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                                                                     EXHIBIT 1.2

                          THE COMPANIES LAW, 5759-1999
                          ----------------------------

                           A COMPANY LIMITED BY SHARES
                           ---------------------------


                             ARTICLES OF ASSOCIATION
                             -----------------------

                                       OF

                                NICE-SYSTEMS LTD.


1.   DEFINITIONS; INTERPRETATION

     (a) "Companies Law" - the Israeli Companies Law, 5759-1999 as the same
shall be amended from time to time, or any other law which shall replace that
Law, together with any amendments and regulations thereto.

     (b) "Companies Ordinance" - those sections of the Israeli Companies
Ordinance [New Version] 5743-1983 that shall remain in force after the date of
the coming into force of the Companies Law, as the same shall be amended from
time to time.

     (c) Unless the subject or the context otherwise requires: words and
expressions defined in the Companies Law and in the Companies Ordinance, as the
case may be, shall have the same meanings herein; words and expressions
importing the singular shall include the plural and vice versa; words and
expressions importing the masculine gender shall include the feminine gender;
and words and expressions importing persons shall include bodies corporate.

     (d) The captions in these Articles are for convenience only and shall not
be deemed a part hereof or affect the construction of any provision hereof.

2.   OBJECT AND PURPOSE OF THE COMPANY

     The object and the purpose of the Company are as set forth in Section 2 of
the Memorandum of Association of the Company.

3.   LIMITATION OF LIABILITY

     The liability of the shareholders of the Company is limited as set forth in
Section 3 of the Memorandum of Association of the Company.

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                                  SHARE CAPITAL

4.   SHARE CAPITAL

     The share capital of the Company is fifty million New Israeli Shekels (NIS
50,000,000) divided into fifty million (50,000,000) Ordinary Shares of nominal
value of NIS 1.00 each ("Ordinary Shares").

5.   INCREASE OF SHARE CAPITAL

     (a)  The Company may, from time to time, by resolution of the shareholders,
whether or not all the shares then authorized have been issued, resolve to
increase its share capital by the creation of new shares. Any such increase
shall be in such amount and shall be divided into shares of such nominal
amounts, and such shares shall confer such rights and preferences, and shall be
subject to such restrictions, as such resolution shall provide.

     (b)  Except to the extent otherwise provided in such resolution, such new
shares shall be subject to all the provisions applicable to the shares of the
original share capital.

6.   THE RIGHTS OF ORDINARY SHARES

     The Ordinary Shares confer upon the holders thereof all rights accruing to
a shareholder of the Company, as provided in these Articles, including, INTER
ALIA, the right to receive notices of (in the manner proscribed in Articles 20
and 50 of these Articles), and to attend, shareholder meetings of the
shareholders; for each share held - the right to one vote at all shareholders'
meetings for all purposes, and to share equally, on a per share basis, in such
dividends as may be declared by the Board of Directors in accordance with the
terms of these Articles and the Companies Law; and upon liquidation or
dissolution, the right to participate in the distribution of any surplus assets
of the Company legally available for distribution to shareholders after payment
of all debts and other liabilities of the Company, in accordance with the terms
of these Articles and the law. All Ordinary Shares rank PARI PASSU in all
respects with each other.

7.SPECIAL RIGHTS; MODIFICATIONS OF RIGHTS

     (a)  Subject to the provisions of any law, the Company may, from time to
time, by resolution of the shareholders, provide for shares with such preferred
or deferred rights or rights of redemption or other special rights and/or such
restrictions, whether in regard to dividends, voting, repayment of share capital
or otherwise, as may be stipulated in such resolution.

     (b)  (i) If at any time the share capital is divided into different classes
of shares, the rights attached to any class, unless otherwise provided by these
Articles, may be modified or abrogated by the Company, by a shareholder
resolution, subject to the consent of the holders of a majority of the voting
power of such class by written consent or at a separate General Meeting of the
holders of the shares of such class.

          (ii)     The provisions of these Articles relating to General Meetings
shall, mutatis mutandis, apply to any separate General Meeting of the holders of
the shares of a particular class.

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          (iii)    Unless otherwise provided by these Articles, the enlargement
of an existing class of shares, or the issuance of additional shares thereof,
shall not be deemed, for purposes of this Article 7(b), to modify or abrogate
the rights attached to the previously issued shares of such class or of any
other class.

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

     (a)  The Company may (subject, however, to the provisions of Article 7(b)
hereof and to applicable law), from time to time, by resolution of the Company's
shareholders:

          (i)      consolidate and divide all or any of its issued or unissued
share capital into shares of larger nominal value than its existing shares,

          (ii)     subdivide its shares (issued or unissued) or any of them,
into shares of smaller nominal value than is fixed by these Articles (subject to
the provisions of the Companies Law), and the shareholders resolution whereby
any share is subdivided may determine that, as among the holders of the shares
resulting from such subdivision, one or more of the shares may, as compared with
the others, have any such preferred or deferred rights or rights of redemption
or other special rights, or be subject to any such restrictions, as the Company
has power to attach to unissued or new shares.

          (iii)    cancel any shares which, at the date of the adoption of such
resolution, have not been taken or agreed to be taken by any person, and
diminish the amount of its share capital by the amount of the shares so
cancelled, or

          (iv)     reduce its share capital in any manner, and with and subject
to any incident authorized, and consent required, by law.

     (b)  With respect to any consolidation of issued shares into shares of
larger nominal value, and with respect to any other action which may result in
fractional shares, the Board of Directors may settle any difficulty which may
arise with regard thereto, as it deems fit, including, INTER ALIA, resort to one
or more of the following actions:

          (i)      determine, as to the holder of shares so consolidated, which
issued shares shall be consolidated into each share of larger nominal value;

          (ii)     allot, in contemplation of or subsequent to such
consolidation or other action, such shares or fractional shares sufficient to
preclude or remove fractional share holdings;

          (iii)    redeem, in the case of redeemable preference shares, and
subject to applicable law, such shares or fractional shares sufficient to
preclude or remove fractional share holdings;

          (iv)     cause the transfer of fractional shares by certain
shareholders of the Company to other shareholders thereof so as to most
expediently preclude or remove any fractional shareholdings, and cause the
transferees to pay the transferors the fair value of fractional shares so
transferred, and the Board of Directors is hereby authorized to act as agent for
the transferors and transferees with power of substitution for purposes of
implementing the provisions of this sub-Article 8(b)(iv).

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     (c)  The notice of a General Meeting with respect to the adoption of a
resolution under Article 8(a) above, shall specify the actions to be adopted by
the Board of Directors under Article 8(b) above.


                                     SHARES

9.   ISSUANCE OF SHARE CERTIFICATES; REPLACEMENT OF LOST CERTIFICATES

     (a)  Share certificates of issued shares shall, if issued, be issued under
the seal or the rubber stamp of the Company or the Company printed name, and
shall bear the signatures of two Directors, or of one Director and of the
Secretary of the Company, or of any other person or persons authorized thereto
by the Board of Directors.

     (b)  Each shareholder, registered in the Register of Shareholders (as
defined in the Companies law), shall be entitled to one numbered certificate for
all the shares of any class registered in his name, or if the Board of Directors
so approves, to several certificates, each for one or more of such shares, in
the form as shall be determined by the Board of Directors and according to the
law.

     (c)  A share certificate registered in the names of two or more persons
shall be delivered to the person first named in the Register of Shareholders in
respect of such co-ownership.

     (d)  If a share certificate is defaced, lost or destroyed, it may be
replaced, provided that the original certificate is presented to and destroyed
by the Board of Directors or it is proved to the satisfaction of the Board of
Directors that the certificate has been lost or destroyed, and upon payment of
such fee, and upon the furnishing of such evidence of ownership and such
indemnity or security, as the Board of Directors may think fit.

10.  ALLOTMENT OF SHARES

     The unissued shares shall be under the control of the Board of Directors,
who shall have the power to allot shares or otherwise dispose of them to such
persons, on such terms and conditions (including INTER ALIA terms relating to
calls as set forth in Article 11(f) hereof), and either at par or at a premium,
and at such times, as the Board of Directors may think fit, and the power to
grant to any person the option to acquire from the Company any shares, either at
par or at a premium, during such time and for such consideration as the Board of
Directors may think fit.

11.  CALLS ON SHARES; FORFEITURE AND SURRENDER

     (a)  The Board of Directors may, from time to time, make such calls as it
may think fit upon a shareholder in respect of any sum unpaid in respect of
shares held by such shareholder which is not, by the terms of allotment thereof
or otherwise, payable at a fixed time, and each

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shareholder shall pay the amount of every call so made upon him (and of each
installment thereof if the same is payable in installments), to the person(s)
and at the time(s) and place(s) designated by the Board of Directors, as any
such time(s) may be thereafter extended and/or such person(s) or place(s)
changed. Unless otherwise stipulated in the resolution of the Board of Directors
(and in the notice hereafter referred to), each payment in response to a call
shall be deemed to constitute a pro rata payment on account of all shares in
respect of which such call was made.

     (b)  Notice of any call shall be given in writing to the shareholder(s) in
question not less than fourteen (14) days prior to the time of payment,
specifying the time and place of payment, and designating the person to whom
such payment shall be made, provided, however, that before the time for any such
payment, the Board of Directors may, by notice in writing to such
shareholder(s), revoke such call in whole or in part, extend such time, or alter
such person and/or place. In the event of a call payable in installments, only
one notice thereof need be given.

     (c)  If, by the terms of allotment of any share or otherwise, any amount is
made payable at any fixed time, every such amount shall be payable at such time
as if it were a call duly made by the Board of Directors and of which due notice
had been given, and all the provisions herein contained with respect to such
calls shall apply to each such amount.

     (d)  The joint holders of a share shall be jointly and severally liable to
pay all calls in respect thereof and all interest payable thereon.

     (e)  Any amount unpaid in respect of a call shall bear interest from the
date on which it is payable until actual payment thereof, at such rate (not
exceeding the then prevailing debitory rate charged by leading commercial banks
in Israel), and at such time(s) as the Board of Directors may prescribe.

     (f)  Upon the allotment of shares, the Board of Directors may provide for
differences among the allottees of such shares as to the amount of calls and/or
the times of payment thereof.

     (g)  If any shareholder fails to pay any amount payable in respect of a
call, or interest thereon as provided for herein, on or before the day fixed for
payment of the same, the Company, by resolution of the Board of Directors, may
at any time thereafter, so long as the said amount or interest remains unpaid,
forfeit all or any of the shares in respect of which said call had been made.
Any expense incurred by the Company in attempting to collect any such amount or
interest, including, inter alia, attorneys' fees and costs of suit, shall be
added to, and shall, for all purposes (including the accrual of interest
thereon), constitute a part of the amount payable to the Company in respect of
such call.

     (h)  Upon the adoption of a resolution of forfeiture, the Board of
Directors shall cause notice thereof to be given to such shareholder, which
notice shall state that, in the event of the failure to pay the entire amount so
payable within a period stipulated in the notice (which period shall not be less
than fourteen (14) days and which may be extended by the Board of Directors),
such shares shall be ipso facto forfeited, provided, however, that, prior to the
expiration of such period, the Board of Directors may nullify such resolution of
forfeiture, but no such nullification shall stop the Board of Directors from
adopting a further resolution of forfeiture in respect of the non-payment of the
same amount.

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     (i)  Whenever shares are forfeited as herein provided, all dividends
theretofore declared in respect thereof and not actually paid shall be deemed to
have been forfeited at the same time.

     (j)  The Company, by resolution of the Board of Directors, may accept the
voluntary surrender of any share.

     (k)  Any share forfeited or surrendered as provided herein shall become the
property of the Company, and the same, subject to the provisions of these
Articles, may be sold, re-allotted or otherwise disposed of as the Board of
Directors thinks fit.

     (l)  Any shareholder whose shares have been forfeited or surrendered shall
cease to be a shareholder in respect of the forfeited or surrendered shares, but
shall, notwithstanding, be liable to pay, and shall forthwith pay, to the
Company, all calls, interest and expenses owing upon or in respect of such
shares at the time of forfeiture or surrender, together with interest thereon
from the time of forfeiture or surrender until actual payment, at the rate
prescribed in Article 11(e) above, and the Board of Directors, in its
discretion, may enforce the payment of such moneys, or any part thereof, but
shall not be under any obligation to do so. In the event of such forfeiture or
surrender, the Company, by resolution of the Board of Directors, may accelerate
the date(s) of payment of any or all amounts then owing by the shareholder in
question (but not yet due) in respect of all shares owned by such shareholder,
solely or jointly with another, and in respect of any other matter or
transaction whatsoever.

     (m)  The Board of Directors may at any time, before any share so forfeited
or surrendered shall have been sold, re-allotted or otherwise disposed of,
nullify the forfeiture or surrender on such conditions as it thinks fit, but no
such nullification shall stop the Board of Directors from re-exercising its
powers of forfeiture pursuant to this Article 11.

     (n)  Except to the extent the same may be waived or subordinated in writing
and to the extent permitted by applicable law, the Company shall have a first
and paramount lien upon all the shares registered in the name of each
shareholder (without regard to any equitable or other claim or interest in such
shares on the part of any other person), and upon the proceeds of the sale
thereof, for his debts, liabilities and engagements arising from any cause
whatsoever, solely or jointly with another, to or with the Company, whether the
period for the payment, fulfillment or discharge thereof shall have actually
arrived or not. Such lien shall extend to all dividends from time to time
declared in respect of such share. Unless otherwise provided, the registration
by the Company of a transfer of shares shall be deemed to be a waiver on the
part of the Company of the lien (if any) existing on such shares immediately
prior to such transfer.

     (o)  The Board of Directors may cause the Company to sell any shares
subject to such lien when any such debt, liability or engagement has matured, in
such manner as the Board of Directors may think fit, but no such sale shall be
made unless such debt, liability or engagement has not been satisfied within
fourteen (14) days after written notice of the intention to sell shall have been
served on such shareholder, his executors or administrators.

     (p)  The net proceeds of any such sale, after payment of the costs thereof,
shall be applied in or toward satisfaction of the debts, liabilities or
engagements of such shareholder (whether or not the same have matured), or any
specific part of the same (as the Company may

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determine), and the residue (if any) shall be paid to the shareholder, his
executors, administrators or assigns.


                               TRANSFER OF SHARES

12.  EFFECTIVENESS AND REGISTRATION

     No transfer of shares shall be registered in the Register of Shareholders
unless a proper instrument of transfer (in form and substance satisfactory to
the Secretary of the Company) has been submitted to the Company, together with
such other evidence of title as the Board of Directors may reasonably require.
Until the transferee has been registered in the Register of Shareholders in
respect of the shares so transferred, the Company may continue to regard the
transferor as the owner thereof.

                             TRANSMISSION OF SHARES

13.  DECEDENTS' SHARES

     (a)  In case of a share registered in the names of two or more holders
established by law, the Company may recognize the survivor(s) as the sole
owner(s) thereof unless and until the provisions of Article 13(b) have been
effectively invoked.

     (b)  Any person becoming entitled to a share in consequence of the death of
any person, upon producing evidence of the grant of probate or letters of
administration or declaration of succession (or such other evidence as the Board
of Directors may reasonably deem sufficient that he sustains the character in
respect of which he proposes to act under this Article or of his title), shall
be registered as a shareholder in respect of such share, or may, subject to the
regulations as to transfer herein contained, transfer such share.

14.  RECEIVERS AND LIQUIDATORS

     (a)  The Company may recognize the receiver, liquidator or similar official
of any corporate shareholder in winding-up or dissolution, or the receiver,
trustee or similar official in bankruptcy or in connection with the
reorganization of any shareholder, as being entitled to the shares registered in
the name of such shareholder.

     (b)  The receiver, liquidator or similar official of a corporate
shareholder in winding-up or dissolution, or the receiver, trustee or similar
official in bankruptcy or in connection with the reorganization of any
shareholder, upon producing such evidence as the Board of Directors may deem
sufficient that he sustains the character in respect of which he proposes to act
under this Article or of his title, shall with the consent of the Board of
Directors (which the Board of Directors may grant or refuse in its absolute
discretion), be registered as a shareholder in respect of such shares in the
Register of Shareholders, or may, subject to the regulations as to transfer
herein contained, transfer such shares.

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                 RECORD DATE WITH RESPECT TO OWNERSHIP OF SHARES

15.  RECORD DATE FOR GENERAL MEETINGS

     The shareholders entitled to receive notice of, to participate in and to
vote thereon at a General Meeting, or to express consent to or dissent from any
corporate action in writing, shall be the shareholders on the date set in the
resolution of the Board of Directors to convene the General Meeting, provided
that, such date shall not be earlier than forty (40) days prior to the date of
the General Meeting and not later than four (4) days prior to the date of such
General Meeting, or different periods as shall be permitted by law. A
determination of shareholders of record with respect to a General Meeting shall
apply to any adjournment of such meeting.

16.  RECORD DATE FOR DISTRIBUTION OF DIVIDENDS

     The shareholders entitled to receive dividends shall be the shareholders on
the date upon which it was resolved to distribute the dividend or at such later
date as shall be provided in the resolution in question.


                                GENERAL MEETINGS

17.  ANNUAL GENERAL MEETING

     An Annual General Meeting shall be held once in every calendar year at such
time (within a period of not more than fifteen (15) months after the last
preceding Annual General Meeting) and at such place either within or without the
State of Israel as may be determined by the Board of Directors.


18.  SPECIAL GENERAL MEETING

     All General Meetings other than Annual General Meetings shall be called
"SPECIAL GENERAL MEETINGS." The Board of Directors may, whenever it thinks fit,
convene a Special General Meeting at such time and place, within or without the
State of Israel, as may be determined by the Board of Directors. Special General
Meetings may also be convened upon requisition in accordance with the Companies
Law.

19.  POWERS OF THE GENERAL MEETING

     Subject to the provisions of the Companies Law and of these Articles, the
resolutions in respect to the following matters shall be adopted by the General
Meeting:

     (a)  Amendments to the Articles, as set forth in Section 20 of the
Companies Law.

     (b)  Exercise of the authorities of the Board of Directors in accordance
with the provisions of Section 52(a) of the Companies Law.

     (c)  Appointment of the outside auditor(s) of the Company, the
determination of its/their terms of engagement with the Company and termination
of its/their engagement with

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the Company, all in accordance with the provisions of Sections 154-167 of the
Companies Law.

     (d)  Appointment of independent ("external") Directors in accordance with
the provisions of Section 239 of the Companies Law ("External Directors").

     (e)  Approval of actions and transactions that require the approval of the
General Meeting pursuant to Sections 255 and 268-275 of the Companies Law.

     (f)  An increase and a decrease of the authorized share capital of the
Company, pursuant to Sections 286 and 287 of the Companies Law.

     (g)  A merger, as set forth in Section 320(a) of the Companies Law.

20.  NOTICE OF GENERAL MEETINGS

     (a)  Not less than twenty-one (21) days' prior notice shall be given of
every General Meeting (the "Notice"). The Notice shall be published in two (2)
newspapers in Israel and as shall be required by law or rules and regulations of
the stock exchanges on which the Company's shares are listed. The Notice shall
specify the place, date and hour of the General Meeting, its agenda, a summary
of proposed resolutions and the procedure for voting in such General Meeting by
proxy statement and any other matter as shall be required by law. Notices shall
not be sent to each of the shareholders registered in the Company's Register of
Shareholders.

     (b)  The validity of any resolutions carried at a General Meeting shall not
be affected if the Company, by oversight, has not sent a notice of the convening
of the meeting, or has sent an incomplete or incorrect notice regarding the
convening of the meeting or its agenda, or has not served a notice as aforesaid
or has delayed in sending or delivering the said notice.

                         PROCEEDINGS AT GENERAL MEETINGS

21.  QUORUM

     (a)  Two or more shareholders (not in default in payment of any sum
referred to in Article 26(a) hereof), present in person or by proxy or by
written ballot, as shall be permitted, and holding shares conferring in the
aggregate twenty-five percent (25%) or more of the voting power of the Company,
shall constitute a quorum at General Meetings.

     (b)  If within half an hour from the time appointed for the meeting a
quorum is not present, if convened upon requisition under sections 63, 64 or 65
of the Companies Law, the meeting shall be dissolved, but in any other case it
shall stand adjourned to the same day in the next week, at the same time and
place, or to such day and at such time and place as specified in the Notice of
such meeting or as the Chairman may determine with the consent of the holders of
a majority of the voting power represented at the meeting in person or by proxy
or by written ballot, as shall be permitted, and voting on the question of
adjournment. At such adjourned meeting, any two (2) shareholders (not in default
as aforesaid) present in person or by proxy or by written ballot, as shall be
permitted, shall constitute a quorum.

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     (c)  No business shall be transacted at a General Meeting, or at any
adjournment thereof, unless the requisite quorum is present when the meeting
proceeds to business.

22.  CHAIRMAN

     Any member of the Board of Directors shall preside as Chairman at any
General Meeting of the Company. If there is no such member, or if at any meeting
such member is not present within fifteen (15) minutes after the time fixed for
holding the meeting or is unwilling to act as Chairman, the shareholders present
shall choose someone of their member to be Chairman. The office of Chairman
shall not, by itself, entitle the holder thereof to vote at any General Meeting
nor shall it entitle such holder to a second or casting vote (without
derogating, however, from the rights of such Chairman to vote as a shareholder
or proxy of a shareholder if, in fact, he is also a shareholder or such proxy).

23.  ADOPTION OF RESOLUTIONS AT GENERAL MEETINGS

     (a)  Unless otherwise specifically provided in these Articles or under any
applicable law, all resolutions submitted to the shareholders shall be deemed
adopted if approved by the holders of a simple majority of the voting power
represented at the meeting in person or by proxy or by written ballot, as shall
be permitted, and voting thereon.

     (b)  Every question submitted to a General Meeting shall be decided by a
count of votes.

     (c)  A declaration by the Chairman of the meeting that a resolution has
been carried unanimously, or carried by a particular majority, or lost, and an
entry to that effect in the minute book of the Company, shall be prima facie
evidence of the fact without proof of the number or proportion of the votes
recorded in favor of or against such resolution.

24.  POWER TO ADJOURN

     (a)  The Chairman of a General Meeting, in which the required quorum is
present, may resolve to adjourn the meeting ,for no more than thirty(30)days, to
such time and place as shall be determined but no business shall be transacted
at any adjourned meeting except business which might lawfully have been
transacted at the meeting as originally called.

     (b)  It shall not be necessary to give any notice of an adjournment under
Article 24(a), unless the meeting is adjourned for more than twenty-one (21)
days in which event notice thereof shall be given in the manner required for the
meeting as originally called.

25.  VOTING POWER

     Subject to any provision hereof conferring special rights as to voting, or
restricting the right to vote, every shareholder shall have one vote for each
share held by him of record, on every resolution.

26.  VOTING RIGHTS

     (a)  The shareholders entitled to vote at a General Meeting shall be the
shareholders listed in the Company's Register of Shareholders on the record
date, as specified in Article 15.

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     (b)  A company or other corporate body being a shareholder of the Company
may, by resolution of its directors or any other managing body thereof,
authorize any person to be its representative at any meeting of the Company. Any
person so authorized shall be entitled to exercise on behalf of such shareholder
all the power which the latter could have exercised if it were an individual
shareholder. Upon the request of the Chairman of the meeting, written evidence
of such authorization (in form acceptable to the Chairman) shall be delivered to
him.

     (c)  Any shareholder entitled to vote may vote either personally or by
proxy (who need not be a shareholder of the Company), or, if the shareholder is
a company or other corporate body, by a representative authorized pursuant to
Article 26(b) or by a written ballot, as permitted by law and according to these
Articles.

     (d)  If two or more persons are registered as joint holders of any share,
the vote of the senior who tenders a vote, in person or by proxy or by written
ballot, as shall be permitted, shall be accepted to the exclusion of the vote(s)
of the other joint holder(s); and for this purpose seniority shall be determined
by the order in which the names stand in the Register of Shareholders.

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

     (f)  The Board of Directors may determine, in its discretion, the matters
that may be voted upon a written ballot to the Company (without attendance in
person or by proxy or by written ballot, as shall be permitted, at a General
Meeting, in addition to the matters listed in Section 87(c ) of the Companies
law.

                                     PROXIES

27.  INSTRUMENT OF APPOINTMENT

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

     (b)  The instrument appointing a proxy (and the power of attorney or other
authority, if any, under which such instrument has been signed) shall be
delivered to the Company (at its Registered Office, or at its principal place of
business or at the offices of its transfer agent or at such other place as the
Board of Directors may specify) not less than forty-eight (48) hours (or such
shorter period as may be determined by the Board of Directors) before the time
fixed for the meeting at which the person named in the instrument proposes to
vote.

28.  EFFECT OF DEATH OF APPOINTOR OR REVOCATION OF APPOINTMENT

     A vote cast pursuant to an instrument appointing a proxy shall be valid
notwithstanding the previous death of the appointing shareholder (or of his
attorney-in-fact, if any, who signed

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such instrument), or the revocation of the appointment or the transfer of the
share in respect of which the vote is cast, provided no written notification of
such death, revocation or transfer shall have been received by the Company or by
the Chairman of the meeting before such vote is cast, and provided, further,
that the appointing shareholder, if present in person at said meeting, may
revoke the appointment by means of a writing, oral notification to the Chairman,
or otherwise.


                               BOARD OF DIRECTORS

29.  POWERS OF BOARD OF DIRECTORS

     (a)  The Board of Directors shall have all powers vested in it according to
the Companies Law and these Articles, shall have any and all authorities not
vested in any other organ of the Company according to the Companies Law and
these Articles, shall be authorized to determine the policy of the Company,
shall supervise the performance and actions of the General Manager, and, without
derogating form the above, shall have all the following powers:

          (i)      determine the Company's plans of action, the principles of
their financing and the order of priority among them;

          (ii)     examine the financial status of the Company, and set the
frame of credit that the Company shall be entitle to acquire;

          (iii)    determine the organizational structure of the Company and its
compensation policies;

          (iv)     may resolve to issue series of debentures;

          (v)      shall be responsible for the preparation and approval of the
financial statements of the Company, as set forth in Section 171 of the
Companies Law;

          (vi)     report to the Annual General Meeting of the status of the
Company's affairs and of their financial outcomes, as set forth in Section 173
of the Companies Law.

          (vii)    appoint the General Manager and may terminate such
appointment, in accordance with Section 250 of the Companies Law;

          (viii)   resolve in the matters on actions and transactions that
require its approval according to Sections 255 and 268-275 of the Companies Law
and of the provisions of these Articles;

          (ix)     issue shares and convertible securities up to the total
amount of the authorized share capital of the Company, in accordance with
Section 288 of the Companies Law;

          (x)      decide on a "distribution" as set forth in Sections 307-308
of the Companies Law;

                                     - 12 -
<PAGE>

          (xi)     express its opinion on a special tender offer, as set forth
in Section 329 of the Companies Law.

     (b)  The powers of the Board of Directors described in Articles
29(a)(i)-29(a)(xi) above shall not be delegated to the General Manager(s) of the
Company.

30.  EXERCISE OF POWERS OF DIRECTORS

     (a)  A meeting of the Board of Directors at which a quorum is present shall
be competent to exercise all the authorities, powers and discretion vested in or
exercisable by the Board of Directors.

     (b)  A resolution proposed at any meeting of the Board of Directors shall
be deemed adopted if approved by a simple majority of the Directors then in
office who are lawfully entitled to participate in the meeting and vote thereon
and present when such resolution is put to a vote and voting thereon.

     (c)  A resolution in writing signed by all of the Directors then in office
and lawfully entitled to vote thereon (as conclusively determined by the
Chairman of the Board of Directors) or to which all of such Directors have given
their consent (by letter, telegram, telex, facsimile, telecopier or their oral
consent by telephone (provided that a written summary thereof has been approved
and signed by the Chairman of the Board of Directors of the Company)) shall be
deemed to have been unanimously adopted by a meeting of the Board of Directors
duly convened and held.

31.  DELEGATION OF POWERS

     The Board of Directors may, subject to the provisions of the Companies Law,
delegate its powers to committees, each consisting of two or more persons (all
of whose members must be Directors), and it may from time to time revoke such
delegation or alter the composition of any such committee. Any such Committee
authorized to exercise the powers of the Board of Directors shall include at
least one (1) External Director. Any Committee so formed (in these Articles
referred to as a "Committee of the Board of Directors"), shall, in the exercise
of the powers so delegated, conform to any regulations imposed on it by the
Board of Directors. The meetings and proceedings of any such Committee of the
Board of Directors shall, mutatis mutandis, be governed by the provisions herein
contained for regulating the meetings of the Board of Directors, so far as not
superseded by any regulations adopted by the Board of Directors under this
Article. Unless otherwise expressly provided by the Board of Directors in
delegating powers to a Committee of the Board of Directors, such Committee shall
not be empowered to further delegate such powers.

32.  NUMBER OF DIRECTORS

     Until otherwise determined by resolution of the Company's shareholders, the
Board of Directors shall consist of not less than three (3) nor more than
thirteen (13) Directors, including two (2) External Directors.

                                     - 13 -
<PAGE>

33.  ELECTION AND REMOVAL OF DIRECTORS

     Directors shall be elected at the Annual General Meeting by the vote of the
holders of a simple majority of the voting power represented at such meeting in
person or by proxy or by written ballot, as shall be permitted, and voting on
the election of directors. The Directors so elected shall hold office until the
next Annual General Meeting. The holders of a simple majority of the voting
power represented at a General Meeting and voting thereon shall be entitled to
remove any Director(s) from office, to elect directors in place of the
Director(s) so removed or to fill any vacancy, however created, on the Board of
Directors.

34.  CONTINUING DIRECTORS IN THE EVENT OF VACANCIES

     (a)  Any vacancy in the Board of Directors, however occurring, including a
vacancy resulting from an enlargement of the Board, may be filled by a vote of a
majority of the Directors then in office, even if less than quorum. A Director
elected to fill a vacancy shall be elected to hold office until the next annual
General Meeting.

     (b)  If the position of one or more Directors is vacated, the continuing
Directors shall be entitled to act in every matter so long as their number is
not less than the statutory minimum number required at the time. If, at any
time, their number decreases below said statutory minimum number, they will not
be entitled to act except in an emergency, and they may fill vacant positions on
the Board of Directors pursuant to Article 34(a) herein or call a General
Meeting of the Company for the purpose of electing Directors to fill any
vacancies.

35.  VACATION OF OFFICE

     (a)  The office of a Director shall be vacated, ipso facto, upon the
occurrence of any of the following: (i) such Director's death, (ii) such
Director is convicted of a crime as described in Section 232 of the Companies
Law, (iii) such Director is removed by a court or law in accordance with Section
233 or 247 of the Companies Law, (iv) such Director becomes legally incompetent,
(v) if such Director is an individual, such Director is declared bankrupt, (vi)
if such Director is a corporate entity, upon its winding-up, liquidation,
whether voluntary or involuntary or (vii) upon a resolution of the Company's
shareholders, pursuant to Article 33(a) above.

     (b)  The office of a Director shall be vacated by his written resignation.
Such resignation shall become effective on the date fixed therein, or upon the
delivery thereof to the Company, whichever is later.

36.  REMUNERATION OF DIRECTORS

     Each Director shall be paid remuneration by the Company for his services as
Director as such remuneration shall have been approved pursuant to the
provisions of the Companies Law.

37.  NO ALTERNATE DIRECTORS

     A Director may not appoint an alternate for himself.

                                     - 14 -
<PAGE>

                      PROCEEDINGS OF THE BOARD OF DIRECTORS

38.  MEETINGS

     (a)  The Board of Directors may meet and adjourn its meetings according to
the Company's needs but at least once in every three (3) months, and otherwise
regulate such meetings and proceedings as the Directors think fit. Meetings of
the Board of Directors may be held telephonically or by any other means of
communication provided that each Director participating in such meeting can hear
and be heard by all other Directors participating in such meeting.

     (b)  Any Director may at any time convene a meeting of the Board of
Directors, but not less than seven (7) days' notice (oral or written) shall be
given of any meeting so convened. The failure to give notice to a Director in
the manner required hereby may be waived by such Director. Upon the unanimous
approval of the Directors, a meeting of the Board of Directors can be convened
without any prior notice. The notice of a meeting shall include the agenda of
the meeting.

39.  QUORUM

     A quorum at a meeting of the Board of Directors shall be constituted by the
presence, in person or by any other means of communication by which the
Directors may hear each other simultaneously, of a majority of the Directors
then in office who are lawfully entitled to participate in the meeting and vote
thereon (as conclusively determined by the Chairman of the Board of Directors).
No business shall be transacted at a meeting of the Board of Directors unless
the requisite quorum is present as aforesaid when the meeting proceeds to
business.

40.  CHAIRMAN OF THE BOARD OF DIRECTORS

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

     The General Manager of the Company shall not serve as the Chairman of the
Board of Directors, and the Chairman of the Board of Directors shall not be
granted authorities of the General Manager, unless such appointment, or grant,
as the case may be, is approved by the shareholders in a General Meeting in
accordance with Section 121(c) of the Companies Law. The office of Chairman
shall not entitle the holder to a second or casting vote .

41.  VALIDITY OF ACTS DESPITE DEFECTS

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

                                     - 15 -
<PAGE>

                                 GENERAL MANAGER

42.  GENERAL MANAGER

     (a)  The Board of Directors shall appoint from time to time one or more
persons as General Manager(s) of the Company.

     (b)  The General Manager shall be responsible for the day-to-day management
of the affairs of the Company within the framework of the policies determined by
the Board of Directors from time to time and subject to the discretion of the
Board of Directors.

     (c)  The General Manager shall have full managerial and operational
authority to carry out all the activities which the Company may carry on by law
and under these Articles and which have not been vested by law or by these
Articles in any other organ of the Company. The General Manager shall be subject
to the supervision of the Board of Directors.

     (d)  The General Manager may, subject to the provisions of the Companies
Law, from time to time, appoint a Secretary to the Company, as well as officers,
agents, employees and independent contractors, as the General Manager may think
fit, and may terminate the service of any such person. The General Manager may,
subject to the provisions of the Companies Law, determine the powers and duties,
as well as the salaries and emoluments, of all such persons.


                                     MINUTES

43.  MINUTES

     (a)  Minutes of each General Meeting and of each meeting of the Board of
Directors shall be recorded and duly entered in books provided for that purpose.
The minutes of each meeting of the Board of Directors shall, in all events, set
forth the names of the persons present at the meeting and all resolutions
adopted thereat.

     (b)  Any minutes as aforesaid, if purporting to be signed by the chairman
of the meeting or by the chairman of the next succeeding meeting, shall
constitute prima facie evidence of the matters recorded therein.

     (c)  Subject to the provisions of the Companies Law, each shareholder shall
have the right to inspect the minutes of the General Meetings.


                                    DIVIDENDS

44.  DECLARATION OF DIVIDENDS

                                     - 16 -
<PAGE>

     Subject to the Companies Law, the Board of Directors may from time to time
declare, and cause the Company to pay dividends out of the profits of the
Company. Subject to the Companies Law, the Board of Directors shall determine
the time for payment of such dividends and the record date for determining the
shareholders entitled thereto.

45.  AMOUNT PAYABLE BY WAY OF DIVIDENDS

     (a)  Subject to the rights of the holders of shares with special rights as
to dividends, if any, any dividend paid by the Company shall be allocated among
the shareholders entitled thereto in proportion to the nominal value of their
respective holdings of the shares in respect of which such dividend is being
paid.

     (b)  Shares which are fully paid up or which are credited as fully or
partly paid within any period which in respect thereof dividends are paid shall
entitle the holders thereof to a dividend in proportion to the amount paid up or
credited as paid up in respect of the nominal value of such shares and to the
date of payment thereof (pro rata temporis).

46.  INTEREST

     No dividend shall carry interest as against the Company.

47.  UNCLAIMED DIVIDENDS

     All unclaimed dividends payable in respect of a share may be invested or
otherwise made use of by the Board of Directors for the benefit of the Company
until claimed. The payment by the Directors of any unclaimed dividend into a
separate account shall not constitute the Company a trustee in respect thereof,
and any dividend unclaimed after a period of seven (7) years from the date of
declaration of such dividend unclaimed after a like period from the date the
same were payable, shall be forfeited and shall revert to the Company, PROVIDED,
HOWEVER, that the Board of Directors may, at its discretion, cause the Company
to pay any such dividend, or any part thereof, to a person who would have been
entitled thereto had the same not reverted to the Company.

                                     - 17 -
<PAGE>

                                    ACCOUNTS

48.  AUDITORS

     The outside auditor(s) of the Company shall be appointed by resolution of
the Company's shareholders at the General Meeting and shall serve until
its/their re-election, removal or replacement by subsequent resolution, provided
that each term of service shall not extend beyond the third Annual Meeting after
the Annual Meeting at which such auditor was appointed. The authorities, rights
and duties of the outside auditor(s) of the Company, shall be regulated by
applicable law. The Board of Directors shall have the power and authority to fix
the remuneration of the auditor(s).

                               RIGHTS OF SIGNATURE

49.  RIGHTS OF SIGNATURE

     The Board of Directors shall be entitled to authorize any person or persons
(who need not be Directors) to act and sign on behalf of the Company, and the
acts and signature of such person(s) on behalf of the Company shall bind the
Company insofar as such person(s) acted and signed within the scope of his or
their authority.


                                     NOTICES

50.  NOTICES

Without derogating from the provisions of Article 20:

     (a)  In the event the Company elects to send any written notice or other
document to any of its shareholders such notice may be served either personally
or by sending it by prepaid registered mail (airmail if sent to a place outside
Israel) addressed to such shareholder at his address as described in the
Register of Shareholders or such other address as he may have designated in
writing for the receipt of notices and other documents. In the event a
shareholder elects to send the Company any written notice or other document such
notice may be served by tendering the same in person to the Secretary or the
General Manager of the Company at the principal office of the Company or by
sending it by prepaid registered mail (airmail if posted outside Israel) to the
Company at its Registered Address. Any such notice or other document shall be
deemed to have been served forty-eight (48) hours after it has been posted
(seven (7) business days if sent internationally), or when actually received by
the addressee if sooner than two days or seven days, as the case may be, after
it has been posted, or when actually tendered in person, to such shareholder (or
to the Secretary or the General Manager), provided, however, that notice may be
sent by cablegram, telex, telecopier (facsimile) or other electronic means (to
an address provided to the Company by any shareholder) and confirmed by
registered mail as aforesaid, and such notice shall be deemed to have been given
twenty-four (24) hours after such cablegram, telex, telecopy or other electronic
communication has been sent (provided, that electronic confirmation of the
successful sending of such notice was received) 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,

                                     - 18 -
<PAGE>

notwithstanding that it was defectively addressed or failed, in some respect, to
comply with the provisions of this Article 50(a).

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

     (c)  Any shareholder whose address is not described in the Register of
Shareholders, 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.


                             INSURANCE AND INDEMNITY

51.  INDEMNITY AND INSURANCE


     (a)  INDEMNIFICATION

          (i)      Subject to the provisions of the Companies Law, including the
receipt of all approvals as required therein or under any applicable law, the
Company may indemnify an Office Holder with respect to the following liabilities
and expenses, provided that such liabilities or expenses were incurred by such
Office Holder in such Office Holder's capacity as an Office Holder of the
Company:

                   (1)      a monetary liability imposed on an Office Holder
pursuant to a judgment in favor of another person, including a judgment imposed
on such Office Holder in a settlement or in an arbitration decision that was
approved by a court of law; and

                   (2)      reasonable legal expenses, including attorney's
fees, which the Office Holder incurred or with which the Office Holder was
charged by a court of law, in a proceeding brought against the Office Holder, by
the Company, on its behalf or by another person, or in a criminal prosecution in
which the Office Holder was acquitted, or in a criminal prosecution in which the
Office Holder was convicted of an offense that does not require proof of
criminal intent.

          (ii)     The foregoing indemnification may be procured by the Company
(a) retroactively and (b) as a commitment in advance to indemnify an Office
Holder, provided that such commitment shall be limited to (i) such events that
in the opinion of the Board of Directors can be foreseen at the time the
undertaking to indemnify is provided, and (ii) to the amounts that the Board of
Directors deems reasonable under the circumstances and which shall in no event
exceed ,in the aggregate, twenty five percent (25%) of the Company's
Shareholder's Equity at the time of the indemnification .

     (b)  INSURANCE

                                     - 19 -
<PAGE>

          (i)      Subject to the provisions of the Companies Law, including the
receipt of all approvals as required therein or under any applicable law, the
Company may enter into an agreement to insure an Office Holder for any
responsibility or liability that may be imposed on such Office Holder in
connection with an act performed by such Office Holder in such Office Holder's
capacity as an Office Holder of the Company, with respect to each of the
following:

                   (1)      violation of the duty of care of the Office Holder
towards the Company or towards another person;

                   (2)      breach of the fiduciary duty towards the Company,
provided that the Office Holder acted in good faith and with reasonable grounds
to assume that the such action would not prejudice the benefit of the Company;
and

                   (3)      a financial obligation imposed on the Office Holder
for the benefit of another person.

          (ii)     Articles 51(b) and 51(c) shall not apply under any of the
following circumstances:

                   (1)      a breach of an Office Holder's fiduciary duty,
except as specified in Article 51(c)(i)(2);

                   (2)      a grossly negligent or intentional violation of an
Office Holder's duty of care;

                   (3)      an action intended to reap a personal gain
illegally; and

                   (4)      a fine or ransom levied on an Office Holder.

          (iii)    The Company may procure insurance for or indemnify any person
who is not an Office Holder, including without limitation, any employee, agent,
consultant or contractor, provided, however, that any such insurance or
indemnification is in accordance with the provisions of these Articles and the
Companies Law.

                                     - 20 -
<PAGE>

                                     MERGER

52.  MERGER

     A merger (as defined in the Companies Law) of the Company shall require the
approval of the holders of a majority of seventy five percent (75%) of the
voting power represented at the General Meeting in person or by proxy or by
written ballot, as shall be permitted, and voting thereon in accordance with the
provisions of the Companies Law.


                                   WINDING UP

53.  WINDING UP

     If the Company be wound up, then, subject to applicable law, after
satisfaction of the Company's liabilities to creditors, the Company's
liquidation proceeds shall be distributed to the shareholders of the Company in
proportion to the nominal value of their respective holdings of the shares in
respect of which such distribution is being made. A voluntary winding up of the
Company shall require the approval of the holders of a majority of at least
seventy five percent (75%) of the voting power represented at a General Meeting
in person or by proxy or by written ballot, as shall be permitted, and voting
thereon.


                           AMENDMENT OF THESE ARTICLES

54.  Any amendment of these Articles shall require the approval of the holders
of a simple majority of the voting power represented at the General Meeting in
person or by proxy or by written ballot, as shall be permitted, and voting
thereon.

                                     - 21 -