Israel Company Law 1999

Part I: Interpretation of the Law

1. In this Law –

“absorbed company” – one or more companies intended to merge with a surviving company in such a manner as to bring about the extinction of the absorbed company;

“act” – a legal act, be it an action or an omission;

“address” –

(1) in respect of an individual who is a resident of Israel – his address as registered in the Population Registry, and if he gives any other address, that other address;

(2) in respect of an individual who is not a resident of Israel –the address of his residence and if he gives any other address, that other address;

(3) in respect of a company registered in Israel – the address of its registered office;

(4) in respect of a company registered outside Israel – the address of its office outside Israel and if it gives an address in Israel, the address so given;

(5) in respect of any other corporate body with an address registered by law – its registered address;

“annual meeting” – a meeting of shareholders under section 60;

“articles of association” – the articles of association of a company as first filed with the Registrar upon its incorporation or as altered under law;

“auditor” – an accountant appointed to perform acts of audit as provided in section 154;

“bonus shares” – shares allotted by a company for no consideration to shareholders entitled thereto;

“control block” – shares conferring twenty-five percent or more of the voting rights at the general meeting;

“certificate of incorporation” – a certificate signed by the Registrar evidencing the registration of a company;

“class meeting” – a meeting of shareholders of a class of shares;

“Companies Ordinance” – the Companies Ordinance [New Version] 1983

“control” – as defined in the Securities Law;

“counting of votes” – counting of the votes of voters in accordance with the voting rights laid down for the shares by virtue of which the shareholders taking part in a meeting exercise their votes;

“the court” – the District Court;

“date of incorporation” – the date determined by the Registrar as the date of incorporation of a company in the certificate of incorporation;

“debenture” – a document issued by a company evidencing the existence of a monetary obligation owed by the company, and setting out the terms of such obligation, excluding promissory notes or bills of exchange given to a company during the course of its business;

“derivative action” – action filed by a plaintiff on behalf of a company based on the company’s cause of action;

“director” – a member of the board of directors of the company and a person actually serving in the position of director, whatever his title may be;

“distribution” – the grant of a dividend or an undertaking so to grant, directly or indirectly, as well as purchase; for this purpose,

“purchase” – the purchase or grant of funding for the purchase, directly or indirectly, by a company or by its subsidiary or by any other corporate body controlled by it, of shares in the company or of securities convertible to shares in the company or capable of realization for shares in the company, including undertakings to do any of the above;

“dividend” – any asset given by the company to a shareholder by virtue of his right as a shareholder, whether in cash or in any other manner, including transfer otherwise than for valuable consideration, but excluding bonus shares;

“extraordinary meeting” – a general meeting of shareholders that is not an annual meeting;

“extraordinary transaction” – a transaction not in a company’s ordinary course of business, a transaction that is not undertaken in market conditions or a transaction that is likely substantially to influence the profitability of a company, its property or liabilities;

“floating charge” – as defined in the Companies Ordinance;

“foreign company” – a company registered outside Israel and any body of persons, other than a partnership, registered or incorporated outside Israel;

“general meeting” – an annual meeting or an extraordinary meeting of shareholders;

“holding” and “purchase” – as defined in the Securities Law; “identity number” –

(1) in respect of a company registered in Israel – its registration number;

(2) in respect of a company registered outside Israel – the State in which it is registered and its registration number, should it have one;

(3) in respect of any other corporate body that has a registration number under any law – its registration number;

(4) in respect of an individual who is a resident of Israel – his identity number as registered in the population registry;

(5) in respect of an individual who is not a resident of Israel – the State in which his passport was issued and the passport number;

“index” – the consumer price index published by the Central Bureau of Statistics;

“interested party” – a substantial shareholder, a person with authority to appoint one or more directors or the general manager, and a person acting as director or general manager of a company;

“means of control” – any of the following:

(1) the right to vote at a general meeting of a company;

(2) the right to appoint a director of a company; “member of a stock exchange” – a person who is the member of a stock exchange in accordance with the stock exchange rules as defined in section 46 of the Securities Law;

“memorandum” – as defined in the Companies Ordinance, in its version immediately prior to the coming into force of this Law; “merger”, for the purposes of Part VIII – the transfer of all assets and liabilities, including conditional, future, known and unknown debts of an absorbed company to a surviving company, as a result of which the absorbed company is absorbed, in accordance with section 323;

“merging company” – an absorbed company and a surviving company;

“the Minister” – the Minister of Justice.

“nominee company” – as defined in the Securities Law;

”offeree", in a tender offer – a shareholder whose shares are the subject of a tender offer;

“offeror”, in a tender offer – a person making a tender offer

“office holder” – a director, general manager, chief business manager, deputy general manager, vice-general manager, any person filling any of these positions in a company even if he holds a different title, and any other manager directly subordinate to the general manager;

“External Director” – as defined in Part VI, Chapter 1, Article E;

“personal interest” – a personal interest of any person in an act or transaction of a company, including a personal interest of his relative or of a corporate body in which such person or a relative of such person has a personal interest, but excluding a personal interest stemming from the fact of a shareholding in the company;

“pledge” – as defined in the Pledges Law -1967, as well as a floating charge;

“premium” – the amount by which the consideration for allotment of shares in the company exceeds the nominal value of the shares;

“presence of a shareholder”, at a general meeting – the presence of a shareholder himself or by proxy, or by a voting paper under section 87;

“private company” – a company that is not a public company;

“private placement” – an offer for the issue of securities of a public company that is not an offer to the public;

“promoter” – a person who performs an act in the name or in place of a company that has not yet been incorporated;

“public company” – a company whose shares are listed for trading on a stock exchange, or have been offered to the public pursuant to a prospectus as defined in the Securities Law, and are held by the public;

“Registrar of Companies” or “Registrar” the Registrar of Companies as provided in section 36

“registration company” – as defined in the Securities Law

“related company” – as defined in the Securities Law;

“relative” – spouse, sibling, parent, grandparent, child or child of spouse or spouse of any of the above;

“secured debenture” – a debenture under which a company’s obligations is secured by a pledge over the company’s assets, in whole or in part;

“Securities Authority” – the authority as defined in the Securities Law;

“Securities Law” – the Securities Law -1968;

“security” – including a share, debenture, or rights to purchase, convert or sell any of these, whether registered under a person’s name or for bearer;

“series of debentures” – two or more debentures of equal status with regard to monetary obligation and the securing of payment;

“share” – a bundle of rights in a company laid down by law and in the articles of association;

“share certificate” – a certificate stating the name of the owner registered in the company’s registers together with the number of shares owned by him;

“share warrant” – a document stating that the holder thereof is the owner of a bearer share;

“stock exchange” – a stock exchange in Israel and any stock exchange outside of Israel approved by a person authorized to grant such approval to such under the law of the State in which it operates;

Definitions