Exhibit 1.2

                This is an English translation from the original
                 Hebrew version. In case of any discrepancy, the
                     binding version is the Hebrew original.

                                    ARTICLES

                                       OF

                        AMERICAN ISRAELI PAPER MILLS LTD.

                                  INTRODUCTION

<TABLE>
<CAPTION>

1.  1.1   In these Articles, unless the context otherwise requires -

<S>                                            <C>
          "Person" or "Persons"                 -   Including a corporation;

          "In writing"                          -   In  handwriting,   print,   type,  photo,   telex,
                                                    facsimile  or in  any  other  manner  that  can be
                                                    read;

          "Shareholder"                         -   Whoever is a shareholder on the  determining  date
                                                    as  per  section  182  of The  Companies  Law,  if
                                                    there is a determining date for such matter;

          "Registered Shareholder"              -   The  shareholder  registered  in the  Shareholders
                                                    Register of the Company;

          "Non-Registered Shareholder"          -   A  shareholder   within  the  meaning  of  section
                                                    177(1) of the Law;

          "The Company"                         -   American Israeli Paper Mills Ltd.
          "The Law" or
          "The Companies Law"                   -   The  Companies  Law  5759-1999,  as  from  time to
                                                    time in  force,  and also the  Regulations  issued
                                                    thereunder;

          "The Secretary"                       -   Whoever  may  be  appointed  as  secretary  of the
                                                    Company;

          "The Register" or

          "The Shareholders Register"           -   The  register  of   shareholders  of  the  Company
                                                    which must be maintained by law;

          "The Office" or

          "The Registered Office"               -   The office of the  Company,  the  address of which
                                                    is  from   time  to  time   registered   with  the
                                                    Registrar;

          "The Ordinance" or

          "The Companies Ordinance"             -   The    Companies    Ordinance    (New    Version),
                                                    5743-1983,  as from  time to  time in  force,  and
                                                    also the Regulations issued thereunder;


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          "Special Majority"                    -   A  majority  of sixty  percent of all votes of the
                                                    shareholders  present  at  a  general  meeting  or
                                                    class  meeting,  as  the  case  may  be,  who  are
                                                    entitled  to vote and who  voted at such  meeting,
                                                    without taking abstentions into account;

          "Ordinary Majority"                   -   A   simple   majority   of   all   votes   of  the
                                                    shareholders  present  at  a  general  meeting  or
                                                    class  meeting,  as  the  case  may  be,  who  are
                                                    entitled  to vote and who  voted at such  meeting,
                                                    without taking abstentions into account;

          "Year" or "Month"                     -   In accordance with the Gregorian calendar;

          "Corporation"                         -   A  company,   partnership,   cooperative  society,
                                                    association   and  any  other   body  of   persons
                                                    whether incorporated or unincorporated;

          "These Articles" or

          "The Articles"                        -   The  Articles  of  Association  in the  version of
                                                    this  document,  as  may  from  time  to  time  be
                                                    amended;
</TABLE>

1.2      Any  expression  in  these  Articles  which  is not  defined  in  these
         Articles, shall have the meaning designated to it in the Companies Law,
         unless this may involve any contradiction to the subject written or its
         content;  words in the singular - shall mean also the plural,  and vice
         versa, words in masculine gender - shall mean also feminine gender.

1.3      The headings in these Articles are meant for the purpose of convenience
         only and shall not be used for the interpretation of these Articles.

1.4      In any  place in these  Articles  which  provides  that the  provisions
         thereof shall apply subject to the  provisions of the Ordinance  and/or
         subject to the  provisions of the  Companies Law and/or  subject to the
         provisions  of any law, the intention is to provisions of the Ordinance
         and/or  provisions of the  Companies Law and/or  provisions of any law,
         which are not elective, unless the context otherwise demands.

1.5      Provisions  which in  accordance  with the  Companies  Law are elective
         shall  apply to the  Company,  to the extent  that it is not  otherwise
         provided  in  these  Articles  and  to  the  extent  that  there  is no
         contradiction   between  them  and  between  the  provisions  of  these
         Articles.

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                               Name of the Company

2. The name of the Company is as follows:

         2.1      In Hebrew -

         2.2      In English - American Israeli Paper Mills Ltd.


                             Limitation of Liability

3.      The liability of the shareholders is limited to the payment of par value
        of the shares unless the provisions of section 304 of The Law exist.

                             Objects of the Company

4.       The  objects of the  Company  are as  specified  in the  Memorandum  of
         Association of the Company.

                                    Business

5.      The Company  may, at any time,  engage in any branch or kind of business
        in which it is,  expressly or by  implication,  authorized  to engage in
        accordance with Article 4 above. The Company may also cease to engage in
        such  businesses,  whether  or not it has  commenced  to  engage in such
        branch or kind of business.

                                    Donations

6.      The Company may donate  reasonable  amounts for deserving  causes,  even
        though  the  donation  is not  within  the  framework  of  the  business
        considerations of the Company.

                                Registered Office

7.      The registered office of the Company shall be the address  determined by
        the Board, as may from time to time be changed.

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                                  The Articles

8.      The Company may alter these Articles by resolution  carried at a General
        Meeting  by a  majority  of  sixty  percent  of  all  the  votes  of the
        shareholders present at the General Meeting who are entitled to vote and
        who voted at the meeting, without taking abstention votes into account.

9.      A resolution  carried at a General Meeting by the majority  required for
        alteration  of the  Articles,  as  aforesaid  in Article 8 above,  which
        alters any  provision  of the  provisions  of these  Articles,  shall be
        deemed to constitute a resolution  for the  alteration of these Articles
        even though the  resolution  does not  expressly  state  "alteration  of
        Articles".

10.     Subject to the  provisions of the Companies  Law,  alterations  of these
        Articles  shall be valid as from the date of adoption of the  resolution
        by the  Company  or from such  later  date as may be  determined  in the
        resolution.

                            Registered Share Capital

11.     The registered  share capital of the Company is NIS 200,000 divided into
        20,000,000  Ordinary  Shares of par value NIS 0.01 each  (hereinafter  -
        "The  Ordinary  Shares").  The  Company may alter the  registered  share
        capital in  accordance  with the  provisions of the Companies Law and of
        these Articles.

                                   The Shares

12.      Every  Ordinary Share in the capital of the Company is of equal rights,
         for all intents and purposes, to every other Ordinary Share,  including
         the right to  dividend,  to bonus  shares and to  participation  in the
         surplus assets of the company upon liquidation,  proportionately to the
         par value of each share,  without taking into consideration any premium
         paid in respect thereof, all the aforesaid subject to the provisions of
         these Articles.

13.      Each of the Ordinary  Shares entitles the holder thereof to participate
         at and to one vote at General Meetings of the Company.

14.14.1           14.1.1 A  shareholder  is any  person who is  registered  as a
                  shareholder in the  Shareholders  Register , and any person to
                  whose credit a share is registered  with a member of the Stock
                  Exchange   and  such  share  is  included   among  the  shares
                  registered in the Shareholders  Register of the Company in the
                  name of a Nominee Company.

         14.1.2   A  shareholder  who is a trustee  shall be  registered  in the
                  Shareholders  Register with a note as to his trusteeship,  and
                  for the purpose of the  Companies Law he shall be deemed to be
                  a shareholder.

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                  Without  derogating  from the  aforesaid,  the  Company  shall
                  recognize a trustee, as aforesaid,  as a shareholder,  for all
                  intents and purposes, and shall not recognize any other person
                  whomsoever,  including  the  beneficiary,  as the owner of any
                  right whatsoever to the share.

         14.2     Without  derogating  from the  aforesaid,  and  subject to the
                  provisions of these Articles,  apart from  shareholders of the
                  Company, as aforesaid in Article 14.1 above, no person will be
                  recognized by the Company as the owner of any right whatsoever
                  to a share  and the  Company  will not be  bound  and will not
                  recognize any beneficial  right in accordance with the laws of
                  equity or trustee  relations  or a future or partial  right to
                  any share or any beneficial  right in a fraction of a share or
                  any other  right in respect of a share,  but only the right of
                  the  shareholder  as  aforesaid  in Article  14.1 above to the
                  share in its entirety,  all the aforesaid except if a court of
                  competent jurisdiction may otherwise direct.

                               Share Certificates

15.     he  certificates  evidencing the right of ownership to shares shall bear
        the stamp of the Company or its printed name and the  signatures  of one
        Director  together  with the CEO of the  Company  or  together  with the
        secretary of the Company or the signatures of any two persons  appointed
        by the Board for such purpose.

        The Board may resolve that a signature or signatures as aforesaid may be
        effected by any mechanical means, as may be determined by the Board.

16.      Except in the  event  that the  conditions  of the  issuance  of shares
         otherwise provide:

         16.1     Every registered  shareholder is, at his request,  entitled to
                  receive  from  the  Company  within  a  period  of two  months
                  following the allotment or the  registration  of transfer,  as
                  the case may be, one  certificate  evidencing his ownership of
                  the shares registered in his name, or, with the consent of the
                  Company, several such certificates.

         16.2     A Nominee Company is, at its request, entitled to receive from
                  the  Company  within  a period  of two  months  following  the
                  allotment or the registration of transfer, as the case may be,
                  one  certificate  evidencing the number of shares and class of
                  shares registered in its name in the Shareholders Register.

17.     Subject to the  provisions of the Companies Law, there shall be detailed
        in every  certificate  the  number  of shares  in  respect  of which the
        certificate was issued, their serial numbers and par value.

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18.     A certificate  which relates to a share registered in the name of two or
        more persons,  shall be delivered to the person whose name appears first
        in the  Shareholders  Register in respect of such share,  unless all the
        registered  shareholders  of such share  shall  direct the  Company,  in
        writing,  to  deliver  the  certificate  to  another  of the  registered
        shareholders.

19.      If a share  certificate  is destroyed,  spoiled,  lost or damaged,  the
         Board  may  order  the  cancellation  thereof  and the  issue  of a new
         certificate  in place thereof,  provided that the share  certificate is
         delivered  to the Company and  destroyed by it, or that it is proved to
         the  satisfaction  of the Board that the  certificate  has been lost or
         destroyed and the Company has received  securities to the  satisfaction
         of the Board against any possible  damage.  A reasonable  sum as may be
         determined by the Board, from time to time, shall be paid in respect of
         every certificate issued pursuant to this Article.


                               Payments for Shares

20.      All shares in the issued capital of the Company shall be fully paid up.

                                Forfeit of Shares

21.     Without derogating from the aforesaid in Article 20 above, the Board may
        forfeit a share  allotted by the  Company and may sell the same,  if the
        consideration which the shareholder  undertook to pay to the Company, in
        whole or in part,  has not been paid to the Company,  and the provisions
        of the Companies Law shall apply to such matter.

                       Transfer and transmission of Shares

22.      Every transfer of shares registered in the Shareholders Register in the
         name  of a  registered  shareholder,  including  by or to  the  Nominee
         Company,  shall be made in writing,  provided that the Deed of Transfer
         shall  be  signed  in  handwriting  only by the  transferor  and by the
         transferee,  in person or by their  attorneys  and also by witnesses to
         their signature, and shall be delivered to the registered office of the
         Company  or to such  other  place as may be fixed by the Board for such
         purpose.  Subject to the provisions of the Companies Law, a transfer of
         shares shall not be  registered  in the  Shareholders  Register  except
         after a Deed of Transfer shall have been  delivered to the Company,  as
         aforesaid;  the  transferor  shall  continue  to be  deemed  to be  the
         shareholder of the shares  transferred  until the  registration  of the
         transferee in the  Shareholders  Register as  shareholder of the shares
         transferred.

23.     A Deed of  Transfer  of a share  shall be made in  writing,  in the form
        usual in Israel or in such other form as may be  approved  by the Board.
        If the transferor or the  transferee is a corporation,  a certificate of
        an advocate or of an accountant or of any other person acceptable by the
        Board, shall be given

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<PAGE>

        with  regard  to the  authority  of the  signatories  on  behalf  of the
        corporation to make or receive the transfer, as the case may be.

24.     The Company may close the  Shareholders  Register  for a period fixed by
        the Board  provided that such period shall not exceed thirty days in any
        year.  When the  Register  is closed,  no  transfer  of shares  shall be
        registered in the Register.  Without derogating from the aforesaid,  the
        Board may fix a determining  date for the purpose of entitlement to vote
        at a General  Meeting,  or to receive a dividend or any rights allotment
        or for any other legal purpose.

25.     Subject to the provisions of these Articles or to the terms of the issue
        of shares of any class,  shares may be transferred without necessity for
        approval by the Board.

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26.               Every Deed of Transfer shall be lodged for registration at the
                  office or any other place as may be fixed by the Board,
                  together with the share certificates of the shares to be
                  transferred, if such a certificate has been issued, and
                  together with any other proof required by the Board as to the
                  proprietary right of the transferrer or his right to transfer
                  the shares. Deeds of Transfer which are registered shall
                  remain with the Company but any Deed of Transfer which the
                  Board refuses to transfer, shall be returned to the person who
                  lodged the same, at his request.

27.               If the Board  refuses to approve the  transfer  of shares,  it
                  shall notify the  transferrer of same not later than one month
                  from the date of receipt of the Deed of Transfer.

28.               The Company shall be entitled to charge a fee for registration
                  of transfer in an amount to be fixed by the Board from time to
                  time  and  which is  reasonable  in the  circumstances  of the
                  matter.

         29.29.1  Subject  to the  provisions  of the  Companies  Law and to the
                  provisions of these Articles,  if there shall be proved to the
                  Company to the satisfaction of the Board in such manner as may
                  be determined  by it, the existence of the legal  requirements
                  for the  transmission  of shares  registered  in the name of a
                  registered  shareholder,   the  Company  shall  recognize  the
                  assignee alone as the owner of the right to the said shares.

         29.2     Notwithstanding  the  aforesaid,  in the event of the death of
                  one or more of the  shareholders  in whose joint names  shares
                  are registered in the Shareholders Register, the Company shall
                  recognize  only the  surviving  shareholders  as owners of the
                  proprietary right to such shares.

         30. 30.1 Subject to the provisions of these Articles, the Company shall
                  change  the  registration  of the  ownership  of shares in the
                  Shareholders  Register in the event that there shall be lodged
                  with  the  Company  a court  order  for the  amendment  of the
                  Register  or if there shall be proved to the  Company,  to the
                  satisfaction  of the Board in the  manner  fixed by the Board,
                  the existence of the legal  requirements  for the transmission
                  of shares,  and the Company  shall not  recognize any right of
                  any person to shares  unless his right  shall first be proved,
                  as aforesaid.

         30.2     Without derogating from the aforesaid, the Board may refuse to
                  effect the  registration  or delay the same,  as it would have
                  been  entitled to do had the  registered  shareholder  himself
                  transferred the share, prior to the transmission of the right.

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31.    Subject to the  provisions of the Companies Law and to the  provisions of
       these Articles,  a person who becomes entitled to a share as aforesaid in
       Article 29 above,  shall be entitled  to transfer  the shares in the same
       way that the  registered  owner was entitled to do himself,  prior to the
       transmission of the right.

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32.    The Company may destroy the Deeds of Transfer of shares on the expiration
       of seven years from  registration  in the Register,  the Company may also
       destroy share certificates which have been cancelled on the expiration of
       seven  years from their  cancellation,  and there  shall be a prima facie
       presumption  that the Deeds of Transfer and  certificates  destroyed were
       fully valid and that the transfers,  cancellations and registrations,  as
       the case may be, were correctly effected.

                              Alteration of Capital

33.      The  Company  may,  by  resolution  carried  at a General  Meeting by a
         special majority, increase the registered share capital of the Company,
         by classes of shares, as it may determine.

34.      Subject to the  provisions  of the  Companies  Law, the Company may, by
         resolution carried at a General Meeting by an ordinary majority:

         34.1     To  consolidate  all or part of its shares and to divide  them
                  into  shares of a greater  par value than the par value of the
                  existing shares;

         34.2     To split  all or part of its  shares,  by way of  subdivision,
                  into  shares  of lesser  par  value  than the par value of the
                  existing shares;

         34.3     To decrease the capital of the Company and of any reserve fund
                  from redemption of capital.

         For the execution of any resolution as aforesaid, the Board may, at its
         discretion,  resolve  any  difficulty  which  may  arise in  connection
         therewith.

35.      Without  derogating  from the generality of the authority of the Board,
         as  aforesaid,  if as a  result  of  the  consolidation  or  split,  as
         aforesaid,  fractions  of a share  shall  stand  to the  credit  of the
         shareholders,  the Board is  authorized  at its  discretion,  to act as
         follows:

         34.1     To  determine  that  fractions  of shares which do not entitle
                  their  owners to a whole  share,  shall be sold by the Company
                  and  that  the  consideration  for  the  sale  be  paid to the
                  beneficiaries,  on the  terms and in the  manner  which may be
                  determined.

         34.2     To allot to every  shareholder whom the  consolidation  and/or
                  split  leaves with a fraction of a share,  shares of the class
                  which   existed  in  the   Company's   capital  prior  to  the
                  consolidation  and/or  split,  in such  quantity  which,  when
                  consolidated  with the  fraction,  will  constitute  one whole
                  share,  and  such  allotment  shall  be  deemed  to  be  valid
                  immediately  prior to the  consolidation or split, as the case
                  may be.

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        34.1      To  determine  the manner in which the  amounts to be paid for
                  shares  allotted as aforesaid in Article 35.2 above,  shall be
                  paid up, including on account of bonus shares.

        34.1      To determine  that the owners of fractions of shares shall not
                  be  entitled  to  receive a whole  share in respect of a share
                  fraction.

        34.2      To  determine  that  shareholders  shall  not be  entitled  to
                  receive a whole  share in  respect  of a  fraction  of a whole
                  share of a  determined  par value or less than same,  and that
                  they shall be  entitled to receive a whole share in respect of
                  a fraction  of a whole share the par value of which is greater
                  than such determined par value.

36.      The  Company  may, by  resolution  carried at a General  Meeting,  by a
         special majority, annul registered share capital which has not yet been
         issued,  provided  that the  Company  has no  undertaking,  including a
         provisional undertaking, to allot such shares.

                             Modification of Rights

37.      At any time during which the share  capital is divided  into  different
         classes, the Company may by resolution carried at a General Meeting, by
         a special  majority,  except if the terms of the issuance of the shares
         of such class otherwise provide,  annul, convert,  expand,  supplement,
         restrict,  amend or otherwise modify the rights of a class of shares of
         the  Company,  provided  that  the  consent,  in  writing,  of all  the
         shareholders  of such  class  thereto  shall  be  received  or that the
         resolution  shall  have  been  approved  by a  General  Meeting  of the
         shareholders of such class by special majority, or in the event that it
         was  otherwise  provided in the terms of the  issuance of a  particular
         class of the shares of the  Company,  as may have been  provided in the
         terms of issuance of such class.

38.      The  provisions of these  Articles  concerning  General  Meetings shall
         apply,  subject to the necessary changes, to any class meeting provided
         that the quorum at the class meeting  shall be the presence,  in person
         or by proxy, at the opening of the meeting of at least two shareholders
         who own at least twenty five percent of the number of the issued shares
         of such class. However if there is no such quorum, the meeting shall be
         adjourned to another date and at the  adjourned  meeting a quorum shall
         be constituted by any number of  participants  regardless of the number
         of shares held by them.

39.      The  rights  conferred  upon the  shareholders  or owners of a class of
         shares,  whether issued with ordinary rights or with preference  rights
         or with  other  special  rights,  shall  not be  deemed  to  have  been
         converted, restricted, prejudiced or altered in any other manner by the
         creation or issuance of additional shares of any class,  whether of the
         same degree or in a degree  different or preferable to them,  nor shall
         they be  deemed  to have  been  converted,  restricted,  prejudiced  or
         altered  in any other  manner by a change of the  rights  linked to any
         other class of shares,  all the aforesaid  unless  otherwise  expressly
         provided in the terms of the issuance of such shares.


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                     Issuance of Shares and Other Securities

40.      The Board may issue shares and other  securities  which are convertible
         or  realizable  for shares,  up to the extent of the  registered  share
         capital of the Company;  for this purpose convertible  securities which
         may be  converted  or realized  for shares shall be deemed to have been
         converted or realized at the time of issue. Without derogation from the
         generality  of the  aforesaid,  the Board may  issue  shares  and other
         securities,  as aforesaid,  to grant  optional  rights for the purchase
         thereof  including  options or to confer them in any other manner,  all
         the  aforesaid to such persons as may be determined by the Board and at
         such  times,  for  such  prices  and  upon  such  conditions  as may be
         determined by the Board,  and also to determine any other  provision in
         connection  therewith,  including  provisions  as to the  manner of the
         distribution  of the shares and the  securities  issued by the Company,
         between  the  purchasers  thereof,   including  in  the  case  of  over
         subscription, all the aforesaid at the discretion of the Board.

41.      Without derogating from the generality of the foregoing, and subject to
         the  provisions of the Companies Law and of these  Articles,  the Board
         may determine,  at its discretion,  that the  consideration  for shares
         shall be paid in cash or in kind,  including  in  securities  or in any
         other  manner,  or that the shares shall be allotted as bonus shares or
         be  allotted  for a  consideration  equal to or greater  than their par
         value, either in units or in series, all the aforesaid on the terms and
         at the times as may be determined by the Board at its discretion.

42.      In a resolution for the increase of the registered share capital of the
         Company, the General Meeting may determine that the new shares included
         in the amount by which the  registered  share  capital was increased as
         aforesaid  (hereinafter - "the New Shares"), or any part of them, shall
         first be  offered,  at par value or at a premium,  to all the  existing
         shareholders  in  proportion  to the par  value of their  shares in the
         Company or may determine  other  provisions with regard to the issuance
         and  allotment  of the new  shares.  However,  in the absence of such a
         determination  by the General Meeting in the resolution to increase the
         registered  share  capital  of the  Company,  the Board may offer  such
         shares as aforesaid in Article 40 above.

43.      The Board may resolve to pay  commissions or  underwriting  fees to any
         person, at the time of subscription or a subscription  agreement or the
         procurement of subscriptions  or pledge of subscriptions  for shares or
         debentures  or other  securities  of the  Company.  In the event of any
         issuance of  securities  of the Company,  the Board may also resolve to
         pay agency commissions, the aforesaid in cash, in shares of the Company
         or in other securities  issued by the Company,  or in any other manner,
         or partly in one manner and partly in another manner, all the aforesaid
         subject to the provisions of law.

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                              Redeemable Securities

44.      Subject to the  provisions  of the  Companies Law the Company may issue
         securities  which may be  redeemed  on such terms and in such manner as
         may be determined by the Board at its discretion.

                                    Registers

         45. 45.1 The Company shall maintain a Shareholders  Register and shall,
                  shortly  after the  issuance  of any  shares  of the  Company,
                  register  therein the names of the  shareholders and the other
                  particulars  required  by the  Companies  Law.  Subject to the
                  provisions of the Law, upon  registration  in the Register the
                  registered  shareholder shall be deemed to be the owner of the
                  shares registered in his name even if share  certificates have
                  not been issued in respect of such shares.

         45.2     The   Company   shall   maintain   a  Register   of   Material
                  Shareholders, as required by the Companies Law.

46.      The Company may maintain an additional Shareholders Register outside of
         Israel on the terms provided for such purpose by the Companies Law.

47.      The  Company  shall  maintain  a  Register  of  Debenture  Holders  and
         Convertible  Security  Holders and all the provisions of these Articles
         relating  to  shares  shall  apply  with  regard  to  such  Convertible
         Securities,   as  regards  registration  in  the  Register,   issue  of
         certificates,  exchange of  certificates,  transfer  and  transmission,
         subject to such changes as the context may require,  all the  aforesaid
         subject to the terms of the issue of the securities.

                                General Meetings

48.      Resolutions of the Company in the following matters shall be adopted at
         a General Meeting:

         48.1     Alterations of the Articles or Memorandum of the Company;

         48.2     Exercise  of the  authorities  of the  Board of  Directors  by
                  General  Meeting  in the  event  that the Board is not able to
                  exercise its  authorities and the exercise of any authority is
                  vital for the proper management of the Company, as provided in
                  section 52(a) of the Companies Law;

         48.3     Appointment and termination of employment of auditors;

         48.4     Appointment and dismissal of Directors;

                                       13

<PAGE>

         48.5     Approval  of actions  and  transactions  which are  subject to
                  approval  at  a  General   Meeting  in  accordance   with  the
                  provisions  of  sections  255 and 268 to 275 of the  Companies
                  Law;

         48.6     Increase of the  registered  share  capital  and the  decrease
                  thereof in accordance  with the provisions of sections 286 and
                  287 of the Companies Law as well as  alterations in capital as
                  provided for in Article 34 above;

         48.7     Merger in accordance with section 320(a) of the Companies Law;

         48.8     Any matter which in accordance with these Articles is required
                  to be adopted by resolution of a General Meeting.

49.      The Company  shall hold an Annual  General  Meeting each year not later
         than fifteen months after the previous Annual Meeting, at such time and
         place as may be determined by the Board.

50.      The Agenda of the Annual  General  Meeting  shall include the following
         items:

         50.1     Discussion of the Financial  Statements and Directors'  Report
                  regarding  the Company's  business  which are presented to the
                  General Meeting;

         50.2     Appointment   of   Directors   and   determination   of  their
                  remuneration;

         50.3     Appointment of auditors;

         50.4     Report of the Board as to the  auditor's  fee for auditing and
                  additional services, if any;

         50.5     In  addition  to the  aforesaid,  there may be included on the
                  agenda of the Annual  Meeting any other matter  determined  in
                  accordance with Article 53 hereafter.

         A General  Meeting as aforesaid  is referred to as an "Annual  Meeting"
         and any other General Meeting is referred to as a "Special Meeting".

51.      The Board of Directors of the Company shall  convene a Special  Meeting
         as may be  decided  by the  Board,  and  shall  also  convene a Special
         Meeting at the demand of any one of the following:

         51.1     Any two Directors or one quarter of the officiating Directors.

         51.2     One or more shareholders who hold at least five percent of the
                  issued capital and one percent of the voting rights, or one or
                  more shareholders who hold at least five percent of the voting
                  rights.

                                       14

<PAGE>

         If the Board receives a demand for the convocation of a Special Meeting
         as aforesaid,  the Board shall within twenty one days of receipt of the
         demand  convene  the  meeting  for a date fixed in the notice as to the
         Special  Meeting in accordance  with Article 55.1  hereafter,  provided
         that the date for convocation  shall not be later than thirty five days
         from the date of publication of the notice,  all the aforesaid  subject
         to the provisions of the Companies Law.

52.      In the event that the Board does not convene a Special Meeting demanded
         in accordance with Article 51 above, the persons making the demand, and
         in the case of  shareholders,  such  part of them as hold more than one
         half of  their  voting  rights,  may  themselves  convene  the  meeting
         provided  that it shall not be held more than  three  months  after the
         date that the demand was lodged as aforesaid,  and the meeting shall be
         convened, to the extent possible, in the same manner as the convocation
         of meetings by the Board.

         53. 53.1 The  agenda  at a General  Meeting  shall be fixed by the
                  Board and  shall  include  also  items in  respect  of which a
                  demand for the  convocation of a Special Meeting has been made
                  in accordance  with Article 51 above and any matter  requested
                  in accordance with Article 53.2 hereafter.

         53.2     One or more  shareholders who hold at least one percent of the
                  voting rights at the General Meeting, may request the Board to
                  include  any  matter on the  agenda  of a  meeting  to be held
                  provided that such matter is appropriate for deliberation at a
                  General Meeting.

        53.3      A request as  aforesaid  in Article 53.2 above shall be lodged
                  with the  Company  at least  seven days prior to the giving of
                  notice of the  convocation of the General  Meeting,  and there
                  shall be attached  thereto a draft of the resolution  proposed
                  by the shareholder.

         54. 54.1 A notice of a General  Meeting  shall be  published in at
                  least two widely  distributed  daily  newspapers  published in
                  Hebrew;  The notice shall be published at least  fourteen days
                  prior to the convocation of the meeting.

         54.2     Apart from the notice as to the General  Meeting as in Article
                  54.1 above,  the  Company  shall not give any notice as to the
                  General Meeting,  either to the registered  shareholders or to
                  shareholders who are not registered,  subject to provisions of
                  the law and/or any other applicable law.

         55. 55.1 The notice as to a General Meeting shall detail the place, the
                  day and the hour at which the  meeting  will be held and shall
                  include  the  agenda  as well  as a  summary  of the  proposed
                  resolutions and any other details required by law.

         55.2     In the resolution of the Board to convene a meeting, the Board
                  may, at its  discretion  and subject to the  provisions of the
                  Law,  fix the manner in which the items on the agenda  will be
                  detailed  and  notified  to  the   shareholders   entitled  to
                  participate at the meeting.

                                       15

<PAGE>

         55.3     Without   derogating  from  the  authority  of  the  Board  as
                  aforesaid in this Article 55 and without  derogating  from the
                  generality  of the  provisions of these  Articles  relating to
                  delegation  of the  authority  of the  Board,  the  Board  may
                  delegate  its  authority as aforesaid in this Article 55, to a
                  Committee  of the Board  and/or to an officer of the  company,
                  either for the purpose of a specific  General Meeting or for a
                  period.

56.      A defect made bona fide in the  convocation of a General Meeting or the
         management  of  the  meeting  including  a  fault  resulting  from  the
         non-performance  of a provision or  condition  fixed by law or by these
         Articles,  including as to the manner of the  convocation or management
         of the General Meeting,  shall not invalidate any resolution carried at
         the General  Meeting and shall not prejudice the  proceedings  thereof,
         subject to the provisions of any law.

                         Proceedings at General Meetings

57.      No business shall be transacted at any General  Meeting unless a quorum
         is present at the time the meeting proceeds to business. A quorum shall
         be constituted  when two  shareholders,  holding  collectively at least
         twenty five percent of the voting  rights,  are present in person or by
         proxy within half an hour from the time appointed for  commencement  of
         the meeting, unless otherwise determined in these Articles.

58.      If a quorum is not present within half an hour, the meeting shall stand
         adjourned  for seven days, to the same day of the week at the same time
         and place,  without need for  notification to the  shareholders,  or to
         such  other  day,  time and  place as the  Board  may by  notice to the
         shareholders appoint.

59.      At an  adjourned  meeting  a  quorum  shall  be  constituted  when  two
         shareholders,  holding collectively at least twenty five percent of the
         voting  rights,  are present in person or by proxy  within half an hour
         from the time appointed for commencement of the adjourned meeting. If a
         quorum is not  present as  aforesaid,  at the  adjourned  meeting,  the
         meeting shall be dissolved.

60.      The Chairman of the Board or in his absence, any Director appointed for
         such  purpose  by the  Board,  shall  take the  chair at every  General
         Meeting of the  Company.  If there shall be no Chairman as aforesaid or
         if at any particular  meeting, no such person is present within fifteen
         minutes from the time appointed for commencement of the meeting,  or if
         they  shall  be  unwilling  to act as  Chairman  of  the  meeting,  the
         Directors  present  may by majority  vote elect as Chairman  one of the
         Directors  or officers of the Company  present at the  meeting,  and in
         default  of their so doing,  the  shareholders  present in person or by
         proxy may elect as  Chairman  one of the  Directors  or officers of the
         Company present at the meeting. If no Directors or officers are present
         or if all of the  Directors  or officers  shall be  unwilling to act as
         Chairman,  one of the shareholders or the proxy of a shareholder  shall
         be elected to act as Chairman.


                                       16

<PAGE>

61.      The Company shall  maintain  Minutes of the  proceedings at the General
         Meeting which shall include the following details:

         61.1     The names of the  shareholders  participating  at the  General
                  Meeting and the number of shares held by them;

         61.2     The  matters   transacted  at  the  General  Meeting  and  the
                  resolutions carried.

62.      Minutes signed by the Chairman of the General  Meting shall  constitute
         prima facie evidence as to the contents thereof.

             Voting and Carrying of Resolutions at General Meetings

63.      A  shareholder  who wishes to vote at a General  Meeting shall prove to
         the Company his  ownership  of his share in the manner  required by the
         Companies Law.  Without  derogating  from the  aforesaid,the  Board may
         issue  directives and procedures  relating to the proof of ownership of
         shares of the Company.

64.      A  shareholder  is  entitled  to vote at a  General  Meeting  or  Class
         Meeting,  in person or by proxy,  in accordance  with the provisions of
         these  Articles and subject to the  provisions of the Companies  Law. A
         voting proxy need not be a shareholder of the Company.

65.      Subject to the  provisions  of any law, in the event of joint  holders,
         each of them, in person or by proxy, is entitled to vote at any meeting
         in  respect  of the  jointly  owned  shares  as though he were the sole
         owner.  In the event that more than one of the joint  owners is present
         at the meeting, in person or by proxy, the shareholder entitled to vote
         will be the one whose  name  appears  first in the  Register  or in the
         Ownership  Certificate  issued  by  a  member  of  the  Stock  Exchange
         (hereinafter  "Ownership  Certificate"),  or  in  such  other  document
         determined by the Board for such purpose,  as the case may be.  Several
         executors or  administrators  of a deceased  shareholder  shall for the
         purpose of this Article be deemed joint owners of the shares.

66.      Any person entitled to shares in accordance with Article 29 above,  may
         vote at any General Meeting in respect thereof in the same manner as if
         he were the  registered  holder of such shares,  provided that at least
         forty  eight  hours  before the time for the  meeting or the  adjourned
         meeting,  as the case may be, at which he  proposes  to vote,  he shall
         satisfy the Board of his right to vote such  shares  unless the Company
         shall have  previously  recognized his right to vote the shares at such
         meeting.

67.      The instrument appointing a proxy (hereinafter "The Proxy Appointment")
         shall be in writing signed by the  principal,  or if the principal is a
         corporation  the proxy  appointment  shall be in writing  and signed by
         authorized  signatories  of the  corporation;  The Board is entitled to
         demand that prior to the holding of the

                                       17

<PAGE>

         meeting,  there  shall be produced  to the  Company a  confirmation  in
         writing of the authority of signatories to bind the  corporation to the
         satisfaction  of the  Board.  The Board may also issue  provisions  and
         procedures relating to such matter.

         The proxy  appointment  or an office  copy to the  satisfaction  of the
         Board  shall be  deposited  at the  registered  office or at such other
         place or places, in or outside of Israel, - as may from time to time be
         determined by the Board,  either  generally or in respect of a specific
         meeting - at least forty eight hours prior to the  commencement  of the
         meeting  or the  adjourned  meeting,  as the case may be,  at which the
         proxy  proposes  to vote on the  strength  of such  proxy  appointment.
         Notwithstanding the aforesaid,  the Chairman of the meeting may, at his
         discretion,  accept  such  proxy  appointment  after such time if he so
         deems fit at his discretion.  If the proxy  appointment is not received
         as aforesaid in this Article, it shall not be valid at such meeting.

68.      A voting proxy is entitled to  participate  in the  proceedings  at the
         General  Meeting  and to be elected as  chairman  of the meeting in the
         same manner as the appointing shareholder, unless the proxy appointment
         otherwise provides.

         68.1     The proxy  appointment shall be in form usual in Israel or any
                  other form which may be approved by the Board.

         68.2     The proxy  appointment  shall  state  the class and  number of
                  shares  in  respect  of  which  it  is  given.  If  the  proxy
                  appointment  does not state the number of shares in respect of
                  which it is given or states a number of shares  which  exceeds
                  the number registered in the name of the shareholder or stated
                  in the  Ownership  Certificate,  as the case may be, the proxy
                  instrument  shall be deemed to have been  given in  respect of
                  all the shares of the shareholder.

        68.3      If the proxy  appointment  is given in  respect of a number of
                  shares which is less than the number of shares  registered  in
                  the  name  of the  shareholder  or  stated  in  the  Ownership
                  Certificate,  as the case  may be,  the  shareholder  shall be
                  deemed  not to have  participated  in the voting in respect of
                  the excess shares and the proxy  appointment shall be valid in
                  respect of the number of shares stated therein.

69.      Without  derogating  from the provisions of these Articles  relating to
         the  appointment  of a proxy for voting,  a shareholder  who holds more
         than one share is entitled to appoint  more than one proxy,  subject to
         the following provisions:

         61.1     Each  proxy  appointment  shall  state the class and number of
                  shares in respect of which it is given.

         61.2     If the total  number  of  shares of any class  stated in proxy
                  appointments  given by such shareholder  exceeds the number of
                  shares  registered in the name of the shareholder or stated in
                  the Ownership  Certificate,  as the case may be, all the proxy
                  appointments given by such shareholder shall be invalid.

                                       18

<PAGE>

70.      A  shareholder  or his voting proxy may vote in respect of part only of
         the shares held by him or in respect of which he acts as proxy,  and he
         may vote one way in respect of some of the  shares and  another  way in
         respect of some thereof.

71.      A  vote  given  by  virtue  of  a  proxy  appointment  shall  be  valid
         notwithstanding any defect in the proxy appointment and also in case of
         the decease of the principal or declaration of his legal  incapacity or
         revocation  of the  proxy  appointment  or  transfer  of the  shares in
         respect  of  which  the vote is given  prior to the  meeting,  unless a
         notice in writing has been  received at the office prior to the meeting
         as to such defect,  death,  incapacity,  revocation or transfer, as the
         case may be.  Notwithstanding the aforesaid the chairman of the meeting
         may, at his discretion  accept such a notice also during the meeting if
         he shall so deem fit at his discretion.

72.      A proxy  appointment  shall be valid also in  respect  of an  adjourned
         meeting of the meeting to which the proxy  appointment  relates  unless
         otherwise provided in the proxy appointment.

73.      Each Ordinary  Share  entitles the holder  thereof to  participate at a
         General Meeting of the Company and to one vote at a poll.

74.      Any  resolution  standing  to the vote of a  General  Meeting  shall be
         decided by a poll of the votes of the shareholders voting; A poll shall
         be taken in such manner as the  chairman of the meeting may direct.  In
         case of any dispute as to the  acceptance or rejection of any vote on a
         poll,  the chairman of the meeting  shall  determine the matter and his
         bona fide decision shall be final and binding.

75.      A  declaration  by the chairman  that a resolution  has been carried or
         rejected, whether unanimously or by a particular majority, and an entry
         to that effect in the minutes of the meeting,  shall  constitute  prima
         facie  evidence of such fact,  and there shall be no necessity to prove
         the number of votes (or the relative  proportion thereof) cast in favor
         of, or against the proposed resolution.

76.      Subject to the  provisions of the  Companies  Law or the  provisions of
         these Articles  requiring any other majority,  resolutions of a General
         Meeting  shall be  adopted  by a simple  majority.  In the  event of an
         equality of votes for and against,  the  chairman of the meeting  shall
         not have a second or casting vote.

77.      The chairman of a General Meeting may, with the consent of a meeting at
         which a quorum is present,  and shall if so  directed  by the  meeting,
         adjourn  the  meeting or adjourn  the  proceedings  with  regard to any
         particular  matter on the agenda,  to another  time and place as may be
         decided. No business shall be transacted at the adjourned meeting other
         than  business  which was on the agenda but  unfinished  at the meeting
         from which the  adjournment  took place.  It shall not be  necessary to
         give notice of the adjourned  meeting  unless the  adjournment  exceeds
         twenty one days, in which case notice of the adjourned meeting shall be
         given as provided for in Articles 54 and 55.


                             The Board of Directors

                                       19

<PAGE>

78.      The  number  of  Directors  shall  not be less  than five and shall not
         exceed fifteen, including the External Directors.

79.      The  Directors  shall be appointed at the Annual  Meeting and, with the
         exception of the External Directors, shall continue in office until the
         termination of the first Annual Meeting  following  their  appointment.
         Notwithstanding  the  aforesaid,  if no Directors were appointed at the
         Annual Meeting,  the Directors appointed at the previous Annual Meeting
         shall continue in office.  Directors whose period of office is expiring
         are eligible for re-appointment.

80.      No person  other than a person who acted as a Director up to the Annual
         Meeting, shall be appointed as a Director at the Annual Meeting, unless
         recommended  for  appointment by the Board,  or unless a shareholder of
         the Company who wishes to propose a candidate  shall have lodged at the
         Office,  not later than seven days after the  publication of the notice
         of the  meeting,  a  document  in  writing  signed  by the  shareholder
         notifying his intention to propose such candidate for  appointment as a
         Director,  to which document there shall be attached the consent of the
         candidate to act as a Director.

81.      The Board may from  time to time  appoint  an  additional  Director  or
         Directors,  whether in order to fill the office of a Director which has
         become vacant for any reason whatsoever or as an additional Director or
         Directors, provided that the total number of Directors shall not exceed
         the maximum number fixed in Article 78 above.  The office of a Director
         appointed as aforesaid shall terminate at the end of the Annual Meeting
         held   following  his   appointment   and  he  shall  be  eligible  for
         re-appointment.

82.    The Company may, at an Special Meeting, appoint an additional Director or
       Directors,  whether in order to fill the  office of a Director  which has
       become vacant for any reason  whatsoever or as an additional  Director or
       Directors,  provided that the total number of Directors  shall not exceed
       the maximum  number fixed in Article 78 above.  The office of  Directors,
       other than External Directors,  appointed as aforesaid shall terminate at
       the end of the Annual Meeting held following their appointment.

83.    The  General  Meeting  or the  Board  may  provide  that the  office of a
       Director  appointed by them, as the case may be, shall commence at a date
       later than his appointment.

84.      Notwithstanding the aforesaid,  the General Meeting may at any time, by
         a  simple  majority,  remove  any  Director,  other  than  an  External
         Director,  from office prior to the expiration of his office,  provided
         that there shall be afforded to such Director a reasonable  opportunity
         to present  his  standpoint  before the  General  Meeting.  Any General
         Meeting may also appoint,  by a simple  majority,  another  person as a
         Director in place of a Director  removed  from office as  aforesaid.  A
         Director  appointed as aforesaid  shall  continue in office only during
         such time as the  Director in whose place he was  appointed  would have
         held office.

85.      Without  prejudice  to the  provisions  of any law,  the  office of any
         Director, other than an External Director, shall terminate prior to the
         termination of the period for

                                       20

<PAGE>

         which he was  appointed,  in the event that there  shall be served upon
         him a demand that he should resign signed by at least two thirds of the
         Directors then officiating.

86.      In the event of the vacation of the office of a Director, the Board may
         continue to act in all matters so long as the number of Directors  does
         not fall  below the  minimum  number of  Directors  fixed in Article 78
         above.  If the number of Directors  shall fall below such  number,  the
         Board  may not act  otherwise  than for the  convocation  of a  General
         Meeting for the purpose of the appointment of additional  directors but
         not for any other purpose.

87.      A Director may resign by notice to the Board, to the chairman or to the
         office,  as required by the Companies  Law, and his  resignation  shall
         come into effect upon delivery of such notice,  unless the notice shall
         determine  a later  date.  A Director  shall  state the reasons for his
         resignation.

88.      Subject to the provisions of the Companies Law, the Company may pay the
         Directors remuneration for carrying out their duty as Directors.

         89. 89.1 A Director may appoint a substitute director in his place
                  subject  to the  approval  of  the  substitute  by  the  Board
                  (hereinafter - "The Substitute Director"). Notwithstanding the
                  aforesaid,  there  shall  not  be  appointed  as a  Substitute
                  Director,  any  person  who is  not  himself  qualified  to be
                  appointed a director,  or who himself already  officiates as a
                  Director of the Company or as a Substitute Director of another
                  Director or a representative of a corporation.

         89.2     The same rules shall apply to a Substitute  Director as to the
                  Director  who  appointed  the  Substitute   Director  and  the
                  Substitute  Director  may attend a meeting of the Board and/or
                  committees of the Board, to participate  and vote thereat,  in
                  the same  manner  as could  the  Director  who  appointed  the
                  Substitute.

         89.3     A  Director  who has  appointed  a  Substitute  Director  may,
                  subject to the  provisions of law,  revoke the  appointment at
                  any time.  In addition,  the office of a  Substitute  Director
                  shall be vacated  at any time that the office of the  Director
                  who  appointed  the   Substitute  is  vacated  in  any  manner
                  whatsoever.

         89.4     Any   appointment  or  revocation  of  the  appointment  of  a
                  Substitute Director, as aforesaid,  shall be made by notice in
                  writing which shall be lodged with the Substitute Director and
                  with the  Company,  and which  shall come into force after the
                  lodging of the  instrument of appointment as aforesaid or upon
                  such  date  as is  fixed  in the  instrument  of  appointment,
                  whichever is the later.

         89.5     Subject to the  provisions of the  Companies  Law, the Company
                  may pay Substitute Directors remuneration for participation at
                  meetings of the Board.

                               External Directors

                                       21

<PAGE>

90.      At least two  External  Directors  shall  officiate in the Company with
         respect  to whom the  provisions  fixed in the  Companies  Law shall be
         applicable.

                         Powers and Duties of The Board

91.      The Board shall have all the powers and  authorities  conferred upon it
         by these Articles, by the Companies Law and by any law.

92.      Without  derogating  from the provisions of these  Articles,  the Board
         shall  formulate  the policies of the Company and shall  supervise  the
         performance of the office and actions of the General Manager, including
         inter alia -

         92.1     Determination of the business plans of the Company,  financing
                  principles and priorities;

         92.2     Examination  of the  financial  position  of the  Company  and
                  determination  of the credit  framework  which the Company may
                  receive;

         92.3     Fixing the organizational structure and salary policies;

         92.4     Decision as to the issue of a series of debentures;

         92.5     Responsibility  for the  preparation and approval of Financial
                  Statements , in  accordance  with section 117 of the Companies
                  Law;

         92.6     Reporting to the Annual  Meeting on the affairs of the Company
                  and business  results,  in accordance  with section 173 of the
                  Companies Law;

         92.7     Appointment and dismissal of the General Manager;

         92.8     Decision  with regard to  activities  and  transactions  which
                  require  approval  of  the  Board  in  accordance  with  these
                  Articles or in accordance  with the provisions of sections 255
                  and 268 to 275 of the Companies Law;

         92.9     Allotment of shares and securities  convertible into shares up
                  to the registered share capital of the Company;

         92.10    Decision as to the  distribution of dividends or bonus shares,
                  as the case may be;

         92.11    Decision as to acquisition  within the meaning of section 1 of
                  the Companies Law, from all or part or any of the shareholders
                  of the Company, at its discretion;

         92.12    Opinion as to a special acquisition tender, in accordance with
                  the provisions of section 329 of the Companies Law;


                                       22

<PAGE>

93.      The  powers  of the  Board in  accordance  with  Article  92 may not be
         delegated to the General Manager.

94.      Any  power of the  Company  which has not been  conferred  by law or by
         these Articles to any other body, may be exercised by the Board.

         95. 95.1 The  Board   may  resolve   that the  powers  vested  in   the
                  General  Manager shall be  transferred to the authority of the
                  Board,  the aforesaid in respect of a specific matter or for a
                  particular period.

         95.2     Without derogating from the aforesaid,  the Board may instruct
                  the  General  Manager as how to act with  regard to a specific
                  matter.  If the  General  Manager  shall  not  carry  out such
                  instruction,  the Board may exercise instead of him the powers
                  necessary for carrying out such instruction.

         95.3     If the General Manager is unable to carry out his powers,  the
                  Board may carry them out in his place.

96.      Subject to the  provisions of the Companies Law, the Board may delegate
         its powers to the General  Manager,  to an officer of the Company or to
         any other  person.  Delegation  of the  powers of the Board may be with
         regard to a specific matter or for a particular  period,  the aforesaid
         at the discretion of the Board.

                               Grant of Mortgages

97.      Without  derogating  from any power  vested in the Board in  accordance
         with  these  Articles,  the  Board  may,  from  time  to  time,  at its
         discretion, decide upon the issue of a series of debentures,  including
         capital notes or undertakings,  including debentures,  capital notes or
         undertakings  which can be converted  into  shares,  and also the terms
         thereof,  and mortgage of the  property of the Company,  in whole or in
         part, at present or in future, by floating or fixed charge. Debentures,
         capital notes,  undertakings or other securities,  as aforesaid, may be
         issued either at a discount or at a premium or in any

         other  manner,  whether with deferred  rights or special  rights and/or
         preferred  rights and/or other  rights,  all the aforesaid as the Board
         may, at its discretion, determine.

                             Committees of the Board

98.      Subject to the  provisions of the  Companies  Law, the Board may, as it
         deems fit, set up committees of two or more members, appoint members of
         such  committees  from  members  of the Board  (hereinafter  - "A Board
         Committee),  and delegate its powers,  in whole or in part,  to a Board
         Committee.  Notwithstanding the aforesaid, the Board shall not delegate
         to a  Board  Committee  any of its  powers  in  the  following  matters
         otherwise than for the receipt of recommendations only:

         98.1     Determination of the general policies of the Company;

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<PAGE>

           98.2       Distribution,  unless than with regard to the  purchase of
                      shares of the  Company in  accordance  with the  framework
                      already determined by the Board;

           98.3       Determination of the standpoint of the Board in any matter
                      which is  subject  to  approval  by a General  Meeting  or
                      formulating  an  opinion  with  regard  to the  merit of a
                      special  acquisition tender in accordance with section 329
                      of the Companies Law;

           98.4       Appointment of directors;

           98.5       Allotment  of  shares  or  of  securities   which  may  be
                      converted  or  realized   for  shares,   or  a  series  of
                      debentures,  other than the allotment of shares  resulting
                      from the  realization  or  conversion of securities of the
                      Company;

           98.6       Approval of the Financial Statements;

           98.7       Approval  of   transactions   and  actions  which  require
                      approval by the Board in accordance  with sections 255 and
                      268 to 275 of the Companies Law.

99.        A resolution carried or an action taken by a Board Committee shall be
           as effective  as a  resolution  carried or action taken by the Board,
           unless otherwise  expressly  determined by the Board with regard to a
           specific matter or with regard to a specific committee. The Board may
           from time to time enlarge, limit or annul the delegation of powers to
           a  Board  Committee,  however  no such  limitation  or  annulment  as
           aforesaid,  shall  prejudice  the validity of any  resolution  of the
           Board Committee in accordance with which the Company shall have acted
           vis-a-vis a third party who was not aware of the annulment.

           100.100.1  The quorum for  proceeding  to  business at a meeting of a
                      Board Committee shall be two committee members officiating
                      at  the  time  of  the  meeting,  in  person  or by  their
                      substitute, unless otherwise determined by the Board.

           100.2      The provisions of these Articles with regard to actions of
                      the Board,  shall apply,  except as the context  otherwise
                      requires, also to Board Committees,  so long as they shall
                      not have been  replaced  by  instructions  of the Board in
                      such respect,  all the aforesaid subject to the provisions
                      of the Companies Law.

           100.3      A Board Committee  shall regularly  report its resolutions
                      and recommendations to the Board.

           101. 101.1 The Board shall, from among its members,  appoint an Audit
                      Committee.  The number of  members of the Audit  Committee
                      shall  not  be  less  than  three  and  all  the  External
                      Directors shall be members thereof.  The following persons
                      shall not be members of the Audit Committee: The

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<PAGE>

                      Chairman of the Board, any director who is employed by the
                      Company or who  provides  the Company  with  services on a
                      fixed basis, any controlling shareholder of the Company or
                      a relative of same.

           101.2      The  functions  of  the  Audit   Committee   shall  be  as
                      determined  by  the  Companies  Law  including  any  other
                      function which may be imposed upon it by the Board.

                            Proceedings of the Board

102.       Subject  to the  provisions  of these  Articles,  the  Board may hold
           meetings to carry out its functions, may adjourn its meetings and may
           organize its actions and deliberations as it may deem fit.

103.       The Board shall  appoint one of its members to act as Chairman of the
           Board and may  appoint  more than one  Chairman of the Board (each of
           whom is  hereinafter  referred to as - "The  Chairman of the Board").
           The Board may also  remove the  Chairman of the Board from office and
           appoint  another in his place.  The Board may  appoint one or more of
           its members as Vice-chairman of the Board who shall serve in place of
           the  Chairman  in his  absence.  The Board may fix the period  during
           which the  Chairman  and  Vice-Chairmen  of the Board shall remain in
           office. If no such period is fixed, the Chairman and Vice-Chairmen of
           the  Board  shall  remain  in  office  so long as they  officiate  as
           directors.

104.       The Chairman of the Board shall preside at and manage the proceedings
           at meetings of the Board. If the Chairman of the Board is absent from
           a meeting of the Board in  accordance  with  advance  notice given by
           him, or if he is not present at the  meeting  within 15 minutes  from
           the time fixed for the meeting,  then the  Vice-Chairman of the Board
           (if appointed) shall preside at the meeting.  In the absence from the
           meeting of both the  Chairman  and  Vice-Chairmen  of the Board,  the
           Board members  present shall elect one of their number as chairman of
           the meeting.

105.       The Board  shall hold  meetings in  accordance  with the needs of the
           Company.

106.       The  Chairman is  authorized  to convene the Board at any time and to
           determine the place and time of any Board meeting.

107.       Without  derogating  from the  aforesaid,  the Chairman is obliged to
           convene the Board in any of the following instances:

           107.1      On receipt of a demand from at least two directors for the
                      convocation  of the Board,  for  discussion  of the matter
                      detailed in such demand;

           107.2      On receipt of a notice or report from the General  Manager
                      which requires an action by the Board;

           107.3      On receipt  of a notice  from the  auditor as to  material
                      defects in the bookkeeping of the Company.

                                       25

<PAGE>

           Upon receipt of such a notice or demand as above,  the Chairman shall
           convene the Board,  without delay,  and not later than within 14 days
           of the date of the demand, notice or report, as the case may be.

           108. 108.1 Prior notice of the  convening of the Board shall be given
                      to all members of the Board  reasonably  in advance of the
                      meeting.

           108.2      Notwithstanding the aforesaid, with the consent of all the
                      directors, the Board may hold a meeting without notice.

109.       The agenda of Board meetings shall be determined by the Chairman, and
           shall include:

           109.1      Matters determined by the Chairman;

           109.2      Matters fixed in accordance with Article 107 above;

           109.3      Any matter  which a director or the General  Manager  may,
                      reasonably in advance of the convening of a Board meeting,
                      request   the   Chairman   to  include   on  the   agenda.
                      (Hereinafter - "The Agenda").

110.       There shall be detailed in the notice  convening the Board,  the time
           and place at which the meeting is to be held and  reasonable  details
           as to the matters on the agenda of the meeting.

111.       Notice of a meeting of the Board shall be delivered to the address of
           the  director  furnished  to the  Company  unless  the  director  has
           requested that the notice be delivered to him at another address.

112.       The quorum for commencing a meeting of the Board shall be half of the
           members  of the  Board  officiating  at the time of the  meeting,  in
           person or by their substitute, or four members - the smallest.

           113. 113.1 Each director  shall have one vote on a poll of the Board.
                      Resolutions of the Board shall be carried by a majority of
                      the  votes of the  directors  present  and  voting  at the
                      meeting without taking abstention votes into account.  The
                      Chairman  of the  Board  shall not have an  additional  or
                      casting vote.

           113.2      In the event of an equality of votes, the resolution voted
                      upon shall be deemed to have been rejected.

114.       The  Board  may  hold  its  meetings  by  the  use of  any  means  of
           communication provided that all the directors can hear one another at
           the same  time.  The Board may  determine  the mode and  methods  for
           conducting a meeting by means of communication.

115.       The Board is authorized to adopt  resolutions  even without  actually
           holding  a  meeting,  provided  that all the  directors  entitled  to
           participate in the proceedings and

                                       26

<PAGE>

           to vote on the matter,  have so consented.  The provisions of Article
           113 above subject to the changes required by the context, shall apply
           to such a resolution.  A resolution  carried in accordance  with this
           Article shall be valid for all intents and purposes, as though it had
           been carried at a duly convened and conducted meeting of the Board.

                                     Minutes

116.       The Board shall cause minutes of the  proceedings  at meetings of the
           Board to be kept;  The minutes  shall be filed in registers  kept for
           such purpose and, inter alia, shall include the following details:

           116.1      The names of directors  participating  in and the names of
                      other persons present at each meeting;

           116.2      The matters  discussed at the meetings and the resolutions
                      carried.

           All  minutes  shall be  signed  by the  Chairman  of the Board or the
           Chairman of the  meeting,  as the case may be,  minutes  approved and
           signed as aforesaid,  shall constitute prima facie evidence as to the
           contents thereof.

117.       The  provisions  of Article 116 above shall apply also with regard to
           the  meetings of every  Committee of the Board and with regard to the
           carrying of  resolutions  by the Board without  meeting as in Article
           115 above.

                               The General Manager

118.       The  Board may from time to time  appoint  a General  Manager  of the
           Company  or  more  than  one  General  Manager  (each  one of whom is
           hereinafter  referred to as - "The General  Manager").  The Board may
           also  dismiss  or  replace  the  General  Manager  at any time at its
           discretion,  subject to the terms of any contract between the General
           Manager and the Company.

119.       The General  Manager is not bound to be a shareholder  of the Company
           or a director.

120.       The General Manager shall be responsible  for the current  management
           of the affairs of the Company  within the  framework  of the policies
           determined by the Board and subject to the directives of the Board.

121.       The  General  Manager  shall have all the  management  and  executive
           powers  which are not  conferred by law or in  accordance  with these
           Articles on any other organ of the  Company,  with the  exception  of
           such powers,  if any, as may be transferred  from the General Manager
           to the Board in accordance with the provisions of Article 95.1 above;
           The General Manager shall be subject to the supervision of the Board.

122.       Subject to the  provisions of the Companies Law and to the provisions
           of  these  Articles,  the  Board  may,  from  time  to  time,  at its
           discretion  give to and confer  upon the  General  Manager any of the
           powers of the Board in accordance with these

                                       27

<PAGE>

           Articles,  and may  confer  such  powers  for such  period,  for such
           purposes,  upon such terms and with such limitations as the Board may
           deem fit, and the Board may also confer such  powers,  either with or
           without waiving its own powers in such matter or in place and instead
           of  them,  in whole or in  part,  and may  from  time to time  annul,
           rescind and change such powers, in whole or in part.

123.       The General Manager may, with the approval of the Board, delegate his
           powers  to  another  person or  persons  under  his  authority;  Such
           approval may be either general or with regard to a specific matter.

124.       Without  derogating  from the provisions of the Companies Law or from
           any other law, the General  Manager shall submit to the Board reports
           on such matters,  at such times and to such extent as may be required
           by the Board, either by a specific resolution or within the framework
           of the procedures of the Board.

125.       The  remuneration of the General Manager may be paid by way of salary
           or by  commission or  participation  in profits or by the grant of or
           right to purchase securities, or in any other manner.

                Validity of Actions and Approval of Transactions

126.       Subject to the  provisions of any law, all actions of the Board or of
           a Committee of the Board or of any person  acting as a director or as
           a member of a Committee  of the Board or of the General  Manager,  as
           the case  may be,  shall be valid  even  though  it may  subsequently
           transpire that there was some defect in the appointment of the Board,
           of the  Committee  of the Board,  of the  director who is a committee
           member or of the General Manager,  as the case may be, or that any of
           the said officials was not qualified to hold office.

           127. 127.1 Subject to the  provisions of the Companies  Law, the fact
                      that an officer of the Company holds shares of the Company
                      or is an  interested  party  or an  officer  in any  other
                      corporation,  including a corporation in which the Company
                      is an interested  party or a  shareholder  of the Company,
                      shall not  disqualify the officer from being an officer of
                      the  Company.  In  addition,   an  officer  shall  not  be
                      disqualified  from being an officer of the  Company,  as a
                      result of the entering  into a contract  with the Company,
                      in any matter and in any manner whatsoever,  by himself or
                      by such a corporation as above.

           127.2      Subject to the  provisions of the Companies  Law, the fact
                      that a person  is an  officer  of the  Company  shall  not
                      disqualify   him  and/or  a  relative   of  his  and/or  a
                      corporation  in  which  he is an  interested  party,  from
                      entering into an agreement  with the Company in respect of
                      any  transactions  in which the officer  has any  personal
                      interest.

           127.3      Subject to the provisions of the Companies Law, an officer
                      shall be entitled to participate in the  deliberations and
                      vote with regard to the approval of  transactions in which
                      he has a personal interest.

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<PAGE>

128.       Subject to the  provisions of the Companies Law, a transaction of the
           Company  with  an  officer  of the  Company  or  with  a  controlling
           shareholder,  or a  transaction  of the Company with a third party in
           which an officer of the Company or a  controlling  shareholder  has a
           personal  interest,  and which are not out of the ordinary  course of
           business, shall be approved in the following manner:

           128.2      Such agreement as above,  which is not out of the ordinary
                      course of  business,  shall be approved by the Board or by
                      the Audit  Committee  or by such other organ  empowered by
                      the  Board  for  such  purpose,   whether  by  a  specific
                      resolution   or  within   the   framework   of  the  Board
                      procedures,  whether by general  approval  or by  approval
                      with  regard  to a  specific  type  of  transaction  or by
                      approval of a specific transaction.

           128.3      The  approval  of  transactions  which  are not out of the
                      ordinary course of business as aforesaid,  may be given by
                      a general approval of a specific type of transaction or by
                      approval of a specific transaction.

129.       Subject  to  the   provisions  of  the   Companies   Law,  a  general
           notification  given to the Board by an  officer  or by a  controlling
           shareholder,  with regard to a personal  interest  in any  particular
           body, detailing such personal interest, shall constitute a disclosure
           by the  officer  or  controlling  shareholder  to the  Company of his
           personal interest as aforesaid,  for the purpose of the entering into
           an agreement with such body in a transaction  which is not out of the
           ordinary course of business.

                       Signature on behalf of the Company

130.       Subject to the provisions of the Companies Law and of these Articles,
           the Board may  authorize  any person to act and sign on behalf of the
           Company, whether on his own or jointly with any other person, whether
           generally or with regard to specific matters.

131.       The Company  shall have a stamp  bearing the name of the Company.  No
           signature on a document  shall bind the Company  unless signed by the
           persons  authorized to sign in the name of the Company  together with
           the stamp or the printed name of the Company.

                            Appointment of Attorneys

132.       Subject to the  provisions of the Companies Law, the Board may at any
           time grant a Power of  Attorney  to any person to act as  attorney of
           the Company for such purposes,  with such powers and discretion,  for
           such period and subject to such conditions,  all the aforesaid as the
           Board may deem fit.The Board may confer upon such person, inter alia,
           power to assign, in whole or in part, to another person,  the powers,
           authority and discretion conferred upon him.

                       Exemption, Indemnity and Insurance

                                       29

<PAGE>

133.       Subject to the  provisions  of the  Companies  Law,  the  Company may
           exempt any  officer of the  Company  from  liability,  in whole or in
           part,  in  respect of damage  resulting  from a breach of his duty of
           care to the Company.

134.       Subject to the  provisions  of the  Companies  Law,  the  Company may
           insure the  liability  of any  officer  of the  Company in respect of
           liability  which  may be  imposed  upon  him as a  result  of any act
           carried out by him in his capacity as an officer of the  Company,  in
           any of the following instances:

           134.1      Breach  of a duty of care to the  Company  or to any other
                      person;

           134.2      Breach of a duty of trust to the Company provided that the
                      officer  acted bona fide and had  reasonable  grounds  for
                      believing that the act would not harm the interests of the
                      Company;

           134.3      A financial liability imposed upon him to a third party;

           134.4      Any  other  event  in  respect  of which  insurance  of an
                      officer is permitted and/or may be permitted.

135.       Subject to the provisions of the Companies Law -

           135.1      The Company may undertake, in advance, to indemnify one of
                      its  officers  for a  liability  or  expense as set out in
                      section  136 below,  imposed  upon him as the result of an
                      action  taken by virtue of  service  as an  officer of the
                      Company, provided such liability is restricted to the type
                      of events  that in the  opinion of the Board of  Directors
                      are foreseen in light of the Company's actual  activities,
                      at the time such undertaking for  indemnification is made,
                      and for such  amount or measure as the Board of  Directors
                      determined, is reasonable in the circumstances of the case
                      and does not exceed, cumulatively,  twenty five percent of
                      the  Company's   equity   according  to  the  consolidated
                      financial  statements  last published  before the de facto
                      grant  of  indemnification  payment  (hereinafter:  "  the
                      Undertaking to Indemnify")

           135.2      Without  derogating  from the  aforesaid in Article  135.1
                      above, the Company may indemnify an officer of the Company
                      retroactively  in  respect  of a  liability  or expense as
                      detailed in Article 136  hereafter,  imposed upon him as a
                      result of an act carried out by him in his  capacity as an
                      officer of the  Company,  provided  that the amount of the
                      indemnity shall not exceed the amount specified on Article
                      135.1 above.

136.       An Indemnity undertaking or an Indemnity, as aforesaid in Article 135
           above,  may be issued  with  respect  to a  liability  or  expense as
           detailed in Articles 136.1 to 136.3 below,  which is imposed upon the
           officer as a result of an act carried  out by him in his  capacity as
           an officer of the Company, as follows:

                                       30

<PAGE>

           136.1      A monetary liability  imposed upon him in favor of a third
                      party pursuant to a judgment,  including a judgment by way
                      of compromise or a judgment of an arbitrator approved by a
                      court;

           136.2      Reasonable expenses of the proceedings,  including lawyers
                      fees,  expended by the officer or imposed  upon him by the
                      court,  in proceedings  issued against him by or on behalf
                      of the  Company  or by a third  party,  or with  regard to
                      criminal  proceedings from which the officer was acquitted
                      or  criminal  proceedings  in which he was  convicted  but
                      which do not require proof of a criminal intention;

           136.3      Reasonable legal expenses, including attorney's fees, that
                      the officer paid following an  investigation or proceeding
                      against him by an  authority  authorized  to perform  such
                      investigation  or proceeding,  ending without any criminal
                      indictment being filed against him, and without having any
                      financial  liability imposed upon him as an alternative to
                      a  criminal  proceeding,   or  having  ended  without  any
                      criminal  indictment  being  filed but having a  financial
                      liability imposed upon him as an alternative to a criminal
                      proceeding  for a crime not  requiring  proof of  criminal
                      intent.

           136.4      Any  other  liability  or  expense  regarding  which it is
                      permitted  and/or will be permitted by law to indemnify an
                      officer.

137.       Subject to the provisions of the Companies Law -

           137.1      The Company may  undertake,  in advance,  to indemnify any
                      person, including a Company officer,  currently serving or
                      who has served on behalf of the  Company by its request as
                      a  director  of  another  company  in  which  the  Company
                      directly  or  indirectly  holds  shares,  or in which  the
                      Company possesses any interest (hereinafter: a director in
                      the other company),  for a liability or expense as set out
                      in article  136 above,  imposed  upon him on account of an
                      action  undertaken  by virtue of being a  director  of the
                      other  company,  provided such  liability is restricted to
                      the type of  events  that in the  opinion  of the board of
                      directors  are foreseen in light of the  Company's  actual
                      activities,    at   the   time   such    undertaking   for
                      indemnification is made, and for such amount or measure as
                      the board of directors prescribes,  being reasonable under
                      the circumstances and not exceeding,  cumulatively, twenty
                      five  percent  of  the  Company's   shareholders'   equity
                      according to the last  consolidated  financial  statements
                      published  before  actually  making  such  indemnification
                      payment (hereinafter: "indemnification undertaking").

           137.2      Without  derogating  from the  aforesaid in Article  137.1
                      above,  the Company may  indemnify a Director of the other
                      company retroactively in respect of a liability or expense
                      as detailed in Article  136 above,  imposed  upon him as a
                      result of an act carried  out by him in his  capacity as a
                      director of the other company,

                                       31

<PAGE>

                      provided that the amount of the indemnity shall not exceed
                      the amount specified on Article 137.1 above.

138.       Subject to the provisions of the Companies Law, the Company may issue
           an  undertaking  in advance to  indemnify an employee or clerk of the
           Company  who is not an officer of the  Company  or to  indemnify  him
           retroactively with respect to any monetary liability imposed upon him
           in favor of any third party with respect to an act carried out by him
           bona fide in his  capacity as an  employee  or clerk of the  Company,
           provided that the amount of the indemnity shall not exceed the amount
           specified on Article 137.1 above.

139.       Subject to the  provisions  of the  Companies  Law,  nothing in these
           Articles  shall limit the  Company,  in any manner  whatsoever,  with
           regard to  taking  out  insurance  or to the  grant of  exemption  or
           indemnity:

           139.1      With respect to an officer of the Company or a director of
                      the other company,  to the extent that the insurance,  the
                      exemption or the indemnity are not forbidden by law.

           139.2      With  respect  to any  person who is not an officer of the
                      Company or a director of the other company,  including but
                      without  derogating  from the generality of the aforesaid,
                      employees, contractors or consultants.

    Dividends, Reserve Funds and Capitalization of Reserve Funds and Profits

140.       The Board may, before  deciding on the  distribution of a dividend as
           in Article 142 hereafter,  appropriate out of the profits, such sums,
           as the Board may deem fit,  to a General  Fund or a Reserve  Fund for
           the  distribution  of dividends,  distribution of bonus shares or any
           other purpose, as the Board may in its discretion determine.

141.       Until  use is made of the said  funds,  the  Board is  authorized  to
           invest the monies  appropriated  as  aforesaid  and the monies of the
           funds,  in any  investment  as the Board may deem fit, to manage such
           investments,  to vary them or otherwise to use them, and the Board is
           authorized  to divide the Reserve Fund into special  funds and to use
           each fund or part  thereof  for the  purpose of the  business  of the
           Company,  without  holding the same distinct from the other assets of
           the Company,  all the  aforesaid at the  discretion  of the Board and
           upon such terms as the Board may determine.

142.       Subject to the provisions of the Companies Law, the Board may resolve
           upon  the   distribution   of  a  dividend.   When  deciding  on  the
           distribution  of a dividend,  the Board may decide that the  dividend
           shall  be  paid,  in  whole  or in  part,  in  cash  or by way of the
           distribution  of assets in specie,  including  securities,  or in any
           other manner at the discretion of the Board.

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<PAGE>

143. 143.1            A.         Subject to the  provisions  of the Companies
                                 Law, the Board may

                                 resolve upon the  allotment of bonus shares and
                                 to convert to share capital part of the profits
                                 of the  Company,  within the meaning of section
                                 302(b) of the Companies  Law, part of a premium
                                 of shares or part of any other source  included
                                 in the  shareholders  equity of the  Company as
                                 stated in the last Financial  Statements of the
                                 Company, in such amount as may be determined by
                                 the  Board  and  which is not less than the par
                                 value of the bonus shares.

                      B.         When deciding on the allotment of bonus shares,
                                 the Board  shall  determine  whether  the bonus
                                 shares   shall   be  of   one   class   to  all
                                 shareholders  notwithstanding  the  classes  of
                                 shares   held  by  them,   or  that  each  such
                                 shareholder  shall  receive bonus shares of the
                                 same class with respect to each class of shares
                                 held by him.

                      C.         Bonus shares  allotted in accordance  with this
                                 Article shall be deemed fully paid up.

           143.2      When  deciding  upon the  allotment of bonus  shares,  the
                      Board may decide  that the  Company  shall  transfer  to a
                      special  fund  designated  for the  distribution  of bonus
                      shares in the future,  such sum as the conversion  thereof
                      to  share  capital  shall  be  sufficient  to allot to any
                      person  who  is at  such  time  entitled  for  any  reason
                      whatsoever to purchase shares in the Company (including an
                      entitlement  which can only be  realized  at a  subsequent
                      date),  those bonus shares to which such person would have
                      been entitled had he realized his  entitlement to purchase
                      such  shares  prior to the date  determining  the right to
                      receive  the  bonus   shares  (in  this   Article  -  "The
                      Determining Date"). If subsequent to the determining date,
                      such person shall realize his  entitlement to purchase the
                      shares or part of them,  the  Company  shall  allot to him
                      those  bonus  shares  of a par value  which he would  have
                      received had he realized,  prior to the determining  date,
                      his entitlement to purchase those shares which he actually
                      did purchase, the aforesaid by converting to share capital
                      an appropriate  part of the aforesaid  special fund. Bonus
                      shares shall entitle the holders thereof to participate in
                      the   distribution  of  cash  dividends  or  bonus  shares
                      commencing  from such time as is fixed by the  Board.  For
                      the purpose of fixing the amount to be appropriated to the
                      aforesaid  special fund,  any amount  appropriated  to the
                      fund  with  respect  to  previous  distributions  of bonus
                      shares,  shall be deemed as  though  it had  already  been
                      capitalized and there had been allotted  therefrom  shares
                      entitling the persons entitled to purchase shares,  to the
                      bonus shares.

144.       Subject to the rights assigned to the classes of shares issued by the
           Company and to the provisions of these Articles,  a dividend or bonus
           shares shall be

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           distributed to the shareholders  proportionately  to the par value of
           each share  without  taking into  consideration  any premium paid for
           such share.

145.       In  order to  carry  out any  resolution  for the  distribution  of a
           dividend  or  for  the  allotment  of  bonus  shares,  the  Board  is
           authorized:

           145.1      To  settle  as it may deem fit any  difficulty  which  may
                      arise and to take such steps as it may deem  necessary  in
                      order to overcome the difficulty.

           145.2      To decide that  fractions or fractions less than an amount
                      fixed by the  Board,  shall not be taken  into  account in
                      order to adjust the entitlement of the  shareholders or to
                      decide  on  the  sale  of  fractions  of  shares  and  the
                      distribution  of the net proceeds to the persons  entitled
                      thereto.

           145.3      To authorize  signatures on behalf of the  shareholders of
                      any agreement or other  document  which may be required in
                      order to give effect to the allotment and/or distribution,
                      and in particular to authorize the signing and lodging for
                      registration  of a document in writing in accordance  with
                      section 291 of the Companies Law.

           145.4      To determine the value of assets to be distributed  and to
                      decide  that  payments  in  cash  shall  be  paid  to  the
                      shareholders on the basis of the valuation so determined.

           145.5      To vest  monies or  specific  assets in  trustees  for the
                      persons entitled thereto, as the Board may deem expedient.

           145.6      To make any other  arrangement or settlement as may in the
                      opinion  of the Board be  required  in order to enable the
                      allotment or the distribution, as the case may be.

146.       Dividends  or other  benefits  with  respect to shares shall not bear
           interest.

147.       The Board may  withhold  any dividend or bonus shares or other rights
           with respect to shares the  consideration  for which,  in whole or in
           part,  has not been  paid to the  Company,  and to  collect  any such
           amount as aforesaid or  consideration  received  from the sale of the
           bonus shares or other rights,  on account of the debts or liabilities
           with  respect to the said  shares,  the  aforesaid  whether  the said
           shares are solely  owned by the  shareholder  in debt or whether  the
           shares are owned jointly with other shareholders.

148.       The Board may  withhold  any dividend or bonus shares or other rights
           with respect to shares of which a person is entitled to be registered
           as owner thereof in the Register or which he is entitled to transfer,
           in accordance  with Article 29 or 31 above, as the case may be, until
           such person is registered as the owner thereof or until he shall duly
           transfer them, as the case may be.

149.       The Board may, from time to time,  decide upon the mode of payment of
           dividends or  allotment  of bonus  shares or transfer  thereof to the
           persons  entitled  thereto  and  may  also  determine   instructions,
           procedures and arrangements

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           relating thereto, both with regard to the registered shareholders and
           also with regard to  unregistered  shareholders.  Without  derogating
           from the  generality  of the  aforesaid,  the board may  determine as
           follows:

           149.1      A.         Subject to the  provisions  of  sub-article  B.
                                 hereafter,   any   dividend  or  monies  to  be
                                 distributed to a registered shareholder,  shall
                                 be paid by  posting a check to his  address  as
                                 registered in the Shareholders  Register, or in
                                 the case of jointly registered shareholders, to
                                 the  person  whose  name  appears  first in the
                                 Shareholders   Register  with  regard  to  such
                                 shares.  The posting of any check as  aforesaid
                                 shall  be  at  the   risk  of  the   registered
                                 shareholder;   without   derogating   from  the
                                 aforesaid,  the  Board may  determine  that any
                                 dividend  less than a specific  amount fixed by
                                 the  Board,  shall  not be  sent  by  check  as
                                 aforesaid   and   that   the    provisions   of
                                 sub-article B. hereafter shall apply thereto.

                      B.         The  Board  may  determine  that  payment  of a
                                 dividend  or  monies  to  be   distributed   to
                                 registered  shareholders  shall be  effected at
                                 the Office or at such other  place as the Board
                                 may fix.

           149.2      Any  dividend  distributed  to  unregistered  shareholders
                      shall be transferred to such  shareholders by means of the
                      Nominees  Company or in such other manner as the Board may
                      determine.

150.       If two or more persons are registered in the Register as joint owners
           of any share,  each of them is entitled to give a valid  receipt with
           respect to any dividend,  share or other security, or other monies or
           rights payable with respect to such share.

                                Company Documents

           151. 151.1 Shareholders  are entitled to peruse the  documents of the
                      Company  detailed in section 184 of the  Companies  Law in
                      the circumstances fixed for such purpose.

           151.2      Without  derogating  from the  aforesaid in Article  151.1
                      above,  the  Board  may,  at its  discretion,  permit  the
                      perusal of the  documents of the Company,  or any of them,
                      also  to  shareholders  or any of  them,  as it may in its
                      discretion deem fit.

           151.3      Shareholders   shall  not  have  a  right  to  peruse  the
                      documents of the Company or any of them, unless such right
                      has  been  conferred  upon  them  by  any  legislation  or
                      regulation or unless permitted so to do by the Board as in
                      Article 151.2 above.

152.       Subject to the  provisions  of any law,  any book,  list or  register
           which the Company is, by law or by these Articles, bound to

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<PAGE>

           maintain, shall be kept by such technical,  mechanical or other means
           as may be decided by the Board.

                              Financial Statements

153.       The  Financial  Statements  of the  Company  shall be  signed  by the
           persons authorized by the Board for such purpose, as required by law.

                                    Auditors

154.       An accountant  auditor or accountant  auditors  shall be appointed at
           every Annual  Meeting and shall  officiate in that capacity until the
           closing of the following Annual Meeting.

           155. 155.1 The Board shall in its  discretion  determine the auditing
                      fees of the accountant auditor appointed.

           155.2      Fees of the accountant  auditor with respect to additional
                      services to the Company which are not audit acts, shall be
                      determined by the Board at its discretion.

                                     Notices

156.       The giving of notices or service of documents to shareholders  and to
           the  Nominees  Company,  in  accordance  with the  provisions  of the
           Companies Law or of these  Articles,  shall be effected in one of the
           manners referred to in this Chapter.

157.       Notice of a General Meeting shall be served as provided in Article 54
           above.

           158. 158.1 Without  derogating  from the  aforesaid,  the Company may
                      serve a  shareholder  with  any  notice  or  document,  by
                      delivery by hand or by facsimile or by dispatch by post or
                      by email.  Dispatch by post shall be to the address of the
                      shareholder  registered  in the  Register,  or if no  such
                      address is  registered,  to such  address as may have been
                      furnished by him to the Company for the purpose of sending
                      notices to him. A notice  delivered by facsimile  shall be
                      sent to the shareholder according to the address furnished
                      by him to the Company.  A notice delivered by e-mail shall
                      be  sent  to  the  shareholder  according  to  the  e-mail
                      furnished by him to the Company.

          158.2       A.          notice   or   document   delivered   to   a
                                 shareholder,  shall  be  deemed  to  have  been
                                 served at such time as delivered by hand.

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<PAGE>

                      B.         A notice or document  dispatched by post, shall
                                 be deemed to have been duly  served,  if handed
                                 in  for   dispatch  at  any  post  office  when
                                 correctly   addressed  and  properly   stamped.
                                 Service  shall be deemed to have been  effected
                                 at such time as the letter is  delivered by the
                                 post in the usual course and not later than two
                                 days from the date that the  letter  containing
                                 such notice was handed to the post office.

                      C.         A notice sent by facsimile or by email shall be
                                 deemed to have been  served  twenty  four hours
                                 after dispatch.

159.       Without  derogating from the aforesaid,  the Company may,  subject to
           the  provisions of the Law and/or  another  applicable  law,  serve a
           notice  to the  shareholders  by a single  publication  in two  daily
           newspapers  published  in Israel in Hebrew,  either in addition or in
           place of a notice as in Article 158 above. The date of publication in
           the  newspaper  shall be  deemed to be the date on which  notice  was
           received by the shareholders.

160.       The Company may give notice as to service of a document at the Office
           or at such other  place as may be fixed by the Board or as to service
           in any other manner, including by means of the Internet.

161.       The Company may serve a notice or document to joint  shareholders  by
           the dispatch of the same to the shareholder  whose name appears first
           in the Shareholders Register with regard to such share.

162.       The  service  of a  notice  or  document  to one  member  of a family
           residing  together with the person for whom the notice or document is
           intended, shall be deemed as service of same to the intended person.

163.       Any person who by  operation  of law,  transfer  or other means shall
           become  entitled  to any share,  shall be bound by every  notice with
           respect to such share which was duly given, prior to the entry of his
           details in the register, to the person from whom he derives his title
           to such share.

164.       Any  notice or  document  given to a  shareholder  of the  Company in
           accordance with the provisions of these Articles,  shall be deemed to
           have been duly served  notwithstanding  the  decease,  bankruptcy  or
           liquidation of such  shareholder or the  transmission of the right to
           the shares by law  (whether or not the Company is aware of same),  so
           long as no other person has been registered as owner of the shares in
           his place,  and  despatch  or  delivery  as  aforesaid  shall for all
           intents and purposes be deemed  sufficient  with regard to any person
           having an interest in such shares and/or entitled to them by

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<PAGE>

           virtue of transmission of the right by law,whether  jointly with such
           shareholder or on his behalf or in his place.

165.       Subject to the  provisions of any law, any  shareholder,  director or
           other  person  entitled to receive  notice in  accordance  with these
           Articles or by the Companies  Law, may waive receipt of same,  either
           in  advance  or  retroactively,  either  with  regard  to a  specific
           instance  or  generally,  and by his  doing so, it shall be deemed as
           though the notice had been duly given,  and any procedure or act with
           respect to which the notice was bound to be given, shall be deemed as
           valid and effective.

166.       A certificate  in writing signed by a Director or by the Secretary of
           the Company  with regard to the dispatch or giving of a notice in one
           of  the  manners   detailed  in  these  Articles,   shall  constitute
           conclusive evidence to the facts detailed in such certificate.

167.       When prior notice of a given number of days or a notice effective for
           a specific period is required to be given,  the day of service shall,
           unless otherwise determined,  be counted in the number of days or the
           specific  period.  If notice is given in more than one of the manners
           detailed above, it shall be deemed to have been given at the earliest
           on which it is deemed to have been served as aforesaid.

                                     Merger

168.       Approval of merger as provided in section 327 of the  Companies  Law,
           is  subject  to a simple  majority  at the  General  Meeting or Class
           Meeting,  as the  case  may be,  all  the  aforesaid  subject  to the
           applicable provisions of any law.

                                   Winding Up

169.       Subject to the  provisions  of any law,  the  liquidator,  whether on
           voluntary or other  liquidation,  may in accordance with a resolution
           of a General Meeting carried by a special majority,  distribute among
           the shareholders in specie,  the excess assets,  in whole or in part,
           and may in accordance  with a resolution of a General Meeting carried
           by a special majority, vest any part of the excess assets in trustees
           upon such trust for the  shareholders as the liquidator may deem fit.
           For the purpose of the  distribution  of the excess assets in specie,
           the liquidator may determine the proper value of the assets available
           for  distribution  and  determine  how  the  distribution  among  the
           shareholders will be carried out taking into consideration the rights
           of the  various  classes  of  shares  of the  Company  owned by them.


(sec'-50192)