exv4w1






Exhibit 4.1




AMENDED AND RESTATED

ARTICLES OF ASSOCIATION




OF



VOCALTEC COMMUNICATIONS LTD.



A COMPANY LIMITED BY SHARES



PRELIMINARY



1. [RESERVED]




2. INTERPRETATION





	 	(a)	 	In these Articles, the following terms shall bear the meanings set opposite to
them, unless inconsistent with the subject or context.






	 	 	 	“Office Holder” shall mean every director and every other person included in such
definition under the Companies Law, including the executive officers of the Company.
	 
	 	 	 	“Company” — VocalTec Communications Ltd.
	 
	 	 	 	“External Directors” shall mean directors appointed and serving in accordance with
Sections 239 through 249 of the Companies Law.
	 
	 	 	 	“Companies Law” shall mean the Israeli Companies Law, 5759-1999, as amended and as
may be amended from time to time, and any regulations promulgated thereunder.
	 
	 	 	 	“These Articles” — These Articles of Association as originally adopted or as amended
from time to time by a Special Resolution.
	 
	 	 	 	“Office” — The registered office of the Company.
	 
	 	 	 	“Year” and “Month” — a Gregorian month or year.






	 	(b)	 	Unless the subject or the context otherwise requires: words and expressions
importing the masculine gender shall include the feminine gender; and words and
expressions importing persons shall include bodies corporate.





3. PUBLIC COMPANY





	 	The Company is a Public Company, as such a term is defined in the Companies Law.





SHARE CAPITAL




4. SHARE CAPITAL





	 	(a)	 	The authorized share capital of the Company consists of one hundred million
(100,000,000) Ordinary Shares, no par value.






 









 






	 	(b)	 	The Ordinary Shares all rank pari passu in all respects.





5. INCREASE OF AUTHORIZED SHARE CAPITAL





	 	(a)	 	The Company may, from time to time, by an Ordinary Resolution (as defined in
Article 28(a) below), whether or not all the shares then authorized have been issued
and whether or not all the shares theretofore issued have been called up for payment,
increase its authorized share capital by the creation of new shares. Any such increase
shall be in such amount and shall be divided into shares of such nominal amounts, and
such shares shall confer such rights and preferences, and shall be subject to such
restrictions, as such Ordinary Resolution shall provide.
	 
	 	(b)	 	Except to the extent otherwise provided in such Ordinary
Resolution, any new shares included in the authorized share capital increased as aforesaid shall be subject
to all the provisions of these Articles which are applicable to shares of the same
class included in the existing share capital (and, if such new shares are of the same
class as a class of shares included in the existing share capital, to all of the
provisions which are applicable to shares of such class included in the existing share
capital).





6. SPECIAL RIGHTS; MODIFICATION OF RIGHTS





	 	(a)	 	(a) Subject to the provisions of the Memorandum of Association of the Company,
and without prejudice to any special rights previously conferred upon the holders of
existing shares in the Company, the Company may, from time to time, by Ordinary
Resolution, provide for shares with such preferred or deferred rights or rights of
redemption or other special rights and/or such restrictions, whether in regard to
dividends, voting, repayment of share capital or otherwise, as may be stipulated in
such Ordinary Resolution provided that any resolution with respect to
the issuance of shares will be made only by the Board of Directors.
	 
	 	(b)	 	(i) If at any time the share capital is divided into different classes of shares, the rights attached to any class, unless otherwise provided by these Articles,
may be modified or abrogated by the Company, by a Special Resolution (as defined in
Article 28(a) below), subject to the consent in writing of the holders of seventy-five
percent (75%) of the issued shares of such class or the adoption of a Special
Resolution passed at a separate General Meeting of the holders of the shares of such
class.






	 	(ii)	 	The provisions of these Articles relating to General Meetings
shall, mutatis mutandis, apply to any separate General Meeting of the holders
of the shares of a particular class, provided, however, that the requisite
quorum at any such separate General Meeting shall be two or more members
present in person or by proxy and holding not less than thirty three and a
third per cent (33 1/3%) of the issued shares of such class.
	 
	 	(iii)	 	Unless otherwise provided by these Articles, the enlargement
of an authorized class of shares, or the issuance of additional shares thereof
out of the authorized and unissued share capital, shall not be deemed, for
purposes of this Article 6(b), to modify or abrogate the rights attached to
previously issued shares of such class or of any other class.





7. CONSOLIDATION, SUBDIVISION, CANCELLATION AND REDUCTION OF SHARE CAPITAL





	 	(a)	 	The Company may, from time to time, by Ordinary Resolution (subject, however,
to the provisions of Article 6(b) hereof and to applicable law):






	 	(i)	 	consolidate and divide all or part of its issued or un-issued
authorized share capital;





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	 	(ii)	 	subdivide its shares (issued or un-issued) or any of them;
	 
	 	(iii)	 	cancel any shares which, at the date of the adoption of such
Ordinary Resolution, have not been taken or agreed to be taken by any person,
and diminish the amount of its share capital by the amount of the shares so
canceled; or
	 
	 	(iv)	 	reduce its share capital in any manner, and with and subject to
any incident authorized, and consent required, by law.






	 	(b)	 	With respect to any consolidation of issued shares, and with respect to any
other action which may result in fractional shares, the Board of Directors may settle
any difficulty which may arise with regard thereto, as it deems fit, and, in connection
with any such consolidation or other action which could result in fractional shares,
may, without limiting its aforesaid power:






	 	(i)	 	determine, as to the holder of shares so consolidated, which
issued shares shall be consolidated .(ii) allot, in contemplation of or
subsequent to such consolidation or other action, shares or fractional shares
sufficient to preclude or remove fractional share holdings;
	 
	 	(ii)	 	redeem, in the case of redeemable preference shares, and
subject to applicable law, such shares or fractional shares sufficient to
preclude or remove fractional share holdings;
	 
	 	(iii)	 	cause the transfer of fractional shares by certain
shareholders of the Company to other shareholders thereof so as to most
expediently preclude or remove any fractional shareholdings, and cause the
transferees of such fractional shares to pay the transferors thereof the fair
value thereof, and the Board of Directors is hereby authorized to act in
connection with such transfer, as agent for the transferors and transferees of
any such fractional shares, with full power of substitution, for the purposes
of implementing the provisions of this sub-Article 7(b)(iv).





SHARES




8. ISSUANCE OF SHARE CERTIFICATES; REPLACEMENT OF LOST CERTIFICATES





	 	(a)	 	Share Certificates shall be issued under the corporate seal of the Company and
shall bear the signature of one Director, or of any other person or persons authorized
therefor by the Board of Directors.
	 
	 	(b)	 	Each member shall be entitled to one or several numbered certificate for all
the shares of any class registered in his name, each for one or more of such shares.
Each certificate shall specify the serial numbers of the shares represented thereby and
may also specify the amount paid up thereon.
	 
	 	(c)	 	A share certificate registered in the names of two or more persons shall be
delivered to the person first named in the Register of Members in respect of such
co-ownership.
	 
	 	(d)	 	A share certificate which has been defaced, lost or destroyed, may be replaced,
and the Company shall issue a new certificate to replace such defaced, lost or
destroyed certificate upon payment of such fee, and upon the furnishing of such
evidence of ownership and such indemnity, as the Board of Directors in its discretion
deems fit.




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9. REGISTERED HOLDER






	 	 	Except as otherwise provided in these Articles, the Company shall be entitled to treat the
registered holder of each 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
obligated to recognize any equitable or other claim to, or interest in, such share on the
part of any other person.





10. ALLOTMENT OF SHARES





	 	 	The un-issued shares from time to time shall be under the sole control of the Board of
Directors, who shall have the power to allot, issue or otherwise dispose of shares to such
persons, on such terms and conditions (including inter alia terms relating to calls as set
forth in Article 12(f) hereof), or, subject to the provisions of the Companies Law, at a
discount and/or with payment of commission, and at such times, as the Board of Directors
deems fit, and the power to give to any person the option to acquire
from the Company any shares, either at par or at a premium, or, subject as aforesaid, at a discount and/or with
payment of commission, during such time and for such consideration as the Board of Directors
deems fit.





11. PAYMENT IN INSTALLMENTS





	 	 	If pursuant to the terms of allotment or issue of any share, all or any portion of the price
thereof shall be payable in installments, every such installment shall be paid to the
Company on the due date thereof by the then registered holder(s) of the share or the
person(s) then entitled thereto.





12. CALLS ON SHARES





	 	(a)	 	The Board of Directors may, from time to time, as it, in its discretion, deems
fit, make calls for payment upon members in respect of any sum which has not been paid
up in respect of shares held by such members and which is not pursuant to the terms of
allotment or issue of such shares or otherwise, payable at a fixed time, and each
member shall pay the amount of every call so made upon him (and of each installment
thereof if the same is payable in installments), to the Company at the time(s) and
place(s) designated by the Board of Directors, as any such time(s) may be thereafter
extended or place(s) changed. Unless otherwise stipulated in the resolution of the
Board of Directors (and in the notice hereafter
referred to), each payment in response to a call shall be deemed to constitute a pro
rate payment on account of all the shares in respect of which such call was made.
	 
	 	(b)	 	Notice of any call for payment by a member shall be given in writing to such
member not less than fourteen (14) days prior to the time of payment fixed in such
notice, and shall specify the time and place of payment. Prior to the time for any
such payment fixed in a notice of a call given to a member, the Board of Directors may
in its absolute discretion, by notice in writing to such member, revoke such call in
whole or in part, extend the time fixed for payment thereof, or designate a different
place of payment. In the event of a call payable in installments, only one notice
thereof need be given.
	 
	 	(c)	 	If pursuant to the terms of allotment or issue of a share or otherwise, an
amount is made payable at a fixed time (whether on account of such share or by way of
premium), such amount shall be payable at such time as if it were payable by virtue of
a call made by the Board of Directors and for which notice was given in accordance with
paragraphs (a) and (b) of this Article 12, and the provisions of these Articles with
regard to calls (and the non-payment thereof) shall be applicable to such amount (and
the non-payment thereof).
	 
	 	(d)	 	Joint holders of a share shall be jointly and severally liable to pay all calls
for payment in respect of such share and all interest payable thereon.





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	 	(e)	 	Any amount called for payment which is not paid when due shall bear interest
from the date fixed for payment until actual payment thereof, at such rate (not
exceeding the then prevailing debitory rate charged by leading commercial banks in
Israel), and payable at such time(s) as the Board of Directors may prescribe.
	 
	 	(f)	 	Upon the allotment of shares, the Board of Directors may provide for
differences among the allottees of such shares as to the amounts and times for payment
of calls in respect of such shares.





13. PREPAYMENT





	 	 	With the approval of the Board of Directors, any member may pay to the Company any amount
not yet payable in respect of his shares, and the Board of Directors may approve the payment
by the Company of interest on any such amount until the same would be payable if it had not
been paid in advance, at such rate and time(s) as may be approved by the Board of Directors.
The Board of Directors may at any time cause the Company to repay all or any part of the
money so advanced, without premium or penalty. Nothing in this Article 13 shall derogate
from the right of the Board of Directors to make any call for payment before or after
receipt by the Company of any such advance.





14. FORFEITURE AND SURRENDER





	 	(a)	 	If any member fails to pay an amount payable by virtue of a call, or interest
thereon as provided for in accordance herewith, on or before the day fixed for payment
of the same, the Board of Directors may at any time after the day fixed for such
payment, so long as such amount (or any portion thereof) or interest thereon (or any
portion thereof) remains unpaid, resolve to forfeit all or any of the shares in respect of which such payment was called for. All expenses incurred by the
Company in attempting to collect any such amount or interest thereon, including,
without limitation, attorney’s fees and costs of legal proceedings, shall be added
to, and shall, for all purposes (including the accrual of interest thereon),
constitute a part of, the amount payable to the Company in respect of such call.
	 
	 	(b)	 	Upon the adoption of a resolution as to the forfeiture of a member’s share, the
Board of Directors shall cause notice thereof to be given to such member, which notice
shall state that, in the event of the failure to pay the entire amount so payable by a
date specified in the notice (which date shall be not less than fourteen (14) days
after the date such notice is given and which may be extended by the Board of
Directors), such shares shall be ipso facto forfeited, provided, however, that, prior
to such date, the Board of Directors may nullify such resolution of forfeiture, but no
such nullification shall stop the Board of Directors from adopting a further resolution
of forfeiture in respect of the non-payment of the same amount.
	 
	 	(c)	 	Without derogating from Articles 54 and 59 hereof, whenever shares are
forfeited as herein provided, all dividends, if any, theretofore declared in respect
thereof and not actually paid shall be deemed to have been forfeited at the same time.
	 
	 	(d)	 	The Company, by resolution of the Board of Directors, may accept the voluntary
surrender of any share not fully paid for.
	 
	 	(e)	 	Any share forfeited or surrendered as provided herein, shall become the
property of the Company, and the same, subject to the provisions of these Articles, may
be sold, re-allotted or otherwise disposed of as the Board of Directors deems fit.
	 
	 	(f)	 	Any member whose shares have been forfeited or surrendered shall cease to be a
member in respect of the forfeited or surrendered shares, but shall, notwithstanding,
be liable to pay, and





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	 	 	 	shall forthwith pay, to the Company, all calls, interest and
expenses owing upon or in respect of such shares at the time of forfeiture or
surrender, together with interest thereon from the time of forfeiture or surrender
until actual payment, at the rate prescribed in Article 12(e) above, and the Board of
Directors, in its discretion, may, but shall not be obligated to, enforce the payment
of such moneys, or any part thereof. In the event of such forfeiture or surrender, the
Company, by resolution of the Board of Directors, may accelerate the date(s) of payment
of any or all amounts then owing to the Company by the member in question (but not yet
due) in respect of all shares owned by such member, solely or jointly with another.






	 	(g)	 	The Board of Directors may at any time, before any share so forfeited or
surrendered shall have been sold, re-allotted or otherwise disposed of, nullify the
forfeiture or surrender on such conditions as it deems fit, but no such nullification
shall stop the Board of Directors from re-exercising its powers of forfeiture pursuant
to this Article 14.





15. LIEN





	 	(a)	 	Except to the extent the same may be waived or subordinated in writing, the
Company shall have a first and paramount lien upon all the shares registered in the
name of each member (without regard to any equitable or other claim
or interest in such shares on the part of any other person), and upon the proceeds
of the sale thereof, for his debts, liabilities and engagements to the Company
arising from any amount payable by such member in respect of any unpaid or partly
paid share, whether or not such debt, liability or engagement has matured. Such lien
shall extend to all dividends from time to time declared or paid in respect of such
share. Unless otherwise provided, the registration by the Company of
a transfer of shares shall be deemed to be a waiver on the part of the Company of the lien (if
any) existing on such shares immediately prior to such transfer.
	 
	 	(b)	 	The Board of Directors may cause the Company to sell a share subject to such a
lien when the debt, liability or engagement giving rise to such lien has matured, in
such manner as the Board of Directors deems fit, but no such sale shall be made unless
such debt, liability or engagement has not been satisfied within fourteen (14) days
after written notice of the intention to sell shall have been served on such member,
his executors or administrators.
	 
	 	(c)	 	The net proceeds of any such sale, after payment of the costs thereof, shall be
applied in or toward satisfaction of the debts, liabilities or engagements of such
member in respect of such share (whether or not the same have matured), and the residue
(if any) shall be paid to the member, his executors, administrators or assigns.





16. SALE AFTER FORFEITURE OR SURRENDER OR IN ENFORCEMENT OF LIEN





	 	 	Upon any sale of a share after forfeiture or surrender or for enforcing a lien, the Board of
Directors may appoint any person to execute an instrument of transfer of the share so sold
and cause the purchaser’s name to be entered in the Register of Members in respect of such
share. The purchaser shall be registered as the shareholder and shall not be bound to see to
the regularity of the sale proceedings, or to the application of the proceeds of such sale,
and after his name has been entered in the Register of Members in respect of such share, the
validity of the sale shall not be impeached by any person, and the remedy of any person
aggrieved by the sale shall be in damages only and against the Company exclusively.





17. REDEEMABLE SHARES





	 	 	The Company may, subject to applicable law, issue redeemable shares and redeem the same.





18. [RESERVED]



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TRANSFER OF SHARES




19. REGISTRATION OF TRANSFER





	 	(a)	 	No transfer of shares shall be registered unless a proper writing or instrument
of transfer (in any customary form or any other form satisfactory to the Board of
Directors) has been submitted to the Company (or its transfer agent), together with
the share certificate(s) and such other evidence of title as the Board of Directors may
reasonably require. Until the transferee has been registered in the Register of Members
in respect of the shares so transferred, the Company may continue to regard the
transferor as the owner thereof. The Board of Directors, may, from time to time,
prescribe a fee for the registration of a transfer.
	 
	 	(b)	 	The Board of Directors may, in its discretion to the extent it deems necessary,
close the Register of Members for registrations of transfers of shares during any year
for a period determined by the Board of Directors, and no
registrations of transfers of shares shall be made by the Company during any such period during which the Register of
Members is so closed.





20. RECORD DATE FOR NOTICES OF GENERAL MEETINGS AND OTHER ACTION





	 	(a)	 	Notwithstanding any provision of these Articles to the contrary, and to allow
the Company to determine the members entitled to notice of, or to vote at, any Annual
or Extraordinary General Meeting or any adjournment thereof, or to express consent to
or dissent from any corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of, or to take or be the subject to, any
other action, the Board of Directors may fix, a record date, which shall not be more
than forty (40), or any longer period permitted under the Companies Law, nor less than
four (4) days before the date of such meeting or other action. A determination of
members of record entitled to notice of or to vote at a meeting shall apply to any
adjournment of the meeting: provided, however, that the Board of Directors may fix a
new record date for the adjourned meeting.
	 
	 	(b)	 	Any Shareholder or Shareholders of the Company holding, at least, one percent
(1%) of the voting rights in the issued share capital of the Company may, pursuant to
the Companies Law, request that the Board of Directors include a subject in the agenda
of a General Meeting to be held in the future. Any such request must be in writing,
must include all information related to subject matter and the reason that such subject
is proposed to be brought before the General Meeting and must be signed by the
shareholder or shareholders making such request. In addition subject to the Companies
Law and the provisions of Article 39, the Board of Directors may include such subject
in the agenda of a General Meeting only if the request has been delivered to the
Secretary of the Company not later than sixty (60) days and not more than one hundred
and twenty (120) days prior to the General Meeting in which the subject is to be
considered by the shareholders of the Company. Each such request shall also set forth:
(a) the name and address of the shareholder making the request; (b) a representation
that the shareholder is a holder of record of shares of the Company entitled to vote at
such meeting and intends to appear in person or by proxy at the meeting; (c) a
description of all arrangements or understandings between the shareholder and any other
person or persons (naming such person or persons) in connection with the subject which
is requested to be included in the agenda; and (d) a declaration that all the
information that is required under the Companies Law and any other applicable law to
provided to the Company in connection with such subject, if any, has been provided.
Furthermore, the Board of Directors, may, in its discretion to the extent it deems
necessary, request that the shareholders making the request provide additional
information necessary so as to include a subject in the agenda of a General Meeting, as
the Board of Directors may reasonably require.





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TRANSMISSION OF SHARES




21. DECEDENTS’ SHARES





	 	(a)	 	In case of death of a registered holder of a share registered in the names of
two or more holders, the Company may recognize the survivor(s) as the sole owner(s)
thereof unless and until the provisions of Article 21(b) have been effectively invoked.
	 
	 	(b)	 	Any person becoming entitled to a share in consequence of the death of any
shareholder, upon producing evidence of the grant of probate or letters of
administration or declaration of succession (or such other evidence as the Board of
Directors may reasonably deem sufficient), shall be registered as a member in respect
of such share, or may, subject to the regulations as to transfer herein contained,
transfer such share.





22. RECEIVERS AND LIQUIDATORS





	 	(a)	 	The Company may recognize any receiver, liquidator or similar official
appointed to wind-up, dissolve or otherwise liquidate a corporate member, and a
trustee, manager, receiver, liquidator or similar official appointed in bankruptcy or
in connection with the reorganization of, or similar proceeding with respect to a
member or its properties, as being entitled to the shares registered in the name of
such member.
	 
	 	(b)	 	Such receiver, liquidator or similar official appointed to wind-up, dissolve or
otherwise liquidate a corporate member and such trustee, manager, receiver, liquidator
or similar official appointed in bankruptcy or in connection with the reorganization
of, or similar proceedings with respect to a member or its properties, upon producing
such evidence as the Board of Directors may deem sufficient as to his authority to act
in such capacity or under this Article, shall with the consent of the Board of
Directors (which the Board of Directors may grant or refuse in its absolute
discretion), be registered as a member in respect of such shares, or may, subject to
the regulations as to transfer herein contained, transfer such shares.





GENERAL MEETINGS




23. ANNUAL GENERAL MEETING





	 	(a)	 	An Annual General Meeting shall be held once in every calendar year at such
time (within a period of not more than fifteen (15) months after the last preceding
Annual General Meeting) and at such place, either within or without the State of
Israel, as may be determined by the Board of Directors.
	 
	 	(b)	 	Subject to the provisions of these Articles, the function of the Annual General
Meeting shall be to elect the members of the Board of Directors; to receive the
Financial Statements, the ordinary reports and accounts of the Company’s directors and
auditors; to appoint the Company’s auditors and to fix their remuneration and to
transact any other business which under these Articles or the Companies Law are to be
transacted at a General Meeting.





24. EXTRAORDINARY GENERAL MEETINGS





	 	 	All General Meetings other than Annual General Meetings shall be called “Extraordinary
General Meetings”. The Board of Directors may, whenever it thinks fit, convene an
Extraordinary General Meeting, at such time and place, within or out of the State of Israel,
as may be determined by the Board of Directors, and shall be obliged to do so upon a
requisition in writing in accordance with Section 63 of the Companies Law.





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25. NOTICE OF GENERAL MEETINGS; OMISSION TO GIVE NOTICE





	 	 	Not less than twenty-one (21) days’ prior notice shall be given of every General Meeting to
all shareholders who would be entitled to attend and vote at such meeting. No separate
notice shall be given to registered shareholders of the Company. Each such notice shall
specify the place and the day and hour of the meeting and the general nature of each item to
be acted upon thereat, said notice to be given to all members who would be entitled to
attend and vote at such meeting. Anything therein to the contrary notwithstanding, with the
consent of all members entitled to vote thereon, a resolution may be proposed and passed at
such meeting although a lesser notice than hereinabove prescribed has been given.





PROCEEDINGS AT GENERAL MEETINGS




26. QUORUM





	 	(a)	 	No business shall be transacted at a General Meeting, or at any adjournment
thereof, unless the quorum required under these Articles for such General Meeting or
such adjourned meeting, as the case may be, is present when the meeting proceeds to
business.
	 
	 	(b)	 	In the absence of contrary provisions in these Articles, two or more members
(not in default in payment of any sum referred to in Article 32(a) hereof), present in
person or by proxy and holding shares conferring in the aggregate more than thirty
three and a third (33 1\3%) percent of the voting power of the Company, shall
constitute a quorum of General Meetings.
	 
	 	(c)	 	If within half an hour from the time appointed for the meeting a quorum is not
present, the meeting, if convened upon requisition under Sections 64 or 65 of the
Companies Law, shall be dissolved, but in any other case it shall be adjourned to the
same day in the next week, at the same time and place, or to such day and at such time
and place as the Chairman may determine. No business shall be transacted at any
adjourned meeting except business which might lawfully have been transacted at the
meeting as originally called. At such adjourned meeting (other than an adjourned
separate meeting of a particular class of shares as referred to in Article 6 of these
Articles), any two (2) members (not in default as aforesaid) present in person or by
proxy, shall constitute a quorum.
	 
	 	(d)	 	The Board of Directors may determine, in its discretion, the matters that may
be voted upon at the meeting by proxy in addition to the matters listed in Section
87(a) to the Companies Law.





27. CHAIRMAN





	 	 	The Chairman, if any, of the Board of Directors, shall preside as Chairman at every General
Meeting of the Company. If at any meeting the Chairman is not present within fifteen (15)
minutes after the time fixed for holding the meeting or is unwilling to act as Chairman, the
Co-Chairman shall preside at the meeting. If at any such meeting both the Chairman and the
Co-Chairman are not present or are unwilling to act as Chairman, the members present shall
choose someone of their number to be Chairman. The office
of Chairman shall not, by itself, entitle the holder thereof to vote at any General Meeting
nor shall it entitle such holder to a second or casting vote (without derogating, however,
from the rights of such Chairman to vote as a shareholder or proxy of a shareholder if, in
fact, he is also a shareholder or such proxy).





28. ADOPTION OF RESOLUTIONS AT GENERAL MEETINGS





	 	(a)	 	(i) An Ordinary Resolution shall be deemed adopted if approved by the holders
of a majority of the voting power represented at the meeting in person or by proxy and
voting thereon.





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	 	(ii)	 	A Special Resolution shall be deemed adopted if approved by the
holders of not less than seventy-five percent (75%) of the voting power
represented at the meeting in person or by proxy and voting thereon.






	 	(b)	 	Every resolution of the General Meeting shall be an Ordinary Resolution, unless
these Articles specifically require a Special Resolution. Every question submitted to a
General Meeting shall be decided by a show of hands, but the Chairman of the Meeting
may determine that a resolution shall be decided by a written ballot. A written ballot
may be implemented before the proposed resolution is voted upon or immediately after
the declaration by the Chairman of the results of the vote by a show of hands. If a
vote by written ballot is taken after such declaration, the results of the vote by a
show of hands shall be of no effect, and the proposed resolution shall be decided by
such written ballot.
	 
	 	(c)	 	A declaration by the Chairman of the meeting that a resolution has been carried
unanimously, or carried by a particular majority, or lost, and an entry to that effect
in the minute book of the Company, shall be conclusive evidence of the fact without
proof of the number or proportion of the votes recorded in favor of or against such
resolution.





29. RESOLUTIONS IN WRITING





	 	 	A resolution in writing signed by all members of the Company then entitled to attend and
vote at General Meetings or to which all such members have given their written consent (by
letter, telegram, telex, facsimile or otherwise) shall be deemed to have been unanimously
adopted by a General Meeting duly convened and held.





30. POWER TO ADJOURN





	 	(a)	 	The Chairman of a General Meeting at which a quorum is present may, with the
consent of the holders of a majority of the voting power represented in person or by
proxy and voting on the question of adjournment (and shall if so directed by the
meeting), adjourn the meeting from time to time and from place to place, but no
business shall be transacted at any adjourned meeting except business which might
lawfully have been transacted at the meeting as originally called.
	 
	 	(b)	 	It shall not be necessary to give notice of an adjournment, whether pursuant to
Article 26(c) or Article 30(a), unless the meeting is adjourned for twenty one (21)
days or more in which event notice thereof shall be given in the manner required for
the meeting as originally called.





31. VOTING POWER





	 	 	Subject to the provisions of Article 32(a) and subject to any provision hereof conferring
special rights as to voting, or restricting the right to vote, every member shall have one
vote for each share held by him of record, on every resolution, without regard to whether
the vote thereon is conducted by a show of hands, by written ballot or by any other means.





32. VOTING RIGHTS





	 	(a)	 	No member shall be entitled to vote at any General Meeting (or be counted as a
part of the quorum thereat), unless all calls and other sums then payable by him in
respect of his shares in the Company have been paid, but this Article 32(a) shall not
apply to separate General Meetings of the holders of a particular class of shares
pursuant to Article 6(b).
	 
	 	(b)	 	A company or other corporate body being a member of the Company may duly
authorize any person to be its representative at any meeting of the Company or to
execute or deliver a proxy





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	 	 	 	on its behalf. Any person so authorized shall be entitled to
exercise on behalf of such member all the power which the latter could have exercised
if it were an individual shareholder. Upon the request of the Chairman of the meeting,
written evidence of such authorization (in form acceptable to the Chairman) shall be
delivered to him.






	 	(c)	 	Any member entitled to vote may vote either in person or by proxy (who need not
be a member of the Company), or, if the member is a company or other corporate body, by
a representative authorized pursuant to Article 32(b).
	 
	 	(d)	 	If two or more persons are registered as joint holders of any share, the vote
of the senior who tenders a vote, in person or by proxy, shall be accepted to the
exclusion of the vote(s) of the other joint holder(s). For the purpose of this Article
32(d), seniority shall be determined by the order of registration of the joint holders
in the Register of Members.





PROXIES




33. INSTRUMENT OF APPOINTMENTS





	 	(a)	 	An instrument appointing a proxy shall be in writing and shall be substantially
in the following form:





	 	 	 	 	 	 	 	 

	“I	 
	 	of	 	 	 	 
	 	 
 (Name
of Shareholder)

	 	
	 	 

(Address of Shareholder)
	 	 
	 	 
	 	 	 	 	 	 
	Being a member of VocalTec Ltd. hereby appoint
	 	 	 	 	 	 
	 	 
	 	of	 	 	 	 
	 
 (Name
of Proxy)

	 	
	 	 

(Address of Proxy)
	 	 






	 	 	 

	as my proxy to vote for me and on my behalf at the General Meeting of
the Company to be held on the ___ day of
_______, 20__ and at any Adjournment(s) thereof.
	 	 
	 
	 	 
	Signed this ____ day of ___________, 20_.
	 	 
	 

	 	 
	 

	 	(Signature of Appointor)”





or in any usual or common form or in such other form as may be approved by the Board of Directors.
Such proxy shall be duly signed by the appointor or such person’s duly authorized attorney or, if
such appointor is a company or other corporate body, under its common seal or stamp or the hand of
its duly authorized agent(s) or attorney(s).





	 	(b)	 	The instrument appointing a proxy (and the power of attorney or other
authority, if any, under which such instrument has been signed) shall either be
presented to the Chairman at the meeting at which the person named in the instrument
proposes to vote or be delivered to the Company (at its Registered Office, at its
principal place of business, or at the offices of its registrar or transfer agent, or
at such place as the Board of Directors may specify) not less than two (2) hours before
the time fixed for such meeting, except that the instrument shall be delivered (i)
twenty-four (24) hours before the time fixed for the





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	 	 	 	meeting where the meeting is to be
held in the United States and the instrument is delivered to the Company at its
Registered Office or principal place of business, or (ii) forty-eight (48) hours before
the time fixed for the meeting where the meeting is to be held outside of the United
States of America and Israel and the instrument is delivered to the Company’s registrar
or transfer agent. Notwithstanding the above, the Chairman shall have the right to
waive the time requirement provided above with respect to all instruments of proxies
and to accept any and all instruments of proxy until the beginning of a General
Meeting.





34. EFFECT OF DEATH OF APPOINTOR OR TRANSFER OF SHARE OR REVOCATION OF APPOINTMENT





	 	(a)	 	A vote cast in accordance with an instrument appointing a proxy shall be valid
notwithstanding the prior death or bankruptcy of the appointing member (or of his
attorney-in-fact, if any, who signed such instrument), or the transfer of the share in
respect of which the vote is cast, unless written notice of such matters shall have
been received by the Company or by the Chairman of such meeting prior to such vote
being cast.
	 
	 	(b)	 	An instrument appointing a proxy shall be deemed revoked (i) upon receipt by
the Company or the Chairman, subsequent to receipt by the Company of such instrument,
of written notice signed by the person signing such instrument or by the member
appointing such proxy canceling the appointment thereunder (or the authority pursuant
to which such instrument was signed) or of an instrument appointing a different proxy
(and such other documents, if any, required under Article 33(b) for such new
appointment), provided such notice of cancellation or instrument appointing a different
proxy were so received at the place and within the time for delivery of the instrument
revoked thereby as referred to in Article 33(b) hereof, or (ii) if the appointing
member is present in person at the meeting for which such instrument of proxy was
delivered, upon receipt by the Chairman of such meeting of written notice from such
member of the revocation of such appointment, or if and when such member votes at such
meeting. A vote cast in accordance with an instrument appointing a proxy shall be valid
notwithstanding
the revocation or purported cancellation of the appointment, or the presence in
person or vote of the appointing member at a meeting for which it was rendered,
unless such instrument of appointment was deemed revoked in accordance with the
foregoing provisions of this Article 34(b) at or prior to the time such vote was
cast.





BOARD OF DIRECTORS




35. POWERS OF BOARD OF DIRECTORS





	 	(a)	 	General






	 	 	 	The management of the business of the Company shall be vested in the Board of
Directors, which may exercise all such powers and do all such acts and things as the
Company is authorized to exercise and do, and are not hereby or by law required to
be exercised or done by the Company by action of its members at a General Meeting.
The authority conferred on the Board of Directors by this Article 35 shall be
subject to the provisions of the Companies Law, these Articles and any regulation or
resolution consistent with these Articles adopted from time to time by the Company
by action of its members at a General Meeting, provided, however, that no such
regulation or resolution shall invalidate any prior act done by or pursuant to a
decision of the Board of Directors which would have been valid if such regulation or
resolution had not been adopted.






	 	(b)	 	Borrowing Power






	 	 	 	The Board of Directors may from time to time, at its discretion, cause the Company
to borrow or secure the payment of any sum or sums of money for the purposes of the
Company, and may secure or provide for the repayment of such sum or sums in such
manner, at such times and





12









 











	 	 	 	upon such terms and conditions as it deems fit, and, in
particular, by the issuance of bonds, perpetual or redeemable debentures, debenture
stock, or any mortgages, charges, or other securities on the undertaking or the
whole or any part of the property of the Company, both present and future, including
its uncalled or called but unpaid capital for the time being.






	 	(c)	 	Reserves






	 	 	 	The Board of Directors may, from time to time, set aside any amount(s) out of the
profits of the Company as a reserve or reserves for any purpose(s) which the Board
of Directors, in its absolute discretion, shall deem fit, including without
limitation, capitalization and distribution of bonus shares, and may invest any sum
so set aside in any manner and from time to time deal with and vary such investments
and dispose of all or any part thereof, and employ any such reserve or any part
thereof in the business of the Company without being bound to keep the same separate
from other assets of the Company, and may subdivide or redesignate any reserve or
cancel the same or apply the funds therein for another purpose, all as the Board of
Directors may from time to time think fit.





36. EXERCISE OF POWERS OF BOARD OF DIRECTORS





	 	(a)	 	A meeting of the Board of Directors at which a quorum is present shall be
competent to exercise all the authorities, powers and discretion vested in or
exercisable by the Board of Directors, whether in person or by any other means by
which the Directors may hear each other simultaneously.
	 
	 	(b)	 	A resolution proposed at any meeting of the Board of Directors shall be deemed
adopted if approved by a majority of the Directors present when such resolution is put
to a vote and voting thereon.
	 
	 	(c)	 	The Board of Directors may adopt resolutions without holding a meeting of the
Board of Directors, provided that all of the Directors then in office and lawfully
entitled to vote thereon shall have agreed to vote on the matters underlying such
resolutions without convening a meeting of the Board of Directors. If the Board of
Directors adopts resolutions as set forth in the immediately preceding sentence,
minutes including such resolutions, including a resolution to vote on such matters
without convening a meeting of the Board of Directors, shall be prepared and the
Chairman of the Board of Directors will sign such minutes.





37. DELEGATION OF POWERS





	 	(a)	 	The Board of Directors may, subject to the provisions of the Companies Law,
delegate any or all of its powers to committees, each consisting of one or more persons
(who are Directors), and it may from time to time revoke such delegation or alter the
composition of any such committee. Any Committee so formed (in these Articles referred
to as a “Committee of the Board of Directors”), shall, in the exercise of the powers so
delegated, conform to any regulations imposed on it by the Board of Directors. The
meetings and proceedings of any such Committee of the Board of Directors shall, mutatis
mutandis, be governed by the provisions herein contained for regulating the meetings of
the Board of Directors, so far as not superseded by any regulations adopted by the
Board of Directors under this Article. Unless otherwise expressly provided by the Board
of Directors in delegating powers to a Committee of the Board of Directors, such
Committee shall not be empowered to further delegate such powers.
	 
	 	(b)	 	Without derogating from the provisions of Article 50, the Board of Directors
may from time to time appoint a Secretary to the Company, as well as officers, agents,
employees and independent contractors, as the Board of Directors deems fit, and may
terminate the service of any such





13









 











	 	 	 	person. The Board of Directors may, subject to the
provisions of the Companies Law, determine the powers and duties, as well as the
salaries and emoluments, of all such persons, and may require security in such cases
and in such amounts as it deems fit.






	 	(c)	 	The Board of Directors may from time to time, by power of attorney or
otherwise, appoint any person, company, firm or body of persons to be the attorney or
attorneys of the Company at law or in fact for such purpose(s) and with such powers,
authorities and discretions, and for such period and subject to such conditions, as it
deems fit, and any such power of attorney or other appointment may contain such
provisions for the protection and convenience of persons dealing with any such attorney
as the Board of Directors deems fit, and may also authorize any such attorney to
delegate all or any of the powers, authorities and discretion vested in him.





38. NUMBER OF DIRECTORS





	 	 	The Board of Directors of the Company shall consist of not less than two (2) nor more than
eleven (11) Directors.





39. ELECTION AND REMOVAL OF DIRECTORS





	 	(a)	 	[RESERVED]
	 
	 	(b)	 	Directors shall be elected at the Annual General Meeting or an Extraordinary
Meeting of the Company by the vote of the holders of a majority of the voting power
represented at such meeting in person or by proxy and voting on the election of
directors. Each Director, except for External Directors, will serve for a term that
expires either at the Annual General Meeting held in the first year following the year
of his/her election or at the Annual General Meeting held in the third year following
the year of his/her election. The term of service for each director would be determined
by the shareholders at the time of the election of such director.
	 
	 	(c)	 	Nominations for the election of Directors may be made by the Board of Directors
or a committee appointed by the Board of Directors or by any shareholder holding at
least 1% of the outstanding voting power in the Company. However, and without
limitation of Section 63 of the Companies Law, any such shareholder may nominate one or
more persons for election as Directors at a General Meeting only if a written notice of
such shareholder’s intent to make such nomination or nominations has been given to the
Secretary of the Company not later than (i) with respect to an election to be held at
an Annual General Meeting of shareholders, ninety (90) days prior to the anniversary
date of the immediately preceding annual meeting, and (ii) with respect to an election
to be held at a Extraordinary General Meeting of shareholders for the election of
Directors, at least ninety (90) days prior to the date of such meeting. Each such
notice shall set forth: (a) the name and address of the shareholder who intends to make
the nomination and of the person or persons to be nominated; (b) a representation that
the shareholder is a holder of record of shares of the Company entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice; (c) a description of all arrangements or
understandings between the shareholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination or nominations are to
be made by the shareholder; and (d) the consent of each nominee to serve as a Director
of the Company if so elected and a declaration signed by each of the nominees declaring
that there is no limitation under the Companies Law for the appointment of such a
nominee and that all the information that is required under the Companies Law to
provided to the Company in connection with such an appointment has been provided. The
Chairman of the meeting may refuse to acknowledge the nomination of any person not made
in compliance with the foregoing procedure.





14









 











	 	(d)	 	The General Meeting may, by a Special Resolution, remove any Director(s) from
office, and elect Directors instead of Directors so removed or fill any Vacancy (as
defined in Article 41), however created, in the Board of Directors unless such Vacancy
was filled by the Board of Directors under Article 41.
	 
	 	(e)	 	Notwithstanding the provisions of this Article 39, External Directors shall be
elected and hold office in accordance with the provisions of the Companies Law.





40. QUALIFICATION OF DIRECTORS





	 	 	No person shall be disqualified to serve as a Director by reason of his not holding shares
in the Company or by reason of his having served as a Director in the past.





41. CONTINUING DIRECTORS IN THE EVENT OF VACANCIES





	 	 	In the event that , one or more vacancies is created in the Board of Directors, including
without limitation a situation in which the number of Directors is less than the maximum
number permitted under Article 38 (a “Vacancy”), the continuing Directors may continue to
act in every matter, and, may appoint Directors to temporarily fill any such Vacancy,
provided, however, that if the number of Directors is less than four (4), they may only act
in (i) an emergency; or (ii) to fill the office of director which has become vacant; or
(iii) in order to call a General Meeting of the Company for the purpose of electing
Directors to fill any or all Vacancies, so that at least four (4) Directors are in office as
a result of said meeting. Notwithstanding the foregoing, in the event of Vacancy of an
External Director, the Company shall elect a new External Director or take such other action
as required under the Companies Law.





42. VACATION OF OFFICE





	 	(a)	 	The office of a Director shall be vacated, ipso facto, upon his or her death,
or if he or she be found lunatic or become of unsound mind, or if he or she becomes
bankrupt, or if the Director is a company, upon its winding-up, or if he is found by a
court guilty of any of the felonies listed in Section 226 of the Companies Law.
	 
	 	(b)	 	The office of a Director shall be vacated by his written resignation. Such
resignation shall become effective on the date fixed therein, or upon the delivery
thereof to the Company, whichever is later. Such written resignation shall include the
reasons that lead the Director to resign from his office.





43. REMUNERATION OF DIRECTORS





	 	 	A Director shall be paid remuneration by the Company for his services as Director to the
extent such remuneration shall have been approved by the Company in accordance with the
Companies Law.





44. CONFLICT OF INTEREST





	 	 	Subject to the provisions of the Companies Law, no Director shall be disqualified by virtue
of his office from holding any office or place of profit in the Company or in any company in
which the Company shall be a shareholder or otherwise interested, or from contracting with
the Company as vendor, purchaser or otherwise, nor shall any such contract, or any contract
or arrangement entered into by or on behalf of the Company in which any Director shall be
in any way interested, be avoided, nor, other than as required under The Companies Law,
shall any Director be liable to account to the Company for any profit arising from any such
office or place of profit or realized by any such contract or arrangement by reason only of
such Director’s holding that office or of the fiduciary relations thereby established, but
the nature of his interest, as well as any material fact or document, must be disclosed by
him at the meeting of the Board





15









 











	 	 	of Directors at which the contract or arrangement is first considered, if his interest then
exists, or, in any other case, at no later than the first meeting of the Board of Directors
after the acquisition of his interest.





45. ALTERNATE DIRECTORS





	 	(a)	 	A Director may, by written notice to the Company given in the manner set forth
in Article 45(b) below, appoint any individual who is qualified to serve as a director
(provided that such individual is not a member of the Board of Directors and is not an
Alternate Director) as an alternate for himself (in these Articles referred to as
“Alternate Director”), remove such Alternate Director and appoint another Alternate
Director in place of any Alternate Director appointed by him whose office has been
vacated for any reason whatsoever. Notwithstanding the foregoing, a Director that is a
member of a Committee of the Board of Directors may appoint as his Alternate Director
on such Committee of the Board of Directors a member of the Board of Directors, but
provided that such Director is not already a member of such Committee of the Board of
Directors and further provided that if such person is appointed as an Alternate
Director for an External Director, such Alternate Director shall have the same
accounting and financial expertise or other professional expertise as possessed by the
appointing Director (as such accounting, financial and professional expertise may be
promulgated and amended from time to time). An External Director may not appoint an
Alternate Director for himself except as set forth in the immediately preceding
sentence. The appointment of an Alternate Director shall be subject to the consent of
the Board of Directors. Unless the appointing Director, by the instrument appointing an
Alternate Director or by written notice to the Company, limits such appointment to a
specified period of time or restricts it to a specified meeting or action of the Board
of Directors, or otherwise restricts its scope, the appointment shall be for all
purposes, and for a period of time concurrent with the term of the appointing Director.
	 
	 	(b)	 	Any notice to the Company pursuant to Article 45(a) shall be given in person
to, or by sending the same by mail to the attention of the General Manager of the
Company at the principal office of the Company or to such other person or place as the
Board of Directors shall have determined for such purpose, and shall become effective
on the date fixed therein, or upon the receipt thereof by the Company (at the place as
aforesaid), whichever is later, subject to the consent of the Board of Directors if the
appointee is not then a member of the Board of Directors, in which case the notice will
be effective as of the date of such consent.
	 
	 	(c)	 	An Alternate Director shall have all the rights and obligations of the Director
who appointed him, provided however, that (i) he may not in turn appoint an alternate
for himself (unless the instrument appointing him otherwise expressly provides), and
(ii) that an Alternate Director shall have no standing at any meeting of the Board of
Directors or any committee thereof while the Director who appointed him is present, and
(iii) that the Alternate Director is not entitled to remuneration.
	 
	 	(d)	 	An Alternate Director shall be responsible for his or her own acts and
defaults.
	 
	 	(e)	 	The office of an Alternate Director shall be vacated under the circumstances,
mutatis mutandis, set forth in Article 42 and Article 45(a), and such office shall ipso
facto be vacated if the Director who appointed such Alternate Director ceased to be a
Director.





PROCEEDINGS OF THE BOARD OF DIRECTORS




46. MEETINGS





	 	(a)	 	The Board of Directors may meet and adjourn its meetings and otherwise regulate
such meetings and proceedings as the Directors think fit.




16









 











	 	(b)	 	Any Director may at any time, and the Secretary, upon the request of such
Director, shall, convene a meeting of the Board of Directors, but not less than two (2)
days’ notice shall be given of any meetings so convened. Notice of any such meeting
shall be given to all the Directors and may be given orally, by telephone, in writing
or by mail, telex, cablegram or facsimile. Notwithstanding anything to the contrary
herein, failure to deliver notice to a director of any such meeting in the manner
required hereby may be waived by such Director, and a meeting shall be deemed to have
been duly convened notwithstanding such defective notice if such failure or defect is
waived prior to action being taken at such meeting, by all Directors entitled to
participate at such meeting to whom notice was not duly given as aforesaid.





47. QUORUM





	 	 	Until otherwise unanimously decided by the Board of Directors, a quorum at a meeting of the
Board of Directors shall be constituted by the presence in person or by telephone conference
of half (50%) of the Directors then in office who are lawfully entitled to participate in
the meeting. No business shall be transacted at a meeting of the Board of Directors unless
the requisite quorum is present (in person or by telephone conference) when the meeting
proceeds to business.





48. CHAIRMAN OF THE BOARD OF DIRECTORS





	 	 	The Board of Directors may from time to time, elect one of its members to be the Chairman of
the Board of Directors, and another of its members as Co-Chairman, remove such Chairman and
Co-Chairman from office and appoint others in their place. The Chairman of the Board of
Directors shall preside at every meeting of the Board of Directors, but if there is no such
Chairman, or if at any meeting he is not present within fifteen (15) minutes of the time
fixed for the meeting or if he is unwilling to take the chair, the Co-Chairman shall
preside. If both the Chairman and the Co-Chairman are not present within such fifteen (15)
minutes or are unwilling to take the chair the Directors present shall choose one of their
number to be the Chairman of such meeting





49. VALIDITY OF ACTS DESPITE DEFECTS





	 	 	All acts done bona fide at any meeting of the Board of Directors, or of a Committee of the
Board of Directors, or by any person(s) acting as Director(s), shall, notwithstanding that
it may afterwards be discovered that there was some defect in the appointment of the
participants in such meetings or any of them or any person(s) acting as aforesaid, or that
they or any of them were disqualified, be as valid as if there were no such defect or
disqualification.





CHIEF EXECUTIVE OFFICER AND PRESIDENT




50. CHIEF EXECUTIVE OFFICER AND PRESIDENT





	 	 	The Board of Directors may from time to time appoint one or more persons, whether or not
Directors, as Chief Executive Officer or Officers, General Manager or Managers, or President
of the Company and may confer upon such person(s), and from time to time modify or revoke,
such title(s) and such duties and authorities of the Board of Directors as the Board of
Directors may deem fit, subject to such limitations and restrictions as the Board of
Directors may from time to time prescribe. Unless otherwise determined by the Board of
Directors, the Chief Executive Officer shall have authority with respect of the management
of the Company in the ordinary course of business. Such appointment(s) may be either for a
fixed term or without any limitation of time, and the Board of Directors may from time to
time (subject to the provisions of the Companies Law and of any contract between any such
person and the Company) fix his or their salaries and emoluments, remove or dismiss him or
them from office and appoint another or others in his or their place or places.




17









 










MINUTES




51. MINUTES





	 	(a)	 	Minutes of each General Meeting and of each meeting of the Board of Directors
shall be recorded and duly entered in books provided for that purpose, and shall be
held by the Company at its principal place of office or its Registered Office or such
other place as shall have been determined by the Board of Directors. Such minutes
shall, in all events, set forth the names of the persons present at the meeting and all
resolutions adopted thereat.
	 
	 	(b)	 	Any minutes as aforesaid, if purporting to be signed by the chairman of the
meeting or by the chairman of the next succeeding meeting, shall constitute prima facie
evidence of the matters recorded therein.





DIVIDENDS




52. DECLARATION OF DIVIDENDS





	 	 	The Board of Directors may, subject to the applicable provisions of the Companies Law, from
time to time declare, and cause the Company to pay, such dividend as may appear to the Board
of Directors to be justified by the profits of the Company. The Board of Directors shall
determine the time for payment of such dividends, both interim and final, and the record
date for determining the shareholders entitled thereto.





53. FUNDS AVAILABLE FOR PAYMENT OF DIVIDEND





	 	 	No dividend shall be paid otherwise than out of the profits of the Company.





54. AMOUNT PAYABLE BY WAY OF DIVIDENDS





	 	 	Subject to the provisions of these Articles and subject to any rights or 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 which shall be declared as dividends shall be distributed among the
shareholders of the Company pro rata in accordance with their respective shareholdings in
the Company on the record date. No amount paid or credited as paid on a share in advance of
calls shall be treated for purposes of this Article as paid on a share.





55. INTEREST





	 	 	No dividend shall carry interest as against the Company.





56. PAYMENT IN SPECIE





	 	 	Upon the determination of the Board of Directors, the Company (i) may cause any monies,
investments, or other assets forming part of the undivided profits of the Company, standing
to the credit of a reserve fund, or to the credit of a reserve fund for the redemption of
capital, or in the hands of the Company and available for dividends, or representing
premiums received on the issuance of shares and standing to the credit of the share premium
account, to be capitalized and distributed among such of the shareholders as would be
entitled to receive the same if distributed by way of dividend and in the same proportion,
on the footing that they become entitled thereto as capital, or may cause any part of such
capitalized fund to be applied on behalf of such shareholders in paying up in full, on such
terms as the resolution may provide, any unissued shares or debentures or debenture stock of
the Company which shall be distributed accordingly or in payment, in full or in part, of the
uncalled liability on all issued shares or debentures or




18









 











	 	 	debenture stock if such liability
exists, on a pro rata basis; and (ii) may cause such distribution or payment to be accepted
by such shareholders in full satisfaction of their interest in the said capitalized sum.





57. IMPLEMENTATION OF POWERS UNDER ARTICLE 56





	 	 	For the purpose of giving full effect to any resolution under Article 56, and without
derogating from the provisions of Article 7(b) hereof, the Board of Directors may settle any
difficulty which may arise in regard to the distribution as it thinks expedient, and, in
particular, may issue fractional certificates, and may fix the value for distribution of any
specific assets, and may determine that cash payments shall be made to any members upon the
footing of the value so fixed, and may vest any such cash, shares, debentures, debenture
stock or specific assets in trustees upon such trusts for the persons entitled to the
dividend or capitalized fund as may seem expedient to the Board of Directors.





58. DIVIDEND ON UNPAID SHARES





	 	 	Without derogating from Article 54 hereof, the Board of Directors may give an instruction
which shall prevent the distribution of a dividend to the registered holders of a share the
full consideration of which has not been paid up.





59. RETENTION OF DIVIDENDS





	 	(a)	 	The Board of Directors may retain any dividend or other monies payable or
property distributable in respect of a share on which the Company has a lien, and may
apply the same in or towards satisfaction of the debts, liabilities, or engagements in
respect of which the lien exists.
	 
	 	(b)	 	The Board of Directors may retain any dividend or other monies payable or
property distributable in respect of a share in respect of which any person is, under
Article 21 or 22, entitled to become a member, or which any person, is,
under said Articles, entitled to transfer, until such person shall become a member
in respect of such share or shall transfer the same.





60. UNCLAIMED DIVIDENDS





	 	 	All unclaimed dividends or other moneys payable in respect of a share may be invested or
otherwise made use of by the Board of Directors for the benefit of the Company until
claimed. The payment by the Directors of any unclaimed dividend or such other moneys into a
separate account shall not constitute the Company a trustee in respect thereof . The
principal (and only the principal) of an unclaimed dividend or such other moneys shall be if
claimed, paid to a person entitled thereto.





61. MECHANICS OF PAYMENT





	 	 	The Board of Directors may fix the mechanics for payment of dividends as it deems fit.
However, if nothing to the contrary in the resolution of the Board of Directors, than all
dividends or other moneys payable in cash in respect of a share may be paid by check or
warrant sent through the post to, or left at, the registered address of the person entitled
thereto or by transfer to a bank account specified by such person (or, if two or more
persons are registered as joint holders of such share or are entitled jointly thereto in
consequence of the death or bankruptcy of the holder or otherwise, to the joint holder whose
name is registered first in the Register of Members or his bank account or the person who
the Company may then recognize as the owner thereof or entitled thereto under Article 21 or
22 hereof, as applicable, or such person’s bank account), or to such person and at such
other address as the person entitled thereto may by writing direct. Every such check or
warrant shall be made payable to the order of the person to whom it is sent, or to such
person as the person entitled thereto as aforesaid may direct, and payment of the check or
warrant by the banker upon whom it is drawn shall be a good discharge to the Company.





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62. RECEIPT FROM A JOINT HOLDER





	 	 	If two or more persons are registered as joint holders of any share, or are entitled jointly
thereto in consequence of the death or bankruptcy of the holder or otherwise, any one of
them may give effectual receipts for any dividend or other moneys payable or property
distributable in respect of such share.





ACCOUNTS




63. BOOKS OF ACCOUNT





	 	 	The Board of Directors shall cause accurate books of account to be kept in accordance with
the provisions of the Companies Law and of any other applicable law. Such books of account
shall be kept at the Registered Office of the Company, or at such other place or places as
the Board of Directors may think fit, and they shall always be open to inspection by all
Directors. No member, not being a Director, shall have any right to inspect any account or
book or other similar document of the Company, except as conferred by law or authorized by
the Board of Directors or by Ordinary Resolution of the Company.





64. AUDIT





	 	 	At least once in every fiscal year the accounts of the Company shall be audited and the
correctness of the profit and loss account and balance sheet certified by one or more duly
qualified auditors.





65. AUDITORS





	 	 	The appointment, authorities, rights and duties of the auditor(s) of the Company, shall be
regulated by applicable law, provided, however, that in exercising its authority to fix the
remuneration of the auditor(s), the members in General Meeting may, by Ordinary Resolution,
act (and in the absence of any action in connection therewith shall be deemed to have so
acted) to authorize the Board of Directors to fix such remuneration subject to such criteria
or standards, , if any, as may be provided in such Ordinary Resolution, and if no such
criteria or standards are so provided, such remuneration shall be fixed in an amount
commensurate with the volume and nature of the services rendered by such auditor(s).





BRANCH REGISTERS




66. BRANCH REGISTERS





	 	 	Subject to and in accordance with the provisions of Sections 71 to 80, inclusive, of the
Companies Law and to all orders and regulation issued thereunder, the Company may cause
branch registers to be kept in any place outside Israel as the Board of Directors may think
fit, and, subject to all applicable requirements of law, the Board of Directors may from
time to time adopt such rules and procedures as it may think fit in connection with the
keeping of such branch registers.





INSURANCE, INDEMNITY AND EXEMPTION



Subject to the provisions of the Companies Law with regard to such matters and to the maximum
extent permitted under the Companies Law:




67. INSURANCE





	 	 	The Company may enter into a contract for the insurance of the liability, in whole or in
part, of any of its Office Holders with respect to an obligation imposed on such Office
Holder due to an act performed by the Office Holder in the Office Holder’s capacity as an
Office Holder of the Company arising from any of the following:





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	 	1.	 	a breach of duty of care to the Company or to any other person;
	 
	 	2.	 	a breach of the duty of loyalty to the Company, provided that the Office Holder
acted in good faith and had reasonable grounds to assume that the act that resulted in
such breach would not harm the interests of the Company; and
	 
	 	3.	 	a financial liability imposed on such Office Holder in favor of any other
person.





68. INDEMNITY





	 	(a)	 	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 of the Company with respect to the
following liabilities and expenses, provided that such liabilities or expenses
were incurred by such Office Holder in such Office Holder’s capacity as an Office
Holder of the Company:






	 	(i)	 	a financial liability imposed on an Office Holder in favor of
another person by any judgment, including a judgment given as a result of a
settlement or an arbitrator’s award which has been confirmed by a court in
respect of an act performed by the Office Holder.
	 
	 	(ii)	 	reasonable litigation expenses, including attorneys’ fees,
expended by the Office Holder as a result of an investigation or proceeding
instituted against him or her by an authority authorized to conduct such
investigation or proceeding, provided that (i) no indictment (as defined in the
Companies Law) was filed against such office holder as a result of such
investigation or proceeding; and (ii) no financial liability as a substitute
for the criminal proceeding (as defined in the Companies Law) was imposed upon
him or her as a result of such investigation or proceeding or if such financial
liability was imposed, it was imposed with respect to an offence that does not
require proof of criminal intent.
	 
	 	(iii)	 	reasonable litigation costs, including attorney’s fees,
expended by an Office Holder or which were imposed on an Office Holder by a
court in proceedings filed against the Office Holder by the Company or in its
name or by any other person or in a criminal charge in respect of which the
Office Holder was acquitted or in a criminal charge in respect of which the
Office Holder was convicted for an offence which did not require proof of
criminal intent.






	 	(b)	 	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 undertake in
advance to indemnify an Office Holder of the Company with respect to those liabilities
and expenses described in the following Articles:






	 	(i)	 	Sub-Article 68(a)(ii) and 68(a)(iii); and
	 
	 	(ii)	 	Sub-Article 68(a)(i), provided that the undertaking to
indemnify:






	 	(1)	 	is limited to such events which the Directors
shall deem to be likely to occur in light of the operations of the
Company at the time that the undertaking to indemnify is made and for
such amounts or criteria which the Directors may, at the time of the
giving of such undertaking to indemnify, deem to be reasonable under
the circumstances; and





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	 	(2)	 	the undertaking to provide such indemnification
shall set forth such events which the Directors shall deem to be likely
to occur in light of the operations of the Company at the time that the
undertaking to indemnify is made, and the amounts and/or criteria which
the Directors may, at the time of the giving of such undertaking to
indemnify, deem to be reasonable under the circumstances.





69. EXEMPTION





	 	 	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 release, in advance, any
Office Holder from any liability for damages arising out of a breach of a duty of care
towards the Company, other than breach of such duty of care towards the Company in a
distribution (as such term is defined in the Companies Law).






	 	(a)	 	Any amendment to the Companies Law adversely affecting the right of any Office
Holder to be indemnified or insured pursuant to Articles 67 and 68 shall be prospective
in effect, and shall not affect the Company’s obligation or ability to indemnify or
insure an Office Holder for any act or omission occurring prior to such amendment.
	 
	 	(b)	 	The provisions of Articles 67-69 are not intended, and shall not be
interpreted so as to restrict the Company, in any manner, in respect of the procurement
of insurance and/or in respect of indemnification and/or exculpation, in favor of 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 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 or the
provision of any such indemnification shall be approved by the Board of Directors. Any
modification of Articles 67-69 shall be prospective in effect and shall not affect the
Company’s obligation or ability to indemnify an Office Holder for any act or omission
occurring prior to such modification.





WINDING UP




70. WINDING UP





	 	 	If the Company is wound up, then subject to applicable law and to the rights of the holders
of shares with special rights upon winding up, the assets of the Company available for
distribution among the members shall be distributed to them in proportion to the respective
holdings of the shares in respect of which such distribution is being made.





RIGHTS OF SIGNATURE, STAMP, AND SEAL




71. RIGHTS OF SIGNATURE, STAMP, AND SEAL





	 	(a)	 	The Board of Directors shall be entitled to authorize any person or persons
(who need not be Directors) to act and sign on behalf of the Company, and the acts and
signature of such person (s) on behalf of the Company shall bind the Company insofar as
such person (s) acted and signed within the scope of his or their authority.
	 
	 	(b)	 	The Board of Directors may provide for a seal. If the Board of Directors so
provides, it shall also provide for the safe custody thereof. Such seal shall not be
used except by the authority of the Board of Directors and in the presence of the
person (s) authorized to sign on behalf of the Company, who shall sign every instrument
to which such seal is affixed.





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	 	(c)	 	The Company may exercise the powers conferred by Section 102 of the Companies
Law regarding a seal for use abroad, and such powers shall be vested in the Board of
Directors.





NOTICES




72. NOTICES





	 	(a)	 	Any written notice or other document may be served by the Company upon any
member either personally or by sending it by prepaid mail (airmail if sent
internationally) addressed to such member at his address as described in the Register
of Members. Any written notice or other document may be served by any member upon the
Company by tendering the same in person to the Secretary or the General Manager or
Chief Executive Officer of the Company at the principal office of the Company or by
sending it by prepaid registered mail (airmail if posted outside Israel) to the Company
at it Registered Address. Any such notice or other document shall be deemed to have
been served five (5) business days after it has been posted seven (7) business days if
posted internationally), or when actually tendered in person, to such member ( or to
the Secretary or the General Manager). Notice sent by cablegram, telex, or facsimile
shall be deemed to have been served two business days after the notice is, sent to the
addressee, or when in fact received, whichever is earlier, notwithstanding that it was
defectively addressed or failed, in some other respect, to comply with the provisions
of this Article 73 (a).






	 	(b)	 	All notices to be given to the members shall, with respect to any share to
which persons are jointly entitled, be given to whichever of such persons is named
first in the Register of Members, and any notice so given shall be sufficient notice to
the holders of such share.






	 	(c)	 	Any member whose address is not described in the Register of Members, and who
shall not have designated in writing delivered to the Company an address for the
receipt of notices, shall not be entitled to receive any notice from the Company.






	 	(d)	 	Notwithstanding anything to the contrary contained herein, notice by the
Company of a General Meeting which is published in at least two daily newspapers in the
State of Israel within the time otherwise required for giving notice of such meeting
under Article 25 hereof and containing the information required to be set forth in such
notice under such Article, shall be deemed to notice of such meeting duly given, for
purposes of these Articles, to any member of the Company.





73. AMENDMENTS





	 	 	Except as set forth in Articles 5, 6 and 7,    these Articles may be amended, replaced or
superseded only by a Special Resolution adopted by the General Meeting, unless a provision
of these Articles requires a greater majority.





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