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EXHIBIT 1.2

THE COMPANIES
ORDINANCE

A COMPANY LIMITED BY
SHARES

ARTICLES OF ASSOCIATION

OF

LanOptics LTD.

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PRELIMINARY

1.     Table
A Excluded

The
regulations contained in the second schedule to the Companies Ordinance (New Version)
5743-1983 (the Companies Ordinance) shall not apply to the Company.

2.     Interpretation

(a)        In
these Articles the words standing in  the
first column of the table next hereinafter contained shall bear the meaning set opposite
to them respectively in the second column thereof, if not inconsistent with the subject or
context.

The
Company  The aforementioned company.

The
Statutes  The Companies Ordinance (New Version) and every other Israeli
Ordinance in force concerning companies limited by shares and affecting the Company.

These
Articles  These Articles of Association as originally drafted or as altered
from time to time by Special Resolution.

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The
Office  The current registered office of the Company.

Yearand
Month  A Gregorian month or year.

3.     Public
Company

This
Company is a Public Company, as such term is defined in the Companies Ordinance (New
Version).

SHARE CAPITAL

4.     Share
Capital

(a)        The
authorized share capital of the Company is NIS 1,000,000 divided into
               50,000,000 (Fifty Million) Ordinary Shares, par value NIS 0.02 per share.

(b)        The
Ordinary Shares shall rank pari passu.

5.     Increase
of Authorized Share Capital

(a)        The
Company may, from time to time, by Special Resolution, whether or not all
               the shares then authorized have been issued, and whether or not all the
shares                theretofore issued have been called up for payment, increase its
authorized                share capital. Any such increase shall be in such amount and
shall be divided                into shares of such nominal amounts, and such shares
shall confer such rights                and preferences, and shall be subject to such
restrictions, as such Special                Resolution shall provide.

(b)        Except
to the extent otherwise provided in such Special Resolution, any new
               shares included in the authorized share capital increased as aforesaid
shall be                subject to all the provisions of these Articles which are
applicable to shares                of such class included in the exist ing share capital
without regard to class                (and, if such new shares are of the same class as
a class of shares included in                the existing share capital, to all of the
provisions which are applicable to                shares of such class included in the
existing share capital).

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6.     Special
Rights; Modification of Rights

(a)        Subject
to the provisions of the Memorandum of Association of the Company, and
               without prejudice to any special rights previously conferred upon the
holders of                existing shares in the Company, the Company may, from time to
time, by Special                Resolution, provide for shares with such preferred or
deferred rights or rights                of redemption or other special rights and/or
such restrictions, whether in                regard to dividends, voting, repayment of
share capital or otherwise, as may be                stipulated in such Special
Resolution.

(b)        (i)
If at any time the share capital is divided into different classes of
               shares, the rights attached to any class, unless otherwise provided by
these                Articles, may be modified or abrogated by the Company, by Special
Resolution,                subject to the consent in writing of the holders of
seventy five percent (75%)                of the issued shares of such class or the
sanction of a Special Resolution                passed at a separate General Meeting of
the holders of the shares of such class.

| | (ii)        The
provisions of these Articles relating to General Meetings shall,  mutatis
mutandis, apply to any separate General Meeting of the holders of the shares of a
particular class, provided, however, that the requisite quorum at any such separate
General Meeting shall be two or more members present in person or proxy and holding not
less than seventy five per cent (75%) of the issued shares of such class.
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| | (iii)        Unless
otherwise provided by these Articles, the enlargement of an  authorized
class of shares, or the issuance of additional shares thereof out of the authorized and
unissued share capital, shall not be deemed, for purposes of this Article 6(b), to modify
or abrogate the rights attached to previously issued shares of such class or of any other
class.
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7.     Consolidation,
Subdivision, Cancellation and Reduction of Share Capital

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

| | (i)        consolidate
and divide all or any part of its issued or unissued  authorized
share capital into shares of a per share nominal value which is larger than the per share
nominal value of its existing shares;
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| | (ii)        subdivide
its shares (issued or unissued) or any of them, into shares  of
smaller nominal value than is fixed by the Memorandum of Association (subject, however, to
the provisions of Section 144(4) of the Companies Ordinance);
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| | (iii)        cancel
any shares which, at the date of the adoption of such Special  Resolution,
have not been taken or agreed to be taken by any person, and diminish the amount of its
share capital by the amount of the shares so cancelled; or
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| | (iv)        reduce
its share capital in any manner, and with and subject to any  incident
authorized, and consent required, by law.
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(b)        with
respect to any consolidation of issued shares into shares of a larger
               nominal value per share, and with respect to any other action which may
result                in fractional shares, the Board of Directors may settle any
difficulty which may                arise with regard thereto, as it deems fit, and, in
connection with any such                consolidation or other action which could result
in fractional shares, may,                without limiting its aforesaid power:

| | (i)        determine,
as to the holder of shares so consolidated, which issued shares  shall
be consolidated into a share of a larger nominal value per share;
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| | (ii)        allot,
in contemplation of or subsequent to such consolidation or  other
action, shares or fractional shares sufficient to preclude or remove fractional share
holdings;
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| | (iii)        redeem,
in the case of redeemable preference shares, and subject to  applicable
law, such shares
or fractional shares sufficient to preclude or remove fractional share holdings;
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| | (iv)        cause
the transfer of fractional shares by certain shareholders of  the
Company to other shareholders thereof so as to most expediently preclude or remove any
fractional shareholdings, and cause the transferees of such fractional shares to pay the
transferors thereof the fair value thereof, and the Board of Directors is hereby
authorized to act in connection with such transfer, as agent for the transferors and
transferees of any such fractional shares, with full power of substitution, for the
purposes of implementing the provisions of this sub-Article 7(b)(iv).
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SHARES

8.     Issuance
of Share Certificates; Replacement of Lost Certificates

(a)        Share
certificates shall be issued under the corporate seal of the Company and
               shall bear the signature of one Director, or of any other person or
persons                authorized therefor by the Board of Directors.

(b)        Each
member shall be entitled to one numbered certificate for all the shares of
               any class registered in his name, and if the Board of Directors so
approves, to                several certificates, each for one or more of such shares.
Each certificate                shall specify the serial numbers of the shares
represented thereby and may also                specify the amount paid up thereon.

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

(d)        A
share certificate which has been defaced, lost or destroyed, may be
               replaced, and the Company shall issue a new certificate to replace such
defaced,                lost or destroyed certificate upon payment of such fee, and upon
the furnishing                of such evidence of ownership and such indemnity, as the
Board of Directors in                its discretion deems fit.

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9.     Registered
Holder

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

10.     Allotment
of Shares

The
unissued shares from time to time shall be under the control of the Board of Directors,
who shall have the power to allot, issue or otherwise dispose of shares to such persons,
on such terms and conditions (including inter alia terms relating to calls as set forth
in Article 12(f) hereof), and either at par or at a premium, or, subject to the
provisions of the Companies Ordinance, at a discount and/or with payment of commission,
and at such times, as the Board of Directors deems fit, and the power to give to any
person the option to acquire from the Company any shares, either at par or at a premium,
or, subject as aforesaid, at a discount and/or with payment of commission, during such
time and for such consideration as the Board of Directors deems fit.

11.     Payment
in Installment

If
pursuant to the terms of allotment or issue of any share, all or any portion of the price
thereof shall be payable in installments, every such installment shall be paid to the
Company on the due date thereof by the then registered holder(s) of the share or the
person(s) then entitled thereto.

12.     Calls
on Shares

(a)        The
Board of Directors may, from time to time, as it, in its discretion, deems
               fit, make calls for payment upon members in respect of any sum which has
not                been paid up in respect of shares held by such members and which, is
not,                pursuant to the terms of allotment or issue of such shares or
otherwise, payable                at a fixed time, and each member shall pay the amount
of every call so made upon                him (and of each installment thereof if the
same is payable in installments), to                the person(s) and at the
time(s) and place(s) designated by the Board of Directors, as any such time(s) may be
thereafter extended and/or such person(s) or place(s) changed. Unless otherwise
stipulated in the resolution of the Board of Directors (and in the notice hereafter
referred to), each payment in response to a call shall be deemed to constitute a pro rata
payment on account of all the shares in respect of which such call was made.

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(b)        Notice
of any call for payment by a member shall be given in writing to such
               member not less than fourteen (14) days prior to the time of payment fixed
in                such notice, and shall specify the time and place of payment, and the
person to                whom such payment is to be made. Prior to the time for any such
payment fixed in                a notice of a call given to a member, the Board of
Directors may in its absolute                discretion, by notice in writing to such
member, revoke such call in whole or in                part, extend the time fixed for
payment thereof, or designate a different place                of payment or person to
whom payment is to be made. In the event of a call                payable in
installments, only one notice thereof need be given.

(c)        If
pursuant to the terms of allotment or issue of a share or otherwise, an
               amount is made payable at a fixed time (whether on account of such share
or by                way of premium), such amount shall be payable at such time as if it
were payable                by virtue of a call made by the Board of Directors and for
which notice was                given in accordance with paragraphs (a) and (b) of this
Article 12, and the                provisions of these Articles with regard to calls (and
the non-payment thereof)                shall be applicable to such amount (and the
non-payment thereof).

(d)        Joint
holders of a share shall be jointly (and severally liable to pay all calls
               for payment in respect of such share and all interest payable thereon.

(e)        Any
amount called for payment which is not paid when due shall bear interest
               from the date fixed for payment until actual payment thereof, at such rate
(not                exceeding the then prevailing debitory rate charged by leading
commercial banks                in Israel), and payable et such time(s) as the Board of
Directors may prescribe.

(f)        Upon
the allotment of shares, the Board of Directors may provide for differences
               among the allottees of such shares as to the amounts and times for payment
of                calls for payment in respect of such shares.

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13.     Prepayment

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

14.     Forfeiture
and Surrender

(a)        If
any member fails to pay an amount payable
by virtue of a call, or interest thereon as provided for in accordance herewith, on or
before the day fixed for payment of the same, the Board of Directors, may at any time
after the day fixed for such payment, so long as such amount (or any portion thereof) or
interest thereon (or any portion thereof) remains unpaid, forfeit all or any of the shares
in respect of which such payment was called for. All expenses incurred by the Company in
attempting to collect any such amount or interest thereon, including, without limitation,
attorneys fees and costs of legal proceedings, shall be added to, and shall, for all
purposes (including the accrual of interest thereon), constitute a part of, the amount
payable to the Company in respect of such call.

(b)        Upon
the adoption of a resolution as to the forfeiture of a members share,
               the Board of Directors shall cause notice thereof to be given to such
member,                which notice shall state that, in the event of the failure to pay
the entire                amount so payable by a date specified in the notice (which date
shall be not                less than fourteen (14) days after the date such notice is
given and which may                be extended by the Board of Directors), such shares
shall be ipso facto                forfeited, provided, however, that, prior to such
date, the Board of Directors                may nullify such resolution of forfeiture,
but no such nullification shall estop                the Board of Directors from adopting
a further resolution of forfeiture in                respect of the non-payment of the
same amount.

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(c)        without
derogating from Articles 54 and 59 hereof, whenever shares are forfeited
               as herein provided, all dividends, if any, theretofore declared in respect
               thereof and not actually paid shall be deemed to have been forfeited at
the same                time.

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

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

(f)        Any
member whose shares have been forfeited or surrendered shall cease to be a
               member in respect of the forfeited or surrendered shares, but shall, notwithstanding, be liable to pay, and shall forthwith pay, to the company,
all                calls, interest and expenses owing upon or in respect of such shares
at the time                of forfeiture or surrender, together with interest thereon
from the time of                forfeiture or surrender until actual payment, at the rate
prescribed in Article                12(e) above, and the Board of Directors, in its
discretion, may, but shall not                be obligated to, enforce the payment of
such moneys, or any part thereof. In the                event of such forfeiture or
surrender, the Company, by resolution of the Board                of Directors, may
accelerate the date(s) of payment of any or all amounts then                owing to the
Company by the member in question (but not yet due) in respect of                all
shares owned by such member, solely or jointly with another.

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

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15.     Lien

(a)        Except
to the extent the same may be waived or subordinated in writing, the
               Company shall have a first and paramount lien upon all the shares
registered in                the name of each member (without regard to any equitable or
other claim or                interest in such shares on the part of any other person),
and upon the proceeds                of the sale thereof, for his debts, liabilities and
engagements to the Company                arising from any amount payable by such member
in respect of any unpaid or                partly paid share, whether or not such debt,
liability or engagement has                matured. Such lien shall extend to all
dividends from time to time declared or                paid in respect of such share.
Unless otherwise provided, the registration by                the Company of a transfer
of shares shall be deemed to be a waiver on the part                of the Company of the
lien (if any) existing on such shares immediately prior to                such transfer.

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

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

16.     Sale
After Forfeiture or Surrender or in Enforcement of Lien

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

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17.     Redeemable
Shares

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

18.     Conversion
of Shares into Stock

(a)        The
Board of Directors may, with the sanction of the members previously given
               by Special Resolution, convert any paid-up shares into stock, and may,
with                like sanction, reconvert any stock into paid-up shares of any
denomination.

(b)        The
holders of stock may transfer the    same,
or any part thereof, in the same manner and subject to the same regulations, as the shares
from which the stock arose might have been transferred prior to conversion, or as near
there to as circumstances admit, provided, however, that the Board of Directors may from
time to time fix the minimum amount of stock so transferable, and restrict or forbid the
transfer of fractions of such minimum, but the minimum shall not exceed the nominal value
of each of the shares from which such stock arose.

(c)        The
holders of stock shall, in accordance with the amount of stock held by them,
               have the same rights and privileges as regards minimum amount of stock so
               transferable, and restrict or forbid the transfer of fractions of such
minimum,                but the minimum shall not exceed the nominal value of each of the
shares from                which such stock arose.

(d)        The
holders of stock shall, in accordance with the amount of stock held by them,
               have the some rights and privileges as regards dividends, voting at
meetings of                the Company and other matters as if they held the shares from
which such stock                arose, but no such right or privilege, except
participation in the dividends and                profits of the Company, shall be
conferred by any such aliquot part of such                stock as would not, if existing
in shares, have conferred that right or                privilege.

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(e)        Such
of the Articles of the Company as are applicable to paid-up shares shall
               apply to stock, and the words share and shareholder (or
               member) therein shall include stock and
               Stockholder. 

TRANSFER OF SHARES

19.     Registration
of Transfer

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

(b)        The
Board of Directors may, in its discretion to the extent it deems necessary,
               close the Register of Members for registrations of transfers of shares
during                any year for a period determined by the Board of Directors, and no
registrations                of transfers of shares shall be made by the Company during
any such period                during which the Register of Members is so closed.

20.     Record
Date for Notices of General Meetings

Notwithstanding
any other contrary provision of these Articles, the Board of Directors may fix a date,
not exceeding ninety (90) days prior to the date of any General Meeting, as the date as
of which shareholders entitled to notice of and to vote at such meeting shall be
determined, and all persons who were holders of record of voting shares on such date and
no others shall be entitled to notice of and to vote at such meeting.

TRANSMISSION OF SHARES

21.     Decedents Shares

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

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(b)        Any
person becoming entitled to a share in consequence of the death of any
               person, upon producing evidence of the grant of probate or letters of
               administration or declaration of succession (or such other evidence as the
Board                of Directors may reasonably deem sufficient), shall be registered as
a member in                respect of such share, or may, subject to the regulations as
to transfer herein                contained, transfer such share.

22.     Receivers
and Liquidators

(a)        The
Company may recognize any receiver, liquidator or similar official appointed
               to wind-up, dissolve or otherwise liquidate a corporate member, and a
trustee,                manager, receiver, liquidator or similar official appointed in
bankruptcy or in                connection with the reorganization of, or similar
proceeding with respect to a                member or its properties, as being entitled
to the shares registered in the name                of such member.

(b)        Such
receiver, liquidator or similar official appointed to wind-up, dissolve or
               otherwise liquidate a corporate member and such trustee, manager,
receiver,                liquidator or similar official appointed in bankruptcy or in
connection with the                reorganization of, or similar proceedings with respect
to a member or its properties, upon producing such evidence as the Board
of Directors may deem                sufficient as to his authority to act in such
capacity or under this Article,                shall with the consent of the Board of
Directors (which the Board of Directors                may grant or refuse in its
absolute discretion), be registered as a member in                respect of such shares,
or may, subject to the regulations as to transfer herein                contained,
transfer such shares.

GENERAL MEETINGS

23.     Annual
General Meeting

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

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24.     Extraordinary
General Meetings

All
General Meetings other than Annual General Meetings shall be called Extraordinary
General Meetings. The Board of Directors may, whenever i t thinks fit, convene an
Extraordinary General Meeting, at such time and place, within or out of the State of
Israel, as may be determined by the Board of Directors, and shall be obliged to do so
upon a requisition in writing in accordance with Section 109 of the Companies Ordinance.

25.     Notice
of General Meetings; Omission to Give Notice

(a)        Not
less than seven (7) days prior notice shall be given of every General
               Meeting, provided, however, that a Special Resolution shall not be passed
               unless at least twenty-one (21) days prior notice shall have been
given of                the meeting at which it is proposed to pass the same. Each such
notice shall                specify the place and the day and hour of the meeting and the
general nature of                each item to be acted upon thereat, said notice to be
given to all members who                would be entitled to attend and vote at such
meeting. Anything therein to the                contrary notwithstanding, with the
consent of all members entitled to vote                thereon, a resolution may be
proposed and passed at such meeting although a                lesser notice than
hereinabove prescribed has been given.

(b)        The
accidental omission to give notice of a meeting to any member, or the
               non-receipt of notice sent to such member, shall not invalidate the
proceedings,                at such meeting.

PROCEEDINGS AT GENERAL
MEETINGS

26.     Quorum

(a)       
          No business shall be transacted at a General
Meeting, or at any adjournment thereof, unless the quorum required under these Articles
for such General Meeting or such adjourned meeting, as the case may be, is present when
the meeting proceeds to business.

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(b)       
          In the absence of contrary provisions in these
Articles, two or more members (not in default in payment of any sum referred to in Article
32(a) hereof), present in person or by proxy and holding shares conferring in the
aggregate more than fifty percent of the voting power of the Company, shall constitute a
quorum of General Meetings.

(c)        If
within half an hour from the time appointed for the meeting a quorum is not
               present, the meeting, if convened upon requisition under Section 109 of
the                Companies Ordinance, shall be dissolved, but in any other case it
shall be                adjourned to the same day in the next week, at the same time and
place, or to                such day and at such time and place as the Chairman may
determine with the                consent of the holders of a majority of the voting
power represented at the                meeting in person or by proxy and voting on the
question of adjournment. No                business shall be transacted at any adjourned
meeting except business which                might lawfully have been transacted at the
meeting as originally called. At such                adjourned meeting (other than an
adjourned separate meeting of a particular                class of shares as referred to
in Article 6 of these Articles), any two (2)                members (not in default as
aforesaid) present in person or by proxy, shall                constitute a quorum.

27.     Chairman

The
Chairman, if any, of the Board of Directors, shall preside as Chairman at every General
Meeting of the Company. If at any meeting the Chairman is not present within fifteen (15)
minutes after the time fixed for holding the meeting or is unwilling to act as Chairman,
the Co-Chairman shall preside at the meeting. If at any such meeting both the Chairman
and the Co-Chairman  are
not present or are unwilling to act as Chairman, members present shall choose someone of
their number to be Chairman. The office of Chairman shall not, by itself, entitle the
holder thereof to vote at any General Meeting nor shall it entitle such holder to a second
or casting vote (without derogating, however, from the rights of such Chairman to vote as
a shareholder or proxy of a shareholder if, in fact, he is also a shareholder or such
proxy).

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28.     Adoption
of Resolutions at General Meetings

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

| | (ii)        A
Special or Extraordinary Resolution shall be deemed adopted if  approved
by the holders of not less than seventy-five per cent (75%) of the voting power
represented at the meeting in person or by proxy and voting thereon.
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(b)        Every
question submitted to a General Meeting shall be decided by a show of
               hands, but if a written ballot is demanded by any member present in person
or by                proxy and entitled to vote at the meeting, the same shall be decided
by such                ballot. A written ballot may be demanded before the proposed
resolution is voted                upon or immediately after the declaration by the
Chairman of the results of the                vote by a show of hands. If a vote by
written ballot is taken after such                declaration, the results of the vote by
a show of hands shall be of no effect,                and the proposed resolution shall
be decided by such written ballot. The demand                for a written ballot may be
withdrawn at any time before the same is conducted,                in which event another
member may then demand such written ballot. The demand                for a written
ballot shall not prevent the continuance of the meeting for the
               transaction of business other than the question on which the written
ballot has                been demanded.

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

29.     Resolutions
in Writing

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

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30.     Power
to Adjourn

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

31.     Voting
Power

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

32.     Voting
Rights

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

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

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

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(d)        If
two or more persons are registered as joint holders of any share, the vote of
               the senior who tenders a vote, in person or by proxy, shall be accepted to
the                exclusion of the vote (s) of the other joint holder(s). For the
purpose of this                Article 32(d), seniority shall be determined by the order
of registration of the                joint holders in the Register of Members.

PROXIES

33.     Instrument
of Appointment

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

"I
____________________ of   ________________________(Name
of Shareholder)                     (Address of Shaerholder)being
a member of LanOptics hereby appoint ____________________ of _______________________(name
of Proxy)                                 (Address of Proxy)as
my proxy to vote for me and on my behalf at the General Meeting of the Company to be held
                               on the ____day of____ __,_____ and at any adjournment (s) thereof.Signed
this day of ___________,______.

_________________________
                                                                                                                                    (Signature of Appointer)"

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

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| | (b)       
               The instrument appointing a proxy (and the power of attorney or other authority,
               if any, under which such instrument has been signed) shall either be delivered
               to the Company (at its Registered Office, at its principal place of business, or
               at the offices of its registrar or transfer agent, or at such place as the Board
               of Directors may specify) not less than two (2) hours (or twenty-four (24)
               hours, if delivered to the Company at its Registered Office or principal place
               of business in respect of a meeting to be held outside Israel or forty-eight
               (48) hours if delivered to the Companys registrar or transfer agent in
               respect of a meeting to be held outside the United States of America) before the
               time fixed for the meeting at which the person named in the instrument proposes
               to vote, or presented to the Chairman at such meeting.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

34.     Effect
of Death of Appointer of Transfer of Share and or Revocation of           Appointment

(a)        A
vote cast in accordance with an instrument appointing a proxy shall be valid
               notwithstanding the prior death or bankruptcy of the appointing member (or
of                his attorney-in-fact, if any, who signed such instrument), or the
transfer of                the share in respect of which the vote is cast, unless written
notice of such                matters shall have been received by the Company or by the
Chairman of such                meeting prior to such vote being cast.

(b)        An
instrument appointing a proxy shall be deemed revoked (i) upon receipt by the
               Company or the Chairman, subsequent to receipt by the Company of such
               instrument, of written notice signed by the person signing such instrument
or by                the member appointing such proxy canceling the appointment there
under (or the                authority pursuant to which such instrument was signed) or
(of an instrument                appointing a different proxy (and such other documents,
if any, required under                Article 33(b) for such new appointment), provided
such notice of cancellation                or instrument appointing a different proxy
were so received at the place and                within the time for delivery of the
instrument revoked thereby as referred to in                Article 33(b) hereof, or (ii)
if the appointing member is present in person at                the meeting for which
such instrument of proxy was delivered, upon receipt by                the Chairman of
such meeting of written notice from such member of the                revocation of such
appointment, or if and when such member votes at such                meeting. A vote cast
in accordance with an instrument appointing a proxy shall                be valid
notwithstanding the revocation or purported cancellation of the
               appointment or the presence in person or vote of the appointing member at
a                meeting for which it was rendered unless such instrument of appointment
was                deemed revoked in accordance with the foregoing provisions of this
Article                34(b) at or prior to the time such vote was cast.

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BOARD OF DIRECTORS

35.     Powers
of Board of Directors

(a)        In
General

The
management of the business of the Company shall be vested in the Board of Directors which
may exercise all such powers and do all such acts and things as the Company is authorized
to exercise and do and are not hereby or by law required to be exercised or done by the
Company by action of its members at a General Meeting. The authority conferred on the
Board of Directors by this Article 35 shall be subject to the provisions of the Companies
Ordinance, these Articles and any regulation or resolution consistent with these Articles
adopted from time to time by the Company by action of its members at a General Meeting,
provided , however, that no such regulation or resolution shall invalidate any prior act
done by or pursuant to a decision of the Board of Direc-tors which would have been valid
if such regulation or resolution had not been adopted.

(b)        Borrowing
Power

The
Board of Directors may from time to time, at
its discretion cause the Company to borrow or secure the payment of any sum or sums of
money for the purposes of the Company and may secure or provide for the repayment of such
sum or sums in such manner at such times and upon such terms and conditions as it deems
fit, and, in particular by the issuance of bonds, perpetual or redeemable debentures,
debenture stock or any mortgages, charges, or other securities on the undertaking or the
whole or any part of the property of the Company both present and future including its
uncalled or called but unpaid capital for the time being.

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(c)        Reserves

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

36.     Exercise
of Powers of Board of Directors

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

(b)        A
resolution proposed at any meeting of the Board of Directors shall be deemed
               adopted if approved
by a majority of the Directors present when such resolution is put to a vote and voting
thereon.

(c)        A
resolution in writing signed by the majority of Directors then in office and
               lawfully entitled to vote thereon or to which a majority of the Directors
have                given their written consent (by letter, tele-gram, telex, facsimile,
electronic                mail or otherwise) shall be deemed to have been unanimously
adopted by a meeting                of the Board of Directors duly convened and held.

37.     Delegation
of Powers

(a)        The
Board of Directors may, subject to the provisions of the Companies
               Ordinance, delegate any or all of its powers to committees, each
consisting of                one or more persons (who are Directors), and it may from
time to time revoke                such delegation or alter the composition of any such
committee. Any Committee so                formed (in these Articles referred to as a
Committee of the Board of                Directors , shall, in the exercise
of the powers so delegated, conform to                any regulations imposed on it by
the Board of Directors. The meetings and                proceedings of any such Committee
of the Board of Directors shall, mutatis                mutandis, be governed by the
provisions herein contained for regulating the                meetings of the Board of
Directors, so far as not superseded by any regulations                adopted by the
Board of Directors under this Article. Unless otherwise expressly                provided
by the Board of Directors in delegating powers to a Committee of the                Board
of Direc-tors, such Committee shall not be empowered to further delegate
               such powers.

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(b)        Without
derogating from the provisions of Article 50, the Board of Directors may
               from time to time appoint a Secretary to the Company, as well as officers,
               agents, employees and independent contractors, as the Board of Directors
deems                fit, and may terminate the service of any such person. The Board
of Directors                may, subject to the provisions of the Companies Ordinance,
determine the powers                and duties, as well as the salaries and emoluments,
of all such persons, and may                require security in such cases and in such
amounts as it deems fit.

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

38.     Number
of Directors

The
Board of Directors of the Company shall consist of such number of Directors (not less
than three nor more than fourteen) as may be fixed, from time to time, by Ordinary
Resolution of the Company.

39.     Election
and Removal of Directors

Directors
shall be elected at the Annual General Meeting by the vote of the holders of a majority
of the voting power represented at such meeting in person or by proxy and voting on the
election of directors, and each Director shall serve, subject to article 42 hereof, and,
with respect to a Director appointed pursuant to Article 41 hereof, subject to such
Article, until the Annual General Meeting next following the Annual General Meeting or
General Meeting at which such Director was elected pursuant to this Article or Article 41
hereof, or his earlier removal pursuant to this Article 39. The holders of a majority of
the voting power represented at a General Meeting in person or by proxy and voting
thereon at such Meeting shall be entitled to remove any Director(s) from office, to
elect Directors instead of Directors so removed or to fill any vacancy, however created,
in the Board of Directors.

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40.     Qualification
of Directors

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

41.     Continuing
Directors in the Event of Vacancies

In
the event of one or more vacancies in the Board
of Directors, the continuing Directors may continue to act in every matter, and, pending
the filling of any vacancy pursuant to the provisions of Article 39, may appoint Directors
to temporarily fill any such vacancy, provided, however, that if they number less than a
majority of the number provided for pursuant to Article 38 hereof, they may only act in
an emergency or to fill the office of director which has become vacant up to the minimum
number or in order to call a General Meeting of the Company for the purpose of electing
Directors to fill any or all vacancies, so that at least a majority of the number of
Directors provided for pursuant to Article 38 hereof are in office as a result of said
meeting.

42.     Vacation
of Office

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

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

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43.     Remuneration
of Directors

Director
shall be paid remuneration by the Company
for his services as Director to the extent such remuneration shall have been approved by a
General Meeting of the Company.

44.     Conflict
of Interests

Subject
to the provisions of the Companies Ordinance, no Director shall be disqualified by virtue
of his office from holding any office or place of profit under the Company or under any
company in which the Company shall be a shareholder or otherwise interested, or from
contracting with the Company as vendor, purchaser or otherwise, nor shall any such
contract, or any contract or arrangement entered into by or on behalf of the Company in
which any Director shall be in any way interested, be avoided, nor, other than as
required under the Companies Ordinance, shall any Director be liable to account to the
Company for any profit arising from any such office or place of profit or realized by any
such contract or arrangement by reason only of such Directors holding that office
or of the fiduciary relations thereby established, but the nature of his interest, as
well as any material fact or document, must be disclosed by him at the meeting of the
Board of Directors at which the contract or arrangement is first considered, if his
interest then exists, or, in any other case, at no later than the first meeting of the
Board of Directors after the acquisition of his interest.

45.     Alternate
Directors

(a)        A
Director may, by written notice to the Company given in the manner set forth
               in Article 45(b) below, appoint any individual (whether or not such person
is                then a member of the Board of Directors) as an alternate for himself
(in these                Articles referred to as Alternate Director), remove
such Alternate                Director and appoint another Alternate Director in place of
any Alternate                Director appointed by him whose office has been vacated for
any reason                whatsoever. Unless the appointing Director, by the instrument
appointing an                Alternate Director or by written notice to the Company,
limits such appointment                to a specified period of time or restricts it to a
specified meeting or action                of the Board of Directors, or otherwise
restricts its scope, the appointment                shall be for all purposes, and for a
period of time concurrent with the term of                the appointing Director.

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(b)        Any
notice to the Company pursuant to Article 45(a) shall be given in person to,
               or by sending the same by mail to the attention of the General Manager of
the                Company at the principal office of the Company or to such other person
or place                as the Board of Directors shall have determined for such purpose,
and shall                become effective on the date fixed therein, or upon the receipt
thereof by the                Company (at the place as aforesaid), whichever is later.

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

(d)        Any
Individual, whether or not he be a member of the Board of Directors, may act
               as an Alternate Director. One person may act as Alternate Director for
several                Directors, and in such event he shall have a number of votes (and
shall be                treated as the number of persons for purposes of establishing a
quorum) equal to                the number of Directors for whom he acts as Alternate
Director. If an Alternate                Director is also a Director in his own right,
his rights as an Alternate                Director shall be in addition to his rights as
a Director.

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

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

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PROCEEDINGS OF THE
BOARD OF DIRECTORS

46.     Meetings

(a)        The
Board of Directors may meet and adjourn its meetings and otherwise regulate
               such meetings and proceedings as the Directors think fit.

(b)        Any
Director may at any time, and the Secretary, upon the request of such
               Director, shall, convene a meeting of the Board of Directors, but not less
than                seven (7) days notice shall be given of any meeting so
convened. Notice of                any such meeting may be given orally, by telephone, in
writing or by mail,                telex, cablegram or facsimile. Notwithstanding
anything to the contrary herein,                failure to deliver notice to a director
of any such meeting in the manner                required hereby may be waived by such
Director, and a meeting shall be deemed to                have been duly convened
notwithstanding such defective notice if such failure or                defect is waived
prior to action being taken at such meeting, by all Directors                entitled to
participate at such meeting to whom notice was not duly given as
               aforesaid.

47.     Quorum

Until
otherwise unanimously decided by the Board
of Directors, a quorum at a meeting of the Board of Directors shall be constituted by the
presence in person or by telephone conference of a majority of the Directors then in
office who are lawfully entitled to participate in the meeting. No business shall be
transacted at a meeting of the Board of Directors unless the requisite quorum is present
(in person or by telephone conference) when the meeting proceeds to business.

48.     Chairman
of the Board of Directors

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

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49.     Validity
of Acts Despite Defects

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

CHIEF EXECUTIVE OFFICER
AND PRESIDENT

50.     Chief
Executive Officer and President

The
Board of Director may from time to time appoint one or more persons, whether or not
Directors, as Chief Executive Officer or Officers, General Manager or Managers, or
President of the Company and may confer upon such person (s), and from time to time
modify or revoke, such title (s) and such duties and authorities of the Board of
Directors as the Board of Directors may deem fit, subject to such limitations and
restrictions as the Board of Directors may from time to time prescribe. Unless otherwise
determined by the Board of Directors the Chief Executive Officer shall have authority
with respect of the management of the Company in the ordinary course of business. Such
appointment (s) may be either for a fixed term or without any limitation of time, and the
Board of Directors may from time to time (subject to the provisions of the Companies
Ordinance and of any contract between any such person and the Company) fix his or their
salaries and emoluments, remove or dismiss him or them from office and appoint another or
others in his or their place or places.

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MINUTES

51.     Minutes

(a)       
          Minutes of each General Meeting arid of each
meeting of the Board of Directors shall be recorded and duly entered in books provided for
that purpose, and shall be held by the Company at its principal office or its Registered
Office or such other place as shall have been determined by the Board of Directors. Such
minutes shall, in all events, set forth the names of the persons present at the meeting
and all resolutions adopted thereat.

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

DIVIDENDS

52.     Declaration
of Dividends

The
Board of Directors may from time to time declare, and cause the Company to pay, such
interim dividend as may appear to the Board of Directors to be justified by the profits
of the Company. The final dividend in respect of any fiscal period shall be proposed by
the Board of Directors and shall be payable only after the same has been approved by
Ordinary Resolution of the Company, but no such resolution shall provide for the payment
of an amount exceeding that proposed by the Board of Directors for the payment of such
final dividend, and no such resolution or any failure to approve a final dividend shall
affect any interim dividend theretofore declared and paid. The Board of Directors shall
determine the time for payment of such dividends, both interim and final, and the record
date for determining the shareholders entitled thereto.

53.     Funds
Available for Payment of Dividends

No
dividend shall be paid otherwise than out of the profits of the Company.

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54.     Amount
Payable by Way of Dividends

(a)
               Subject to the rights of the holders of shares as to dividends, any
dividend                paid by the Company shall be allocated among the members entitled
thereto in                proportion to the sums paid up or credited as paid up on
account of the nominal                value of their respective holdings of the shares in
respect of which such                dividend is being paid without taking into account
the premium paid up for the                shares. The amount paid up on account of a
share which has not yet been called                for payment or fallen due for payment
and upon which the Company pays interest                to the shareholder shall not be
deemed, for the purposes of this Article, to be                a sum paid on account of
the share.

(b)
               Whenever the rights attached to any shares or the terms of issue of the
shares                do not provide other- wise, shares which are fully paid up or which
are credited as fully or partly paid within any period which in respect
thereof dividends                are paid shall entitle the holders thereof to a dividend
in proportion to the                amount paid up or credited as paid up in respect of
the nominal value of such                shares and to the date of payment thereof (pro
rata temporis).

55.     Interest

No
dividend shall carry interest as against the Company.

56.     Payment
in Specie

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

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57.     Implementation
of Powers under Article 56

For
the purpose of giving full effect to any resolution under Article 56, and without
derogating from the provisions of Article 7(b) hereof, the Board of Directors may
settle any difficulty which may arise in regard to the distribution as it thinks
expedient, and, in particular, may issue fractional certificates, and may fix the value
for distribution of any specific assets, and may determine that cash payments shall be
made to any members upon the footing of the value so fixed, or that fractions of less
value than the nominal value of one share may be disregarded in order to adjust the
rights of all parties, and may vest any such cash, shares, debentures, debenture stock or
specific assets in trustees upon such trusts for the persons entitled to the dividend or
capitalized fund as may seem expedient to the Board of Directors. Where requisite, a
proper contract shall be filed in accordance with Section 130 of the Companies Ordinance,
and the Board of Directors may appoint any person to sign such contract on behalf of the
persons entitled to the dividend or capitalized fund.

58.     Dividends
on Unpaid Shares

Without
derogating from Article 54 hereof, the Board of Directors may give an instruction which
shall prevent the distribution of a dividend to the holders of shares the full nominal
amount of which has not been paid up.

59.     Retention
of Dividends

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

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

60.     Unclaimed
Dividends

All
unclaimed dividends or other moneys payable in respect of a share may be invested or
otherwise made use of by the Board of Directors for the benefit of the Company until
claimed. The payment by the Directors of any unclaimed dividend or such other moneys into
a separate account shall not constitute the Company a trustee in respect thereof. The
principal (and only the principal) of an unclaimed dividend or such other moneys shall
be, if claimed, paid to a person entitled thereto.

61.     Mechanics
of Payment

Any
dividend or other moneys payable in cash in respect of a share may be paid by check or
warrant sent through the post to, or left at, the registered address of the person
entitled thereto or by transfer to a bank account specified by such person (or, if two or
more persons are registered as joint holders of such share or are entitled jointly
thereto in consequence of the death or bankruptcy of the holder or otherwise, to the
joint holder whose name is registered first in the Register of Members or his bank
account or the person who the Company may then recognize as the owner thereof or entitled
thereto under Article 21 or 22 hereof, as applicable, or such persons bank
account), or to such person and at such other address as the person entitled thereto may
be writing direct. Every such check or warrant shall be made payable to the order of the
person to whom it is sent, or to such person as the person entitled thereto as aforesaid
may direct, and payment of the check or warrant by the banker upon whom it is drawn shall
be a good discharge to the Company.

62.     Receipt
from a Joint Holder

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

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ACCOUNTS

63.     Books
of Account

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

64.     Audit

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

65.     Auditors

The
appointment, authorities, rights and duties of
the auditor(s) of the Company, shall be regulated by applicable law, provided, however,
that in exercising its authority to fix the remuneration of the auditor(s), the members in
General Meeting may, by Ordinary Resolution, act (and in the absence of any action in
connection therewith shall be deemed to have so acted) to authorize the Board of Directors
to fix such remuneration subject to such criteria or standards, if any, as may be provided
in such Ordinary Resolution, and if no such criteria or standards are so provided, such
remuneration shall be fixed in an amount commensurate with the volume and nature of the
services rendered by such auditor(s).

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BRANCH REGISTERS

66.     Branch
Registers

Subject
to and in accordance with the provisions
of Sections 71 to 80, inclusive, of the Companies Ordinance and to all orders and
regulations issued thereunder, the Company may cause branch registers to be kept in any
place outside Israel as the Board of Directors may think fit, and, subject to all
applicable requirements of law, the Board of Directors may from time to time adopt such
rules and procedures as it may think fit in connec-tion with the keeping of such branch
registers.

67.     Audit
Committee

(a)        For
purposes of these Articles the terms Office Holder,                Personal
Interest and Relative shall be defined as set                forth in
Section 96(24) of the Companies Ordinance.

(b)        The
Board of Directors shall appoint an Audit Committee which shall be composed
               of three members, none of which shall be Chairman or Co-Chairman of the
Board of                Directors, the Chief Executive Officer, Controller, Secretary or
any other                Office Holder who is an employee of the Company, and the
majority of which shall                not be shareholders of the Company holding more
than 5% (five percent) of the                issued and outstanding share capital of the
Company, or their relatives.

(c)        All
of the following matters shall be brought before the Audit Committee, and no
               action in respect thereof shall be taken prior to receiving the Audit
               Committees and the Board of Directors approval. Approval of
the                Board of Directors may be given only following the Audit Committees
               approval.

| | (i)        Proposed
transactions to which the Company intends to be a party in which  an
Office Holder has a direct or indirect Personal Interest; and
| | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)        Actions
which may otherwise be deemed to constitute a breach of      fiduciary duty or the duty
of care, as defined In Section 96(27) of the Companies Ordinance, of an      Office
Holder of the Company; and
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (iii)        Agreements
with directors as to the terms of their service; and
| | ----------------------------------------------------------------------------

| | (iv)        Indemnification
of Office Holders.
| | ----------------------------------------------

(d)        Approval
by the majority of the Members of the Audit Committee shall be deemed
               approval of the Audit Committee for the purposes of this Article.

(e)        The
Audit Committee shall meet upon receiving prior written notice of seven
               days from the Board of Directors of the adjournment of a meeting. Such
prior                written notice shall contain details of the action in respect of
which the                meeting will be adjourned.

(f)        Should
a majority of the Audit Committee or of the Board of Directors have a
               Personal Interest in any of the matters detailed in Section 67(c) above,
the                action shall be raised at the next General Shareholders Meeting, and
shall be                subject to approval of the General Meeting.

(g)       
          Any Office Holder whose interest is brought
before the Audit Committee and the Board of Directors for approval shall not be present
nor shall he have a vote at any meeting at which his interest shall be discussed or voted
upon.

INDEMNITY AND INSURANCE

68.     Insurance,
Indemnification and Exculpation

The
Company may insure, indemnify and exculpate its Office Holders to the fullest extent
permitted by law, from time to time. Without limiting the generality of the foregoing:

(a)        Subject
to the provisions of the Companies Law 5759-1999 as amended from time to
               time (the Companies Law), the Company may enter into a
contract for                the insurance of its Office Holders, for act or omissions in
their capacity as                Office Holders, in whole or in part, against any of the
following:

| | (i)        breach
of the duty of care owed to the Company or a third party;
| | ---------------------------------------------------------------------------

| | (ii)        breach
of the fiduciary duty owed to the Company, provided that  the
Office Holder acted in good faith and had reasonable grounds to believe that his action
would not harm the Companys interests; and
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (iii)        monetary
liability imposed on the Office Holder in favor of a  third
party.
| | ----------------------------------------------------------------------------------------

(b)        Subject
to the provisions of the Companies Law, the Company is entitled
               retroactively to indemnify any Office Holder, or to provide a prior
undertaking                to indemnify an Office Holder where such prior undertaking is
limited                (1) to categories of events that the Board believes are
foreseeable in                light of the Companys activities on the date of grant
of the undertaking                to indemnify, and (2) to an amount or in
accordance with guidelines                determined by the Board to be reasonable in the
circumstances (and such                undertaking includes the categories of events that
the Board believes are                foreseeable in light of the Companys
activities on the date of grant of                the undertaking to indemnify and to an
amount or in accordance with guidelines                determined by the Board to be
reasonable in the circumstances), for an act that                such Office Holder
performed by virtue of being an Office Holder of the Company,                for monetary
liability imposed on the Office Holder in favor of a third party in                a
judgment, including a settlement or an arbitral award confirmed by a court.

(c)        Subject
to the provisions of the Companies Law, the Company is entitled
               retroactively to indemnify any Office Holder, or to provide a prior
undertaking                to indemnify an Office Holder for:

| | (i)        reasonable
legal costs, including attorneys fees, expended by an Office  Holder
as a result of an investigation or proceeding instituted against the Office Holder by a
competent authority, provided that such investigation or proceeding concludes without the
filing of an indictment against the Office Holder and either (A) no financial
liability was imposed on the Office Holder in lieu of criminal proceedings, or
(B) financial liability was imposed on the Office Holder in lieu of criminal
proceedings but the alleged criminal offense does not require proof of criminal intent;
and
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)        reasonable
legal costs, including attorneys fees, expended by the  Office
Holder or for which the Office Holder is charged by a court, (a) in an action brought
against the Office Holder by or on behalf of the Company or a third party, or (b) in a
criminal action in which the Office Holder is found innocent, or (c) in a criminal action
in which the Office Holder is convicted and in which a proof of criminal intent is not
required.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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(d)        Subject
to the provisions of the Companies Law, the Company may exculpate an
               Office Holder in advance from liability, or any part of liability, for
damages                sustained by virtue of a breach of duty of care to the Company.

(e)        Subject
to the provisions of the Companies Law, the Company may procure                insurance
for, indemnify and exculpate any person who is not an Office Holder
               including, without limitation, any employee, agent, consultant or
contractor of                the Company who is not an Office Holder.

WINDING UP

69.     Winding
up

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

RIGHTS OF SIGNATURE,
STAMP AND SEAL

70.     Rights
of Signature, Stamp and Seal

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

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

(c)        The
Company may exercise the powers conferred by Section 102 of the Companies
               Ordinance regarding a seal for use abroad, and such powers shall be vested
in the Board of Directors.

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NOTICES

71.     Notices

(a)       
          Any written notice or other document may be
served by the Company upon any member either personally or by sending it by prepaid mail
(airmail if sent internationally) addressed to such member at his address as described in
the Register of Members or such other address as he may have designated in writing for the
receipt of notices and other documents. Any written notice or other document may be served
by any member upon the Company by tendering the name in person to the Secretary or the
General Manager of the Company at the principal office of the Company or by sending it by
prepaid registered mail (airmail if posted outside Israel) to the Company at its
Registered Address. Any such notice or other document shall be deemed to have been served
forty-eight (48) hours after it has been posted (seven (7) business days if sent
internationally), or when actually received by the addressee if sooner than forty-eight
hours or seven days, as the case may be, after it has been posted, or when actually
tendered in person, to such member (or to the Secretary or the General Manager). Notice
sent by cablegram, telex, facsimile or electronic mail shall be deemed to have been served
when actually received by such member (or by the Company). If a notice is, in fact,
received by the addressee, it shall be deemed to have been duly served, when received,
notwithstanding that it was defectively addressed or failed, in some other respect, to
comply with the provisions of this Article 71(a).

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

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

(d)        Notwithstanding
anything to the contrary contained herein, notice by the Company                of a
General Meeting which is published in at least two daily newspapers in the
               State of Israel within the time otherwise required for giving notice of
such                meeting under Article 25 hereof and containing the information
required to be                set forth in such notice under such Article, shall be
deemed to be a notice of                such meeting duly given, for purposes of these
Articles, to any member whose                address as registered in the Register of
Members is located in the State of                Israel.

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