Document:

cksw_ex4-2.htm

    Exhibit
4.2

     

     

     

     

     

     

     

     

    
      ARTICLES
OF ASSOCIATION

       

      OF

       

      CLICKSOFTWARE
TECHNOLOGIES LTD.

       

      AMENDED
AND RESTATED AS OF JULY 9, 2007

       

    

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLES
OF ASSOCIATION

     

    OF

     

    CLICKSOFTWARE
TECHNOLOGIES  LTD.

     

    INTERPRETATION

     

    

     

    
      	
              1.

            	
               

            	
              In
      these Articles, the words in the first column of the following table shall
      bear the meanings set opposite them respectively in the second column
      thereof, if not inconsistent with the subject or
  context:

            

    

    
       

    

    
      	 	
              Word

            	
              Meaning

            	 
	 	
              The
      Company

               

            	
              The
      above-named Company.

            	 
	 	
              Companies
      Law

               

            	
              The
      Companies Law, 1999 (the "Companies Law") and all orders and regulations
      issued thereunder as amended from time to time, including any law or
      statute replacing it.

               

            	 
	 	
              The
      Statutes

               

            	
              The
      Companies Law, the Securities Law,  5728-1968 and every other
      ordinance or law for the time being in force concerning companies and
      affecting the Company.

               

            	 
	 	
              These
      Articles

            	
              These
      Articles of Association, as shall be amended from time to
      time.

               

            	 
	 	
              Officer

               

            	
              A
      Director, General Manager, Chief Executive Officer, Vice General Manager,
      Chief Financial Officer, any other manager directly subordinate to the
      General Manager, and any person who fills one of the said positions in the
      Company, even if he carries a different title.

               

            	 
	 	
              Audit
      Committee

               

            	
              As
      defined in the Companies Law.

            	 
	 	
              The
      Office

               

            	
              The
      registered office of the Company.

            	 
	 	
              The
      Seal

            	
              Any
      of (i) the rubber stamp of the Company, (ii) the facsimile signature of
      the Company, or (iii) the electronic signature of the Company as approved
      by the Board of Directors.

               

            	 
	 	
              Shareholders
      Register

            	
              The
      shareholders register required to be kept according to the Companies Law
      and any other shareholders register permitted to be kept by the Company
      according to the Companies Law.

            	 

    

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
 

    
      	 	
              Month

            	
              A
      Gregorian month.

               

            	 
	 	
              NIS

            	
              New
      Israeli Shekel

               

            	 
	 	
              Writing

            	
              Printing,
      lithography, photography and any other mode or modes of representing or
      reproducing words in a visible form.

            	 

    

    
      
         

      

    

    Words
importing the masculine gender shall include the feminine gender, and words
importing person shall include corporations.

    
       

    

    Subject
as aforesaid, any words or expressions defined in the Statutes shall, except
where the subject or context forbids, bear the same meanings in these
Articles.

    
       

       
PURPOSE

    
      
        
           

        

      

    

    
      	
               
      

            	
              2.

            	
              The
      Company may engage in any type of lawful business as may be determined by
      the board of directors of the Company from time to
  time.

            

    

    
       

       
PUBLIC
COMPANY

    
       

    

    
      	
               
      

            	
              3.

            	
              The
      Company is a limited public company,
  consequently:

            

    

    
       

    

    
      
        	
                 
      

              	
                 

              	
                (a)           no
      limitations will apply to the transfer of its
  shares;

              

      

      
        
           

        

        
          	
                   
      

                	
                   

                	
                  (b)           the
      number of shareholders will be
unlimited;

                

        

        
          
             

          

          
            	
                     
      

                  	
                     

                  	
                    (c)           the
      Company may issue shares, debentures or any other securities to the
      public.

                  

          

          
            
               

            

            
              	
                       
      

                    	
                       

                    	
                      (d)           the
      liability of its shareholders is limited by
  shares.

                    

            

            
               

               
SHARE
CAPITAL

          

        

      

    

    
       

    

    
      
        	
                 
      

              	
                4.

              	
                (a)           The
      share capital of the Company is NIS two million (2,100,000), divided
      into:

              

      

      
         

      

    

    
      	
               
      

            	
              (i)

            	
              97,000,000
      Ordinary Shares of NIS 0.02 nominal value each ("Ordinary
      Shares");

            

    

    
       

    

    
      	
               
      

            	
              (ii)

            	
              3,000,000
      Non-Voting Ordinary Shares of NIS 0.02 nominal value each ("Non-Voting
      Ordinary Shares"), and

            

    

    
       

    

    
      	
               
      

            	
              (ii)

            	
              5,000,000
      Special Preferred Shares of NIS 0.02 nominal value each ("Special
      Preferred Shares").

            

    

    
      
         
Except
as otherwise provided herein, the shares of each class will rank pari passu with
all the other shares in that class.

    

    
       

    

    
      
        	
                 
      

              	
                 

              	
                (b)           Each
      Ordinary Share entitles its holder to receive notice of, and to
      participate in, all General Meetings of the Company, and to one (1) vote
      in such meetings for every share, and the other rights specified
      in  these Articles.

              

      

      
         

      

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
       

    

    
      
        	
                 
      

              	
                 

              	
                

                  (c)           The
      Special Preferred Shares may be issued from time to time as shares of one
      or more series, with such distinctive serial designations as may be stated
      or expressed in the resolution or resolutions providing for the issuance
      of such shares from time to time adopted by the Board of Directors of the
      Company. In the resolution or resolutions providing for the issuance of
      such shares, the Board of Directors of the Company is expressly
      authorized, without the need for shareholder action, to fix the terms and
      preferences of the shares of such series, including without limitation the
      dividend rate, number of shares, and the terms upon which the shares are
      convertible into or exchangeable for shares of any other class or
      classes.

                

              

      

      
        
           

        

        
          	
                   
      

                	
                   

                	
                  

                    (d)           Each
      Non-Voting Ordinary Share will have the same rights as the Ordinary Shares
      except that they will not have any voting rights in the Company, including
      the right to receive notice of meetings of shareholders and to participate
      in and vote at meetings of shareholders.  Each Non-Voting
      Ordinary Share is convertible at any time after issuance of such share at
      the option of the holder thereof and without payment of any additional
      consideration into one (1) fully-paid and non-assessable voting Ordinary
      Share, according to the procedure set out below. Before any holder of
      Non-Voting Ordinary Shares shall be entitled to convert the same into
      Ordinary Shares to be converted, the holder shall deliver to the Company
      written notice specifying the number of shares to be converted. From and
      after the date on which the Company or its transfer agent received such
      notice, shares included in such notice shall be deemed converted as
      specified in the notice, and the converting holder shall be deemed the
      owner and shall be treated for all purposes as the record holder of the
      number of Ordinary Shares into which such shares were converted. Promptly
      after delivery of such written notice, the holder shall surrender the
      certificate(s) therefor, duly endorsed, at the office of the Company or of
      any transfer agent for such shares. The Company shall, as soon as
      practicable thereafter, issue and deliver at such office to such holder,
      certificate(s) for the number of shares to which such holder shall be
      entitled as aforesaid.

                  

                

        

        
           

           
AMENDMENT OF ARTICLES

        
          
             

          

          
            
              
                
                  	
                           
      

                        	
                          5.

                        	
                          

                            These
      Articles may be amended by a majority vote at a meeting of shareholders of
      the Company, except where otherwise required by law.

                          

                           

                          
                            If
      the Company's shares are divided into classes of shares, then a change
      that infringes on the rights of a class of shares shall be made only with
      the approval of a General Meeting of that class; the provisions of these
      Articles shall apply, mutatis mutandis, to the adoption of decisions by a
      class meeting.

                          

                           

                          
                            Notwithstanding
      the provisions of this Article, a change of these Articles that obligates
      a shareholder to acquire additional shares or to increase the extent of
      his liability shall not obligate the
  shareholder.

                          

                        

                

                
                   

                   
SHARES

                
                  
                     

                  

                  
                    	
                             
      

                          	
                            6.

                          	
                            

                              

                                Subject
      to these Articles or to the terms of any resolution creating new shares,
      the unissued shares in the registered share capital of the Company from
      time to time shall be under the control of the Board of Directors, which
      shall have the power to allot shares or otherwise dispose of them to such
      persons, on

                              

                            

                          

                  

                  
                     

                  

                  
                    
                      
                      

                    

                    
                      4

                      
                        

                      

                    

                    
                      
                      

                    

                  

                

                
                   

                

                
                  
                    
                      	
                               
      

                            	
                               

                            	
                              

                                

                                  such
      terms and conditions, and either at par or at a premium or, subject to the
      provisions of the Statutes, at a discount, and at such times as the Board
      of Directors may think fit, and the power to give to any person the option
      to acquire from the Company any shares, either at nominal value or at a
      premium or, subject as aforesaid, at a discount, during such time and for
      such consideration as the Board of Directors may
      determine.

                                

                              

                            

                    

                    
                      
                         

                      

                      
                        	
                                 
      

                              	
                                7.

                              	
                                

                                  

                                    If
      two or more persons are registered as joint holders of any share, any one
      of such persons may give effectual receipts for any dividends or other
      monies in respect of such share.

                                     

                                    
                                      The
      Company shall not be required to recognize any holder of a share as a
      holder other than the registered holder of such
      share.

                                    

                                  

                                

                              

                      

                      
                        
                           

                        

                        
                          	
                                   
      

                                	
                                  8.

                                	
                                  

                                    

                                      Every
      shareholder registered in the Shareholders' Register shall been titled,
      without payment, to receive within thirty days after allotment or
      registration of transfer (unless the conditions of issuance provide for a
      longer interval), one certificate under the Seal for all the shares
      registered in his name, and if the Board of directors so approves, several
      certificates, each for one or more of such shares.  Each
      certificate shall specify the number and denoting numbers of the shares in
      respect of which it is issued and may also specify the amount paid up
      thereon; provided that, in the case of joint holders, the Company shall
      not be bound to issue more than one certificate to all the joint holders,
      and delivery of such certificate to one of them shall be sufficient
      delivery to all. Every certificate shall be signed by one Director and
      countersigned by the Secretary or some other person nominated by the Board
      of Directors for this
purpose.

                                    

                                  

                                

                        

                        
                           

                          
                            	
                                     
      

                                  	
                                    9.

                                  	
                                    If
      any share certificate shall be defaced, worn out, destroyed or lost, it
      may be renewed on such evidence being produced, and such indemnity (if
      any) being given as the Board of Directors shall require and (in the case
      of defacement or wearing out) upon delivery of the old certificate and, in
      any case, upon payment of such sum not exceeding NIS 50 (fifty New Israeli
      Shekels) as the Board of Directors may from time to time
      require.

                                  

                          

                          
                             

                          

                          
                            	
                                     
      

                                  	
                                    10.

                                  	
                                    The
      Company may, directly or indirectly, purchase its own shares subject to
      the provisions of the Companies Law. If the Company purchases its own
      shares, such shares will not have any rights as long as they are owned by
      the Company.

                                  

                          

                          
                             

                          

                          
                            	
                                     
      

                                  	
                                    11.

                                  	
                                    [Reserved]

                                  

                          

                          
                             

                             
TRANSFER
OF SHARES

                        

                        
                           

                        

                        
                          	
                                   
      

                                	
                                  12.

                                	
                                  No
      transfer of shares shall be registered unless a proper writing or
      instrument of transfer (in any customary form or any other form
      satisfactory to the Board 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 Shareholders Register
      (which the Company guarantees to perform promptly from submission to it of
      the foregoing) in respect of the shares so transferred, the Company may
      continue to regard the transferor as the owner
  thereof.

                                

                        

                        
                           

                        

                      

                      
                        
                          
                          

                        

                        
                          5

                          
                            

                          

                        

                        
                          
                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
       

    

    
      
        	
                 
      

              	
                13.

              	
                The
      Board of Directors may refuse, without giving any reasons therefor, to
      register any transfer of shares where the Company has a lien on the
      shares, constituting the subject matter of the transfer, but fully paid-up
      shares may be transferred freely and such transfers do not require the
      approval of the Board of Directors.

                 

                
                  All
      instruments of transfer shall remain in the custody of the Company, but
      any such instrument which the Board of Directors refused to register shall
      be returned to the person from whom it was received, if such request be
      made by him.

                

              

      

      
         

      

      
        
          	
                   
      

                	
                  14.

                	
                  The
      Transfer Records and the Shareholders Register and Debenture Holders (if
      any) Register and Debenture Stock Holders (if any) Register and other
      securities (if any) Register of the Company may be closed during such time
      as the Board of Directors may deem fit, not exceeding, in the aggregate,
      thirty (30) days in each year.

                

        

        
           

           
TRANSMISSION
OF SHARES

      

      
         

      

      
        	
                 
      

              	
                15.

              	
                In
      the case of the death of a shareholder, or a holder of a debenture, the
      survivor or survivors, where the deceased was a joint holder, and the
      executors and/or administrators and/or the legal heirs of the deceased
      where he was a sole or only surviving holder, shall be the only persons
      recognized by the Company as having any title to his shares or his
      debentures, but nothing herein contained shall release the estate of a
      deceased joint holder from any liability in respect of any share or any
      debenture jointly held by him.

              

      

      
         

      

      
        	
                 
      

              	
                16.

              	
                Any
      person who becomes entitled to a share or a debenture in consequence of
      the death or bankruptcy or any shareholder may, upon producing such
      evidence of title as the Board of Directors shall require, with the
      consent of the Board of Directors, be registered himself as holder of the
      share or the debenture or, subject to the provisions as to transfers
      herein contained, transfer the same to some other
  person.

              

      

      
         

      

      
        	
                 
      

              	
                17.

              	
                A
      person entitled to a share or a debenture by transmission shall be
      entitled to receive, and may given a discharge for, any dividends or
      interest or other monies payable in respect of the share or debenture, but
      he shall not be entitled in respect of it to receive notices of, or to
      attend or vote at meetings of the Company or, save as aforesaid, to
      exercise any of the rights or privileges of a shareholder or a holder of a
      debenture unless and until he shall become a shareholder in respect of the
      share or a holder of the debenture.

              

      

      
         

         
ALTERATIONS OF
CAPITAL

    

    
       

    

    
      	
               
      

            	
              18.

            	
              Subject
      to the provisions of the Companies Law, the Company may from time to time
      by a majority vote at a meeting of shareholders of the
      Company:

            

    

    
       

    

    
      
        	
                 
      

              	
                 

              	
                

                  (a)           consolidate
      and divide all or any of its share capital into shares of larger amount
      than its existing shares; or

                

              

      

      
        
           

        

        
          	
                   
      

                	
                   

                	
                  

                    (b)           cancel
      registered share capital that has not yet been issued, on condition that
      there are no undertakings of the Company including conditional
      undertakings to issue such shares;
or

                  

                

        

        
          
             

          

          
            
              
              

            

            
              6

              
                

              

            

            
              
              

            

          

          
             

          

          
            	
                     
      

                  	
                     

                  	
                    

                      (c)           divide
      its share capital or any part thereof into shares of smaller amount than
      is fixed by its Articles of Association by sub-division of its existing
      shares or any of them, and so that as between the resulting shares, one or
      more of such shares may, by the Resolution by which such sub-division is
      effected, be given any preference or advantage as regards dividend, return
      of capital, voting or otherwise over the others or any other shares;
      or

                    

                  

          

          
            
              
                 

              

            

            
              	
                       
      

                    	
                       

                    	
                      

                        (d)           reduce
      its share capital and any capital redemption reserve fund in any way that
      may be considered expedient.

                      

                    

            

            
               

            

          

        

      

    

    
      
        	
                 
      

              	
                19.

              	
                The
      Company may, subject to the Companies Law, issue redeemable shares and
      redeem the same according to the terms and conditions which the Company
      shall determine.

              

      

      
         

         
INCREASE
OF CAPITAL

      
         

      

      
        	
                 
      

              	
                20.

              	
                The
      Company may from time to time by a majority vote at a meeting of
      shareholders, whether all the shares for the time being authorized shall
      have been issued or all the shares for the time being issued shall have
      been fully called up or not, increase its share capital by the creation of
      new shares; such new capital to be of such amount and to be divided to
      shares of such respective amounts and (subject to any special rights for
      the time being attached to any existing class of shares) to carry such
      preferential, deferred or other special rights (if any) or to be subject
      to such conditions or restrictions (if any) in regard to dividend, return
      of capital, voting or otherwise as the General Meeting deciding upon such
      increase directs.

              

      

      
         

      

      
        	
                 
      

              	
                21.

              	
                Except
      so far as otherwise provided by or pursuant to these Articles or by the
      conditions of issuance, any new share capital shall be considered as part
      of the original ordinary share capital of the Company, and shall be
      subject to the same provisions with reference to liens, transfer,
      transmission and otherwise as the original share
  capital.

              

      

      
         

         

      

      MODIFICATION
OF CLASS RIGHTS

      
         

      

      
        	
                 
      

              	
                22.

              	
                If,
      at any time, the share capital is divided into different classes of
      shares, the rights attached to any class (unless otherwise provided by the
      terms of issuance of the shares of that class) may be varied with the
      consent in writing of the holders of all the issued shares of that class,
      or with the sanction of a majority vote at a meeting of the shareholders
      passed at a separate meeting of the holders of the shares of the class.
      The provisions of these Articles relating to General Meetings shall apply,
      mutatis mutandis, to every such separate General Meeting. Any holder of
      shares of the class present in person or by proxy  may demand a
      secret poll.

              

      

      
         

      

      
        	
                 
      

              	
                23.

              	
                Unless
      otherwise provided by the conditions of issuance, the enlargement of an
      existing class of shares, or the issuance of additional shares thereof,
      shall not be deemed to modify or abrogate the rights attached to the
      previously issued shares of such class or of any other
    class.

              

      

      
         

         
BORROWING
POWERS

      
        
           

        

        
          	
                   
      

                	
                  

                    24.

                  

                	
                  

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

                  

                

        

        
           

        

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      
        
           

        

        
          	
                   
      

                	
                   

                	
                  

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

                  

                

        

        
          
             

             
POWERS
OF THE GENERAL MEETING

        

      

      
         

      

      
        	
                 
      

              	
                25.

              	
                Without
      derogating from the authority of the General Meeting pursuant to these
      Articles, the Company's decisions on the following matters shall be
      adopted at a General Meeting:

              

      

    

    
       

    

    
      
        
          
            	
                     
      

                  	
                     

                  	(1) 	
                    

                      any
      changes in these Articles;

                    

                  

          

          
            
              
                 

              

              
                	
                         
      

                      	
                         

                      	(2) 	
                        exercise
      of the powers of the Board of Directors in accordance with the provisions
      of Section 52(a) of the Companies
Law;

                      

              

              
                
                  
                     

                  

                  
                    	
                             
      

                          	
                             

                          	(3) 	
                            

                              appointment
      of the Company's Auditor;

                            

                          

                  

                  
                    
                      
                         

                      

                      
                        	
                                 
      

                              	
                                 

                              	(4) 	
                                

                                  appointment
      of External Directors, in accordance with the provisions of the Companies
      Law;

                                

                              

                      

                      
                        
                          
                             

                          

                          
                            	
                                     
      

                                  	
                                     

                                  	(5) 	
                                    

                                      approval
      of acts and transactions that require approval by the General Meeting
      under the provisions of Articles 255 and 268 to 275 of the Companies
      Law;

                                    

                                  

                          

                          
                            
                              
                                 

                              

                              
                                	
                                         
      

                                      	
                                         

                                      	(6) 	
                                        

                                          the
      increase and reduction of the registered share capital, inaccordance with
      the provisions of Articles 286 and 287 to the Companies
      Law;

                                        

                                      

                              

                              
                                
                                  
                                     

                                  

                                  
                                    	
                                             
      

                                          	
                                             

                                          	(7) 	
                                            

                                              a
      merger, as specified in Article 320(a) to the Companies
      Law.

                                            

                                          

                                  

                                  
                                     

                                     
GENERAL
MEETINGS

                                  
                                    
                                       

                                    

                                    
                                      
                                        	
                                                 
      

                                              	
                                                26.

                                              	
                                                

                                                  (a)           General
      Meetings shall be held at least once in every calendar year
      at such time, not being more than fifteen months after
      the  holding of the last preceding General Meeting, and at such
      time and place as may be determined by the Board of Directors. Such Annual
      General Meetings shall be called "Annual Meetings", and all other General
      Meetings of the shareholders shall be called “Special Meetings". The
      Annual Meeting shall receive and consider the Directors' Report, the
      Financial Statements, appoint auditors, elect directors, and transact any
      other business which, under these Articles or by the Companies Law, may be
      transacted at a General Meeting of the Company, provided that notice of
      such other business was given to shareholders in accordance with the
      provisions of these Articles. At a General Meeting, decisions shall be
      adopted only on matters that were specified on the agenda.

                                                   

                                                  
                                                    (b)           Any
      reference in these Articles to a "General Meeting" will be either a
      General Meeting or a Special Meeting, according to the
      context.

                                                  

                                                

                                              

                                      

                                      
                                         

                                      

                                      
                                        
                                          	
                                                   
      

                                                	
                                                  27.

                                                	
                                                  The
      Board of Directors may, whenever it deems necessary, and shall upon such
      requisition in writing as is provided by Section 63(b) of the Companies
      Law, convene a General Meeting. Any such request must state the purposes
      for which the meeting is to be called, be signed by the requesting
      shareholders, and must be deposited at the Office. Such
      request

                                                

                                        

                                        
                                           

                                        

                                        
                                          
                                            
                                            

                                          

                                          
                                            8

                                            
                                              

                                            

                                          

                                          
                                            
                                            

                                          

                                        

                                      

                                      
                                        
                                           

                                        

                                        
                                          
                                            	
                                                     
      

                                                  	
                                                     

                                                  	
                                                    

                                                      may
      consist of several documents in like form, each signed by one or more
      requesting shareholder.

                                                    

                                                  

                                          

                                          
                                            
                                               

                                            

                                            
                                              
                                                	
                                                         
      

                                                      	
                                                        28.

                                                      	
                                                        Unless
      a longer period for notice is prescribed by the Companies Law, at least
      ten (10) days and not more than sixty (60) days notice of any General
      Meeting shall be given, specifying the place, the day and the hour
      of meeting and, in the case of special business, the nature of such business,
      shall be given in the manner hereinafter mentioned, to 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.
      Notices shall be given in accordance with Article 96.  Provided
      that the accidental omission to give such notice to, or the non-receipt of
      such notice by, any such shareholder shall not invalidate any resolution
      passed or proceeding held at any such meeting and, with the consent
      of all the shareholders for the time being entitled to receive notice
      of meetings, a meeting may be convened upon a shorter notice or without
      notice, and generally in such manner as such shareholders may approve.
      Such consent may be given at the meeting or retrospectively after
      the meeting. If the shareholder did not provide the Company any address
      for the delivery of notices, the shareholder shall be deemed to have
      waived his right to receive
      notices.

                                                      

                                              

                                              
                                                 

                                              

                                              
                                                
                                                  	
                                                           
      

                                                        	
                                                          29.

                                                        	
                                                          Only
      shareholders of record as reflected on the Company's Share Register at the
      close of business on the date fixed by the Board of Directors as the
      record date (the "Record Date") determining the then shareholders who will
      be entitled to vote, shall be entitled to notice of, and to vote, in
      person or by proxy, at a General Meeting and any postponement or
      adjournment thereof.

                                                        

                                                

                                                
                                                   

                                                   
PROCEEDINGS
AT GENERAL MEETINGS

                                                
                                                   

                                                

                                                
                                                  
                                                    	
                                                             
      

                                                          	
                                                            30.  

                                                          	
                                                            No
      business shall be transacted at any General Meeting unless a quorum is
      present when the meeting proceeds to business. The quorum at
      any  Meeting shall be two shareholders present in person or by
      proxy holding or representing at least thirty three percent (33%) of the
      total voting rights in the Company. A company being a shareholder shall be
      deemed to be personally present for the purpose of this Article if
      represented by its representative duly authorized in accordance with
      Article 42.

                                                          

                                                  

                                                  
                                                     

                                                  

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          31.

                                                        	
                                                          If,
      within half an hour from the time appointed for the holding of a General
      Meeting, a quorum is not present, the meeting shall stand adjourned to the
      same day in the next week at the same time and place, or any time and hour
      as the Board of Directors shall designate and state in a notice to the
      shareholders  entitled to vote at the original meeting, and if,
      at such adjourned meeting, a quorum is not present within half an hour
      from the time appointed for holding the meeting any two shareholders
      present in person or by proxy shall constitute a quorum. Notwithstanding
      the aforesaid, if a General Meeting was convened  at the demand
      of shareholders as permitted by Section 63(b) of the Companies Law, then a
      quorum at such adjourned meeting shall be present only if one or more
      shareholders are present who held in the aggregate at least 5% of the
      issued share capital of the Company and at least 1% of the voting rights
      in the Company or one or more shareholders who hold in the aggregate at
      least 5% of the voting rights in the
Company.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    
                                                    

                                                  

                                                  
                                                    9

                                                    
                                                      

                                                    

                                                  

                                                  
                                                    
                                                    

                                                  

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    	
                                                             
      

                                                          	
                                                            

                                                              32.

                                                            

                                                          	
                                                            

                                                              

                                                                (a)    At
      every General Meeting, a chairman shall be elected for that
      meeting.

                                                                 

                                                                (b)          The
      election of the meeting's chairman shall be held at the beginning of the
      meeting's discussions, which shall be opened by the chairman of the Board
      of Directors or by a Director whom the Board of Directors authorized to do
      so.

                                                              

                                                            

                                                          

                                                    
                                                       

                                                    

                                                  

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          33.

                                                        	
                                                          The
      chairman may, with the consent of any meeting at which a quorum is
      present, and shall, if so directed by the meeting, adjourn any meeting
      from time to time and from place to place as the meeting shall
      determine.  Whenever a meeting is adjourned pursuant to the
      provisions of this Article for more than seven days, notice of the
      adjourned meeting shall be given in the same manner as in the case of an
      original meeting. Save as aforesaid, no shareholder shall be entitled to
      any notice of an adjournment, or of the business to be transacted at an
      adjourned meeting. No business shall be transacted at any adjourned
      meeting other than the business which might have been transacted at the
      meeting from which the adjournment took
place.

                                                        

                                                

                                                
                                                   

                                                   

                                                

                                                VOTES
OF SHAREHOLDERS

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          34.

                                                        	
                                                          Except
      as otherwise provided in these Articles, any resolution at a General
      Meeting shall be deemed adopted if approved by the holders of a majority
      of the voting rights in the Company represented at the meeting in person
      or by proxy and voting thereon. In the case of an equality of votes,
      either on a show of hands or a poll, the chairman of the meeting shall not
      be entitled to a further or casting
vote.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          35.

                                                        	
                                                          At
      all General Meetings, a resolution put to a vote at the meeting shall be
      decided on a show of hands unless, before or upon the declaration of the
      result of the show of hands, a poll in writing be demanded by the chairman
      (being person entitled to vote), or by at least two shareholders present,
      in person or  by proxy, holding at least 5% of the issued share
      capital of the Company and, unless a poll be so demanded, a declaration by
      the chairman of the meeting that a resolution has been carried, or has
      been carried unanimously or by a particular vote, or lost, or not carried
      by a particular vote, shall be conclusive, and an entry to that effect in
      the Minute Book of the Company shall be conclusive evidence thereof,
      without proof of the number or proportion of the votes recorded in favor
      of or against such resolution.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          36.

                                                        	
                                                          If
      a poll be demanded in manner aforesaid, it shall be taken forthwith, and
      the result of the poll shall be deemed to be the resolution of the meeting
      at which the poll was demanded. The demand of a poll shall not prevent the
      continuance of a meeting for the transaction of any business other than
      the question on which a poll has been
demanded.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          37.

                                                        	
                                                          Any
      shareholder which is not a natural person may, by resolution of its
      directors or other governing body, authorize such person as it thinks fit
      to act as its representative at any General Meeting, and the person so
      authorized to the satisfaction of the Company shall be entitled to
      exercise the same powers on behalf of such company, which he represents as
      that company could exercise if it were an individual
      shareholder.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          38.

                                                        	
                                                          Subject
      to any rights or restrictions for the time being attached to any class or
      classes of shares, every shareholder shall have one vote for each share of
      which he is the holder, whether on a show of hands or on a
      poll.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    
                                                    

                                                  

                                                  
                                                    10

                                                    
                                                      

                                                    

                                                  

                                                  
                                                    
                                                    

                                                  

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          39.

                                                        	
                                                          A
      shareholder without legal capacity is entitled to vote only by means of a
      trustee or a legal custodian, who    may vote either
      personally or by proxy.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          40.

                                                        	
                                                          If
      two or more persons are jointly entitled to a share then, in voting upon
      any question, the vote of the senior person who tenders a vote, whether in
      person or by proxy, shall be accepted to the exclusion of the votes of the
      other registered holders of the share and, for this purpose, seniority
      shall be determined by the order in which the names stand in the
      Shareholders Register.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          41.

                                                        	
                                                          Votes
      may be given either personally or by proxy. A proxy need not be a
      shareholder of the Company.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    	
                                                             
      

                                                          	
                                                            42.

                                                          	
                                                            

                                                              (a)    The
      instrument appointing a proxy shall be in writing in the usual common
      form, or such form as may be approved by the Board of Directors, and shall
      be signed by the appointor or by his attorney duly authorized in writing
      or, if the appointor is a corporation, the corporation shall vote by its
      representative, appointed by an instrument duly signed by the
      corporation.

                                                               

                                                              
                                                                (b)    The
      instrument appointing a proxy shall be deemed to include authorization to
      demand a poll or to vote on a poll on behalf of the
      appointor.

                                                              

                                                            

                                                          

                                                  

                                                  
                                                     

                                                  

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          43.

                                                        	
                                                          A
      vote given in accordance with the terms of an instrument of proxy shall be
      valid notwithstanding the previous death or insanity of the principal, or
      revocation of the proxy, or transfer of the share in  respect of
      which the vote is given, unless an intimation in writing of  the
      death, revocation or transfer shall have been received at the Office
      before the commencement of the meeting or adjourned meetings at
      which  the proxy is used.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          44.

                                                        	
                                                          The
      instrument appointing a proxy shall be deposited at the Office or at such
      other place or places, whether in Israel or elsewhere, as the Board of
      Directors may from time to time, either generally or in a particular case
      or class of cases prescribe, at least forty-eight (48) hours before the
      time appointed for holding the meeting or adjourned meeting at which the
      person named in such instrument proposes to vote; otherwise, the person so
      named shall not be entitled to vote in respect thereof; but no instrument
      appointing a proxy shall be valid after the expiration of twelve months
      from the date of its execution.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          45.

                                                        	
                                                          Subject
      to the provisions of the Companies Law, a resolution in writing (approved
      by letter, telex, facsimile or otherwise) by all the shareholders, in
      person or by proxy, for the time being entitled to vote at a General
      Meeting of the Company, shall be as valid and as effectual as a resolution
      adopted by a General Meeting duly convened, held and constituted for the
      purpose of passing such resolution.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          46.

                                                        	
                                                          A
      shareholder will be entitled to vote at the Meetings of the Company by
      several proxies appointed by him, provided that each proxy shall be
      appointed with respect to different shares held by the appointing
      shareholder. Every proxy so appointed on behalf of the same shareholder
      shall be entitled to vote as he sees
fit.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          47.

                                                        	
                                                          No
      person shall be entitled to vote at any General Meeting (or be counted as
      a part of the quorum thereof) unless all calls then payable by him in
      respect of his shares in the Company shall have been
  paid.

                                                        

                                                

                                                
                                                   

                                                   
DIRECTORS
POWERS AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          48.

                                                        	
                                                          (a)    Without
      derogating from the authority of the General Meeting pursuant to these
      Articles and the Companies Law, the Board of Directors
  

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    
                                                    

                                                  

                                                  
                                                    11

                                                    
                                                      

                                                    

                                                  

                                                  
                                                    
                                                    

                                                  

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          shall
      formulate the Company's policy and shall supervise the exercise of the
      General Manager's office and his acts, and as part thereof it
      –

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (1)

                                                        	
                                                          shall
      determine the Company's plans of activity, the principles for financing
      such plans and the order of priority among
them;

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (2)

                                                        	
                                                          shall
      examine the Company's financial situation and set the framework of credit
      which the Company may take;

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (3)

                                                        	
                                                          shall
      determine the organizational structure and the compensation policy of
      employees;

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (4)

                                                        	
                                                          may
      decide to issue a series of
debentures;

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (5)

                                                        	
                                                          is
      responsible for the preparation and approval of the financial reports
      according to Section 171 to the Companies
Law;

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (6)

                                                        	
                                                          shall
      report to the Annual Meeting about the state of the Company's affairs and
      on its business results, as required by Section 173 to the Companies
      Law;

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (7)

                                                        	
                                                          shall
      appoint and dismiss the General Manager, as provided by Section 250 to the
      Companies Law;

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (8)

                                                        	
                                                          shall
      decide on the acts and transactions that require its approval in
      accordance with these articles or under the provisions of Sections 255 and
      268 to 275 to the Companies Law;

                                                        

                                                

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (9)

                                                        	
                                                          may
      issue shares and securities convertible into shares up to the limit of the
      Company's registered share capital, under the provisions of Section 288 to
      the Companies Law;

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (10)

                                                        	
                                                          may
      decide on a distribution according to Sections 307 and 308 to the
      Companies Law;

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (11)

                                                        	
                                                          shall
      express its opinion on a special purchase offer, according to Section 329
      to the Companies Law; and

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    	
                                                             
      

                                                          	
                                                            (12) 

                                                          	
                                                            shall
      determine the minimum number of Directors that should have "accounting and
      financial expertise", as provided in Section 92 to the Companies
      Law.

                                                          

                                                  

                                                  
                                                     

                                                    
                                                      	
                                                               
      

                                                            	
                                                               

                                                            	
                                                              (b)    The
      powers of the Board of Directors under this Article cannot be delegated to
      the General Manager.

                                                            

                                                    

                                                    
                                                       

                                                       
DIRECTORS

                                                  

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          49.

                                                        	
                                                          The
      Board of Directors of the Company shall consist of a minimum of two (2)
      and a maximum of eleven (11)
Directors.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    	
                                                             
      

                                                          	
                                                            50.

                                                          	
                                                            (a)    Except
      for External Directors (as defined in the Companies Law), all directors
      shall be classified, with respect to the time for which they severally
      hold office, into three classes, as nearly equal in number as possible,
      one class to hold office initially for a term expiring at the 2001 Annual
      Meeting of the Company, another class to hold office initially for a term
      expiring at the 2002 Annual Meeting of the Company, and another class to
      hold office initially for a term expiring at the 2003 Annual Meeting of
      the Company, with the members of each class to hold office until their
      successors have been duly elected and qualified. At each Annual Meeting
      following the 2001 Annual Meeting, the class of directors whose term
      expires at that meeting shall be elected to hold office for a term
      expiring at the Annual Meeting of the Company held in the third year
      following the year of their election and until their successors have been
      duly elected and
qualified.

                                                          

                                                  

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    
                                                    

                                                  

                                                  
                                                    12

                                                    
                                                      

                                                    

                                                  

                                                  
                                                    
                                                    

                                                  

                                                

                                                
                                                   

                                                  
                                                    	
                                                             
      

                                                          	
                                                             

                                                          	
                                                            

                                                              (b)    Any
      director or directors may be removed from office at any time, but only for
      "cause" and only by the affirmative vote of (i) the holders of the
      majority of the Ordinary Shares present in person or by proxy and voting
      thereon, or (ii) a majority of the Board of Directors. For purposes of
      this clause (b): "cause" shall mean the willful and continuous failure of
      a director substantially to perform such director's duties to the Company
      (other than any such failure resulting from incapacity due to physical or
      mental illness) or the willful engaging by a director in gross misconduct
      materially and demonstrably injurious to the Company.

                                                               

                                                              
                                                                (c)    The
      Company shall appoint External Directors as and to the extent required by,
      and they shall hold office according to, the Companies Law, as long as the
      Company is required by the Companies Law to appoint External
      Directors.

                                                              

                                                            

                                                          

                                                  

                                                  
                                                     

                                                  

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          

                                                            51.

                                                          

                                                        	
                                                          

                                                            (a)    No
      person shall be nominated for the office of a director at a General
      Meeting, except for directors whose term of office expired at the time the
      General Meeting was convened, persons nominated for the office of a
      director by the Board of Directors, and as provided for in Article
      51(b).

                                                             

                                                            
                                                              (b)    Any
      shareholder entitled to receive notice of and vote at a General Meeting
      desiring to propose a nominee for director to be elected at an Annual
      General Meeting of Shareholders has to deliver notice to the Secretary, at
      the Company's principal offices, not later than ninety (90) days prior to
      the date of the annual General Meeting at which meeting such election is
      to occur, whichever date is later. The notice shall set forth: (i) the
      name and address, as they appear on the Company's share register, of the
      shareholder proposing  such nominee, (ii) the identity and
      background of the nominee, (iii) the class and number of shares of the
      Company beneficially owned by such shareholder, (iv) a representation that
      such shareholder is a shareholder of record and intends to appear by
      person or by proxy at such General Meeting to bring the General Meeting
      the nominee specified in the notice, (v) a brief description of the
      reasons for wanting to nominate such nominee as a director, (vi) any
      material interest that the shareholder has in the election of such nominee
      and (vii) the written consent of the nominee to be elected as a director
      of the Company.

                                                            

                                                          

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          52.

                                                        	
                                                          The
      Directors in their capacity as such, shall be entitled to receive
      remuneration and reimbursement of expenses incurred by them in the course
      of carrying out their duties as
Directors.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          53.

                                                        	
                                                          The
      office of a Director shall be vacated, ipso
  facto:

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                           

                                                        	
                                                          

                                                            (a)    upon his
      resignation by written notice signed by him and delivered to the
      Office;

                                                          

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                           

                                                        	
                                                          

                                                            (b)    if he
      becomes bankrupt or enters into an arrangement with his
      creditors;

                                                          

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           

                                                        	
                                                          (c)    if he is
      or becomes of unsound mind;

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                           

                                                        	
                                                          (d)    if he be
      relieved of his office as provided in Article 50(b)
  hereof;

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           

                                                        	
                                                          (e)    if he
      is prevented by applicable law from serving as a director of the
      Company.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                           

                                                        	
                                                          (f)    if the
      Board of Directors terminate his office according to Section 231 of the
      Companies Law;

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                           

                                                        	
                                                          (g)    if
      court order is given according to Section 233 of the Companies
      Law.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    
                                                    

                                                  

                                                  
                                                    13

                                                    
                                                      

                                                    

                                                  

                                                  
                                                    
                                                    

                                                  

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    	
                                                             
      

                                                          	
                                                            

                                                              54.

                                                            

                                                          	
                                                            (a)    Subject
      to the provisions of the Companies Law, no Director shall be disqualified
      by virtue of his office from holding any office, or deriving any profit
      from any other office in the Company or from any company in which the
      Company shall be a shareholder or otherwise interested, or from
      contracting with the Company as a vendor, purchaser or
      otherwise.

                                                             

                                                            (b)    Transactions
      entered into by the Company in which an office holder of the Company has a
      personal interest, directly or indirectly, will be valid in respect of the
      Company and the office holder only if approved by the Company's Board of
      Directors and, if such transactions are "Extraordinary Transactions" as
      defined in the Companies Law, only if approved in accordance with the
      requirements of the Companies Law.

                                                          

                                                  

                                                  
                                                     

                                                  

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          55.

                                                        	
                                                          Subject
      to the provisions of the Companies Law, a Director who has a personal
      interest in  an "Extraordinary Transaction" which is brought for
      discussion before the Board of Directors or the Audit Committee shall
      neither vote in nor attend discussions concerning the  approval
      of such transaction. If said Director did vote or attend as aforesaid, the
      approval given to the aforesaid activity or arrangements shall be
      invalid.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          56.

                                                        	
                                                          In
      the event of one or more vacancies on the Board of Directors, the
      continuing Directors may continue to act as long as the Board of Directors
      consists of at least a majority of the total number of Directors elected.
      However, in the event that the remaining Directors are not a majority of
      the total number of Directors elected, the remaining Director or Directors
      may call for the convening of a General Meeting for the purpose of the
      election of Directors.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          57.

                                                        	
                                                          Subject
      to the limitation on the number of Directors as specified in Article 49,
      the Board of Directors may, at any time and from time to time, appoint any
      other person as a Director, whether to fill a vacancy or to add to their
      number. Any Director so appointed shall hold office until the next Annual
      Meeting at which the term of the class to which they have been elected
      expires, and may be re-elected.

                                                        

                                                  
                                                     

                                                  

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          58.

                                                        	
                                                          In
      case of any increase in the number of directors, the additional director
      or directors, and in case of any vacancy in the Board of directors due to
      a death, resignation, removal, disqualification or any other cause, the
      successors appointed according to Article 57 to fill the vacancies shall
      be elected by a majority of the directors then in
  office.

                                                        

                                                

                                                
                                                   

                                                   
CONVENING
THE BOARD OF DIRECTORS

                                                
                                                   

                                                

                                                
                                                  
                                                    	
                                                             
      

                                                          	
                                                            

                                                              59.

                                                            

                                                          	
                                                            (a)    The
      Chairman of the Board of Directors may convene a meeting of the Board of
      Directors at any time.

                                                             

                                                            (b)    The
      Board of Directors shall hold a meeting on a specified subject on the
      demand of two Directors, or if the Board of Directors consists of up to
      five Directors one Director;

                                                             

                                                            (c)    The
      Chairman of the Board of Directors shall convene the Board of Directors
      upon a demand said in Sub-article (b) of this Article 59 or if Section
      122(d) to the Companies Law applies, due to a notice or report from the
      General Manager or due to a notice from the Auditor of the Company under
      Section 169 to the Companies Law.

                                                             

                                                            (d)    If a meeting of
      the Board of Directors was not convened within 14 days after the date of a
      demand pursuant to Sub-article (b) of this Article 59, or after the date
      of a notice or report of the General Manager according to Section 122(d)
      to the Companies Law, or after notice of the Auditor under Section 169 to
      the Companies Law, then each of those persons enumerated in Sub-articles
      (b) and (c) may convene a meeting of the Board of Directors,
  

                                                          

                                                  

                                                   

                                                

                                                 

                                                
                                                  
                                                    
                                                    

                                                  

                                                  
                                                    14

                                                    
                                                      

                                                    

                                                  

                                                  
                                                    
                                                    

                                                  

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    	
                                                             

                                                          	
                                                            which
      shall discuss the subject specified in the demand, notice or report, as
      the case may be.

                                                          

                                                  

                                                  
                                                     

                                                     
MEETINGS
OF THE BOARD OF DIRECTORS AND THEIR CONDUCT

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          60.

                                                        	
                                                          The
      agenda of a meeting of the Board of Directors shall be set by the Chairman
      of the Board of Directors, and it shall
include:

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (1)    subjects
      determined by the Chairman of the Board of
  Directors;

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (2)    subjects
      determined as said in Section 98 to the Companies
  Law;

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (3)    any
      subject which a Director or the General Manager requested at a reasonable
      time before the meeting was convened of the Chairman of the Board of
      Directors to include in the agenda

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    	
                                                             
      

                                                          	
                                                            61.

                                                          	
                                                            (a)    Notice
      of a meeting of the Board of Directors shall be delivered  to
      all its members at a reasonable time before the meeting, but not later
      than forty eight (48) hours prior to the time set for any such
      meeting,

                                                             

                                                            (b)    A
      notice under Sub-article (a) shall be delivered to the Director's address
      that was given to the Company in advance, and in it shall be stated the
      time of the meeting and the place where it will convene, as well as
      reasonable  details on all the subjects on the
      agenda.

                                                          

                                                  

                                                  
                                                     

                                                  

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          62.

                                                        	
                                                          Notwithstanding
      the provision of Article 61 hereto, the Board of Directors may - with the
      consent of all the Directors - convene for a meeting without
      notice.

                                                        

                                                

                                                
                                                   

                                                   

                                                

                                                GENERAL
MANAGER

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          63.

                                                        	
                                                          The
      Board of Directors will appoint one or more persons as General Manager,
      and they will be titled as President or Chief Executive Officer (CEO) or
      Chief Operating Officer (COO). The Board of Directors may from time to
      time remove or discharge him or them from office (subject to the
      provisions of any agreement between any such person and the Company) and
      appoint another or others in his or their place or
  places.

                                                        

                                                

                                                
                                                  
                                                     

                                                  

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          64.

                                                        	
                                                          The
      Board of Directors may from time to time appoint one or more Vice
      Presidents for certain functions, to carry out duties delegated to him
      (them) by the President, CEO or COO.

                                                        

                                                  
                                                     

                                                  

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          65.

                                                        	
                                                          To
      the extent permitted by the Companies Law, the Board of Directors may from
      time to time confer upon and delegate to a President, CEO, COO or other
      Executive Officer then holding office, such authorities and duties of the
      Board of Directors as they may deem fit, and they may delegate such
      authorities and duties for such period and for such purposes and subject
      to such conditions and restrictions which they consider in
      the  bests interests of the Company, and they may delegate such
      authorities and duties without waiving the authorities of the Board of
      Directors with respect thereto and it may from time to time revoke, cancel
      and alter such authorities and duties in whole or in
  part.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          66.

                                                        	
                                                          The
      remuneration of a President, CEO, COO or other Executive Officer shall be
      fixed by the Board of Directors, taking into consideration any agreement
      between him and the Company, and it may be in whole or in part, in the
      form of salary, share options, or commissions or profit sharing or a
      combination thereof.

                                                        

                                                

                                                
                                                   

                                                   
DIRECTOR'S
ACTS AND AUTHORITIES

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          67.

                                                        	
                                                          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
      

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    
                                                    

                                                  

                                                  
                                                    15

                                                    
                                                      

                                                    

                                                  

                                                  
                                                    
                                                    

                                                  

                                                

                                                
                                                   

                                                

                                                
                                                  	 	 	and
      things as the Company is authorized to exercise and do, and are
      not  hereby or by law required to be exercised or done by the
      Company in a General Meeting. The authority conferred on the Board of
      Directors by this  Article 67 shall be subject to the provisions
      of the Companies Law, of these  Articles and any regulation or
      resolution consistent with these Articles adopted from time to time by the
      Company in a General Meeting, provided,  however that no such
      regulation or resolution shall invalidate any prior act done by or
      pursuant to a decision of the Board of Directors which would have been
      valid if such regulation or resolution had not been
  adopted.

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          68.

                                                        	
                                                          The
      Directors may postpone their meetings and otherwise regulate them as they
      shall deem fit. The quorum for the dispatch of business by the Board of
      Directors shall be determined by the Directors and, if not so determined,
      shall be the majority of the Directors then holding
  office.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          69.

                                                        	
                                                          A
      resolution in writing signed or otherwise approved in writing (by letter,
      telegram, telex, facsimile, electronic mail or otherwise) by all the
      Directors then in office shall be as valid and as effectual as a
      resolution adopted by the Board of Directors at a meeting of the Board of
      Directors duly convened and held.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          70.

                                                        	
                                                          Members
      of the Board of Directors, or of any committee designated by the Board of
      Directors, may participate in a meeting of the Board of Directors, or of
      any committee, by means of a telephone conference or similar
      communications equipment by means of which all persons participating in
      the meeting can hear each other, and such participation in a meeting shall
      constitute attendance in person at the
meeting.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          71.

                                                        	
                                                          (a)    The
      Board of Directors shall elect a Chairman for the meeting and fix the term
      of his office.

                                                           

                                                          (b)    In
      the event that a Chairman was not elected or if the Chairman should fail
      to be present at a meeting fifteen (15) minutes after the time set for its
      convening, the remaining Directors shall elect one of those present to be
      Chairman of the meeting.

                                                           

                                                          (c)    All
      questions that arise at meetings of the Board of Directors shall be
      decided by a majority of votes. In the event of a tie vote, the Chairman
      of the Board of Directors shall cast the deciding
  vote.

                                                        

                                                

                                                
                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          72.

                                                        	
                                                          Any
      meeting of the Board of Directors at which a quorum is present shall have
      the authority to exercise all or part of the authorities, powers of
      attorney and discretion invested at such time in the Directors or
      regularly exercised by them.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          73.

                                                        	
                                                          Subject
      to the Companies Law, the Board of Directors may delegate its authorities
      in whole or in part to committees as it shall deem fit, and it may from
      time to time revoke such delegation. Any committee so created must, in
      exercising the authorities granted to it, adhere to all the instructions
      of the   Board of Directors given from time to time and/or
      to the provisions of the companies Law.

                                                        

                                                  
                                                     

                                                  

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          74.

                                                        	
                                                          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
      meeting or any of them or any person(s) acting as aforesaid, or that they
      or any of them or any person(s) acting as aforesaid, or that they or any
      of them were disqualified, be as valid as if there were no such defect or
      disqualification.

                                                        

                                                

                                                
                                                  
                                                     

                                                  

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          75.

                                                        	
                                                          The
      Board of Directors shall cause proper Minutes to be kept of the
      following:

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    
                                                    

                                                  

                                                  
                                                    16

                                                    
                                                      

                                                    

                                                  

                                                  
                                                    
                                                    

                                                  

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           

                                                        	
                                                          (a)    the
      names of all the Directors present at any meeting of the Board of
      Directors and at any meeting of a committee of the Board of
      Directors;

                                                           

                                                          (b)    all
      proceedings and resolutions of General Meetings of the Company, Board of
      Directors' meetings and Committees of the Board of Directors' meetings.
      Any Minutes as aforesaid, if purporting to be signed by the Chairman of
      such meeting or by the Chairman of the next succeeding meeting, shall be
      accepted as prima facie evidence of the matters therein
      recorded.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          76.

                                                        	
                                                          [Reserved.]

                                                        

                                                

                                                
                                                   

                                                   
SHAREHOLDERS
REGISTERS

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          77.

                                                        	
                                                          Subject
      to, and in accordance with, the provisions of the Companies Law, the
      Company may cause Shareholder Register to be kept at any place in Israel
      and may cause a copy of the Shareholder Register to be kept outside Israel
      as the Board of Directors may think fit and, subject to all applicable
      legal requirements, 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 registers. In addition to the Shareholders Register, the
      Company shall also keep a Register of Substantial Shareholders as defined
      in the Companies Law.

                                                        

                                                

                                                
                                                   

                                                   
SECRETARY

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          78.

                                                        	
                                                          The
      Board of Directors may from time to time appoint a Secretary to the
      Company as it deems fit, and may appoint a temporary Assistant Secretary
      who shall act as Secretary for the term of his
  appointment.

                                                        

                                                

                                                
                                                   

                                                   

                                                

                                                RIGHTS
OF SIGNATURE - STAMP AND SEAL

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          79.

                                                        	
                                                          (a)    Authorization
      to sign on behalf of the Company and thereby bind it shall be made and
      granted from time to time by the Board of Directors. The Company shall
      have at least one rubber stamp. The Company shall be bound by the
      signature of the aforesaid appointees if appearing together after its
      stamp or printed name.

                                                           

                                                          (b)    The
      Board 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.

                                                        

                                                

                                                
                                                   

                                                   
DIVIDENDS

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          80.

                                                        	
                                                          Subject
      to any preferential, deferred, qualified or other rights, privileges or
      conditions attached to any special class of shares with regard to
      dividends, the profits of the Company available for dividend and resolved
      to be distributed shall be applied in payment of dividends upon the shares
      of the Company in proportion to the amount paid up or credited as paid up
      per the nominal value thereon respectively. Unless not otherwise specified
      in the conditions of issuance of the shares, all dividends with respect to
      shares which were not fully paid up within a certain period, for which
      dividends were paid, shall be paid proportionally to the amounts paid or
      credited as paid on the nominal value of the shares during any portion of
      the abovementioned period.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          81.

                                                        	
                                                          The
      Board of Directors may declare a dividend to be paid to the shareholders
      according to their rights and interests in the profits, and may fix the
      record date for eligibility and the time for
  payment.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    
                                                    

                                                  

                                                  
                                                    17

                                                    
                                                      

                                                    

                                                  

                                                  
                                                    
                                                    

                                                  

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          82.

                                                        	
                                                          The
      Directors may from time to time pay to the shareholders on account of the
      next forthcoming dividend such interim dividends as, in their judgment,
      the position of the Company
justifies.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          83.

                                                        	
                                                          A
      transfer of shares shall not pass the right to any dividend declared
      thereon after such transfer and before the registration of the
      transfer.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          84.

                                                        	
                                                          Notice
      of the declaration of any dividend, whether interim or otherwise, shall be
      given to the holders of registered shares in the manner hereinafter
      provided.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          85.

                                                        	
                                                          Unless
      otherwise directed, any dividend may be paid by check, bank transfer or
      warrant, sent through the post to the registered address of the
      shareholder or person entitled or, in the case of joint registered
      holders, to that one of them first named in the register in respect of the
      joint holding. Every such check shall be made payable to the order of the
      person to whom it is sent. The receipt by the person whose name, at the
      date of the declaration of the dividend, appears in the register of
      shareholders as the owner of any share or, in the case of joint holders,
      of any one of such joint holders, shall be a good discharge to the Company
      of all payments made in respect of such share. All dividends unclaimed for
      one year after having been declared may be invested or otherwise used by
      the Directors for the benefit of the Company until claimed. No unpaid
      dividend or interest shall bear interest as against the
      Company.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          86.

                                                        	
                                                          The
      Board of Directors may determine that, a dividend may be paid, wholly or
      partly, by the distribution of specific assets of the Company or by
      distribution of paid-up shares, debentures or debenture stock or any other
      securities of the Company or of any other companies or in any one or more
      of such ways in the manner and to the extent permitted by the Companies
      Law.

                                                        

                                                

                                                
                                                   

                                                   
PROHIBITED
DISTRIBUTION

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          87.

                                                        	
                                                          (a)    If the
      Company made a prohibited distribution as defined in the Companies Law,
      then the shareholder must return to the Company whatever he received,
      unless he did not know and did not need to know that the distribution
      carried out was prohibited.

                                                           

                                                          (b)    It
      is assumed that a shareholder in the Company, who at the time of the
      distribution is not a Director, General Manager or controlling member of
      the Company, did not know and did not need to know that the distribution
      carried out was a prohibited
distribution.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          88.

                                                        	
                                                          If
      the Company carried out a prohibited distribution, then every person who
      was a Director at the time of the distribution shall be treated as a
      person who thereby committed breach of his duties to the Company under
      sections 252, 253 or 254 of the Companies Law, as
      applicable,  unless he proved one of the
    following:

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                           

                                                        	
                                                          (1)    that he
      opposed the prohibited distribution and took all reasonable steps to
      prevent it;

                                                        
	 	 	 
	 	 	(2)    that he
      exercised reasonable reliance on information under which- had it not been
      misleading - the distribution would have been
  permitted;
	 	 	 
	 	 	(3)    that
      under the circumstances of the case he did not know and did not need to
      know of the distribution.

                                                

                                                
                                                   

                                                   
MERGER

                                                
                                                   

                                                

                                                
                                                  
                                                    
                                                    

                                                  

                                                  
                                                    18

                                                    
                                                      

                                                    

                                                  

                                                  
                                                    
                                                    

                                                  

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          89.

                                                        	
                                                          A merger requires approval by the
      Board of Directors and by a simple majority vote at the General Meeting,
      except as otherwise required by the provisions of the Companies
      Law.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          90.

                                                        	
                                                          (a)    The
      Board of Directors of the Company, while considering whether to approve
      the merger, shall discuss and determine taking the Company's financial
      situation into account - whether in its opinion there is a reasonable
      suspicion that in consequence of the merger the merged Company will not be
      able to meet the Company's obligations to its
      creditors.

                                                           

                                                          (b)    If the
      Board of Directors determined that there is a suspicion as said in
      Sub-article (a), then it shall not approve the
  merger.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          91.

                                                        	
                                                          If
      each of the Boards of Directors of the merging companies approved the
      merger, then they shall jointly draw up a proposal for the approval of the
      merger (hereafter: merger proposal) and sign
it.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  
                                                    	
                                                             
      

                                                          	
                                                            92.

                                                          	
                                                            (a)    The
      Company shall deliver the merger proposal to the Companies Registrar
      within three days after the General Meeting was
called.

                                                             

                                                            
                                                              (b)    The
      Company shall inform the Companies Registrar of the General Meetings
      decision within three days after the decision was adopted, shall inform
      him that the notice was given to the creditors under Section 318 to the
      Companies Law, and shall also deliver to the Registrar a copy of the Court
      decision under Sections 319 to 321 to the Companies Law within three days
      after the said decision was
given.

                                                            

                                                          

                                                  

                                                  
                                                     

                                                     
ACCOUNTS

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          93.

                                                        	
                                                          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 shareholder not being a Director shall have any right to
      inspect any account or book or other similar document of the Company,
      except as conferred by law or authorized by the Board of Directors of the
      Company.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          94.

                                                        	
                                                          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.

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          95.

                                                        	
                                                          The
      appointment, authorities, rights and duties of the auditor(s) of the
      Company shall be regulated by the applicable
  law.

                                                        

                                                

                                                
                                                   

                                                   
NOTICES

                                              

                                              
                                                
                                                  
                                                     

                                                  

                                                

                                                
                                                  
                                                    	
                                                             
      

                                                          	
                                                            96.

                                                          	
                                                            

                                                              (a)     Subject
      to the Statutes, notice or any other document which the Company shall
      deliver and which it is entitled or required to give pursuant to the
      provisions of these Articles and/or the Statutes shall be delivered by the
      Company to any person, in any one of the following manners as the Company
      may choose: in person, by mail, transmission by fax or in electronic form
      (including through the Internet).  Notwithstanding anything to
      the contrary contained herein and subject to the requirements of the
      Statutes, a notice to a Shareholder may alternatively be served, as
      general notice to all Shareholders, in accordance with the rules and
      regulations of any applicable securities authority with jurisdiction over
      the Company or in accordance with the rules of any stock market upon which
      the Company’s shares are
traded.

                                                            

                                                          

                                                  

                                                   

                                                   

                                                  
                                                    
                                                      
                                                      

                                                    

                                                    
                                                      19

                                                      
                                                        

                                                      

                                                    

                                                    
                                                      
                                                      

                                                    

                                                  

                                                   

                                                  
                                                    	 	 	
                                                            Any
      notice or other document which shall be sent by mail shall be deemed to
      have reached its destination forty eight hours (48) after the day of
      mailing if sent by registered mail or regular mail (seven (7) days if sent
      to a place or mailed at a place outside of Israel, forty-eight (48) hours
      if sent within the U.S. or Canada), or when actually received by the
      addressee if sooner than forty-eight (48) hours or seven (7) days, as the
      case may be, after it has been mailed, or when actually tendered in person
      to such shareholder (or to the Secretary or the President of the Company,
      as the case may be) or on the first day after transmission if transmitted
      by fax or in electronic form.

                                                             

                                                            Should it be required to prove delivery,
      it shall be sufficient to prove that the notice or document sent contains
      the correct mailing, e-mail, or fax details as registered in the Register
      or any other address which the Shareholder submitted in writing to the
      Company as the address and fax or e-mail details for the submission of
      notices or other documents.

                                                             

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

                                                             

                                                            (c)    Any
      notice or other document served upon or sent to any shareholder by
      publication in accordance with these  Articles shall,
      notwithstanding that he be then deceased or bankrupt, and whether or not
      the Company has notice of his death or bankruptcy, be deemed to be duly
      served or sent in respect of any shares held by him (either alone or
      jointly with others) until some other person is registered in his stead as
      the holder or joint holder of such shares, and such service or sending
      shall be a sufficient service on or sending to his heirs, executors,
      administrators or assigns and all other persons (if any) interested in
      such share.

                                                             
b

                                                            (d)    Where
      a given number of days' notice, or notice extending over any period, is
      required to be given, the day of service shall be counted in such number
      of days or other period.

                                                          

                                                  

                                                  
                                                     

                                                     
RECONSTRUCTION

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          97.

                                                        	
                                                          On
      any sale of the undertaking of the Company, the Board of Directors or the
      liquidators on a winding-up may, if authorized by a majority vote at a
      meeting of shareholders, accept fully paid up shares, debentures or
      securities of any other company, whether Israeli or foreign, either then
      existing or to be formed, for the purchase, in whole or in part, of the
      property of the Company, and the Board of Directors (if the profits of the
      Company permit), or the liquidators (on a winding-up), may distribute such
      shares or securities, or any other property of the Company, amongst the
      shareholders without realization, or vest the same in trustees for them,
      and the shareholders of the Company at any General Meeting may provide for
      the distribution or appropriation of the cash, shares or other securities,
      benefits or property, in accordance with the legal rights of the
      shareholders or contributors of the Company, and for the valuation of any
      such securities or property at such price and in such manner as the
      meeting may approve, and all holders of shares shall be bound to accept
      and shall be bound by any valuation or distribution so authorized, and
      waive all rights in relation thereto, save only in the case the Company is
      proposed to be, or is, in the course of being wound up, such statutory
      rights (if any) under the provisions of the Statutes as are incapable of
      being varied or excluded by these
presents.

                                                        

                                                

                                                

                                                

                                                

                                                
                                                  
                                                    
                                                    

                                                  

                                                  
                                                    20

                                                    
                                                      

                                                    

                                                  

                                                  
                                                    
                                                    

                                                  

                                                

                                                
                                                   

                                                   
INDEMNITY
AND INSURANCE OF OFFICERS

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          98.

                                                        	
                                                          The
      Company may, to the maximum extent permitted by the Companies
      Law:

                                                           

                                                          (a)    enter
      into a contract for the insurance of the liability, in whole or in part,
      of any of its Officers, to the fullest extent permitted by the Companies
      Law;

                                                           

                                                          (b)    may
      indemnify an Officer of the Company post factum;

                                                           

                                                          (c)    may
      indemnify an Officer of the Company in advance for the following
      events:

                                                        

                                                

                                                
                                                   

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                          (i)

                                                        	
                                                          Any
      financial obligation imposed on an Officer or incurred by the Officer in
      favor of a third party by a court judgment, including a compromise
      judgment approved by court (provided that the Company approved the
      compromise in advance) or an arbitrator's  award approved by
      court (provided that it was given  pursuant to arbitration
      agreed to by the Company in  advance), for an act or omission
      performed by an Officer  in his capacity as an
      Officer;

                                                        
	 	 	 
	 	(ii)	reasonable
      legal expenses, including attorneys' fees, expended by or charged to an
      Officer or adjudicated against an Officer by a court in a proceeding
      commenced against an Officer by the Company or on its behalf or
      by  another person, or in a criminal charge from which
      an  Officer was acquitted, or in a criminal charge that
      does  not require intent, in which an Officer was convicted,
      all  for an act or omission performed in his capacity as an
      Officer;
	 	 	 
	 	(iii)	reasonable
      litigation expenses, including legal fees, incurred by the officer due to
      such investigation or proceeding conducted against him by authorized body,
      and which was ended without filing an indictment against him and without
      the imposition of  a financial liability as a substitute for a
      criminal proceeding, or that was ended without filing an indictment
      against him but for which he was subject to a financial liability as a
      substitute for a criminal proceeding relating to an offense which does not
      require criminal intent, within the meaning of the relevant terms in the
      Companies Law; and
	 	 	 
	 	(iv)	any
      other liability or expense in respect of which it is permitted or will be
      permitted under the Companies Law to indemnify an
  Officer.

                                                

                                                 

                                                The
indemnity provided for in clause (i) above is restricted to events which in the
opinion of the Board of Directors are anticipated in light of the Company’s
activities at the time of granting the obligation to indemnify, and is limited
to a sum or criteria determined by the Board of Directors to be reasonable in
the circumstances. The undertaking to indemnify shall specify such events, sum
and criteria; and

                                                

                                                
                                                  
                                                    
                                                    

                                                  

                                                  
                                                    21

                                                    
                                                      

                                                    

                                                  

                                                  
                                                    
                                                    

                                                  

                                                

                                                

                                                
                                                  	
                                                           
      

                                                        	
                                                           

                                                        	
                                                          (d)    exempt
      an Officer prospectively from liability, in whole or in part, for damage
      resulting from a breach of his or her duty of care toward the
      Company.

                                                        

                                                

                                                
                                                   

                                                   
WINDING-UP

                                                 

                                                
                                                  
                                                    	
                                                             
      

                                                          	
                                                            99.

                                                          	
                                                            If
      the Company shall be wound up, whether voluntarily or otherwise, the
      liquidators may, subject to the provision of the Statutes, divide among
      the shareholders in specie any part of the assets of the Company and may,
      with like sanction, vest any part of the assets of the Company in trustees
      upon such trusts, for the benefit of the shareholders, as the liquidators
      with like sanction shall think fit.

                                                          

                                                  

                                                   

                                                

                                                 

                                                 

                                                22Filed by Bowne Pure Compliance

 

Exhibit 10.1

NON-DIRECTOR FORM

STOCK OPTION AGREEMENT

This Agreement is dated as of [Date] and is entered into by and between Westwood One, Inc.
(“Westwood” or “Company”) and [Name] (“Participant”). Reference is made to the Company’s 1999
Stock Incentive Plan, as amended (the “Plan”). Pursuant to the Plan, the Company grants a
Non-Qualified Stock Option or an Incentive Stock Option (either, a “Stock Option” herein) to
purchase shares of the Common Stock, $.01 par value per share, of the Company (“Common Stock”) as
set forth below. A summary is set forth in the attached Exhibit “A” which is incorporated by this
reference.

The parties agree to the following terms and conditions:

	1.	 	Definitions. Unless otherwise defined in this Agreement, terms used in this
Agreement will have the meanings as set forth in the Plan. For purposes hereof, the terms
“Cause” and “Change in Control” shall have the meanings ascribed to such terms under the
Company’s 2005 Equity Compensation Plan.

	2.	 	Grant of Stock Option. The Company grants to Participant a Stock Option of the type
set forth in Exhibit “A” to purchase all or part of [Number] shares of Common Stock at the
price of $  per share subject to the terms and conditions of the Plan. The number of
 shares subject to such Stock Option and the price per share are subject to adjustment in
certain events as provided in the Plan.

	 
	3.	 	Term of Stock Option.

	 	A.	 	Unless otherwise terminated pursuant to this Agreement or the Plan, each
Non-Qualified Stock Option will expire as provided in Paragraph 6 hereof. However,
expiration will not occur later than ten years from the date of grant.

	 	B.	 	Each Incentive Stock Option will expire as provided in Paragraph 6 hereof, but
not later than ten years from the date of grant, or five years in the case of a Ten
Percent Stockholder.

	4.	 	Vesting of Stock Option. The Stock Option may be exercised, in whole or in part, at
any time or from time to time during the balance of the term of the Stock Option pursuant to
the vesting schedule set forth in Exhibit “A”, subject to Paragraphs 7 and 12 hereof. The
minimum number of shares of Common Stock for which this Stock Option may be exercisable at any
one time is one hundred (100), unless the number of shares exercisable thereunder is less than
one hundred (100). The Stock Option may only be exercised by the Participant (or by his or
her guardian or legal representative), except as provided in Subparagraph 6.A. hereof in the
case of the Participant’s death.

 

1

 

	5.	 	Manner of Exercise. This Stock Option may be exercised in whole or in part, by
delivering to the Company a Notice of Exercise identical to Exhibit “B” attached to this
Agreement
stating the number of shares with respect to which the Stock Option is being exercised. The
Company will have no obligation upon exercise of any Stock Option, until payment has been
received by the Company for all sums due with respect to such exercise, including the
Participant’s federal, state and local income and employment taxes. Shares of Common Stock
purchased upon the exercise of this Stock Option must be paid for in full (i) in cash or
cash equivalent, (ii) with the approval of the Plan Administrator, in shares of Common
Stock which have been held by the Participant for a period of at least six (6) calendar
months preceding the date of surrender and which have a Fair Market Value equal to the
aggregate Exercise Price thereof and the tax withholding amounts due in respect thereof,
(iii) solely to the extent permitted by applicable law, if the Common Stock is traded on the
New York Stock Exchange, any other national securities exchange, the Nasdaq Stock Market or
quoted on a national quotation system sponsored by the Financial Industry Regulatory
Authority, and the Committee authorizes, through a procedure whereby the Participant
delivers irrevocable instructions to a broker reasonably acceptable to the Committee to
deliver promptly to the Company an amount equal to the Exercise Price, or (iv) in a
combination of the foregoing methods.

	 
	6.	 	Termination.

	 	A.	 	Upon the Participant’s termination of service all then vested Stock Options
shall remain exercisable as follows, but in no event later than ten years after the
grant date: (i) three years in the event of the Participant’s Retirement; (ii) one year
in the event of a Special Terminating Event of the Participant (in which case the
Participant’s estate or legal representative may exercise such Option) or (iii) three
months for any other termination of service (other than for Cause).

	 	B.	 	Upon the Participant’s termination of service for Cause, all outstanding Stock
Options (whether vested or unvested) shall immediately terminate upon such termination.

	 	C.	 	Stock Options that are not vested as of the date of the Participant’s
termination of service for any reason shall terminate and expire as of the date of such
termination.

	7.	 	Change in Control. This Stock Option shall be subject to the provisions of the Plan
and, to the extent then unvested, shall become fully vested and immediately exercisable upon a
termination of the Participant’s service by the Company without Cause during the 24-month
period following a Change in Control, and shall remain exercisable following such termination
for the period specified under Subparagraph 6.A.

	8.	 	Assignment or Transfer. This Stock Option is not: (i) assignable or subject to any
encumbrance, pledge or charge of any nature, whether by operation of law or otherwise; (ii)
subject to execution, attachment or any legal or quasi-legal process similar to execution or
attachment; or (iii) transferable other than by (x) will or by the laws of descent and
distribution, or (y) pursuant to a qualified domestic relations order as defined by the Code
or Title I of the Employee Retirement Income Security Act of 1974, as amended, and the rules
and regulations promulgated thereunder.

 

2

 

	9.	 	No Rights as Stockholder. The Participant, and any beneficiary or other person
claiming under or through him or her, will not have any right, title or interest in or to any
 shares of Common Stock allocated or reserved for the Plan or subject to this Stock Option
except as to such shares of Common Stock, if any, as have been previously sold, issued or
transferred to him or her.

	10.	 	Modification and Termination. The rights of the Participant are subject to
modification and termination in certain events as provided in the Plan. The Participant
acknowledges receipt of a copy of the Plan by signing and returning a copy of this Agreement
to the Company. Except as otherwise provided in the Plan, no amendment or discontinuance of
the Plan will adversely affect this Stock Option, except with the consent of the Participant.
No modification of this Agreement may be made other than in a writing signed by the Company
and the Participant.

	11.	 	Investment Representation. An investment representation is required in the event
Company does not have in effect, at the time this Stock Option is exercised, a prospectus and
a registration statement relating to the shares issuable upon exercise of this Stock Option
pursuant to the requirements of the Securities Act of 1933, as amended, and the securities
laws of the Participant’s state of residence. In such event, Participant hereby represents
and agrees that Participant will acquire the shares upon exercise of this Stock Option for
investment and not with a view to sale or resale and will comply with all applicable laws with
regard to resale, including, but not limited to, Rule 144 promulgated by the United States
Securities and Exchange Commission. If the Participant is a California resident, Participant
also agrees to comply with the requirements of the California Corporate Securities Law of
1968.

	12.	 	Six (6) Month Holding Period. A Participant is prohibited from selling or otherwise
disposing of shares of Common Stock received upon the exercise of this Stock Option within six
(6) months from the date the Stock Option is granted.

	13.	 	No Obligation to Continued Service. This Agreement is not an agreement of employment
or for other services. This Agreement does not guarantee that the Company will employ or
retain the Participant for any specific time period, nor does it modify in any respect the
Company’s right to terminate or modify the Participant’s service relationship or compensation
at any time.

	14.	 	Provisions of Plan Control. This Agreement is subject to all of the terms,
conditions and provisions of the Plan, including, without limitation, the amendment provisions
thereof, and to such rules, regulations and interpretations relating to the Plan as may be
adopted by the Plan Administrator and as may be in effect from time to time. The Plan is
incorporated herein by reference. If and to the extent that this Agreement conflicts or is
inconsistent with the terms, conditions and provisions of the Plan, the Plan shall control,
and this Agreement shall be deemed to be modified accordingly. This Agreement contains the
entire understanding of the parties with respect to the subject matter hereof (other than any
exercise notice or other documents expressly contemplated herein or in the Plan) and
supersedes any
prior agreements between the Company and the Participant with respect to the subject matter
hereof.

 

3

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

	 	 	 	 	 	 	 
	WESTWOOD ONE, INC.	 	PARTICIPANT
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	(Signature)
	 	 	 	(Signature)
	 
	 	 	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 
	 

	 	(Type or Print)
	 	 	 	(Type or Print)
	 
	 	 	 	 	 	 
	Title:

	 	 	 	Date:
	 	[Date]
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	[Date]	 	 	 	 

THE UNDERSIGNED HEREBY ACKNOWLEDGES THAT HE OR SHE HAS RECEIVED A COPY OF THE PLAN.

	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	[Name]
	 
	 	 	 	 
	 

	 	Date:	 	 
	 

	 	 	 	 

 

4

 

EXHIBIT “A”

	 	 	 	 	 
	1.

	 	Participant:
	 	     [Name]
	 

	 	 	 	 
	 

	 	 	 	 
	2.

	 	No. of shares of Common Stock
subject to the Stock Option Granted:
	 	     [Number]
	 

	 	 	 	 
	 

	 	 	 	 
	3:

	 	Exercise Price:
	 	     $
	 

	 	 	 	 
	 

	 	 	 	 
	4.

	 	Type of Option Granted

(Incentive/Non-Qualified):
	 	     Non-Qualified
	 

	 	 	 	 
	 

	 	 	 	 
	5.

	 	Date of Grant:
	 	     [Date]
	 

	 	 	 	 
	 

	 	 	 	 
	6.

	 	Vesting Schedule:
	 	Except as provided in Paragraph 7 of the Agreement, this Stock Option shall vest in three equal
annual installments on each of [insert vesting date], subject to the Participant’s continued
service with the Company on each applicable vesting date.
	 

	 	 	 	 
	7.

	 	Expiration Date:
	 	10 years after the grant date, subject to earlier termination as provided in the
Agreement.

 

5

 

EXHIBIT “B”

NOTICE OF EXERCISE

(To be signed only upon exercise of the Option)

TO: Westwood One, Inc. (“Westwood” or “Company”)

The undersigned, the holder of a Stock Option to purchase                      shares of
the Company’s Common Stock pursuant to the enclosed Stock Option Agreement dated [Date], hereby
irrevocably elects to exercise the purchase rights represented by the Stock Option and to purchase
thereunder                      shares of Common Stock and herewith encloses a certified or cashier’s check
in the amount of $                     and/or                      shares of the Company’s Common Stock in
full payment of the exercise price and all federal and state income taxes required to be paid in
connection with the purchase of such shares.

	 	 	 	 	 
	Dated:                                         
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	(Signature must conform in all respects to name of holder as
specified on the face of the Option).
	 
	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	 	 	(Print or Type)
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	(Address)
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	(Social Security Number)

 

6

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