EXHIBIT 4.6

CONVERTIBLE LOAN
AGREEMENT

This Loan
Agreement (the Agreement) is
made as of the 29 day of April, 2004 by and between C-Signature Ltd. with an
address at: Berkman, Wechsler, Sahar, Bloom & Co. Law Offices 1 Azrieli
center Tel Aviv Israel (the Company)
and Aladdin Knowledge Systems Ltd. With an Address at: 15 Beit Oved St., Tel
Aviv, Israel (the Lender) (each of the Company and the
Lender, a Party).

|WHEREAS: | The Company
  requires an infusion of funds in order to conduct its business activities;
  and                            
|-------- | --------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                           
|WHEREAS: | The Lender
  is willing to make available a loan to the Company on the terms and
  conditions set forth in this Agreement.

Now, therefore, the Parties hereto hereby agree as follows:

|1. | Loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Lender
  covenants to lend the Company a total amount of US$550,000 (the Principal Amount). The Principal Amount
  and any portion thereto, if paid in New Israeli Shekels shall be paid in
  accordance with the last known representative rate of exchange of the US
  Dollar as published by the Bank of Israel on the date of payment. The
  Principal amount shall be paid by the Lender to the Company at a closing
  meeting to be held at the offices of Berkman Wechsler Sahar Bloom & Co.,
  1 Azrieli Tower, Tel-Aviv, on April 29, 2004, or at such other time, place
  and manner as the Company and the Lender will mutually agree upon, orally or
  in writing (the First Closing).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | Repayment of
  the Loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company
  undertakes to repay to the Lender the Principal Amount less any amounts that
  were used by the Company in accordance with Section 10.1 below (the Remainder of the Principal amount). The
  Remainder of the Principal Amount shall be due and payable upon [*****] set
  forth in Schedule 2 (the Milestone), [*****]; all, unless such
  repayment date is extended by the Parties hereto.                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3. | Conversion
  of the Loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Within
  [*****] after the First Closing, provided that [*****] until such date, the
  Principal Amount will be automatically converted into Series A Preferred
  Shares of the Company nominal value NIS 0.01 each (the Preferred A Shares) at a price per
  share of [*****] (the PPS). In
  such case the Company shall not be obligated to make any payment with respect
  to the Principle Amount converted thereby or any accrued interest thereto.
  The Lender shall be entitled, at its sole discretion, to convert the Loan
  into Preferred A Shares, as set forth above, even earlier than the lapse of
  the 6 months period and even if a Repayment Event has occurred.                 

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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|4. | Additional
  Investment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Concurrently
  with the conversion of the Loan, as set forth in Section 3 above, Lender
  shall purchase, and the Company shall sell and issue to the Lender additional
  Preferred A Shares at the PPS in an aggregate amount of US$500,000, such that
  the aggregate number of Preferred A Shares held by the Lender upon the Second
  Closing (assuming conversion of the Principle Amount) shall be 2,484 as set
  forth in the capitalization table attached hereto as Schedule 4 (respectively: the Second Closingand the Second Installment) (the Principle
  amount and the Second Installment, together, the Purchase Price).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|5. | Amendment of
  Corporate Documents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | At, or prior
  to, the First Closing, the Company shall replace its current Articles of
  Association by adopting the Amended Articles of Association, in the form
  attached hereto as Schedule 5
  (Amended Articles). As soon as practicable following the First Closing (but
  in any event not later than 14 days following theFirst Closing), the Company
  shall file the Amended Articles with the Israeli Registrar of Companies.                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|6. | License
  Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Soon after
  the First Closing the Company and the Lender shall enter into and execute a
  License Agreement, in a form acceptable to the Company and the Lender(the License
  Agreement).                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|7. | Closing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | 7.1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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| |      |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      | 7.1.4.                                                                                                                                                                                                                                                                                                                                                                                                    | Opinion of Counsel. The Company shall
  deliver to the Lender an opinion (in the form attached hereto as Schedule7.1.4), dated as of the
  Closing date, of Berkman Wechsler Sahar Bloom & Co., counsel to the
  Company.                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                
| |      | 7.1.5.                                                                                                                                                                                                                                                                                                                                                                                                    | Payment. The First Closing shall not
  occur with respect to the Lender until the Lender shall have paid to the
  Company the Loan amount, by way of a wire transfer to the Companys bank
  account, in accordance with the wiring instructions as shall be provided by
  the Company, or by such other form of payment as is mutually agreed by the
  Company and the Lender.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                
| | 7.2. | Conditions to First Closing. Each
  Partys obligation at the First Closing to consummate the transactions
  contemplated hereby is subject to the satisfaction and fulfillment, prior to
  or at the first Closing, of each of the following conditions (any or all of
  which may be waived, in whole or in part, by any of the Parties, which waiver
  shall be at the sole discretion of such Party):
| |      |                                                                                                                                                                                                                                                                                                                                                                                                          
| |      | 7.2.1.                                                                                                                                                                                                                                                                                                                                                                                                    | Accurate Representations and Warranties.
  The representations and warranties set forth in Sections 8 and 9 below shall
  be true and correct in all material respects when made and as of the First
  Closing (as if made at the first Closing).                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                
| |      | 7.2.2.                                                                                                                                                                                                                                                                                                                                                                                                    | Compliance with Covenants. Each Party
  shall have performed and complied in all respects with all of its covenants,
  agreements, and undertakings as set forth herein.                                                                                                                                                                                                       
| |      |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                
| |      | 7.2.3.                                                                                                                                                                                                                                                                                                                                                                                                    | Actions Taken; Delivery of Documents.
  All of the actions to be taken pursuant to Section 7.1 above shall have been
  completed to the satisfaction of the Lender and the Company. Documents to be
  delivered by the Company pursuant to Section 7.1 above shall have been
  delivered.                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                
| |      | 7.2.4.                                                                                                                                                                                                                                                                                                                                                                                                    | Consents and Approvals.  The Company shall have applied for and
  received all consents and approvals required in order to consummate the
  transactions contemplated by this Agreement.                                                                                                                                                                                       
| |      |                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                
| | 7.3. | Deliveries and Transactions at the Second Closing.
  At the Second Closing, the following transactions shall occur simultaneously
  (no transaction shall be deemed to have been completed or any document
  delivered until all such transactions have been completed and all such required
  documents delivered):                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                          
| |      | 7.3.1.                                                                                                                                                                                                                                                                                                                                                                                                    | Share Certificates. The Company shall
  deliver to the Lender a validly executed share certificate representing the
  Preferred Shares issued in the name of the Lender in consideration of the
  Principal Amount (which has been converted as set forth in Section 3 above)
  and the Second Installment.                                                                    

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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 7.3.2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Payment. The Second Closing shall not
  occur with respect to the Lender until the Lender shall have paid to the
  Company the Second Installment, by way of a wire transfer to the Companys
  bank account, in accordance with the wiring instructions as shall be provided
  by the Company, or by such other form of payment as is mutually agreed by the
  Company and the Lender.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                        
|   | 7.4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Conditions to Second Closing.Each Partys
  obligation at the Second Closing to consummate the transactions contemplated
  hereby is subject to the satisfaction and fulfillment, prior to or at the
  Second Closing, of each of the following conditions (any or all of which may
  be waived, in whole or in part, by any of the Parties, which waiver shall be
  at the sole discretion of such Party):                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 7.4.1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Actions Taken; Delivery of Documents.
  All of the actions to be taken pursuant to Section 7.3 above shall have been
  completed to the satisfaction of the Lender and the Company. Documents to be
  delivered by the Company pursuant to Section 7.3 above shall have been
  delivered.                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 7.4.2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Consents and Approvals.  The Company shall have applied for and
  received all consents and approvals required in order to consummate the
  transactions contemplated by this Agreement.)                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                        
|8. | Representations
  & warranties of the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company,
  being aware that the Lender has agreed to enter into this Agreement in
  reliance on the representations and warranties set forth in this Section 8,
  hereby represents and warrants to the lender that, except as set forth on a
  Schedule of Exceptions (Schedule of
  Exceptions) attached hereto as Schedule 8 which exceptions shall be deemed to be
  representations and warranties as if made hereunder), the statements
  contained in this Section 8 are true and correct as of the date of this
  Agreement and will be true and correct as of the First Closing (as though
  made then and as though the First Closing Date was substituted for the date
  of this Agreement throughout this Section 8):
|   | 8.1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Incorporation. The Company is a
  corporation duly incorporated and validly existing under the laws of the
  State of Israel and has all requisite corporate power and authority to carry
  on its business as now conducted and as currently proposed to be conducted.                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 8.2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Authorization. All corporate and other
  actions on the part of the Company, its officers, directors and shareholders,
  necessary for the authorization, execution and delivery of this Agreement,
  the performance of all obligations of the Company hereunder, including the
  authorization, issuance, sale and delivery of the Preferred Shares being sold
  upon conversion of the Loan, have been taken or will be taken prior to the
  First Closing.                                                                                                                                                                                                                          
|   | 8.3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Validity. This Agreement and the
  documents to be delivered to the Lender at the First Closing, when executed
  and delivered by the Company, will be duly executed and, at the First
  Closing, shall constitute the valid and legally binding obligations of the
  Company, enforceable against the Company in accordance with their respective
  terms, except (i) as limited by applicable bankruptcy, insolvency,
  reorganization, moratorium and other laws of general application affecting
  enforcement of creditors rights generally, and (ii) as limited by laws
  relating to the availability of specific performance, injunctive relief, or
  other equitable remedies.
|   | 8.4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Governmental Consents or Third Party Consents.
  Except as set forth in Section 8.4 to Schedule 8, the Company is not required
  to give any notice to, make any filing with, or obtain any authorization,
  consent, qualification, order or approval of any governmental authority or
  agency, or any third party, in order to consummate the transactions
  contemplated by this Agreement. At the First Closing, each of the
  shareholders of the Company will waive any preemptive or similar rights it
  may have with respect to the transactions contemplated by this Agreement.                                                                                              

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| | 8.5.  | Subsidiaries. The Company does not (i)
  own any stock or have any equity investment or other interest in, (ii) have
  the right to acquire any such interest, and (iii) control, directly or
  indirectly, any corporation, association, partnership, joint venture or other
  entity, and has not had such an ownership or control relationship with any
  such entity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | 8.6.  | Capitalization. Immediately prior to the
  First Closing, the authorized share capital of the Company will be NIS10,000
  consisting of 1,000,000 shares, nominal value NIS 0.01 each, divided into:
  (a) 996,667 Ordinary Shares of the Company, nominal value NIS 0.01 each (the Ordinary Shares), of which 10,000
  Ordinary Shares are issued and outstanding; and (b) 3,333 Series A Preferred
  Shares, nominal value NIS 0.01 each, of which none are issued and
  outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |       | The rights,
  privileges and preferences of the Preferred Shares will be as set forth in
  the Amended Articles.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 8.7.  | Valid Issuance. The Companys issued and
  outstanding shares are all duly and validly authorized and issued, fully paid
  and nonassessable, and were issued in compliance with all applicable Israeli
  laws, including the relevant securities laws of the State of Israel.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | 8.8.  | Options; Warrants; Etc. (A) as of the
  date hereof, there are no outstanding options, warrants, purchase rights,
  subscription rights, preemptive rights, rights of first refusal, conversion
  rights, exchange rights, or other rights or securities, of any nature
  whatsoever, or other contracts, agreements, undertakings, promises or
  commitments, that could require the Company to issue, sell, or otherwise
  cause to become outstanding any of its share capital; and (B) as of the First
  Closing, there shall not be any rights granted by the Company in its share
  capital, or, to the Companys knowledge, claims possessed by any person
  (other than as specifically set forth in this Agreement including all
  Schedules thereto) and enforceable against the Company in law or in equity,
  to compel such an issuance, adjustment or transfer of the Ordinary Shares or
  Preferred Shares (or any options, warrants, preemptive rights or other rights
  or securities, of any nature whatsoever, convertible into or exchangeable for
  shares of the Company), by reason of the execution, closing or performance of
  this Agreement or by any other reason. There are no outstanding or authorized
  stock appreciation, phantom stock, or similar rights with respect to the
  Company.
| | 8.9.  | Summary Capitalization. Schedule 8.9contains a list of
  all of the holders of the Companys issued and outstanding share capital.
  Such holders are the record and, to the Companys best knowledge, and the
  beneficial owners of all the issued and outstanding share capital and all
  rights to acquire share capital free and clear of any liens (except as set
  forth in the Amended Articles), claims, charges, encumbrances, restrictions,
  right, options to purchase, proxies, voting trusts and other voting
  agreements, calls or commitments of every kind.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | 8.10. | Valid Issuance of Preferred Shares. The
  Preferred Shares that will be purchased by the lender upon conversion, when
  issued, delivered and fully paid for in accordance with the terms of this
  Agreement, will be duly and validly authorized and issued, fully paid,
  nonassessable, and issued in compliance with all applicable Israeli laws,
  including Israeli securities laws, free of restrictions on transfer,
  preemptive or similar rights other than as set forth in this Agreement, the
  Shareholders Rights Agreement, the Amended Articles and under the applicable
  laws. The Ordinary Shares issuable upon conversion of the Preferred Shares
  in accordance with the Amended Articles have been duly authorized and
  reserved for issuance by all necessary corporate actions and, when issued and
  paid-for in accordance with the Amended Articles and this Agreement, will be
  duly and validly issued, fully paid, non-assessable and issued in compliance
  with all applicable Israeli laws, free of restrictions or transfer,
  preemptive rights or similar rights other than as set forth herein, the
  Amended Articles and applicable laws.                                                                                                                                       

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| |       |                                                                                  
| | ----- | ---------------------------------------------------------------------------------
| | 8.11. | Employees. The Company does not employ,
  nor has it ever employed any personnel.
| | 8.12. | Intellectual Property                                                            
| |       | 8.12.1.                                                                          
| |       | 8.12.2.                                                                          
| |       | 8.12.3.                                                                          

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| | 8.13. | Litigation. The Company is not: (i)
  subject to any outstanding injunction, judgment, order, decree, writ,
  stipulation, ruling, or charge of any court or any governmental agency or any
  arbitrator; or (ii) a party or, to the Companys knowledge, is threatened to
  be made a party, to any action, suit, proceeding, hearing, complaint, charge
  or investigation of, in, or before any court or quasi-judicial or
  administrative agency of any state, municipal, or foreign jurisdiction or
  before any arbitrator or other method of settling disputes or disagreements.
  The Company does not know or anticipate that any such action, suit,
  proceeding, hearing, complaint, charge or investigation will be brought or
  threatened against the Company, and the Company does not intend to initiate
  any such action, suit, proceeding, hearing, complaint, charge or
  investigation. There is no action, suit, proceeding, or investigation pending
  or, to the Companys knowledge, currently threatened, involving the prior
  employment of any of the Companys employees, their use in connection with
  the Companys business of any information or techniques allegedly proprietary
  to any of their former employers, and their obligations under any agreement
  with prior employers.                                                                                                                                                                                                                                                                                                                                                         
| | 8.14. | Compliance with the Law and Other Instruments.
  The Company has conducted its respective business in all material respects in
  accordance with all applicable laws and there is no material violation or
  default with respect to any law or judgment of any court or any governmental
  agency. To the best of the Companys knowledge, there is no existing law,
  rule, regulation or order which would prohibit or restrict the Company from,
  or otherwise materially adversely affect the Company in, conducting its
  respective businesses in any jurisdiction in which it is now conducting
  business or in which it currently proposes to conduct business. The Company
  is not in material violation or default of any provision of its corporate
  documents or any contract to which it is a party or by which it is bound. The
  execution and the delivery of this Agreement and the Shareholders Rights
  Agreement, and the consummation of the transactions contemplated hereby and
  thereby, will not (i) violate any law, injunction, judgment, order, decree,
  ruling, charge, or other restriction of any government, governmental agency,
  or court to which the Company is subject; or (ii) conflict with, result in a
  breach of, constitute a default under, result in the acceleration of, create
  in any party the right to accelerate, terminate, modify, or cancel, or
  require any notice under any agreement, lease, license, instrument, or other
  arrangement to which the Company is a party or by which it is bound, or to
  which its assets are subject, or result in the imposition of any security
  interest upon such assets.
| | 8.15. | Agreements. Except as mentioned in this
  Agreement (including the Schedules hereto) hereto, and except as set forth in
  Section 8.15 to Schedule 8 hereto, there are no agreements, contracts or
  proposed transactions to which the Company is a party or by which it is
  bound, that may involve (i) obligations (contingent or otherwise) of, or
  payments to either in excess of $30,000 in the aggregate, (ii) the license of
  any patent, copyright, trade secret or other proprietary right to or from the
  Company, (iii) provisions restricting or affecting the development,
  manufacture or distribution of the Companys products or services; or (iv)
  indemnification by the Company with respect to infringements or proprietary
  rights (other than indemnification obligations arising from purchase or sale
  agreements entered into in the ordinary course of business). All the material
  agreements to which the Company is a party (which are not otherwise mentioned
  in this Agreement and which exceed the thresholds set forth above) are listed
  in the Schedule of Exeptions. All such agreements are in full force and
  effect and the Company has no knowledge of the invalidity of or grounds for
  rescission on any of these agreements, or of any intention to terminate any
  such agreement.                                                                                                                                                                                                                                                                                                                                     

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|   | 8.16.                                                                                                                                                                                                                           | Corporate Documents. The current
  Articles of Association of the Company is in the form attached hereto as Schedule 8.16.The minute books of
  the Company contain a complete summary of all meetings of directors and
  shareholders of the Company, as the case may be, and all actions by written
  consent without a meeting by the directors and/or shareholders since the time
  of incorporation of the Company, and accurately reflect in all material
  respects all actions by the respective board of directors (and any committee
  thereof) and/or shareholders of the Company, as the case may be, with respect
  to all transactions referred to in such minutes.                                                      
|   | 8.17.                                                                                                                                                                                                                           | Disclosure. The representations and
  warranties of the Company in this Agreement are each accurate, correct and
  complete and do not contain any untrue statement of any material fact
  necessary in order to make the statements and information contained herein or
  therein not misleading.                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|9. | Representations
  & Warranties of the Lender                                                                                                                                                                                   
|   | The Lender,
  being aware that the Company has agreed to enter into this Agreement in
  reliance on the representations and warranties set forth in this Section 9,
  hereby represents and warrants to the Company as follows:
|   | 9.1.                                                                                                                                                                                                                            | Organization. It is duly organized, and
  validly existing under the laws of the state of its incorporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 9.2.                                                                                                                                                                                                                            | Authorization. The execution and
  delivery of this Agreement and the performance of the obligations of the
  Lender hereunder, have been duly authorized by all necessary corporate
  actions and no other action, consent, approval or authorization is necessary
  for the due authorization of such execution, delivery and performance of this
  Agreement and the obligations hereunder.                                                                                                                                                                                                                                                                                                                                         
|   | 9.3.                                                                                                                                                                                                                            | Enforceability. It has full power and
  authority to enter into this Agreement, and this Agreement, when executed and
  delivered by the Lender, will constitute the valid and legally binding
  obligations of the Lender, enforceable against the Lender in accordance with
  its terms, except (i) as limited by applicable bankruptcy, insolvency,
  reorganization, moratorium, and other laws of general application affecting
  enforcement of creditors rights generally, (ii) as limited by laws relating
  to the availability of specific performance, injunctive relief, or other
  equitable remedies.                                                                                                                   
|   | 9.4.                                                                                                                                                                                                                            | Purchase Entirely for Own Account. This
  Agreement is made with the Lender in reliance upon such Lenders
  representation to the Company, which by the Lenders execution of this
  Agreement the Lender hereby confirms, that the Preferred Shares to be
  purchased hereunder by the Lender will be acquired for investment for the
  Lenders own account, and not with a view to the resale or distribution of
  any part thereof, and that the Investor has no present intention of selling,
  granting any participation in, or otherwise distributing, same.                                                                                                                                                                  
|   | 9.5.                                                                                                                                                                                                                            | Due Diligence. It has reviewed and
  inspected all the information and materials provided to it in connection with
  this Agreement and same is deemed by it necessary or appropriate for deciding
  whether to purchase the Preferred Shares. The Lender further represents that
  it has had an opportunity to ask questions and receive answers from the
  Company regarding the terms and conditions of the Loan and the Preferred
  Shares and the business, properties, prospects and financial condition of the
  Company, and has reached the decision to pay the Loan amount and, subject to
  the conditions of this Agreement to convert the Loan and purchase shares in
  the Company as a result of careful consideration.

8

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---

|    |                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | 9.6.                                   | Investment Experience. It is an
  experienced and knowledgeable investor in securities of companies in the
  development stage similar to that of the Company and acknowledges that it is
  able to fend for itself, can bear the economic risk of the Loan and its
  investment, and has such knowledge and experience in financial or business
  matters that it is capable of evaluating the merits and risks of the Loan and
  the investment hereunder in the Preferred Shares. It acknowledges that this
  Agreement and the issuance of Preferred Shares hereunder (i) do not
  constitute a promise or guaranty by the Company or its shareholders or
  directors as to the financial or commercial success of the Company or the
  future value of its shares; and (ii) involves a risk factor that may even
  result in the loss of the total Loan amount or the amount invested in the
  Company.                                                                                                                                                                                                                                                                                                                 
|    |                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|10. | Affirmative
  Covenants of the Company
|    | 10.1.                                  | Use of Proceeds. The Company shall use
  the proceeds of the Loan and the Second Installment to continue the
  development of the Companys technology, sales and marketing programs and
  provide general working capital according to the Companys budget and
  business plan, all in accordance with and subject to the resolutions of the
  Board of Directors of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | 10.2.                                  | Confidentiality of Information. Each
  Party undertakes to keep in strict confidence, and not to use for any purpose
  whatsoever except for internal purposes, any and all information relating, in
  any way, to the other Party (the Disclosing
  Party) which has been provided to such receiving Party (the Recipient) by the Disclosing Party or
  was otherwise obtained bythe Recipient, except for information which: (i) is
  or shall be in the public domain not due to any act of the Recipient in
  breach of law or agreement; (ii) was initially possessed by the Recipient
  without being subject to any obligation of confidentiality; (iii) was
  rightfully received by the Recipient from a third party without being subject
  to any obligation of confidentiality; or (iv) is required to be disclosed by
  the Recipient under any applicable law or by any Securities and Exchange
  Commission/Agency, (provided,
  however, that the
  Recipient  shall, to the extent
  permitted by law, give the Disclosing Party written notice in advance of such
  required disclosure and shall use all reasonable efforts to obtain
  confidential treatment of materials required to be disclosed).
|    |                                        | Each of the
  Parties and any other person acting on their behalf shall keep this
  Agreement, including all schedules thereto, in strict confidence (subject to
  any applicable law), and shall not issue any public statement or press
  release concerning the transaction contemplated hereby without the prior
  written approval of the substance and form of any such statement or release.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | 10.3.                                  | Competitive Investments In the event
  that the Lender invests in any corporate entity that, under the Lenders good
  faith and reasonable discretion, competes with the Company and/or its
  business, the Lender shall provide written notice to the Company, as soon as
  practicable after completing such investment, that it has made an investment
  in a competitive entity, and shall maintain a strict policy of Chinese Walls
  with respect to all that concern the Company and any such competing corporate
  entity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | 10.4.                                  | Information Rights.Until a Qualified
  IPO (as such term is defined in the Amended Articles) the Lender shall be
  entitled to receive from the Company: (i) within 60 days after the end of
  each fiscal year, annual financial statements (including a balance sheet,
  statement of income and statement of cash flow), prepared in accordance with
  GAAP, audited by an accounting firm associated with one of the big four accounting
  firms; (ii) within 45 days from the end of each quarter (other than the last
  quarter of each fiscal year), unaudited, but reviewed, quarterly financial
  statements prepared in accordance with GAAP (including a balance sheet,
  statement of income and statement of cash flow); (iii) a monthly management
  report containing such information as shall be determined by the Company and
  the Lender; (iv) an annual operating plan and budget, at least 30 days prior
  to the first day of the year pertaining to such plan; (v) such other
  information as may be required by the Lender in accordance to any applicable
  security law; and (vi) such other information as may be reasonably requested
  by the Lender.                                       

9

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---

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | 10.5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Internal Reporting.The Companys
  management shall submit to the Companys Board, for its approval, on an
  annual basis, an annual operating plan and budget, at least 30 days prior to
  the first day of the year pertaining to such plan. In addition, the Companys
  management shall submit to the Board reports in such format, and concerning
  such information, as shall be required by the Board.                                                
|    | 10.6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Access and Visitation Rights. The Lender
  shall have, at reasonable times and upon reasonable notice, full access to
  all books and records of the Company, shall be entitled to review and copy
  them at its discretion, and shall be entitled to inspect the properties of
  the Company and consult with the management of the Company, all subject to
  the execution of a confidentiality agreement in the form satisfactory to the
  Companys Board.
|    | 10.7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Insurance. The Company undertakes
  that as soon as practicable after the execution of this Agreement, the
  Company will obtain a Directors and Officers liability insurance policy
  covering all directors of the Company, which insurance policy shall provide
  adequate insurance coverage for each of such persons, all as shall be
  approved by the Companys Board (and if so lawfully required, by the
  Shareholders of the Company).             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|11. | Additional
  Preferred A Shares for the Lender.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Company
  hereby undertakes that at any one or several events (Issuance Event) at which Company issues
  additional shares (whether Ordinary Shares or Preferred Shares of any
  series), Company shall issue to the Lender, in consideration for their
  nominal value, additional Preferred A Shares (the Lenders Additional Shares), in such number which shall
  not exceed, in the aggregate for all such Issuance Events, 849
  Preferred A Shares (subject to adjustments due to any stock split or
  combination, distribution of share dividend, recapitalization, mergers,
  reorganizations, distribution of bonus shares etc.); such Lenders Additional
  Shares shall be issued to the Lender by the Company in installments, at each
  Issuance Event, in such number for each installment, which shall not bring
  the Lender to an aggregate holding exceeding 19.9% of the issued and
  outstanding share capital of the Company, at any given time.
|    | The Parties
  hereby acknowledge that the Principle Amount and the Second Installment,
  along with the nominal value of the Lenders Additional Shares (to be paid
  upon issuance of such shares as set forth above), include a full and final
  consideration for the issuance of the Lenders Additional Shares, and that
  the Lenders Additional Shares, upon issuance, shall be fully paid.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|12. | Miscellaneous                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | 12.1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Each of the
  Parties hereto shall perform such further acts and execute such further
  documents as may reasonably be necessary to carry out and give full effect to
  the provisions of this Agreement and the intentions of the Parties as
  reflected thereby.                                                                                                                                                                                            

10

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| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 12.2.  | This
  Agreement shall be governed by and construed according to the laws of the
  State of Israel, without regard to the conflict of laws provisions thereof.
  Any dispute arising under or in relation to this Agreement shall be
  exclusively resolved in the competent court of the Tel-Aviv-Jaffa district,
  and each of the Parties hereby submits irrevocably to the jurisdiction of
  such court.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 12.3.  | Except as
  otherwise expressly limited herein, the provisions hereof shall inure to the
  benefit of, and be binding upon, the successors, assigns, heirs, executors
  and administrators of the Parties hereto. 
  None of the rights, privileges, or obligations set forth in, arising
  under, or created by this Agreement may be assigned or transferred by either
  Party without the prior consent in writing of the other Party.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 12.4.  | This
  Agreement constitutes the full and entire understanding and agreement between
  the Parties with regard to the subject matters hereof and thereof.  The preamble hereto constitutes an
  integral part hereof.  Any term of
  this Agreement may be amended and the observance of any term hereof may be
  waived (either prospectively or retroactively and either generally or in a
  particular instance) only with the written consent of the Party to this
  Agreement against whom such waiver is sought.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 12.5.  | All notices
  and other communications required or permitted hereunder to be given to a
  Party to this Agreement shall be in writing and shall be sent by facsimile or
  mailed by registered or certified airmail, postage prepaid, or otherwise
  delivered by hand or by messenger, if to the Company then to the Companys
  registered address, and if to the Lender then to the address set forth in the
  preamble hereto, or such other address with respect to a Party as such Party
  shall notify each other Party in writing as above provided.  Any notice sent in accordance with this
  Section 6 shall be effective: (i) if mailed, seven (7) business days after
  mailing; (ii) if sent by messenger, upon delivery; and (iii) if sent via
  facsimile, upon transmission and electronic confirmation of receipt or (if
  transmitted and received on a non-business day) on the first business day
  following transmission and electronic confirmation of receipt.
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 12.6.  | No delay or
  omission to exercise any right, power, or remedy accruing to any Party upon
  any breach or default under this Agreement, shall be deemed a waiver of any
  other breach or default theretofore or thereafter occurring.  All remedies, either under this Agreement
  or by law or otherwise afforded to any of the Parties, shall be cumulative
  and not alternative.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 12.7.  | If any
  provision of this Agreement is held by a court of competent jurisdiction to
  be unenforceable under applicable law, then such provision shall be excluded
  from this Agreement and the remainder of this Agreement shall be interpreted
  as if such provision were so excluded and shall be enforceable in accordance
  with its terms; provided, however, that in such event this Agreement shall be
  interpreted so as to give effect, to the greatest extent consistent with and
  permitted by applicable law, to the meaning and intention of the excluded
  provision as determined by such court of competent jurisdiction.                                                                                                                                                                                                                                                                                                                                        
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 12.8.  | No agent, finder
  or broker acting on behalf of or under the authority of the Company is or
  will be entitled to any brokers or finders fee or any other similar
  commission or fee in connection with the transactions contemplated hereby.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 12.9.  | The
  representations and warranties set forth in this Agreement shall survive the
  First Closing for a period of two years thereafter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | 12.10. | The Investor
  Lender shall not bring any claim, or series of claims for compensation,
  unless the damages claimed in accordance therewith are at least US$100,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

11

---

---

| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 12.11. | This
  Agreement may be executed in two or more counterparts, each of which shall be
  deemed an original and enforceable against the Parties actually executing
  such counterpart, and all of which when taken together shall constitute one
  and same instrument.                                                                                                                                                                                                                                                                                                                                                                                         
| | 12.12. | Waiver of Conflicts. Each Party to this
  Agreement acknowledges that Berkman Wechsler Sahar, Bloom & Co. (BWSB),
  counsel for the Company and for the Lender, in matters which are related and
  which are unrelated to the transactions described in this Agreement.
  Accordingly, each Party to this Agreement hereby (i) acknowledges that they
  have had an opportunity to ask for information relevant to this disclosure;
  and (ii) gives its informed consent to BWSBs representation of the Lender in
  such matters and to BWSBs representation of the Company in connection with
  this Agreement and the transactions contemplated hereby.

12

---

---

IN
WITNESS WHEREOFthe Parties have signed this Agreement
in one or more counterparts as of the date first hereinabove set forth.

|CSignature Ltd. | Aladdin Knowledge Systems Ltd. |       
|---------------- | ------------------------------ | ------
|                 |                                |       
|By:              |                                | By:   
|                 |                                |       
|Name:            |                                | Name: 
|Title:           |                                | Title:
|                 |                                |       

[Signature
Page of 
Convertible Loan Agreement  
April 29, 2004]

13

---

---

Schedule 2

The Milestone

UNDER NORMAL REAL LIFE CONDITIONS [*****]:

FALSE POSITIVE    [*****] %

FALSE
NEGATIVE  [*****] %

14



---

---

C-Signature
Capitalization Table

|                               |  | Pre Investment  |   | Post Investment | 
|------------------------------ |  | --------------- | - | --------------- | 
|                               |  |                 |   |                 | 
|Shareholder                    |  | Ordinary Shares |   | Total           | 
|                               |  |                 |   |                 | 
|Yossi Gross                    |  |                 |   | 2,300           | 
|Danny Lange                    |  |                 |   | 2,800           | 
|Baruch
  Levanon               |  |                 |   | 4,600           | 
|Avi
  Goldsobel, Adv.          |  |                 |   | 150             | 
|Piter Kirshen,
  Adv.          |  |                 |   | 150             | 
|Aladdin Knowledge Systems Ltd. |  |                 |   |                 | 
|                               |  |                 |   |                 | 
|Total                          |  |                 |   | 10,000          | 
|                               |  |                 |   |                 | 
|                               |  |                 |   |                 | 
|General Notes:                 |  |                 |   |                 | 
|Pre Money
  Valuation          |  |                 | $ | 4,226,382       | 
|Post Money
  Valuation         |  |                 | $ | 5,276,382       | 
|Investment
  Amount            |  |                 | $ | 1,050,000       | 
|Price Per
  Share              |  |                 | $ | 422.71          | 



---

---

Amended and Restated Articles
of Association

Of

C-Signature
Ltd.

Private
Company # 51-3532291

GENERAL

1.       DEFINITION
AND INTERPRETATION

1.1.                                        The
following terms in these Articles of Association shall have the respective
meanings ascribed to them below:

|AKS                  | Aladdin Knowledge Systems Ltd.                                                                                          
|-------------------- | ------------------------------------------------------------------------------------------------------------------------
|                     |                                                                                                                         
|Articles             | The Articles of Association of the Company, as set forth herein or as
  amended expressly or pursuant to the Law.       
|                     |                                                                                                                         
|As Converted Basis   | The number of Ordinary Shares into which the Preferred Shares are
  convertible at the time of the relevant calculation.
|                     |                                                                                                                         
|Board                | The board of directors of the Company.                                                                                  
|                     |                                                                                                                         
|Business Day         | Sunday to
  Thursday, inclusive, with the exception of holidays and official days of rest
  in the State of Israel.     
|                     |                                                                                                                         
|Companies Law        | The Companies Law, 1999, as may be amended from time to time.                                                           
|                     |                                                                                                                         
|CompaniesRegulations | Regulations promulgated under the Companies Law.                                                                        
|                     |                                                                                                                         
|Company              | C-Signature. Ltd.                                                                                                       
|                     |                                                                                                                         
|Director             | A Director of the Company in accordance with the definition under the
  Companies Law.                                  
|                     |                                                                                                                         
|Director Register    | Register of Directors that is to be kept
  pursuant to the Companies Laws provisions.                                  



---

---

|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Dollar or $       | United States Dollars.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Equity Securities   | Any Ordinary Shares, Preferred Shares, any securities evidencing an
  ownership interest in the Company, or any securities (including, inter alia,
  options, warrants, convertible debentures, bonds or capital notes) convertible, exchangeable or exercisable into
  any of the aforesaid securities, any certificates conferring a right in any
  such securities, and any agreement or commitment to issue any of the
  foregoing.                                                                                                                                                                   
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Founder             | Each of (i) Dr. Danny Lange, Israeli I.D.
  number 022418867, (ii) Yossi Gross, Israeli I.D. number 42080119, and (iii)
  Baruch Levanon, Israeli I.D. number 000091496.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Fully Diluted Basis | The Companys issued and outstanding share capital at the time of
  applicable calculation, plus all shares issuable upon conversion of then
  existing options, warrants, convertible securities or any other rights to
  acquire shares or securities exchangeable for or convertible into shares of
  the Company, including, inter alia, all Companys shares issuable pursuant to
  then existing employee share option plan(s) and arrangements and shares issuable
  pursuant to previously (to the time of applicable calculation) triggered anti
  dilution rights of then existing shareholders.
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|General Meeting     | An annual or special meeting of the Shareholders of the Company in
  accordance with the Companies Law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Law                 | The provisions of any law (din) as defined in the Interpretation
  Law, 1981.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|NIS                 | New Israeli
  Shekels.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

2

---

---

|                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Ordinary Majority    | More than
  fifty percent (50%) of the voting power underlying the shares held by all of
  the Shareholders who are entitled to vote and who voted in a General Meeting
  in person or by means of a proxy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Ordinary Shares      | The
  Companys Ordinary Shares, nominal value NIS 1.00 each.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Original Issue Date  | With respect
  to a series of Preferred Shares - the date on which a share of such series of
  Preferred Shares was first issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Original Issue Price | With respect
  to the Series A Preferred Shares, the price actually paid to the Company for
  the issuance of such share, subject to proportional adjustment for any
  Recapitalization Event.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Permitted Transferee | All of the
  following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                     | (A) With
  respect to any Shareholder - (i) such Shareholders spouse, sibling, lineal descendant or
  antecedent; (ii) such
  Shareholders beneficiary (in the event the Shareholder holds the shares as a
  trustee) or trustee (including the trustee of a voting trust and including
  a trustee of such Shareholder that receives shares directly from another
  trustee of such a Shareholder);(iii)
  such Shareholders transferee by operation of law;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                     | (B) With respect to any Shareholder which
  is a limited partnership or a corporation: (i) any corporate
  entity which controls, is controlled by, or is under common control with,
  such Shareholder; (ii) the surviving entity in the
  merger of such Shareholder with another company or the acquiring entity of
  all or substantially all of the assets of such Shareholder; (iii) the limited and general partners of
  such Shareholder and the limited and general partners of, and any person or
  entity controlling (either directly or through an entity controlled by such
  person or entity), such limited or general partners, or (iv) any entity over
  which such Shareholder or its affiliates exercises investment discretion or
  act as a principal investment advisor, (v) any affiliate of any of the above
  managed by the same management company or managing general partner or by an
  entity which controls, is controlled by, or is under common control with such
  management company or managing general partner, or any shareholder, partner
  or member of such affiliate.

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|                                     |                                                                                                                                                                                                                                                                                                                      
|------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Preferred A Shareholders             | Holders of
  the Series A Preferred Shares.                                                                                                                                                                                                                                                                          
|                                     |                                                                                                                                                                                                                                                                                                                      
|Preferred A Share Purchase Agreement | The
  Convertible Loan Agreement by and among the Company, the Founders and the
  Purchasers listed therein dated as of April 29, 2004.                                                                                                                                                                              
|                                     |                                                                                                                                                                                                                                                                                                                      
|Preferred Shareholders               | Holders of
  the Preferred Shares.                                                                                                                                                                                                                                                                                   
|                                     |                                                                                                                                                                                                                                                                                                                      
|Preferred Shares                     | Series A
  Preferred Shares of the Company of nominal value NIS 0.01 each (also, Series
  A Preferred Shares).                                                                                                                                                                                                     
|                                     |                                                                                                                                                                                                                                                                                                                      
|Person                               | An
  individual, corporation, partnership, joint venture, trust, and any other
  body corporate or unincorporated organization.                                                                                                                                                                                      
|                                     |                                                                                                                                                                                                                                                                                                                      
|Qualified Public Offering            | A firmly
  underwritten public offering of Ordinary Shares of the Company (Public Offering).                                                                                                                                                                                                                       
|                                     |                                                                                                                                                                                                                                                                                                                      
|Realization
  Event                  | As defined in Article 96 below.                                                                                                                                                                                                                                                                                      
|                                     |                                                                                                                                                                                                                                                                                                                      
|Recapitalization
  Event             | Any split or reverse split of
  the applicable shares, distribution of share dividend, with respect thereto,
  or any other recapitalization, reclassification or similar event resulting in
  a change of such shares into a different number of shares of the same class
  or any other class or classes of shares.
|                                     |                                                                                                                                                                                                                                                                                                                      
|Shareholder                          | Any Person registered in the Shareholder Register of the
  Company as a holder of Ordinary Share(s) or Preferred Share(s).                                                                                                                                                                                           

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|                     |                                                                                          
|-------------------- | -----------------------------------------------------------------------------------------
|Shareholder Register | Register of Shareholders that is to be kept
  pursuant to the Companies Laws provisions.

1.2.     The specific provisions of these
Articles shall supersede the provisions of the Companies Law to the extent
permitted under the Companies Law. Unless the subject or the context
otherwise requires, each word and expression used but not specifically defined
herein and defined in the Companies Law as in effect on the date when these
Articles first became effective, shall have the same meaning ascribed to them
therein, and to the extent that no meaning is attached to it in the Companies
Law, the meaning ascribed to it in the Companies Regulations, and if no meaning
is ascribed thereto in the Companies Regulations, the meaning ascribed to it in
the Securities Law, 1968 or the regulations promulgated thereunder.

1.3.     Words
and expressions importing the singular shall include the plural and vice versa,
words and expressions importing the masculine gender shall include the feminine
gender and words and expressions importing persons shall include corporate
entities.

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

1.5.     All
shares held (beneficially or of record), at the time of applicable calculation,
by Shareholders who are Permitted Transferees of each other, shall be
aggregated together for the purpose of determining the availability to such
holders of any rights under these Articles, and such rights  to the extent
they are determined to be available at such time - may be exercised (up to the
maximum extent so determined to be available in the aggregate to all such
Shareholders) by any, some or all of such Shareholders who are Permitted Transferees
of each other.

2.       PRIVATE
COMPANY

The Company
is a private company, as defined in the Companies Law.

Furthermore:

2.1.     The number of Shareholders for the time
being of the Company (exclusive of persons who are in the employment of the
Company and of persons who having been formerly in the employment of the
Company were, while in such employment, and have continued after termination of
such employment to be, Shareholders of the Company), shall not exceed fifty
(50), but where two or more persons jointly own one or more shares in the
Company, they shall, for the purposes of this Article, be treated as a single
Shareholder;

2.2.     Any
invitation to the public to subscribe for any shares or debentures of the
Company is hereby prohibited; and

2.3.     The
right to transfer shares in the Company shall be restricted as hereinafter
provided.

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3.       THE PURPOSE OF THE COMPANY

The purpose
of the Company is to operate in accordance with business considerations to
generate profits; provided, however, that the Company may donate reasonable
amounts to worthy causes, as the Board may determine in its discretion, even if
such donations are not within the framework of business considerations.

4.       THE
OBJECTIVES OF THECOMPANY

The Company
shall engage in any lawful business.

5.       LIMITED LIABILITY

The
liability of the Shareholders of the Company is limited, each one up to the
full amount he undertook to pay for the shares of the Company allotted to him.

SHARE CAPITAL

6.       SHARE CAPITAL

6.1.     The
authorized and registered share capital of the Company is NIS 10,000, divided
into 996,667 Ordinary Shares and 3,333 Series A Preferred Shares.

6.2.     The
Ordinary Shares shall have all the rights attached to the Ordinary Shares in
these Articles, including, without limitation, the right to receive notices of,
and to attend, all General Meetings, to one vote per each share held at all
General Meetings
for all purposes, to participate and share equally, on a per share basis, in distribution
of dividends, and
to participate and share equally, on a per share basis, in distribution of
surplus assets and funds in the Company (subject to the provisions of Articles
96), and no other rights except as may be expressly provided for herein or
under the Companies Law.

6.3.     All
the Ordinary Shares rank pari passu amongst themselves for all intents and
purposes, including, without limitation, in relation to (i) the amounts of
capital paid or credited as paid on their nominal value, (ii) participation in
the distribution of dividends, bonus shares and any other distribution as may be declared by the Board
out of funds and assets legally available therefor, return of the
capital and distribution of the Companys surplus assets upon the voluntary or
involuntary dissolution, liquidation or winding up thereof.

6.4.     The
Preferred Shares shall confer upon the holders thereof all rights accruing to
holders of Ordinary Shares in the Company, and, in addition, the rights,
preferences and privileges granted to the Preferred Shares in these Articles.

7.       CONVERSION
OF PREFERRED SHARES.

7.1.     Right
to Convert. Each Preferred Share shall be convertible, at the option of the
respective holder(s) thereof, at any time or from time to time, into such
number of fully paid and nonassessable Ordinary Shares as determined by
dividing the
applicable Original Issue Price for such share by the Conversion Price (as
defined below) at the time in effect for such share.

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7.2.     Mandatory
Conversion. All outstanding Preferred Shares shall be automatically
converted into fully paid and nonassessable Ordinary Shares, at the respective Conversion
Price at the time in effect for such Preferred Shares upon: (i) the
election of the holders of a majority of the then issued and outstanding
Preferred Shares on the date specified in a written notice by such holders to
the Company (the Company shall give notice of any conversion pursuant to this
Article 7.2 upon receipt of a notice from the requisite holders of Preferred
Shares), or (ii) the consummation of a Qualified Public Offering (the Company
shall give notice of any conversion pursuant to this Article 7.2 to each holder
of Preferred Shares a reasonable time (but in any event not later than twenty
(20) days) prior to the consummation of a Qualified Public Offering, as shall
be determined by the Board).

7.3.     Reserved.

7.4.     Reserved.

7.5.     Conversion
Price. The conversion price per share for each Preferred Share shall
initially be the
Original Issue Price thereof, subject to adjustment pursuant only to the
provisions of Article 7.7(a), (b) and (c). The conversion price of the Preferred Shares,
as in effect from time to time, is referred to as the Conversion Price.

7.6.     Mechanics
of Conversion. Each holder that desires to convert Preferred Shares into
Ordinary Shares pursuant to Article 7.1 shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the Company, and shall
give notice to the Company at such office that such holder elects to convert
the same and shall state therein the number of Preferred Shares being
converted. Thereupon the Company shall promptly issue and deliver at such
office to such holder certificates for the number of Ordinary Shares to which
such holder is entitled upon conversion. Such conversion shall be deemed to
have been made immediately prior to the close of business on the date of such
surrender of the certificate representing the Preferred Shares to be converted,
and
at that time the rights of such Preferred Shares shall cease, and the
Person entitled to receive the Ordinary Shares issuable upon such conversion
shall be treated for all purposes as the record holder of such Ordinary Shares
on such time. In the event of any conversion of Preferred Shares pursuant to
Article 7.2, then the
holders of Preferred Shares shall be deemed to have surrendered their
certificates as aforesaid, and the certificates representing such
Preferred Shares shall thereupon represent solely the right to receive the
Ordinary Shares into which the Preferred Shares represented by such
certificates shall have been converted upon the tender (or deemed tender) of
such certificates to the Company, and the record holder of such Preferred
Shares shall be treated for all purposes as the record holder of such Ordinary
Shares effective upon the date of such conversion. Upon the occurrence of such
conversion of the Preferred Shares, the holders thereof shall surrender the
certificates representing such shares at the office of the Company. Thereupon,
there shall be issued and delivered to such holder promptly at such office and
in its name as shown on such surrendered certificate or certificates,
certificates for the number of shares of Ordinary Shares into which the
Preferred Shares surrendered were convertible on the date of such conversion.

7.7.     Adjustments.
The Conversion Price and the number of Ordinary Shares issuable upon conversion
of the Preferred Shares shall be subject to adjustment as follows:

(a)     Adjustment
for Stock Splits and Combinations. If the Company effects a subdivision of
the outstanding Ordinary Shares, then, the Conversion Price then in effect
immediately before the subdivision shall be proportionately decreased, such
that the number of Ordinary Shares issuable upon conversion of the Preferred
Shares shall be proportionately increased. Conversely, if the Company combines
the outstanding Ordinary Shares into a smaller number of shares, then the
Conversion Price then in effect immediately before the combination shall be
proportionately increased such that the number of Ordinary Shares issuable upon
conversion of the Preferred Shares shall be proportionately decreased. Any
adjustment under this subsection (a) shall become effective at the close of
business on the date the subdivision or combination becomes effective.

7

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(b)     Adjustments
for Reclassification, Exchange and Substitution. In the event the Ordinary
Shares issuable upon the conversion of the Preferred Shares are changed into
the same or a different number of shares of any class or classes of stock,
whether by recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or a reorganization, merger, consolidation
or sale of assets provided for elsewhere in this Article 7), then in any such
event each holder of Preferred Shares shall have the right thereafter to
receive, upon the conversion of such Preferred Shares, the kind and amount of
shares and other securities and property receivable upon such recapitalization,
reclassification or other change by holders of the number of Ordinary Shares
into which such Preferred Shares would have been converted, all subject to
further adjustment as provided herein.

(c)     Reorganizations,
Mergers, Consolidations or Sales of Assets. If there is a capital
reorganization of the Ordinary Shares (other than a recapitalization,
subdivision, combination, reclassification or exchange of shares provided for
elsewhere in this Article 7) or a merger or consolidation of the Company with
or into another company, or the sale of the Companys properties and assets to
any other person, then, subject to compliance with, and without derogating in
any manner from the provisions of, Article 96 hereof (if applicable to such
transaction), as a part of such reorganization, merger, consolidation or sale,
provision shall be made so that the holders of the Preferred Shares shall
thereafter be entitled to receive, upon the conversion of such Preferred
Shares, the number of shares of stock or other securities or property to which
a holder of the number of shares of Ordinary Shares issuable upon such
conversion would have been entitled upon such capital reorganization, merger,
consolidation or sale. In any such case, appropriate adjustment shall be made
in the application of the provisions of this Article 7 with respect to the
rights of the holders of such Preferred Shares after the reorganization,
merger, consolidation or sale to the end that the provisions of this Article 7
(including adjustment of the Conversion Price then in effect and the number of
shares issuable upon conversion of such Preferred Shares) shall be applicable
after that event and be as nearly equivalent as may be practicable.

(d)     Share
Dividend. If the Company at any time pays a dividend, with respect to its
Ordinary Shares only, payable in additional Ordinary Shares or other securities
or rights convertible into, or entitling the holder thereof to receive directly
or indirectly, additional Ordinary Shares, without any comparable payment or
distribution to the holders of any class of Preferred Shares (hereinafter
referred to as Ordinary Shares
Equivalents), then the applicable Conversion Price shall
be adjusted as at the date the Company fixes as a record date for the purpose
of receiving such dividend (or if no such record date is fixed, as at the date
of such payment) to that price determined by dividing the applicable Conversion
Price in effect immediately prior to such record date (or if no record date is
fixed then immediately prior to such payment) by the sum of (i) one (1) plus
(ii) the number of Ordinary Shares Equivalents payable upon such event with
respect to one Ordinary Share then outstanding.

(e)     Securities
Dividend.In the event the Company declares a distribution payable in
securities of other persons, evidences of indebtedness issued by the Company or
other persons, assets (excluding cash dividends) or options or rights not
referred to in (e) above, then, in each such case, the holders of Preferred
Shares shall be entitled to receive a proportionate share of such distribution
in respect of their Preferred Shares on an As Converted Basis as of the record
date for such distribution.

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(f)     Certificate
of Adjustment. In each case of an adjustment or readjustment of any
Conversion Price or the number of Ordinary Shares or other securities issuable
upon conversion of the Preferred Shares, the Company, at its expense and upon
the request of any holder of Preferred Shares, shall compute such adjustment or
readjustment in accordance with the provisions hereof and prepare a certificate
showing such adjustment or readjustment, executed by the Companys Chief
Financial Officer, and shall send such certificate to each registered holder of
the Preferred Shares. The certificate shall set forth such adjustment or
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based.

(g)     Notices
of Record Date. In the event of (A) any taking by the Company of
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or other
distribution, or (B) any capital reorganization of the Company, any
reclassification or recapitalization of the share capital of the Company, any
merger or consolidation of the Company with or into any other company, or any
transfer of all or substantially all of the assets of the Company to any other
person or any voluntary or involuntary dissolution, liquidation or winding up
of the Company, the Company shall mail to each holder of Preferred Shares, at
least fourteen (14) days prior to the record date specified therein (or such
shorter period as may be agreed to by the majority in interest of the holders
of Series A Preferred Shares), a notice specifying (1) the date on which
any such record is to be taken for the purpose of such dividend or distribution
and a description of such dividend or distribution, (2) the date on which
any such reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation or winding up is expected to become effective, and
(3) the date, if any, that is to be fixed, as of when the holders of
record of Ordinary Shares and Preferred Shares (or other securities) shall be
entitled to exchange their securities for securities or other property
deliverable upon such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up.

(h)     Reservation
of Shares Issuable. The Company shall at all times reserve and keep
available out of its authorized but unissued Preferred Shares and Ordinary
Shares, solely for the purpose of effecting the exercise of warrants and
options issued to holders of Preferred Shares and for conversion of the
Preferred Shares, such number of Preferred Shares and Ordinary Shares as shall
from time to time be sufficient to effect the exercise of all warrants and
options issued to holders of Preferred Shares and for the conversion of all
outstanding Preferred Shares; and if at any time the number of authorized but
unissued Preferred Shares and Ordinary Shares, as applicable, shall not be
sufficient to effect the exercise of all warrants and options issued to holders
of Preferred Shares and for conversion of all then outstanding Preferred
Shares, the Company shall take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued Preferred
Shares and/or Ordinary Shares, as applicable, to such number of shares as shall
be sufficient for such purpose.

(i)     Payment
of Taxes. The Company shall pay all stamp taxes and other taxes (other than
taxes based upon gross receipts, capital gain or income) and other governmental
charges that may be imposed with respect to the issue or delivery of Ordinary
Shares upon conversion of Preferred Shares, except any tax or other charge
imposed in connection with any transfer of securities involved  upon
conversion of Preferred Shares - in the issue and delivery of Ordinary Shares
in a name other than that in which the Preferred Shares so converted were
originally registered.

(j)     Rounding
of Calculations; Minimum Adjustment. Any provision of this Article 7 to the
contrary notwithstanding, no adjustment in the Conversion Price shall be made
if the amount of such adjustment would be less than $0.01, but any such amount
shall be carried forward and an adjustment with respect thereto shall be made at
the time of and together with any such subsequent adjustment which, together
with such amount and any other amount or amounts so carried forward, shall
aggregate $0.01 or more.

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(k)     Adjustments
Cumulative. Each of the adjustments pursuant to this Article 7 shall be
applied individually and cumulatively upon the occurrence of any of the events
specified therein, and shall apply from and after the date of these Articles of
Association to all authorized Preferred Shares.

(l)     Impairment.
Subject to the Companys power and authority to amend the Articles, restructure
its capital, merge or enter into sale of assets transactions, dissolve itself
or issue securities, the Company will not, by amendment of these Articles or
through any reorganization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed hereunder in this Article 7 by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Article 7 and in taking of all such action as may be
necessary or appropriate in order to protect the conversion rights of the
holders of the Preferred Shares against impairment.

(m)     Fractional
Shares. No fractional share shall be issued upon the conversion of any
Preferred Shares. All Ordinary Shares (including fractions thereof) issuable
upon conversion of more than one Preferred Share by a holder thereof shall be
aggregated for purposes of determining whether the conversion would result in
the issuance of any fractional share. If, after the aforementioned aggregation,
the conversion would result in the issuance of a fraction of a Ordinary Shares,
the Company shall, subject to the Law, in lieu of issuing any fractional share,
pay the holder otherwise entitled to such fraction a sum in cash equal to the
fair market valued of such fraction on the date of conversion (as determined in
good faith by the Board).

8.       INCREASE OF SHARE CAPITAL

8.1.     The
Company may, from time to time, by a resolution of the General Meeting adopted
by an Ordinary Majority, whether or not all the shares then authorized and
registered have been issued, and whether or not all the shares theretofore
issued have been called up for payment, increase its share capital by the
creation of new shares. Any such increase shall be in such amount and shall be
divided into shares of such nominal amounts, and such shares shall confer such
rights and preferences, and shall be subject to such restrictions, as such
resolution of the General Meeting shall provide.

8.2.     Except
to the extent otherwise provided in such resolution of the General Meeting,
such new shares shall be subject to all the provisions applicable to the shares
of the original capital.

9.       SPECIAL
RIGHTS; MODIFICATIONS OF RIGHTS

9.1.     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 a
resolution of the General Meeting adopted by an Ordinary Majority, authorize
and/or issue shares with such having the same rights as existing shares or
having preferred or deferred rights or rights of redemption or restricted
rights or any other special rights and/or such restrictions, whether with
respect to liquidation, dividends, voting, conversion, repayment of share
capital or otherwise, as may be stipulated in such resolution.

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9.2.     If
at any time the share capital is divided into different classes of shares, the
rights attached to any class may be modified or abrogated by the Company, unless
otherwise provided by these Articles, by a resolution of the General Meeting
adopted by an Ordinary Majority, provided
that any modification that would directly adversely alter the rights attached
to such class shall require the consent in writing of the holders of more than
fifty percent (50%) of the issued shares of such class (including shares held
by Shareholders holding, in addition, shares of other classes in the Company)
or the sanction of a resolution of a separate General Meeting of the holders of
the shares of such class (in accordance with Article 30 hereof) adopted by an
Ordinary Majority. Any resolution required to be adopted pursuant to these
Articles by a separate General Meeting of a certain class of shares, shall be
voted upon and adopted by the holders of such class entitled to vote thereon
and no holder of a certain class shall be banned from participating and voting
in a separate General Meeting of such class by virtue of being a holder of more
than one class of shares of the Company, irrespective of any conflicting
interests that may exist between such different classes of shares. For
illustration purposes, in the event that a certain Shareholder is the
holder of Series A Preferred Shares and Series B Preferred Shares (when such
exist) whilst another shareholder is the holder of Series A Preferred Shares
only, the Shareholder holding two classes of shares shall not be banned from
voting on a resolution which adversely affects the rights of the Series A
Preferred Shares Series, irrespective of the affect such change shall have on
the Series B Preferred Shares. Anything contained herein to the contrary
notwithstanding, subject to any applicable law, a Shareholder shall not be
required to refrain from participating in the discussion or voting on any
resolution concerning the modification or abrogation of the rights attached to
any class of shares held by such Shareholder, due to the fact that such
Shareholder may benefit in one way or another from the outcome of such
resolution. e.g. a Shareholder shall be entitled to vote on the modification of
rights attached to shares held by such Shareholder in a way that may benefit
such holder either directly or indirectly (such as in the case of an increased
financial value gained by virtue of such change).

9.3.     Unless
otherwise provided by these Articles it is hereby clarified that:

(a)     The
increase of the authorized and registered number of shares of an existing class
of shares, or the issuance of additional shares thereof, or the creation of a
new class of shares identical to an existing class of shares in all respects,
except for the price per share paid for such shares, shall not be deemed, for
purposes of this Article 9, to adversely alter the rights attached to the
previously issued shares of such class or of any other class.

(b)     The
authorization or the issuance of additional shares or other Equity Securities
of the Company having certain rights, preferences or privileges over or
relative to all other Equity Securities of the Company (e.g. the Series A
Preferred Shares and the Ordinary Shares), shall not be deemed, for purposes of
this Article 9, to be modifying or abrogating the rights, powers and
privileges attached to the previously issued shares of any existing class,
provided the rights, preferences or privileges attached to such additional
shares or other Equity Securities apply in the same manner vis-a-vis all other
existing series or classes of shares, without a different application to
different classes, even though the result of such equal application may be
different with respect to different shareholders due to the number of shares
held by them and/or even though such an issuance will change the economic value
of the existing shares (but not the legal rights of such shares, as illustrated
by the example set forth in sub-Article (c) below), and shall not be subject to
the approval of a separate class vote of the holders of the shares of any
particular class; and

(c)     The
authorization of a new series of shares or class of shares, or the issuance of
such shares, shall not be deemed, for any purpose hereunder, to modify or
abrogate the rights attached to an existing class of shares if the rights
attached to the new class of shares apply in the same manner vis-a-vis all
other existing series or classes of shares, without a different application to
different classes, even though the result of such equal application may be
different with respect to different shareholders due to the number of shares
held by them and/or even though such an issuance will change the economic value
of the existing shares (but not the legal rights of such shares  for example,
if (i) the holders of the Ordinary Shares are entitled to appoint one Director;
(ii) the Board of Directors consists of 2 members; and (iii) the Company issues
a new class of shares (Preferred B Shares) which are entitled to appoint a
Director, and to enable such an appointment, the Articles are amended to
provide that the Board of Directors may consist of 3 members, then, in such an
event, such an act will not be deemed to change, modify or abrogate the rights
and powers attached to the Ordinary Shares (as the holders thereof will
continue to hold the power to appoint one Director), even if one may argue that
the economic value of the Ordinary Shares was decreased by such an act (the
holders can then appoint one out of three members to the Board of Directors).

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9A.    RESTRUCTURE OF SHARE CAPITAL

(a)     If
at any time, a restructure of the Companys issued or unissued share capital is
effectuated (a Recapitalization),
and as a result of such Recapitalization the rights attached to one or more
classes of shares is modified or abrogated, then, such Recapitalization shall
require the consent of the holders of the majority of the issued and
outstanding shares of such affected class (or classes as the case may be),
which shall be obtained at a separate Special Meeting of such class (in
addition to such other approvals requires under these Articles or applicable
law). The provisions concerning separate General Meetings set forth in Article
9 shall apply to any separate General Meeting convened in connection with such
Recapitalization.

(b)     In
the event that such Recapitalization can be consummated in more than one manner
(such as by means of arrangement proceedings approved by a court of law, or
alternatively by means of amendment of the Companys corporate documents), the
sole and absolute discretion in determining the manner by which such
Recapitalization shall be consummated shall vest in the Companys Board of
Directors.

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

10.1.   The
Company may, from time to time, by a resolution of the General Meeting adopted
by an Ordinary Majority (subject, however to the Companies Law):

(a)     Consolidate
and divide all or any of its issued or unissued share capital into shares of
larger nominal value than its existing shares;

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

(c)     Cancel
any shares which, at the date of the adoption of such resolution of the General
Meeting, have not been allotted, so long as the Company is not under an
obligation to allot these shares, and diminish the amount of its share capital
by the amount of the shares so cancelled; or

(d)     Reduce
its share capital in any manner, and with and subject to any incident
authorized, and consent required, by Law.

10.2.   With
respect to any consolidation of issued shares into shares of larger nominal
value, and with respect to any other action which may result in fractional
shares, including upon conversion of any Preferred Shares, the Board may settle
any difficulty which may arise with regard thereto, as it deems appropriate,
including, inter alia, resort to
one or more of the following actions:

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

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

(c)     Redeem,
in the case of redeemable shares, and subject to applicable Law, such shares or
fractional shares sufficient to preclude or remove fractional share holdings;

(d)     Cause
the transfer of fractional shares by certain Shareholders to other Shareholders
thereof so as to most expediently preclude or remove any fractional
shareholdings, and cause the transferees to pay the transferors the fair value
of fractional shares so transferred, and the Board is hereby authorized to act
as agent for the transferors and transferees with power of substitution for
purposes of implementing the provisions of this Article 11.2, without
regard to any restriction or limitation that may apply to the transfer of such
shares, as may be provided herein.

SHARES

11.     ISSUANCE
OF SHARE CERTIFICATES;
REPLACEMENT OF LOST CERTIFICATES;
BEARER CERTIFICATES

11.1.   The
Company shall maintain a Shareholder Register, to be administered by the
corporate secretary of the Company, subject to the oversight of the Board.

11.2.   Share
certificates shall bear the signatures of one Director and the corporate
secretary, or of two Directors, or of any other person or persons authorized
thereto by the Board, provided, however, that in the event the Board consists
of one Director, the share certificate shall bear the signature of such
Director or of any other person or persons authorized thereto by the Board.
Every certificate shall bear the Companys name in printed, stamped or sealed
form (if the latter exists in accordance with Article 100.2).

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

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

11.5.   If
a share certificate is defaced, lost or destroyed, it may be replaced, upon
payment of such fee, and upon the furnishing of such evidence of ownership and
such indemnity, as the Board may deem appropriate.

11.6.   The
Company shall not issue bearer share certificates that grant the bearer rights
in the shares specified therein.

12.     REGISTERED HOLDER

Except as
otherwise provided in these Articles, the Company shall be entitled to treat
the registered holder of any share as the absolute owner thereof, and, shall be
entitled to treat the holder of any share in trust as a Shareholder and to
issue to him a share certificate, provided that the trustee notify the Company
of the identity of the beneficiary, and, accordingly, the Company shall not,
except as ordered by a court of competent jurisdiction, or as required by Law,
be bound to recognize any equitable or other claim to, or interest in, such
share on the part of any other person.

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13.     ISSUANCE OF SHARES AND OTHER
SECURITIES

13.1.   The
Board may issue shares and other Equity Securities of the Company, up to the
limit of the Companys authorized and registered share capital. If the
Companys share capital includes a number of classes of shares and Equity
Securities, shares and Equity Securities exceeding the limit of the authorized
and registered share capital of such class shall not be issued. In such regard,
Equity Securities convertible or exercisable into shares shall be deemed to
have been converted or exercised on the date of their issue.

13.2.   The
issuance of shares and other Equity Securities, in accordance with Article
13.1, from time to time, shall be under the control of the Board, who shall
have the power to allot shares and other Equity Securities or otherwise dispose
of them to such persons, on such terms and conditions (including inter alia terms relating to calls as set
forth in Article 16 hereof), and either at par value or at a premium, or,
subject to the provisions of the Companies Law, at a discount, and at such
times, as the Board may deem appropriate, and the power to give to any person
the option to acquire from the Company any shares, either at par or at a
premium, or, subject as aforesaid, at a discount, during such time and for such
consideration as the Board may deem appropriate.

13.3.   The
Board may determine to issue a series of bonds or other debt Equity Securities,
as part of its authority to take a loan on behalf of the Company, and within
the limits of such authority. The foregoing does not negate the authority of
the General Manager or someone authorized by him to take a loan on behalf of
the Company, to issue debentures, promissory notes and bills of exchange,
within the limits prescribed by the Board.

13.4.   Subject
to applicable Law, the Company is entitled to pay a commission, including
underwriting fees, to any person, as determined by the Board. Payments, as
stated in this Article 13.4, may be paid in cash or in Equity Securities of the
Company, or in a combination thereof.

13.5.   The
Company shall not issue a share, all or part of the consideration of which is
not to be paid in cash, unless the consideration for the share was specified in
a written document.

14.     PREEMPTIVE RIGHTS
ON COMPANY SHARE ISSUANCE.

14.1.   Until
the closing of a Qualified Public Offering each holder of 5% or more of the
Companys issued and outstanding share capital on an As-Converted Basis (each,
an Eligible Shareholder), shall have the right to purchase its pro rata share
of New Securities (as defined in Article 14.2) that the Company may, from time
to time, propose to sell and issue. Such pro rata share, for purposes of this
preemptive right, is the ratio of (X) the total number of Ordinary Shares which
- immediately prior to the issuances of New Securities  are held beneficially
or of record by such Shareholder or issuable upon the conversion of the Series
A Preferred Shares then held beneficially or of record by such Shareholder, to
(Y) the total number of Ordinary Shares which - immediately prior to the
issuances of New Securities  are issued and outstanding on a Fully Diluted
As-Converted Basis.

14.2.   New Securities shall mean any Equity
Securities issued or issuable by the Company, excluding such that are issued or
issuable:

(a)   to
officers, directors and employees of, or consultants or service providers to,
the Company or its subsidiaries pursuant to employee share option plans or
arrangements approved by the Board;

(b)   upon
conversion of the Preferred Shares;

(c)   to
the public pursuant to a Public Offering;

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(d)   In
connection with any Recapitalization Event;

(e)   Pursuant to the exercise or
conversion of any outstanding options, warrants or other rights convertible,
exchange or exercisable into Ordinary Shares;

(f)   Pursuant to the conversion of
the Loan, as defined in the Preferred A Share Purchase Agreement;

(g)   With
the consent of the holders of at least a majority of the then issued and
outstanding shares of the Company on an As-Converted Basis (consenting together
as a single class) that such Equity Securities shall not constitute New
Securities;

14.3.   In
the event that the Company proposes to undertake an issuance of New Securities,
it shall give each Eligible Shareholder written notice of its intention,
describing the type of New Securities, the price, and the general terms upon which
the Company proposes to issue the same. Each Eligible Shareholder shall have
fourteen (14) days after receipt of such notice to agree to purchase up to its
pro rata share of such New Securities at the price and upon the terms specified
in the notice by giving written notice to the Company and stating therein the
quantity of New Securities to be purchased.

14.4.   In
the event that by the end of the aforesaid fourteen (14) day period specified
above, not all of the New Securities have been subscribed for by Eligible
Shareholders, the Company shall have one hundred and twenty (120) days
thereafter to sell (or enter into an agreement pursuant to which the sale of
New Securities covered thereby shall be sold, if at all, within thirty (30)
days from the date of said agreement) all or part of the remaining New
Securities respecting which the rights of the Eligible Shareholders were not
exercised, at a price not lower and upon terms no more favorable to the
purchasers thereof than specified in the Companys notice. In the event the
Company has not sold the New Securities within such one hundred and twenty
(120) day period (or sold and issued New Securities in accordance with the
foregoing within fifteen (30) days from the date of such agreement) the Company
shall not thereafter issue or sell any New Securities, without first offering
such New Securities to the Eligible Shareholders and in the manner provided
above.

15.     PAYMENT
IN INSTALLMENTS

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

16.     CALLS
ON SHARES

16.1.   The
Board may, from time to time, make such calls as it may deem appropriate upon
Shareholders in respect of any sum unpaid in respect of shares held by such
Shareholders which is not, by the terms of allotment thereof or otherwise,
payable at a fixed time, and each Shareholder shall pay the amount of every
call so made upon him (and of each installment thereof if the same is payable
in installments), to the person(s) and at the time(s) and place(s) designated
by the Board, 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 (and in the notice referred to in Article 16.2), each payment in
response to a call shall be deemed to constitute a pro rata payment on account
of all shares in respect of which such call was made.

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

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

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

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

16.6.    A
Shareholder shall not be entitled to his rights as shareholder, including
dividend, unless he has paid all the amounts detailed in the calls made on him,
together with interest and expenses, if any, unless otherwise prescribed by the
Board.

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

17.     PREPAYMENT

With the
approval of the Board, any Shareholder may prepay to the Company any amount not
yet payable in respect of his shares. Nothing in this Article 17
shall derogate from the right of the Board of Directors to make any call before
or after receipt by the Company of any such prepayment.

18.     FORFEITURE
AND SURRENDER

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

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

18.3.   Whenever
shares are forfeited as herein provided, all distributions theretofore declared
in respect thereof and not actually paid or distributed shall be deemed to have
been forfeited at the same time.

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18.4.   The
Company, by resolution of the Board, may accept the voluntary surrender of any
share.

18.5.   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 deems appropriate. Any
such share shall become a dormant share, and shall not confer any rights, so
long as it is held by the Company.

18.6.   Any
Shareholder whose shares have been forfeited or surrendered shall cease to be a
Shareholder in respect of the forfeited or surrendered shares, but shall,
notwithstanding, be liable to pay, and shall forthwith pay, to the Company, all
calls, interest and expenses owing upon or in respect of such shares at the
time of forfeiture or surrender, together with interest thereon from the time
of forfeiture or surrender until actual payment, at the rate prescribed in Article 16.5
above, and the Board, in its discretion, may enforce the payment of such
moneys, or any part thereof, but shall not be under any obligation to do so. In
the event of such forfeiture or surrender, the Company, by resolution of the
Board, may accelerate the date(s) of payment of any or all amounts then owing
by the Shareholder in question (but not yet due) in respect of all shares owned
by such Shareholder, solely or jointly with another.

18.7.   The
Board 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 appropriate, but no such nullification
shall estop the Board from re-exercising its powers of forfeiture pursuant to
this Article 18.

19.     LIEN

19.1.   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 Shareholder which are not fully paid up (without regard to any
equitable or other claim or interest in such shares on the part of any other
Person), and upon the proceeds of the sale thereof, for his debts, liabilities
and engagements arising from the failure to pay for such shares, solely or
jointly with another, to or with the Company, whether the period for the
payment, fulfillment or discharge thereof shall have actually arrived or not.
Such lien shall extend to all dividends and other distributions from time to
time declared in respect of such shares. 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 any lien existing on such shares
immediately prior to such transfer.

19.2.   The
Board may cause the Company to sell any shares subject to such lien when any
such debt, liability or engagement has matured, in such manner as the Board may
deem appropriate, 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 Companys intention to sell shall have been served on such
Shareholder, his executors or administrators.

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

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20.     SALE
AFTER FORFEITURE OR
SURRENDER OR IN ENFORCEMENT
OF LIEN

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

21.     REDEEMABLE
SECURITIES

The Board
may, subject to applicable Law, issue redeemable Equity Securities, with such
rights and on such conditions as the Board prescribes, and redeem the same.

TRANSFER
OF SHARES

22.     TRANSFER
OF SHARES - GENERAL

22.1.   No
sale, assignment, conveyance, pledge, grant of any security interest or gift,
or any other disposition or transfer (collectively Transfer) of Shares shall be effective unless the Transfer
has been approved by the Board, which consent shall not be unreasonably
withheld or delayed, and such Transfer is effected in compliance with the
provisions of Articles 23, 24, 25 and 26. Any Transfer of shares shall be
conditioned upon an undertaking in writing by the transferee to assume and be
bound by all obligations of the transferor under any instrument and agreement
involving the transferor and the Company and applicable to such transferred
shares, signed by the transferee. The Board may refuse to register a Transfer
of shares, inter alia, in the
event that such a Transfer is to a competitor of the Company, or in the event
that such a Transfer would result in the Company having more than 50
shareholders. The Board shall refuse to register a Transfer of shares in the
event that such a Transfer is in violation of these Articles and/or if the
transferee does not agree, in writing, prior to such Transfer, to assume and be
bound by all obligations of the transferor under any instrument and agreement
involving the transferor and the Company and applicable to such transferred
shares.

Notwithstanding
the above, any Transfer of shares by a Shareholder to any of such Shareholders
Permitted Transferees (as confirmed in writing to the Company by transferor and
transferee) shall not require the approval of the Board, provided that any such
Permitted Transferee undertakes in writing towards the Company and the
Shareholders to assume and be bound by all obligations of the transferor under
any instrument and agreement involving the transferor (in its capacity as
Shareholder) and the Company.

22.2.   No
Transfer of shares shall be registered unless the Company receives a deed of
transfer or other proper instrument of transfer (in form and substance
satisfactory to the Board or the corporate secretary of the Company), together
with the share certificate(s) and such other evidence of title as the Board or
the corporate secretary of the Company may reasonably require. Until the transferee
has been registered in the Shareholder Register in respect of the shares so
transferred, the Company may continue to regard the transferor as the owner
thereof. The Board may, from time to time, prescribe a fee for the registration
of a Transfer. A deed of transfer shall be in the following form or in any
substantially similar form, including any such form as is acceptable to the
transfer agent for the Companys shares, or in any form otherwise approved by
the Board or the corporate secretary of the Company.

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Deed of Transfer

I, _________, (hereinafter: the Transferor)
of ________________, do hereby transfer, in consideration for ____________, to
______________ (hereinafter: the Transferee),
______________share(s) NIS __ par value each of _______________ Ltd.
(hereinafter: the Company) to be
held by the Transferee and/or his executors, administrators and assigns,
subject to the same terms and conditions under which I held the same at the
time of execution hereof; and the Transferee, do hereby agree to take the said
share(s) subject to the conditions aforesaid.

In witness whereof we hereby execute this Deed of Transfer, this ___day
of ______, 20__.

|The
  Transferor | The
  Transferee
|---------------- | ----------------
|Name:            | Name:           
|                 |                 
|Signature:       | Signature:      
|                 |                 
|                 |                 

22.3.   Upon
the death of a Shareholder, the Company shall recognize the custodian or
administrator of the estate or executor of the will, and in the absence of
such, the lawful heirs of the Shareholder, as the only holders of the right for
the shares of the deceased Shareholder, after receipt of evidence to the
entitlement thereto, as determined by the Board.

22.4.   The
Company may recognize the receiver or liquidator of any corporate Shareholder
in liquidation or dissolution, or the receiver or trustee in bankruptcy of any
Shareholder, as being entitled to the shares registered in the name of such
Shareholder, after receipt of evidence to the entitlement thereto, as
determined by the Board.

22.5.   A
person acquiring a right in shares as a result of being a custodian,
administrator of the estate, executor of a will or the heir of a Shareholder,
or a receiver, liquidator or a trustee in a bankruptcy of a Shareholder or
according to another provision of Law, is entitled, after providing evidence of
his right to the satisfaction of the Board, to be registered as the Shareholder
or to transfer such shares to another person, subject to the provisions of this
Article 22.

22.6.   The
Board may suspend the registration of Transfers during the fourteen (14) day
immediately preceding the Annual Meeting (as defined below) of each year.

22.7.   Unless
otherwise provided elsewhere, the provisions of this Article 22 shall also
apply to other Equity Securities issued by the Company, mutatis mutandis.

23.     RIGHTS
OF FIRST REFUSAL.

23.1.   Any
Shareholder proposing to transfer all or any of his shares in the Company other
than to a Permitted Transferee (the Offeror)
shall first offer such shares (the Offered
Shares), at the price and on the terms of the proposed transfer, by
written notice to each Shareholder who holds no less than 5% of the issued and
outstanding shares capital of the Company on an As-Converted Basis (the Offerees) (with a copy to the Company).
The notice shall include the identity of the purchaser, the proposed price and
terms of sale of the Offered Shares and the pro rata share of the Offeree (in
proportion to the respective holdings of the Offerees) with respect to the
Offered Shares (the Offer). Any
Offeree may accept such offer in respect of all or any of the Offered Shares by
giving the Offeror (with a copy to the Company) notice to that effect within
twenty (20) days after receiving the Offer. Failure to timely accept the
Offered Shares, in whole or in part, shall be deemed as a decision not to
purchase any of the Offered Shares.

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23.2.   If
the acceptances, in the aggregate, are in respect of all of, or more than, the
Offered Shares, then the accepting Offerees shall be entitled to acquire the
Offered Shares, on the terms aforementioned, in proportion to their respective
holdings of shares, provided that no Offeree shall be entitled to
acquire under the provisions of this Article 23 more than the number of Offered
Shares initially accepted by such Offeree, and upon the allocation to him of
the full number of shares so accepted, he shall be disregarded in any
subsequent computations and allocations hereunder. Any shares remaining after
the computation of such respective entitlements shall be re-allocated among the
Offerees (other than those to be disregarded as aforesaid), in the same manner,
until one hundred percent (100%) of the Offered Shares have been allocated as
aforesaid.

23.3.   If
the acceptances by Offerees, in the aggregate, are in respect of less than one
hundred percent (100%) of the Offered Shares, then the accepting Offerees shall
not be entitled to acquire any Offered Shares, and the Offeror, at the
expiration of the aforementioned twenty (20) day period, shall be entitled,
subject to compliance with the provisions of Articles 22, 24 and 26, to
transfer the Offered Shares at a price not lower and on terms no more favorable
to the buyer(s) than those stated in the Offer, and provided further
that if the Offered Shares are not transferred within ninety (90) days after
the expiration of such twenty (20)-day period, any subsequent sale shall again
be subject to the provisions of this Article 23.

23.4.   The
right of first refusal granted under this Article 23 shall expire immediately
prior to consummation of a Qualified Public Offering.

24.     BRING ALONG.

24.1.   Notwithstanding
the provisions of Section 314 through 327 and 341 of the Companies Law, until
the Qualified Public Offering and subject to Article 96 hereof, if Shareholders holding 70% of the
Companys issued share capital (on An As-Converted Basis) (the Proposing Shareholders) elect to sell all of their Equity
Securities to a third party, or agree to merge or consolidate the
Company with or into another entity (the buyer of the Equity Securities or the
entity surviving or resulting such merger or consolidation  Third Party), then, all remaining shareholders (Remaining Shareholders) will be
required, if so demanded in writing by the Proposing Shareholders (the Bring Along Notice), to sell all of
their Equity Securities to such Third Party or to agree to the merger or
consolidation of the Company therewith as aforesaid, as the case may be, at the
same price and upon the same terms and conditions as applicable to the
Proposing Shareholders (the Proposed
Transaction). The
provisions of applicable law (including, in particular but without limitation,
Section 341 of the Companies Law) to the contrary notwithstanding, the price,
terms and conditions of a Proposed Transaction shall be considered to apply in
the same manner as to all Shareholders, if the application of such price, terms
and conditions to the respective shares of the Company held by each Shareholder
is made based upon and in accordance with the rights, preferences and
privileges conferred upon such shares under these Articles (e.g. if each such
share receives the respective portion of the proceeds of such Proposed
Transaction (being a Realization Event) as determined pursuant to the
provisions of Article 96 below). Notwithstanding anything in these Articles or,
to the extent permitted, in any applicable law to the contrary, the approval of
a Proposed Transaction shall not be subject to the approval of a separate class
vote of the holders of the shares of any particular class.

24.2.   Upon
receipt of the Bring Along Notice, each Remaining Shareholder shall be
obligated to agree to the Proposed Transaction and to sell all of its shares in
connection therewith, notwithstanding any other no sale right, first refusal
rights or other rights to which such Shareholder is entitled or by which it is
bound, and the proceeds of such Proposed Transaction shall be distributed in
accordance with the liquidation preference provisions set forth in Article 96.

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24.3.   At
the closing of the Proposed Transaction (which place, date and time shall be
designated by the Proposing Shareholders and provided to each of the Remaining
Shareholders at least 5 days in advance), each such Remaining Shareholder shall
deliver certificates evidencing all of its Equity Securities, duly endorsed or
accompanied by written instruments of transfer in from satisfactory to the
Third Party, duly executed by such Remaining Shareholder, against delivery of
the purchase price therefor (any Shareholder who fails or refuses to deliver such
certificates as aforesaid, shall be deemed to have surrendered such
certificates in accordance with the aforesaid on the latest date designated
therefor under the Proposed Transaction, and thereupon the certificates
held by such Shareholder and representing such Equity Securities shall be
deemed cancelled and of no further force and effect).

25.     RESTRICTION
ON DISPOSITIONS BY SHAREHOLDERS

Except with
the prior written consent of the holders of at least 60% of the then issued and
outstanding share capital of the Company, on an As-Converted Basis, no
shareholder shall Transfer any of its Shares or other Equity Securities, except
to any Permitted Transferee thereof, during each 6-month period commencing on
the effective date of any bona fide resolution of the Board to the effect that
the Company is to solicit financing thereof by means of the issuance of any
Equity Securities to third parties, provided the Company is diligently pursuing
such financing.

26.RESERVED.

GENERAL MEETINGS

27.     THE AUTHORITY OF THE GENERAL MEETING

27.1.   The
following matters shall require the approval of the General Meeting:

(a)     Amendment
of the Articles.

(b)    The
exercise by the General Meeting of the authority of the Board, subject to the
provisions of the Companies Law, if it is resolved by the General Meeting that
the Board is incapable of exercising its authority, and that the exercise of
such authority is essential to the orderly management of the Company.

(c)    The
appointment or reappointment of the Companys Auditor (however, the terms of
such appointment, including, inter alia, the consideration payable therefor,
shall be determined by the Board who shall report same to the Annual Meeting),
and the termination or non-renewal of his service.

(d)    To
the extent required by the provisions of the Companies Law, the approval of
actions and transactions with interested parties and the approval of an action
or a transaction of an Office Holder (as defined in Article 91 below) which
might constitute a breach of the duty of loyalty.

(e)    Changes
in the share capital of the Company, as set forth in Articles 8 and 9 hereof.

(f)     A
merger of the Company, as defined in the Companies Law.

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(g)     A
liquidation of the Company.

(h)    Entry
into a Proposed Asset Sale Transaction in the event set forth in Article 103
below.

(i)     Any
other matters which the Companies Law requires to be dealt with at the General
Meeting of the Company, or any matters that were given to the General Meeting
in these Articles.

27.2.   The
General Meeting shall not transfer to another organ of the Company any of its
authorities detailed in Article 27.1 above.

27.3.   The
General Meeting, by a resolution adopted by an Ordinary Majority, may assume
the authority which is given to another organ of the Company; provided however,
that such taking of authorities shall be with regard to a specific issue or for
a specific period of time, all as stated in the resolution of the General
Meeting regarding such taking of authorities.

28.     ANNUAL MEETING

28.1.   An
annual General Meeting may be held by the Company, and, at the request of any
Shareholder or Director or if necessary for the appointment of an independent
Auditor, 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. These General Meetings shall be referred to
as Annual Meetings.

28.2.   In
the event an Annual Meeting was not held by the Company, the Company shall send
to each Shareholder of the Company registered in the Shareholder Register, prior
to the date on which the Annual Meeting would have been held and not more than
once in every fiscal year, the financial statements of the Company.

28.3.   The
agenda of an Annual Meeting shall include a discussion of the following issues:

(a)     The
financial statements of the Company, as of the end of the fiscal year preceding
the year of the Annual Meeting, and the report of the Board with respect
thereto.

(b)     The
report of the Board with respect to the fee paid to the Companys Auditor.

28.4.   The
agenda at an Annual Meeting may include the following issues, in addition to
those referred to in Article 28.3:

(a)     The
appointment of an Auditor or the renewal of his office.

(b)     Any
other issue, which was detailed in the agenda for the Annual Meeting.

29.     SPECIAL MEETINGS

29.1.   All
General Meetings other than Annual Meetings shall be referred to as Special Meetings. A Special Meeting shall
discuss and decide in all matters for which the Special Meeting was convened.

29.2.   The
Board may, whenever it deems appropriate, convene a Special Meeting at such
time and place, within or without the State of Israel, as may be determined by
the Board, and shall be obliged to do so upon the demand of one of the
following:

(a)     Any
Director; or

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(b)     Any one or more Shareholders, holding alone or
together at least ten percent (10%) of the issued share capital of the Company and
at least one percent (1%) of the voting rights in the Company or one or more
Shareholders holding at least ten percent (10%) of the voting rights in the
Company.

29.3.   The
Board, upon demand to convene a Special Meeting in accordance with Article 28.2
above, shall announce the convening of the General Meeting within twenty one
(21) days from the receipt of a demand in that respect.

29.4.   If
the Board does not convene a Special Meeting as aforesaid, the person
requisitioning the meeting, and where Shareholders are involved - also some of
them, who have more than half the voting rights in the Company, may convene the
meeting themselves, provided that it is not held more than three months after
the date the requisition was made, and it shall be convened, insofar as
possible, in the same way in which meetings are convened by the Board. Where a
general meeting is convened as aforesaid, the Company shall cover the
reasonable expenses incurred by the person requisitioning it.

30.     CLASS MEETINGS

The
provisions of these Articles with respect to General Meetings shall apply, mutatis mutandis, to meetings of the
holders of a class of shares of the Company (hereinafter: Class Meetings); provided, however, that the requisite quorum at
any such Class Meeting shall be one or more Shareholders  present in person or by proxy, and holding
together not less than twenty five percent (25%) of the issued shares of such
class.

31.     NOTICE
OF GENERAL MEETINGS

31.1.   Unless
a shorter period is permitted by Law, a notice of a General Meeting shall be
sent to each Shareholder of the Company registered in the Shareholder Register
and entitled to attend and vote at such meeting, at least seven (7) days prior
to the date fixed for the General Meeting (such 7 days not to include the day
on which the notice is deemed received by a Shareholder in accordance with
Article 101 below, but may include the day fixed for the General Meeting); provided however that such notice
shall not be sent more than forty five (45) days from the date fixed for the
General Meeting. Subject to the provisions of any Law, each such notice shall
specify the place, the day and hour of the meeting, the agenda of the meeting
and a concise description of the items for discussion; provided however, that:
(i) in the event that the agenda includes a proposal to amend the Articles, the
notice shall include the text of the proposed amendment(s); and (ii) with
respect to a notice of an Annual Meeting, then, notwithstanding the provisions
of Section 173(e) of the Companies Law, a copy of the annual financial
statements of the Company which are to be discussed in such an Annual Meeting
shall be delivered, together with the notice of such Annual Meeting, to any
Shareholder entitled to vote at such Annual Meeting. Anything herein to the
contrary notwithstanding, with the written consent of all Shareholders entitled
to vote thereon, a resolution may be proposed and passed at such meeting
although a shorter notice than hereinabove prescribed has been given. A waiver
by a Shareholder can also be made in writing after the fact and even after the
convening of the General Meeting.

31.2.   The
Boards authority to determine the time and the place for the convening of the
General Meeting shall include the power to change such time and/or place, prior
to the convening of the General Meeting and subject to the provisions of these
Articles and any Law, including with regard to the sending of a new notice to
the Shareholders.

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31.3.   Any
accidental omission with respect to the giving of a notice of a General Meeting
to any Shareholder or the non-receipt of a notice with respect to a meeting or
any other notice on the part of any Shareholder shall not cause the
cancellation of a resolution adopted at that meeting, or the cancellation of
acts based on such notice.

32.     THE AGENDA OF GENERAL MEETINGS

32.1.   The
agenda of General Meetings shall be determined by the Board and shall also
include issues for which a Special Meeting
is being convened in accordance with Article 29 above, or as may be required
upon the request of Shareholders in accordance with the provisions of the
Companies Law.

32.2.   The
General Meeting shall only adopt resolutions on issues, which are on its
agenda.

32.3.   The
General Meeting is entitled to accept or reject a proposed resolution, which is
on the agenda of the General Meeting. Subject to applicable Law, the General
Meeting may adopt a resolution, which is different from the description thereof
included in the notice of the General Meeting, provided that such resolution is
not materially different from the proposed resolution.

33.     ENTITLEMENT
TO PARTICIPATE IN A GENERAL MEETING AND TO VOTE THEREAT

33.1.   Subject
to the provisions of the Companies Law, the Shareholders who are entitled to
participate in and vote at a General Meeting shall be the Shareholders on the
date of the General Meeting.

33.2.   An
objection to the right of a Shareholder to participate in and vote at a General
Meeting must be raised at such meeting and any vote not disqualified thereat
shall be deemed valid for any purpose. The Chairman of the meeting shall decide
whether to accept or reject any objection raised at the appointed time with
regard to the participation and vote of a Shareholder and his decision shall be
final.

34.     QUORUM

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

34.2.    Subject
to the requirements of the Companies Law and the provisions of these Articles,
any two or more Shareholders (not in default in payment of any sum referred to
in Article 16 hereof, present in person or by proxy, and who hold or represent
in the aggregate at least fifty percent (50%) of the voting power of the
Company, shall constitute a lawful quorum at General Meetings. A Shareholder or
his proxy, who also serves as a proxy for other Shareholder(s), shall be
regarded as two or more Shareholders, in accordance with the number of
Shareholders he is representing.

34.3.   If
within half an hour from the time appointed for the General Meeting a quorum is
not present, the meeting, if convened by the Board upon demand under Article
29.2 or, if not convened by the Board, if convened by the demanding
Shareholder(s) in accordance with the provisions of the Companies Law, shall be
dissolved, but in any other case it shall stand adjourned to the fourth
Business Day thereafter (including the day of original General Meeting), at the
same time and place, or to such later 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 and notice of such adjourned meeting shall be delivered
by email in accordance with  Article 36
below.  No business shall be transacted
at any adjourned meeting except business, which might lawfully have been
transacted at the meeting as originally called. The provisions of Section 79 of
the Companies Law shall apply to such adjourned meeting.

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35.     CHAIRMAN

The
Chairman of the Board shall preside as Chairman at every General Meeting. If
there is no such Chairman, or if the Chairman is not present within fifteen
(15) minutes after the time fixed for holding such meeting or is unwilling to
act as Chairman, the Shareholders present shall choose someone of their number
or any other person to be Chairman. The position 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 proxy, respectively).

36.     ADJOURNED MEETING

A General
Meeting at which a lawful quorum is present (hereinafter: the Original General Meeting), may resolve by
an Ordinary Majority to adjourn the General Meeting, from time to time, to
another time and/or place (hereinafter: an Adjourned
Meeting). In any event of an Adjourned Meeting, the Company will,
as soon as practicable following the respective Original General Meeting (but
in any event by the end of the next Business Day thereafter), send an email to
each Shareholder of the Company registered in the Shareholder Register and
entitled to attend and vote at such meeting notifying such Shareholder of the
Adjourned Meeting (specifying the time and place thereof), which notice shall
be sent (and be deemed properly given), notwithstanding the provisions of
Article 101 below to the contrary, only by means of an email to the Address (as
defined therein) of such Shareholder. With the exception of the aforesaid, a
Shareholder shall not be entitled to receive a notice of an Adjourned Meeting
or of the issues which are to be discussed in the Adjourned Meeting. The
Adjourned Meeting shall only discuss issues that could have been discussed at
the Original General Meeting, and with respect to which no resolution was
adopted.

37.     ADOPTION
OF RESOLUTIONS AT GENERAL MEETINGS

37.1.   All
resolutions of the General Meeting shall be adopted by an Ordinary Majority,
except for any matters with respect to which a greater or different majority is
required by these Articles or by the Companies Law.

37.2.   Every
matter submitted to a General Meeting shall be decided by a show of hands, but
if a written ballot is demanded by any Shareholder, 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 Shareholder 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.

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

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38.     RESOLUTIONS IN WRITING

A
resolution in writing signed by all Shareholders of the Company then entitled
to attend and vote at General Meetings or to which all such Shareholders have
given their written consent (by letter, facsimile, telegram, telex, e-mail or
otherwise), or their oral consent by telephone (provided that a written summary
thereof has been approved and signed by the Chairman of the Board) shall be
deemed to have been unanimously adopted by a General Meeting duly convened and
held. Such resolution could be stated in several counterparts of the same
document, each of them signed by one Shareholder or by several Shareholders.

39.     CONDUCTING A GENERAL MEETING
THROUGH MEANS OF COMMUNICATION

The Company
may conduct a General Meeting telephonically or through the use of any other
means of communication, provided all of the participating Shareholders can hear
each other simultaneously. A resolution approved by use of means of communications
as aforesaid, shall be deemed to be a resolution lawfully adopted at a General
Meeting.

40.     VOTING POWER

Subject to the provisions of Article 41.1 and subject to any
provision hereof conferring special rights as to voting, or restricting the
right to vote, every Shareholder shall have one vote for each share held by him
of record (calculated on an As Converted Basis), on every resolution, without
regard to whether the vote thereon is conducted in person, by proxy, by a show
of hands, by written ballot or by any other means.

41.     VOTING RIGHTS

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

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

41.3.   Any
Shareholder entitled to vote may vote either personally (or, if the Shareholder
is a company or other corporate entity, by a representative authorized pursuant
to Article 41.2) or by proxy (subject to Article 45 below).

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

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42.     PREFERRED SHARES VOTING RIGHTS.

Without
derogating from or limiting the provisions of Article 40, and in addition and
without limitation to the general voting rights of the Preferred Shares or as
otherwise required by law, each holder of Preferred Shares shall be entitled to
vote, together with the holders of the Ordinary Shares as one class, on all
matters submitted to a vote of the Shareholders of the Company, and shall be
entitled to the number of votes equal to the number of shares of Ordinary Shares
that would be issuable to such holder if all Preferred Shares held by such
holder were converted into the number of shares of Ordinary Shares issuable
pursuant to Article 7 hereof immediately prior to the record date for the
determination of the shareholders entitled to vote on such matters or, if no
such record date is established, as of the date such vote is taken or any
written consent of shareholders is first executed.

43.     PERSONAL INTEREST IN RESOLUTION

43.1.   A
Shareholder seeking to vote with respect to a resolution which requires that
the majority for its adoption include at least a certain percentage of the
votes of all those not having a personal interest (as defined in the Companies
Law) in the resolution, shall notify the Company prior to the date of the
General Meeting, whether or not he has a personal interest in the resolution,
as a condition for his right to vote and be counted with respect to such
resolution.

43.2.   A
Shareholder voting on a resolution, as aforesaid, by means of a deed of
authorization of a proxy, may include his notice with respect to his personal
interest on the deed of authorization.

44.     VALIDITY
OF ACTS DESPITE DEFECTS

Subject to
the provisions of the Companies Law, a defect in convening or conducting the
General Meeting, including a defect deriving from the non-fulfillment of any
provision or condition laid down in the Law or these Articles, including with
regard to the manner of convening or conducting the General Meeting, shall not
disqualify any resolution passed at the General Meeting and shall not affect
the discussions which took place thereat.

45.     VOTING BY MEANS OF A PROXY

45.1.   A
Shareholder registered in the Shareholder Register is entitled to appoint by
deed of authorization a proxy (who is not required to be a Shareholder of the
Company) to participate and vote in his stead, whether at a certain General
Meeting or generally at General Meetings of the Company.

45.2.   In
the event that the deed of authorization is not limited to a certain General
Meeting, then the deed of authorization, which was deposited prior to a certain
General Meeting, shall also be good for other General Meetings thereafter. This
Article 45 shall also apply to a Shareholder that is a company, appointing a
person to participate and vote in a General Meeting in its stead.

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46.     A DEED OF AUTHORIZATION

46.1.   The
deed of authorization of a proxy shall be in writing and shall be substantially
in the form specified below, or in any usual or common form or in such other
form as may be approved by the Board or the corporate secretary of the Company.
It shall be duly signed by the appointer or his duly authorized attorney or, if
such appointer is a company or other corporate entity, under its common seal or
stamp or the hand of its duly authorized agent(s) or attorney(s). The Company
may demand that it be given written confirmation to its satisfaction of the
authority of those signing to bind such company.

Deed of Authorization

To: _____________ Ltd. (the Company)

Attn: Corporate Secretary

I _____________________ of __________________________________

(Name of Shareholder) (I.D. of Shareholder)

being a registered holder of __________ (*) Ordinary Shares
having a par value of NIS __ each, of the Company, hereby appoint

|________________________
  I.D. no. ____________________________ and/or          
|---------------------------------------------------------------------------------
|(Name
  of
  Proxy)                                        (I.D.
  of Proxy) (**)
|                                                                                 
|________________________
  I.D. no. ____________________________                 
|(Name
  of
  Proxy)                                        (I.D.
  of Proxy)     



as my proxy to participate and vote for me and in my stead and on my
behalf at [mark one]:

|o | The General
  Meeting of the Company to be held on the _____ day of ___________, 20__ and
  at any adjournment(s) thereof.
|- | --------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                           
|  | I direct
  that my vote(s) be cast on the resolutions as indicated by a ü in the appropriate space.                       
|  |                                                                                                                           
|  | Resolutions                                                                                                               
|  | (***)                                                                                                                     

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|  |                                                                                                                                                             |                                                                                                                                 |  | 
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------- |  | 
|  | On the
  receipt of this form duly signed but without any specific direction on a
  particular matter, my proxy will vote or abstain at his/her discretion.
|  |                                                                                                                                                            
|  | [Optional 
  mark one:]                                                                                                                                   
|  |                                                                                                                                                            
|o |                                                                                                                                                             | I hereby
  notify the Company that I do not have a personal interest in any of the
  resolutions to be voted on in the meeting.
|  |                                                                                                                                                             |                                                                                                                                
|o |                                                                                                                                                             | I hereby
  notify the Company that I have a personal interest in resolutions no.
  ____________ to be voted on in the meeting. 
|  |                                                                                                                                                             |                                                                                                                                
|o | At any
  General Meeting of the Company, until I shall otherwise notify you.                                                                               
|  |                                                                                                                                                             |                                                                                                                                 |  | 

Signed this ______ day of ____________, 20__.

|                           | 
|-------------------------- | 
|(Signature
  of Appointer)

(*)A registered shareholder may grant a
number of proxy appointment instruments, each in relation to another quantity
of the Companys shares held by him, provided that he does not grant proxy
appointment instruments for a quantity of shares larger than the quantity held
by him.

(**)Where the proxy does not have an
Israeli identity document, the passport number and the country, which issued
the passport, may be stated.

(***)Fill in the resolutions set forth in
the agenda of the meeting and mark your vote with respect to each resolution.

46.2.   The
Company shall only accept an original proxy appointment instrument or a copy
thereof.

46.3.   The
deed of authorization of a proxy (and the power of attorney or other authority,
if any, under which such instrument has been signed) shall be delivered to the
Company (at its registered office or at such place as the Board may specify)
before the time fixed for the meeting at which the person named in the deed of
authorization proposes to vote, or presented to the Chairman at such meeting.

47.     EFFECT OF DEATH OF APPOINTER
OR REVOCATION OF APPOINTMENT

A vote cast
pursuant to a deed of authorization of a proxy shall be valid notwithstanding
the previous death, incapacity or bankruptcy, or if a company or other
corporate entity, the liquidation, of the appointing Shareholder (or of his
attorney-in-fact, if any, who signed such instrument), or the revocation of the
appointment or the transfer of the share in respect of which the vote is cast,
provided no written notice of any such event shall have been received by the
Company or by the Chairman of the General Meeting before such vote is cast and
provided, further, that the appointing Shareholder, if present in person at
said General Meeting, may revoke the appointment by means of a writing, oral
notification to the Chairman, or otherwise.

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48.     DISQUALIFICATION
OF DEEDS OF AUTHORIZATION

Subject to
the provisions of applicable Law, the corporate secretary of the Company may,
in his discretion, disqualify a deed of authorization and so notify the
Shareholder who submitted the deed of authorization in the following cases:

48.1.   If
there is a reasonable suspicion that it is forged or falsified;

48.2.   If
it is not duly executed or completed;

48.3.   If
there is a reasonable suspicion that it is given with respect to shares for
which one or more deeds of authorization have been given and not withdrawn; or

48.4.   If
more than one choice is marked for the same resolution; or

48.5.   With
respect to resolutions, which require that the majority for their adoption
include a certain percentage of those not having a personal interest in the
approval of the resolution, where it was not marked, or otherwise notified to
the Company, whether or not the relevant Shareholder has a personal interest.

49.     BOARD RECOMMENDATION

The Board
may, in its sole discretion, send to the Shareholders a recommendation in order
to persuade them with respect to any matter, which is on the agenda of the
General Meeting. Such recommendation shall be delivered at the expense of the
Company.

50.RESERVED.

BOARD
OF DIRECTORS

51.     THE AUTHORITY OF THE BOARD

51.1.   The
authority of the Board is as specified in the Companies Law and in the
provisions of these Articles, subject, however, to the provisions of Article
103 below.

51.2.   The
Board may exercise any authority of the Company that is not, by the Companies
Law or by these Articles, required to be exercised by another organ of the
Company.

51.3.   Without
derogating from the generality of Articles 51.1 and 51.2 above, the Boards
authority shall include the following:

(a)     The
Board may, from time to time, in its discretion, cause the Company to borrow or
secure the payment of any sum or sums of money for the purposes of the Company,
and may secure or provide for the repayment of such sum or sums in such manner,
at such times and upon such terms and conditions in all respects as it deems
appropriate, including, without limitation, by the issuance of bonds, perpetual
or redeemable debentures or other Equity Securities, or any mortgages, charges,
or other liens 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.

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(b)     The
Board 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, in its
sole discretion, shall deem appropriate, 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 re-designate
any reserve or cancel the same or apply the funds therein for another purpose,
all as the Board may from time to time deem appropriate.

(c)     Subject
to the provisions of any Law, the Board may, from time to time, authorize any
person to be the representative of the Company with respect to those objectives
and subject to those conditions and for that time period, as the Board deems
appropriate, and may also grant any such representative the authority to
delegate any or all of the authorities, powers and discretion given to him by
the Board.

52.     CONVENING
MEETINGS OF THE
BOARD

52.1.   The
Chairman of the Board, and in the event that a Chairman has not been appointed,
any Director, may convene a meeting of the Board at any time; provided that a
meeting of the Board be convened at least once a quarter.

52.2.   The
Chairman of the Board shall convene a meeting of the Board at any time or in
any event that such meeting is required by the provisions of the Companies Law,
including:

(a)     The
Chairman of the Board shall convene the Board on a specified matter on the
demand of a Director.

(b)     The
Chairman of the Board shall act without delay to call a meeting of the Board
within 10 days of being notified by a Director of the Company that he has
learned of a matter of the Company in which a breach of the Law or impairment
to proper business procedure has prima facie been discovered or of the date on
which the Companys Auditor reports to him that he has learned of material
deficiencies in the audit of the Companys accounts.

(c)     If
a notice or report of the General Manager obliges action by the Board, the
Chairman of the Board shall, without delay and within 10 days of the notice or
report, call a meeting of the Board.

53.     NOTICE
OF A MEETING OF THE BOARD

53.1.   Any
notice with respect to meeting of the Board may be given to all Directors
incumbent at the time the notice is sent, orally or in writing, so long as the
notice is given at least three (3) Business Days (not including date of
delivery of notice but including date of meeting) prior to the date fixed for
the meeting (such 3 Business Days not to include the day on which the notice is
deemed received by a Director in accordance with Article 101 below, but may
include the day fixed for such a meeting of the Board), unless all members of
the Board or their Alternate Directors (as defined in Article 63.1) or their
Representatives (as defined in Article 63.3) agree on a shorter time period.
Such notice shall be delivered personally, by mail, or transmitted via
facsimile or e-mail or through another means of communication, to the address,
facsimile number or to the e-mail address or to an address where messages can
be delivered through other means of communication, as the case may be, as the
Director informed the Company in advance.

53.2.   A
notice with respect to a meeting of the Board shall include the place, date and
time of the meeting of the Board, the issues on its agenda and any other
material that the Chairman of the Board, or the Director who convened the
meeting, requests to be included in the notice with respect to the meeting.

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54.     THE AGENDA OF BOARD MEETINGS

The agenda
of any meeting of the Board shall be as determined by the Chairman of the
Board, and if there is no Chairman, by a resolution of the director convening
the meeting, and shall include the following matters:

54.1.   Matters
for which the meeting is required to be convened in accordance with the
Companies Law;

54.2.   Any
matter requested by a Director or by the General Manager to be included in the
meeting within a reasonable time (taking into account the nature of the matter)
prior to the date of the meeting;

54.3.   Any
other matter determined by the Chairman of the Board, or if there is no
Chairman, by the Director convening the meeting.

55.     QUORUM

55.1.   Unless
otherwise unanimously decided by the Board, a quorum at a meeting of the Board
shall be constituted by the presence of a majority of the Directors then in
office (at least one of which being a Director appointed by holders of
Preferred Shares) who are lawfully entitled to participate in the meeting.

55.2.   If
within half an hour from the time appointed for the meeting a quorum is not
present, the meeting shall stand adjourned to the second Business Day at the
same time and place, or to such later day and at such time and place as the
Chairman may determine with the consent of the majority of the Directors
present. In any event of a meeting adjourned as aforesaid, the Company will, as
soon as practicable following the respective original meeting (but in any event
by the end of the next Business Day thereafter), send an email to all Directors
incumbent at the time the notice is sent, notifying such Director of the
adjourned meeting (specifying the time and place thereof), which notice shall be
sent (and be deemed properly given), notwithstanding the provisions of Article
101 below to the contrary, by means of an email to the Address (as defined
therein) of such Director. With the exception of the aforesaid, a Director
shall not be entitled to receive a notice of an adjourned meeting or of the
issues which are to be discussed in the adjourned meeting. 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,
any two Directors present shall constitute a lawful quorum.

56.     CONDUCTING A MEETING THROUGH MEANS OF COMMUNICATION

The Board
may conduct a meeting of the Board telephonically or through the use of any
other means of communication, provided all of the participating Directors can
hear each other simultaneously. A resolution approved by use of means of
communications as aforesaid, shall be deemed to be a resolution lawfully
adopted at a meeting of the Board.

57.     VOTING IN THE BOARD

Unless
otherwise provided by these Articles, issues presented at meetings of the Board
shall be decided upon by a majority of the votes of Directors present (or
participating, in the case of a vote through a permitted means of
communications) and lawfully entitled to vote thereon. Each Director shall have
a single vote.

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58.     ADOPTION OF RESOLUTIONS WITHOUT
CONVENING

The Board
may adopt resolutions without actual physical convening with the written consent
(given by letter, facsimile, e-mail or otherwise) of all the Directors then in
office and lawfully entitled (as conclusively determined by the Chairman of the
Board) to participate and to vote thereon. Matters presented in accordance with
this Article 58 shall be decided upon by a majority of the votes of such
Directors. Resolutions adopted pursuant to this Article 58 shall be deemed to
have been duly adopted by a meeting of the Board duly convened and held.
Minutes of such resolutions shall be approved and signed by the Chairman of the
Board.

59.     WRITTEN RESOLUTION

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

60.     THE NUMBER OF DIRECTORS

The Board
shall consist of up to six (6) Directors.

61.     DIRECTORS GENERALLY

61.1.   Subject
to the provisions of the Companies Law, a Director may hold another position in
the Company.

61.2.   A
company or other corporate entity may serve as a Director in the Company,
subject to the provisions of Article 63 below.

62.     THE ELECTION OF DIRECTORS

62.1.   The
Directors of the Company (and of any subsidiaries of the Company) shall not be
elected by the General Meeting of the Shareholders, but instead shall be
appointed as follows:

(a)      One
Director shall be appointed by AKS so long as AKS holds 5% or more of the
Companys issued and outstanding share capital on an As-Converted Basis, and so
long as AKS holds less that 5% of the Companys issued and outstanding share
capital on an As-Converted Basis, such Director shall be appointed by the
holders of the majority of the issued and outstanding Ordinary Shares;

(b)      five
Directors shall be appointed by the holders of the majority of the Ordinary
Shares;

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62.2.   Any
vacancy on the Board shall be filled by the party or parties who had appointed
such director.

62.3.   Any
appointment, dismissal or replacement of any Director, shall be made by written
notice given to the Company by the appointing parties.

63.     ALTERNATE
DIRECTORS AND REPRESENTATIVE
OF A DIRECTOR THAT IS A COMPANY

63.1.   Subject
to the provisions of the Companies Law, any Director may, by written notice to
the Company, appoint an alternate for himself (in these Articles, an Alternate Director), dismiss 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, whether for a certain meeting or a certain period of time or
generally. Any notice given to the Company pursuant to this Article shall be in
writing, delivered to the Company and signed by the appointing or dismissing
Director, and shall become effective on the date fixed therein, or upon the
delivery thereof to the Company, whichever is later.

63.2.   Anyone
who is not qualified to be appointed as a Director and/or anyone serving as a
Director or as an existing Alternate Director may not be appointed and may not
serve as an Alternate Director.

63.3.   A
Director that is a company or other corporate entity shall appoint an
individual, qualified to be appointed as a Director in the Company, in order to
serve on its behalf, either for a certain meeting or for a certain period of
time or generally and such company or other entity may also dismiss that
individual and appoint another in his stead (hereinafter: Directors Representatives). Any notice
given to the Company pursuant to this Article shall be in writing, delivered to
the Company and signed by the appointing or dismissing body, and shall become
effective on the date fixed therein, or upon the delivery thereof to the
Company, whichever is later.

63.4.   Intentionally
Left Blank.

63.5.   Each
of an Alternate Director and a Directors Representative shall have all the
authority of the Director who appointed him (except that neither an Alternate
Director nor a directors Representative may appoint an alternate for himself,
unless the instrument appointing him otherwise expressly provides), provided,
however, that an Alternate Director shall have no standing at any meeting of
the Board or any committee thereof while the Director who appointed him is
present.

63.6.   The
office of an Alternate Director or a Directors Representative shall be vacated
under the circumstances, mutatis mutandis,
set forth in Article 64, and such office shall ipso facto be vacated if the Director who appointed such
Alternate Director or Directors Representative ceases to be a Director.

64.     TERMINATION
OF THE TERM OF A DIRECTOR

The term of
a Director shall terminate in any of the following cases:

64.1.   If
he resigned from his office by way of a signed letter, filed with the corporate
secretary at the Companys office;

64.2.   If
he is declared bankrupt;

64.3.   If
he is declared by an appropriate court to be incapacitated;

64.4.   Upon
his death and, in the event of a company or other corporate entity, upon the
adoption of a resolution for its voluntary liquidation or the issuance of a
liquidation order;

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64.5.   If
he is removed from his office by way of a written notice to the Company of the
termination of his appointment by the persons or entities that appointed him;

64.6.   If
he is convicted of a crime requiring his termination pursuant the Companies
Law; or

64.7.   If
his term of office is terminated by the Board pursuant to the provisions of the
Companies Law.

65.     CONTINUING DIRECTORS IN THE EVENT OF VACANCIES

In the
event of one or more vacancies in the Board, the continuing Directors may
continue to act in every matter.

66.     COMPENSATION OF DIRECTORS

66.1.   Directors
who do not hold other positions in the Company shall not receive any
compensation from the Company, unless such compensation and its amount are
approved by the Compensation Committee and by the General Meeting, or if such
committee does not exist then by the Board and by the General Meeting, subject
to applicable Law.

66.2.   The
compensation of the Directors may be fixed, as an all-inclusive payment or as
payment for participation in meetings or as any combination thereof.

The Company
may reimburse expenses incurred by a Director in connection with the
performance of his duties as a Director, to the extent provided in a resolution
of the Board. The Company shall reimburse all reasonable out-of-pocket expenses
(including air travel) incurred by the directors for attending the Board and
committees meetings and performing their duties as directors.

67.     PERSONAL INTEREST OF A DIRECTOR

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

68.     COMMITTEES
OF THE BOARD OF DIRECTORS

68.1.   Subject
to the provisions of the Companies Law and these Articles, the Board may
delegate its authorities or any part of them to committees as it deems
appropriate, and it may from time to time cancel the delegation of any such
authority. Any such committee, while utilizing an authority as stated, is
obligated to fulfill all of the instructions given to it from time to time by
the Board. The Board may adopt a charter, or guidelines, for any such committee
and amend the same from time to time. Any committee appointed by the Board
shall consist of the same proportion of the number of Directors appointed by
the holders of Preferred Shares to the number of Directors appointed by the
holders of Ordinary Shares, as applicable to the Board incumbent from time to time.
So long as the Founder is entitled to appoint a Director to the Board, the
Director nominated by the Founder shall have a right to be a member of any such
committee and any committee in the board of directors of any subsidiary of the
Company.

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68.2.   The
provisions of these Articles with respect to meetings of the Board shall apply,
mutatis mutandis,to the meetings
and discussions of each committee of the Board, provided that no other terms
are set by the Board in this matter, and provided that the lawful quorum for
the meetings of the committee, as stated, shall be at least a majority of the
members of the committee, unless otherwise required by Law.

69.     CHAIRMAN
OF THE BOARD

69.1.   The
Board, by decision of the non-executive directors, may from time to time choose
one of its members to serve as the Chairman of the Board, remove such Chairman
from office and choose another in its place.

69.2.   The
Chairman of the Board shall preside at every meeting of the Board, 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 Board shall appoint one of the Directors present to preside at the
meeting.

69.3.   The
Chairman of the Board shall preside over meetings of the Board and shall sign
the minutes of the meetings.

69.4.   In
the event of deadlock vote, the Chairman of the Board shall not have an
additional or casting vote.

69.5.   The
Chairman of the Board, or if there is only one Director in the Board, such
Director, is entitled, at all times, at his initiative or pursuant to a
resolution of the Board, to require reports from the General Manager in matters
pertaining to the business affairs of the Company.

70.     VALIDITY
OF ACTS DESPITE
DEFECTS

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

OFFICERS; AUDITOR

71.     THE GENERAL MANAGER

The Board
may appoint a General Manager, and may appoint more than one General Manager.
The General Manager may be a Director. Such appointment(s) may be either for a
fixed term or without any limitation of time, and the Board may from time to
time (subject to the provisions of the Companies Law and of any contract
between any such person and the Company) fix his or their salaries and emoluments,
remove or dismiss him or them from office and appoint another or others in his
or their place.

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72.     THE AUTHORITY OF THE GENERAL MANAGER

72.1.   The
General Manager is responsible for the day-to-day management of the affairs of
the Company within the framework of the policies set by the Board and subject
to its instructions.

72.2.   The
General Manager shall have all managerial and operational authorities, which
were not conferred by Law or pursuant to these Articles to any other organ of
the Company, and he shall be under the supervision of the Board.

72.3.   In
the event the Board appoints more than one General Manager, the Board may
determine the respective positions and functions of the General Managers and
allocate their authorities, as the Board may deem appropriate.

72.4.   The
Board may assume the authority granted to the General Manager, either with
respect to a certain issue or for a certain period of time.

72.5.   The
Board may instruct the General Manager how to act in a particular matter; if
the General Manager does not obey the instruction, the Board may exercise the
power required to implement the instruction in his stead.

72.6.   In
the event that the General Manager is unable to exercise his authority, the
Board may exercise such authority in his stead, or authorize another to
exercise such authority.

72.7.   The
General Manager, with the approval of the Board, may delegate to his
subordinates any of his authorities.

72.8.   Subject
to the provisions of the Companies Law, the Board may delegate to the General
Manager powers which the Board has pursuant to these Articles, as it deems fit,
and it may delegate these powers, or any of them, for such period and objects,
on such conditions and with such restrictions as it deems fit. The Board may
alter or cancel any delegation of powers as aforesaid.

72.9.   In
the event that the Company did not appoint a General Manager, the Board shall
have all the authorities of the General Manager as detailed in this Article 72.

73.     THE GENERAL MANAGERS REPORTING DUTIES

73.1.   The
General Manager must notify the Chairman of the Board of any exceptional
matter, which is material to the Company, or of any material deviation of the
Company from the policy prescribed by the Board. If the Company does not have a
Chairman of the Board, for any reason, the General Manager shall notify all the
Board members as aforesaid.

73.2.   The
General Manager shall submit reports to the Board on the matters, at the times
and on the scale prescribed by the Board.

73.3.   The
General Manager shall report to the Chairman of the Board, on his demand, on
matters relating to the Companys business and the proper management thereof.

74.     CORPORATE SECRETARY

74.1.   The
Board may appoint a corporate secretary for the Company, on such terms as it
deems fit, and may appoint a deputy secretary and determine their duties and
powers.

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74.2.   If
a corporate secretary is not appointed for the Company, the General Manager, or
someone authorized by him for such purpose and in the absence of a General
Manager someone authorized for such purpose by the Board, shall perform the
duties prescribed for the corporate secretary pursuant to the Law, these
Articles and the Boards resolution.

74.3.   The
Companys corporate secretary shall be responsible for all the documents kept
at the Companys registered office and shall keep the registers to be kept by
the Company pursuant to the Law.

75.     OTHER OFFICERS OF THE COMPANY

The Board may appoint, in addition to the General Manager, other
officers, define their positions and authorities, and set their compensation
and terms of employment. The Board may authorize the General Manager to
exercise any or all of its authorities stated in this Article.

76.     THE AUDITOR

76.1.   The
Shareholders at the Annual Meeting shall appoint an Auditor for a period until
the completion of the performance of one audit, or for a longer period not to
extend beyond the completion of the performance of three audits. Where the
Auditor is appointed for such a period, the Annual Meeting shall not discuss
the appointment of an Auditor during the said period, unless a resolution is
passed to terminate his office. The General Meeting is entitled at any time to
terminate the service of the Auditor.

76.2.   The
Board shall fix the compensation of the Auditor of the Company for his auditing
activities, and shall also fix the compensation of the Auditor for additional
services, if any, which are not auditing activities, and, in each case, shall
report thereon to the Annual Meeting.

DISTRIBUTIONS

77.     PERMITTED DISTRIBUTION

The Company
may effect a distribution to its Shareholders to the extent permitted by the
Companies Law.

78.     RIGHT TO DIVIDEND OR BONUS SHARES

78.1.   A
Shareholder shall be entitled to receive dividends or bonus shares, upon the
resolution of the Company in accordance with Article 79 below, consistent with
the rights attached to the shares held by such Shareholder.

78.2.   Subject
to the provisions of Article 16.6 above, the Shareholders entitled to receive
dividends or bonus shares shall be those who are registered in the Shareholder
Register on the date of the resolution approving the distribution or allotment,
or on such later date, as may be determined in such resolution.

78.3.   In
the event the Company pays a dividend or distributes bonus shares, then, in
each such case, the holders of Preferred Shares shall be entitled to receive
such distribution, pari passu with the Ordinary Shares. In
any such event, the amount of dividends each Preferred Share shall be entitled
to receive shall be calculated on the basis of the number of Ordinary Shares
into which such Preferred Share could then be converted.

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79.     RESOLUTION OF THE COMPANY WITH RESPECT TO A DIVIDEND OR BONUS SHARES

Subject to
Article 78.3, the resolution of the Company with respect to the distribution of
a dividend or bonus shares shall be adopted by the Board.

80.     SPECIFIC DIVIDEND

A dividend
may be paid, in whole or in part, by the distribution of specific assets of the
Company or by distribution of paid up shares, debentures or other Equity
Securities of the Company or of any other companies, or in any combination
thereof, the fair value of which shall be determined by the Board.

81.     DEDUCTIONS FROM DIVIDENDS

The Board
may deduct from any distribution or other moneys payable to any Shareholder in
respect of a share any and all sums of money then payable by him to the Company
on account of calls or otherwise in respect of shares of the Company and/or on
account of any other debt permitted to be setoff in accordance with applicable
Law.

82.     RETENTION
OF DIVIDENDS

82.1.   The
Board may retain any dividend, bonus shares 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.

82.2.   The
Board may retain any dividend, bonus shares or other moneys payable or property
distributable in respect of a share in respect of which any person is, under
Article 22.5, entitled to become a Shareholder, or which any person is,
under said Article, entitled to transfer, until such person shall become a
Shareholder in respect of such share or shall transfer the same.

83.     MECHANICS
OF PAYMENT

Any
dividend or other moneys payable in cash in respect of a share, less the tax
required pursuant to the Law, may be paid by check sent by registered mail 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
as a result of the death or bankruptcy of the holder or otherwise, to any one
of such persons or to his bank account), or to such person and at such address
as the person entitled thereto may direct in writing. Every such check 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 by the banker upon whom it is drawn shall be a good discharge to the
Company. Every such check shall be sent at the risk of the person entitled to
the money represented thereby.

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84.     AN UNCLAIMED DIVIDEND

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

85.     RECEIPT FROM A JOINT HOLDER

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

86.     FUNDS

The Board
may, in its discretion, make provisions to special funds of any amount from the
Companys profits, or from a revaluation of its assets, or its proportional
part in the revaluation of the assets of its affiliates, and determine the
purpose of these funds.

87.     MANNER OF CAPITALIZATION OF PROFITS AND
THE DISTRIBUTION OF BONUS SHARES.

Upon the
recommendation of the Board approved by a resolution of the General Meeting
adopted by an Ordinary Majority, subject to compliance with the provisions of
Article 78.3, the Company 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 distribution, or
representing premiums received on the issuance of shares and standing to the
credit of the share premium account, to be capitalized and distributed as
capital among such of the Shareholders as would be entitled to receive the same
if distributed by way of dividend and in the same proportion, 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 other Equity Securities 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 other Equity
Securities, and may cause such distribution
or payment to be accepted by such Shareholders in full satisfaction of their
interest in such capitalized sum.

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88.     SETTLEMENT
BY THE BOARD

The Board
may settle, as it deems fit, any difficulty arising with regard to the
distribution of bonus shares, distributions referred to in Article 80 hereof or
otherwise, and in particular, to issue certificates for fractions of shares and
sell such fractions of shares in order to pay their consideration to those
entitled thereto, to set the value for the distribution of certain assets and
to determine that cash payments shall be paid to the Shareholders on the basis
of such value, or that fractions whose value is less than NIS 1.00 shall not be
taken into account. The Board may pay cash or convey these certain assets to a
trustee in favor of those people, who are entitled to a dividend or to a
capitalized fund, as the Board shall deem appropriate.

89.     ALLOTMENT
FOR A CONSIDERATION LOWER THAN THE NOMINAL VALUE

Where the
Company resolves to allot shares, which have a nominal value for a
consideration lower than their nominal value, including bonus shares, it must
convert into share capital part of its profits, from premium on shares or from
any other source included in its equity, which are mentioned in its last
financial statements, in an amount equal to the difference between the nominal
value and the consideration. Notwithstanding the foregoing, the Company may,
with the courts approval, allot shares for a consideration lower than their
nominal value.

90.     ACQUISITION
OF SHARES

90.1.   The
Company is entitled to acquire or to finance an acquisition, directly or
indirectly, of shares of the Company or Equity Securities convertible or
exercisable into shares of the Company, including incurring an obligation to
take any of these actions, subject to the provisions of the Companies Law. In
the event that the Company so acquired any of its shares, any such share shall
become a dormant share, and shall not confer any rights, so long as it is held
by the Company.

90.2.   A
subsidiary or another company controlled by the Company is entitled to acquire
or finance an acquisition, directly or indirectly, of shares of the Company or
Equity Securities convertible or exercisable into shares of the Company, or
incur an obligation with respect thereto, to the same extent that the Company
may make a distribution, subject to the terms of, and in accordance with the
Companies Law. In the event a subsidiary or such controlled company so acquired
any of the Companys shares, any such share shall not confer any voting rights,
so long as it is held by such subsidiary or controlled company.

INSURANCE, INDEMNIFICATION AND RELEASE
OF OFFICE HOLDERS

91.     OFFICE HOLDER

For
purposes of Articles 92, 93 and 94 below, the term Office Holder shall have
the meaning ascribed to such term in the Companies Law.

92.     INSURANCE OF OFFICE HOLDERS

The Company
may, to the extent permitted by the Companies Law, enter into a contract for
the insurance of the liability of an Office Holder of the Company, in respect
of a liability imposed on him as a result of an act done by him in his capacity
as an Office Holder of the Company, in any of the following:

92.1.   a
breach of his duty of care to the Company or to another person;

92.2.   a
breach of his duty of loyalty to the Company, provided that the Office Holder
acted in good faith and had reasonable grounds to assume that such act would
not harm the Company;

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92.3.   a
financial liability imposed on him in favor of another person.

93.     INDEMNIFICATION
OF OFFICE HOLDERS

The Company
may, to the extent permitted by the Companies Law, indemnify an Office Holder
of the Company for liability or expense he incurs as a result of an act done by
him in his capacity as an Office Holder of the Company, as follows:

93.1.   a
financial liability imposed on him in favor of another person by a court
judgment, including a settlement judgment or an arbitrators award approved by
a court;

93.2.   Reasonable
litigation expenses, including attorneys fees, expended by an Office Holder or
charged to him by a court, in a proceeding filed against him by the Company or
on its behalf or by another person, or in a criminal charge from which he was
acquitted, or in a criminal charge of which he was convicted of a crime which
does not require a finding of criminal thought (mens rea).

93.3.   The
Company may indemnify an Office Holder of the Company pursuant to this Article
93 retrospectively, and may also undertake in advance to indemnify an Office
Holder of the Company, provided the undertaking is limited to events of a kind
which the Board believes can be anticipated at the time of such undertaking,
and in an amount that the Board determines is reasonable under the
circumstances.

94.     RELEASE
OF OFFICE HOLDERS

The Company
may, to the extent permitted by the Companies Law, release an Office Holder of
the Company, in advance, from his liability, in whole or in part, for damages
resulting from the breach of his duty of care to the Company.

95.     GENERAL

The
provisions of Articles 92, 93 and 94 above are not intended, and shall not be
interpreted, to restrict the Company in any manner in respect of the
procurement of insurance and/or in respect of indemnification
and/or release from liability in connection with any person who is not an
Office Holder, including, without limitation, any employee, agent, consultant
or contractor of the Company who is not an Office Holder, or in connection with
any Office Holder to the extent that such insurance and/or indemnification
and/or release from liability is permitted under the Law.

LIQUIDATION

96.     LIQUIDATION
PREFERENCE.

96.1.   Upon
the occurrence of a Realization Event (as defined below), the holders of the Series A
Preferred Shares shall be entitled to receive, prior to and in preference to
any payments to any of the holders of any other classes of shares, by reason of
their ownership thereof, an amount per each Preferred Share equal to their
respective Original Issue Price, as adjusted in case of any Recapitalization
Event, plus interest at the rate of 8% per annum, of such Original Issue Price,
compounded annually from the respective closing dates of the Preferred A Share
Purchase Agreement to the date any distributions are made pursuant to any
Realization Event plus an amount equal to the declared but unpaid dividends on
each Preferred Share (Liquidation Preference Amount). The
assets and funds of the Company legally available for distribution to its
shareholders, whether capital, surplus, earnings, securities or assets of any
kind (Distributable Assets) shall be distributed to the holder of
Series A Preferred Shares, until the holder of Series A Preferred Shares shall
have received in such distribution the Liquidation Preference Amount.

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96.2.   Upon the completion of the
distribution required by Article 96.1, the remaining assets of the Company
available for distribution to Shareholders shall be distributed among the
holders of the Preferred Shares and the Ordinary Shares pro rata based on the
number of Ordinary Shares held by each (assuming conversion of all Preferred
Shares).

96.3.   A
Realization Event shall
mean (i) an order
has been made or resolution passed for the liquidation, dissolution,
bankruptcy or winding up of the Company, whether voluntary or involuntary, or
(ii) any voluntary or
involuntary petition or proceeding under bankruptcy or insolvency laws is
instituted against the Company, or (iii) any foreclosure by creditors of the Company on substantially
all assets of or equity interest in the Company; or (iv) the Company adopts a
resolution for the discontinuance of its business or for its dissolution;
or (v) the acquisition of
the Company by another entity by means of any transaction or series of related
transactions (including, without limitation, any reorganization, merger,
consolidation), unless, in each case, the Shareholders of the Company as
of immediately
prior to such transaction hold (by
virtue of securities issued as consideration for such a transaction),
immediately following consummation thereof, more than 50% of the voting power of the
surviving or resulting entity after giving effect to such transaction,
or (vi) the sale or license of all or substantially all of the assets of the
Company (including, for
purposes of this section, intellectual property rights which, in the aggregate,
constitute substantially all of the Companys material assets).

MISCELLANEOUS

97.     MINUTES

97.1.   Minutes
of each General Meeting and of each meeting of the Board shall be recorded and
duly entered in books provided for that purpose. Such minutes shall set forth
all resolutions adopted at the meeting and, with respect to minutes of a
meeting of the Board, the names of the persons present at the meeting.

97.2.   Any
minutes as aforesaid, if purporting to be signed by the Chairman of the meeting
or by the Chairman of the next succeeding meeting (or, in the case of Board
meetings where there is only one Director on the Board, by such Director),
shall constitute prima facie
evidence of the matters recorded therein.

98.     BOOKS OF ACCOUNT

The Board
shall cause accurate books of account to be kept in accordance with the
provisions of the Companies Law and of any other applicable Law. Such books of
account shall be kept at the registered office of the Company or at such other
place or places as the Board may deem appropriate, and they shall always be
open to inspection by all Directors. Any Shareholder shall be entitled to
receive a copy of the audited financial statements of any fiscal year with the
opinion of the Companys Auditor with respect to such financial statements.

43

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99.     AUDIT

Without
derogating from the requirements of any applicable Law, at least once in every
fiscal year the accounts of the Company shall be audited and the accuracy of
the profit and loss account and balance sheet certified by one or more duly
qualified auditors.

100.   RIGHTS
OF SIGNATURE, STAMP AND SEAL

100.1.   The
Board 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. The
Board may determine separate signatory rights in respect of different matters
of the Company and in respect of the amounts in respect of which such persons
are authorized to sign.

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

101.   NOTICES

101.1.   Any
notice or other communication or document served by the Company upon any
Shareholder or served by a Shareholder upon the Company (in each case, in such
Shareholders capacity as such), whether pursuant to these Articles or
otherwise (unless other notice provisions are specifically applicable to such a
notice or communication), shall be in writing and shall be conclusively deemed
to have been duly given to the receiving party: (i) in the case of hand
delivery or a delivery by an internationally recognized overnight courier,
freight prepaid, to the Address (as hereinafter defined), on the next Business
Day after delivery; (ii) in the case of prepaid registered mail (airmail if
sent to a place outside Israel) to the Address, (iii) in the case of facsimile
transmission to the Address, on the next Business Day after delivery, if
facsimile transmission is electronically confirmed; or (iv) in the case of an
email transmission to the Address, on the date of transmission, except where a
notice is received stating that such mail has not been successfully delivered.
In the event that notices are given pursuant to one of the methods listed in
Sub-Articles (i) through (iii) above, a copy of this notice should also be sent
by email transmission. If a notice is, in fact, received by the addressee, it
shall be deemed to have been duly served, when received, notwithstanding that
it was defectively addressed or failed, in some respect, to comply with the
provisions of this Article 101. Unless otherwise provided in these Articles,
the provisions of this Article 101 shall also apply to notices and other
communications permitted or required to be given by the Company to any Director
or by any Director to the Company (in each case, in such Directors capacity as
such).

101.2.   The
term Address means, (i) with respect to each Shareholder or Director -
such Shareholders or Directors mail address, facsimile number or email
address, as the case may be, as specified in the Shareholder Register or in the
Directors Register, as applicable, or such other (or additional) address,
facsimile numbers and email addresses as such a Shareholder or Director may
have designated in writing to the Company in accordance with the notice
provisions hereof for the purpose of this Article 101; and (ii) with respect to
the Company  the address of the principal office or registered office of the
Company (to the attention of the Chief Executive Officer thereof).

44

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101.3.   All
notices to be given to the Shareholders shall, with respect to any share held
by persons jointly, be given to whichever of such persons is named first in the
Shareholder Register, and any notice so given shall be sufficient notice to the
holders of such share.

101.4.   Any
Shareholder or Director whose address is not described in the Shareholder
Register or Director Register (as applicable), 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.

101.5.   Any
Shareholder and any Director may waive his right to receive notices generally
or during a specific time period and he may consent that a General Meeting of
the Company or a meeting of the Board, as the case may be, shall be convened
and held notwithstanding the fact that he did not receive a notice with respect
thereto, or notwithstanding the fact that the notice was not received by him
within the required time, in each case subject to the provisions of any Law
prohibiting any such waiver or consent.

102.   WAIVERS

102.1.   With the written consent of the holders of a majority of
the outstanding shares of any class, the obligations of the Company to, and the
rights of, the holders of such class under any provision of these Articles may
be waived (either generally or in a particular instance, either retroactively
or prospectively and either for a specified period of time or indefinitely).

102.2.   Upon the effectuation of each
such waiver referred to in Article 102.1 above, the Company shall promptly give
written notice thereof to the holders of the shares of such class who have not
previously consented thereto in writing; provided,
however, that any such waiver that would similarly adversely
affect more than one class of shares shall require only the consent of the
holders of a majority of the outstanding shares of the classes similarly
affected acting together as a single class on an As Converted Basis; and provided, further, that in the event that any
waiver, by its nature, does not affect all the holders of shares of a particular class
(Affected Class) in a
substantially identical manner (relative to the respective stakes of the
holders of such Affected Class within such Affected Class), each group within
such Affected Class who is affected by such waiver in a manner which is not
substantially identical as aforesaid (due to the fact that (i) certain holders
of such Affected Class are the holders of more than one class of shares of the
Company, and (ii) certain conflicting interests exist between such Affected
Class and any such other classes of shares held by such certain holders) shall
not be deemed to be a separate class for purposes of this Article 102 or any
other Articles hereof.

102.3.   Any
waiver affected in accordance with this Article 102 shall be binding upon all
of the holders of the applicable class or classes of shares, each transferee of
such shares and each future holder of such class of shares.

103.   SALE OF ASSETS

103.1.   If
prior to a Qualified Public Offering, the Company receives an offer to
sell all or substantially all of the assets of the Company (Proposed Asset
Sale Transaction), and, subject to Articles 50 and 96 hereof, Shareholders
holding 60% of the Companys issued share capital (on As-Converted Basis) agree in writing to such a Proposed
Asset Sale Transaction,
then the Company shall accept such an offer and agree to the Proposed
Asset Sale Transaction, and the proceeds of such Proposed Asset Sale
Transactions shall be distributed in accordance with the provisions of Article
96 above.

45

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103.2.   Anything
in these Articles to the contrary notwithstanding, in accordance with Section
50(a) of the Companies Law, the power and authority to discuss and approve a
Proposed Asset Sale Transaction on behalf of the Company in accordance with
this Article 103, shall be vested, for all intents and purposes, with the
General Meeting and not with the Board, effective as of the time on which the
written consent of the Shareholders holding a majority of the Companys issued
share capital (on
As-Converted Basis) shall have been received by the Company.

103.3.   Notwithstanding
anything in these Articles or, to the extent permitted, in any applicable law
to the contrary, the approval of a Proposed Asset Sale Transaction shall not be
subject to the approval of a separate class vote of the holders of the shares
of any particular class.

104.   ISSUANCE
OF ADDITIONAL SHARES TO AKS

At any one
or several events (Issuance Event)
at which Company issues additional shares (whether Ordinary Shares or Preferred
Shares of any series), Company shall issue to AKS, in consideration for their
nominal value, additional Preferred Shares (the AKS Additional Shares), in such number which shall not
exceed, in the aggregate for all such Issuance Events, 849 Preferred
Shares (subject to adjustments due to any stock split or combination,
distribution of share dividend, recapitalization, mergers, reorganizations,
distribution of bonus shares etc.); such AKS Additional Shares shall be issued
to AKS by the Company in installments, at each Issuance Event, in such number
for each installment, which shall not bring AKS to an aggregate holding
exceeding 19.9% of the issued and outstanding share capital of the Company, at
any given time.

46



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WRITTEN RESOLUTION
OF THE SHAREHOLDERS OFC-SIGNATURE LTD.(the Company)Dated April 29, 2004

The undersigned, comprising all the shareholders of C-Signature Ltd.
(the Company) acting by
unanimous written resolution after having waived their right to prior notice,
do hereby adopt as of the date hereinabove in accordance with Article 8 of the
Articles of Association of the Company, the following resolution:

Amendment of Share Capital
RESOLVED,to amend the authorized
share capital of the Company by creating one new class of shares - Series A
Preferred Convertible Shares of the Company, nominal value NIS 0.01 each.

Following such amendment and creation of the Series A Preferred
Convertible Shares, the Companys authorized share capital shall be NIS10,000
divided into 996,667 Ordinary Shares of the Company, nominal value NIS 0.01
each, and 3,333 shares of Series A Preferred Shares of the Company, nominal
value NIS 0.01 each.

Amended Articles of AssociationRESOLVED, to replace the existing Articles of Association
of the Company in their entirety with the Amended Articles of Association in
the form attached hereto as Exhibit A.

This document may be executed in a number of counterparts, each of
which shall be deemed an original and all of which together shall constitute
one and the same instrument.

IN WITNESS WHEREOF,
the shareholders have signed this Written Resolution on the date hereinabove.

|                      |                       |  | 
|--------------------- | --------------------- |  | 
|Dr. Danny
  Lange     | Yossi Gross          
|                      |                      
|                      |                      
|                      |                       |  | 
|Baruch
  Levanon      | Avi
  Goldsobel, Adv.
|                      |                      
|                      |                      
|                      |                       | 
|Piter
  Kirshen, Adv. |                      



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WRITTEN RESOLUTION 
OF THE SHAREHOLDERS OFC-SIGNATURE LTD.(the Company)Dated April 29, 2004

The undersigned, comprising all the shareholders of C-Signature Ltd.
(the Company) acting by
unanimous written resolution after having waived their right to prior notice,
do hereby adopt as of the date hereinabove in accordance with Article 8 of the
Articles of Association of the Company, the following resolutions:

Note: In view of the personal interest that
Mr. Baruch Levanon is deemed to have in the proposed resolution No. 3 set forth
herein, his signature below shall only apply to the approval of resolutions No.
1 & 2 herein. Mr. Baruch Levanon has disclosed his personal interest in
resolution No. 3 to the shareholders.

1.       Convertible
Loan AgreementRESOLVED,that the execution, delivery and
performance of the Convertible Loan Agreement by and among the Company, and
Aladdin Knowledge Sytems (Aladdin),
in the form attached hereto as Exhibit A,
including all exhibits thereto (the Loan
Agreement) and all transactions contemplated thereby, be, and
hereby is, authorized, adopted, confirmed and approved in all respects, and
that each of Yossi Gross, Baruch Levanon and Dr. Danny Lange is hereby
authorized, empowered and directed to execute the Loan Agreement and any
ancillary document and to take on behalf of the Company any action as shall be
required for the performance of the Loan Agreement and the ancillary documents.

2.        Appointment
of CEORESOLVED, to appoint Mr. Baruch Levanon as the
Companys Chief Executive Officer and to authorize and empower him to
take any action as shall be required for the management of business and
operations of the Company.

[Remainder of page intentionally left blank]

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This document may be executed in a number of counterparts, each of
which shall be deemed an original and all of which together shall constitute
one and the same instrument.

IN WITNESS WHEREOF,
the shareholders have signed this Written Resolution on the date hereinabove.

|                      |                       |  | 
|--------------------- | --------------------- |  | 
|Baruch
  Levanon      | Yossi Gross          
|                      |                      
|                      |                      
|                      |                       |  | 
|Dr. Danny
  lange     | Avi
  Goldsobel, Adv.
|                      |                      
|                      |                      
|                      |                       | 
|Piter
  Kirshen, Adv. |                      

[C-Signature Ltd.
Signature Page of a
Written Resolution of the Shareholders, 
dated April 29, 2004]



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Schedule 7.1.3Compliance Certificate

This certificate is given in accordance with Section 7.1.3 of the
Convertible Loan Agreement dated April 29, 2004 (the Agreement) between
C-Signature Ltd., a company incorporated under the laws of the State of Israel
(the Company), and Aladdin Knowledge Systems Ltd. (Aladdin). All
capitalized terms not otherwise defined herein shall have the meaning ascribed
to them in the Agreement.

The undersigned, hereby confirms in the name of the Company and on its
behalf, as follows:

|(i)  | The
  representations and warranties made by the Company in Section 8 of the
  Agreement were true, complete and accurate on the date of signing the
  Agreement and are true, complete and accurate as of the date hereof.                         
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                     
|(ii) | All
  covenants, agreements and conditions set forth in the Agreement to be
  performed or complied with by the Company at or prior to the First Closing
  have been performed, complied with and satisfied in all respects as of the
  date hereof.



| | /s/ B. Levanon              
| | ----------------------------
| |                             
| | Baruch
  Levanon, Founder   
| | Date:  _____________________

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|BERKMAN WECHSLER SAHAR BLOOM & CO. LAW
  OFFICES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | LOGO                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Date: 29/04/04
  To: Aladdin Knowledge Systems Ltd.
  Re: Opinion of Counsel  We have acted as counsel to C-Signature Ltd., a company organized
  under the laws of the State of Israel (the Company),
  in connection with the Convertible Loan Agreement dated as of April 29, 2004
  (the Agreement) between the
  Company and Aladdin Knowledge Systems Ltd. (Aladdin).  Capitalized terms used herein that are not otherwise defined herein
  shall have respective meanings set forth in the Agreement.  As such counsel, we have made such legal and factual examinations and
  inquiries as we have deemed advisable or necessary for the purpose of
  rendering this opinion.  In addition,
  we have examined and relied upon originals or copies of corporate records of
  the Company certificates of public officials, certificates of officials of
  the Company and other documents which we consider necessary or advisable for
  the purpose of rendering this opinion, including without limitation (i) the Agreement
  and all schedules and exhibits attached thereto, (ii) share certificates and
  minutes provided to us by officers of the Company and (iii) a printout from
  the Registrar of Companies as to the share capital of the Company and other
  matters. In such examination we have assumed the genuineness of all
  signatures (other than of the Company) on original documents, the
  authenticity and completeness of all documents submitted to us as originals,
  the conformity to original documents of all copies submitted to us, and the
  due execution and delivery of all documents (other than by the Company) where
  due execution and delivery are prerequisites to the effectiveness thereof.  In making our examination of documents executed by corporate or other
  entities other than the Company, we have assumed that such entities had the
  power, corporate or other, to enter into and perform all obligations
  thereunder and have also assumed that due authorization by all requisite
  action, corporate or other, and due execution and delivery by such entities
  of such documents and the validity and bindery effect thereof. |  | Ron Berkman
  Ari Wechsler
  Alon Sahar
  Ofir Bloom
  Sharon Gazit
  Maya Racine Netser
  Sigal Koren-Heldenberg
  David Zilberboim
  Drorit Weiser*
  Miri Klein
  Dini Caspi
  Tzvia Peretz
  Sharon Aloni-Fellman
  Liat Shechter
  Tal Inbar
  Efrat Rosiansky
  Haim Gueta
  Anat Lavi
  Adi Bar-Tal
  Ziv Yakobi
  Efrat Ziv
  Einat Dill-Katzenell
  Rami Bartal (decd)Member of the NY Bar*
  1 Azrieli Center
  Tel-Aviv 67021 Israel
  Tel: 972-3-6072222
  Fax: 972-3-6072220
  bwsb@bwsb-law.co.il

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As to factual
matters, which are not within our knowledge, we have relied upon the accuracy,
completeness and genuineness of the representations and warranties of the
Company set forth in the Agreement and other agreements examined by us. We have
not undertaken any independent investigation to determine the existence or
absence of any fact, except for a review of the legal affairs of the Company,
based solely upon material supplied to us by the Company.

The opinions hereinafter expressed are subject to the following
qualifications:

|(a) | We express
  no opinion as to the effect of applicable liquidation, bankruptcy,
  insolvency, reorganization, moratorium or other similar laws affecting the
  rights of creditors; and                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                      
|(b) | We express
  no opinion as to the effect of rules of law governing specific performance,
  injunctive relief or other equitable remedies (regardless of whether any such
  remedy is considered in a proceeding at law or in equity).

Based upon the
foregoing, and subject to the qualifications and exceptions noted herein, we
are of opinion as follows:

|1. | The Company
  has been duly organized and is validly existing as a company under the laws
  of the State of Israel and has all requisite corporate power and authority to
  execute, deliver and perform the Agreement, and to issue and sell the Issued
  Shares.                                                                                                                                                                                                                                                                                                           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2. | All
  necessary corporate actions have been duly taken by the Company to adopt the
  Amended and Restated Articles and to authorize the execution, delivery and
  performance of the Agreement by the Company. 
  The Agreement constitutes the legal, valid and binding obligations of
  the Company, and is enforceable as to the Company in accordance with its
  terms.                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | The Issued
  Shares are duly authorized, validly issued, fully paid (except to the extent
  expressly provided in the Agreement and in the Amended and Restated
  Articles), and non-assessable and, to our knowledge, are not issued in
  violation of any preemptive rights, and the holder of the Issued Shares will
  have good title to such shares, free and clear of all liens, security
  interests, pledges, charges or encumbrances in favor of the Company except to
  the extent expressly provided in the Agreement and in the Amended and
  Restated Articles).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4. | The
  authorized share capital of the Company (the Share Capital) at the First Closing consists of NIS 10,000
  divided into 1,000,000 shares each of nominal value NIS 0.01, of which
  996,667 are Ordinary Shares, and 3,333 are Series A Preferred Shares.                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|5. | The Amended
  and Restated Articles of Association of the Company as they appear in Schedule 5 to the Agreement were
  validly adopted and are in full force and effect.                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|6. | We are not
  aware of any pending or threatened actions, suits, claims, investigations or
  other proceedings (either legal or administrative), filed or authorized by
  the Company or the Founders in their capacity as such; and nor we are aware
  of any pending or, threatened actions, suits, claims, investigations, or
  other proceedings (either legal or administrative), or any court or arbitration
  judgment, against the Company or with regard to the Company and its business.                                                                            

2

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|7. | No breach or
  violation of (i) any of the terms of the Corporate Documents, (ii) to the
  best of our knowledge any agreement or other instrument to which the Company
  is a party or by which it is bound, or (iii) any Israeli law, statute,
  ordinance, directive, consent, permit, rule, regulation or order of any
  court, or any governmental agency or body having jurisdiction over the
  Company, shall result from the execution and delivery by the Company of the
  Agreement and the performance of the terms thereof.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|8. | To our best
  knowledge, except as stated in the Agreement, the execution, delivery and
  performance of the obligations of the Company under the Agreement do not require
  any consents, approvals, permits, orders or authorizations of any applicable
  Israeli governmental authority or another Person on the part of the Company,
  except as have been obtained and are effective.                                                                                                                                             

We are
advocates admitted to practice law in the State of Israel, and we express no
opinion as to any laws other than the laws of the State of Israel as in force
on the date hereof, nor have we made, for the purpose of this opinion, any
investigation of the laws of any other jurisdiction. In addition, we express no
opinion as to any document, agreement or arrangement other than those subject
to the laws of the State of Israel.  The
opinions expressed herein are rendered to you and may be relied upon only by
you.  This opinion may not be disclosed
to or relied upon by any other person without our express prior written
consent.

Sincerely,

SIGNATURE

Sharon
Gazit, Adv.Berkman Wechsler Sahar Bloom & Co.

3



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Schedule of Exceptions

This
Schedule of Exceptions is made and given pursuant to Section 8 of the
Convertible Loan Agreement entered into by and among the Company and Aladdin
Knowledge Syetems Ltd. (the Agreement). Any terms not otherwise defined
herein shall have the meaning ascribed to them in the Agreement.

Schedule 8.4Governmental Consents or Third Party Consents

The Company was assigned from Dr. Danny Lange with a grant by Tnufa
Fund of the Office of Chief Scientist at the Ministry of Industry and Trade,
according to a letter of approval no. 29704. 
According to the terms of the letter of approval, the Company is to
notify the Tnufa Fund of the transaction contemplated by the Agreement.

Section 8.12.1Intellectual Property

| | 1. | Method and
  Apparatus for Electro-Biometric Identify Recognition - Provisional Patent
  Application, US App. No. 60/938,832, submitted to the USPTO on July 29, 2002.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | Method and
  Apparatus for Electro-Biometric Identify Recognition - PCT Patent Application
  No. PCT/US03/23016, submitted on July 24, 2003.                          

Section 8.15Agreements

The company has been assigned
with a grant by Tnufa Fund, as set forth hereinabove.

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