ARTICLES OF INCORPORATION


         On this  thirty  first day of May,  nineteen  hundred  and  ninety-six,
appeared before me, Mr Cornelis  Everardus  Martinus van  Steenderen,  civil law
notary, practicing at Rijswijk (South Holland, The Netherlands):

         Theodor  Franciscus  Hubertus Reijnen,  civil law Notary awaiting Crown
appointment,  residing at 2264 KM  Leidschendam,  Schadeken  207, a married man,
born at Nijmegen on the second day of January  Nineteen hundred -and sixty-three
and  holder  of a valid  passport  of the  Kingdom  of the  Netherlands,  number
W687635,

         The appearer declared:

-- that the general  meeting of shareholders of the private limited company ICTS
HOLLAND  Production  B.V.,  registered  office at The Hague,  and whose place of
business is at 1185 ZH Amstelveen,  Binderij 7G, which company was  incorporated
by deed executed on October ninth nineteen  hundred and ninety- two before Mr J.
van  Elswijk,  civil law  notary,  resident  at  Rotterdam  and the  Articles of
Association of which company have been altered most recently by deed executed on
March eighth,  nineteen hundred and ninety-five  before Mr. R.G.M.C.  ridder van
Rappard, civil law notary, resident at Rotterdam, has resolved to:

         a.       conversion into a company limited by shares ("N.V."); and

         b.       alter and lay down over again its Articles of Association;

-- that he, the appearer, has been appointed by that resolution to apply for the
required  declaration  of no objection on the draft of the present deed, and has
been authorized to make the changes which may be required by or on behalf of the
Minister  of  Justice  and  furthermore  has  been  authorized  to have the deed
executed and signed;

-- that said resolution and said appointment and authorization are apparent from
a writing to be attached to this deed;

-- that an expert as referred to in section 393 Volume of the Netherlands  Civil
Code has given the certificate as referred to in section 72 subsection part b of
Volume 2 of the Netherlands  Civil Code, which  certificate shall be attached to
this deed;

-- that the MMinistry  ofJustice on the sixteenth day of April nineteen  hundred
and ninety-six under number B.V. 440.855 has declared that no objections have

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         been  found to exist;  the draft of this deed on which the  declaration
         that no  objection  have been found to exist is noted shall be attached
         to this deed.

         The appearer, acting as aforementioned, declared to convert the private
limited  company into a company limited by shares and to amend and lay down over
again the Articles of Association of said company as follows:

                                              ARTICLES OF ASSOCIATION

Name and registered office.                          .

Article 1.

1.    The name of the Company limited by shares is: ICTS INTERNATIONAL N.V. and
has its registered office in Amstelveen, The Netherlands.

2.       The Company has been established for an indefinite period of time.

Objects.

Article 2.
                                         .
1.       The objects for which the Company has been established are:

a. to advise and render  other  services  regarding  the security of persons and
goods and to arrange for (cause others to arrange for) such security by order of
companies,  government  bodies  and  private  persons;  in  particular  but  not
exclusively: to (have others) install, manage and check security systems for the
prevention and control of crime and terrorism in and around grounds,  buildings,
installations, vessels and aircraft;

b. to acquire and dispose of  participation  or other interests in companies and
enterprises,  whether or not together with others,  to cooperate  with companies
and enterprises and to manage the same;

c. to  acquire,  manage,  commercially  exploit,  encumber,  dispose of property
including intellectual and industrial property rights, and to invest capital;

d. to grant  loans or cause  the  granting  of  loans,  in  particular,  but not
exclusively,  to legal persons and companies which are subsidiaries and/or group
companies of the company or in which the Company has a  participation,  all with
due of observance of the statutory  provisions and to draw loans or to cause the
drawing of loans;


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e. to enter into  agreements by which the company commits itself as guarantor or
joint and  several,  debtor,  warrants  performance  by a third party or commits
itself besides or on behalf of others, in particular,  but not exclusively,  for
the benefit of legal  persons and companies as referred to under d, all with due
observance to the provisions of paragraph 2 of this article;

f. to perform any and all acts which are related or maybe  conducive to the
foregoing;

g. to engage in any other lawful act or activity  for which  companies
may be organized  under the  Netherlands  Civil Code,  as amended from
time to time.

2. Unless the provisions of section 98c of Book 2 of the Netherlands  Civil Code
apply,  the  Company may not stand  surety,  give price  guarantees,  enter into
agreements by which the Company commits itself as guarantor or joint and several
debtor,  warrants  performance  by a third party or commits itself besides or on
behalf of others,  with an eye to the taking or acquiring by others of shares in
its capital or depo sitary receipts thereof.

Capital.

Article 3.

The authorized  capital of the Company is ten million guilders (NLG 10,000,000),
divided into ten million (10,000.000) common shares, with a nominal value of one
guilder (NLG 1.) each.

Definitions.                                        .

Article 4.

1. In these Articles of Association the following terms shall have the following
meaning:

          a.  Management  Board/Managing  Director(s):  the  management/managing
          officer(s)  within  the  meaning  of Book 2 of the  Netherlands  Civil
          code;-

          b. Supervisory Board/Members of the Supervisory Board: the supervisory
          board/members of the supervisory board within the meaning of Book 2 of
          the Netherlands Civil Code;

         c.       shares: shares in the capital of the Company;

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          d. the General Meeting: the body of the Company formed by shareholders
          and other persons entitled to vote;

          e. the General  Meeting of  Shareholders:  the meeting of shareholders
          and other persons entitled to attend the General Meeting;

          f. the Annual Meeting:  The General  Meeting of Shareholders  held for
          the purpose of discussion and adoption of the annual accounts;

          g. annual accounts:  the balance sheet and the profit and loss account
          with the explanatory notes thereon,  both in drafted and adopted form,
          unless the context shows differently;

          h. the law: the law of The Netherlands.

          2. In these Articles of  Association  the term "in writing" shall also
          mean: by telegram, by telex or by telecopier.

Shares: share certificates.
                           .
Article 5.

1.       The shares may not be divided into sub-shares.

2.       The shares shall be registered shares.

3.       Registered shares shall be available:

          -- in the form of an entry in the share  register  without  issue of a
          share certificate ("uncertificated shares"); or

          -- at the  option of the  shareholder,  in the form of an entry in the
          share register with issue of a certificate ("certificated shares").

4. Upon request of a shareholder collective share certificates for any number of
shares may be issued to that  shareholder.  Where these  Articles of Association
refer  to  share   certificates   this  term  shall  include   collective  share
certificates.

5. Share  certificates  shall be signed by or on behalf of the Management  Board
either by original signature or by printed facsimile.

6. Subject to the  approval of the  Supervisory  Board the  Management
Board can  determine  that for the trade at  foreign  Exchanges  share
certificates shall be issued

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          complying with the  requirements  set by said foreign  Exchange(s) and
          not provided with any dividend sheet.

7. The shareholder  may, upon his request,  have issued to him one or more share
certificates for his shares.

8. Damaged,  but in the opinion of the Management Board still identifiable share
certificates,  may be  exchanged by the  Management  Board for  duplicates;  the
Management  Board  shall in that case  ensure  that the  damaged  documents  are
destroyed.  For the destroyed or lost share  certificates,  the Management Board
may issue  duplicates,  while complying with such requirements as the Management
Board  shall  determine.  Each  document  newly to be  issued  shall be  clearly
provided with the word: "duplicate" and shall bear the same specification as the
document  which it is to replace.  The issue of the  duplicate  shall render the
document  which it replaces null and void.  All costs of  implementation  of the
provisions  of this  paragraph  shall  be for  the  applicants  account,  unless
determined otherwise by the Management Board.

Usufruct and pledge on shares.  Delivery of title to shares.
                                              .
Article 6.

1.       Shares may be encumbered with usufruct.

2.  Shares  may be  pledged as  security.  A pledge may also be created  without
acknowledgment by or service on the Company.

3. A  shareholder  without the right to vote as a result -of a  qualified  right
created on his  shares and a  usufructuary  and  pledgee  with the right to vote
shall have the rights granted to holders of depositary  receipts issued with the
cooperation of the Company under the law.  Usufructuaries and pledgees of shares
without the right to vote shall not have such rights.

Notification of place of residence and address. Notices and communications. 
Register of shareholders.

Article 7.

1. With due regard to the provisions of the law in respect of registered  shares
a register shall be kept by or on behalf of the Company, which register shall be
regularly  updated and, at the discretion of the Management Board, may, in whole
or in part, be kept in more than one copy and at more than one place. As long as
shares in the Company are quoted on the NASDAQ  National  Market,  a part of the
share register may be kept in New York.


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2. Each shareholder's  name, his address and such further data as the Management
Board deems desirable,  whether at the request of a shareholder or not, shall be
entered in the register.

3. The form and the contents of the share  register  shall be  determined by the
Management Board with due regard to the provisions of paragraphs 1 and 2 of this
Article.

4. Upon request a  shareholder  shall be given free of charge a  declaration  of
what is stated in the register with regard to the shares registered in his name,
which declaration may be signed by a specially authorized person to be appointed
by the Management Board for this purpose.

5. The provisions of the preceding four paragraphs  shall equally apply to those
who hold a right of  usufruct  or lien on one or more  shares,  with the proviso
that the other data required by law must be entered in the register.

Transfer of shares

Article 8.

1. The transfer of shares and the  creation and the transfer of a limited  right
thereon shall take place in  accordance  with the  applicable  provisions of the
law.

2. The allotment of shares on the  partitioning of any joint property shall take
place in accordance  with the applicable  formalities  for transfer of shares in
such situations.

Issue of shares. Payment
 .
Article 9.

1. The General Meeting or, as the case may be, the  Supervisory  Board if and to
the extent  that it has been  designated  thereto by the General  Meeting  shall
decide in  respect  of the issue of shares;  if the  Supervisory  Board has been
designated  thereto,  the General Meeting may not decide in respect of the issue
as long as the designation is in effect.

2. The  General  Meeting  or, as the case may be, the  Supervisory  Board  shall
determine  the price of issue as well as the  other  conditions  of  issue,  the
payment in foreign currencies on shares included.

3. If the  Supervisory  Board is designated as authorized to decide on the issue
of shares,  such  designation  shall  specify the number of shares  which may be
issued.  Such  designation  shall also determine the duration of the designation
which may not

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exceed five years.  The  designation  can be renewed  each time for a period not
exceeding five years. Unless stipulated  otherwise upon designation,  it may not
be withdrawn.

4. The  provisions of paragraphs 1 through 3 of this Article shall apply mutatis
mutandis to the  granting of rights to take  shares,  but shall not apply to the
issue of shares to a person who  exercises a previously  acquired  right to take
shares.

5.       The Company may not subscribe for its own shares.

6. Shares shall never be issued below nominal  value,  without  prejudice to the
provisions of Section 80, Subsection 2 of Book 2 of the Netherlands Civil Code.

7. Payment shall be made in cash insofar as another form of payment has not been
agreed upon, with due observance of the relevant  provisions of the law. Payment
may only be made in foreign  currencies  with the permission of the Company and,
furthermore,  with  due  observance  of the  relevant  provisions  of  the  law.
preemptive right upon issue .

Article 10.

1. On the issuance of common  shares,  each holder of common shares shall have a
right of pre-emption in proportion to the aggregate  nominal value of his common
shares,  with due observance of the relevant  limitations set by law. Holders of
common shares shall have a similar right of  pre-emption  if options are granted
to subscribe for common shares.

2. The right of  pre-emption  may,  subject to due  observance  of the  relevant
provisions  of the law, be limited or excluded by the General  Meeting or by the
Supervisory  Board  designated  in this  respect by  resolution  of the  General
Meeting for a fixed period of time not exceeding five years.  Such a designation
may only be made if the Supervisory Board is also or  simultaneously  designated
as the body authorized to, issue shares.

Acquisition by the Company of its own shares.            Reduction of capital.

Article 11.

1. Any acquisition by the Company of partly paid shares in its own capital shall
be null and void.

2.   The Company may acquire fully paid up shares for no consideration or if:


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         a.       its shareholders  equity,  reduced by the acquisition price is
                  not less  than the paid  and  called  up part off the  capital
                  Increased by the reserves  which must be  maintained by law or
                  these Articles of Association;

         b.       the nominal amount of the shares in its capital to be acquired
                  and already  jointly held by the Company and its  subsidiaries
                  does not exceed one-tenth of the issued capital.

3. The factor  deciding  whether the acquisition is valid shall be the amount of
the  shareholders  equity as shown in the most recently  adopted  balance sheet,
reduced by the acquisition price of shares in the capital of the Company and any
payments  from profit or reserves  from third  parties,  which became due by the
Company and its  subsidiaries  after the balance  sheet date.  In the event that
more than six months of a financial year have passed without the annual accounts
having been adopted,  acquisition in accordance  with paragraph 2 other than for
no consideration, shall not be permitted.

4.  The  Company  may  acquire  shares  in its own  capital  other  than  for no
consideration only after the General Meeting has authorized the Management Board
thereto.  This authorization  shall be valid for a period not exceeding eighteen
months. In the authorization the General Meeting shall determine how many shares
may be  acquired,  how they may be acquired  and between  which limits the price
should  be. No  authorization  shall be  required,  insofar as the  Articles  of
Association  permit the  Company to  acquire  its own shares for the  purpose of
transferring  the same to employees of the Company or of a group Company under a
scheme  applicable to such employees such shares must be officially listed on an
exchange.

5. The preceding paragraphs shall not apply in respect of shares acquired by the
Company by universal succession.

6. The term shares where used in the preceding  paragraphs of this Article shall
include depositary receipts of shares.

7. Acquisition of shares in violation of the provisions of this Article shall be
null and void.  The Managing  Directors  shall be jointly and  severally  liable
vis-a-vis  the  transferor  in good faith who suffers a loss as a result of such
nullity.

8. On  proposal of the  Supervisory  Board,  the  General  Meeting may decide to
reduce the issued  capital by  withdrawing  shares or by reducing  the amount of
shares by  alteration of the Articles of  Association.  In such  resolution  the
shares  to  which  the   resolution   relates  shall  be   designated   and  the
implementation of the resolution shall be arranged.  The paid up and called part
of the capital may not be reduced  below the minimum  capital  prescribed at the
time of the resolution.


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9. A resolution to withdraw may only relate to shares held by the Company itself
or the depositary receipts whereof are held by the Company.

10. Partial  repayment in respect of shares or dispensation of the obligation to
pay up shall be possible  only in the  implementation  of a resolution to reduce
the  amount  of  the  shares.   Repayment  or  dispensation  shall  be  effected
proportionally in respect of all shares.  The requirement of proportionally  may
be deviated from with the approval of all shareholders concerned.

11.The notice convening a meeting at which a resolution referred to in paragraph
8 or 10 of this Article shall be passed, shall state the object of the reduction
of capital and the manner of  implementation.  The  provisions  of Article 21 of
these Articles of Association shall apply mutatis mutandis.

12.The Company shall deposit the  resolutions  referred to in paragraphs 8 or 10
of this Article at the office of the commercial  register and shall announce the
deposit in a national daily newspaper.

Joint owners of a share.

Article 12.

         If more than one person  jointly  possess rights in respect of a share,
such joint owners may exercise such rights only by having themselves represented
vis-a-vis the Company by one person.

Management and supervision.

Article 13.

1. The Company shall be managed by a Management  Board consisting of one or more
Directors.  The Management Board shall be under the supervision of a Supervisory
Board  consisting  of one or more Members.  Only natural  persons are capable of
being Members of the Supervisory Board.

2. The number of Managing  Directors and Members of the Supervisory  Board shall
be determined by the General Meeting.

3. The  remuneration and the further terms of employment of each of the Managing
Directors shall be determine by the Supervisory  Board.  The General Meeting can
grant a remuneration to one -or more Members of the Supervisory Board.

4.       The Managing Directors and Members of the Supervisory Board shall be
appointed by the General Meeting. The Members of the Supervisory Board shall be

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appointed for an indefinite period of time. The Supervisory Board can make
recommendations for Managing Directors or Members of the Supervisory Board.

5. A person who has attained the age of seventy-two years cannot be appointed to
be a Member of the supervisory  Board. A Member of the  Supervisory  Board shall
retire  at that  latest on the day on which the  Annual  Meeting  is held in the
financial year in which he attains the age of seventy-two years.

6. Managing  Directors and Members of the Supervisory  Board may be suspended or
removed  from  office by the  General  Meeting at all times.  Besides,  Managing
Directors can at all times be suspended by the  Supervisory  Board,  the reasons
for such suspension being stated.

7. If in the  event of  suspension  of a  Managing  Director  or a Member of the
Supervisory  Board the General  Meeting has not within  three  months  after the
effective date of suspension  resolved to remove him from office, the suspension
shall end. The suspended  Managing  Director or Member of the Supervisory  Board
shall be given the opportunity to account for his actions to the General Meeting
and may have himself assisted for that purpose by a legal adviser.

Management Board

Article 14
                                           .
1.  Subject  to these  articles  and the  relevant  provisions  of the law,  the
Management Board is entrusted with the management of the Company. The Management
Board  represents the Company.  Moreover,  the Company can be represented by two
Managing  Directors  acting jointly.  If a member of the Management  Board has a
conflict of interest with the Company,  such member of the Management Board will
immediately  notify the  Supervisory  Board of any such conflict and the Company
will  not be  represented  by a  Managing  Director  in  such  matter.  In  such
situations, the Supervisory Board shall be authorized to appoint a disinterested
person, either from within or outside of the supervisory Board, to represent the
Company.

2. If there is more than one member of the  Management  Board,  such members may
divide their  activities  between or among themselves in such fashion as they --
shall mutually agree, subject to review and modification, it appropriate, by the
Supervisory Board.

3. The Management  Board is authorized to appoint  persons who may represent the
Company and to grant such persons any title and power as it deems appropriate.

4.  Members of the  Management  Board serve until  their  resignation,  death or
removal.

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5. If one or more  Managing  Directors  are  absent or unable to act,  the other
Managing  Directors or the sole remaining Managing Director shall be temporarily
entrusted with the entire  management.  In the event that all Managing Directors
are absent or unable to act, a person  appointed  to this end for an  indefinite
period of time by the Supervisory Board from among or not from among its members
shall temporarily be charged with the entire management.

Supervisory Board.

1. It shall be the duty of the  Supervisory  Board to  supervise  the conduct of
affairs  by the  Management  Board and the  general  course of  business  in the
Company and in the business  connected  with it. It shall assist the  Management
Board by  advice.  In the  accomplishment  of  their  task  the  Members  of the
supervisory  Board  shall be guided by the  interests  of the Company and of the
business connected with it.

2. The Management Board shall furnish the Supervisory Board in due time with the
particulars  which the latter needs for the  performance  of its task and shall,
besides,  furnish each Member of the Supervisory  Board with all the information
about the Company's affairs which he may desire.  The Supervisory Board shall be
authorized  to inspect and to cause to be inspected  all the books,  records and
correspondence of the Company; each Member of the Supervisory Board shall at all
times have access to all the buildings and grounds used by the Company.

3. In the  accomplishment  of its task  the  Supervisory  Board  may call in the
assistance of experts at the Company's expense.

4.       The Supervisory Board shall appoint one of its members to be chairman.

5. Each Member of the Supervisory Board as well as the Management Board shall be
entitled  to convene a meeting  of the  Supervisory  Board.  At a meeting of the
supervisory Board a Member of the Supervisory Board may have himself represented
by another Member of this Board, appointed by an instrument in writing.

6. The  supervisory  Board shall pass  resolutions  by an  absolute  majority of
votes.  In case of an  equality  of votes  the  proposal  shall be  regarded  as
rejected.

7. The  Supervisory  Board can also pass  resolution  without holding a meeting,
provided this is done in writing,  each of the Members of the Supervisory  Board
has  cast  his  vote  and  none of them  has  opposed  this  manner  of  passing
resolutions.  A resolution  shall then have been passed if more than half of the
number of  Members of the  Supervisory  Board  have  pronounced  in favor of the
proposal.


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8. If there is only one Member of the  Supervisory  Board, he shall have all the
powers and obligations  conferred or imposed  respectively  upon the Supervisory
Board and its chairman by these Articles of Association.

General Meeting of Shareholders.

Article 16                                            .

1. General Meetings of Shareholders shall be held in the place where the Company
has its  registered  office or in  Amsterdam,  Rotterdam  or The  Hague.  Lawful
resolutions may be passed at a General  Meeting of  Shareholders  held elsewhere
than  in  the  preceding  sentence,   only  if  the  entire  issued  capital  is
represented.

2. At least one General  Meeting of  Shareholders  shall be held each year,  not
later than six months after the -end of the financial year.

3. The Managing  Board and the  Supervisory  Board shall be equally  entitled to
convene  a  General  Meeting  of  Shareholders.   The  Managing  Board  and  the
Supervisory Board shall be required to call a General Meeting of Shareholders if
one or more shareholders  jointly  representing at least one tenth of the issued
capital  shall so  request  in  writing,  thereby  stating  the  subjects  to be
considered  in  detail.  If in such  case  neither  the  Managing  Board nor the
Supervisory  Board  have taken  such  measures  that the  -General  fleeting  of
Shareholders  can  be  held  within  six  weeks  of  the  request,  each  of the
shareholders  concerned  shall  be  authorized  to  call a  General  Meeting  of
Shareholders  themselves with due observance of the relevant provisions of these
Articles of Association.

4. All convocations of General Meetings of Shareholders and all notifications to
shareholders and  beneficiaries of a usufruct and pledgees to whom voting rights
have been granted shall be made by letter mailed to their  addresses as shown in
the register of shareholders.

5. Communications  which by law or the Articles of Association must be addressed
to the General Meeting may be made by inclusion either in the notice calling the
meeting or in the document deposited for inspection at the office of the Company
and in a place in Amsterdam  provided that this is stated in the notice  calling
the meeting.  The notice shall be sent no later than on the  fifteenth day prior
to the day of the meeting.

6. If the entire  issued  capital is  represented  at the meeting as well as all
other persons who by virtue of the law or these Articles of Association  must be
called to the meeting  legally  valid  resolutions  may be passed by the General
Meeting of  Shareholders  about all subjects put forward for the vote,  provided
that they are passed

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unanimously even if the requirements set by law or these Articles of Association
in  respect  of the  notice of the  General  Meeting  of  Shareholders  were not
observed.

7. Each  shareholder  and each person to whom the law grants this right shall be
authorized,  in person or by a proxy appointed in writing, to attend and address
the General Meeting of Shareholders.  Before he is granted access to a meeting a
shareholder,  a person as  referred to in the  previous  sentence or their proxy
shall sign an attendance list and state his name and, insofar as applicable, the
number of votes  which he may cast.  A proxy  shall  also  state the name of the
person he represents.

8. Members of the  Supervisory  Board,  Members of the Management  Board and any
other persons who have the right of access  pursuant to law shall have access to
the General Meeting of Shareholders. In addition, the General Meeting may decide
on the admittance of persons other than the persons  referred to in the previous
sentence.  Members of the Supervisory  Board and Members of the Management Board
shall have an advisory voice at the General Meeting of Shareholders.

Article 17.

1. The General Meeting of Shareholders shall be presided over by the Chairman of
the Supervisory  Board or, in his absence,  by a member of the Supervisory Board
selected by the supervisory  Board acting as a body. The  Supervisory  Board has
the authority to designate a person who is not a member of the Supervisory Board
as  chairman  of the  General  Meeting  of  Shareholders.  If no  members of the
Supervisory  Board are present,  the General  Meeting of  shareholders  shall be
presided over by the person  appointed  for that purpose by the General  Meeting
itself.

2. Unless a notarial record is drawn up, minutes of the meeting shall be kept by
a person  designated  thereto by the Chairman  who can also  appoint  himself as
such, which minutes shall be confined at that or the next meeting by the General
Meeting and which shall be signed in evidence  thereof by the  Chairman  and the
person keeping the minutes of that meeting.  Each Managing Director,  as well as
one or more  holders  of shares  representing  at least one tenth of the  issued
capital may determine that a notarial record be drawn up. The cost of a notarial
record shall be for the account of the Company.

Voting at General Meeting of Shareholders

Article 18

1.       Each share carries the right to cast one vote.

2. Resolutions may be adopted only when a quorum of at least fifty percent (50%)
of the  outstanding  shares  entitled  to vote are  represented  and  require an
absolute

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majority  of  the  Votes  cast.  Section  120  subsection  3 of  Book  2 of  the
Netherlands  Civil Code is hereby deemed to be inapplicable.  Resolutions of the
General Meeting of shareholders  with respect to an amendment of the Articles of
Association,  dissolution  of the Company,  acquisition of its own shares by the
Company or  pertaining to a merger may be adopted only when a quorum of at least
fifty percent of the  outstanding  shares  entitled to vote are  represented and
require a vote of at least two-thirds of the votes cast,  representing more than
fifty percent (50 %) of the outstanding capital.

3.  If  there  is a tie in the  vote  for the  election  of the  Members  of the
Supervisory  Board,  the  chairman of the  Supervisory  Board shall select which
nominee shall be elected. For all other shareholders' resolutions, if there is a
tie it the vote, the proposal shall be rejected.

4.  Abstentions on a particular  matter shall be counted toward the quorum,  but
shall not be counted as affirmative votes.

Financial year, annual account and distribution of profit.
                                            .
Article 19.

1. The financial  year of the Company shall  coincide with the calendar year. 

2.Each  year  within  five  months  after the end of the  financial  year of the
Company,  save where this  period is  extended by a maximum of six months by the
General Meeting on account of special circumstances,  the Management Board shall
draw up the annual  accounts  and  deposit the same at the office of the Company
open to the  inspection of the  shareholders.  Within this period the Management
Board unless section 403 of Book 2 of the Netherlands Civil Code -applies to the
Company  shall  furthermore  draw  up  the  annual  report  and  deposit  it for
inspection  as stated  above.  The  particulars  as referred to in section  392,
subsection  1 of Book 2 of the  Netherlands  Civil  Code shall be added to these
documents  and  furthermore,  if the  Supervisory  Board gave an  opinion,  that
opinion shall be added to these  documents.  The annual accounts shall be signed
by all  Managing--.  Directors  and  Members of the  Supervisory  Board;  if the
signature  of one or more of them is  missing,  this  and the  reason  for  such
absence shall be stated.

3. Without prejudice to the provisions of the preceding  paragraph,  the Company
shall ensure that the documents referred to in said paragraph shall be available
at its office for  inspection  as stated above from the date of convening of the
General  Meeting of  Shareholders  at which said documents are to be considered.
The persons  entitled to inspect said  documents may obtain a copy thereof at no
cost.

4. The annual accounts shall be adopted by the General Meeting.  Adoption of the
annual accounts without  reservation shall constitute a discharge from liability
of the Managing  Directors  and the Members of the  Supervisory  Board,  without
prejudice to

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<PAGE>



the provisions of sections l. and 150 Volume 2 of the Netherlands Civil Code.

Article 20
                                         .
1.  The  profit  shall be  determined  in  accordance  with  generally  accepted
accounting principals.

2. Of the profit  appearing  from the  annual  accounts  adopted by the  General
Meeting such a sum can be reserved as shall be fixed by the supervisory Board.

3. The remaining  profits after the  application  of paragraph 2 of this Article
shall be available to the General Meeting.

4. The Company may make  distributions of profit to the shareholders only to the
extent that the  shareholders  equity exceeds the paid and called up part of the
capital increased by the amount of the reserves which it is required to maintain
by law or by these Articles of Association.

5.  Distribution  of profit  shall be made only  after  adoption  of the  annual
accounts which shows that such distribution is possible.

6. In calculating the  distribution of profit shares or the depositary  receipts
thereof,  the full  ownership -. of which is vested in the Company or in respect
of which the Company has usufruct shall not be counted.

7. The Company may pay interim  dividends  with due observance of the provisions
of paragraph 4. The resolution to distribute an interim dividend shall be passed
by the  Management  Board after the approval of the  Supervisory  Board has been
obtained.

8. The date on which dividends and other distributions  become payable, no later
than three  months  from the date such  dividends  have been  declared  shall be
determined  by the  Supervisory  Board  and  announced  in-accordance  with  the
provisions of Article 16, Section 4.

9.  Dividends  which have not been  claimed  within five years after the date on
which they were made payable shall be forfeited to the benefit of the Company.

Alteration of the Articles of Association and winding up.

Article 21

         When a proposal to amend these  Articles of Association or dissolve the
Company is made to the General Meeting,  -this must be stated in the convocation
to the General  Meeting of  Shareholders.  With  respect to an  amendment to the
Articles of

                                                        15

<PAGE>



Association, a copy of the proposal in which the proposed modification is stated
in full must -. be filed at the office of the  Company for  inspection  by every
shareholder and must be kept on file and available for inspection  until the end
of the meeting.  The  provisions  of Article 123 of the  Netherlands  Civil Code
shall  apply  accordingly.   In  addition,  no  amendment  to  the  Articles  of
Association  will  become  effective  until the Dutch  Ministry  of Justice  has
reviewed and approved such  amendment and the notarial deed of alteration of the
Articles of Association has been executed.

Liquidation.

Article 22.

1. If the  Company is wound up,  its  liquidation  shall be  carried  out by the
Management Board under the supervision of the Supervisory  Board. The provisions
of Article 13 and Article 14, paragraphs 2. and 2, shall apply mutatis mutandis.

2.   The General Meeting shall determine the remuneration of the liquidators.

3. During the liquidation these Articles of Association shall remain in force to
the extent possible.

4. The surplus assets  remaining  after  satisfaction  of all liabilities of the
Company,  shall be paid to the  shareholders  pro rata to the amount  paid up on
each one's shares.
Indemnification.

Article 23

1. The Company shall, to the fullest extent permitted by the law indemnify,  and
advance  expenses  to,  Bach  of  its  now  acting  and  former  members  of the
Supervisory  Board,  members of the Management  Board,  officers,  employees and
agents,  whenever any such person is made a party,  or  threatened  to be made a
party,  in any action,  suit or  proceeding by reason of his or her service with
the Company.

2. The Company is  authorized,  to the fullest  extent  permitted by the law, as
amended from time to time, to produce  liability  insurance on behalf of its now
acting and former members of the Supervisory  Board,  -members of the Management
Board, officers, employees and agents.

Finally the following statement was made:

  The issued share capital amounts to four million guilders (NLG. 4,000,000.)

End of deed.


                                                        16

<PAGE>


         This  instrument,  drawn  up in one  original  copy,  was  executed  in
Rijswijk (South  Holland) on the date first before written.  After the substance
of this instrument had been stated -to the person appearing, he declared that he
had noted the contents of this  instrument and did not require it to be read out
in full.

         Subsequently,  following a partial  reading in accordance with the law,
this instrument was signed by the person appearing,  who is known to me, Notary,
and by me, Notary.



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