thereof.

Notice of any dividend that may have been declared shall be given, in the manner hereinafter mentioned, to every person entitled to a share thereof.

No dividend shall bear interest against the Company.

Service of Notices

A notice may be served by the Company upon any member either personally or by sending it through the post to him at his registered address, and if he has no address in Israel, to the address in Israel which he has supplied to the Company for the purpose of giving notices to him. Where a notice is sent by post, service of the notice shall be deemed to be effected if a letter containing the notice was properly addressed and the postage was prepaid and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.

If a member has no address in Israel and has not supplied the Company with an address in Israel for the service of notices, a notice addressed to him and published in a newspaper widely circulated in the vicinity of the Company's registered office shall be deemed to have been duly served on the day of publication.

A notice may be served by the Company upon the joint holders of a share by serving it upon the joint holder whose name stands first in the register in respect of the share.

A notice may be served by the Company upon the persons entitled to a share in consequence of the death or Bankruptcy of a member by sending it through the post in a prepaid letter addressed to them by name, or by the title of representatives of the deceased, or trustees of the bankrupt, or by any like description, at the address in Israel supplied for the purpose by those claiming to be so entitled, and until such an address has been supplied, by serving the notice in any manner in which the same might have been served if the death or Bankruptcy had not occurred.

Moshe Nissim

Minister of Justice

857 Statute Book 37 10 Elul 5743 – 19.08.1983

Companies Ordinance

Comparison Table

New

Section

Previous

Section

New

Section

Previous

Section

New

Section

Previous

Section

141, 1

152(a)-(c)

152(d)

160(a)

160(b)

43, 44

97(a),(b)

99(a)

115(a)

38(1), (3)

38(2)

39

43(1), (2)

43(3)

43(4)

43(5)

43(6)

44(1), (6)

44(2)-(5)

45, 46

47(1)-(3)

47(4)

49(1)

49(2)

52(1) opening

52(1) closing

52(2)

53(a)

59(1), (2)

59(3)

60(1)

60(2), (3)

63(1), (2)

63(3)-(6)

64(1)

64(2)

65a

66(1)-(4)

66(5)-(7)

60(a) closing

52(a), (b)

54(b)

52(c)

54(a)

121(a)

121(b)

97(c)

25b(3)

28(1)

28(2)

28(3)

28(4)

29(1)

29(2)

29(3)

29(4)

29(5)

29(6)

29(7)

29(8)

30(2) closing

31(1), (2)

31(3)

31(4)

31(5)

35a(1)

35a(2), (3)

35b(1), (2)

35b(3)

35b(4)

35b(5)

35b(6)

35b(7)

35c

35d, 35e

36(1)

36(2)

36(3)

36(4)

36(5)

36(6)

36(7)

36(8)

36(9)

36a

Name

1, 2

5 opening

24(a), (b)

24(c), (d)

Omitted

4 opening

4(1)-(3)

5(1)

5(2)

5(3)

5(4)

8(1)

8(2)

8(3), (4)

18(1), (2)

18(3)

18(4)

19a

19b

20(1)

20(2)

20(3)

20(4)

20(5)

20(6)-(8)

21(1), (2)

21(3), (4)

22(1)

22(2), (3)

22(4)

22(5)

23(1)-(3)

23(4)

25a

25b(1), (2)

858 Statute Book 37 10 Elul 5743 – 19.08.1983

New

Section

Previous

Section

New

Section

Previous

Section

New

Section

Previous

Section

178(b)

Omitted

183(a) opening

199

Omitted

Omitted

164(b)

245, 1

127(1) conditions

127(1)

condition (c)

127(2)

127(3), (4)

127(5)

127(6)

127(7)

127(8), (9)

127(10)

127(11)

127(12)

127(13)

131

133a

135a

138(1),(2)

138(3)

138(4)

138(5), (6)

143(1)

opening, (a)

143(1)

143(1)

143(1)(f)

143(1)(g)

143(2) opening

143(2) condition

143(3)

209(a), (b)

207 closing

209(c)

207 opening

210(1)

211(b)

210(2)

211(a)

164(a)

169(a), (b)

178(a),(c)

105(10)

105(11)

105(12), (13)

106(1)-(2a)

106(3)

106(4)

106(5)

107(1)-(3)

107(4)

107(5)

107(6)

107(7)

107(8), (9)

108(1)

108(2)

108(3)

109a

118a

119a(1)-(3)

119a(4)-(6)

119a(7)

119a(8)

119a(9)-(11)

119a(12)

119a(13)

121(1)

121(2), (3)

122(1)

122(2), (3)

123(1)

123(2),(3)

123(4)

125(1),(2)

125(3), (4)

27(1) opening

115(b)

120(a), (b)

120(c)

91-93

130(a)

130(b)

Omitted

66(8)

68(1)-(3)

68(4), (5)

68(6)

93(1)

93(2)

93(3)

93(4)

95(1), (2)

95(3), (4)

96(1)

96(2), (3)

96(4)

102(1),(2)

102(3), (4)

102(5), (6)

102(7)-(9)

102(10)

102(11)

103(1)-(2)

103(3)

105(1)

105(2)

105(3), (6)

105(8)

105(9)

859 Statute Book 37 10 Elul 5743 – 19.08.1983

New

Section

Previous

Section

New

Section

Previous

Section

New

Section

Previous

Section

307(4)-(6)

Omitted

207(11)

214(1)

214(2)

218(1)

218(2)

220a

220b

220b(1)

220c(1)-(3)

220c(4)

220c(5)

220c(6)

220c(7)

229(1), (3)

229(2)

237(1)-(3)

237(4)-(6)

348(a)-(e)

348(f)

320 opening

320 closing

173(1), (2)

173(3)-(5)

174

174a

176(1)

176(2)-(3)

176(4)-(8)

176(9)

206(1)-(4)

206(5), (6)

207(1)

207(2)-(5)

207(6)

207(7), (8)

207(9)

207(10)

260(a)

Repealed

260(b)

271

292(a)

292(b),(c)

292(d)

300(a)

300(b)

300(d), (e)

300(f)

300(g)

307(a)

307(b),(c)

300(c)

313(1)

313(a), (b)

151(1) opening

151(1)(a)

151(1)(b)

151(1)(c)

151(2)

151(3)

160(1)

160(2)

160(3), (4)

160(5)

160(6)

160(7)

161(1)

161(2)

161(3)

162(1)-(3)

162(2)

opening, (a)

162(2)

162(3)

162(4), (5)

162(6)

162(7)

162(8)

166(1)

166(2)

166(4)

860 Statute Book 37 10 Elul 5743 – 19.08.1983

New

Section

Previous

Section

New

Section

Previous

Section

New

Section

Previous

Section

42, 44,

45(c)

First Schedule

Second Schedule

169(c)

First Schedule

Third Schedule

[5741 30]

Omitted

Omitted

243(5)

243a

243b

368(a)-(e)

368(f)

242(6)

242(7)

242b

243(1)

243(2)

243(2a)

243(3)

243(4)

861 Statute Book 37 10 Elul 5743 – 19.08.1983

862 Statute Book 37 10 Elul 5743 – 19.08.1983

863 Statute Book 37 10 Elul 5743 – 19.08.1983

864 Statute Book 37 10 Elul 5743 – 19.08.1983