T H E G O V E R N M E N T

[Symbol of the State of Israel] RESHUMOT (Official Gazette) BILLS T H E G O V E R N M E N T Shvat 7, 5768 356 January 14, 2008 Page Electronic Commerce Bill, 5768 2008.................................. 322

A bill is hereby published on behalf of the Government: Electronic Commerce Bill, 5768 2008 Chapter A: Purpose of the Law Purpose of the Law 1. The purpose of this Law is to regulate various aspects of the use of electronic documents in the course of commercial activities, including compliance with a writing requirement in legislation and the performance of a legal act by means of an electronic document, the determination of presumptions regarding the dispatch and receipt of electronic messages, as well as provisions regarding the limitation of civil liability of Internet service providers for the provision of Internet services, and their duty to maintain confidentiality regarding the particulars of a distributor of information over the Internet. Electronic commerce creates General various legal problems, in respect of which uncertainty currently prevails, in the absence of special legislation. For example, in the transition to the world of electronic commerce, has there been a change in the need for the documentation of transactions and various legal acts, in respect of which a writing requirement currently exists, in the form of "paper-based documents", or can tortious liability be imposed on the commission of torts on the Internet, and if so, what is the scope of such a liability, and can it be imposed on third parties? In 2001, the then-justice Minister, Yossi Beilin, appointed an interministerial committee headed by Ms. Tanna Spanitz, the Deputy Attorney General (Civil Law), in order to examine the legal aspects of electronic commerce, in the field of civil law, including the need to adjust legislation to the changing technological reality (hereinafter: the "Spanitz Committee"). The Committee examined various issues, including the aforementioned issues (and also issues relating to the protection of privacy on Internet databases, the privacy of minors, consumer protection and electronic signatures) with the aim of examining whether legislation is necessary or whether the uncertainty could be resolved by interpreting the existing legislation. One of the products of the Committee's work was the enactment of the Electronic Signature Law, 5761[sic] 2001, which regulates the conditions under which it is possible to comply with the signature requirement in the legislation, by way of an electronic signature. Upon completion of the work of the Spanitz Committee, a draft report was published, for the public's comments, containing various recommendations, and subsequently, the report was published, which incorporated part of the comments that had been received on the draft. This Bill was prepared on the basis of the said report.

Definitions 2. In this Law Chapter B: Definitions "Electronic Document" an electronic message in respect of which the following two conditions have been met: (1) It is accessible for further use; (2) It is capable of being retrieved. "Electronic Message" as defined in the Electronic Signature Law, 5762 2001 1 ; "Accessible for further use" available and visually decipherable; "Capable of being retrieved" may be saved electronically in a manner that does not alter the information contained therein, and may be produced as Output; Section 1 The purpose of this Law is to regulate various aspects of the civil law in the electronic world, in the spirit of the recommendations of the Spanitz Committee, such as: the use of electronic documents in the course of commercial activities including compliance with a writing requirement in the legislation and the performance of a legal act by means of an electronic document, the determination of presumptions regarding the dispatch and receipt of electronic messages, and also provisions regarding the limitation on civil liability of Internet service providers for the provision of Internet services, and their duty to maintain confidentiality regarding the particulars of a distributor of information over the Internet. Section 2 This section sets forth the definitions of various terms used in the sections of the proposed law, including The definition of "Electronic Message" which refers to the definition of this term in the Electronic Signature Law, 5762 2001; The definition of "Output" which refers to the definition of this term in the Computer Law, 5755 1995; The definition of "Electronic Document" which is the most important definition in this section. The proposed definition constitutes the adoption of the "equivalence of form" approach or the "functional equivalence" approach, which was set forth in the UNCITRAL Model Law on Electronic Commerce. This approach means that, as a rule, in cases of an evidentiary writing requirement, there is no impediment, in principle, to the Electronic Document replacing the "paper-based document". According to this approach, an Electronic Message which 1 Laws of the State of Israel [Sefer Hachukkim] 5765, page 210.

"Output" as defined in the Computer Law, 5755 1995 2 ; The "Minister" the Minister of Justice. Chapter C: Compliance with a Writing Requirement and Performance Of a Legal Act By Means of an Electronic Document Delivery of Information by Means of an Electronic Document 3. (a) Should it be required in a statute specified in the First Schedule, that information shall be published to the public or shall be delivered to a particular person, in writing, this requirement may be complied with by means of an electronic document; for this purpose, "published" with the exception of publication in Reshumot (Official Gazette). complies with several requirements enjoys a legal status identical to that of the document constituting its paper-based counterpart. The definition determines that not every Electronic Message will be deemed to be an electronic "document", but only one which satisfies the two conditions set forth in the definition: it is accessible for further use and is capable of being retrieved. The purpose of these conditions is to guarantee that the Electronic Message will be accessible for inspection, reading and understanding, and that it is capable of being retrieved in other words, that it can be saved electronically in a manner that preserves the information as contained in the Electronic Message, including different variables, such as the size of the letters (which could be of legal significance in the case of a standard contract, for example) or different emphases, etc. Section 3 This section deals with situations in which a statute determines that certain information must be published to the public or delivered to a particular person, in writing. The proposed section provides that it will be possible to comply with this requirement, with regard to the statutes specified in the First Schedule, by means of an electronic document, thus removing the uncertainty regarding the interpretive question as to whether such a statute would also apply if the information was published to the public or was delivered to a particular person over the Internet or by email. Currently one statute is specified in the First Schedule, the Trademarks Ordinance (New Version), 5732 1972. According to the provisions of the section, it will be possible to submit applications electronically to the Registrar of Trademarks. Pursuant to section 14 of the proposed law, the Minister of Justice will be entitled, in an order, to amend the First Schedule. It is also proposed to determine that a minister who is charged with the implementation of a statute specified in the First Schedule shall be entitled, upon consultation with the Minister of Justice, to determine conditions for the application of the provisions of sub-section (a) with regard to the said statute. 2 Laws of the State of Israel 5755, page 366.

(b) A minister who is charged with the execution of a statute specified in the First Schedule shall be entitled, upon consultation with the Minister of Justice, to determine conditions for the application of the provisions of sub-section (a) with regard to the said statute. Performance of a Legal Act By Means of an Electronic Document Disclosure of Information Prior to Conclusion a Contract By Means of an Electronic Document 4. (a) A legal act, including the conclusion of a contract, shall be valid even if such has been effected by means of an electronic document. (b) The provisions of sub-section (a) shall not apply with regard to legal acts specified in the Second Schedule. 5. Should a statute require disclosure, in writing, of information prior to the conclusion of a contract, such a requirement may be complied with by means of an electronic document, provided that the party subject to such a disclosure obligation shall bring to the attention of the other party to the contract, in a separate Electronic Document, such particulars as shall be determined by the Minister in the regulations, including particulars regarding the manner in which the contract was concluded by means of an electronic document; for this purpose, "contract" with the exception of a contract between a consumer and a dealer, as defined in the Consumer Protection Law, 5741 1981 3 ; Section 4 The proposed section determines that, in principle, a contract may be concluded or a legal act performed by means of an electronic document, with the exception of a contract or a legal act which are listed in the Second Schedule to the Law. The cases listed in the Second Schedule are, for the most part, cases where there is a material writing requirement with regard to the contract or the legal act, so that it would appear to be undesirable for them to be concluded or performed, as the case may be, by means of an electronic document, due to the importance and complexity of such contracts and acts for the parties engaging therein. In addition, the Schedule also includes documents in respect of which the Electronic Signature Order (Determination of Schedules to the Law), 5762 2002 provided that they cannot be signed with an electronic signature, since obviously if these documents cannot be signed electronically, there is also no point in preparing them in such a manner. Section 5 The provisions of the proposed section determine that when a statute contains a requirement for certain information to be delivered prior to the conclusion of a contract, in writing, the writing requirement may be complied with by means of an electronic document, provided that the party subject to such a disclosure obligation shall bring to the attention of the other party to the contract, in a separate electronic document, such particulars of the electronic engagement as shall be determined by the Minister in the regulations. This concerns the submission of 3 Laws of the State of Israel 5741, page 248.

Chapter D: Presumptions Regarding the Dispatch and Receipt of an Electronic Message Presumptions Regarding the Dispatch and Receipt of an Electronic Message 6. (a) An Electronic Message shall be presumed to have been sent when it enters an Information Processing System which is beyond the sender s control, and if the sender and the addressee use the same Information Processing System when the message is capable of being retrieved and is accessible for further use by the addressee. (b) An Electronic Message shall be presumed to have been received by the addressee when it enters an Information Processing System which is used by the addressee for receiving Electronic Messages of the type that was sent, and it is accessible for further use by the addressee. particulars such as: what are the acts required for the purpose of concluding the contract electronically; whether the contract will be delivered as a document printed on paper; which measures must be taken so that the electronic document will be accessible; which technical measures must be taken to identify and correct typing errors before the order is made, including the presentation of the particulars of the transaction prior to the final approval thereof. This section clarifies that the provision contained therein will not apply to contracts which are not consumer contracts, since the aspects relating to consumer contracts will be regulated in separate legislation. Section 6 The proposed section determines presumptions regarding the date of dispatch and the date of receipt of the Electronic Message, for example, when email is sent or messages transmitted through other electronic information systems, such as instant messaging systems. Such dates are of the utmost importance in the law of contract, just as they are in relation to legal acts which are not contracts, such as the delivery of various notices with legal validity, for example, in matters pertaining to the conclusion of a contract the date of delivery of the acceptance notice or the date for retracting the offer, or in matters pertaining to the cancellation of a contract, such as the delivery of the cancellation notice. It should be clarified that these presumptions are rebuttable presumptions. On sub-section (a) This sub-section deals with the delivery of an Electronic Message. For the purpose of the date of dispatch of an Electronic Message, the proposed section determines that the Electronic Message will be deemed to have been sent to the addressee when it enters an Information Processing System which is beyond the sender's control; in contrast, if the sender and the addressee use the same Information Processing System, the section determines a presumption whereby the Electronic Message will be deemed to have been sent when it is capable of being retrieved and is accessible for further use by the addressee, because in such an event, the Electronic Message remains within the same Information Processing System and does not enter an Information Processing System which is beyond the sender's control. On sub-section (b) This sub-section deals with the receipt of an Electronic Message. For the purpose of the date of the receipt of the message, the proposed section determines that an Electronic Message will

(c) In this section, "Information Processing System" an electronic system which is intended to create, send, receive, save, store, present or process information. Chapter E: Provision of Internet Services Article A: Limitations on Civil Liability of Internet Service Providers Definitions 7. In this Chapter "Civil Liability" tortious liability or liability for an intellectual property claim; be deemed to have been received by the addressee when it enters an Information Processing System which is used by the addressee for receiving Electronic Messages of the type that was sent (for example, the email address which the addressee specified as the email address to which he wishes email to be sent by the sender) and when the message is accessible for further use by the addressee. On sub-section (c) This sub-section includes the definition of the term "Information Processing System" for the purpose of this section, whereby this refers to an electronic system which is intended to create, send, receive, save, store, present or process information. It refers, inter alia, to an email system, an instant messaging system, a short message service (SMS notices), etc. Chapter E General This Chapter (sections 7 to 13 of the proposed law) deals with a serious issue, namely, the liability of Internet service providers in civil law for information distributed over the Internet by a third party. This issue is complex, due to both its technological aspect and its legal aspects, which go to the root of questions concerning the balance between freedom of expression and various basic rights protected by the civil law, such as the right to property (through the intellectual property laws), the right to reputation (through the laws of libel), the right to privacy (through the Privacy Protection Law) and other rights, and also due to the uniqueness of the Internet as an innovative medium, which is open to anybody, with all the advantages and disadvantages entailed thereby. The arrangement proposed in this Chapter primarily pursues the approach common in American law in the field of copyright and in the law of the European Union in the field of civil law as a whole. According to this approach, an Internet service provider which has complied with the terms set forth in the law in relation to the Internet service which it provides (special terms are specified with respect to each service), will be exempt from civil liability in respect of the provision of the service. Section 7 The proposed section sets forth the definitions of various terms used in this Chapter. The main definitions concern the types of Internet service discussed in the Chapter. It is proposed to distinguish between three types of services which an Internet service provider can provide: mere conduit services, caching services and

"Intellectual Property Claim" as defined in section 40(4) of the Courts (Consolidated Version) Law, 5744-1984 4 ; "Information Distributor" a party which has uploaded information to an electronic communications network; "Internet Service Provider" a party which provides one of the following: caching service, hosting service or mere conduit service; "Caching Service" a service designed for the temporary storage of information, which is done automatically in order to facilitate the transfer of the information in the electronic communications network and to increase the speed of the transfer; "Hosting Service" a service designed for one of the following: The permanent storage on the service provider s computer server, of information that was submitted to it in order for it to be uploaded to an electronic communications network; The presentation, on the website of the service provider, of information that was submitted to it in order for it to be uploaded to an electronic communications network; The provision of the possibility to electronically identify information situated in an electronic communications network; "Mere Conduit Service" a service designed to enable people to access an electronic communications network; "Electronic Communications Network" the Internet and any other public communications network which the Minister of Justice, in consultation with the Minister of Communications, has determined in an order. Limitation on Liability For the Provision of Mere Conduit Service 8. An Internet Service Provider shall not bear Civil Liability for the provision of Mere Conduit Services regarding information that was uploaded to an Electronic Communications Network by another person, if all the following conditions have been met: hosting services (which also include search services). In addition, by defining the term "Civil Liability" the section determines to which fields the limitation on liability, as proposed in this Chapter, will apply: tortious liability for all the torts set forth in the Torts Ordinance and elsewhere; or liability for an Intellectual Property Claim, such as claims for a breach of copyright, patent infringement, the infringement of a trademark or design, etc. Section 8 The proposed section determines which conditions must be satisfied for the Internet Service Provider providing Mere Conduit Services to be 4 Laws of the State of Israel 5744, page 198.

(1) The provider did not choose the information thus uploaded, did not initiate the transfer thereof and did not modify the contents thereof; (2) The provider did not choose who would receive the information thus uploaded. Limitation on Liability For the Provision of Caching Service 9. An Internet Service Provider shall not bear Civil Liability for the provision of Caching Services regarding information that was uploaded to an Electronic Communications Network by another person, if all the following conditions have been met: (1) The provider did not modify the information thus uploaded; (2) The provider complied, in respect of said information with the standard rules regarding the updating of the contents of the information and the obtaining of data on the use thereof; (3) The provider took steps to remove the information or to block access thereto immediately after learning that the Information Distributor removed it from the Electronic Communications exempt from Civil Liability as defined in section 7, regarding information that was uploaded to an Electronic Communications Network by another person. The first condition is that the provider did not choose the information thus uploaded, did not initiate the transfer thereof and did not modify the contents thereof, and the second condition is that the provider did not choose who would receive the information so uploaded. In other words, in the given circumstances, the provider served purely as a conduit for the transfer of the information. Section 9 The proposed section determines which conditions must be satisfied for the Internet Service Provider providing Caching Services to be exempt from the said Civil Liability, regarding information that was uploaded to an Electronic Communications Network by another person. It concerns an Internet Service Provider which provides Caching Services for information, which is done automatically in order to facilitate the transfer of the information in the Electronic Communications Network and to increase the speed of the transfer. The first condition for exemption from said Civil Liability is that it did not modify the information thus uploaded in other words, that it is storing the information as originally uploaded. The second condition is that in respect of said information, uploaded to the network as stated, the provider complied with the standard rules in the Internet industry regarding the updating of the contents of the information and the attainment of data on the use thereof. The third condition is that the provider took steps to remove the information or to block access thereto, immediately after learning that the Information Distributor had removed it from the Electronic Communications Network or blocked the access thereto due to the contents or the distribution thereof constituting a tort or a violation of an intellectual property right, or after a court or any other local authority ordered it to remove the information or to block the access thereto. The reason for this is that if the information was removed from the original site to which it was uploaded, it must also be removed from the caching sites, otherwise the purpose of the removal would be defeated.

Network or blocked the access thereto due to the contents or the distribution thereof constituting a tort or a violation of an intellectual property right, or after a court or any other local authority ordered it to remove the information or to block the access thereto. Limitation on Liability For the Provision of Hosting Service 10. (a) An Internet Service Provider shall not bear Civil Liability for the provision of Hosting Services, regarding information that was uploaded to an Electronic Communications Network by another person, if all the following conditions have been met: (1) The provider did not know, on the date on which the information was uploaded to the Electronic Communications Network, that the contents of the information or the distribution thereof constituted a tort or a violation of an intellectual property right; (2) The Information Distributor did not act on behalf of the provider and was not under the provider's control; (3) The provider took steps to remove the information or to block access thereto, after receiving a complaint that the contents of the information or the distribution thereof constituted a tort or a violation of an intellectual property right, pursuant to the following: (a) Immediately after the provider received a complaint from a party claiming that the contents of the information or the distribution thereof on the Electronic Communications Network constituted a tort or a violation of its intellectual property right, the provider sent notice in this regard to the Information Distributor, if the Information Distributor is capable of being identified using reasonable means, in which the provider stated that it intended to remove the information or to block access thereto upon the expiration of three business days, if it does not receive a notice from the Information Distributor disputing the contents of the notice and stating that it intended to litigate against the claimant with respect to this matter in court; Section 10 On sub-section (a) - It is proposed to determine that an Internet Service Provider which provides Hosting Services will be exempt from said Civil Liability, if the following three conditions have been met: firstly, the provider did not know on the date on which the information was uploaded to the Electronic Communications Network, that the contents of the information or the distribution thereof constituted a tort or a violation of an intellectual property right (because had it known this, then there would be no justification for limiting its liability); secondly, the Information Distributor did not act on behalf of the provider and was not under the provider's control (because were this not the case, then

(b) After receiving notice specified in sub-paragraph (a) from the Information Distributor, the provider has failed to remove the information or block access thereto, and has given notice in respect thereof to the complainant, together with a copy of the notice, and if it did not receive such notice the provider has removed the information or blocked access thereto, and has given notice in respect thereof to the complainant; (c) If the provider failed to identify the Information Distributor using reasonable means the provider has given notice in respect thereof to the complainant and refrained from removing the information or blocking access thereto. (b) An Internet Service Provider which provides Hosting Services shall not bear Civil Liability on account of its having taken the measures stated in sub-section (a)(3). (c) The Minister shall determine provisions regarding the delivery of notices pursuant to sub-section (a)(3) and the documents to be attached thereto, and he may also determine additional provisions regarding said sub-section. vicarious or direct liability could be attributed to the provider itself and there would be no justification for limiting its liability); the third condition is that the provider took steps took steps to remove the information or to block access thereto, after receiving a complaint that the contents of the information or the distribution thereof constituted a tort or a violation of an intellectual property right, in accordance with the "notice-and-removal" procedure set out in paragraph (3). party claiming that information composed by a third party or the distribution thereof constitutes a tort against it, as well as against the Information Distributor. On sub-section (b) - It is proposed to provide that an Internet Service Provider which provides Hosting Services and which took measures in the course of performance of the notice-and-removal procedure will not bear Civil Liability on account of its having taken such measures. Paragraph (3) sets forth the principles of the "notice-and-removal" procedure. Upon implementation of said procedure and satisfaction of the other conditions determined in the proposed sub-section (a), as stated, the Internet Service Provider which provides Hosting Services will be exempt from Civil Liability vis-à-vis a On sub-section (c) - It is proposed to authorize the Minister of Justice to determine in the regulations the details of the notice-and-removal procedure, including dates, particulars which must be submitted and documents which must be attached to the applications to the Hosting Service Provider.

Filing of a False Complaint to the Hosting Service Provider A Tort Issuance of an Order to a Hosting Service Provider or a Caching Service Provider Regarding Information Whose Contents Or Distribution Constitute a Tort Or a Violation of An Intellectual Property Right 11. The filing of a complaint specified in section 10(a)(3) knowing it to be false or out of indifference to the possibility that it is false, shall constitute a tort, and the provisions of the Torts Ordinance [New Version] 5 shall apply thereto. 12. The provisions of sections 9 and 10 shall not derogate from the authority of the court hearing a claim filed by a claimant against an Information Distributor, to order the Internet Service Provider which provides Hosting Services or Caching Services, to remove from the Electronic Communications Network information whose contents or distribution constitute a tort or a violation of an intellectual property right, or to block access thereto. Article B: Obligation to Maintain Confidentiality Regarding the Particulars of an Information Distributor Obligation of Hosting Service Provider or Caching Service Provider [sic] to Maintain Confidentiality Regarding the Particulars of an Information Distributor 13. (a) An Internet Service Provider which provides Mere Conduit Services [sic] or Hosting Services shall not disclose any detail, knowledge or document which came into its possession and which enable an Information Distributor to be identified, unless the Information Distributor gave its express, written consent thereto, or if it was required to do so pursuant to the provisions of any law or pursuant to a court order specified in sub-section (b). Section 11 The proposed section determines that the filing of a complaint to an Internet Service Provider which provides Hosting Services, with the knowledge that it is false or out of indifference to the possibility that it is false, shall constitute a tort. The purpose of this is to prevent the abuse of the noticeand-removal procedure. Section 12 The proposed section determines that provisions of sections 9 and 10 shall not derogate from the authority of the court hearing a claim between the claimant and the Information Distributor, to order the Hosting Service Provider or the Caching Service Provider to permanently remove the information. Section 13 On sub-section (a) - It is proposed to impose on an Internet Service Provider the duty of confidentiality vis-à-vis an Information Distributor, and to provide that an Internet Service Provider which provides Hosting Services or Mere Conduit Services will required to maintain confidentiality with regard to the particulars of the Information Distributor which would enable the Information Distributor to be identified, and not to disclose them unless the Information Distributor has granted its express written consent thereto, or if it was 5 Iton Rishmi (Pre-State Official Gazette) 1944, Schedule 1, page 93.

(b) If it has been proven to the satisfaction of the court that there is a genuine concern that the contents of the information uploaded to the Electronic Communications Network or the distribution thereof on the said Network constitute a tort against a person or a violation of his intellectual property right, then it may, upon an application by said person, order the Internet Service Provider which provides Mere Conduit Services or Hosting Services, to submit to the applicant particulars in its possession, which would enable the Information Distributor to be identified. (c) The Minister shall determine provisions regarding the particulars which must be specified in an application as stated in sub-section (b), the documents which must be attached thereto, the procedures to be applied when considering the application and the conditions upon which the Court will grant the remedy sought. Chapter F: Miscellaneous Amendment of Schedules Implementation and Regulations Continued Validity of Laws 14. The Minister may, in an order, amend the First Schedule and the Second Schedule. 15. The Minister is charged with the implementation of this Law and he may enact regulations for the implementation thereof. 16. The provisions of this Law shall not derogate from the provisions of any law. required to do so pursuant to the provisions of any law or pursuant to a court order specified in sub-section (b). On sub-section (b) - It is proposed to authorize the court to order the Hosting Service Provider and the Mere Conduit Service Provider to submit the particulars of the Information Distributor, which are alleged to constitute a tort or an offense against another person, if it has been proven to the satisfaction of the court that there is a genuine concern that the contents of the information uploaded to the Electronic Communications Network or the distribution thereof on the said Network constitute a tort against a person or a violation of his intellectual property right. On sub-section (c) - It is proposed to authorize the Minister to determine in the regulations the conditions for the issuance of an order specified in sub-section (b), the particulars of which must be specified in the application for the order, and the documents which must be attached thereto. Section 14 It is proposed to authorize the Minister to amend, in an order, the Schedules to the proposed law. Section 15 This section authorizes the Minister to enact regulations for the purpose of implementing the proposed law. Section 16 The proposed section clarifies that the provisions of the proposed Law are intended to supplement existing provisions

Application to the State and to Public Entities 17. The provisions of this Law shall apply both to the State and to public entities; however, the provisions of Chapter C shall apply to the State or to a public entity with respect to the delivery of information to a private person or the performance of a legal act visà-vis such a person, only if said person has granted his express consent that the submission of such information or legal act, as the case may be, shall be effected by means of an electronic document; for this purpose, "public entity" shall be any of the following: (1) A local authority; (2) A municipal company, as defined in section 21 of the Budget Foundations Law, 5745 1985 6 ; (3) A corporation set up pursuant to law; (4) An body performing a public function under the law; (5) A government company, as defined in the Government Companies Law, 5735 1975 7 ; Chapter G: Indirect Amendments and Inception Amendment of the Securities Law 18. In the Securities Law, 5728 1968 8, in section 1, in the definition of of the law, and not to derogate therefrom. Therefore if, for example, the terms of the limitation on liability for a Hosting Service Provider are not satisfied, then the general laws of tort can still be applied to the provider. Thus, for example, by virtue of the section, the provisions of the Securities Law, 5728 1968 will continue to apply with respect to electronic reporting (subject to the amendment of the definition of "Electronic Reporting" specified in section 17 below) and the regulations pursuant thereto which set forth special provisions concerning various matters, such as presumptions regarding the receipt of the Electronic Reporting by the Securities Authority, provisions regarding saving electronic reports, as determined by the Securities Authority by virtue of section 44(e) of the Securities Law or provisions regarding the receipt of electronic documents without the recipient s consent all of the above as shall be enacted from 6 Laws of the State of Israel 5745, page 60. 7 Laws of the State of Israel 5735, page 132. 8 Laws of the State of Israel 5728, page 243. time to time. Section 17 The proposed section applies the provisions of the proposed law to the State and to public entities, as defined in the section, such as local authorities, government companies and statutory corporations with respect to legal acts which are not a contract that have been effected by the State or a public authority, and in respect of which the addressee thereof is a private person, such as various notices, the proposed section determines that these acts shall be valid if effected by means of an electronic document only if the addressee granted his consent to the act being effected by means of an Electronic Message. The consent must be express and not implied. Section 18 In this section, it is proposed to amend the definition of the term "Electronic Reporting" as defined in the Securities Law, 5728 1968, which is somewhat different

"Electronic Reporting", the existing wording shall be replaced by: "the filing of a report to the Authority, through the Authority's electronic reporting system, by way of an electronic document, as defined in the Electronic Commerce Law, 5768 2008, signed by an approved electronic signature, provided that the Electronic Document is kept as it was filed, inter alia in terms of the form and the contents thereof". Amendment of the Trademarks Ordinance 19. In the Trademarks Ordinance [New Version], 5732-1972 9, in section 71 (1) In the definition "Electronic Documents" the existing wording shall be replaced by: "documents pursuant to this Ordinance, which are an Electronic Document as defined in the Electronic Commerce Law, 5768 2008"; (2) The definitions "Electronic Message", "Secured Electronic Signature", "Approved Electronic Signature" and "Output" shall be deleted. Inception 20. This Law shall enter into force 90 days following the date of publication thereof. FIRST SCHEDULE (SECTION 3) (1) The Trademarks Ordinance [New Version], 5732 1972. from the definition of an Electronic Document in the proposed section 1. The proposed amendment is necessary in order to adjust the definition of the term "Electronic Reporting" so as to be consistent with the definition of an Electronic Document, whilst maintaining the stringent requirements of the Securities Law and the regulations enacted thereunder for an Electronic Document to be deemed to be "Electronic Reporting". The definition clarifies that not every filing of an Electronic Document will be deemed to be "Electronic Reporting", but only filing that was effected in accordance with the technological requirements of the electronic reporting system of the Securities Authority. 9 Laws of the State of Israel, New Version 26, 5732, page 511. Section 19 In this section it is proposed to amend the definition of the term "Electronic Documents" in the Trademarks Ordinance [New Version], 5732 1972. The proposed amendment is necessary in order to adjust the definition of the term "Electronic Documents" in the said Ordinance so as to be consistent with the definition of "Electronic Document" in the proposed Law. Section 20 The proposed section determines that the Law shall come into effect 90 days following the publication thereof, in order to allow a period of adjustment to the provisions thereof.

SECOND SCHEDULE [SECTION 4(B)] (1) Documents which cannot be signed electronically, as specified in the Electronic Signature Order (Determination of Schedules to the Law), 5762 2002 10 ; (2) An undertaking to conclude a real estate transaction as specified in section 8 of the Land Law, 5729-1960 11 ; (3) An agreement to transfer or pledge an heir's share of an estate, as specified in section 7 of the Inheritance Law; (4) An agency contract; (5) The conferral of consent by an attorney, who was granted such power of attorney to another attorney, to act on his behalf pursuant to section 92 of the Bar Council Law; (6) The signing of a guarantee contract with a sole guarantor, as specified in section 24(a) of the Guarantee Law, 5727-1967 12 ; (7) An order for the performance of a real estate brokerage act, and consent regarding the conferral of a specific transaction for the exclusive handling of a real-estate broker, as specified in section 9 of the Real-Estate Broker Law, 5756 1996 13 ; (8) The conclusion of a loan contract as specified in section 2 of the Non-Bank Loan Law, 5753 1993 14 ; (9) The conclusion of a transaction for the purchase of vacation units, as specified in section 14(a)(1) of the Consumer Protection Law, 5741 1981. 10 Collection of Regulations (Kovetz HaTakanot) 5762, page 754. 11 Laws of the State of Israel 5729, page 259. 12 Laws of the State of Israel 5727, page 46. 13 Laws of the State of Israel 5756, page 118. 14 Laws of the State of Israel 5753, page 174.

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