<PAGE>
                                                                     EXHIBIT 1.2




                             ARTICLES OF ASSOCIATION


                                       OF


                      MARNETICS BROADBAND TECHNOLOGIES LTD.

                                [HEBREW PHRASE]


                   AMENDED AND RESTATED AS OF 8 DECEMBER, 2000


<PAGE>
                             ARTICLES OF ASSOCIATION


                                       OF


                      MARNETICS BROADBAND TECHNOLOGIES LTD.

                                [HEBREW PHRASE]

--------------------------------------------------------------------------------

1.   INTERPRETATION

     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:

     Words                 Meanings

     The Company           Marnetics Broadband Technologies Ltd.

     The Board             The Board of Directors of the 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 of 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 "NOSEH MISRA", as defined in the Companies Law, to
                           wit, a Director, General Manager, chief business
                           manager, deputy General Manager, vice General
                           Manager, or any other manager directly subordinate to
                           the managing director or any other person assuming
                           the responsibilities of any of the foregoing
                           positions without regard to such person's title.

     Audit Committee       As defined in the Companies Law.

     The Office            The registered office of the Company.

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     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.

     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.

     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 denoting the singular number shall include the plural number and vice
     versa; words denoting the masculine gender shall include the feminine and
     neuter genders; words denoting persons shall include any individual,
     company, corporation, partnership, trust, unincorporated association or
     other entity or any combination of the foregoing.

     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.


2.   PUBLIC COMPANY

     The Company is a public company which may have an unlimited number of
     Shareholders and may offer Securities to the public. The liability of a
     Shareholder for debts of the Company is limited to the unpaid portion of
     the consideration (including any premium) in exchange for which the
     Shareholder's Ordinary Shares were issued. The Company may not alter the
     liability of a Shareholder or require the acquisition of Securities without
     his consent.


THE COMPANY'S PURPOSE

3.   The Company's purpose is to operate according to business considerations
     for the production of profits.

4.   SHARE CAPITAL


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     (a) The registered share capital of the Company is NIS 2,000,000 (Two
     Million New Israeli Shekel), divided into 25,000,000 (Twenty-five Million)
     Ordinary Shares of NIS 0.08 nominal value each (the "Ordinary Shares").

     (b) Each Ordinary Share shall rank pari passu. The Ordinary Shares shall
     entitle their holders the right to participate and vote in all General
     Meetings of the Company, the right to receive dividends and the right to
     participate in the distribution of surplus assets of the Company in the
     event of the winding up of the Company, and all other rights generally
     conveyed to the holders of ordinary shares.


AMENDMENT OF ARTICLES


5.   These Articles (with the exception of Article 101 which may be amended as
     provided therein) may be amended by a majority vote at a meeting of
     shareholders of the Company, with the exception of Article 101 which may be
     amended only by the affirmative vote of two-thirds of the shareholders
     present (in person or by proxy) and voting on such resolution at a General
     Meeting.

     Notwithstanding the provisions of this Article 5, 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
     without his consent.

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, which shall have
     the power to allot shares or otherwise dispose of them to such persons, on
     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 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 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. A share certificate registered in the
     names of two or more persons shall be delivered to the person first named
     in the Register of Members in respect of such co-ownership.

8.   Every shareholder registered in the Shareholders' Register shall be
     entitled, 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 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

                                      -4-
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     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 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 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 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.  (a) A subsidiary or some other corporate body under the Company's control
     in this Article: "ACQUIRING CORPORATE BODY") may acquire shares of the
     Company subject to the provisions of the Companies Law, on condition that
     the subsidiary's Board or the Directors of the acquiring corporate body
     determined that - had the acquisition been made by the Company - it would
     have been permitted by the provisions of the Companies Law.

     (b) If the Company's shares are acquired by a subsidiary or by an acquiring
     corporate body, such shares shall not grant voting rights so long as they
     are owned by the subsidiary or by the acquiring corporate body.

     (c) If a prohibited distribution (as defined in Section 301 to the
     Companies Law) was made, then the refund specified in Section 310 to the
     Companies Law shall be made to the subsidiary or to the acquiring body
     corporate and the provisions of Section 311 shall apply, mutatis mutandis,
     to the Directors of the subsidiary and to the Directors of the acquiring
     body corporate. However, if the Company's Board determined that the
     distribution is permitted, then the responsibility shall be that of the
     Company's Directors, as provided in Section 311 to the Companies Law.

     (d) Notwithstanding the provisions of Sub-article (a), acquisition by a
     subsidiary or by an acquiring corporate body that is not wholly owned by
     the Company constitutes a distribution in an amount equal to the amount of
     the acquisition, multiplied by the proportion of rights in the subsidiary's
     capital or in the capital of the acquiring corporate body held by the
     Company.

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) 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 may reasonably require. Until the transferee
     has been registered in the Shareholders Register (which the Company shall
     perform promptly from submission to it of the

                                      -5-
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     foregoing) in respect of the shares so transferred, the Company may
     continue to regard the transferor as the owner thereof.

13.  The Board 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.

     All instruments of transfer shall remain in the custody of the Company, but
     any such instrument which the Board 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 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 shall require, with the consent of the
     Board, 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 give 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 General 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


                                      -6-
<PAGE>

     (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

     (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 IN 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 into
     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
     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

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     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 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 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 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, in
          accordance 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 MEETING

26.  (a)  An Annual General Meeting 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 Annual General Meeting, and at such
          time and place as may be determined by the Board. Such Annual General
          Meetings shall be called "Annual Meetings", and all other Meetings of
          the shareholders shall be called "Extraordinary Meetings". The Annual
          Meeting shall receive and consider the Directors' Report, the
          Financial Statements, appoint


                                      -8-
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          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 Annual General Meeting or a Extraordinary Meeting, according to the
          context.

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

28.  Except as otherwise 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 such shareholders as are under the
     provisions of these Articles, entitled to receive notices from the Company.
     Notices shall be given by mail or by personal delivery to every registered
     shareholder of the Company, to his address as described in the Shareholders
     Register of the Company or such other address as designated by him in
     writing for this purpose. 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 as 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. The Board will fix the
     record date of not less than four (4) nor more than forty (40) days before
     the date of the General Meeting, or such other timeframe, as allowed under
     the Companies Law and regulations thereunder, as may be amended from time
     to time.

PROCEEDINGS AT GENERAL MEETINGS

30.  No business shall be transacted at any General Meeting, or at an
     adjournment thereof, unless a quorum is present when the meeting proceeds
     to business. The

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     quorum at any Meeting shall be two shareholders present in person or by
     proxy, holding or representing at least thirty three and a third percent
     (33 1/3%) 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 fifteen minutes 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 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.

32.  The President of the Company or in his absence any other person nominated
     for that purpose by the Board, shall preside as chairman at every General
     Meeting of the Company. If there is no such President or other person, or
     if at any General Meeting neither the President nor the other person is
     present, or if at any General Meeting neither the President nor the other
     person is present within fifteen (15) minutes after the time fixed for
     holding the General Meeting or is willing to act as Chairman of the General
     Meeting, the Directors present shall choose one of themselves or if no
     Director is present, or if all the Directors present decline to take the
     chair, the members present shall choose one of themselves to be chairman of
     the General Meeting. The chairman of the General Meeting shall have no
     second or casting vote (without derogating from the rights of such chairman
     to vote as a shareholder or proxy of a shareholder if, in fact, he is also
     a shareholder or such proxy).

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 THE 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


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     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 a 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.

39.  If any shareholder be a lunatic, idiot, or non compos mentis, he may vote
     by his committee, receiver, curator bonis or other legal curator, and such
     last-mentioned persons may give their votes 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, and shall
          be signed by the appointor or by his attorney duly authorized in
          writing or, if the appointor is a


                                      -11-
<PAGE>
          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
     may from time to time, either generally or in a particular case or class of
     cases prescribe, at least twenty-four (24) 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.  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.

46.  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


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

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<PAGE>
          (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.

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

DIRECTORS

48.  The Board of the Company shall consist of a minimum of two (2) and a
     maximum of eleven (11) Directors. Each Director shall be appointed by the
     Annual General Meeting unless appointed according to Section 57, and shall
     serve as Director from the time of appointment until the next Annual
     General Meeting unless such Director is disqualified for whatever reason.

49.  (a) Any director or directors may be removed from office at any time, but
     only for cause and only by the affirmative vote of the holders of the
     majority of the Ordinary Shares present in person or by proxy and voting
     thereon. For purposes of this clause (a): "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.

     (b) The General Meeting 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
     such External Directors.

50.  A Director may appoint, dismiss and/or replace an individual as a
     substitute for himself as a Director (an "ALTERNATE DIRECTOR"). The person
     appointed as an Alternate Director must be qualified to serve as a Director
     and may not already be acting as a Director or an Alternate Director. The
     appointment, replacement and/or dismissal of an Alternate Director shall be
     by written notice by the appointing Director either to the Company or to
     the Chairman of the Board. Upon expiration or termination of the term of an
     appointing Director, the term of his Alternate Director will also expire.
     An Alternate Director will not be entitled to participate or vote at a
     Board Meeting at which the appointing

                                      -13-
<PAGE>
     Director is present. An Alternate Director shall have all the powers and
     obligations of the appointing Director, except the power to appoint an
     Alternate Director.

51.  (a) No person shall be nominated for the office of a director at a General
     Meeting except for persons nominated for the office of a director 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 forty-five
     (45) 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 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.


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

                                      -14-
<PAGE>
     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 Officer of the
     Company has a personal interest, directly or indirectly, will be valid in
     respect of the Company and the Officer only if approved by the Company's
     Board in accordance with the requirements of the Companies Law.

55.  A Director who has a personal interest in a matter which is brought for
     discussion before the Board may participate in said discussion, provided
     that he shall neither vote in nor attend discussions concerning the
     approval of the activities or the arrangements. 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, the continuing
     Directors may continue to act as long as the Board 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 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 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


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

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

     (c) The Chairman of the Board shall convene the Board 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 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

                                      -15-
<PAGE>

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


                                         MEETINGS OF THE BOARD AND THEIR CONDUCT


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

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

     (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 to include in the agenda

61.  Notice of a meeting of the Board 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.

62.  A notice under Section 61 may be given orally, by telephone, in writing or
     by mail, electronic mail, telex or facsimile. Notwithstanding anything to
     the contrary herein, failure to deliver notice to a Director of any such
     meeting in the manner required hereby may be waived by such Director, and a
     meeting shall be deemed to have been duly convened notwithstanding such
     defective notice if such failure or defect is waived prior to action being
     taken at such meeting by all Directors entitled to participate at such
     meeting to whom notice was not duly given as aforesaid.

63.  Any person, either a Director or not, may be substitute member of the
     Board, and one person may substitute several members of the Board. Any
     substitute member of the Board who is also a member of the Board shall
     have, in addition to his own vote, a number of votes equal to the number of
     members of the Board that he substitutes. A substitute member of the Board
     shall have, subject to his letter of appointment, all authorities vested to
     the member of the Board he substitutes, and if and as long as such
     substitute member is, for himself, a member of the Board, the aforesaid
     authorities as substitute member shall be in addition to his authorities as
     a member of the Board. The tenure of office of a substitute member of the
     Board shall automatically be terminated upon the dismissal of such member,
     or upon the office of the member of the Board he substitutes being vacated
     for any reason, or upon the occurrence of one of the situations stated in
     Article 53 above in relation with such substitute member.


GENERAL MANAGER


                                      -16-
<PAGE>
64.  The Board 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 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.

65.  The Board 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.

66.  To the extent permitted by the Companies Law, the Board 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 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 with respect thereto and it may from time to time
     revoke, cancel and alter such authorities and duties in whole or in part.

67.  The remuneration of a President, CEO, COO or other Executive Officer shall
     be fixed by the Board, 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

68.  The management of the business of the Company shall be vested in the Board,
     which may exercise all such powers and do all such acts and things as the
     Company is authorized to exercise and do, and are not hereby or by law
     required to be exercised or done by the Company in a General Meeting. The
     authority conferred on the Board by this Article 68 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 which would have been valid if such regulation or resolution
     had not been adopted.

69.  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
     shall be determined by the Directors and, if not so determined, shall be
     the majority of the Directors then holding office.

70.  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 at a meeting of the Board duly convened and held.

71.  Members of the Board, or of any committee designated by the Board, may
     participate in a meeting of the Board, or of any committee, by means of a


                                      -17-
<PAGE>
     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.

72.  (a) The Board shall elect a Chairman for the meeting and fix the term of
     his office. The CEO shall not serve as Chairman of the Board and vice versa
     unless the holders of two thirds of the voting rights in the Company
     represented in person or by proxy and voting on such resolution at a
     General Meeting, who are not controlling shareholders of the Company or
     their representatives and who are present at the vote, adopt a decision to
     appoint the Chairman of the Board as the CEO, for a period not exceeding
     three years after the date of the adoption of the decision.

     (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 shall be decided by a
     majority of votes. In the event of a tie vote, the Chairman of the Board
     shall not have a casting vote.

73.  Any meeting of the Board 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.

74.  Subject to the Companies Law, the Board 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 given from time to time and/or to the provisions of the Companies
     Law.

75.  All acts done bona fide at any meeting of the Board, or of a committee of
     the Board 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.

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

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

     (b)  all proceedings and resolutions of General Meetings of the Company,
          Board meetings and Committees of the Board meetings.


                                      -18-
<PAGE>
     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.

77.  [Reserved.]

SHAREHOLDER REGISTERS

78.  Subject to, and in accordance with, the provisions of the Companies Law,
     the Company may cause the 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 may think fit and, subject to all applicable legal
     requirements, the Board 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

79.  The Board 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

80.  (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. 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 may provide for a seal. If the Board so provides, it shall
     also provide for the safe custody thereof. Such seal shall not be used
     except by the authority of the Board 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

81.  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 above-mentioned period.


                                      -19-
<PAGE>

82.  The Board 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.

83.  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.

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

85.  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.

86.  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.

87.  The Board 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

88.  (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.

89.  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 trust against the Company, unless he proved
     one of the following:


                                      -20-
<PAGE>
     (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 permitted;

     (3)  that under the circumstances of the case he did not know and did not
          need to know of the distribution.

MERGER

90.  A merger requires approval by the Board and by the General Meeting, in
     accordance with the provisions of the Companies Law.


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

92.  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.


93.  (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

94.  The Board 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 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 the Company.

                                      -21-
<PAGE>
95.  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.

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

NOTICES

97.  (a) A notice or any other document may be served by the Company upon any
     shareholder either personally or by sending it by prepaid mail in Israel
     (by prepaid air mail if sent to a place outside Israel other than the U.S,
     or by first class mail if sent within the U.S.) addressed to such
     shareholder at his address as recorded in the Company's Shareholder
     Register or such other address as he may have designated in writing for the
     receipt of notices and other documents. Any written notice or other
     document shall be deemed to have been served forty-eight (48) hours after
     it has been mailed (seven (7) days if mailed to a place outside of Israel
     or forty-eight (48) hours if mailed from within the U.S. to a location
     within the U.S.), 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);
     provided, however, that such notice or other document mentioned above may
     be sent by facsimile and confirmed by registered mail as aforesaid, and
     such notice shall be deemed to have been given twenty-four (24) hours after
     such facsimile has been sent or when actually received by such shareholder
     (or by the Company), whichever is earlier. If a notice is, in fact,
     received by the addressee, it shall be deemed to have been duly served when
     received, notwithstanding that it was defectively addressed or failed in
     some respect to comply with the provisions of this Article.

     (b) Unless otherwise specified in bearer share warrants, the holders of
     such warrants shall not be entitled to receive notice of any General
     Meeting of the Company, and the Company is under no obligation to give
     notice of General Meetings to a person entitled to a share by virtue of its
     delivery to him, unless he is duly registered as a shareholder.

     (c) 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.

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

     (e) 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


                                      -22-
<PAGE>

     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.

     (f) 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

98.  On any sale of the undertaking of the Company, the Board 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 (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.

INDEMNITY AND INSURANCE OF OFFICERS

99.  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,

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

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

          (i)  Any financial obligation imposed on an 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.; and

                                      -23-
<PAGE>

          (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 .

          Such indemnity shall apply in certain forseeable events and up to a
          feasible amount under the circumstances, as determined by the Board.

         WINDING-UP

100. 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.

BUSINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS


101. Notwithstanding any other provision of these Articles, the Company shall
     not engage in any business combination with any interested shareholder for
     a period of three years following the time that such shareholder became an
     interested shareholder, unless:

     (a) prior to such time the Board of the Company approved either the
     business combination or the transaction which resulted in the shareholder
     becoming an interested shareholder, or

     (b) upon consummation of the transaction which resulted in the shareholder
     becoming an interested shareholder, the interested shareholder owned at
     least 85% of the voting shares of the Company outstanding at the time the
     transaction commenced, excluding for purposes of determining the number of
     shares outstanding those shares owned (i) by persons who are directors and
     also officers and (ii) employee share plans in which employee participants
     do not have the right to determine confidentially whether shares held
     subject to the plan will be tendered in a tender or exchange offer, or

     (c) at or subsequent to such time the business combination is approved by
     the Board and authorized at a General Meeting, and not by written consent,
     by the affirmative vote of at least 66 2/3% of the outstanding voting
     shares which is not owned by the interested shareholder.

     (d) A shareholder becomes an interested shareholder inadvertently and (i)
     as soon as practicable diverts itself of ownership of sufficient shares so
     that the shareholder ceases to be an interested shareholder; and (ii) would
     not, at any time within the three-year period immediately prior to a
     business combination


                                      -24-
<PAGE>
     between the Company and such shareholder, have been an interested
     shareholder but for the inadvertent acquisition of ownership; or

     (e) The business combination is proposed prior to consummation or
     abandonment of and subsequent to the earlier of the public announcement or
     the notice required hereunder of a proposed transaction which (i)
     constitutes one of the transactions described in the second sentence of
     this paragraph; (ii) is with or by a person who either was not an
     interested shareholder during the previous three years or who became an
     interested shareholder with the approval of the Company's Board; and (iii)
     is approved or not opposed by a majority of the members of the Boards of
     Directors then in office who were directors prior to any person becoming an
     interested shareholder during the previous three years or were recommended
     for election or were elected to succeed such directors by a majority of
     such directors. The proposed transactions referred to in the preceding
     sentences are limited to (x) a merger or consolidation of Company (except
     for merger in respect of which no vote of shareholders of the Company is
     required according to the Companies Law); (y) a sale, lease, exchange,
     mortgage, pledge, transfer or other disposition (in one transaction or a
     series of transactions), whether as part of a dissolution or otherwise of
     assets of the Company or of any direct or indirect majority-owned
     subsidiary of the Company (other than to any direct or indirect wholly
     owned subsidiary or to the Company) having an aggregate market value equal
     to 50% or more of either that aggregate market value of all of the assets
     of the Company determined on a consolidated basis or the aggregate market
     of all the outstanding shares of the Company; or (z) a proposed tender or
     exchange offer for 50% or more of the outstanding voting shares of the
     Company. The Company shall give not less than 20 days notice to all
     interested shareholders prior to the consummation of any of the transaction
     described in clause (x) or (y) of the second sentence of this paragraph.

     As used in this Article only, the term:

          (1)  "affiliate" means a person that directly, or indirectly through
               one or more intermediaries, controls, is controlled by or is
               under common control with another person.

          (2)  "associate" when used to indicate a relationship with any person,
               means (I) any corporation, partnership, unincorporated
               association or other entity of which such person is a director,
               officer or partner or is, directly or indirectly, the owner of
               20% or more of any class of voting shares, (ii) any trust or
               other estate in which such person has at least a 20% beneficial
               interest or as to which such person serves as trustee or in a
               similar fiduciary capacity, and (iii) any relative or spouse of
               such person, or any relative of such spouse, who has the same
               residence as such person.

          (3)  "business combination" when used in reference to the Company and
               any interested shareholder of the Company, means:


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<PAGE>

               (i)   any merger or consolidation of the Company or any direct or
                     indirect majority owned subsidiary of the Company with (A)
                     an interested shareholder, or (B) with any other
                     corporation, partnership, unincorporated association or
                     other entity if the merger or consolidation is caused by an
                     interested shareholder and as a result of such merger or
                     consolidation Sub-article (a) of this Article 101 is not
                     applicable to the surviving entity;

               (ii)  any sale, lease, exchange, mortgage, pledge, transfer or
                     other disposition (in one transaction or a series of
                     transactions), except proportionately as a shareholder of
                     such Company to or with the interested shareholder, whether
                     as part of a dissolution or otherwise, of assets of the
                     Company or of any direct or indirect majority owner
                     subsidiary of the Company, which assets have an aggregate
                     market value equal to 10% or more of either the aggregate
                     market value of all of the assets of the Company determined
                     on a consolidated basis or the aggregate market value of
                     all of the outstanding shares of the Company.

               (iii) any transaction which results in the issuance or transfer
                     by the Company or by any direct or indirect majority-owned
                     subsidiary of the Company of any shares of the Company or
                     of such subsidiary to the interested shareholder, except
                     (A) pursuant to the exercise, exchange or conversion of
                     securities exercisable for or convertible into shares of
                     the Company or any such subsidiary, which securities were
                     outstanding prior to the time that the interested
                     shareholder became such, (B) pursuant to a dividend or
                     distribution paid or made, or the exercise, exchange or
                     conversion of securities exercisable for, exchangeable for
                     or convertible into shares of the Company or any such
                     subsidiary, which security is distributed pro rata to all
                     holders of a class or series of shares of the Company
                     subsequent to the time the interested shareholder became
                     such, (C) pursuant to an exchange offer by the Company to
                     purchase shares made on the same terms to all holders of
                     said shares or (D) any issuance or transfer of shares by
                     the Company; provided, that in no case under (B)-(D) above
                     shall there be an increase in the interested shareholder's
                     proportionate share of the shares of any class or series of
                     the Company or of the voting shares of the Company.

               (iv)  any transaction involving the Company or any direct or
                     indirect majority owned subsidiary of the Company which has
                     the effect directly or indirectly of increasing the
                     proportionate share of the shares of any class or series or

                                      -26-
<PAGE>
                    securities convertible into the shares of any class or
                    series of the Company or of any such subsidiary which is
                    owned by the interested shareholder except as a result of
                    immaterial changes due to fractional share adjustments or as
                    a result of any purchase or redemption of any shares not
                    caused, directly or indirectly, by the interested
                    shareholder; or

               (v)  any receipt by the interested shareholder of the benefit,
                    directly or indirectly (except proportionately as a
                    shareholder of such Company), of any loans, advances,
                    guarantees, pledges or any other financial benefits (other
                    than those expressly permitted in subparagraphs (i)-(iv)
                    above) provided by or through the Company or any direct or
                    indirect majority owned subsidiary.

          (4)  "control" including the term "controlling," "controlled by" and
               "under common control with," means the possession, directly or
               indirectly, of the power to direct or cause the direction of the
               management and policies of a person, whether through the
               ownership of voting shares, by contract or otherwise. A person
               who is the owner of 20% or more of the outstanding voting shares
               of any company, partnership, unincorporated association or other
               entity shall be presumed to have control of such entity.
               Notwithstanding the foregoing, a presumption of control shall not
               apply where such person holds voting shares in good faith and not
               for the purpose of circumventing this Article as an agent, bank,
               broker, nominee, custodian or trustee for one or more owners who
               do not individually or as a group have control of such entity.

          (5)  "interested shareholder" means any person (other than the Company
               and any direct or indirect majority owner subsidiary of the
               Company) that (i) is the owner of 15% or more of the outstanding
               voting shares of the Company, or (ii) is an affiliate or
               associate of the Company and was the owner of 15% or more of the
               outstanding voting shares of the Company at any time within the
               three year period immediately prior to that date on which it is
               sought to be determined whether such person is an interested
               shareholder and the affiliates and associates of such person, or
               (iii) any person whose ownership of shares in excess of the 15%
               limitation set forth herein is the result of action taken solely
               by the Company provided that such person shall be an interested
               shareholder if thereafter such person acquires additional voting
               shares of the Company, except as a result of further corporate
               action not caused, directly or indirectly, by such person. For
               the purpose of determining whether a person is an interested
               shareholder, the voting shares of the Company deemed to be
               outstanding shall include shares deemed to be owned by the person
               through application of paragraph (8) of this Sub-article but
               shall not include any other unissued shares of the Company which


                                      -27-
<PAGE>
               may be issuable pursuant to any agreement, arrangement or
               understanding, or upon exercise of conversion rights, warrants or
               options, or otherwise.

          (6)  "share" means with respect to the Company shares of its capital
               and with respect to any other entity any equity interest.

          (7)  "voting shares" means any class or series entitled to vote
               generally in the election of directors of the Company and
               generally.

          (8)  "owner" including the terms "own" and "owned," when used with
               respect to any share, means a person that individually or with or
               through any of its affiliates or associates:

               (i)    beneficially owns such share, directly or indirectly; or

               (ii)   has (A) the right to acquire such share (whether such
                      right is exercisable immediately or only after the passage
                      of time) pursuant to any agreement, arrangement or
                      understanding or upon the exercise of conversion rights,
                      warrants or options, or otherwise, provided, however, that
                      a person shall not be deemed the owner of share tendered
                      pursuant to a tender or exchange; or (B) the right to vote
                      such share pursuant to any agreement, arrangement or
                      understanding; provided, however, that a person shall not
                      be deemed the owner of any share because of such person's
                      right to vote such share if the agreement, arrangement, or
                      understanding to vote such share arises solely from a
                      revocable proxy or consent given in response to a proxy or
                      consent solicitation made to 10 or more persons: or

               (iii)  has any agreement, arrangement or understanding for the
                      purpose of acquiring, holding, voting (except voting
                      pursuant to a revocable proxy or consent as described in
                      item (b) of clause (ii) of this paragraph) or disposing of
                      such share with any other person that beneficially owns or
                      whose affiliates or associates beneficially own, directly
                      or indirectly, such share.



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