Exhibit 3.1
THE COMPANIES LAW
A COMPANY LIMITED BY SHARES
AMENDED AND RESTATED ARTICLES OF ASSOCIATION OF
NEGEVTECH LTD.
PRELIMINARY
| 2. |
In
these Articles, unless the context otherwise requires: |
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The
“2007 Investment Agreement” – shall mean the Series A1 Preferred
Share Purchase Agreement dated July 20, 2007, between the Company and certain investors. |
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“Amadeus” – shall mean Xxxxxxx XXX and Xxxxxxx XXX Affiliates Fund LP and their Permitted
Transferees to which they transfer shares. |
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“as
converted basis” – shall mean assuming the theoretical conversion of all
outstanding Preferred Shares into Ordinary Shares, at the then applicable conversion
ratio. |
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“Board” or “ Board of Directors” – shall mean the Board of Directors of
the Company. |
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“Bonus
Shares” – shall mean shares issued by the Company for no consideration to
shareholders entitled to receive them on a pro rata basis. |
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“Business
Day” – shall mean a day on which commercial banks in Israel are open for
business (including, for the avoidance of doubt, Fridays). |
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The
“Companies Law” – shall mean the Companies Law, 5759-1999 as shall
be in effect from time to time and any other law that shall be in effect from time to time
with respect to companies and that shall apply to the Company. |
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“Dividend”
– shall mean any asset transferred by the Company to a shareholder in respect of such
shareholder’s shares, whether in cash or in any other way, including a transfer
without valuable consideration, but excluding Bonus Shares. |
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“Genesis”
– shall mean Genesis Partners II, L.D.C., Genesis Partners II (Israel) L.P. and their
Permitted Transferees to which they transfer shares. |
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“Intel”
shall mean Intel Atlantic, Inc., a corporation established and existing under the laws of
the State of Delaware, USA. |
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The
“Office” – shall mean the registered office of the Company as it
shall be from time to time. |
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The
term “Major Holder” shall mean a holder of at least 2.5% of the issued
and outstanding shares of the Company, on an as converted basis and with respect solely to
Article 14 – a holder of at least 2% of the issued and outstanding shares of the
Company, on an as converted basis. |
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“Majority
Preferred Shareholders” – shall mean the holders of at least 60% (sixty
percent) of the issued and outstanding Preferred Shares (calculated on an as converted
basis). |
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“Ordinary
Shares” – shall mean Ordinary Shares of the Company, par value NIS 1 each. |
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“Ordinary
Option Shares” – shall mean Ordinary Shares purchased by employees,
consultants and/or directors of the Company by exercising options granted to them under
any of the Share Option Plans. |
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“Original
Issue Price” – shall mean: (i) with respect to the Series A1 Preferred
Shares, $1.3235 per share; (ii) with respect to the Ordinary Preferred A Shares, $1.3406
per share; (iii) with respect to the Ordinary Preferred B Shares, $1.86665 per share, as
such prices may be adjusted, for certain purposes set forth in these Articles, upon the
occurrence of a Recapitalization Event. |
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“Orbotech”
– shall mean Orbotech Technology Ventures L.P. and its Permitted Transferees to which
it transfers shares. |
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“Permitted
Transferee” – shall mean: (i) a person or entity that controls or is
controlled by or is under common control with the respective shareholder; (ii) spouse,
brothers, sisters, parents and children of the transferor or a trust for the benefit of
the transferor and/or any of the foregoing, in the event the shares are held by
individuals; (iii) in the case of any shareholder which is a limited or general
partnership or a trust, to its partners (whether general or limited, including retired
partners) or beneficiaries and to affiliated partnerships managed by the same management
company or managing (general) partner or by an entity which directly or indirectly
controls, is controlled by, or is under common control with, such management company or
managing or general partner; (iv) a trustee of the Company’s incentive plans may
transfer to a beneficiary and vice versa; (v) in the case of Plenus Technologies Ltd.,
Plenus II, L.P., Plenus II (D.C.M.), Limited Partnership, Golden Gate Bridge Fund, L.P.,
Bank Leumi Le-Israel B.M. and the Participants (listed in Schedule 1 of the Loan Agreement
between the Company, Plenus II, L.P. and Plenus II (D.C.M.), Limited Partnership dated
October 11, 2005), each shall be considered a Permitted Transferee of each other, as long
as such Permitted Transferee is not a competitor of the Company; (vi) an acquirer that
acquires in one transaction the entire outstanding share capital of the Company from its
shareholders, whether pursuant to Article 29B or Section 341 of the Companies Law or
otherwise, including by way of a merger shall be deemed a Permitted Transferee for
purposes of such transfer ;and (vii) Bank Leumi Le-Israel BM (“BLL”)
shall be a Permitted Transferee of Pitango Principals Fund III (Israel) LP
(“Pitango Principals”), who may freely pledge and subject any of its
shares and other securities in the Company to a charge in favor of BLL, without being
subject to any restrictions hereunder with respect to the creation or imposition of such
pledge or charge, including, without limitation, the requirement for Board approval or any
other approval, any right of first refusal, co-sale offer or otherwise. However, the sale
of the said securities on behalf of Bank Leumi Le-Israel BM pursuant to a realization of
the said charge shall be subject to the right of first refusal and any other
restrictions on the transfer of shares contained herein. |
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The
term “control” shall have the same meaning as designated to it under the
Companies Law and shall also mean the possession, directly or indirectly, of more than 50%
of the voting power or the right to appoint more than 50% of the members of the Board of
Directors or the right to receive more than 50% of the distributed profit. |
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“Pitango”
– shall mean Pitango Venture Capital Fund III (Israeli Sub) L.P., Pitango Venture
Capital Fund III (Israeli Sub.) Non-Q L.P., Pitango Venture Capital Fund III (Israeli
Investors) L.P., Pitango Parallel Investor Fund III (Israel), L.P., Pitango Principles
Fund III (Israel) L.P., Pitango Venture Capital Fund III Trusts 2000 L.P., all of which
shall be deemed Permitted Transferees of each other, and their Permitted Transferees to
which they transfer shares. |
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“Poalim
Ventures” means Poalim Ventures Ltd., Poalim Ventures I Ltd. and Poalim Ventures
II L.P., who shall be deemed Permitted Transferees of each other, and their Permitted
Transferees to which they transfer shares. |
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“Preferred
Shares” – shall mean Series A1 Preferred Shares, Ordinary Preferred A Shares
and Ordinary Preferred B Shares. |
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“Qualified
IPO” or “QIPO” – shall mean the consummation of a firm
commitment underwritten public offering of the Company’s shares, with aggregate gross
proceeds for the Company of at least US$ 30,000,000 (Thirty Million), at an offering price
per share representing a Company valuation of at least US$ 130,000,000 (One Hundred and
Thirty Million). |
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“Recapitalization
Event” – shall mean any event of share combination or subdivision,
distribution of Bonus Shares or any other similar reclassification, reorganization or
recapitalization of the Company’s share where the shareholders retain their
proportionate holdings in the Company on an as converted basis. |
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“Series
A1 Preferred Shares” – shall mean Series A1 Preferred Shares of the Company,
par value NIS 1 each. |
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“Ordinary
Preferred A Shares” – shall mean Ordinary Preferred A Shares of the
Company, par value NIS 1 each. |
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“Ordinary
Preferred B Shares” – shall mean Ordinary Preferred B Shares of the Company,
par value NIS 1 each. |
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“Share
Option Plans” – shall mean the share option plans of the Company as shall be
in force and effect from time to time including the Company’s Employee Share
Ownership and Option Plan (2001, as amended 2003 & 2004 & 2005 & 2006) and the
Company’s Employee Share Ownership and Option Plan (2001, as amended 2003 & 2004
& 2005 & 2006 & 2007) or any other employee option plan adopted by the
Company. |
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“Star”
– shall mean SVE Star Ventures Enterprises GmbH & Co. No. IX KG., Star Management
of Investments No. II (2000) L.P., SVM Star Ventures Management gesellschaft mbH No. 3,
Star Growth Enterprise, a German Civil Law Partnership (with limitation of liability) and
their Permitted Transferees to which they transfer shares. |
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"Wellington"
- shall mean Wellington Partners Ventures III Technology Fund L.P. and its
Permitted Transferees to which it transfers shares. |
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In
these Articles, subject to this Article 2 and unless the context otherwise requires,
expressions defined in the Companies Law, or any modification thereof in force at the date
at which these Articles become binding on the Company, shall have the meanings so defined;
and words importing the singular shall include the plural, and vice versa, and words
importing the masculine gender shall include the female, and words importing persons shall
include bodies corporate. The titles of the articles are not part of the articles. |
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For
purposes of determining the availability of any right, the computation of any
shareholdings or the applicability of any limitation under these Articles, all Ordinary
Shares and Preferred Shares entitled to such right or the application of such limitation
held or acquired by entities or persons constituting Permitted Transferees of each other,
shall be aggregated and such entities or persons shall be viewed as a single Shareholder. |
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In
the event that an article that has been added to these Articles contradicts an original
article found in these Articles – the article added shall take precedence. |
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(a) |
The
Company is a private Company. |
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(b) |
The
right to transfer the shares of the Company shall be restricted in the
manner hereinafter appearing; |
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(c) |
The
number of the shareholders of the Company (not including persons who are in
the employment of the Company, and persons who, having been formerly
in the employment of the Company were while in that employment and
have continued after the termination of that employment to be
shareholders of the Company) shall be limited to fifty, provided
that, for the purposes of this provision, where two or more persons
hold one or more shares in the Company jointly they shall be treated
as a single shareholder; and |
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(d) |
No
invitation shall be issued to the public to subscribe for any shares or
debentures or debenture stocks of the Company. |
| 3A |
CHARITABLE
CONTRIBUTIONS |
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The
Company may donate reasonable sums of money and/or issue securities of the Company
representing up to tenth of one percent (0.1%) of its issued and outstanding share
capital, to any worthy purpose or entity approved by the Board of Directors of the Company
even if such donation is not made for business consideration. |
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The
Office of the Company shall be at such place as the Board shall from time to time
designate. |
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The
authorized capital of the Company is comprised of NIS 74,000,000 divided into: 40,000,000
Ordinary Shares, par value 1 NIS per share, 20,500,000 Series A1 Preferred Shares, par
value 1 NIS per share, 3,500,000 Ordinary Preferred A Shares, par value 1 NIS per share
and 10,000,000 Ordinary Preferred B Shares, par value 1 NIS per share. |
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| 6. |
RIGHTS,
PREFERENCES AND RESTRICTIONS OF PREFERRED SHARES |
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The
rights, preferences, privileges, and restrictions granted to and imposed on the Preferred
Shares are as set forth in these Articles. |
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Subject
to Article 8 below, any dividends declared by the Company shall be distributed, subject to
Article 30 below, between all holders of shares of the Company, pari passu, based upon the
number of Ordinary Shares (on an as converted basis) held by any such holder. |
| 8. |
DIVIDEND
AND LIQUIDATION PREFERENCE |
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(a) |
Upon
the happening of any of the following events: |
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(1) |
any
liquidation, dissolution or winding up of the Company, either voluntary or
involuntary; or |
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(2) |
any
consolidation, or merger of the Company with or into another corporation
following which the shareholders of the Company prior to such transaction do
not hold following such transaction more than 50% of the outstanding shares and
the voting power of the surviving corporation by virtue of their holdings in
the Company prior to such transaction (“Merger”); or |
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(3) |
any
sale or Transfer to another corporation of all or substantially all of the
assets of the Company, or all or substantially all of the shares in the Company
(other than to a wholly owned subsidiary of the Company or to a corporation in
which the shareholders of the Company prior to the transaction hold more than
50% of the outstanding voting rights by virtue of their holdings in the Company
prior to such transaction) (“Acquisition”); or |
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(4) |
any
distribution of Dividends; |
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(any
of the events described in sections (1) to (4) above shall be hereinafter referred to as
a “Liquidation Event”) |
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then
the amount of declared Dividends or any assets of the Company available for distribution
in connection with, or the consideration received in, such Liquidation Event (hereinafter
referred to as “Distribution Assets”) shall be distributed pursuant to
the following order of preference: |
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(b) |
The
holders of the Series A1 Preferred Shares shall be entitled to receive,
prior and in preference to any distribution of any of the assets of
the Company to the holders of all other equity securities of the
Company by reason of their ownership thereof but subject to the
provisions of sub-article 8(e) below, an amount per each Series A1
Preferred Share equal to: (i) Two time (2X) of the applicable
Original Issue Price for each such share, less (ii) the aggregate
amount previously paid in respect of such share pursuant to this
Article 8(b), if any (the “A1 Preference Amount”).
In the event that the Distribution Assets are not sufficient for a
full payment of the A1 Preference Amount to the holders of the Series
A1 Preferred Shares pursuant to this subarticle (b), such
Distribution Assets as are available for distribution, shall be
distributed among the holders of the Ordinary Option Shares and the
holders of the Series A1 Preferred Shares in accordance with
sub-article 8(e) below, and among the holders of the Series A1
Preferred Shares as between themselves, pro-rata in proportion to the
preferential amount each such holder would otherwise be entitled to
receive had the A1 Preference Amount been paid in full. |
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(c) |
Following
the payment in full of the A1 Preference Amount, the holders of the
Ordinary Preferred A Shares and the holders of the Ordinary Preferred
B Shares shall be entitled to receive, prior and in preference to any
distribution of any of the assets of the Company to the holders of
all other equity securities of the Company by reason of their
ownership thereof but subject to the provisions of sub-article 8(e)
below, an amount per each Ordinary Preferred A Share and per each
Ordinary Preferred B Share equal to: (i) the applicable Original Issue
Price of such share, less (ii) the aggregate amount previously paid
in respect of such share pursuant to this Article 8(c), if any (the
“Ordinary A/B Preference Amount”). In the
event that the Distribution Assets are not sufficient for a full
payment of the Ordinary A/B Preference Amount to the holders of the
Ordinary Preferred A Shares and the holders of the Ordinary Preferred
B Shares pursuant to this sub-article (c), such Distribution Assets
as are available for distribution, shall be distributed among the holders
of the Ordinary Option Shares and the holders of the Ordinary
Preferred A Shares and the holders of the Ordinary Preferred B Shares
in accordance with sub-article 8(e) below, and among the holders of
the Ordinary Preferred A Shares and the holders of the Ordinary
Preferred B Shares as between themselves, pro-rata in proportion to
the preferential amount each such holder would otherwise be entitled
to receive in respect of such shares had the Ordinary A/B Preference
Amount been paid in full. |
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Notwithstanding
anything to the contrary in these Articles, any change or amendment to the rights
attached to the Ordinary Preferred B Shares under this sub-article 8(c) shall require the
approval of holders of at least 75% (Seventy Five Percent) of the Ordinary Preferred B
Shares, provided that the authorization or issuance of a new class of shares with
preferential rights (including preferential rights of dividend and liquidation
preferences) or issuance of additional shares of an existing class shall not be deemed a
change or amendment in the rights of the Ordinary Preferred B Shares under this
sub-article 8(c). |
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(d) |
Following
the payment in full of the A1 Preference Amount, the Ordinary A/B
Preference Amount and the Ordinary Option Preference Amount (as
defined in sub-article 8(e) below), the holders of the Preferred
Shares and the holders of the Ordinary Shares shall receive any
remaining Distribution Assets available for distribution pro rata
based on the number of Ordinary Shares (on an as converted basis)
held by any such holder, provided however that the holders of
Ordinary Option Shares shall not receive in the aggregate, under both
this sub-article 8(d), sub-articles 8(b) and 8(c) above and
sub-article 8(e) below, more than their pro rata portion (on an as
converted basis) of the Distribution Assets. |
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(e) |
Notwithstanding
the provisions of sub-articles 8(b) and 8(c) above, the holders of
Ordinary Option Shares shall participate, pari passu with the holders of each
class of Preferred Shares (and pro rata among themselves, based on
the number of Ordinary Option Shares held by any such holder) in the
distribution of any Distribution Assets until such time as the
preference amounts payable with respect to such Preferred Shares are
paid (i.e., the A1 Preference Amount and the Ordinary A/B Preference
Amount), in such manner that the holders of Ordinary Option Shares
shall receive, pari passu with the distribution to the holders of
each class of Preferred Shares of their preference amount and prior
and in preference to any distribution of any of the assets of the
Company to the holders of all other equity securities of the Company,
by reason of their ownership thereof, the lower of (i) an
amount equals to 10% of the aggregate amount distributed to the
holders of the Preferred Shares until such time as their liquidation
preferences are paid pursuant to sub-articles 8(b) and 8(c) above
(i.e., the A1 Preference Amount and the Ordinary A/B Preference
Amount, or (ii) an amount equals to their pro rata portion
holdings (on an as converted basis) of the Distribution Assets (the
“Ordinary Option Preference Amount”);. |
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(i)
if the A1 preference amount is $30,000,000 (Thirty Million US Dollars), the
Ordinary A/B preference amount is $20,000,000 (Twenty Million US Dollars), the
Ordinary Option Shares constitute 12% of the issued and outstanding share
capital of the Company on an as converted basis and there is $75,000,000
(Seventy-Five Million US Dollars) in Distribution Assets, the holders of Series
A1 Preferred Shares will receive $30,000,000 (Thirty Million US Dollars), the
holders of Ordinary A Preferred Shares and the holders of the holders of
Ordinary B Preferred Shares will receive, in the aggregate, $20,000,000 (Twenty
Million US Dollars), the holders of Ordinary Option Shares will receive
$5,000,000 (Five Million US Dollars) and $20,000,000 (Twenty Million US
Dollars) will be distributed among the holders of Preferred Shares and Ordinary
Shares, including the Ordinary Option Shares, in accordance with sub-article
8(d) above. |
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(ii)
if the A1 Preference amount is $30,000,000 (Thirty Million US Dollars), the
Ordinary A/B Preference amount is $20,000,000 (Twenty Million US Dollars), the
Ordinary Option Shares constitute 12% of the issued and outstanding share
capital of the Company on an as converted basis and there is $25,000,000
(Twenty-Five Million US Dollars) in Distribution Assets, the holders of Series
A1 Preferred Shares will receive $22,500,000 (Twenty-Two Million, Five Hundred
Thousand US Dollars), the holders of Ordinary Option Shares will receive
$2,500,000 (Two Million Five Hundred Thousand US Dollars) and the holders of
Ordinary A Preferred Shares and the holders of Ordinary B Preferred Shares will
receive nothing). |
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Notwithstanding
the foregoing, it is hereby clarified that this Sub-Article 8(e) shall not apply in the
event of a distribution of Distribution Assets resulting from an acquisition of the
Company by, or a merger of the Company with or into, a SPAC (as defined hereinafter),
even if such acquisition or merger shall be deemed a “Merger”, an “Acquisition” and/or
a “Liquidation Event”, as such terms are defined under Sub-Article 8(a) above.
A “SPAC”, for the purpose of this Article, means a Special Purpose Acquisition
Corporation, meaninga public company, having no substantial operations at the time
of the acquisition or merger, which went public with the intention of merging with or
acquiring a company with the proceeds resulting from its public offering. |
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(f) |
In
the event of a Merger or an Acquisition in which the shareholders (and not
the Company) are the intended recipients of the proceeds resulting
therefrom (such as with a sale of shares transaction), no transfer of
securities in accordance thereto will be considered valid and the
Company will not register or otherwise give effect to such transfer,
unless the provisions of the distribution preferences under this
Article 8 shall apply. |
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(g) |
Whenever
the Distribution Assets are in securities or property other than cash,
the value of such assets shall be the fair market value of such
securities or other property as shall be determined by the Board, or
by the liquidator in case of winding up. Such proceeds shall be made
payable in US dollars unless any holder of fully paid share elects to
receive such distributions in NIS. The NIS equivalent of the dollar
value of any distribution shall be determined in accordance with the
Representative Rate last published by the Bank of Israel prior to the
date of the making of the distribution. |
| 9. |
CONVERSION
OF PREFERRED SHARES |
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The
holders of the Preferred Shares shall have conversion rights as follows (the
“Conversion Rights”): |
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(1) |
Subject
to Article 9(c), each fully paid Preferred Share shall be convertible, at the
option of the holder thereof, at any time after the date of issuance of such
Preferred Share at the Office or any transfer agent for the Preferred Shares,
into one fully paid and non-assessable Ordinary Share nominal value NIS 1 and
the Company shall, at such time, issue to the holders thereof, for no
additional charge (a portion of the premium paid for such Preferred Shares
being attributed as payment on account of the nominal value of such additional
Ordinary Shares – in the event that the then applicable law requires that
shares are issued for no less than their nominal value and to the extent no
other source available pursuant to the provisions of the then applicable law
may be used for such purpose), such number of fully-paid and non-assessable
Ordinary Shares as required so that the total number of Ordinary Shares so
issued (i.e. including the Ordinary Share into which the Preferred Share was
converted) will be equal to the number determined by dividing the Original
Issue Price applicable to such Preferred Share by the Conversion Price (as
defined below) at the time in effect for such share. In the event that the then
applicable law requires that shares are issued for not less than their nominal
value, and the aggregate nominal value of all such Ordinary Shares shall exceed
the consideration paid to the Company with respect to such Preferred Share, the
holder thereof shall pay the Company such excess nominal value to the extent no
other source available pursuant to the provisions of the then applicable law
(such as premiums paid for other shares of the Company) may be used for such
purpose. The initial Conversion Price per each Preferred Share shall be its
Original Issue Price, provided, however, that the Conversion Price for the
Series A1 Preferred Shares shall be subject to adjustment as set forth in
subarticles 9(c), 9(d) and 9(e) and the Conversion Price for the Ordinary
Preferred A Shares and Ordinary Preferred B Shares shall be subject to
adjustment as set forth in subarticles 9(d) and 9(e). |
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(2) |
All
Preferred Shares shall automatically be converted into Ordinary Shares at the
Conversion Price at the time in effect for such Preferred Shares upon the
earlier of: (A) a Qualified IPO, or (B) the written consent of the Majority
Preferred Shareholders. |
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(b) |
Mechanics
of Conversion. |
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(1) |
Before
any holder of Preferred Shares shall be entitled to convert the same into
Ordinary Shares such holder shall surrender the certificate or certificates
therefor at the Office and shall give written notice to the Company of the
election to convert the same (or any part thereof) and shall state therein the
name or names of any nominee for such holder in which the certificate or
certificates for shares of Ordinary Shares are to be issued. The Company shall,
as soon as practicable thereafter unless such notice states that conversion is
to be effective on any later date or when any conditions specified in the
notice have been fulfilled in which case conversion shall take effect on such
other date or when such conditions have been fulfilled, issue and deliver at
such office to such holder of Preferred Shares, or subject to the transfer
restrictions contained in these Articles to the nominee or nominees of such
holder, a certificate or certificates for the number of shares of Ordinary
Shares to which such holder shall be entitled as aforesaid. Such conversion
shall be deemed to have been made immediately prior to the close of business on
the date of such surrender of the shares of Preferred Shares to be converted,
or on any later date or when any conditions specified in the notice have been
fulfilled and the person or persons entitled to receive the Ordinary Shares
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such Ordinary Shares as of such date. If the conversion is
in connection with a QIPO, the conversion may, at the option of any holder
tendering Preferred Shares for conversion, be conditioned upon the closing with
the underwriter of the sale of securities pursuant to such offering, in which
event the person(s) entitled to receive the Ordinary Shares issuable upon such
conversion of the Preferred Shares shall not be deemed to have converted such
Preferred Shares until immediately prior to the closing of such sale of
securities. In the event that the certificate(s) representing the Preferred
Shares to be converted as aforesaid are not delivered to the Company, then the
Company shall not be obligated to issue any certificate(s) representing the
Ordinary Shares issued upon such conversion, unless the holder of such
Preferred Shares notifies the Company in writing that such certificate(s) have
been lost, stolen or destroyed and executes an agreement satisfactory to the
Company to indemnify the Company from any loss incurred by it in connection
with such certificates. |
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(2) |
A
conversion of Preferred Shares pursuant to one of the events described in
Article 9(a)(2) shall be deemed to have taken place automatically regardless of
whether the certificates representing such shares have been tendered to the
Company but from and after such conversion any such certificates not tendered
to the Company shall be deemed to evidence solely the Ordinary Shares received
upon such conversion and the right to receive a certificate for such Ordinary
Shares. |
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(c) |
Conversion
Price Adjustments of Preferred Shares |
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Until
the QIPO, the applicable Conversion Price of the Series A1 Preferred Shares shall be
subject to adjustment from time to time as follows: |
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(1) |
Upon
each issuance by the Company of any “Additional Securities” (as
defined below), without consideration or for a price per share less than
the applicable Conversion Price for any issued and outstanding Series A1
Preferred Shares, in effect immediately prior to the issuance of such
Additional Securities, the applicable Conversion Price for any such issued
and outstanding Series A1 Preferred Shares in effect immediately prior to
each such issuance shall be adjusted to a price (calculated to the nearest
cent ($0.01)) determined by dividing (1) the sum of (A) the total number
of Ordinary Shares issued and outstanding prior to the issuance of such
Additional Securities multiplied by the applicable Conversion Price of the
Series A1 Preferred Shares in effect prior to the issuance of such
Additional Securities, plus (B) the total amount of the consideration
received by the Company for such Additional Securities by (2) the sum of
the total number of Ordinary Shares issued and outstanding immediately
prior to the issuance of such Additional Securities plus the number of
such Additional Securities issued. For the purpose of the above calculation,
the number of shares of Ordinary Shares issued and outstanding immediately
prior to such issue shall be calculated on an as converted and fully
diluted basis, as if all outstanding warrants, options or other rights for
the purchase of shares or convertible securities had been fully exercised
(and the resulting securities fully converted into Ordinary Shares, if so
convertible) as of such date, but excluding the warrants to purchase
Series AA Preferred Shares outstanding prior to the execution of the 2007
Investment Agreement, unless cancelled). |
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(2) |
(A) |
No adjustments of any applicable Conversion Price shall be made in an amount
less than one US cent ($0.01). No adjustment of any applicable Conversion
Price pursuant to subarticle 9(c)(1) shall be made if it has the effect of
increasing the applicable Conversion Price above the applicable Conversion
Price in effect immediately prior to such adjustment. |
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(B) |
In
the case of the issuance of Additional Securities (as defined below) for cash,
the consideration, for the purpose of subarticles 9(c)(1) shall be deemed to be
the amount of cash received therefore before any payment of commissions,
expenses and the like. |
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(C) |
In
the case of the issuance of Additional Securities (defined below) for a
consideration, in whole or in part other than cash, the consideration other
than cash shall, for the purpose of subarticle 9(c)(1) be deemed to be the fair
value thereof as determined, in good faith, by the Board of Directors. |
- 10 -
| |
(D) |
In
the case of the issuance of options to purchase or rights to subscribe for
Ordinary Shares, or securities by their terms convertible into or exchangeable
for Ordinary Shares or options to purchase or rights to subscribe for such
convertible or exchangeable securities, the aggregate maximum number of
Ordinary Shares deliverable upon exercise (assuming the satisfaction of any
conditions to exercise, including without limitation, the passing of time, but
without taking into account potential anti-dilution adjustments) of such
options to purchase or rights to subscribe for Ordinary Shares or upon
conversion or an exchange of such convertible or exchangeable security shall be
deemed to have been issued at the time of the issuance of such options, rights,
or securities at a consideration equal to the consideration (determined in the
manner provided in subarticle 9(c)(2)(B) and 9(c)(2)(C)), if any, received by
the Company upon the issuance of such options or rights or securities plus any
additional consideration payable to the Company pursuant to the term of such
options or rights or securities (without taking into account potential
anti-dilution adjustments) for the Ordinary Shares covered thereby, and the
applicable Conversion Price shall be adjusted accordingly. Upon the expiration
of any such options or rights, the termination of any such rights to convert or
exchange or the expiration of any options or rights related to such convertible
or exchangeable securities, the applicable Conversion Price to the extent in
any way affected by or computed using such options, rights or securities or
options or rights related to such securities (unless such options or rights
were merely to be included in the numerator and denominator for purposes of
determining the number of Ordinary Shares outstanding for purposes of Article
9(c)(1)) shall be recomputed to reflect the issuance of only the number
Ordinary Shares (and convertible or exchangeable securities that remain in
effect) actually issued upon the exercise of such options or rights, or upon
the conversion or exchange of such securities or upon the exercise of the
options or rights related to such securities. The number of Ordinary Shares
deemed issued and the consideration deemed paid therefor shall be appropriately
adjusted to reflect any change, termination or expiration of the type described
in this Article 9(c)(2)(D). |
| |
(E) |
For
purpose of subarticle 9(c)(1) hereof, the consideration for any Additional
Securities shall be taken into account at the U.S. dollar equivalent thereof,
on the day such Additional Securities are issued or deemed to be issued
pursuant to subarticle 9(c)(2)(D). |
| |
(3) |
“Additional
Securities” shall mean any Ordinary Shares, options to purchase or rights
to subscribe for Ordinary Shares, or securities which by their terms are
convertible into or exchangeable for Ordinary Shares, or any securities
convertible into or exercisable for any securities of the foregoing.
Notwithstanding the foregoing, “Additional Securities” does
not include: |
| |
(A) |
Securities
issued pursuant to a transaction described in subarticles 9(d) or 9(e)
hereof; |
| |
(B) |
The
issuance, pursuant to the approval of the Board, of Ordinary Shares or
Options to purchase Ordinary Shares to employees, directors and bona-fide
consultants; |
| |
(C) |
Securities
issued pursuant to options, warrants or other rights outstanding prior to
the issuance of the Series A1 Preferred Shares; |
| |
(D) |
Ordinary
Shares issued upon conversion of Preferred Shares; |
| |
(E) |
Issuance
of Bonus Shares, providing such Bonus Shares are issued to all the then
existing shareholders, or shares issued pursuant to a rights offering in
which all such shares are offered exclusively to existing shareholders; |
- 11 -
| |
(F) |
Shares
issued in the acquisition of another company provided that the issuance of
such shares is approved by the Board of Directors; |
| |
(G) |
Shares
issued in connection with equipment leases, bank loans or secured debt
financings approved by the Board of Directors provided the number of such
shares issued shall not exceed, in the aggregate, together with all
previous issuances made pursuant to this paragraph, 1% of the then issued
and outstanding share capital of the Company on a fully diluted, as
converted basis; |
| |
(H) |
Securities
issued or issuable following written approval of Majority Preferred
Shareholders in which they agree to waive their anti-dilution or
pre-emptive rights (as the case may be) with respect to such specific
issuance; and |
| |
(I) |
Securities
issued as a charitable donation pursuant to Article 3A. |
| |
Subject
to the liquidation preference of the Preferred Shares as set forth in Article 8
above, in the event the Company shall declare a distribution payable in securities of
other persons, evidences of indebtedness issued by the Company or other persons, assets
(excluding cash dividends) or options or rights not referred to in subarticle 9(c)(3) or
if the Company at any time shall pay a dividend payable in additional Ordinary Shares or
other securities or rights convertible into, or entitling the holder thereof to receive
directly or indirectly, additional Ordinary Shares then, in each such case for the
purpose of this subarticle 9(d), the holders of the Preferred Shares shall be entitled to
receive such distribution, in respect of their holdings on an as-converted basis as of
the record date for such distribution. |
| |
Subject
to the liquidation preference of the Preferred Shares as set forth in Article 8
above, if the Company at any time shall make a distribution of its assets to the holders
of its Ordinary Shares as a dividend in liquidation or partial liquidation or by way of
return of capital or other than as a dividend payable out of earnings or surplus legally
available for dividends, each holder of Preferred Shares shall be entitled to receive
without payment of any additional consideration, a sum equal to the amount of such assets
as would have been payable to such holder as owner of that number of Ordinary Shares
receivable by exercise of the conversion rights had such holder been the holder of record
of such Ordinary Shares on the record date for such distribution; and an appropriate
provision therefor shall be made a part of any such distribution. |
| |
If
at any time or from time to time there shall be a Recapitalization Event (other than a
subdivision, combination or merger or sale of assets transaction provided for elsewhere
in this Article 9 or Article 8) provisions shall be made so that the holders of
the Preferred Shares shall thereafter be entitled to receive upon conversion of the
Preferred Shares the number of Ordinary Shares or other securities or property of the
Company or otherwise, to which a holder of Ordinary Shares deliverable upon conversion
would have been entitled immediately prior to such Recapitalization Event. In any such
case, appropriate adjustment shall be made in the application of the provisions of this
Article 9 with respect to the rights of the holders of the Preferred Shares after such
Recapitalization Event to the end that the provisions of this Article (including
adjustment of the Conversion Price then in effect and the number of shares issuable upon
conversion of the Preferred Shares) shall be applicable after that event in a manner as
nearly equivalent as may be practicable. |
- 12 -
| |
If
the Company shall subdivide or combine its Ordinary Shares, the applicable Conversion
Price shall be proportionately reduced, in case of subdivision of shares, as at the
effective date of such subdivision, or if the Company shall fix a record date for the
purpose of so subdividing, as at such record date, whichever is earlier, or shall be
proportionately increased, in the case of combination of shares, as at the effective date
of such combination, or, if the Company shall fix a record date for the purpose of so
combining, as at such record date, whichever is earlier. |
| |
The
Company will not, by amendment of these Articles or through any reorganization,
recapitalization, transfer of assets, consideration, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or
performance of the Conversion Rights of the holders of Preferred Shares, but will at all
times in good faith assist in the carrying out of all the provisions of this Article 9
and in the taking of all such action as may be necessary or appropriate in order to
protect the Conversion Rights of the holders of the Preferred Shares against impairment. |
| |
(g) |
No
Fractional Shares and Certificate as to Adjustments |
| |
(1) |
No
fractional shares shall be issued upon conversion of the Preferred Shares, and
the number of Ordinary Shares to be issued shall be rounded to the nearest
whole share. Whether or not fractional shares are issuable upon such conversion
shall be determined on the basis of the total number of Preferred Shares held
by the holder and the number of Ordinary Shares issuable upon such aggregate
conversion. |
| |
(2) |
Upon
the occurrence of each adjustment or readjustment of any applicable Conversion
Price pursuant to this Article 9, the Company, at its expense, shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and prepare and furnish to each holder of Preferred Shares a certificate
setting forth each adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall furnish
or cause to be furnished to such holder a like certificate setting forth (A) such
adjustment and readjustment, (B) the applicable Conversion Price at the
time in effect, and (C) the number of Ordinary Shares and the amount, if
any, of other property which at the time would be received upon the conversion
of a Preferred Share. |
| |
(h) |
Notices
of Record Date |
| |
In
the event of any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled to receive
any dividend (including a cash dividend) or other distribution, any right to subscribe
for, purchase or otherwise acquire any shares of any class or any other securities or
property, or to receive any other right, the Company shall provide to each holder of
Preferred Shares, at least 20 days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right. |
- 13 -
| |
(i) |
Reservation
of Shares Issuable Upon Conversion |
| |
The
Company shall at all times reserve and keep available out of its authorized but unissued
shares of Ordinary Shares solely for the purpose of effecting the conversion of the
Preferred Shares such number of its Ordinary Shares as shall from time to time be
sufficient to effect the conversion of all outstanding Preferred Shares; and if at any
time the number of authorized but unissued Ordinary Shares shall not be sufficient to
effect the conversion of all then outstanding Preferred Shares, in addition to such other
remedies as shall be available to the holder of such Preferred Shares, the Company will
take such corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued Ordinary Shares to such number of shares as shall be
sufficient for such purposes. |
| |
Subject
to Article 58 below, each holder of Ordinary Shares and Preferred Shares shall be entitled
to one (1) vote per Ordinary Share or Ordinary Share into which such Preferred Share is
convertible at the time of voting, whether in a vote by show of hands, secret ballot or
written consent. Each holder of Preferred Shares shall vote together with the Ordinary
Shares as a single class (except as otherwise expressly provided in these Articles or as
required by law) and shall be entitled to notice of any general meeting of shareholders in
accordance with these Articles. Fractional votes shall not be permitted and any fractional
vote resulting from the conversion mechanism described above in these Articles shall be
rounded up or down to the nearest whole number (with one-half (1/2) being rounded upward). |
| 12. |
PROTECTIVE
PROVISIONS |
| |
(d) |
Until
a QIPO, the Company shall not take any of the following actions without
approval of the Majority Preferred Shareholders (which may be
obtained by way of a written consent and shall not require the
convening of a shareholders meeting for such purpose, unless required
by applicable law): |
| |
(1) |
any
amendment to or modification of these Articles and/or the Memorandum of
Association of the Company or any other action which would amend,
change or modify the rights, preferences or privileges of the
Preferred Shares. |
| |
(2) |
declaration
of any Dividend; |
| |
(3) |
the
authorization of any share capital, or other rights or securities
convertible into or exchangeable for share capital, or the conversion
of any existing shares into shares, in each case with rights equal to
or superior to the rights of the Preferred Shares; |
- 14 -
| |
(4) |
any
action or transaction which is outside the business of the Company as
contemplated in the Updated Work Plan of the Company (as defined in
the 2007 Investment Agreement); |
| |
(5) |
any
action which effects a merger, reorganization, liquidation, disposition,
acquisition or sale of the Company or of any subsidiary thereof, or
any transfer of a material asset of the Company or of any subsidiary
thereof, or the creation of or purchase of or into any entity; |
| |
(6) |
any
action which may alter or change the capital structure of the Company or of
any subsidiary thereof, any action which effects a reclassification
or recapitalization of the outstanding capital shares of the Company,
and any increase in the registered share capital of the Company or of
any subsidiary thereof; |
| |
(7) |
the
creation of any guarantee, mortgage, pledge or security interest in a
material asset, or in all or substantially all of the assets of the
Company or a subsidiary; |
| |
(8) |
the
replacement of the independent auditors to the Company, which in any event
shall be one of the “big four”; and |
| |
(9) |
the
incurrence by the Company or by any subsidiary thereof of any indebtedness
that shall exceed the sum of $250,000 (Two Hundred Fifty Thousand US
Dollars), calculated on a cumulative basis in respect of any one
transaction or in respect of a series of connected transactions; |
| |
(e) |
Until
a QIPO, the Company shall not issue any securities of any kind or options
to purchase securities of any kind without the approval of the
majority of the directors appointed by the holders of the Preferred
Shares, provided however that shares issued upon the exercise of
warrants, options, or other rights outstanding prior to the 2007
Investment Agreement or the grant of options (and shares issued upon
exercise of such options) under the Company’s incentive plans,
are not subject to such approval. |
| |
(f) |
Any
amendment or modification of the rights and obligations of Intel set forth
in Article 29(e) (Right of First Refusal), Article 29A (Co-Sale) and
Article 29(B)(b) (Bring Along) and 65(c) (Directors) shall require
the consent of Intel. |
| |
(g) |
The
required consents as set forth in Articles 12(a) – (b) above shall also
apply to any action taken by any wholly owned subsidiary of the
Company. |
| |
Subject
to the provisions of Articles 12 and 14, the authorized but unissued shares shall be
under the control of the Board of Directors, who shall have the power to allot shares or
otherwise dispose of them to such persons, on such terms and conditions (including,
inter-alia, terms relating to calls as set forth in Article 31 hereof), and either at
par or at a premium, or, subject to the provisions of the Companies Law, at a discount,
and at such times, as the Board of Directors may think fit, and the power to give any
person the option to acquire from the Company any shares, either at par or at premium, or
subject as aforesaid, at a discount, during such time and for such consideration as the
Board of Directors may think fit. |
- 15 -
| |
(a) |
Until
a QIPO, the provisions of this Article 14 shall apply: |
| |
(1) |
Any
Additional Securities (as defined in Article 9 above) to be issued by the
Company (the “Offered Securities”) shall first be offered by
the Board of Directors by written notice to each Major Holder (for purposes of
this Article 14, the “Offerees”). The number of Offered
Securities offered to each Offeree shall be the result of the multiplication of
the Offered Securities by a fraction: (i) the numerator of which shall be
the total number of outstanding Ordinary Shares of the Company (on an
as-converted basis) held by such Offeree as determined prior to the offer made
pursuant to this Article 14, and (ii) the denominator of which is the
total number of outstanding Ordinary Shares of the Company (on an as-converted
basis), as determined prior to the offer made pursuant to this Article 14. |
| |
(2) |
The
Company shall provide each Offeree with a Notice (the “Notice of Offer”)
specifying the number of Offered Securities he is entitled to purchase and
which shall state the terms of the proposed issuance, and any such Offeree may
accept such offer, as to all or any part of the Offered Securities so offered
to him, by giving the Company written notice of acceptance within fourteen (14)
days after being served with such Notice of Offer; provided that if the
purchase by such Offeree is being effected prior to, or concurrently with such
issuance of Offered Securities (rather than subsequent thereto) then such
Offeree shall be obligated to consummate the purchase of such Offered
Securities only if the Company consummates the sale of the balance of the
Offered Securities pursuant to the terms described in such Notice of Offer |
| |
(3) |
Any
and all preemption rights set forth in this Article 14, may be exercised by a
Permitted Transferee of a Major Xxxxxx instead of by such Major Holder if such
Major Holder so notifies the Company in writing. |
| |
(b) |
Any
Offered Securities not subscribed for by the Offeree as aforesaid, shall be
under the control of the Board of Directors and may be issued without
regard to this Article 14, except to the extent that said
Offered Securities may not be allotted on terms more favorable to the
purchaser than those offered pursuant to this Article 14. In the
event the Offered Securities are not acquired by the expiration of
120 days from the date of expiration of the [fourteen (14)] day
period referred to in Article 14(a)(2), they may not be issued except
by compliance with the provisions of Article 14. |
| |
(h) |
If
two or more persons are registered as joint holders of a share they shall be
jointly and severally liable for any calls or any other liability
with respect to such share. However, with respect to voting, power of
attorney and furnishing notices, the one registered first in the
register of shareholders, insofar as all the registered joint holders
shall not notify the Company in writing to relate to another one of
them as the sole owner of the share, as aforesaid, shall be deemed to
be the sole owner of the share. |
- 16 -
| |
(i) |
In
the case that two or more persons are registered together as holders of a
share, each one of them shall be permitted to give receipts binding
all the joint holders for dividends or other monies in connection
with the share and the Company shall be permitted to pay all the
dividends or other monies due with respect to the share to one or
more of the joint holders, as it shall choose. |
| |
(j) |
Except
as otherwise provided in these Articles, the Company shall be entitled to
treat the registered holder of any share as the absolute owner
thereof, and, accordingly, shall not, except as ordered by a court of
competent jurisdiction, or as required by statute, be bound to
recognize any equitable or other claim to, or interest in, such
share, on the part of any other person. |
| |
(k) |
A
shareholder shall be entitled to receive from the Company without payment, one
certificate that shall contain that number of shares registered in
the name of such shareholder, their class and serial numbering.
However, in the event of joint holders holding a share, the Company
shall not be obligated to issue more than one certificate to all of
the joint holders, and the delivery of such a certificate to one of
the joint holders shall be deemed to be a delivery to all of the
joint holders. |
| |
(l) |
Each
certificate shall carry the signature or signatures of a director or such
other person(s) appointed by the Board of Directors for this purpose
and the rubber stamp or the seal of the Company. |
| |
(m) |
If
a share certificate is defaced, lost or destroyed, it may be replaced upon
payment of such fee, if any, and on such terms, if any, as to
evidence and indemnity as the Board of Directors may think fit. |
| 17. |
MODIFICATIONS
OF SHARE RIGHTS |
| |
If
at any time the share capital is divided into different classes of shares (unless
otherwise provided for by the terms of issue of the shares of that class) it shall be
permitted, subject to the provisions of Article 12 above, to change, convert,
broaden, add or vary in any other manner the rights, advantages, restrictions and
provisions attached at that time to one or more of the classes by a resolution of the
general meeting of the shareholders of the Company, without the need for any separate
class vote or class meeting. It is hereby clarified that any resolution required to be
adopted pursuant to these Articles by the consent of a separate class of shares, whether
by way of a separate general meeting of such class or by way of written consent, shall be
given by the holders of shares of such class entitled to vote or give consent thereon and
no holder of shares of a certain class shall be banned from voting or consenting by virtue
of being a holder of more than one class of shares of the Company, irrespective of any
conflicting interests that may exist between such different classes of shares. A
shareholder shall not be required to refrain from participating in the discussion, voting
and/or consenting on any resolution concerning an amendment to any class of shares held by
such shareholder, due to the fact that such shareholder may benefit in one way or another
from the outcome of such resolution. |
- 17 -
| |
Without
derogating from the need to receive any consents or approvals required pursuant to Article
12, it is hereby clarified and agreed that the enlargement of an existing class of shares,
or the issuance or allotment of additional shares thereof, or the creation of additional
shares of that class as a result of conversion of shares from another class or unification
with another class, shall not be deemed, for purposes of these Articles, to amend, change,
vary, modify or abrogate the rights attached to the previously issued shares of such class
or of any other class. |
PLEDGE
| 18. |
The
Company shall have a lien and first pledge on all the shares, not fully paid,
registered in the name of any shareholder (whether registered in his name
only or together with another or others) and on the proceeds from the sale
thereof, for any amount still outstanding with respect to that share,
whether presently payable or not. Such a pledge shall exist whether the
dates of payment or fulfillment or execution of the obligations, debts or
commitments have become due or not, and shall apply to all dividends that
shall be decided upon from time to time in connection with these shares. No
benefit shall be created with respect to this share based upon the rules of
equity which shall frustrate this pledge, however the Board may declare at
any time with respect to any share, that it is released, wholly or in part,
temporarily or permanently, from the provisions of this article. |
| 19. |
The
Company may sell, in such manner and at such time as the Board thinks fit, any of
the pledged shares, but no sale shall be made unless the date of payment of
the monies or a part thereof has arrived, or the date of fulfillment and
performance of the obligations and commitments in consideration of which
the pledge exists has arrived, and after a written request has been
furnished to the shareholder or person who has acquired a right in the
shares, which sets out the amount or obligation or commitment due from him and
which demands their payment, fulfillment or execution, and which informs the
person of the Board's desire to sell the shares in the event of
non-fulfillment of the notice, and the person has not fulfilled his
obligation pursuant to the notice within seven days after the notice has been
sent to him. |
| 20. |
The
net proceeds of such sale after payment of the costs thereof, shall be applied
in payment of such sum due to the Company or to the fulfillment of the
obligation or commitment (including debts, liabilities and engagements which
have not yet fallen due for payment or satisfaction), and the remainder (if
there shall be any) shall be paid to the shareholder or to the person who has
acquired a right in the share sold pursuant to the above. |
| 21. |
After
execution of a sale as aforesaid, the Board shall be permitted to sign or to appoint
someone to sign a deed of transfer of the sold shares and to register the
buyer's name in the register of shareholders as the owner of the sold
shares and it shall not be the obligation of the buyer to supervise the
application of monies nor will his right in the shares be affected by a
defect or illegality in the sale proceedings after his name has been
registered in the register of shareholders with respect to those shares. The
sole remedy of any person aggrieved by the sale shall be in damages
only and against the Company exclusively. |
TRANSFER OF SHARES AND
THE MANAGEMENT THEREOF
| 22. |
Each
transfer of shares shall be made in writing in the form appearing herein below, or in a
similar form, or in any form as to be determined upon by the Board from time
to time, such form shall be delivered to the Office together with the
transferred share certificates and any other proof the Board shall require,
if it shall so require, in order to prove the title of the transferor. The
instruments and documents notifying the Company with respect to the transfer
are a prerequisite to the effectuation of such transfer. Notwithstanding the above,
any transfer of shares to any person or entity that is not at the time
of transfer a shareholder of the Company and that competes with the Company,
directly or indirectly, in the field of optical inspection or metrology
for semiconductors or the transfer of shares which have not been fully paid
up will require the consent and approval of the Board of Directors, except
if such transfer is to a Permitted Transferee. |
- 18 -
Deed of Transfer of
Shares
I, ____________ of _____________ in
consideration of the sum of NIS ________ (New Israeli Shekels) paid to me by
______________, of ____________ (hereinafter called “the said transferee”) do
hereby transfer to the said transferee ___________ share (or shares) having par value of
NIS ________ each one numbered ____ until ____ inclusive in Negevtech Ltd., to hold
unto the said transferee, his executors, administrators, and assigns, subject to the
conditions on which I held the same at the time of the execution hereof; and I, the said
transferee, do hereby agree to accept the said share (or shares) subject to the conditions
aforesaid. As witness we have hereunder set out hands the ______ day of _________ 20__.
|
|
|
|
|
|
|
|
|
|
| ______________________ |
______________________ |
| Transferee |
Transferor |
| |
| ______________________ |
______________________ |
| Address |
Address |
| 23. |
The
deed of share transfer shall be executed both by the transferor and
transferee, and the transferor shall be deemed to remain a holder of
the share until the name of the transferee is entered into the
register of shareholders in respect thereof. |
| 24. |
The
Company shall be permitted to demand a fee for registration of transfer, in
a reasonable rate as to be determined by the Board from time to time,
with the exception of transfers to Permitted Transferees. |
| 26. |
Upon
the death of a shareholder, the remaining holders (in the event that the
deceased was a joint holder in a share) or the administrators or
executors or heirs of the deceased (in the event the deceased was the
sole holder of the share or was the only one of the joint holders of
the share to remain alive) shall be recognized by the Company as the
sole holders of any title to the shares of the deceased. However,
nothing aforesaid shall release the estate of a joint holder of a
share from any obligation with respect to the share that he held
jointly with any other holder. |
| 27. |
Any
person becoming entitled to a share in consequence of the death or
bankruptcy or liquidation of a shareholder shall, upon such evidence
being produced as may from time to time be required by the Board,
have the right, either to be registered as a shareholder in respect
of the share upon the consent of the Board or, instead of being
registered himself, to transfer such share to another person, subject
to the provisions contained in these Articles with respect to
transfers. |
- 19 -
| 28. |
A
person becoming entitled to a share because of the death of a shareholder
shall be entitled to receive, and to give receipts for, dividends or
other payments paid with respect to the share, but he shall not be
entitled to receive notices with respect to Company meetings or to
participate or vote therein with respect to that share, or aside from
the aforesaid, to use any right of a shareholder, until he has been
accepted as a shareholder with respect to that share. |
| 29. |
RIGHT
OF FIRST REFUSAL |
| |
(n) |
Until
a QIPO, a shareholder of the Company shall not be permitted to make any
Transfer (as hereinafter defined) of his shares in the Company, other
than to a Permitted Transferee, except pursuant to the following
provisions set forth below. |
| |
For
the purposes of this Agreement, the term “Transfer” shall mean any sale,
assignment, transfer, hypothecation or other encumbrance or disposition of in any way. |
| |
(o) |
A
shareholder, desirous of making any Transfer of the shares held by him to
others, in whole or in part (hereinafter the “Transferor”)
shall be obligated to offer them first to the Offerees (as defined in
Article 14 above), by giving notice in writing to the Company
and the Company shall forward such notice to such Offerees within 3
(three) business days following receipt of such notice (hereinafter
“Sale Notice”). |
| |
(p) |
In
the Sale Notice the Transferor shall mention the number of shares he wishes
to Transfer (hereinafter the “Offered Shares”), the
price forming the consideration for the Offered Shares, the name of
the transferee (the “Transferee”) and the other
conditions of the sales. |
| |
(q) |
The
Sale Notice shall be irrevocable unless all of the Offerees agree otherwise. |
| |
(r) |
Each
of the Offerees may inform the Transferor and the Company in writing within
21 Business Days from the date of receipt of the Sale Notice as to
his/her intention to purchase that number of Offered Shares, in whole
or in part, which is the result of the multiplication of the Offered
Shares by a fraction: (i) the numerator of which is the number
of Ordinary Shares (on an as-converted basis) of the Company held by
such Offeree and (ii) the denominator of which is the total
number of outstanding Ordinary Shares (on an as-converted basis) held
by all Offerees (hereinafter the “Offerees’ Offered
Shares”), the purchase of which shall be at the purchase
price and in accordance with the payment conditions as provided for
in the Sale Notice (hereinafter the “Purchase Notice”).
An Offeree who has submitted a Purchase Notice shall be referred to
hereinafter as “Buyer”. Notwithstanding the
foregoing, Intel (to the extent it is a Major Holder) shall be
required to provide the Transferor with a Purchase Notice within 10
days of receipt of the Sale Notice and, in the event Intel is the
Transferor, the Offerees will be required to provide Intel with a
Purchase Notice within 10 days of receipt of the Sale Notice. |
| |
(s) |
Thereafter,
the Company shall give each Buyer who has fully exercised his rights
pursuant to Article 29(e) a written notice, with a copy to the
Transferor (the “Excess Notice”) stating the amount
of Offered Shares with respect to which no Purchase Notice was
submitted (hereinafter referred to as “Excess Offered Shares”)
and each such Buyer shall be entitled, subject to Article 29(j)
below, provided he so notifies the Transferor and the Company in
writing (the “Excess Reply Notice”), such Excess
Reply Notice to be received by the Transferor within 7 Business Days
following the delivery to such Buyer of the Excess Notice, to
purchase any or all of such Excess Offered Shares. |
- 20 -
| |
(t) |
If
by the end of the time referred to in Articles 29(e) and 29(f) above no
Purchase Notices have been received by the Company or the Company has
received Purchase Notices with respect to a total number of shares
that is less than the number of Offered Shares, the Transferor may,
within 30 days from the expiration of the time for submission of the
Purchase Notices or, in the event that Article 29(f) applies, the
Excess Reply Notice, sell all (but not less than all) of the Offered
Shares to the Transferee and/or to any Buyer that submitted a Purchase
Notice and, if applicable, an Excess Notice, up to the number of
shares requested to be purchased by such Buyer (though he shall be
under no obligation to do so) at a price not less than the price
mentioned in the Sale Notice (as linked to the representative rate of
the U.S. dollar from the day of the furnishing of the notice to the
date of sale in fact) and upon all other conditions not less
favorable to the Transferor than those provided for in the Sales
Notice. |
| |
(u) |
If
the Transferor shall not transfer the Offered Shares as aforesaid, within the
period of time specified in Articles 29(e), (f) and (g) above,
he shall be obligated, before selling the Offered Shares to another,
to offer them again to the Offerees in accordance with the
aforementioned procedure, and such procedure shall apply to any
further offer. |
| |
(v) |
If
there have been received Purchase Notices and, if applicable, Excess Reply
Notices, for a total number of shares equal to the number of Offered
Shares, then every Buyer shall buy the number of shares as mentioned
in the Purchase Notice and, if applicable, the Excess Reply Notices,
he has submitted. |
| |
(w) |
If
Purchase Notices and Excess Reply Notices shall have been received for a
total number of shares greater than the number of Offered Shares, the
Buyers may acquire shares in a manner proportionate to the share
capital of the Company held by them at that time, as determined in
accordance with Article 29(e) above. However, no Buyer shall be
required to buy a greater number of shares than the number provided
for in the Purchase Notice and, if applicable, the Excess Reply
Notice, submitted by him and upon the allocation to him of the full
number of Offered Shares so requested by him in the Purchase Notice,
such Buyer shall be disregarded for the purpose of any further
allocation of the remaining Excess Offered Shares. |
| |
(x) |
In
every one of the events referred to in Articles 29(e), 29(f), 29(g),
29(h), 29(j) and 29(i) the Company shall send within five (5) days
after the last date for the submission of each of the Purchase
Notices and the Excess Reply Notices to each of the Buyers (with a
copy to the Transferor), a notice accompanied by the copies of all
Purchase Notices received by the Company of either non-acceptance of
the offer pursuant to the Sale Notice or the acceptance thereof
(hereinafter the “Acquisition Notice”). |
| |
(y) |
After
receipt of the Acquisition Notice notifying acceptance, each Buyer shall
purchase from the Transferor, and the Transferor shall sell and
transfer to such Buyer the number of shares referred to in such
notice according to the terms of the Sale Notice (other than in
circumstances set forth in Article 29(g) above, in which case
the provisions of said Article 29(g) will apply). Upon the
transfer to Buyer such shares must be free and clear of any liens or
encumbrances unless otherwise specified in the Sale Notice. The
Transferor and such Buyer shall each have all remedies for breach of
contract available under applicable laws in connection with the
transactions set forth in this Article 29. |
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| |
(z) |
Any
Transfer of shares by any Offeree pursuant to the exercise of its co-sale
rights under Article 29A shall not give the other Offerees additional
rights of first refusal and shall be deemed to have been part of the
Offered Shares and included in the Sale Notice to the extent that the
number of the shares being Transferred has not changed as a result of
the exercise of co-sale rights. To the extent such number has
changed, the provisions hereof shall apply to the transaction again,
ab initio, and the Transferor shall give a new Sale Notice hereunder. |
| |
(a) |
Should
any holder of Preferred Shares (other than Intel) (“Selling Shareholder”)
wish to make a Transfer, other than to a Permitted Transferee, then each of the
holders of Preferred Shares other than Intel (the “Entitled Shareholders”)
shall have the right to participate in the Selling Shareholder’s Transfer
of such Offered Shares, in accordance with this Article 29A, pursuant to
the specified terms and conditions stated in the Sale Notice, provided that an
Entitled Shareholder who is also an Offeree for purposes of Article 29 above
shall be entitled to elect whether to exercise its rights under either Article
29 or Article 29A and shall not be entitled to contingently exercise its rights
under both such articles. Each of the Entitled Shareholders shall be entitled,
upon written notice to the Company and the Selling Shareholder within
twenty-one (21) Business Days after receipt of the Sales Notice (“Participating
Preferred Shareholders”), to sell to the Transferee up to that number
of the Shares in the Company owned by such Participating Preferred Shareholder
(the “Equity Shares”) determined by multiplying the total
number of Offered Shares times a fraction the numerator of which is the number
of Ordinary Shares owned by such Participating Preferred Shareholders (on an
as-converted basis) and the denominator of which is the total number of
Ordinary Shares owned by all Participating Preferred Shareholders (on an
as-converted basis) and the Selling Shareholder. Such written notice shall
indicate, subject to the terms of this Article 29A, the number of Shares that
the Participating Preferred Shareholder intends to transfer to the Transferee.
At the closing of the sale of the Offered Shares to the Transferee, the Selling
Shareholder shall transfer his shares to the Transferee only if the Transferee
concurrently therewith purchases, on the same terms and conditions specified in
the Article 29A Notice, all of the Shares as to which participation notices
have been delivered. |
| |
(b) |
Notwithstanding
the provisions of Article 29A(a), no Transfer in one transaction or in a
series of related transactions, of shares representing more than 50% of
the issued and outstanding shares of the Company (on an as converted
basis) may be made, other than to a Permitted Transferee, unless the
proposed Transferee of such shares offers to purchase the remaining issued
and outstanding shares of the Company upon the same terms and conditions.
In such event, the consideration payable by the Transferee shall be
distributed among all selling shareholders participating in such Transfer
in accordance with the terms of Article 8. |
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| |
(a) |
At
any time prior to a QIPO, in the event that: |
| |
Shareholders
holding 60% (sixty percent) or more (the “Threshold Percent”) of the
Company’s issued and outstanding shares, on an as converted basis (the “Proposing
Shareholders”) accept an offer to affect a Merger or Acquisition (the
“Offer”); and |
| |
Such
Merger or Acquisition is conditioned upon the consent and/or sale of all of the remaining
issued shares of the Company; then all remaining shareholders (the “Non Proposing
Shareholders”) will be required, if so demanded by the Proposing Shareholders,
to vote in favor of, execute the relevant documents, and otherwise take all necessary and
reasonable actions relating to such Offer, including to sell their shares upon the same
terms and conditions as in the Offer made to the Proposing Shareholders and the proceeds
shall be allocated in accordance with the provisions of Article 8. In the event that the
Threshold Percent is met, any sale, assignment, transfer, pledge, hypothecation,
mortgage, disposal or encumbrance of the Shares by the Non Proposing Shareholders other
than in connection with the Offer, shall be absolutely prohibited. |
| |
(a)(1) |
Without
derogating from the aforesaid and in addition to it, the majority
required for a forced sale pursuant to Section 341 of the Companies
Law shall be 60% of the issued and outstanding share capital of the
Company, on an as converted basis (with no need for a separate
consent of each class). The distribution of the consideration in such
transaction shall be in accordance with the provisions of Article 8. |
| |
(b) |
Notwithstanding
the foregoing, the obligation of Intel to sell its shares (the “Transaction”)
pursuant to this Article 29B shall be subject to the satisfaction of
each of the following conditions: |
| |
(i) |
Form
of Consideration. Intel shall not be required to accept any
consideration for its shares other than cash or freely tradeable equity
securities (subject to a lock-up period of no more than 90 days following
the issuance of such securities to Intel) which have been admitted to or
listed upon (i) the Official List of the UK Listing Authority or (ii) the
New York or American Stock Exchange or the NASDAQ National Market in the
United States of America or (iii) the Geregelter Markt or (iv) Euronext
Paris S.A. or (v) such other stock exchange as Intel may agree. |
| |
(ii) |
Equal
Consideration. Subject to section (iii) below, upon the consummation
of the Transaction, all of the holders of Preferred Shares will receive
the same form and amount of consideration per Preferred Share,
respectively, taking into account any liquidation preference to which the
holders of Preferred Shares are entitled, and if any holders of Preferred
Shares are given an option as to the form and amount of consideration to
be received, all holders will be given the same option. |
| |
(iii) |
Costs/Expenses.
Intel shall not be required to incur any costs or expenses (without
limitation whether by way of out of pocket expenses or by way of set off)
in connection with the Transaction except its pro rata share of any costs
incurred for the benefit of all of the Company’s shareholders and for
which Intel has agreed in writing to be responsible in advance of such
costs being incurred. For the avoidance of doubt Intel shall be solely
responsible for any costs that it decides to incur including the costs of
its own counsel. |
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| |
(iv) |
Representations,
Warranties and Indemnities. The only representations, warranties or
indemnities that Intel shall be required to make in connection with the
Transaction are representations, warranties and indemnities concerning (i)
legal ownership of the Company’s securities to be sold by Intel (the
“Intel Securities”), and (ii) the corporate authority of
Intel to convey title to the Intel Securities, and the ability to do so
free and clear of liens, encumbrances or adverse claims (the “Intel
Required Obligations”). The Intel Required Obligations
shall be in the same form as those to be given by each of the other
shareholders of the Company and shall be given by Intel on a several (but
not joint) basis only. |
| |
(v) |
Liability.
Intel shall not accept, assume or be deemed to have assumed any joint, or
joint and several, liability with any other shareholder(s), the Company or
any other party, with respect to any representation, warranty, indemnity,
covenant or combination thereof made by such other shareholder(s), the
Company or other party in connection with the Transaction. Intel’s
liability shall in any event be limited to the amount of consideration
actually received by Intel in cleared funds. |
| |
(vi) |
Escrow
and Liability upon Escrow. In the event that consideration for any of
the shares in the Company is to be placed in escrow (the “Escrow Amount”),
such Escrow Amount will not exceed 15% of the total consideration payable
to all shareholders of the Company and that the Escrow Amount, to the
extent that no claim has been made against it and for such amount as might
remain following such claim, will be released to the shareholders at the
latest three (3) months following the end of the acquiring company’s
first accounting period after the consummation of the transfer of Intel’s
shares or eighteen (18) months after the consummation of such transfer
(the later of the two). Intel’s liability shall be limited to its pro
rata share of the Escrow Amount (Intel’s pro rata share to be
calculated on the basis of the consideration due to Intel as a proportion
of the aggregate consideration due to all shareholders in the Company).
For the avoidance of doubt, the Escrow Amount may be used to satisfy
claims arising out of breaches by the Company of representations and
warranties given by the Company in connection with a Transaction, all
subject to the foregoing terms and conditions. |
| |
(vii) |
US
Securities. If the consideration proposed for Intel’s shares is
in the form of securities of an issuer incorporated in the United States,
Intel shall not be obligated to participate in the Transaction unless it
is provided an opinion of counsel to the effect that the sale in
connection with such Transaction is not in violation of the registration
or qualification requirements of federal or applicable state securities
laws in the United States, or, if Intel is not provided with such an
opinion, the Company shall indemnify Intel for any violation. |
| |
(vii) |
Other
Agreements. Intel shall not be required to amend, extend or terminate
any contractual or other relationship with the Company, the acquirer or
their respective affiliates. |
| |
(viii) |
Covenant
Not to Compete. Intel shall not be required to agree to any covenants
including without limitation any covenant not to compete or any covenant
not to solicit any of the customers, employees or suppliers of any party
to the Transaction. |
- 24 -
| |
Furthermore,
notwithstanding the foregoing, the obligation of Orbotech to sell its shares (the “OrbotechTransaction”)
pursuant to this Article 29B shall be subject to the condition that the only
representations, warranties or indemnities that Orbotech shall be required to make in
connection with the Orbotech Transaction are representations, warranties and indemnities
concerning (i) legal ownership of the Company’s securities to be sold by Orbotech
(the “Orbotech Securities”), and (ii) the corporate authority of
Orbotech to convey title to the Orbotech Securities, and the ability to do so free and
clear of liens, encumbrances or adverse claims (the “Orbotech Required Obligations”).
The Orbotech Required Obligations shall be in the same form as those to be given by each
of the other shareholders of the Company and shall be given by Orbotech on a several (but
not joint) basis only. |
| |
Notwithstanding
anything to the contrary in these Articles, any issuance of securities by the Company, and
any sale, transfer, pledge, encumbrance or other disposal of any of the securities of the
Company (by the Company or any shareholder), or any other action (including repurchase of
any shares of the Company by the Company or by any subsidiary thereof), other than any
action in which the provisions of Article 29B (Bring Along) shall apply, which results in
a Strategic Investor (as defined below) whether or not a shareholder of the Company,
holding (together with affiliates, Permitted Transferees, or other parties acting in
concert with it) more than 20% of the voting rights in the Company, is prohibited unless
approved in writing in advance by the Majority Preferred Shareholders (excluding, for the
purposes of such majority, any Strategic Investors and their affiliates and Permitted
Transferees or other parties acting in concert with them) and on terms and conditions
approved by them. Any of the transactions set forth in the forgoing sentence not so
approved shall be null and void and shall not be registered in the Company’s
Shareholders Register. For purpose hereof a “Strategic Investor” shall mean a
corporation or other business entity whose business is related to the Company’s
business and who is likely to have a business or technologic interest in the
Company’s business, as distinguished from an interest for the sole purpose of a
financial investment. |
CALLS
| 30. |
A
shareholder shall not be entitled to receive dividends nor to use any right a
shareholder has, or receive any benefit or entitlement stated in these
Articles (including without limitation, the rights set forth in Articles
7, 8, 11, 12, 14, 29, 29A, 65 and 86 hereof), unless he has paid all the
calls that shall be made from time to time prior to or on the date
appointed for payment thereof, with respect of money unpaid on all of his shares,
whether he is the sole holder or holds the shares together with another
person, in addition to interest and expenses if there shall be any. |
| 31. |
The
Board may, subject to the provisions of these Articles or any agreement with the
applicable shareholders, make calls upon the shareholders from time to time
in respect of any moneys unpaid on their shares, as they shall determine
proper, upon the condition that there shall be given prior notice of
fourteen (14) days on every call and each shareholder shall be obligated to
pay the total amount requested from him, or the installment on account of the
call (if there shall so be) at the times and places to be determined by the Board. |
- 25 -
| 32. |
The
calls for payment shall be deemed to have been requested from the date the Board shall
have decided upon the calls for payment. |
| 33. |
The
joint holders of a share shall be jointly and severally liable to pay the calls for
payment in full and the installment on account, in connection with such calls. |
| 34. |
If
a sum called in respect of a share is not paid the holders of the share or the person
to whom it has been issued shall be liable to pay interest and linkage
differentials upon the amount of the call or the payments on account, as
determined by the Board of Directors commencing from the day appointed for
the payment thereof to the time of actual payment, but the Board shall be at
liberty to waiver payment of that interest, wholly or in part. |
| 35. |
Any
amount that according to the condition of issuance of a share must be paid at the
time of issuance or at a fixed date, whether on account of the sum of the share
or premium, shall be deemed for the purposes of these Articles to be a call
of payment that was made duly and the date of payment shall be the date
appointed for payment. In the event of non-payment of this amount all of
the Articles herein dealing with payment of interest, expenses,
forfeiture, pledge and the like and all the other Articles connected therewith,
shall apply, as if this sum had been duly requested and notice had been given,
as aforesaid. |
| 36. |
The
Board may make arrangements at the time of issue of shares for a difference between the
holders with respect to the amount of calls to be paid and the times of
payment, and the rate of interest. |
| 37. |
The
Board may, if it thinks fit, receive from any shareholder willing to pay in advance all
of the monies or a part thereof that shall be due on account of his shares,
in addition to any amounts or a part thereof that shall be due on account of
his shares, in addition to any amounts that the payment in fact has been
requested and they shall be permitted to pay him interest at the rate the
Board and shareholders shall agree upon, for the amounts paid in advance
as aforesaid, or upon the part thereof which is in excess of the amounts whose
payment was at the time requested on account of his shares in connection
with which the payments have been made in advance, in addition to paying
dividends that will be paid for that part of the share which has been paid
in advance. The Board of Directors may at any time repay any amount so
advanced without premium or penalty by giving such shareholder seven
days' prior notice in writing. Nothing in this Article 37 shall derogate from the
right of the Board of Directors to make any call before or after receipt by
the Company of any such advance. |
FORFEITURE OF SHARES
| 38. |
If
a shareholder fails to pay any call or installment of a call on the day appointed
for payment thereof, the Board may, at any time thereafter during such time
as any part of such call or installment remains unpaid, serve a notice on
him requiring payment of so much of the call or installment as is unpaid,
together with any interest which may have accrued and any expenses that were
incurred as a result of such non-payment. |
| 39. |
The
notice shall name a further day, not earlier than the expiration of seven days from the
date of the notice, on or before which the amount of the call or
installment or a part thereof is to be made together with interest and any
expenses incurred as a result of such non-payment. The notice shall also
state the place the payment is to be made and that in the event of
non-payment, at or before the time appointed, the shares in respect of which
the call was made will be liable to be forfeited. |
- 26 -
| 40. |
If
the requirements of any such notice as aforesaid are not complied with, any share
in respect of which the notice has been given may at any time thereafter,
before the payment required by the notice has been made, be forfeited by
a resolution of the Board to that effect. In such event, the provisions of
Section 181 of the Companies Law shall apply, and the shares so forfeited
shall be "dormant shares" as provided for therein. The forfeiture shall
include those dividends that were declared but not yet distributed, with respect to
the forfeited shares. |
| 41. |
A
share so forfeited shall be deemed to be the property of the Company and can be sold
or otherwise disposed of, on such terms and in such manner as the Board thinks
fit, subject to applicable law. Such shares shall not be deemed, for the
purposes of these Articles, to comprise part of the issued and outstanding
share capital of the Company, and shall be disregarded for the purposes
of calculations based thereon. At any time before a sale or disposition the
forfeiture may be canceled on such terms as the Board thinks fit. |
| 42. |
A
person whose shares have been forfeited shall cease to be a shareholder in respect of
the forfeited shares, but shall notwithstanding remain liable to pay to the
Company all monies which, at the date of forfeiture, were presently payable by
him to the Company in respect of the shares, but his liability shall cease if
and when the Company receives payment in full of all moneys that, at the date
of forfeiture, were presently payable by him to the Company in respect of the
shares (including interest and expenses). |
| 43. |
Without
derogating from Article 30 above, the forfeiture of a share shall cause, at the
time of forfeiture, the cancellation of all rights in the Company or any
claim or demand against it with respect to that share and the other rights and
obligations between the share owner and the Company accompanying the share,
except for those rights and obligations not included in such a cancellation
according to these Articles or that the Companies Law imposes upon former
shareholders. |
| 44. |
The
provisions of these Articles as to forfeiture shall apply in the case of non-payment of
any sum which, by the terms of issue of a share, becomes payable at a fixed
time, whether on account of the nominal value amount of the share, or by way
of premium, as if the same had been payable by virtue of a call duly made and
notified. |
MODIFICATION OF CAPITAL
| 45. |
Subject
to the provisions of Article 12 above and to any applicable law, the
Company may, from time to time, by resolution duly adopted according
to these Articles: |
| |
(a) |
consolidate
and divide all or any of its issued or unissued share capital into
shares of larger nominal value than its existing shares; |
| |
(b) |
cancel
any shares which have not been taken or agreed to be taken by any person; |
| |
(c) |
by
subdivision of its existing shares, or any of them, divide the whole, or any
part, of its share capital into shares of smaller amounts than is
fixed by the Memorandum of Association in a manner that with respect
to the shares created as a result of the division it will be possible
within the resolution of division to grant to one or more shares a
preferable right or advantage with respect to dividend, capital,
voting or otherwise over the remaining share or other similar shares; |
- 27 -
| |
(d) |
reduce
its share capital and any fund reserved for capital redemption in the
manner that it shall deem to be correct. |
INCREASE OF SHARE CAPITAL
| 46. |
Subject
to the provisions of Article 12 above and to any applicable law, the Company shall
be permitted from time to time, by resolution duly adopted according to these
Articles, to increase its share capital - whether or not all its shares have
been issued, or whether the shares issued have been paid in full - by
creation of new shares. This new capital shall be in such an amount, divided
into shares in such amounts and have such preferable or deferred or other
special rights (subject always to the special rights conferred upon an existing
class of share), subject to any condition and restrictions with respect to
dividends, return of capital, voting or otherwise, all as shall be directed
by the general meeting in its resolution sanctioning the increase of the
share capital. |
| 47. |
Subject
to any decision to the contrary in the resolution sanctioning the increase in share
capital, pursuant to these Articles, the new share capital shall be deemed to
be part of the original share capital of the Company and shall be subject
to the same provisions with reference to payment of calls, liens, title,
forfeiture, transfer and otherwise as apply to the original share capital. |
GENERAL MEETINGS
| 48. |
A
general meeting shall be held once in every calendar year at such time, being not
more than fifteen months after the holding of the last preceding general
meeting, and place as may be prescribed by the Board. The abovementioned
general meetings shall be called "Annual General Meetings". All other general
meetings shall be called "Special General Meetings". |
| 49. |
Subject
to the provisions of these Articles the function of the Annual General Meeting
shall be to receive and to deliberate with respect to the profit and loss
statements, the balance sheets, the ordinary reports and accounts of the
Board and auditors; to declare dividends, to appoint auditors and to fix
their salaries. Every other matter shall be deemed to be special and shall
be discussed at a Special General Meeting. |
| 50. |
The
directors or anyone of them may, whenever they think fit, and upon a requisition in
writing as provided for in the Companies Law, convene a Special General
Meeting. Every such requisition shall include the objects for which a
meeting should be convened, shall be signed by the requisitioners and shall
be sent to the registered Office of the Company. If the Board of Directors
does not convene a meeting within 21 days from the date of the submission
of the requisition as aforesaid, the requisitioners may convene by themselves a
meeting. However, the meeting which was so convened shall not be held after
three months have passed since the date of the submission of the requisition. |
NOTICE OF GENERAL MEETINGS
| 51. |
A
prior notice of 14 (fourteen) days at least shall be sufficient for any general
meeting, including any meeting at which it is being proposed to amend the
Memorandum of Association and/or Articles of Association and, accordingly,
prior notice of at least 14 days shall be given with respect to the place,
date and hour of the meeting, and in the event that a special matter shall
be discussed, a general description of the nature of that matter. The notice
shall be given, as herein below provided for, to the shareholders entitled pursuant
to these Articles to vote at the meeting. The notice shall be sufficient for
any meeting of shareholders including a meeting at which it is proposed
to amend the Memorandum of Association and/or Articles of Association.
If, by chance, a notice as aforesaid was not given or not received by a
shareholder, this shall not amount to a disqualification of the resolution
passed or disqualification of the proceedings held at that meeting. With the
consent of all the shareholders who are entitled, at that time, to vote,
it shall be permitted to convene all meetings and to resolve all types of
resolutions, upon a shorter advance notice or without any notice and in such
manner, generally, as such be approved by the shareholders. |
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QUORUM
| 52. |
No
deliberation shall be commenced with respect to any matter at the general or
special meeting unless there shall be present a quorum at the time when the general
meeting proceeds to deliberate. In any meeting a quorum shall be formed when there
are present personally or by proxy not less than two shareholders who hold or
represent together the majority of the voting rights of the issued share capital of
the Company, providing that one of such two shareholders present shall be a holder of
Preferred Share(s) of the Company. |
| 53. |
If
within half an hour from the time appointed for the meeting a quorum is not present,
the meeting, if convened by the Board upon the demand of shareholders or upon
the demand of less than 50% of the directors then in office or directly by
such shareholders or directors, shall be cancelled. Otherwise, if within
half an hour from the time appointed for the meeting a quorum is not
present, the meeting shall stand adjourned to the same day in the next week
at the same place and time, or any other day and/or any other hour and/or any
other place as the Board shall notify the shareholders, and, if at the
second meeting a quorum is not present within half an hour from the time
appointed for the meeting any two shareholders present personally or by
proxy shall be a quorum, and shall be entitled to deliberate and to resolve
in respect of the matters for which the meeting was convened. Shareholders
may participate by means of conference telephone 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. The secretary of the meeting shall confirm
attendance by telephone to the Chairman. |
CHAIRMAN
| 54. |
The
Chairman of the Board of Directors shall preside as chairman at all general
meetings. If there is no Chairman or he is not present within 15 minutes from
the time appointed for the meeting or if he shall refuse to preside at the
meeting, the shareholders present shall elect one of the directors to act as
Chairman, and if only one director is present he shall act as Chairman. If
no directors are present or if they all refuse to preside at the meeting
the shareholders present shall elect one of the shareholders present to preside at
the meeting. The Chairman shall have no special rights or privileges
and no second or casting vote. |
POWER TO ADJOURN
| 55. |
The
Chairman may, with the consent of any meeting at which a quorum is present, and shall
if so directed by the meeting, adjourn the meeting from time to time and
from place to place, as the meeting shall decide. At an adjourned meeting no
matters shall be discussed except for those permissible to be discussed at
that meeting which decided upon the adjournment. |
- 29 -
ADOPTION OF RESOLUTIONS
| 56. |
At
every meeting a resolution put to the vote of the meeting shall be decided upon by
a show of hands, unless before or upon the declaration of the result of the
show of hands a secret ballot in writing be demanded by the Chairman (if he
is entitled to vote) or by any shareholder present, in person or by proxy,
and entitled to vote at the meeting. Except if a secret vote is demanded as
aforesaid, the declaration of the Chairman that the resolution has been
carried or carried unanimously or by a particular majority, or lost, or not carried
by a particular majority, shall be final, and an entry to that effect in the
minute book of the Company, shall be conclusive evidence of the fact without
the necessity of proving the number or proportion of the votes recorded in
favor or against such a resolution. Subject to any provision in this regard in
the Companies Law, or in these Articles, all resolutions of the shareholders
including without limitation with respect to a merger, a change of the
Company's name, modification or alterations of the Company's share capital and
the amendment of the Company's Memorandum of Association in accordance
with such resolution and the amendment or replacement of the Company's
Articles of Association shall be deemed adopted at a General Meeting at
which a quorum is present if approved by a simple majority of the voting
rights of the Company represented personally or by proxy and voting thereon
(excluding abstentions). |
| 57. |
If
a secret ballot is duly demanded, it shall be taken in such manner as the
Chairman directs, whether immediately or after an adjournment or in a
postponed manner or otherwise, and the results of the ballot shall be deemed
to be a resolution of the meeting wherein the secret ballot was demanded.
Those requesting a secret ballot can withdraw their request at any time
before the secret ballot is held. A secret ballot demanded on the election of a
Chairman, or on a question of adjournment shall be taken forthwith. A
secret ballot demanded on any other question shall be taken at such time as
the Chairman of the meeting directs. A demand for a secret ballot shall not
prevent the continuation of the meeting with respect to the transaction of
any other business, except for the manner with respect to which the secret
ballot was demanded. All demands or notices hereunder may be submitted by
facsimile. |
VOTES OF SHAREHOLDERS
| 58. |
Subject
to and without derogating from the right or preference rights or
restrictions existing at that time with respect to a certain class of
shares forming of the capital of the Company, each shareholder
present at a meeting, personally or by proxy, shall be entitled,
whether at a vote by show of hands or by secret ballot, to one vote
for each Ordinary Share held by him calculated, with respect to the
Preferred Shares, on an as-converted basis, provided that no
shareholder shall be permitted to vote any shares at a general
meeting or appoint a proxy to vote therein except if he has paid all
calls for payment prior to or on the day appointed for payment
thereof and all monies due to the Company from him prior to or on the
day appointed for payment thereof with respect to such shares. |
| 59. |
In
the case of joint holders the vote of the senior who tenders a vote, whether
in person or by proxy, shall be accepted to the exclusion of the
votes of the other joint holders; and for the purpose of this article
seniority shall be determined by the order in which the names stand
in the register of shareholders. Joint holders of a share of which
one of them is present at a meeting shall not vote by proxy. The
appointment of a proxy to vote on behalf of a share held by joint
holders shall be executed by the signature of the senior of the joint
holders. |
- 30 -
| |
(a) |
In
every vote a shareholder shall be entitled to vote either personally or by
proxy. A proxy present at a meeting shall also be entitled to request
a secret ballot. A proxy need not be a shareholder of the Company. |
| |
(b) |
A
shareholder of the Company that is a corporation or partnership shall be
entitled by decision of its Board of Directors or by a decision of a
person or other duly authorized body, to appoint a person who it
shall deem fit to be its representative at every meeting of the
Company. The representative, appointed as aforesaid, shall be
entitled to perform on behalf of the corporation he represents all
the powers that the corporation itself may use just as if it was a
person. |
| 61. |
(a) |
A vote pursuant to an instruction appointing a proxy shall be valid
notwithstanding the death of the appointor or the appointor becoming
of unsound mind or the cancellation of the proxy or its expiration in
accordance with any law, or the transfer of the shares with respect
to which the proxy was given, unless a notice in writing was given of
the death, becoming of unsound mind, cancellation or transfer and was
received at the Office before the meeting took place. |
| |
(b) |
A
shareholder is entitled to vote by a separate proxy with respect to each share
held by him provided that each proxy as aforesaid shall have a
separate letter of appointment containing the serial number of the
shares with respect to which the proxy is entitled to vote. If a
specific share is included by the holder in more than one letter of
appointment, that share shall not entitle any of the holders of such
instrument to a vote. |
INSTRUMENT OF APPOINTMENT
| 62. |
A
letter of appointment of a proxy or power of attorney or other certificate (if there
shall be such) pursuant to which the appointee is acting, shall be in writing
and such instrument or a copy thereof shall be deposited in the Office, or in
another place in Israel or abroad - as the Board shall direct from time to
time generally or with respect to a particular case, no later than upon the
commencement of the meeting or adjourned meeting wherein the person
referred to in the instrument is appointed to vote, otherwise that person shall not
be entitled to vote that share. An instrument appointing a proxy and which
is not limited in time or by the occurrence of an event (such as an IPO) shall
not be valid 12 months after the date of its execution. If the appointment
shall be for a limited period or until the occurrence of an event (such as
an IPO), the instrument shall be valid for the period or until the
occurrence of the event contained therein. |
| 63. |
An
instrument appointing a proxy (whether for a specific meeting or otherwise) may be in
the following form or in any other similar form which the circumstances shall
permit: |
“I,______________, of
______________, a shareholder holding shares in ____________ and entitled to _______
votes hereby appoint ________________, of ____________, or in his place ______________,
of _______________, to vote in my name and in my place at the general meeting (annual,
special, adjourned – as the case may be) of the Company to be held on the ____ day
of __________, 2___ and at any adjournment thereof.
In witness whereof, I have hereby
affixed my signature the ___ day of __________, 2___.
Appointor’s Signature
- 31 -
| |
(a) |
The
Board of Directors shall consist of up to eight (8) members who shall be
appointed as follows: |
| |
(1)
each
of Pitango, Star, Genesis, Poalim Ventures and Xxxxxxxxxx shall be entitled to
appoint one (1) director to the Board of Directors of the Company for so long
as it holds Preferred Shares constituting more than 5% of the issued and
outstanding share capital of the Company, on an as converted basis; |
| |
(2)
the
majority of the directors appointed pursuant to Article 65(a)(1) above shall be
entitled to appoint up to three (3) directors, who shall be industry experts
(andmay include the Chief Executive Officer (“CEO”) of the
Company); and |
| |
(b) |
Xxxxxxx
shall be entitled to appoint one (1) observer to the Board for so long
as it holds Preferred Shares constituting more than 5% of the issued
and outstanding share capital of the Company, on as converted basis. |
| |
(c) |
Observers
to the Board of Directors shall be entitled to attend all Board of
Directors meetings and in this capacity, to receive all notices of
meetings and any documentation the Company provides to the Company’s
directors before, during or after such meetings, subject to
restrictions relating to attorney-client privilege or conflict of
interests, and shall be subject (other than an observer appointed by
Intel) (if any) to the same fiduciary duties that apply to members of
the Board of Directors. |
| |
(d) |
The
provisions of this Article 65 shall be in force until a QIPO. |
| 66. |
(a) |
The directors and observers shall be appointed as set forth in Article 65
and may be removed and vacancies filled by those entitled to appoint,
as specified in Article 65. Notice of appointment or removal shall
become effective on the date fixed in the notice of appointment or
removal, or upon delivery thereof to the Company, whichever is later.
For avoidance of doubt, in the event that a seat of the Board of
Directors is vacated, and no one is entitled to replace such vacated
seat, then such vacated seat shall remain vacant and the number of
directors shall be reduced accordingly. |
| |
(b) |
If
the office of any member of the Board of Directors is vacated, the other
members of the Board of Directors may act in every way and manner so
long as their number does not fall below two, at least one of which
was appointed by the holders of the Preferred Shares. If their number
falls below two, or if there are only two directors but none of them
were appointed by the holder of the Preferred Shares, they may act
only in an emergency, for convening General Meetings and for
providing written notice to those shareholders or groups of
shareholders who are entitled to fill the vacancies, of such
vacancies. In the event that within 10 days following mailing of such
written notices the vacancies are not filled, the directors in
office, whatever their number or by whom appointed, may act in every
way and manner. |
- 32 -
| 67. |
Subject
to the provisions of these Articles or to the provisions of an existing contract,
the tenure of office or the director shall automatically be terminated: |
| |
(1) |
if
he becomes bankrupt; |
| |
(2) |
if
he is declared lunatic or becomes of unsound mind; |
| |
(3) |
if
he has resigned by an instrument in writing to the Company; |
| |
(4) |
if
he is removed from office pursuant to Articles 65 and 66 above; |
| |
(6) |
if
he is the CEO, upon termination of his position as CEO (or earlier, if
removed pursuant to Articles 65 and 66 above, as aforesaid); or |
| |
(7) |
if
a company, with its liquidation. |
| |
(a) |
Any
person who is qualified to be appointed as a Director may serve as a
substitute director even if he is a member of the Board of Directors
or a substitute Director, (hereinafter “substitute”). |
| |
(b) |
A
substitute shall have one vote. |
| |
(c) |
A
substitute shall have, subject to the provisions of the instrument by which he
was appointed, all the powers and authorities that the director for
which he is serving as director, has. |
| |
(d) |
The
provision of this Article with respect to the appointment of a director
shall apply with respect to an appointment of a substitute. |
| |
(e) |
The
office of a substitute director shall be automatically vacated if his
appointment is terminated by the director who appointed him in
accordance with these regulations, or upon the occurrence of one of
the events described in Articles (1), (2), (3), (5), (6) or (7) of
Article 67 or, if the office of the member of the Board of
Directors with respect to whom he serves as a substitute shall be
vacated for any reason whatsoever. |
| |
(f) |
The
substitute director has the right to receive notice of convening of a Board
of Directors meeting and may participate or vote at such meeting only
if the director appointing said substitute is absent from said
meeting. |
- 33 -
| 69. |
REMUNERATION
OF DIRECTOR |
| |
Members
of the Board of Directors, not being employees of the Company or professionals providing
special professional services for consideration to its members, shall not receive a salary
from funds of the Company unless the general meeting has so decided and in the amount that
the general meeting shall decide upon. The directors, and their substitutes, shall be
entitled to receive expenses, in an acceptable rate, for travel expenses, board and
lodging that have been expended for or during the performance of their duties as
directors, and including travel expenses to the Board meetings and return. If pursuant to
a decision of the Board, one of the directors shall perform services or tasks aside from
his regular duties as a director, whether as a result of his particular profession or by a
trip or stay abroad or otherwise, the Board may decide to pay him a preferred wage in
addition to his regular salary, and such a wage shall be paid by way of salary,
commission, participation in profits or otherwise and this wage shall be in addition to
his regular salary, if there shall be any, or will be in place thereof, as shall be
decided. |
| |
The
management of the business of the Company shall be vested in the Board of Directors. They
shall be entitled to exercise all the powers and authorities that the Company has and to
perform in its name all the acts that it is entitled to do according to its memorandum of
association and/or Articles and/or the Companies Law except for those which are pursuant
to the Companies Law or the Articles vested in the general meeting of the Company, subject
to any provisions in the Companies Law or in these Articles or the regulations that the
Company shall adopt in its general meeting (insofar as they do not contradict the
Companies Law or these Articles). However any article adopted by the Company in its
general meeting shall not affect the legality of any prior act of the Board that would be
legal and valid, if not for such an article. |
| 71. |
A
director shall not be required to hold qualifying shares. |
CONFLICT OF INTEREST
| 72. |
A
director shall not be prohibited from fulfilling his rights and duties under
these Articles or from entering into contracts with the Company whether
as a seller, buyer or otherwise, and no such contract or arrangement which
shall be made on behalf of the Company or in its name wherein the director is
or will be an interested party, either directly or indirectly, shall be void
provided, however that: |
| |
(g) |
any
transaction between a director and the Company must be approved both by the Board of
Directors and the Audit Committee of the Company, or, if no Audit
Committee has been created, by the General Meeting; |
| |
(h) |
the
interested director may not participate or vote at the Board of Directors at which
approval is sought unless all other directors are interested
directors, but shall be counted toward the quorum necessary for
commencing deliberations at such meeting; and |
| |
(i) |
the
interested director must, in addition to disclosing the substance of his interest in
the transaction for which approval is sought, also disclose any
material facts and documents relating thereto. The provisions of
this article shall apply also to a substitute or alternate director, if
it is appropriate. |
| 73. |
A
director may hold another paid position or function in the Company or in any
other company that the Company is a shareholder of or that it has some other
interest in, together with his position as a director (except an auditor)
upon those conditions with respect to salary and other matters as decided by
the Board. |
- 34 -
| 74. |
FUNCTIONS
OF THE DIRECTORS |
| |
The
Board may meet in order to transact business, to adjourn its meetings or to organize them
otherwise as it shall deem fit and to determine the legal quorum necessary to conduct
business, provided that the quorum for a meeting of the Board of Directors shall consist
of at least a majority of the directors then in office. A director whose presence is
required for purposes of a quorum as aforesaid may by written notice to the Company waive
the requirement for his presence in order to constitute a quorum. If within half an hour
from the time appointed for the meeting a quorum is not present, the meeting shall stand
adjourned to the second business day following the day originally scheduled, and at such
adjourned meeting 4 directors shall constitute a quorum notwithstanding that a director
appointed by any specific shareholder or class of shareholders is not present. |
| |
The
Board may from time to time elect, by a simple majority, a Chairman, and decide the period
of time he shall hold such an office, and he shall preside at the meetings of the Board of
Directors. However, if such a Chairman is not elected or if he is not present at any
meeting, the Board may, by a simple majority, choose one of its members to serve as
Chairman of that meeting. |
| |
The
Chairman shall have no rights or privileges other than those granted to directors and
shall not have a second or casting vote. |
MEETINGS
| 76. |
A
member of the Board of Directors may at any time call a Board of Directors’ meeting,
and the secretary shall be required on the request of such member to convene a
Board of Directors’ meeting. |
| |
(a) |
Any
notice of a Board of Directors’ meeting can be given, in writing, or by
fax or email provided that the notice is given seven (7) days before
the time appointed for the meeting, unless all the members of the
Board of Directors having received a shorter notice, shall agree to
such a shorter notice, provided, however, that a four (4) days notice
will be sufficient if the majority of the directors then in office
agree to such shorter notice. |
| |
(b) |
Unless
otherwise provided by these Articles, all acts and determinations of the
Board of Directors shall be determined by a simple majority of those
attending and voting. |
| |
(c) |
Members
of the Board of Directors, or any committee designated by the Board of
Directors, may participate in a meeting of the Board of Directors, or
any committee, by means of conference telephone 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. |
| |
(a) |
Subject
to applicable law, the Board of Directors may delegate any of their
powers to committees consisting of such member or members of their
body as they deem fit and may, from time to time, revoke such
delegation. No committee of the Board of Directors shall be
established except by unanimous consent of all directors. |
- 35 -
| |
(b) |
In
the exercise of any power delegated to it by the Board of Directors all
committees shall conform to any regulations that may be imposed upon
them by the Board of Directors, if there shall be any such
regulation. If no such regulations are adopted by the Board of
Directors or if there are no complete and encompassing regulations,
the committees shall act pursuant to these Articles dealing with
organization of meetings, meetings and functions of the Board of
Directors, mutatis mutandis, and insofar as no provision of the Board
of Directors shall replace it pursuant to this article. |
| |
(c) |
All
actions performed in a bona fide fashion by the Board of Directors or by a
committee of the Board of Directors, or by any person acting as a
director or as a substitute shall be as valid, even if at a later
date a flaw shall be discovered in the appointment of such a director
or such a person acting as aforesaid, or that all or some of them
were unfit as if each and every one of those persons shall have been
duly appointed and fit to serve as a director or substitute as the
case may be. |
| |
(a) |
The
Board may from time to time appoint one or more persons, whether or not he
is a member of the Board of Directors, as the CEO of the Company,
either for a fixed period of time or without limiting the time that
he or they will stay in office, and the Board may from time to time
(subject to any provision in any contract between him or them and the
Company) release him or them from their office and appoint another or
others in his or their place. |
| |
(b) |
The
Board of Directors may from time to time grant and bestow upon the general
manager, at that time, those powers and authorities that it exercises
pursuant to these Articles, as it shall deem fit, and may grant those
powers and authorities for such period, and to be exercised for such
objectives and purposes and in such time and conditions, and on such
restrictions, as it shall decide; and it may grant such authorities
whether concurrently with the Board of Directors’ authorities in
that area, or in excess of them, or in place thereof or any one of
them, and it can from time to time revoke, repeal, or change any one
or all of those authorities. |
| |
(c) |
Notwithstanding
the aforesaid in Article 69 the wages of the general manager shall be
determined from time to time by the Board of Directors (subject to any
provision in any contract between him and the Company) and it may be
paid by way of a fixed salary or commission or dividends, or a
percentage of profits or the Company profit turnover or of any other
Company that the Company has an interest in, or by participation in
such profits, or in one or more of the aforementioned methods. |
| |
(a) |
The
Board shall cause minutes to be taken of all general meetings of the
Company, of the appointments of officials of the Company, of Board of
Directors’ meetings and of committee meetings that shall include
the following items, if applicable: |
| |
(1) |
the
names of the members present; |
| |
(2) |
the
matters discussed at the meeting; |
- 36 -
| |
(3) |
the
results of the vote; |
| |
(4) |
resolutions
adopted at the meeting; |
| |
(5) |
directives
given by the meeting to the committees; |
| |
(6) |
if
requested, any reservation of a shareholder or director with regard to a matter
discussed or resolution passed. |
| |
(b) |
The
minutes of any meeting shall serve as prima facie proof as to the facts in
the minutes if the minutes are reviewed and approved at the next
succeeding meeting and are signed by the Chairman of that next
succeeding meeting. |
| 82. |
RESOLUTION
IN WRITING |
| |
A
resolution in writing signed by all shareholders of the Company or by all the members of
the Board of Directors, or of a committee, or such a resolution that all the shareholders
of the Company then entitled to vote at General Meetings, the members of the Board of
Directors or a committee have agreed to in writing or by fax shall be valid for every
purpose as a resolution adopted at a General Meeting, Board of Directors’ or
committee meeting, as the case may be, that was duly convened and held. In place of a
shareholder or director, as the case may be, any such aforesaid resolution may be signed
and delivered by his substitute. |
| 83. |
SEAL,
STAMP AND SIGNATURES |
| |
(a) |
The
Board shall cause the seal (if the Company shall have a seal) to be kept in
safekeeping and it shall be forbidden to use the seal unless prior
permission of the Board of Directors is given. If such permission was
given, the seal shall be affixed in the presence of whoever has been
so appointed by the Board of Directors, and he shall sign any
document upon which the seal has been affixed. |
| |
(b) |
The
Company shall have at least one rubber stamp. The Board shall ensure that
such a stamp is kept in a safe place. |
| |
(c) |
The
Board of Directors may designate and authorize any person or persons (even
if they are not members of the Board of Directors) to act and to sign
in the name of the Company, and the acts and signatures of such a
person or persons shall bind the Company, insofar as such persons
have acted and signed within the limits of their aforesaid authority. |
| |
(d) |
The
printing of the name of the Company by a typewriter or by hand next to the
signatures of the authorized signatories of the Company, pursuant to
sub-article (c) above, shall be valid as if the rubber stamp of the
Company was affixed. |
| |
The
Company may, subject to the provisions of the Companies Law or any other applicable law
that may substitute such provisions, keep in every other country where those provisions
shall apply, a register or registers of shareholders living in that other country as
aforesaid, and to exercise any other powers referred to in the laws with respect to such
branch registers. |
- 37 -
| 85. |
THE
SECRETARY, OFFICERS AND ATTORNEYS |
| |
(a) |
The
Board of Directors may appoint a secretary of the Company upon the
conditions that it deems fit. The Board may as well, from time to
time, appoint an associate secretary who shall be deemed to be the
secretary for the period of his appointment. |
| |
(b) |
The
Board of Directors may, from time to time appoint to the Company, officers,
workers, agents and functionaries to permanent, temporary or special
positions, as it shall, from time to time, see fit and set
compensation for them. |
| |
(c) |
The
Board may, at any time and from time to time, authorize any Company, firm,
person or group of people, whether this authorization is done by the
Board directly or indirectly, to be the attorneys in fact of the
Company for those purposes and with those powers and discretion which
shall not exceed those conferred upon the Board of Directors or that
the Board of Directors can exercise pursuant to these Articles – and
for such a period of time and upon such conditions as the Board deems
proper, and every such authorization may contain such directives as
the Board of Directors deems proper for the protection and benefit of
the persons dealing with such attorneys. |
| |
Subject
to the provisions of the Companies Law and these Articles, including without limitation
the provisions of Articles 7, 8 and 12 and subject to any rights or conditions of
Preferred Shares and other rights and conditions attached at that time to any share in the
capital of the Company granting preferential, special or deferred rights or not granting
any rights with respect to dividends, the profits of the Company shall be distributable to
the shareholders of the Company according to the proportion of the nominal value paid up
or credited as paid up on account of the shares held by them at the date so appointed by
the Company, without regard to the premium paid in excess of the nominal value. A
distribution, setting aside or declaration of dividend requires a decision of the Board of
Directors. |
| |
The
Board of Directors may issue any share upon the condition that a dividend shall be paid at
a certain date or that a portion of the declared dividend for a certain period shall be
paid, or that the period for which a dividend shall be paid shall commence at a certain
date, or a similar condition, all as decided by the Board of Directors. In every such case
– subject to the provision mentioned in the beginning of this article – the
dividend shall be paid in respect of such a share in accordance with such a condition. |
| 87. |
Subject
to the provisions of the Companies Law, at the time of declaration of a
dividend the Board of Directors may decide that such a dividend shall be
paid in part or in whole, by way of distribution of certain properties,
especially by way of distribution of fully paid up shares or debentures or
debenture stock of the Company, or by way of distribution of fully paid up
shares or debentures or debenture stock of any other Company or in one or
more of the aforesaid ways. For purposes of any such distribution, the
outstanding Preferred Shares shall be deemed to have been converted into
Ordinary Shares as of the time appointed by the Board of Directors for the
purpose of determining entitlement to participate in such distribution. |
| 88. |
Any
dividends payable on shares which are not fully paid up, will be first
applied to any unpaid amount on such shares even if such payments are not
yet due, pursuant to the terms of issuance or as provided in these
Articles, and any excess will be distributed to the holder of such shares
as set forth herein. |
- 38 -
| 89. |
The
Board of Directors may put a lien on any dividend on which the Company has a
charge, and it may use it to pay any debts, obligations or commitments
with respect to which the charge exists. |
| 90. |
A
transfer of shares shall not transfer the right to a dividend which has been
declared after the transfer but before the registration of the transfer.
The person registered in the register as a shareholder on the date
appointed by the company for that purpose shall be the one entitled to
receive a dividend. |
| 92. |
A
notice of the declaration of a dividend, whether an interim dividend or
otherwise, shall be given to the shareholders registered in the register,
in the manner provided for in these Articles. |
| 93. |
If
no other provision is given, the dividend may be paid by check or payment
order to be mailed to the registered address of a shareholder or person
entitled thereto in the register or, in the case of registered joint
owners, to the addresses of one of the joint owners as registered in the
register. Every such check shall be made out to the person it is sent to.
The receipt of the person who, on the date of declaration of dividend, is
registered as the holder of any share or, in the case of joint holders, of
one of the joint holders, shall serve as a release with respect to
payments made in connection with that share. |
| 94. |
(a) |
Subject to Article 12 above, if at any time the share capital shall be
divided into different classes of shares, the distribution of fully paid
up shares, from funds pursuant to Article 95 below, shall be made in one
of the two following manners as to be decided upon by the Board: |
| |
(i)
In such a manner so that all the holders of a share entitled to
fully paid up shares shall receive one uniform class of shares; or |
| |
(ii) In
such manner so that each holder of shares entitled to fully paid up shares as aforesaid
shall receive shares of the class of shares held by him and entitling him to fully paid
up shares, as aforesaid. |
| |
(b) |
In
order to give effect to any resolution in connection with the distribution of
dividends, or distribution of property, fully paid-up shares or
debentures, the Board of Directors may resolve any difficulty that shall
arise with distribution as it shall deem necessary, especially to issue
certificates for fractional shares and to determine the value of certain
property for purposes of distribution, and to decide that payment in cash
shall be made to the shareholder on the basis of the value decided for
that purpose, or that fractions the value of which is less than one New
Israeli Shekel shall not be taken into account for the purpose of
coordinating the rights of all the parties. The Board of Directors shall
be permitted, in this regard, to grant cash or property to trustees in
escrow for the benefit of persons entitled thereto, as the Board shall see
beneficial. Wherever required, an agreement shall be submitted to the
registrar of companies and the Board may appoint a person to execute such
an agreement in the name of the persons entitled to a dividend, property,
fully paid up shares or debentures as shares or debentures as aforesaid,
and such an appointment shall be valid. |
| |
(c) |
The
Company shall not be obligated to pay interest on a dividend. |
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| |
(d) |
The
Board of Directors may, with respect to all dividends not collected within
one year after their declaration, invest or use them in another way for
the benefit of the Company, until they shall be demanded. The Company
shall not pay interest for dividends or interest not collected. |
| |
The
Board may set aside from the profits of the Company the sums it deems proper, as a reserve
fund or reserve funds for extraordinary uses, or for preferred dividends or equalization
of dividends or other funds or for the purpose of correcting, bettering or retaining any
property of the Company and for those other purposes which shall, in the absolute
discretion of the Board of Directors, be beneficial to the Company and it may invest the
various sums so invested in such investments as it finds proper, and from time to time
deal with such investments, change or transfer them, in part or in whole, for the benefit
of the Company. The Board of Directors may, as well, divide any reserve liability fund to
preferred funds as it shall deem proper, transfer moneys from fund to fund and use every
fund or any part thereof in the business of the Company, without being required to keep
such sums separate from the rest of the Company’s property. The Board of Directors
may, from time to time, also transfer, to the next year, profits out of such sums which
are, in its absolute discretion, beneficial to the Company. Generally the Board of
Directors may create funds as it deems necessary, either those resulting from profits of
the Company or from re-evaluation of property, or from premiums paid for shares or from
any other source, and to use them in its discretion as it deems fit insofar as that in the
creation of such funds, the changes or uses do not exceed the provisions of the Companies
Law or accepted accounting principles. |
| 96. |
All
premiums received from the issue of shares shall be capital funds and they shall
be treated for every purpose as capital and not as profits distributable as
dividends. The Board of Directors may organize a reserve capital liability
account and transfer, from time to time, all such premiums to the reserve
capital liability account or use such premiums and monies to cover
depreciation or doubtful loss. All losses from sale of investments or other
property of the Company shall be debited from other funds of the Company.
The Board of Directors may use any monies credited to the capital reserve
liability account in any manner that these Articles or the Companies Law
permits. |
| 97. |
Any
amounts transferred and credited to the account of income and expense fund or
general reserve liability account or capital liability reserve account, may,
until otherwise used in accordance with these Articles, be invested together
with such other monies of the Company in the day to day business of the
Company, without having to differentiate between these investments and the
investment of the monies of the Company. |
| |
The
Board shall cause correct accounts to be kept: |
| |
(a)
of the assets and liabilities; |
| |
(b)
of any amount of money received or expended by the Company and the
xxxxxx for which such sum of money is expended or received; and |
| |
(c)
of all purchases and sales made by the Company. |
| 99. |
The
account books shall be kept in the Office or at such other place as the Board deems
fit and they shall also be open for inspection by the directors. |
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| 100. |
The
Board of Directors shall determine from time to time, in any specific case or type
of case, or generally, whether and to what extent and at what times and
places and under what conditions or regulations the accounts and books of the
Company, or any of them, shall be open for inspection by the shareholders,
and no shareholder, not being a director, shall have any right of inspecting
any account book or document of the Company except as conferred by law or
authorized by the Board of Directors or by the Company in a general meeting. |
| 101. |
Not
less than once a year, the Board shall submit before the Company at the Annual
General Meeting a profit and loss account for the period after the previous
account, and if it is the first account for the period after registration of
the Company, it shall be prepared as of a date not more than nine months
before the date of the meeting and in accordance with the relevant
provisions of the Companies Law, and the Board shall submit a balance sheet
that is correct as of the date of the profit and loss account. To the balance
sheet shall be attached a report of the auditor and it shall be accompanied
by a report from the Board with respect to the situation of the Company
business and the amount they propose as a dividend and the amount (if any)
that they propose be set aside for the fund accounts. |
| 102. |
Auditors
shall be appointed and their function shall be set out in accordance with the
Companies Law. |
NOTICES
| 102A. |
A
notice or any other document may be served by the Company upon any shareholder
either personally or by sending it by prepaid letter, fax or e-mail
addressed to such shareholder at his address, wherever situated, as
appearing in the register of shareholders, provided, however that a
shareholder may notify the Company in writing of its objection to the use of
e-mail as the sole means of notice in which event the Company shall provide
notice to such shareholder by e-mail and one of the other means permitted by
this Article 102A. |
| 103. |
All
notices directed to be given to the shareholders shall, with respect to any shares
to which persons are jointly entitled, be given to one of the joint holders,
and any notice so given shall be sufficient notice to the holders of such share. |
| 104. |
Prior
and timely notice of the convening of a shareholders meeting shall be given to each
shareholder, wherever situated, at the last address provided by the
shareholder. Any shareholder registered in the register who shall, from
time to time, furnish the Company with an address at which notices may be
served, shall be entitled to receive all notices he is entitled to receive
according to these Articles at that address. |
| 105. |
A
notice may be given by the Company to the persons entitled to a share in consequence
of the death or bankruptcy of a shareholder by sending it through the post in
a prepaid letter or fax or e-mail addressed to them by name, at the address
furnished for the purpose by the persons claiming to be so entitled or,
until such an address has been so furnished, by giving the notice in any
manner in which the same might have been given if the death or bankruptcy
had not occurred. |
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| 106. |
Any
notice or other document, (i) if delivered personally, shall be deemed to have
been served upon delivery, (ii) if sent by post, shall be deemed to have
been served five (5) days after the time when the letter was delivered to
the post, if sent by airmail, and two (2) days after the letter was delivered
to the post, if sent by domestic post, and (iii) if sent by facsimile or
electronic mail, shall be confirmed by appropriate answer back and shall
be effective upon actual receipt if received during the recipient's normal business
hours, or beginning the recipient's next business day after receipt if not
received during recipient's normal business hours. In proving such service
it shall be sufficient to prove that the letter, facsimile, or electronic mail
containing the notice was properly addressed and delivered at the post office
or sent by facsimile or electronic mail, as the case may be. Any list kept in
the ordinary manner in any mail list of the company or any copy of any fax in
the Company's possession shall be prima facie proof of the delivery. |
| 107. |
(a)
In any case where it is necessary to give prior notice of a certain number of
days or a notice valid for a certain period, the date of delivery shall be
taken into account in the number of days or period. |
| |
(b)
In addition to the furnishing of a notice pursuant to the above article, the
Company may furnish a notice to the shareholders entitled to receive notice, or
to part of them, by publication of a notice in a newspaper distributed in the
area wherein the Office is located, or any other place, in Israel or abroad, as
the Board shall determine from time to time. |
| 109. |
INDEMNITY;
INSURANCE AND EXEMPTION |
| |
(a) |
Subject
to the provisions of the Companies Law, the Company may indemnify its
Office Holders (as such term is defined in the Companies Law) to the
fullest extent permitted by the Companies Law. Subject to the
provisions of the Companies Law including the receipt of all
approvals as required therein or under any applicable law, the
Company may resolve retroactively to indemnify an Office Holder with
respect to the following liabilities and expenses, provided that such
liabilities or expenses were incurred by such Officer Holder in such
Officer Xxxxxx’s capacity as an Officer Holder of the Company: |
| |
(1) |
a
monetary liability imposed on him/her in favor of a third party in any
judgment, including any settlement confirmed as judgment and an
arbitrator’s award which has been confirmed by the court, in
respect of an act performed by the Office Holder by virtue of the
Office Holder being an Office Holder of the Company; |
| |
(2) |
reasonable
litigation expenses, including legal fees, paid for by the Office
Holder, in an investigation or proceeding conducted against such
Office Holder by an agency authorized to conduct such investigation
or proceeding, and which investigation or proceeding (i) concluded
without the filing of an indictment against such Office Holder and
without there having been a financial obligation imposed against such
Office Holder in lieu of a criminal proceeding, or (ii) concluded
without the filing of an indictment against such Office Holder but
with there having been a financial obligation imposed against such
Office Holder in lieu of a criminal proceeding for an offense that
does not require proof of criminal intent; all in respect of an act
performed by the Office Holder by virtue of the Office Holder being
an Office Holder of the Company; or |
| |
(3) |
reasonable
litigation expenses, including legal fees, paid for by the Office
Holder, or which the Office Holder is obligated to pay under a court
order, in a proceeding brought against the Office Holder by the
Company, or on its behalf, or by a third party, or in a criminal
proceeding in which the Office Holder is found innocent, or in a
criminal proceeding in which the Office Xxxxxx was convicted of an
offense that does not require proof of criminal intent, all in
respect of an act performed by the Office Holder by virtue of the
Office Holder being an Office Holder of the Company. |
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| |
(4) |
For
purposes of Article 109(a)(2) above: |
| |
a) |
the
“conclusion of a proceeding without the filing of an indictment” regarding
a matter in which a criminal proceeding was initiated, means the closing
of a file pursuant to Section 62 of the Criminal Procedure Law
[Consolidated Version], 5742-1982 (the “Criminal Procedure Law”)
or a stay of process by the Attorney General pursuant to Section 231 of
the Criminal Procedure Law; and |
| |
b) |
a
“financial obligation imposed in lieu of a criminal proceeding” means
a financial obligation imposed by law as an alternative to a criminal
proceeding, including an administrative fine pursuant to the
Administrative Offenses Law, 5746-1982, a fine for committing an offense
categorized as a finable offense pursuant to the provisions of the
Criminal Procedure Law or a penalty. |
| |
(5) |
The
Company may undertake to indemnify an Office Holder as aforesaid: (i)
prospectively, provided that, in respect of Article 109(a)(1), the
undertaking is limited to categories of events which in the opinion
of the Board of Directors can be foreseen when the undertaking to
indemnify is given, and to an amount set by the Board of Directors as
reasonable under the circumstances, and (ii) retroactively. |
| |
(b) |
Subject
to the provisions of any law, the Company may procure, for the benefit
of any of its Office Holders, office holders’ liability
insurance with respect to any of the following: |
| |
(1) |
a
breach of the duty of care owed to the Company or any other person; |
| |
(2) |
a
breach of the fiduciary duty owed to the Company, provided that the Office
Holder acted in good faith and had reasonable grounds to assume that
the action would not injure the Company; or |
| |
(3) |
a
monetary liability imposed on an Office Holder in favor of a third party, in
respect of an act performed by the Office Holder by virtue of the
Office Holder being an Office Holder of the Company. |
| |
(c) |
Subject
to the provisions of any law, the Company may exempt in advance, by a
Board of Directors’ resolution, Office Holders from all or part
of their responsibilities for damages due to their violation of their
duty of care to the Company. Notwithstanding the foregoing, the
Company may not exempt Office Holders in advance from their
responsibilities for damages due to their violation of their duty of
care to the Company with respect to Distributions. |
| |
(d) |
The
provisions of Articles 109(a), 109(b) and 109(c) above are not intended, and
shall not be interpreted, to restrict the Company in any manner in
respect of the procurement of insurance and/or in respect of
indemnification (i) in connection with any person who is not an
Office Holder, including, without limitation, any employee, agent,
consultant or contractor of the Company who is not an Office Holder,
and/or (ii) in connection with any Office Holder to the extent that
such insurance and/or indemnification is not specifically prohibited
under law; provided that the procurement of any such insurance and/or
the provision of any such indemnification shall be approved by the
Board of Directors. |
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