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Exhibit 1.1

# THE COMPANIES LAW

A COMPANY LIMITED BY
SHARES

SECOND AMENDED AND
RESTATED

ARTICLES OF ASSOCIATION

OF

# TTI TEAM TELECOM
INTERNATIONAL LTD.

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(as
amended through December 27, 2005)

# GENERAL PROVISIONS

|1. | Object
and Purpose of the Company
|-- | ---------------------------------

(a)       
          The object and purpose of the Company shall be as set forth in the
          Companys Memorandum of Association, as the same shall be amended from time
          to time in accordance with applicable law.

(b)       
          In accordance with Section 11(a) of the Companies Law, 5759-1999 (the
          Companies Law), the Company may contribute a reasonable amount to a
          worthy cause.

|2. | Limitation
of Liability
|-- | -----------------------

The
liability of the shareholders is limited to the payment of the nominal value of the shares
in the Company allotted to them and which remains unpaid, and only to that amount. If the
Companys share capital shall include at any time shares without a nominal value, the
shareholders liability in respect of such shares shall be limited to the payment of
up to NIS 0.50 for each such share allotted to them and which remains unpaid, and
only to that amount.



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|3. | Interpretation
|-- | --------------

(a)       
          Unless the subject or the context otherwise requires: words and expressions
          defined in the Companies Law in force on the date when these Articles or any
          amendment thereto, as the case may be, first became effective 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.

(b)       
          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.

|3A. | Amendment.
|--- | ----------

The
approval of a resolution adopted in a General Meeting approved by a simple majority of the
voting power represented at the meeting in person or by proxy and voting thereon (a
Shareholders Resolution) is required to approve any amendment to these
Articles.

# SHARE CAPITAL

|4. | Share
Capital
|-- | -------------

4.1        The
share capital of the Company is Eighteen Million Three Hundred and Eighteen Thousand One
Hundred Ninety-Five Point Five New Israeli Shekels (NIS 18,318,195.5) divided into Thirty
Million (30,000,000) Ordinary Shares, of a nominal value of One Half of One New Israeli
Shekel (NIS 0.50) each, and Six Million Six Hundred and Thirty-Six Thousand Three Hundred
and Ninety-One (6,636,391) Series A Convertible Preferred Shares, of a nominal value of
One Half of One New Israeli Shekel (NIS 0.50) each (the Preferred Shares).

|4A. | The
Preferred Shares
|--- | --------------------

The
Preferred Shares confer on the holders thereof all rights accruing to holders of Ordinary
Shares in the Company, and in addition, bear the following rights:

(a)        Subject
to any provisions hereof conferring special rights as to voting, or           restricting
the right to vote, every holder of Preferred Shares shall have one           vote for
each Ordinary Share into which the Preferred Shares held by him of           record could
be converted (as provided in this Article), on every resolution,           without regard
to whether the vote thereon is conducted by a show of hands, by           written ballot
or by any other means. For this purpose, the holders of Preferred           Shares shall
be given notice of any meeting of shareholders as to which the           holders of
Ordinary Shares are given notice in accordance with these Articles           and
applicable law.



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(b)        Subject
to the registration of the Ordinary Shares underlying the Preferred           Shares
pursuant to an effective registration statement (the Registration
          Statement), commencing two years after the effective date of the
          Registration Statement, at any time that the Ordinary Shares trade at a closing
          ask price of $4.40 (as adjusted for share splits, consolidations, share
          dividends, bonus share issuances and other recapitalizations of the
          Companys shares) or higher for a 20 consecutive trading day period, with
          an average daily trading volume of at least 100,000 shares per day during such
          period, each Preferred Share shall automatically be converted into such number
          of fully paid and non-assessable Ordinary Shares as is determined by dividing
          the applicable Original Issue Price (as defined in Article 4A(d)) by the
          applicable Conversion Price (as defined in and subject to adjustment under
          Article 4A(d)) at the time in effect for such share (as adjusted for share
          splits, consolidations, share dividends, bonus share issuances and other
          recapitalizations of the Companys shares) (an Automatic
          Conversion). Holders of record of Preferred Shares shall be given
          written notice on the date on which an Automatic Conversion was triggered or,
if           later, the date designated for such Automatic Conversion (the Automatic
          Conversion Date) and the place designated for Automatic Conversion of
          all such Preferred Shares pursuant to this Article 4A. Such notice shall
be           provided in accordance with Article 69(a) of these Articles to each record
          holder of Preferred Shares. Upon receipt of such notice, each holder of
          Preferred Shares subject to such Automatic Conversion, shall surrender his or
          its certificate or certificates for all such shares to the Company at the place
          designated in such notice, and shall thereafter receive certificates for the
          number of Ordinary Shares to which such holder is entitled pursuant to this
          Article 4A. On the Automatic Conversion Date, all outstanding Preferred
          Shares, subject thereto, shall be deemed to have been converted into Ordinary
          Shares, which shall be deemed to be outstanding of record, and all rights with
          respect to the Preferred Shares so converted, including the rights, if any, to
          receive notices and vote (other than as a holder of Ordinary Shares) will
          terminate, except only the rights of the holders thereof, upon surrender of
          their certificate or certificates therefor, to receive certificates for the
          number of Ordinary Shares into which such Preferred Shares have been converted,
          and payment of any declared but unpaid dividends thereon. As soon as
practicable           after the Automatic Conversion Date, as applicable, and the
surrender of the           certificate or certificates for Preferred Shares, the Company
shall cause to be           issued and delivered to such holder, or on his or its written
order, a           certificate or certificates for the number of full Ordinary Shares
issuable on           such conversion in accordance with the provisions hereof and cash
as provided in           Section 4A(f) in respect of any fraction of an Ordinary
Share otherwise           issuable upon such conversion.

(c)        Each
Preferred Share shall be convertible at the option of the holder thereof,           at
any time after the date of issuance of such share, at the office of the
          Company, into such number of fully paid and non-assessable Ordinary Shares as
is           determined by dividing the applicable Original Issue Price (as defined in
and           subject to adjustment under Article 4A(d)) by the applicable Conversion
Price at           the time in effect for such share. Before any holder of Preferred
Shares shall           be entitled (in the case of a conversion at such holders
option) to           convert the same into Ordinary Shares, he/she/it shall surrender the
certificate           or certificates therefor, duly endorsed, at the office of the
Company, and shall           give written notice by mail, postage prepaid, to the Company
at its principal           corporate office, of the election to convert the same and
shall state therein           the name or names of any nominee for such holder in which
the certificate or           certificates for Ordinary Shares are to be issued. Such
conversion (in the case           of a conversion at such holders option) shall be
deemed to have been made           immediately prior to the close of business on the date
of such surrender of the           certificate representing the Preferred Shares to be
converted, and the person or           persons entitled to receive the Ordinary Shares
issuable upon such conversion           shall be treated for all purposes as the record
holder or holders of such           Ordinary Shares as of such date. The Company shall,
as soon as practicable after           the conversion and tender of the certificate for
the Preferred Shares converted,           issue and deliver at such office to such holder
of Preferred Shares or to the           nominee or nominees of such holder of Preferred
Shares or to the nominee or           nominees of such holder, a certificate or
certificates for the number of           Ordinary Shares to which such holder shall be
entitled as aforesaid.



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(d)        The
Original Issue Price of the Preferred Shares is US$2.20. The initial           Conversion
Price for the Preferred Shares shall be the Original Issue Price           (subject to
any adjustments under this Article 4A(d)) (the Conversion           Price).
Subject and pursuant to the provisions of this Section 4A(d),           the Conversion
Price and number of Ordinary Shares into which the Preferred           Shares shall be
convertible shall be subject to adjustment from time to time as           set forth
hereinafter.

| | (i)        If
the Company shall, at any time or from time to time pay a dividend or make a
          distribution on its Ordinary Shares in additional Ordinary Shares, subdivide
its           outstanding Ordinary Shares into a greater number of shares or combine its
          outstanding Ordinary Shares into a smaller number of shares or issue by
          reclassification of its outstanding Ordinary Shares any shares of its capital
          stock (including any such reclassification in connection with a consolidation
or           merger in which the Company is the continuing entity), then the number of
          Ordinary Shares into which the Preferred Shares are convertible and the
          Conversion Price in effect immediately prior to the date upon which such change
          shall become effective, shall be adjusted by the Company so that the holder of
          Preferred Shares thereafter converting the Preferred Shares shall be entitled
to           receive the number of Ordinary Shares or other capital stock which such
holder           would have received if such Preferred Shares had been exercised
immediately           prior to such event upon payment of a Conversion Price that has
been adjusted to           reflect a fair allocation of the economics of such event to
such Preferred           Shares. Such adjustments shall be made successively whenever any
event listed           above shall occur.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)        If
any capital reorganization, reclassification of the capital stock of the
          Company, consolidation or merger of the Company with another corporation in
          which the Company is not the surviving entity, or sale, transfer or other
          disposition of all or substantially all of the Companys assets to another
          corporation shall be effected, then, as a condition of such reorganization,
          reclassification, consolidation, merger, sale, transfer or other disposition,
          lawful and adequate provision shall be made whereby each holder of Preferred
          Shares shall thereafter have the right to purchase and receive upon the basis
          and upon the terms and conditions herein specified and in lieu of the Ordinary
          Shares immediately theretofore issuable upon conversion of such Preferred
          Shares, such shares of stock, securities or assets as would have been issuable
          or payable with respect to or in exchange for a number of Ordinary Shares equal
          to the number of Ordinary Shares immediately theretofore issuable upon
          conversion of the Preferred Shares, had such reorganization, reclassification,
          consolidation, merger, sale, transfer or other disposition not taken place, and
          in any such case appropriate provision shall be made with respect to the rights
          and interests of each holder of Preferred Shares to the end that the provisions
          hereof (including, without limitation, provision for adjustment of the
          Conversion Price) shall thereafter be applicable, as nearly equivalent as may
be           practicable in relation to any shares of stock, securities or assets
thereafter           deliverable upon the exercise hereof. The Company shall not effect
any such           consolidation, merger, sale, transfer or other disposition unless
prior to or           simultaneously with the consummation thereof the successor
corporation (if other           than the Company) resulting from such consolidation or
merger, or the           corporation purchasing or otherwise acquiring such assets or
other appropriate           corporation or entity shall assume the obligation to deliver
to each holder of           Preferred Shares, at the last address of such holder
appearing on the books of           the Company, such shares of stock, securities or
assets as, in accordance with           the foregoing provisions, such holder may be
entitled to purchase, and the other           obligations under the terms hereof. The
provisions of this paragraph (ii) shall           similarly apply to successive
reorganizations, reclassifications,           consolidations, mergers, sales, transfers
or other dispositions.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | (iii)        In
case the Company shall fix a payment date for the making of a distribution to
          all holders of Ordinary Shares (including any such distribution made in
          connection with a consolidation or merger in which the Company is the
continuing           corporation) of evidences of indebtedness or assets (other than cash
dividends           or cash distributions payable out of consolidated earnings or earned
surplus or           dividends or distributions referred to in Section 4A(d)(i)), or
          subscription rights or warrants, the Conversion Price to be in effect after
such           payment date shall be determined by multiplying the Conversion Price in
effect           immediately prior to such payment date by a fraction, the numerator of
which           shall be the total number of Ordinary Shares outstanding multiplied by
the           Market Price (as defined below) per share of Ordinary Shares immediately
prior           to such payment date, less the fair market value (as determined by the
          Companys Board of Directors in good faith) of said assets or evidences of
          indebtedness so distributed, or of such subscription rights or warrants, and
the           denominator of which shall be the total number of Ordinary Shares
outstanding           multiplied by such Market Price per Ordinary Shares immediately
prior to such           payment date. Market Price as of a particular
date (the           Valuation Date) shall mean the following: (a) if
the Ordinary           Shares are then listed on a national stock exchange, the closing
sale price of           one Ordinary Share on such exchange on the last trading day prior
to the           Valuation Date; (b) if the Ordinary Shares are then quoted on The Nasdaq
Stock           Market, Inc. (Nasdaq), the National Association of
Securities           Dealers, Inc. OTC Bulletin Board (the Bulletin Board)
or such           similar exchange or association, the closing sale price of one Ordinary
Share on           Nasdaq, the Bulletin Board or such other exchange or association on
the last           trading day prior to the Valuation Date or, if no such closing sale
price is           available, the average of the high bid and the low asked price quoted
thereon on           the last trading day prior to the Valuation Date; or (c) if the
Ordinary Shares           are not then listed on a national stock exchange or quoted on
Nasdaq, the           Bulletin Board or such other exchange or association, the fair
market value of           one Ordinary Share as of the Valuation Date, shall be
determined in good faith           by the Board of Directors of the Company and the
holders of the Preferred           Shares. If the Ordinary Shares are not then listed on
a national securities           exchange, the Bulletin Board or such other exchange or
association, the Board of           Directors of the Company shall respond promptly, in
writing, to an inquiry by a           holder of the Preferred Shares prior to the
exercise hereunder as to the fair           market value of an Ordinary Share as
determined by the Board of Directors of the           Company. In the event that the
Board of Directors of the Company and the holders           of the Preferred Shares are
unable to agree upon the fair market value in           respect of subpart (c) hereof,
the Company and the holders of the Preferred           Shares shall jointly select an
appraiser, who is experienced in such matters.           The decision of such appraiser
shall be final and conclusive, and the cost of           such appraiser shall be borne
equally by the Company and the holders Preferred           Shares. Such adjustment shall
be made successively whenever such a payment date           is fixed.
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| | (iv)        An
adjustment to the Conversion Price shall become effective immediately after           the
payment date in the case of each dividend or distribution and immediately           after
the effective date of each other event which requires an adjustment.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (v)        In
the event that, as a result of an adjustment made pursuant to this           Article 4A,
the holder of the Preferred Shares shall become entitled to           receive any shares
of capital stock of the Company other than Ordinary Shares,           the number of such
other shares so receivable upon conversion of the Preferred           Shares shall be
subject thereafter to adjustment from time to time in a manner           and on terms as
nearly equivalent as practicable to the provisions with respect           to the Ordinary
Shares contained herein.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (vi)        Except
as provided in subsection (vii) hereof, if and whenever the Company shall           issue
or sell, or is, in accordance with any of subsections (vi)(A) through           (vi)(G)
hereof, deemed to have issued or sold, any Ordinary Shares for no           consideration
or for a consideration per share less than the Conversion Price in           effect
immediately prior to the time of such issue or sale, then and in each           such case
(a Trigger Issuance) the then-existing Conversion           Price,
shall be reduced, as of the close of business on the effective date of           the
Trigger Issuance, to a price determined as follows:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# 

| |                               |           
| | ----------------------------- | ----------
| |                               |           
| | Adjusted Conversion
Price = ( | A x B) + D
|
| |                               | A + C     

| | where
| | -----

| | "A"        equals
the number of Ordinary Shares outstanding, including Additional Ordinary Shares (as
defined below) deemed to be issued hereunder, immediately preceding such Trigger
Issuance;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | B       equals
the Conversion Price in effect immediately preceding such Trigger Issuance;
| | --------------------------------------------------------------------------------------------

| | "C"        equals
the number of Additional Ordinary Shares issued or deemed issued hereunder as a result
of the Trigger Issuance; and
| | -------------------------------------------------------------------------------------------------------------------------------------

| | "D"        equals
the aggregate consideration, if any, received or deemed to be received by the Company
upon such Trigger Issuance;
| | -----------------------------------------------------------------------------------------------------------------------------------

provided, however, that in no
event shall the Conversion Price after giving effect to such Trigger Issuance be greater
than the Conversion Price in effect prior to such Trigger Issuance.

For
purposes of this subsection (vi), Additional Ordinary Shares shall mean
all Ordinary Shares issued by the Company or deemed to be issued pursuant to this
subsection (vi), other than Excluded Issuances (as defined in subsection (vii) hereof).

For
purposes of this subsection (vi), the following subsections (vi)(A) to (vi)(G) shall also
be applicable:

| | (vi)(A)
               Issuance of Rights or Options. In case at any time the Company shall in any
               manner grant (directly and not by assumption in a merger or otherwise) any
               warrants or other rights to subscribe for or to purchase, or any options for the
               purchase of, Ordinary Shares or any stock or security convertible into or
               exchangeable for Ordinary Shares (such warrants, rights or options being called
               Options and such convertible or exchangeable stock or securities
               being called Convertible Securities) whether or not such
               Options or the right to convert or exchange any such Convertible Securities are
               immediately exercisable, and the price per share for which Ordinary Shares are
               issuable upon the exercise of such Options or upon the conversion or exchange of
               such Convertible Securities (determined by dividing (1) the sum (which sum shall
               constitute the applicable consideration) of (x) the total amount, if any,
               received or receivable by the Company as consideration for the granting of such
               Options, plus (y) the aggregate amount of additional consideration payable to
               the Company upon the exercise of all such Options, plus (z), in the case of such
               Options which relate to Convertible Securities, the aggregate amount of
               additional consideration, if any, payable upon the issue or sale of such
               Convertible Securities and upon the conversion or exchange thereof, by (2) the
               total maximum number of Ordinary Shares issuable upon the exercise of such
               Options or upon the conversion or exchange of all such Convertible Securities
               issuable upon the exercise of such Options) shall be less than the Conversion
               Price in effect immediately prior to the time of the granting of such Options,
               then the total number of Ordinary Shares issuable upon the exercise of such
               Options or upon conversion or exchange of the total amount of such Convertible
               Securities issuable upon the exercise of such Options shall be deemed to have
               been issued for such price per share as of the date of granting of such Options
               or the issuance of such Convertible Securities and thereafter shall be deemed to
               be outstanding for purposes of adjusting the Conversion Price. Except as
               otherwise provided in subsection (vi)(C), no adjustment of the Conversion Price
               shall be made upon the actual issue of such Ordinary Shares or of such
               Convertible Securities upon exercise of such Options or upon the actual issue of
               such Ordinary Shares upon conversion or exchange of such Convertible Securities.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | (vi)(B)
               Issuance of Convertible Securities. In case the Company shall in any manner
               issue (directly and not by assumption in a merger or otherwise) or sell any
               Convertible Securities, whether or not the rights to exchange or convert any
               such Convertible Securities are immediately exercisable, and the price per share
               for which Ordinary Shares are issuable upon such conversion or exchange
               (determined by dividing (1) the sum (which sum shall constitute the applicable
               consideration) of (x) the total amount received or receivable by the Company as
               consideration for the issue or sale of such Convertible Securities, plus (y) the
               aggregate amount of additional consideration, if any, payable to the Company
               upon the conversion or exchange thereof, by (2) the total number of
               Ordinary Shares issuable upon the conversion or exchange of all such Convertible
               Securities) shall be less than the Conversion Price in effect immediately prior
               to the time of such issue or sale, then the total maximum number of Ordinary
               Shares issuable upon conversion or exchange of all such Convertible Securities
               shall be deemed to have been issued for such price per share as of the date of
               the issue or sale of such Convertible Securities and thereafter shall be deemed
               to be outstanding for purposes of adjusting the Conversion Price,
               provided that (a) except as otherwise provided in
               subsection (d)(vi)(C), no adjustment of the Conversion Price shall be made
               upon the actual issuance of such Ordinary Shares upon conversion or exchange of
               such Convertible Securities and (b) no further adjustment of the Conversion
               Price shall be made by reason of the issue or sale of Convertible Securities
               upon exercise of any Options to purchase any such Convertible Securities for
               which adjustments of the Conversion Price have been made pursuant to the other
               provisions of subsection (d)(vi).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (vi)(C)
               Change in Option Price or Conversion Rate. Upon the happening of any of the
               following events, namely, if the purchase price provided for in any Option
               referred to in subsection (d)(vi)(A) hereof, the additional consideration, if
               any, payable upon the conversion or exchange of any Convertible Securities
               referred to in subsections (d)(vi)(A) or (d)(vi)(B), or the rate at which
               Convertible Securities referred to in subsections (d)(vi)(A) or (d)(vi)(B) are
               convertible into or exchangeable for Ordinary Shares shall change at any time
               (including, but not limited to, changes under or by reason of provisions
               designed to protect against dilution), the Conversion Price in effect at the
               time of such event shall forthwith be readjusted to the Conversion Price which
               would have been in effect at such time had such Options or Convertible
               Securities still outstanding provided for such changed purchase price,
               additional consideration or conversion rate, as the case may be, at the time
               initially granted, issued or sold. On the termination of any Option for which
               any adjustment was made pursuant to this subsection 8(f) or any right to convert
               or exchange Convertible Securities for which any adjustment was made pursuant to
               this subsection 4A(d)(vi) (including without limitation upon the redemption or
               purchase for consideration of such Convertible Securities by the Company), the
               Conversion Price then in effect hereunder shall forthwith be changed to the
               Conversion Price which would have been in effect at the time of such termination
               had such Option or Convertible Securities, to the extent outstanding immediately
               prior to such termination, never been issued.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | (vi)(D)
               Stock Dividends. Subject to the provisions of this Section 4A((d)(vi), in
               case the Company shall declare a dividend or make any other distribution upon
               any stock of the Company (other than the Ordinary Shares) payable in Ordinary
               Shares, Options or Convertible Securities, then any Ordinary Shares, Options or
               Convertible Securities, as the case may be, issuable in payment of such dividend
               or distribution shall be deemed to have been issued or sold without
               consideration.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (vi)(E)
               Consideration for Stock. In case any Ordinary Shares, Options or Convertible
               Securities shall be issued or sold for cash, the consideration received therefor
               shall be deemed to be the net amount received by the Company therefor, after
               deduction therefrom of any expenses incurred or any underwriting commissions or
               concessions paid or allowed by the Company in connection therewith. In case any
               Ordinary Shares, Options or Convertible Securities shall be issued or sold for a
               consideration other than cash, the amount of the consideration other than cash
               received by the Company shall be deemed to be the fair value of such
               consideration as determined in good faith by the Board of Directors of the
               Company, after deduction of any expenses incurred or any underwriting
               commissions or concessions paid or allowed by the Company in connection
               therewith. In case any Options shall be issued in connection with the issue and
               sale of other securities of the Company, together comprising one integral
               transaction in which no specific consideration is allocated to such Options by
               the parties thereto, such Options shall be deemed to have been issued for such
               consideration as determined in good faith by the Board of Directors of the
               Company. If Ordinary Shares, Options or Convertible Securities shall be issued
               or sold by the Company and, in connection therewith, other Options or
               Convertible Securities (the Additional Rights) are
               issued, then the consideration received or deemed to be received by the Company
               shall be reduced by the fair market value of the Additional Rights (as
               determined using the Black-Scholes option pricing model or another method
               mutually agreed to by the Company and the holders of the Preferred Shares). The
               Board of Directors of the Company shall respond promptly, in writing, to an
               inquiry by any holder of the Preferred Shares as to the fair market value of the
               Additional Rights. In the event that the Board of Directors of the Company and
               the holder of the Preferred Shares are unable to agree upon the fair market
               value of the Additional Rights, the Company and the holders of the Preferred
               Shares shall jointly select an appraiser, who is experienced in such matters.
               The decision of such appraiser shall be final and conclusive, and the cost of
               such appraiser shall be borne evenly by the Company and the holders of the
               Preferred Shares.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | (vi)(F)
               Record Date. In case the Company shall take a record of the holders of its
               Ordinary Shares for the purpose of entitling them (i) to receive a dividend or
               other distribution payable in Ordinary Shares, Options or Convertible Securities
               or (ii) to subscribe for or purchase Ordinary Shares, Options or Convertible
               Securities, then such record date shall be deemed to be the date of the issue or
               sale of the Ordinary Shares deemed to have been issued or sold upon the
               declaration of such dividend or the making of such other distribution or the
               date of the granting of such right of subscription or purchase, as the case may
               be.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (vi)(G)
               Treasury Shares. The number of Ordinary Shares outstanding at any given time
               shall not include shares owned or held by or for the account of the Company or
               any of its wholly-owned subsidiaries, and the disposition of any such shares
               (other than the cancellation or retirement thereof) shall be considered an issue
               or sale of Ordinary Shares for the purpose of this subsection 4A(d)(vi).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (vii)        Anything
herein to the contrary notwithstanding, the Company shall not be           required to
make any adjustment of the Conversion Price in the case of the           issuance of (A) Ordinary
Shares, Options or Convertible Securities issued           to employees of the Company in
connection with their employment by the Company           pursuant to an equity
compensation program approved by the Board of Directors of           the Company or the
compensation committee of the Board of Directors of the           Company, (B) Ordinary
Shares issued upon the conversion or exercise of Options           or Convertible
Securities issued prior to the date hereof, (C) securities issued           pursuant to
that certain Purchase Agreement dated November 29, 2004, among the           Company and
the Investors named therein (the Purchase           Agreement),
including securities issued to the placement agent in           connection with the
transactions contemplated by the Purchase Agreement, and           securities issued upon
the exercise or conversion of those securities, (D)           Ordinary Shares issued or
issuable by reason of a dividend, stock split or other           distribution on Ordinary
Shares (but only to the extent that such a dividend,           split or distribution
results in an adjustment in the Conversion Price pursuant           to the other
provisions hereof), and (E) Ordinary Shares or Convertible           Securities issued in
a strategic transaction approved by the Board of Directors           of the Company the
primary purpose of which is not the raising of capital           (collectively, Excluded
Issuances).
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | (viii)        Upon
any adjustment to the Conversion Price pursuant to Section 4A(d)(vi)
          above, the number of Ordinary Shares into which the Preferred Shares are
          convertible shall be adjusted by multiplying such number by a fraction, the
          numerator of which shall be the Conversion Price in effect immediately prior to
          such adjustment and the denominator of which shall be the Conversion Price in
          effect immediately thereafter.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ix)        If
the Company subdivides or combines its Ordinary Shares, the Conversion Price
          shall be proportionately reduced, in case of subdivision of shares, as at the
          effective date of such subdivision, or if the Company fixes a record date for
          the purpose of so subdividing, as at such record date, whichever is earlier, or
          shall be proportionately increased, in the case of combination of shares, as
the           effective date of such combination, or, if the Company fixes a record date
for           the purpose of so combining, as at such record date, whichever is earlier.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(e)        The
Company will not, by amendment of these Articles or through any           reorganization,
recapitalization, transfer of assets, consolidation, merger,           dissolution, issue
or sale of securities or any other voluntary action, avoid or           seek to avoid the
observance or performance of any of the terms to be observed           or performed
hereunder in this Article 4A by the Company, but will at all times           in good
faith assist in the carrying out of all the provisions of this Article           4A and
in taking of all such action as may be necessary or appropriate in order           to
protect the conversion rights of the holders of the Preferred Shares against
          impairment.

(f)        No
fractional shares shall be issued upon conversion of the Preferred Shares,           and
the number of shares of Ordinary Shares to be issued shall be rounded to the
          nearest whole share. No adjustment to the Conversion Price shall be made in an
          amount less than one cent ($0.01) per share. No adjustment to the Conversion
          Price shall be made if it has the effect of increasing the Conversion Price
          beyond the applicable Conversion Price immediately prior to such adjustment. In
          the event that any conversion of a Preferred Share results in the issuance of
          more than one Ordinary Share, then a portion of the share premium paid upon the
          original issuance of such Preferred Share shall be deemed to have been paid as
          capital on the additional Ordinary Shares so issued.

(g)        Upon
the occurrence of each adjustment or readjustment of the Conversion Price
          pursuant to this Article 4A, the Company, at its expense, shall promptly
compute           such adjustment or readjustment in accordance with the terms hereof and
prepare           and furnish to each holder of Preferred Shares a certificate setting
forth each           adjustment or readjustment and showing in detail the facts upon
which such           adjustment or readjustment is based. The Company shall furnish or
cause to be           furnished to such holder a like certificate setting forth (A) such
adjustment or           readjustment, (B) the Conversion Price at the time in effect, and
(C) the number           of shares of Ordinary Shares and the amount, if any, of other
property which at           the time would be received upon the conversion of a Preferred
Share.



---

---



(h)        In
the event of any taking by the Company of a record of the holders of any           class
of securities for the purpose of determining the holders thereof who are
          entitled to receive any dividend (including a cash dividend) or other
          distribution, any right to subscribe for, purchase or otherwise acquire any
          shares of any class or any other securities or property, or to receive any
other           right, the Company shall mail to each holder of Preferred Shares, at
least           twenty (20) days prior to the date specified therein, a notice specifying
the           date on which any such record is to be taken for the purpose of such
dividend,           distribution or right, and the amount and character of such dividend,
          distribution or right.

(i)        The
Company shall at all times reserve and keep available out of its authorized           but
unissued Ordinary Shares, solely for the purpose of effecting the conversion           of
the Preferred Shares, such number of its Ordinary Shares as shall from time           to
time be sufficient to effect the conversion of all issued and outstanding
          Preferred Shares; and if at any time the number of authorized but unissued
          Ordinary Shares shall not be sufficient to effect the conversion of all then
          outstanding Preferred Shares, in addition to such other remedies as shall be
          available to the holders of such Preferred Shares, the Company will take such
          corporate action as may, in the opinion of its counsel, be necessary to
increase           its authorized but unissued Ordinary Share capital to such number of
shares as           shall be sufficient for such purposes.

(j)        The
Company shall not declare, pay or set aside any dividends (other than           dividends
payable in Ordinary Shares to all holders of stock of the Company           where the
amount of such dividend is based on their ownership of Ordinary Shares           and
Ordinary Share Equivalents) on the Ordinary Shares unless the holders of the
          Preferred Shares then outstanding shall first receive, or simultaneously
          receive, a dividend on each outstanding Preferred Share to the product of
          (i) the per share dividend to be declared, paid or set aside for the
          Ordinary Shares, as the case may be, multiplied by (ii) the number of
          Ordinary Shares into which each Preferred Share is then convertible.

(k)        In
the event of any voluntary or involuntary liquidation, dissolution or winding
          up of the Company, the holders of shares of Preferred Shares then outstanding
          shall be entitled to be paid out of the assets of the Company available for
          distribution to its shareholders, before any payment shall be made to the
          holders of Ordinary Shares or any other class or series of stock ranking on
          liquidation junior to the Preferred Shares by reason of their ownership
thereof,           an amount equal to the greater of: (i) $2.20 per share (subject to
appropriate           adjustment in the event of any stock dividend, stock split,
combination or other           similar recapitalization affecting such shares), plus any
dividends declared but           unpaid thereon, or (ii) such amount per share as would
have been payable had           each such share been converted into Ordinary Shares
pursuant to this Section 4A           immediately prior to such liquidation, dissolution
or winding up (the greater of           (i) or (ii) is hereafter referred to as the Preferred
Liquidation           Amount).

(l)        After
the payment of the Preferred Liquidation Amount in full to the holders of
          Preferred Shares pursuant to the foregoing subsection (k), any remaining assets
          and funds of the Company available for distribution to its shareholders upon
the           dissolution, liquidation or winding up of the Company shall be distributed
pro           rata to the holders of Ordinary Shares.



---

---



|5. | Increase
of Share Capital
|-- | -------------------------

(a)       
          Subject to the terms of these Articles, the Company may, from time to time, by a
          Shareholders Resolution, whether or not all shares then authorized have been
          issued, and whether or not all the shares theretofore issued have been called up
          for payment, 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
          capital.

|6. | Special
Rights; Modifications of Rights
|-- | ---------------------------------------

(a)       
          Without prejudice to any special rights previously conferred upon the holders of
          existing shares in the Company, the Company may, from time to time, by
          Shareholders Resolution, provide for shares with such preferred or deferred
          rights or rights of redemption or other special rights and/or such restrictions,
          whether in regard to dividends, voting, repayment of share capital or otherwise,
          as may be stipulated in such Shareholders 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 Shareholders
          Resolution passed by the holders of a majority of the issued shares of such
          class present and voting 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.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (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 6(b), to modify or abrogate the rights           attached
to the previously issued shares of such class or of any other class.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

---



|7. | Consolidation,
Subdivision, Cancellation and Reduction of Share Capital
|-- | -----------------------------------------------------------------------

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

| | (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 of Association (subject, however,           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 7(b)(iv).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# SHARES

|8. | Issuance
of Share Certificates; Replacement of Lost Certificates
|-- | ----------------------------------------------------------------

(a)       
          Share certificates shall be issued under the seal or stamp of the Company and
          shall bear the signatures of two Directors (or if there be only one Director,
          the signature of such Director), or of any other person or persons authorized
          thereto by the Board of Directors.

(b)       
          Each member shall be entitled to one numbered certificate for all the shares of
          any class registered in his name, and if reasonably requested by such member, to
          several certificates, each for one or more of such shares.

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

(d)       
          If a share certificate is defaced, lost or destroyed, it may be replaced, upon
          payment of such fee, and upon the furnishing of such evidence of ownership and
          such indemnity, as the Board of Directors may think fit.

(e)       
          The Company may issue bearer shares.



---

---



|9. | Registered
Holder
|-- | -----------------

Except
as otherwise provided in these Articles, the Company shall be entitled to treat the
registered holder of any share as the absolute owner thereof, and, accordingly, shall not,
except as ordered by a court of competent jurisdiction, or as required by statute, be
bound to recognize any equitable or other claim to, or interest in such share on the part
of any other person.

|10. | Allotment
of Shares
|--- | -------------------

The
unissued shares from time to time 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 12(f) hereof), and either at par or at a premium, or, subject to the
provisions of the Companies Law, at a discount, and at such times, as the Board of
Directors may think fit, and the power to give to any person the option to acquire from
the Company any shares, either at par or at a premium, or, subject as aforesaid, at a
discount, during such time and for such consideration as the Board of Directors may think
fit.

|11. | Payment
in Installments
|--- | -----------------------

If
by the terms of allotment of any share, the whole or any part of the price thereof shall
be payable in installments, every such installment shall, when due, be paid to the Company
by the then registered holder(s) of the share of the person(s) entitled thereto.

|12. | Calls
on Shares
|--- | ---------------

(a)       
          The Board of Directors may, from time to time, make such calls as it may think
          fit upon members in respect of any sum unpaid in respect of shares held by such
          members which is not, by the terms of allotment thereof or otherwise, payable at
          a fixed time, and each member shall pay the amount of every call so made upon
          him (and of each installment thereof if the same is payable in installments), to
          the 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 member(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 member(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.

|13. | Prepayment
|--- | ----------

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



---

---



|14. | Forfeiture
and Surrender
|--- | ------------------------

(a)       
          If any member 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.

(b)       
          Upon the adoption of a resolution of forfeiture, the Board of Directors shall
          cause notice thereof to be given to such member, which notice shall state that,
          in the event of the failure to pay the entire amount so payable 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 estop the Board of Directors from adopting a further
          resolution of forfeiture in respect of the non-payment of the same amount.

(c)       
          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.

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

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

(f)       
          Any member whose shares have been forfeited or surrendered shall cease to be a
          member in respect of the forfeited or surrendered shares, but shall,
          notwithstanding, be liable to pay, and shall forthwith pay, to the Company, all
          calls, interest and expenses owing upon or in respect of such shares at the time
          of forfeiture or surrender, together with interest thereon from the time of
          forfeiture or surrender until actual payment, at the rate prescribed in
          Article 12(e) above, and the Board of Directors, in its discretion, may
          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 member in question (but not yet
          due) in respect of all shares owned by such member, solely or jointly with
          another, and in respect of any other matter or transaction whatsoever.



---

---



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

|15. | Lien
|--- | ----

(a)       
          Except to the extent the same may be waived or subordinated in writing, the
          Company shall have a first and paramount lien upon all the shares registered in
          the name of each member (without regard to any equitable or other claim or
          interest in such shares on the part of any other person), and upon the proceeds
          of the sale thereof, for his debts, liabilities and engagements 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.

(b)       
          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
          member, his executors or administrators.

(c)       
          The net proceeds of any such sale, after payment of the costs thereof, shall be
          applied in or toward satisfaction of the debts, liabilities or engagements of
          such member (whether or not the same have matured), or any specific part of the
          same (as the Company may determine), and the residue (if any) shall be paid to
          the member, his executors, administrators or assigns.



---

---



|16. | Sale
after Forfeiture or Surrender or in Enforcement of Lien
|--- | ------------------------------------------------------------

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

|17. | Redeemable
Shares
|--- | -----------------

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

|18. | Reserved.
|--- | ---------

# TRANSFER OF SHARES

|19. | Effectiveness
and Registration
|--- | ------------------------------

No
transfer of shares shall be registered unless a proper instrument of transfer (in form and
substance satisfactory to the Board of Directors) has been submitted to the Company or its
agent, together with any share certificate(s) and such other evidence of title as the
Board of Directors may reasonably require. Until the transferee has been registered in the
Register of Members in respect of the shares so transferred, the Company may continue to
regard the transferor as the owner thereof. The Board of Directors, may, from time to
time, prescribe a fee for the registration of a transfer.

|20. | Record
Date for General Meetings
|--- | --------------------------------

Notwithstanding
any provision to the contrary in these Articles, for the determination of the members
entitled to receive notice of and to participate in and vote at a General Meeting, or to
express consent to or dissent from any corporate action in writing, or to receive payment
of any dividend or other distribution or allotment of any rights or to exercise any rights
in respect of shares of the Company, the Board of Directors may fix, in advance, a record
date, which, subject to applicable law, shall not be earlier than ninety (90) days prior
to the General Meeting or other action, as the case may be. No persons other than holders
of record of shares as of such record date shall be entitled to notice of and to
participate in and vote at such General Meeting, or to exercise such other right, as the
case may be. A determination of members of record with respect to a General Meeting shall
apply to any adjournment of such meeting, provided that the Board of Directors may fix a
new record date for an adjourned meeting.



---

---



# TRANSMISSION OF SHARES

|21. | Decedents Shares
|--- | -----------------

(a)       
          In case of a share registered in the names of two or more holders, the Company
          may recognize the survivor(s) as the sole owner(s) thereof unless and until the
          provisions of Article 21(b) have been effectively invoked.

(b)       
          Any person becoming entitled to a share in consequence of the death of any
          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 member in respect of such share, or may, subject to the
          regulations as to transfer herein contained, transfer such share.

|22. | Receivers
and Liquidators
|--- | -------------------------

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

(b)       
          The receiver or liquidator of a corporate member in winding-up or dissolution,
          or the receiver or trustee in bankruptcy of any member, 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
          member in respect of such shares, or may, subject to the regulations as to
          transfer herein contained, transfer such shares.



---

---



# GENERAL MEETINGS

|23. | Annual
General Meeting
|--- | ----------------------

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.

|24. | Extraordinary
General Meetings
|--- | ------------------------------

All
General Meetings other than Annual General Meetings shall be called Extraordinary
General Meetings. The Board of Directors may, whenever it thinks fit, convene an
Extraordinary General Meeting at such time and place, within or without the State of
Israel, as may be determined by the Board of Directors, and shall be obliged to do so upon
a requisition in writing in accordance with Section 63(b)(1) or (2) and 63(c) of the
Companies Law.

|25. | Notice
of General Meetings
|--- | --------------------------

The
Company is not required to give notice under Section 69(b) of the Companies Law.

# PROCEEDINGS AT GENERAL
MEETINGS

|26. | Quorum
|--- | ------

(a)       
          Two or more members (not in default in payment of any sum referred to in
          Article 32(a) hereof), present in person or by proxy and holding shares
          conferring in the aggregate a majority of the voting power of the Company
          (subject to rules and regulations, if any, applicable to the Company), shall
          constitute a quorum at General Meetings. 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.



---

---



(b)       
          If within an hour from the time appointed for the meeting a quorum is not
          present, the meeting, if convened upon requisition under Sections 63(b)(1)
          or (2), 64 or 65 of the Companies Law, 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 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 and voting on the question of adjournment. No
          business shall be transacted at any adjourned meeting except business which
          might lawfully have been transacted at the meeting as originally called. If at
          such reconvened meeting a quorum is not present within half an hour from the
          time appointed for holding the meeting, any two (2) members (not in default as
          aforesaid) present in person or by proxy, shall constitute a quorum (subject to
          rules and regulations, if any, applicable to the Company).

(c)       
          The Board of Directors may determine, in its discretion, the matters that may be
          voted upon at the meeting by proxy in addition to the matters listed in
          Section 87(a) of the Companies Law.

|27. | Chairman
|--- | --------

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

|28. | Adoption
of Resolutions at General Meetings
|--- | -------------------------------------------

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

(b)       
          A Shareholders Resolution approving a merger (as defined in the Companies Law)
          of the Company shall be deemed adopted if approved by the holders of a majority
          of the voting power represented at the meeting in person or by proxy and voting
          thereon.



---

---



(c)       
          Every question submitted to a General Meeting shall be decided by a show of
          hands, but if a written ballot is demanded by any member present in person or by
          proxy and entitled to vote at the meeting, the same shall be decided by such
          ballot. A written ballot may be demanded before the proposed resolution is voted
          upon or immediately after the declaration by the Chairman of the results of the
          vote by a show of hands. If a vote by written ballot is taken after such
          declaration, the results of the vote by a show of hands shall be of no effect,
          and the proposed resolution shall be decided by such written ballot. The demand
          for a written ballot may be withdrawn at any time before the same is conducted,
          in which event another member may then demand such written ballot. The demand
          for a written ballot shall not prevent the continuance of the meeting for the
          transaction of business other than the question on which the written ballot has
          been demanded.

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

|29. | Resolutions
in Writing
|--- | ----------------------

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

|30. | Power
to Adjourn
|--- | ----------------

(a)       
          The Chairman of a General Meeting at which a quorum is present may, with the
          consent of the holders of a majority of the voting power represented in person
          or by proxy and voting on the question of adjournment (and shall if so directed
          by the meeting), adjourn the meeting from time to time and from place to place,
          but no business shall be transacted at any adjourned meeting except business
          which might lawfully have been transacted at the meeting as originally called.

(b)       
          It shall not be necessary to give any notice of an adjournment, whether pursuant
          to Article 26(b) or Article 30(a), unless the meeting is adjourned for
          thirty (30) days or more in which event notice thereof shall be given in the
          manner required for the meeting as originally called.



---

---



|31. | Voting
Power
|--- | ------------

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

|32. | Voting
Rights
|--- | -------------

(a)       
          No member shall be entitled to vote at any General Meeting (or be counted as a
          part of the quorum thereat), unless all calls and other sums then payable by him
          in respect of his shares in the Company have been paid, but this Article shall
          not apply to separate General Meetings of the holders of a particular class of
          shares pursuant to Article 6(b).

(b)       
          A company or other corporate body being a member of the Company may, 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 member all the power
          which the latter could have exercised if it were an individual shareholder. Upon
          the request of the Chairman of the meeting, written evidence of such
          authorization (in form acceptable to the Chairman) shall be delivered to him.

(c)       
          Any member entitled to vote may vote either personally or by proxy (who need not
          be a member of the Company), or, if the member is a company or other corporate
          body, by a representative authorized pursuant to Article 32(b).

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



---

---



# PROXIES

33. Instrument of
Appointment

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

|   |                       |    |                                   
|-- | --------------------- | -- | ----------------------------------
|"I | _____________________ | of | __________________________________
|   | (Name of Shareholder) |    | (Address of Shareholder)          
|   |                       |    |                                   

|                  |                             |                | 
|----------------- | --------------------------- | -------------- | 
|being a member of | ___________________________ | hereby appoint | 
|                  | (Name of the Company)       |                | 
|                  |                             |                | 

|                         |    |                               | 
|------------------------ | -- | ----------------------------- | 
|________________________ | of | _____________________________ | 
|(Name of Proxy)          |    | (Address of Proxy)            | 
|                         |    |                               | 

as my proxy to vote for me and on my behalf at the  General  Meeting of the Company to be held on the
_____ day of ___________, ____ and at any adjournment(s) thereof.

Signed
this ______ day of ____________, ____.

| |  | 
(Signature of Appointer)"
| |  | ----------------------------------------

or 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 appointer or his duly authorized attorney or, if such appointer 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 registrar and/or transfer agent or at such place as the Board
          of Directors may specify) not less than seventy-two (72) hours (or such shorter
          period as determined by the Board of Directors) before the time fixed for the
          meeting at which the person named in the instrument proposes to vote.



---

---



|34. | 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 member (or of his attorney-in-fact, if any, who signed
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 intimation 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 member, 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

|35. | Powers
of Board of Directors
|--- | ----------------------------

(a)        In
General

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

(b)        Borrowing
Power

The
Board of Directors may from time to time, 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 thinks fit, and, in particular, by
the issuance of bonds, perpetual or redeemable debentures, debenture stock, or any
mortgages, charges, or other securities on the undertaking or the whole or any part of the
property of the Company, both present and future, including its uncalled or called but
unpaid capital for the time being.



---

---



(c)        Reserves

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

|36. | Exercise
of Powers of 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 discretions 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 majority of the Directors present when such resolution
          is put to a vote and voting thereon.

(c)       
          A resolution may be adopted by the Board of Directors without convening a
          meeting if all Directors then in office and lawfully entitled to vote thereon
          (as conclusively determined by the Chairman of the Audit Committee , and in the
          absence of such determination - by the Chairman of the Board of Directors)
          have given their consent (in any manner whatsoever) not to convene a meeting.
          Such a resolution shall be adopted if approved by a majority of the Directors
          entitled to vote thereon (as determined as aforesaid). The Chairman of the Board
          of Directors shall sign any resolutions so adopted, including the decision to
          adopt such resolutions without a meeting.



---

---



|37. | Delegation
of Powers
|--- | --------------------

(a)       
          The Board of Directors may, subject to the provisions of the Companies Law,
          delegate any or all of its powers to committees, each consisting of 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
          Committee so formed (in these Articles referred to as a Committee of the
          Board of Directors), shall, in the exercise of the powers so delegated,
          conform to any regulations imposed on it by the Board of Directors. The meetings
          and proceedings of any such Committee of the Board of Directors shall, mutatis
          mutandis, be governed by the provisions herein contained for regulating the
          meetings of the Board of Directors, so far as not superseded by any regulations
          adopted by the Board of Directors under this Article. Unless otherwise expressly
          provided by the Board of Directors in delegating powers to a Committee of the
          Board of Directors, such Committee shall not be empowered to further delegate
          such powers.

(b)       
          Without derogating from the provisions of Article 50, the Board of
          Directors may, 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 Board of Directors may think fit, and may
          terminate the service of any such person. The Board of Directors may, subject to
          the provisions of the Companies Law, determine the powers and duties, as well as
          the salaries and emoluments, of all such persons, and may require security in
          such cases and in such amounts as it thinks fit.

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

|38. | Number
of Directors
|--- | -------------------

The
Board of Directors shall consist of such number of Directors (not less than three (3) nor
more than seven (7)) as may be determined by Shareholders Resolution of the Company.



---

---



|39. | Election
and Removal of Directors
|--- | ---------------------------------

(a)       
          If at any time, the Company shall be required to appoint independent or external
          directors such as a public director or directors of any other type as may be
          required by law (External Directors) such directors shall serve on
          the Board according to the number required by law. External Directors will be
          appointed and removed pursuant to, and shall be governed by, the relevant
          provisions of the law which applies to External Directors. If permitted by
          applicable law, External Directors will be appointed by the Board.

(b)       
          The members of the Board of Directors shall be called Directors, and other than
          External Directors (who will be chosen and appointed, and whose term will
          expire, in accordance with applicable law,) they shall be appointed in
          accordance with the provisions of this Article.

(c)       
          Directors (other than External Directors and the Preferred Director, as defined
          below) shall be elected at the Annual General Meeting by vote of the holder of a
          majority of the voting power represented at such meeting in person or by proxy
          and voting on the election of directors, or by the Board of Directors. In the
          event that Directors are appointed by the Board of Directors, such appointment
          of Directors shall be adopted by Shareholders Resolution at the first
          extraordinary or annual general meeting of the shareholders following the date
          upon which the Director was appointed by the Board of Directors. Each director
          shall serve, subject to section 39(d) and Article 42 hereof, and with respect to
          a Director appointed pursuant to Article 41 hereof, subject to such
          Article, until the Annual General Meeting following the Annual General Meeting
          at which such Director was appointed, or his early removal pursuant to this
          Article 39. The shareholders shall be entitled to remove any Director(s) from
          office, subject to section 29(d) and all subject to applicable law.

(d)       
          Notwithstanding anything to the contrary contained herein, for so long as at
          least 50% of the Preferred Shares issued under the Purchase Agreement remain
          outstanding, the holders of a majority of the outstanding Preferred Shares shall
          be entitled at any time to appoint, elect, remove and replace one Director (the
          Preferred Director) to the Board of Directors.

|40. | Qualification
of Directors
|--- | --------------------------

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



---

---



|41. | Continuing
Directors in the Event of Vacancies
|--- | ----------------------------------------------

In
the event of one or more vacancies in the Board of Directors, the continuing Directors may
continue to act in every matter, and may temporarily fill any such vacancy until the next
Annual General Meeting, provided, however, that if they number less than a majority of the
number provided for pursuant to Article 38 hereof, they may only act in an emergency,
and may call a General Meeting of the Company for the purpose of electing Directors to
fill any or all vacancies, so that at least a majority of the number of Directors provided
for pursuant to Article 38 hereof are in office as a result of said meeting.

|42. | Vacation
of Office
|--- | ------------------

(a)       
          The office of a Director shall be vacated, ipso facto, upon his death, or if he
          be found lunatic or become of unsound mind, or if he become bankrupt, or, if the
          Director is a company, upon its winding-up.

(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.

|43. | Compensation
of Directors
|--- | -------------------------

No
Director shall be granted any compensation by the Company for his services as Director
except as may be approved by the Company in a General Meeting, except for reimbursement of
expenses incurred in connection with carrying out all duties as Director.

|44. | Conflict
of Interests
|--- | ---------------------

Subject
to the provisions of the Companies Law, the Company may enter into any contract or
otherwise transact any business with any Director in which contract or business such
Director has a personal interest, directly or indirectly; and may enter into any contract
of otherwise transact any business with any third party in which contract or business a
Director has a personal interest, directly or indirectly.



---

---



|45. | Alternate
Directors
|--- | -------------------

(a)       
          A Director may, by written notice to the Company, appoint a natural person who
          as an alternate for himself (in these Articles referred to as Alternate
          Director), remove such Alternate Director and appoint another Alternate
          Director in place of any Alternate Director appointed by him whose office has
          been vacated for any reason whatsoever. Unless the appointing Director, by the
          instrument appointing an Alternate Director or by written notice to the Company,
          limits such appointment to a specified period of time or restricts it to a
          specified meeting or action of the Board of Directors, or otherwise restricts
          its scope, the appointment shall be for an indefinite period, but will expire
          upon the expiration of the appointing Directors term, and shall be for all
          purposes.

(b)       
          Any notice given to the Company pursuant to Article 45(a) shall become
          effective on the date fixed therein, or upon the delivery thereof to the
          Company, whichever is later.

(c)       
          An Alternate Director shall have all the rights and obligations of the Director
          who appointed him, provided, however, that he may not in turn appoint an
          alternate for himself (unless the instrument appointing him otherwise expressly
          provides), and provided further that an Alternate Director shall have no
          standing at any meeting of the Board of Directors or any committee thereof while
          the Director who appointed him is present.

(d)       
          An Alternate Director shall alone be responsible for his own acts and defaults,
          and he shall not be deemed the agent of the Director(s) who appointed him.

(e)       
          The office of an Alternate Director shall be vacated under the circumstances,
          mutatis mutandis, set forth in Article 42, and such office shall ipso facto
          be vacated if the Director who appointed such Alternate Director ceases to be a
          Director.

(f)       
          Notwithstanding Article 45(a), (i) no person shall be appointed as the Alternate
          Director for more than one Director and (ii) except as otherwise specifically
          permitted by the Companies Law, (A) no External Director may appoint an
          Alternate Director, and (B) no director may serve as an Alternate Director.



---

---



# PROCEEDINGS OF THE
BOARD OF DIRECTORS

|46. | Meetings
|--- | --------

(a)       
          The Board of Directors may meet and adjourn its meetings and otherwise regulate
          such meetings and proceedings as the Board of Directors think fit. Notice of
          meetings of the Board of Directors shall be sent to each Director at the last
          address that the Director provided to the Company, or via telephone, facsimile
          or email message.

(b)       
          Any Director may at any time, and the Secretary, upon the request of such
          Director, shall, convene a meeting of the Board of Directors, but not less than
          five (5) 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.

|47. | Quorum
|--- | ------

Until
otherwise unanimously decided by the Board of Directors, a quorum at a meeting of the
Board of Directors shall be constituted by the presence of a majority of the Directors
then in office who are lawfully entitled to participate in the meeting (as conclusively
determined by the Chairman of the Audit Committee and in the absence of such
determination - by the Chairman of the Board of Directors), but shall not be less
than two.

|48. | Chairman
of the Board of Directors
|--- | ----------------------------------

The
Board of Directors may from time to time elect one of its members to be the Chairman of
the Board of Directors, 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.



---

---



|49. | 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.

# GENERAL MANAGER

|50. | General
Manager
|--- | ---------------

The
Board of Directors may from time to time appoint one or more persons, whether or not
Directors, as General Manager(s) of the Company and may confer upon such person(s), and
from time to time modify or revoke, such title(s) (including Managing Director, Director
General or any similar or dissimilar title) and such duties and authorities of the Board
of Directors as the Board of Directors may deem fit, subject to such limitations and
restrictions as the Board of Directors may from time to time prescribe. Such
appointment(s) may be either for a fixed term or without any limitation of time, and the
Board of Directors may from time to time (subject to the provisions of the Companies Law
and of any contract between any such person and the Company) fix his or their salaries and
emoluments, remove or dismiss him or them from office and appoint another or others in his
or their place or places.

# MINUTES

|51. | Minutes
|--- | -------

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



---

---



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

# DIVIDENDS

|52. | Declaration
of Dividends
|--- | ------------------------

The
Board of Directors may from time to time declare, and cause the Company to pay, such
interim dividend as may appear to the Board of Directors to be justified. The Board of
Directors shall determine the time for payment of such dividends and the record date for
determining the shareholders entitled thereto.

|53. | Reserved.
|--- | ---------

|54. | Amount
Payable by Way of Dividends
|--- | ----------------------------------

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

|55. | Interest
|--- | --------

No
dividend shall carry interest as against the Company.

|56. | Payment
in Specie
|--- | -----------------

Upon
the recommendation of the Board of Directors approved by Ordinary Resolution of the
Company, 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 of the
Company or of any other companies, or in any one or more of such ways.



---

---



|57. | Capitalization
of Profits, Reserves etc.
|--- | ----------------------------------------

Upon
the resolution of the Board of Directors, the Company -

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

(b)       
          may cause such distribution or payment to be accepted by such shareholders in
          full satisfaction of their interest in the said capitalized sum.

|58. | Implementation
of Powers under Articles 56 and 57
|--- | -------------------------------------------------

For
the purpose of giving full effect to any resolution under Articles 56 or 57, and
without derogating from the provisions of Article 7(b) hereof, and subject to
applicable law, the Board of Directors may settle any difficulty which may arise in regard
to the distribution as it thinks expedient, and, in particular, may issue fractional
certificates, and may fix the value for distribution of any specific assets, and may
determine that cash payments shall be made to any members upon the footing of the value so
fixed, or that fractions of less value than the nominal value of one share may be
disregarded in order to adjust the rights of all parties, and may vest any such cash,
shares, debentures, debenture stock or specific assets in trustees upon such trusts for
the persons entitled to the dividend or capitalized fund as may seem expedient to the
Board of Directors.



---

---



|59. | Deductions
from Dividends
|--- | -------------------------

The
Board of Directors may deduct from any dividend or other moneys payable to any member in
respect of a share any and all sums of money then payable by him to the Company on account
of calls or otherwise in respect of shares of the Company and/or on account of any other
matter of transaction whatsoever.

|60. | Retention
of Dividends
|--- | ----------------------

(a)       
          The Board of Directors may retain any dividend or other moneys payable or
          property distributable in respect of a share on which the Company has a lien,
          and may apply the same in or toward satisfaction of the debts, liabilities, or
          engagements in respect of which the lien exists.

(b)       
          The Board of Directors may retain any dividend or other moneys payable or
          property distributable in respect of a share in respect of which any person is,
          under Articles 21 or 22, entitled to become a member, or which any person
          is, under said Articles, entitled to transfer, until such person shall become a
          member in respect of such share or shall transfer the same.

|61. | Unclaimed
Dividends
|--- | -------------------

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



---

---



|62. | Mechanics
of Payment
|--- | --------------------

Any
dividend or other moneys payable in cash in respect of a share may be paid by check or
warrant sent through the post to, or left at, the registered address of the person
entitled thereto or by transfer to a bank account specified by such person (or, if two or
more persons are registered as joint holders of such share or are entitled jointly thereto
in consequence of the death or bankruptcy of the holder or otherwise, to any one of such
persons or to his bank account), or to such person and at such address as the person
entitled thereto may by writing direct. Every such check or warrant shall be made payable
to the order of the person to whom it is sent, or to such person as the person entitled
thereto as aforesaid may direct, and payment of the check or warrant by the banker upon
whom it is drawn shall be a good discharge to the Company. Every such check or warrant
shall be sent at the risk of the person entitled to the money represented thereby.

|63. | Receipt
from a Joint Holder
|--- | ---------------------------

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

# ACCOUNTS

|64. | Books
of Account
|--- | ----------------

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

(b)       
          The Company shall make copies of its annual financial statements available for
          inspection by the shareholders at the principal offices of the Company. The
          Company shall not be required to send copies of its annual financial statements
          to shareholders, except upon request.



---

---



|65. | Audit
|--- | -----

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

|66. | Auditors
|--- | --------

The
appointment, authorities, rights and duties of the auditor(s) of the Company, shall be
regulated by applicable law. The Audit Committee shall have the authority to fix, in its
discretion, the remuneration of the auditor(s) for the auditing services.

# BRANCH REGISTERS

|67. | Branch
Registers
|--- | ----------------

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

# RIGHTS OF SIGNATURE,
STAMP AND SEAL

|68. | Rights
of Signature, Stamp and Seal
|--- | -----------------------------------

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

(b)       
          The Company shall have at least one official stamp.



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(c)       
          The Board of Directors may provide for a seal. If the Board of Directors so
          provides, it shall also provide for the safe custody thereof. Such seal shall
          not be used except by the authority of the Board of Directors and in the
          presence of the person(s) authorized to sign on behalf of the Company, who shall
          sign every instrument to which such seal is affixed.

# NOTICES

|69. | Notices
|--- | -------

(a)       
          Any written notice or other document may be served by the Company upon any
          member either personally, or by facsimile transmission, or by sending it by
          prepaid mail (airmail or overnight air courier if sent to an address on a
          different continent from the place of mailing) addressed to such member at his
          address as described in the Register of Members 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 may be served by any member upon the Company 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 facsimile transmission, or
          by sending it by prepaid registered mail (airmail or overnight air courier if
          posted outside Israel) to the Company at its Registered Address. Any such notice
          or other document shall be deemed to have been served (i) in the case of
          mailing, two (2) business days 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;
          (ii) in the case of overnight air courier, on the third business day
          following the day sent, with receipt confirmed by the courier, or when actually
          received by the addressee if sooner than three business days after it has been
          sent; (iii) in the case of personal delivery, on the date such notice was
          actually tendered in person to such member (or to the Secretary or the General
          Manager); or (iv) in the case of facsimile transmission, the date on which
          the sender receives automatic electronic confirmation by the recipients
          facsimile machine that such notice was received by the addressee. 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 69(a).

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



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(c)       
          Any member whose address is not described in the Register of Members, 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.

(d)       
          Notwithstanding any contrary provision herein, notice by the Company of a
          General Meeting which is published in two daily newspapers in Israel, if at all,
          shall be deemed to have been duly given to any member whose address as
          registered in the Register of Members is located in the State of Israel. The
          mailing or publication date and the date of the meeting shall be counted as part
          of the days comprising any notice period.

# INSURANCE AND INDEMNITY

|70. | Exculpation,
Indemnity and Insurance
|--- | ------------------------------------

(a)       
          For purposes of these Articles, the term Office Holder shall mean
          every Director and every officer of the Company, including, without limitation,
          each of the persons defined as Nosei Misra in the Companies Law.

(b)       
          Subject to the provisions of the Companies Law, the Company may prospectively
          exculpate an Office Holder from all or some of the Office Holders
          responsibility for damage resulting from the Office Holders breach of the
          Office Holders duty of care to the Company.

(c)       
          Subject to the provisions of the Companies Law, the Company may indemnify an
          Office Holder in respect of an obligation or expense specified below imposed on
          or incurred by the Office Holder in respect of an act performed in his capacity
          as an Office Holder, as follows:

| | (i)        a
financial obligation imposed on him in favor of another person by a court
          judgment, including a compromise judgment or an arbitrators award
approved           by a court;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)        reasonable
litigation expenses, including attorneys fees, expended by the           Office
Holder as a result of an investigation or proceeding instituted against           him by
a competent authority, provided that such investigation or proceeding           concluded
without the filing of an indictment against him and either (A)           concluded
without the imposition of any financial liability in lieu of criminal
          proceedings or (B) concluded with the imposition of a financial liability in
          lieu of criminal proceedings but relates to a criminal offense that does not
          require proof of criminal intent; and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | (iii)        reasonable
litigation expenses, including attorneys fees, expended by an           Office
Holder or charged to the Office Holder by a court, in a proceeding           instituted
against the Office Holder by the Company or on its behalf or by           another person,
or in a criminal charge from which the Office Holder was           acquitted, or in a
criminal proceeding in which the Office Holder was convicted           of an offense that
does not require proof of criminal intent.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company may undertake to
indemnify an Office Holder as aforesaid, (aa) prospectively, provided that, in respect of
Article 70(c)(i), the undertaking is limited to events which in the opinion of the Board
of Directors are foreseeable in light of the Companys actual operations when the
undertaking to indemnify is given, and to an amount or criteria set by the Board of
Directors as reasonable under the circumstances, and further provided that such events and
amount or criteria are set forth in the undertaking to indemnify, and (bb) retroactively.

(d)       
          Subject to the provisions of the Companies Law, the Company may enter into a
          contract for the insurance of all or part of the liability of any Office Holder
          imposed on the Office Holder in respect of an act performed in his capacity as
          an Office Holder, in respect of each of the following:

| | (i)        a
breach of his duty of care to the Company or to another person;
| | ----------------------------------------------------------------------------

| | (ii)        a
breach of his fiduciary duty to the Company, provided that the Office Holder
          acted in good faith and had reasonable cause to assume that such act would not
          prejudice the interests of the Company;
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)        a
financial obligation imposed on him in favor of another person.
| | ------------------------------------------------------------------------------

(e)       
          The provisions of Articles 70(a), 70(b), 70(c) and 70(d) above are not intended,
          and shall not be interpreted, to restrict the Company in any manner in respect
          of the procurement of insurance and/or in respect of indemnification (i) in
          connection with any person who is not an Office Holder, including, without
          limitation, any employee, agent, consultant or contractor of the Company who is
          not an Office Holder, and/or (ii) in connection with any Office Holder to
          the extent that such insurance and/or indemnification is not specifically
          prohibited under law; provided that the procurement of any such insurance and/or
          the provision of any such indemnification shall be approved by the Audit
          Committee of the Company.



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# WINDING UP

|71. | Winding
Up
|--- | ----------

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

|72. | Major
Decisions.
|--- | ----------------

Notwithstanding
any other provision of these Articles, for so long as at least 65% of the Preferred Shares
issued shall be outstanding, and no more than 35% of all Preferred Shares issued shall
have been converted into Ordinary Shares, the approval of the holders of 50% of the then
outstanding Preferred Shares shall be required prior to the Company taking any of the
following actions:

(a)       
          Amendment of the Companys Articles of Association which adversely affects
          the rights of the Preferred Shares or authorizes additional shares of the
          Companys share capital;

(b)       
          Alter or change the rights, preferences or privileges of the Preferred Shares;

(c)       
          Declare or pay any dividends or make any distributions on any of the
          Companys securities (other than on the Preferred Shares);

(d)       
          Redeem, purchase or otherwise acquire any of the Companys securities
          ranking junior or pari passu with the Preferred Shares (except for (i)
          repurchases of Ordinary Shares from employees upon termination of employment
          pursuant to arrangements approved by the Board of Directors of the Company and
          (ii) redemptions of Preferred Shares);

(e)       
          Authorize or issue any equity securities having rights or preferences senior to
          or pari passu with the Preferred Shares with respect to voting, dividends
          redemption or liquidation;

(f)       
          Sale of the Company by sale of all or substantially all of the Companys
          issued and outstanding securities, merger, consolidation, sale of assets or
          otherwise if sale is not a sale resulting in consideration to the holders of
          Preferred Shares of at least $6.00 per Preferred Share, as adjusted for share
          splits, consolidations, share dividends, bonus share issuances and other
          recapitalizations of the Companys shares;

(g)       
          Sale or transfer of all of substantially all of the Companys intellectual
          property assets;

(h)       
          Voluntary dissolution or cessation of operations of the Company;



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(i)       
          Any material change of the nature of the business of the Company;

(j)       
          Incur indebtedness (including any guarantees other than guarantees in the normal
          course of business, it being understood that such exclusion shall not include
          guarantees for borrowed monies) exceeding an aggregate principal amount of
          $3,000,000 outstanding at any time, except for bank debt which, when combined
          with other debt, may be incurred for up to $10,000,000 outstanding at any time;

(k)       
          Create or incur any material lien on the assets of the Company (other than liens
          for current taxes not yet payable or liens pursuant to permitted indebtedness);

(l)       
          Transaction with any director, officer, employee or affiliate (other than
          customary employment arrangements and benefit plans);

(m)       
          Enter into an agreement that would limit the Companys ability to perform
          its obligations in respect of the Preferred Shares or the Ordinary Shares issued
          upon conversion of the Preferred Shares;

(n)       
          Any other action, which pursuant to the Companys Articles of Association
          or the Companies Law requires the vote of the Preferred Shares as a separate
          class or series.

(o)       
          Create any subsidiary other than a wholly-owned subsidiary or permit any
          existing subsidiary to issue equity securities to any person or entity other
          than the Company.

(p)       
          Take any action relating to the above.



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