Document:

Exhibit 10.1

                               ADVISORY AGREEMENT
                               ------------------

     AGREEMENT, dated as of the 8th day of July 2010, by and between BALDWIN
TECHNOLOGY COMPANY, INC., a Delaware corporation with an office at 2 Trap Falls
Road, Suite 402, Shelton, CT 06484 (the "Company" or "Baldwin"), and OBX
PARTNERS, LLC, a Florida limited liability company with an office at 14735, West
River Road, Inglis, Florida 34449 ("OBX").

                              W I T N E S S E T H:
                              - - - - - - - - - -

     WHEREAS, OBX is engaged in the business of providing financial and
strategic advisory services to businesses; and

     WHEREAS, the Company desires to engage OBX to provide such services to the
Ad Hoc Advisory Committee of the Board of Directors of Baldwin (the
"Committee"), and OBX is willing to provide such services to the Committee,
subject to the terms of this Agreement;

     NOW, THEREFORE, the parties do hereby agree as follows:

     1.   Services.  The Company has requested that OBX act, and OBX has agreed
that OBX will act, as a financial advisor and strategic consultant to the
Committee, advising the Committee with regard to any transactions being
contemplated by the Company or any of its subsidiaries during the term of this
engagement, advising the Committee with respect to the Company's budget and
business plans and advising the Committee with respect to the Company's
financing needs and liquidity. Such advisory services to be rendered by OBX to
the Committee are outlined in the Proposal to the Committee dated June 8th, 2010
attached hereto as Exhibit A (the "Proposal").

     2.   Consideration.  The Company hereby agrees that as consideration for
such services rendered to the Committee:

          (a)  the Company will pay OBX $200,000 in cash as follows:
                (i)   $130,000 upon the execution of this Agreement, and
                (ii)  $70,000 on or before August 1, 2010.

          (b)  the Company will grant to OBX upon the execution of this
Agreement an option (the "Option") to purchase three hundred thousand (300,000)
shares of the Company's Class A Common Stock (the "Shares"), at an exercise
price per share of $1.26 and, in conjunction therewith, the Company and OBX will
enter into the option agreement attached hereto as Exhibit B (the "Option
Agreement").

                                       4
<PAGE>

     3.   Securities Law Matters.  OBX acknowledges and agrees as follows:

          (a)  Neither the Option nor the Shares, (i) have been, or will be,
registered with the U.S. Securities and Exchange Commission (the "SEC") or the
securities commission of any state in reliance upon an exemption from
registration under the Securities Act of 1933, as amended (the "Securities Act")
or any state securities law and, accordingly, neither the Option nor the Shares
may be offered or sold by OBX except pursuant to an effective registration
statement under the Securities Act or pursuant to an available exemption from,
or in a transaction not subject to, the registration requirements of the
Securities Act, and in accordance with applicable state securities laws; and
(ii) the Option Agreement to be delivered by the Company to OBX shall contain
such representations, covenants and other terms as are customarily contained in
agreements entered into in transactions involving the issuance and sale of
unregistered securities.

          (b)  In the performance of services under this Agreement, OBX shall at
all times be and remain in compliance with all federal and state securities and
other applicable laws, rules and regulations. OBX acknowledges that it is aware,
and that it will so advise its representatives and affiliates who receive
Confidential Information (as defined in Section 6 below) pursuant to this
Agreement, that the U.S. securities laws prohibit any person who has received
from an issuer material, non-public information from purchasing or selling
securities of such issuer and from communicating such information to any other
person under circumstances in which it is reasonably foreseeable that such other
person is likely to purchase or sell any such securities.

     4.   Expenses.  The Company shall reimburse OBX for all reasonable
out-of-pocket expenses in connection with this Agreement and the Proposal
incurred by OBX, including but not limited to, travel, long distance telephone
charges, photocopying, data services, courier and messenger expenses incurred in
connection with OBX's engagement under this Agreement, provided however that any
individual expense or related series of expenses greater than $2,000 shall have
received the approval of such person as the Committee shall have designated for
such purpose.

     5.   Engagement Term.  The term of OBX's engagement by the Company under
this Agreement (the "Engagement Term") shall expire on September 30, 2010
subject to such termination and extension provisions as follow. The Engagement
Term may be terminated by either party, with a thirty (30) day advance notice to
the other party and the payment of any accrued fees and expenses. The Engagement
Term may be extended by the parties on a month-to-month basis on notice given
prior to the Expiration Date or any monthly extension (unless the other party
gives written notice of non renewal prior to the commencement of any monthly
term).

     6.   Confidentiality.  OBX acknowledges that in connection with the
services rendered pursuant to this Agreement, OBX will have access to
Confidential Information which belongs to the Company and/or its subsidiaries.
"Confidential Information" for purposes of this Section 6 means all information
and documents, whether in written or oral form, which the Company furnishes or
otherwise discloses to you or any of your representatives, whether furnished or
otherwise disclosed before or after the date of this Agreement, together with
all analysis, compilations, studies or other documents, records or data prepared

                                       5
<PAGE>

by OBX or any of its representatives which contain or otherwise reflect or are
generated from such information and documents.  OBX agrees to treat all
Confidential Information as confidential and proprietary, and not disclosed to
any other person, or use or assist any other person in using, any Confidential
Information other than as required by this Agreement or as necessary for the
performance of services contemplated by this Agreement.  Any permitted
disclosure which may be necessary in connection with the performance of services
pursuant to this Agreement shall be made only on a need-to-know basis to a
person who has agreed to be bound by the confidentiality provisions of this
Section 6.  The obligations of confidentiality shall not apply to Confidential
Information which (a) is received by OBX from another party not under an
obligation of confidentiality, (b) becomes public knowledge in the industry
other than as a result of a violation of an obligation of confidentiality, or
(c) is required to be disclosed pursuant to law or legal process.   This Section
6 shall not affect or limit any other remedies available to the Company or any
of its subsidiaries, whether wholly or partially owned by the Company or any of
its subsidiaries, at law or in equity.

     7.   Independent Contractors.  In all matters relating to this Agreement,
the Company and OBX shall act as independent contractors, neither shall be the
employee of the other, and each party shall assume any and all liability for its
own acts.  Neither the Company nor OBX shall have any authority to assume or
create obligations, express or implied, on behalf of the other party or any
subsidiary or affiliate of the other party, and neither party shall have any
authority to represent any other party as its agent, employee, partner or in any
other capacity.  Any action taken on behalf of the Company by any individual who
is an officer or employee of the Company (or by an officer, partner or employee
of OBX at the direction of an officer or employee of the Company or of such
person as the Committee shall designate) shall be deemed for all purposes as an
action by the Company.

     8.   Indemnification by Company of OBX.  The Company shall indemnify and
hold harmless OBX, its officers, directors, members, agents, employees and
counsel from and against any and all manner of loss, liability, damage and
expense (including reasonable fees and expenses of counsel) which they may incur
as a result of the performance of their obligations pursuant to this Agreement,
including the distribution of any information or other materials concerning the
Company which were prepared by or at the request of the Company in connection
with the services provided for in this Agreement, except for acts or omissions
of OBX constituting fraud, gross negligence, willful misconduct or a material
breach of this Agreement.

     9.   Indemnification by OBX of Company.  OBX shall indemnify and hold
harmless the Company, its officers, directors, stockholders, agents, employees
and counsel from and against any and all manner of loss, liability, damage and
expense (including reasonable fees and expenses of counsel) which they may incur
as a result of the Company entering into this Agreement and the performance by
the Company of its obligations pursuant to this Agreement, including the payment
by the Company to OBX of any and all amounts in cash and the granting by the
Company to OBX of the Option provided for in Section 2 and the issuance by the
Company to OBX of the Shares and/or any other securities pursuant to the Option
Agreement.

                                       6
<PAGE>

     10.  Miscellaneous.

          (a)  This Agreement constitutes the entire agreement and understanding
of the parties, superseding any and all prior written and prior and
contemporaneous oral agreements, understandings and letters of intent, and may
not be modified or amended nor may any right be waived except by a writing which
expressly refers to this Agreement, states that it is a modification, amendment
or waiver and is signed by both parties in the case of a modification or
amendment or by the party to be charged in the case of a waiver.  No course of
conduct or dealing and no trade custom or usage shall be construed to modify or
amend any of the provisions of this Agreement.  The failure of any of the
parties to this Agreement to enforce any provision of this Agreement on any
occasion shall not be deemed to be a waiver of any preceding or succeeding
breach of such provision or of any other provision.

          (b)  This Agreement, and the respective rights, duties and obligations
of the parties pursuant to this Agreement, shall be governed and construed in
accordance with the laws of the State of Florida applicable to agreements
executed and to be performed wholly within such State. Each of the parties
hereby (i) irrevocably consents and agrees that any legal or equitable action or
proceeding arising under or in connection with this Agreement shall be brought
exclusively in any Federal or state court in the State of Florida, and (ii) by
execution and delivery of this Agreement, irrevocably submits to and accepts,
with respect to its properties and assets, generally and unconditionally, the
jurisdiction of the aforesaid courts.

          (c)  This Agreement shall bind and inure to the benefit of the
parties, and their respective successors and assigns, but may not be assigned or
delegated by either party hereto without the prior written consent of the other
party and any attempted assignment or delegation without such prior written
consent shall be void and be of no effect.

          (d)  Any notice under the provisions of this Agreement shall be given
in writing and by hand, overnight courier or messenger service, against signed
receipt or acknowledgment of receipt, registered or certified mail, return
receipt requested, or telecopier or similar means of communication if confirmed
by mail as provided in this Section 10(d), to the parties at their respective
addresses set forth at the beginning of this Agreement or by telecopier to the
Company at 203 402-5500 or to OBX at 877 849-7416 Notices to the parties shall
be sent to the attention of the person executing this Agreement on behalf of
such party. Either party may, by like notice, change the person, address or
telecopier number to which notice should be sent.

          (e)  If any provision of this Agreement is found to be void or
unenforceable by a court of competent jurisdiction, the remaining provisions of
this Agreement, shall, nevertheless, be binding upon the parties with the same
force and effect as though the unenforceable part had been severed and deleted.

          (f)  Each of the parties to this Agreement shall execute and deliver
to the other party, without charge to the other party, any further instruments
and documents and take such other action as may be requested by the other party
in order to provide for the other party the benefits of this Agreement.

                                       7
<PAGE>

          (g)  All references to the masculine, feminine and neuter genders
shall include the other genders, the singular shall include the plural, and the
plural shall include the singular.

          (h)  This Agreement may be executed in one or more counterparts, all
of which shall be deemed to be duplicate originals.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.

BALDWIN TECHNOLOGY COMPANY, INC.                OBX PARTNERS, LLC

By: /s/ Mark T. Becker                          By: /s/ Peter Houchin
    -------------------                             -----------------
    Name:  Mark T. Becker                           Name: Peter Houchin
    Title: Chairman                                 Title: Managing Partner
           Ad Hoc Advisory Committee

                                       8
<PAGE>
                                                                       EXHIBIT A
                                                                       ---------
                                    PROPOSAL
                                    --------
                   Proposal to the Ad Hoc Advisory Committee
                                     of the
                               Board of Directors
                                       of
                        Baldwin Technology Company, Inc.

June 8th 2010
This note is to summarize discussions regarding the Advisory Proposal and to
outline the purpose and scope of the intended work.
All senior partners as well as support staff will be actively involved with the
assignment, as the combined experiences as operating executives and Investment
bankers as well as directors of companies with publicly traded securities are
all relevant, if not critical, to advising the Ad Hoc Advisory Committee (the
"Committee") well.
While there may be a need to refine the scope and process of the assignment to
accommodate interim needs of the Committee, it is understood that the ultimate
objective is the development of a comprehensive strategic plan to include
identification and development of proposals and action steps to deliver enhanced
shareholder value.  This will require several steps, including participation in
the budget preparation, review of the liquidity outlook and potential covenant
stress points as well as possible options for improving the liquidity and
refinancing the existing bank financing.
The following steps are planned:

PREPARATION: The documents, some of which are enumerated below, have been
reviewed and are being further developed and analyzed.  Further information
needs will be developed as the process proceeds:
- Cash flow forecasts - short and medium term,
- Written correspondence with in connection with recent waivers,
- Forecasts of future covenant calculations,
- Details of working capital elements (receivables/payables) with aging and
history,
- Capital spending budget for the coming fiscal year including any spending
commitments not yet funded,
- List of all banking relationships including foreign accounts,
- Most recent Strategic Plan,
- Most recent budget and actual performance variances -- by operating unit,
- Product line information and profitability analysis.
- Organization structure and personnel including budgets  by function,
- Consolidating statements including results of foreign subsidiaries,
- Information and analyses regarding recent consideration of various value
building strategies.
- Research reports about the company and other background information about the
industry and competitors,
Three main tasks will then be undertaken that are expected to be completed for
the Board Meeting or, should more information and analysis be required, at the
latest, before the Bank submission:

                                       9
<PAGE>

LIQUIDITY ASSESSMENT: (performed by both operating and Investment banking
resources). Deliverables will incorporate tasks into the Company's cash flow
reporting to the Board.  Tasks will include:
(1) A review with management of the short term cash flow of the company (1-6
months), and stress test of current forecasts to identify possible risks of
illiquidity and violation of covenants currently in place.
(2) A review with management of potential to provide additional short term
liquidity to Company should the need arise.
(3) A review with management of all recent discussions with the Company's
lenders about waivers and of all requests by the lenders,
(5) A review of Company proposed bank covenant targets related to the 2011 AOP
presentation deadline,
(7) A review with management of all recent efforts to replace the company's debt
and identification of prospects for replacement lenders.

BUDGET REVIEW: (performed by both operating and Investment banking resources
and expected to require three weeks). No separate report will be generated;
comments, analysis and recommendations to be covered in the presentation during
the Board meeting and at subsequent meetings prior to the Bank submission.
Tasks will include:
(1) Review of the Budget and the Budget process with analysis of trends,
divisional and product line profitability, expected economic/industry recovery,
and revenue and margin assumptions,
(2) Identification through analysis and discussions with management of key risks
inherent in the Budget
(3) Review with management the draft of the Budget to be presented to the banks,
including challenging assumptions, discussing trade-offs between approaches and
considering iterations and alternatives,
(4) Review of cash flow projections and risk areas to Company liquidity
(5) Preliminary assessment of the Budget in relation to management incentive
compensation plans.

STRATEGIC REVIEW: (performed by both operating partners and investment banking
partners and expected to last approximately eight to ten weeks beginning as soon
as the above tasks have been completed).
Building on the process and output from the 2011 budget, embark upon the
thorough strategic review of the company culminating in a new Strategic Plan.
This would include: market and technology assessment, competitive position, and
manufacturing, sales, and financial strategy-including the company's capital
structure and its ability to attract capital in both debt and equity markets.
Comprehensive analysis of the business model, the supply chain and the cost
structure of the organization will be required. This will require travel to and
communication with the Company's overseas operating units and key personnel.
As a part of this process, additional resources beyond the scope of this
proposal may be identified and selected to ascertain the ability of the
company's products/technology to compete and to satisfy its customers' needs.

                                       10
<PAGE>

The goal would be to identify specific action plans for improving structural
costs and operating results that would result in improved and sustainable
shareholder value.
It would include a capital plan as well as specific goals and a revised budget
for the remainder of the fiscal year.
It would also include suggested course of action for management incentive
compensation.
These phases would include support for management during communication and
negotiations with lenders with respect to the Plan and the Budget.
At the completion of this phase, the conclusions, recommendations and an
implementation plan will be presented to the Committee.

Considering the liquidity situation at the company and the nature of the work --
to drive shareholder value, compensation is proposed that aligns our goals
clearly with shareholders and with management.  (As outlined in the Advisory
Agreement.)
While it is the intent to remain available to management and to the Committee
for routine consultation beyond the delivery and acceptance of the Strategic
Plan, to the extent that additional services are proposed during the term of the
Advisory Agreement or after the completion of the Strategic Plan, including, for
example, potentially assisting in further negotiating with current or
alternative lenders, assisting or leading the implementation of any "strategic
initiatives", raising additional equity capital for the company or providing
interim management or consulting services,  compensation for such services would
be negotiated at that time.

                                       11
<PAGE>
                                                                       EXHIBIT B
                                                                       ---------

                             STOCK OPTION AGREEMENT
                             ----------------------

     AGREEMENT, dated as of the 8th day of July, 2010 between BALDWIN TECHNOLOGY
COMPANY, INC., a Delaware corporation with an office at 2 Trap Falls Road, Suite
402, Shelton, CT 06484 (the "Company" or "Baldwin"), and OBX PARTNERS, LLC, a
Florida limited liability company with an office at 14735, West River Road,
Inglis, Florida 34449 (the "Option Holder").

     WHEREAS, the Company and the Option Holder entered into an Advisory
Agreement, dated as of July 8, 2010 (the "Advisory Agreement") pursuant to which
the Option Holder will act as a financial advisor and strategic consultant to
the Ad Hoc Advisory Committee of the Board of Directors of the Company (the
"Committee").

     WHEREAS, the advisory services to be rendered by the Option Holder are
outlined in the Proposal to the Committee dated June 8th, 2010 attached to the
Advisory Agreement as Exhibit A thereto (the "Proposal").

     WHEREAS, pursuant to the Advisory Agreement, the Company agreed, as part of
the consideration for the advisory services to be rendered by the Option Holder
to the Company, to grant to the Option Holder an option to purchase shares of
the Company's Class A Common Stock, par value $0.01 per share ("Class A Common
Stock").

     NOW, THEREFORE, the parties hereto agree as follows:

     1.   The Company irrevocably granted to the Option Holder on July 1, 2010
(hereinafter called the "Date of Granting the Option") an option (hereinafter
called the "Option") to purchase three hundred thousand (300,000) shares of
Class A Common Stock, upon and subject to the terms and conditions set forth in
this Agreement.

     2.   The purchase price of the shares of Class A Common Stock subject to
the Option shall be $1.26 per share.

     3.   Subject to the provision that OBX shall be advised timely by the
Committee of any deficiency and the necessity for remedial work to any previous
submissions to the Committee, and having been granted reasonable time to correct
such deficiencies, and, further subject to the provision that the Engagement
Term may be extended as provided in the Advisory Agreement, if the Option Holder
shall not have substantially completed the Engagement and delivered to the
Committee all necessary reports and a three year strategic plan for the Company
in form and substance satisfactory to the Committee, all as more fully described
in the Proposal, by November 16th 2010, the date of the November Board of
Directors Meeting, the Option shall terminate at 5:00 pm on that date and become
null and void.

                                       1
<PAGE>

     4.   The Option Holder may not exercise the Option prior to October 1,
2011.  If the Option shall not have previously terminated pursuant to Section 3,
the Option Holder may exercise the Option at any time or from time to time
during the period commencing at 12:01am on October 1, 2011 and ending at 5:00 pm
on September 30, 2020 as to all or any part of the total number of shares
subject to the Option, but only as to a whole number of shares, and not as to
less than one thousand (1,000) shares at any one time, except upon the purchase
of the remaining balance of shares as to which the Option is at the time
exercisable.

     5.   If the Option shall not have previously terminated pursuant to Section
3, the Option shall terminate at 5:00 pm on September 30, 2020 and become null
and void.

     6.   The Option may not be transferred by the Option Holder except with the
prior written consent of the Company.

     7.   In the event of any reclassification or increase or decrease in the
number of the issued shares of Class A Common Stock by reason of a split-up or
consolidation of shares, the payment of a stock dividend, a recapitalization, a
combination or exchange of shares, or any like capital adjustment, the number
and class of shares subject to the Option and the price per share (but not the
total price) shall be appropriately and equitably adjusted.

          If the Company shall be reorganized or shall merge into or consolidate
with any other Company, the Option shall be adjusted so as to apply to the
securities to which a holder of the number of shares of Class A Common Stock
subject to the Option would have been entitled by reason of such reorganization,
consolidation or merger.

          Adjustments under this Section shall be made by the Board of Directors
of the Company.  Such adjustments shall be binding and conclusive.

     8.   Subject to the terms and conditions of this Agreement, the Option may
be exercised by the Option Holder delivering written notice thereof to the
Company at its office at 2 Trap Falls Road, Suite 402, Shelton, CT 06484, or at
such other address as the Company may from time to time designate in writing,
marked for the attention of the Secretary of the Company.  Such notice of
exercise shall (a) state that the Option Holder elects to exercise the Option
and specify the number of shares in respect of which the Option is being
exercised, (b) be accompanied by a check payable to the order of the Company in
an amount equal to the full purchase price of the shares as to which the Option
is being exercised, and (c) be signed by the person or persons exercising the
Option.  If the Option is being exercised by any person or persons other than
the Option Holder, such notice shall also be accompanied by evidence
satisfactory to the Company as to the right of such person or persons to
exercise the Option in accordance with the provisions hereof.

          As soon as practicable after such exercise, the Company shall cause to
be issued and delivered a certificate or certificates representing the shares as
to which the Option has been exercised, issued in the name of the person or
persons by whom the Option has been exercised.  All shares issued upon exercise
of the Option will be fully paid and non-assessable.

                                       2
<PAGE>

     9.   The Option Holder hereby agrees for itself and any person or persons
other than itself entitled to exercise the Option that all shares of Class A
Common Stock of the Company purchased upon the exercise of the Option shall be
acquired and held in compliance with the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder, and that there shall be
furnished with each notice of exercise of the Option such documents as the
Company in its discretion may deem necessary to assure compliance with the
applicable rules and regulations of any governmental authority having
jurisdiction over the issuance or exercise of the Option or the issuance of
shares of Class A Common Stock of the Company pursuant to such exercise.

     10.  If and so long as any shares of Class A Common Stock of the Company
shall be listed on any national securities exchange, the Company shall not be
obligated to issue shares upon the exercise of the Option unless and until
authority for listing such shares on such national securities exchange upon
official notice of issue has been obtained; nor shall the Company be obligated
so to issue any of such shares except in compliance with the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended, and the
applicable rules and regulations of the Securities and Exchange Commission.

     11.  The Company shall at all times during the term of the Option reserve
and keep available such number of shares of Class A Common Stock of the Company
as may be required to be issued upon the exercise of the Option.

     12.  The Option Holder shall not have any of the rights or privileges of a
stockholder of the Company with respect to any shares of Class A Common Stock
that may be purchased upon the exercise of the Option prior to the date of
exercise of the Option.

     13.  The Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                                           BALDWIN TECHNOLOGY COMPANY, INC.

                                           By: /s/ Karl S. Puehringer
                                               ----------------------
                                               Name:   Karl S. Puehringer
                                               Title:  President

                                       3
<PAGE>

                                           OBX PARTNERS, LLC

                                           By: /s/ Peter Houchin
                                               -----------------
                                               Name:   Peter Houchin
                                               Title:  Managing Partner

                                       4EXHIBIT 4.2

                                                         AS AMENDED AND RESTATED
                                                                ON JUNE 29, 2010

                          THE COMPANIES LAW, 5759-1999

                           A COMPANY LIMITED BY SHARES

                              AMENDED AND RESTATED

                             ARTICLES OF ASSOCIATION

                                       OF

                                NICE-SYSTEMS LTD.

1.   DEFINITIONS; INTERPRETATION

     (a)  "Companies  Law" - the Israeli  Companies  Law,  5759-1999 as the same
shall be amended  from time to time,  or any other law which shall  replace that
Law, together with any amendments and regulations thereto.

     (b)  "Companies  Ordinance"  -  those  sections  of the  Israeli  Companies
Ordinance  [New Version]  5743-1983 that shall remain in force after the date of
the coming into force of the  Companies  Law, as the same shall be amended  from
time to time.

     (c)  Unless  the  subject  or the  context  otherwise  requires:  words and
expressions defined in the Companies Law and in the Companies Ordinance,  as the
case  may be,  shall  have the  same  meanings  herein;  words  and  expressions
importing  the  singular  shall  include  the plural and vice  versa;  words and
expressions  importing the masculine  gender shall include the feminine  gender;
and words and expressions importing persons shall include bodies corporate.

     (d) 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.

2.   OBJECT AND PURPOSE OF THE COMPANY

     The object and the  purpose of the Company are as set forth in Section 2 of
the Memorandum of Association of the Company.

3.   LIMITATION OF LIABILITY

     The liability of the shareholders of the Company is limited as set forth in
Section 3 of the Memorandum of Association of the Company.

<PAGE>

                                  SHARE CAPITAL

4.   SHARE CAPITAL

     The share capital of the Company is one hundred and twenty five million New
Israeli  Shekels  (NIS  125,000,000)  divided  into one  hundred and twenty five
million  (125,000,000)  Ordinary  Shares  of  nominal  value  of NIS  1.00  each
("Ordinary Shares").

5.   INCREASE OF SHARE CAPITAL

     (a) The Company may, from time to time, by resolution of the  shareholders,
whether or not all the  shares  then  authorized  have been  issued,  resolve to
increase  its share  capital by the  creation of new shares.  Any such  increase
shall be in such  amount  and  shall be  divided  into  shares  of such  nominal
amounts, and such shares shall confer such rights and preferences,  and shall be
subject to such restrictions, as such resolution shall provide.

     (b) Except to the extent otherwise  provided in such  resolution,  such new
shares shall be subject to all the  provisions  applicable  to the shares of the
original share capital.

6.   THE RIGHTS OF ORDINARY SHARES

     The Ordinary  Shares confer upon the holders thereof all rights accruing to
a shareholder of the Company,  as provided in these Articles,  including,  inter
alia, the right to receive  notices of (in the manner  proscribed in Articles 20
and  50  of  these  Articles),  and  to  attend,  shareholder  meetings  of  the
shareholders;  for each share held - the right to one vote at all  shareholders'
meetings for all purposes,  and to share equally,  on a per share basis, in such
dividends as may be declared by the Board of Directors  in  accordance  with the
terms  of  these  Articles  and the  Companies  Law;  and  upon  liquidation  or
dissolution,  the right to participate in the distribution of any surplus assets
of the Company legally available for distribution to shareholders  after payment
of all debts and other liabilities of the Company,  in accordance with the terms
of these  Articles  and the law.  All  Ordinary  Shares  rank PARI PASSU in all
respects with each other.

7.   SPECIAL RIGHTS; MODIFICATIONS OF RIGHTS

     (a) Subject to the  provisions  of any law, the Company  may,  from time to
time, by resolution of the shareholders,  provide for shares with such preferred
or deferred  rights or rights of redemption or other special  rights and/or such
restrictions, whether in regard to dividends, voting, repayment of share capital
or otherwise, as may be stipulated in such resolution.

     (b)  (i)If at any time the share capital is divided into different  classes
of shares, the rights attached to any class,  unless otherwise provided by these
Articles,  may be  modified  or  abrogated  by  the  Company,  by a  shareholder
resolution,  subject to the  consent of the  holders of a majority of the voting
power of such class by written  consent or at a separate  General Meeting of the
holders of the shares of such class.

          (ii) The  provisions of these  Articles  relating to General  Meetings
     shall,  mutatis  mutandis,  apply to any  separate  General  Meeting of the
     holders of the shares of a particular class.

                                     - 2 -

<PAGE>

          (iii) Unless otherwise provided by these Articles,  the enlargement of
     an existing class of shares,  or the issuance of additional shares thereof,
     shall not be  deemed,  for  purposes  of this  Article  7(b),  to modify or
     abrogate the rights attached to the previously  issued shares of such class
     or of any other class.

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

     (a) The Company may (subject,  however,  to the  provisions of Article 7(b)
hereof and to applicable law), from time to time, by resolution of the Company's
shareholders:

          (i)  consolidate and divide all or any of its issued or unissued share
     capital into shares of larger nominal value than its existing shares,

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

          (iii)  cancel any shares  which,  at the date of the  adoption of such
     resolution,  have not been taken or agreed to be taken by any  person,  and
     diminish  the  amount of its share  capital  by the amount of the shares so
     cancelled, or

          (iv) reduce its share  capital in any manner,  and with and subject to
     any incident authorized, and consent required, by law.

     (b) With  respect to any  consolidation  of issued  shares  into  shares of
larger nominal  value,  and with respect to any other action which may result in
fractional  shares,  the Board of Directors may settle any difficulty  which may
arise with regard thereto, as it deems fit, including, INTER ALIA, resort to one
or more of the following actions:

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

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

          (iii) redeem, in the case of redeemable preference shares, and subject
     to applicable law, such shares or fractional  shares sufficient to preclude
     or remove fractional share holdings;

                                     - 3 -

<PAGE>

          (iv) cause the transfer of fractional  shares by certain  shareholders
     of the  Company to other  shareholders  thereof  so as to most  expediently
     preclude or remove any fractional shareholdings,  and cause the transferees
     to pay the transferors the fair value of fractional  shares so transferred,
     and the Board of  Directors  is hereby  authorized  to act as agent for the
     transferors  and  transferees  with power of  substitution  for purposes of
     implementing the provisions of this sub-Article 8(b)(iv).

     (c) The  notice of a General  Meeting  with  respect to the  adoption  of a
resolution under Article 8(a) above,  shall specify the actions to be adopted by
the Board of Directors under Article 8(b) above.

                                     SHARES

9.   ISSUANCE OF SHARE CERTIFICATES; REPLACEMENT OF LOST CERTIFICATES

     (a) Share  certificates of issued shares shall, if issued,  be issued under
the seal or the rubber  stamp of the Company or the Company  printed  name,  and
shall  bear the  signatures  of two  Directors,  or of one  Director  and of the
Secretary of the Company,  or of any other person or persons  authorized thereto
by the Board of Directors.

     (b) Each  shareholder,  registered  in the  Register  of  Shareholders  (as
defined in the Companies law), shall be entitled to one numbered certificate for
all the shares of any class registered in his name, or if the Board of Directors
so approves,  to several  certificates,  each for one or more of such shares, in
the form as shall be  determined  by the Board of Directors and according to the
law.

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

     (d) If a  share  certificate  is  defaced,  lost  or  destroyed,  it may be
replaced,  provided that the original  certificate is presented to and destroyed
by the Board of  Directors or it is proved to the  satisfaction  of the Board of
Directors that the certificate  has been lost or destroyed,  and upon payment of
such  fee,  and upon the  furnishing  of such  evidence  of  ownership  and such
indemnity or security, as the Board of Directors may think fit.

10.  ALLOTMENT OF SHARES

     The unissued  shares shall be under the control of the Board of  Directors,
who shall have the power to allot  shares or  otherwise  dispose of them to such
persons,  on such terms and conditions  (including  INTER ALIA terms relating to
calls as set forth in Article 11(f) hereof),  and either at par or at a premium,
and at such times,  as the Board of  Directors  may think fit,  and the power to
grant to any person the option to acquire from the Company any shares, either at
par or at a premium, during such time and for such consideration as the Board of
Directors may think fit.

                                     - 4 -

<PAGE>

11.  CALLS ON SHARES; FORFEITURE AND SURRENDER

     (a) The Board of Directors  may,  from time to time,  make such calls as it
may think fit upon a  shareholder  in  respect  of any sum  unpaid in respect of
shares held by such shareholder  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 of  Directors,  as any such  time(s) may be  thereafter
extended and/or such person(s) or place(s) changed.  Unless otherwise stipulated
in the  resolution  of the  Board  of  Directors  (and in the  notice  hereafter
referred to), each payment in response to a call shall be deemed to constitute a
pro rata  payment  on  account  of all  shares in respect of which such call was
made.

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

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

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

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

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

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

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

                                     - 5 -

<PAGE>

     (i)  Whenever  shares  are  forfeited  as herein  provided,  all  dividends
theretofore declared in respect thereof and not actually paid shall be deemed to
have been forfeited at the same time.

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

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

     (l) 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  11(e)  above,  and  the  Board  of  Directors,  in  its
discretion,  may enforce the payment of such moneys,  or any part  thereof,  but
shall not be under any  obligation to do so. In the event of such  forfeiture or
surrender,  the Company, by resolution of the Board of Directors, may accelerate
the date(s) of payment of any or all amounts  then owing by the  shareholder  in
question  (but not yet due) in respect of all shares owned by such  shareholder,
solely  or  jointly  with  another,  and in  respect  of  any  other  matter  or
transaction whatsoever.

     (m) The Board of Directors  may at any time,  before any share so forfeited
or  surrendered  shall have been sold,  re-allotted  or  otherwise  disposed of,
nullify the forfeiture or surrender on such  conditions as it thinks fit, but no
such  nullification  shall stop the Board of Directors  from  re-exercising  its
powers of forfeiture pursuant to this Article 11.

     (n) Except to the extent the same may be waived or  subordinated in writing
and to the extent  permitted by  applicable  law, the Company shall have a first
and  paramount  lien  upon  all  the  shares  registered  in the  name  of  each
shareholder  (without regard to any equitable or other claim or interest in such
shares  on the part of any  other  person),  and upon the  proceeds  of the sale
thereof,  for his debts,  liabilities  and  engagements  arising  from any cause
whatsoever,  solely or jointly with another, to or with the Company, whether the
period for the payment,  fulfillment  or discharge  thereof  shall have actually
arrived  or not.  Such  lien  shall  extend to all  dividends  from time to time
declared in respect of such share. Unless otherwise  provided,  the registration
by the  Company  of a transfer  of shares  shall be deemed to be a waiver on the
part of the Company of the lien (if any)  existing  on such  shares  immediately
prior to such transfer.

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

     (p) 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 Company may  determine),  and the residue (if
any) shall be paid to the shareholder, his executors, administrators or assigns.

                                     - 6 -

<PAGE>

                               TRANSFER OF SHARES

12.  EFFECTIVENESS AND REGISTRATION

     No transfer of shares shall be registered  in the Register of  Shareholders
unless a proper  instrument of transfer (in form and substance  satisfactory  to
the Secretary of the Company) has been  submitted to the Company,  together with
such other evidence of title as the Board of Directors may  reasonably  require.
Until the  transferee  has been  registered in the Register of  Shareholders  in
respect of the shares so  transferred,  the Company  may  continue to regard the
transferor as the owner thereof.

                             TRANSMISSION OF SHARES

13.  DECEDENTS' SHARES

     (a) In case of a  share  registered  in the  names  of two or more  holders
established  by law,  the  Company may  recognize  the  survivor(s)  as the sole
owner(s)  thereof  unless and until the  provisions  of Article  13(b) have been
effectively invoked.

     (b) Any person becoming  entitled to a share in consequence of the death of
any  person,  upon  producing  evidence  of the grant of  probate  or letters of
administration or declaration of succession (or such other evidence as the Board
of Directors may reasonably  deem  sufficient  that he sustains the character in
respect of which he proposes to act under this  Article or of his title),  shall
be registered as a shareholder in respect of such share, or may,  subject to the
regulations as to transfer herein contained, transfer such share.

14.  RECEIVERS AND LIQUIDATORS

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

     (b) The receiver, liquidator or similar official of a corporate shareholder
in winding-up or dissolution,  or the receiver,  trustee or similar  official in
bankruptcy or in connection with the  reorganization  of any  shareholder,  upon
producing  such evidence as the Board of Directors may deem  sufficient  that he
sustains the character in respect of which he proposes to act under this Article
or of his title,  shall with the  consent of the Board of  Directors  (which the
Board  of  Directors  may  grant  or  refuse  in its  absolute  discretion),  be
registered  as a  shareholder  in  respect  of such  shares in the  Register  of
Shareholders,  or  may,  subject  to  the  regulations  as  to  transfer  herein
contained, transfer such shares.

                                     - 7 -

<PAGE>

                 RECORD DATE WITH RESPECT TO OWNERSHIP OF SHARES

15.  RECORD DATE FOR GENERAL MEETINGS

     The  shareholders  entitled to receive  notice of, to participate in and to
vote thereon at a General Meeting,  or to express consent to or dissent from any
corporate  action in writing,  shall be the  shareholders on the date set in the
resolution  of the Board of Directors to convene the General  Meeting,  provided
that,  such date shall not be earlier  than forty (40) days prior to the date of
the  General  Meeting and not later than four (4) days prior to the date of such
General  Meeting,  or  different  periods  as  shall  be  permitted  by  law.  A
determination  of shareholders of record with respect to a General Meeting shall
apply to any adjournment of such meeting.

16.  RECORD DATE FOR DISTRIBUTION OF DIVIDENDS

     The shareholders entitled to receive dividends shall be the shareholders on
the date upon which it was resolved to distribute  the dividend or at such later
date as shall be provided in the resolution in question.

                                GENERAL MEETINGS

17.  GENERAL MEETINGS

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

     (b) All General Meetings other than Annual General Meetings shall be called
"SPECIAL GENERAL  MEETINGS." The Board of Directors may, whenever it thinks fit,
convene a Special General Meeting at such time and place,  within or without the
State of Israel, as may be determined by the Board of Directors. Special General
Meetings may also be convened upon  requisition in accordance with the Companies
Law.

18.  SHAREHOLDER PROPOSALS

     (a) A shareholder  (including two or more  shareholders  that are acting in
concert,  a  "PROPOSING  SHAREHOLDER")  holding  one  percent  or  more  of  the
outstanding  voting rights in the Company may request,  subject to Section 66(b)
of the  Companies  Law,  that the Board of  Directors  include a proposal on the
agenda  of a  General  Meeting  to be  held in the  future,  provided  that  the
Proposing  Shareholder  gives  timely  notice  of such  request  in  writing  (a
"PROPOSAL  REQUEST") to the  Secretary  of the Company and the Proposal  Request
complies  with all the  requirements  of this  Article 18,  these  Articles  and
applicable law and stock exchange  rules.  To be considered  timely,  a Proposal
Request  must be  delivered,  either  in person or by  certified  mail,  postage
prepaid,  and received at the principal executive office of the Company, no less
than sixty  (60) days  prior to the date of the  Company's  proxy  statement  in
connection with such General Meeting.

                                     - 8 -

<PAGE>

     (b) The Proposal  Request shall set forth (i) the name,  business  address,
telephone  number and fax number or email address of the  Proposing  Shareholder
(or each member of the group constituting the Proposing Shareholder, as the case
may be) and, if an entity, the name(s) of the person(s) that controls or manages
such  entity,  (ii)  the  number  of  Ordinary  Shares  held  by  the  Proposing
Shareholder,  directly or  indirectly,  and, if any of such Ordinary  Shares are
held  indirectly,  an explanation of how they are held and by whom, and, if such
Proposing Shareholder is not the holder of record of any such Ordinary Shares, a
written  statement  from the  holder  of  record  or  authorized  bank,  broker,
depository  or other  nominee,  as the case may be,  indicating  the  number  of
Ordinary Shares the Proposing  Shareholder is entitled to vote as of a date that
no more  than  ten (10)  days  prior to the  date of  delivery  of the  Proposal
Request,  (iii) any agreements,  arrangements,  understandings  or relationships
between the  Proposing  Shareholder  and any other  person  with  respect to any
securities of the Company or the subject  matter of the Proposal  Request,  (iv)
the  Proposing  Shareholder's  purpose in making the Proposal  Request,  (v) the
complete  text in the English  language  of the  resolution  that the  Proposing
Shareholder  proposes  to be  voted  upon at the  General  Meeting  and,  if the
Proposing  Shareholder  wishes to have a statement  in support of the  Proposing
Shareholder's proposal included in the Company's proxy statement, a copy of such
statement,  which  shall be in the  English  language  and shall not  exceed 500
words,  (vi) a statement  of whether the  Proposing  Shareholder  has a personal
interest in the proposal and, if so, a description in reasonable  detail of such
personal interest,  and (vii) if the proposal of the Proposing Shareholder is to
nominate a candidate for election to the Board of  Directors,  (A) a declaration
signed by the nominee and the other  information  required under Section 224B of
the  Companies  Law,  (B) to the extent not  otherwise  provided  in the Request
Proposal,  the  information  in respect of the  nominee as would be  provided in
response  to the  disclosure  requirements  of Item  6A  (directors  and  senior
management),  Item 6E (share ownership) and Item 7B (related party transactions)
of  Form  20-F  of  the  U.S.   Securities  and  Exchange   Commission,   (C)  a
representation  of whether  the  nominee  meets the  objective  criteria  for an
independent  director of the Company under the listing rules of the NASDAQ Stock
Market (or such  other  stock  exchange  on which the  Ordinary  Shares are then
listed) and if not, then an explanation  of why not, and (D) a statement  signed
by the nominee that he consents to be named in the  Company's  notices and proxy
materials relating to the General Meeting and, if elected, to serve on the Board
of Directors.  In addition, the Proposing Shareholder shall promptly provide any
other  information  reasonably  requested by the Company.  The Company  shall be
entitled to publish information provided by a Proposing  Shareholder pursuant to
Article 18, and the Proposing  Shareholder shall be responsible for the accuracy
thereof.  The parenthetical  regulation headings contained in this Article 18(b)
are for convenience  only and shall not be deemed a part hereof or used to limit
the scope of  disclosure  required by this  Article  18(b).  References  in this
Article 18(b) to particular laws,  regulations or rules shall be deemed to apply
to such amended or successor  laws,  regulations  or rules as shall be in effect
from time to time.

     (c) A Proposing Shareholder holding five percent or more of the outstanding
voting rights in the Company (or five percent or more of the  outstanding  share
capital  and one  percent  or more of the  voting  rights  in the  Company)  may
request,  subject to Section  63(b)(2) of the  Companies  Law, that the Board of
Directors convene a Special General Meeting,  provided that the request complies
with all the  applicable  requirements  of a  "Proposal  Request"  set  forth in
Article 18(b), these Articles and applicable law and stock exchange rules.

                                     - 9 -

<PAGE>

19.  POWERS OF THE GENERAL MEETING

     Subject to the provisions of the Companies Law and of these  Articles,  the
resolutions in respect to the following  matters shall be adopted by the General
Meeting:

     (a) Amendments to the Articles, as set forth in Section 20 of the Companies
Law.

     (b) Exercise of the  authorities  of the Board of  Directors in  accordance
with the provisions of Section 52(a) of the Companies Law.

     (c) Appointment of the outside auditor(s) of the Company, the determination
of its/their  terms of engagement  with the Company and termination of its/their
engagement  with the Company,  all in accordance with the provisions of Sections
154-167 of the Companies Law.

     (d)  Appointment of independent  ("external")  Directors in accordance with
the provisions of Section 239 of the Companies Law ("External Directors").

     (e) Approval of actions and  transactions  that require the approval of the
General Meeting pursuant to Sections 255 and 268-275 of the Companies Law.

     (f) An  increase  and a decrease  of the  authorized  share  capital of the
Company, pursuant to Sections 286 and 287 of the Companies Law.

     (g) A merger, as set forth in Section 320(a) of the Companies Law.

20.  NOTICE OF GENERAL MEETINGS

     (a) Not less than  twenty-one  (21) days'  prior  notice  shall be given of
every General Meeting (the  "Notice").  The Notice shall be published in two (2)
newspapers in Israel and as shall be required by law or rules and regulations of
the stock exchanges on which the Company's  shares are listed.  The Notice shall
specify the place,  date and hour of the General Meeting,  its agenda, a summary
of proposed  resolutions and the procedure for voting in such General Meeting by
proxy statement and any other matter as shall be required by law.  Notices shall
not be sent to each of the shareholders  registered in the Company's Register of
Shareholders.

     (b) The validity of any resolutions  carried at a General Meeting shall not
be affected if the Company, by oversight, has not sent a notice of the convening
of the meeting,  or has sent an  incomplete  or incorrect  notice  regarding the
convening of the meeting or its agenda,  or has not served a notice as aforesaid
or has delayed in sending or delivering the said notice.

                                     - 10 -

<PAGE>

                         PROCEEDINGS AT GENERAL MEETINGS

21.  QUORUM

     (a) Two or more shareholders (not in default in payment of any sum referred
to in Article 26(a) hereof), present in person or by proxy or by written ballot,
as  shall  be  permitted,   and  holding  shares  conferring  in  the  aggregate
twenty-five  percent  (25%) or more of the voting  power of the  Company,  shall
constitute a quorum at General Meetings.

     (b) If within half an hour from the time appointed for the meeting a quorum
is not present,  if convened upon requisition under sections 63, 64 or 65 of the
Companies  Law, the meeting shall be  dissolved,  but in any other case it shall
stand adjourned to the same day in the next week, at the same time and place, or
to such  day and at such  time and  place as  specified  in the  Notice  of such
meeting or 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 or
by  written  ballot,  as shall be  permitted,  and  voting  on the  question  of
adjournment. At such adjourned meeting, any two (2) shareholders (not in default
as aforesaid)  present in person or by proxy or by written  ballot,  as shall be
permitted, shall constitute a quorum.

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

22.  CHAIRMAN

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

23.  ADOPTION OF RESOLUTIONS AT GENERAL MEETINGS

     (a) Unless otherwise  specifically  provided in these Articles or under any
applicable law, all resolutions  submitted to the  shareholders  shall be deemed
adopted if  approved by the  holders of a simple  majority  of the voting  power
represented at the meeting in person or by proxy or by written ballot,  as shall
be permitted, and voting thereon.

     (b) Every  question  submitted to a General  Meeting  shall be decided by a
count of votes.

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

24.  POWER TO ADJOURN

     (a) The  Chairman of a General  Meeting,  in which the  required  quorum is
present, may resolve to adjourn the meeting ,for no more than thirty(30)days, to
such time and place as shall be determined  but no business  shall be transacted
at any  adjourned  meeting  except  business  which  might  lawfully  have  been
transacted at the meeting as originally called.

                                     - 11 -

<PAGE>

     (b) It shall not be  necessary to give any notice of an  adjournment  under
Article  24(a),  unless the meeting is adjourned for more than  twenty-one  (21)
days in which event notice thereof shall be given in the manner required for the
meeting as originally called.

25.  VOTING POWER

     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, on every resolution.

26.  VOTING RIGHTS

     (a) The  shareholders  entitled to vote at a General  Meeting  shall be the
shareholders  listed in the  Company's  Register of  Shareholders  on the record
date, as specified in Article 15.

     (b) A company or other  corporate  body 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 meeting of the Company. 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 meeting,  written evidence
of such authorization (in form acceptable to the Chairman) shall be delivered to
him.

     (c) Any shareholder entitled to vote may vote either personally or by proxy
(who need not be a shareholder  of the  Company),  or, if the  shareholder  is a
company or other  corporate  body, by a  representative  authorized  pursuant to
Article 26(b) or by a written ballot, as permitted by law and according to these
Articles.

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

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

     (f) The Board of Directors may determine,  in its  discretion,  the matters
that may be voted upon a written  ballot to the Company  (without  attendance in
person or by proxy or by written  ballot,  as shall be  permitted,  at a General
Meeting,  in addition to the matters  listed in Section 87(c ) of the  Companies
law.

                                     PROXIES

27.  INSTRUMENT OF APPOINTMENT

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

                                     - 12 -

<PAGE>

     (b) The  instrument  appointing a proxy (and the power of attorney or other
authority,  if any,  under  which  such  instrument  has been  signed)  shall be
delivered to the Company (at its Registered Office, or at its principal place of
business or at the offices of its  transfer  agent or at such other place as the
Board of Directors  may specify) not less than  forty-eight  (48) hours (or such
shorter  period as may be determined by the Board of Directors)  before the time
fixed for the meeting at which the person  named in the  instrument  proposes to
vote.

28.  EFFECT OF DEATH OF APPOINTOR OR REVOCATION OF APPOINTMENT

     A vote cast  pursuant to an  instrument  appointing  a proxy shall be valid
notwithstanding  the previous  death of the  appointing  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  notification  of such death,  revocation or transfer  shall
have been received by the Company or by the Chairman of the meeting  before such
vote is cast, and provided, further, that the appointing shareholder, if present
in person at said  meeting,  may revoke the  appointment  by means of a writing,
oral notification to the Chairman, or otherwise.

                               BOARD OF DIRECTORS

29.  POWERS OF BOARD OF DIRECTORS

     (a) The Board of Directors  shall have all powers vested in it according to
the Companies Law and these  Articles,  shall have any and all  authorities  not
vested in any other  organ of the Company  according  to the  Companies  Law and
these  Articles,  shall be  authorized  to determine  the policy of the Company,
shall supervise the performance and actions of the General Manager, and, without
derogating form the above, shall have all the following powers:

          (i) determine the Company's  plans of action,  the principles of their
     financing and the order of priority among them;

          (ii) examine the financial status of the Company, and set the frame of
     credit that the Company shall be entitle to acquire;

          (iii)  determine the  organizational  structure of the Company and its
     compensation policies;

          (iv) may resolve to issue series of debentures;

          (v) shall be  responsible  for the  preparation  and  approval  of the
     financial  statements  of the  Company,  as set forth in Section 171 of the
     Companies Law;

          (vi)  report  to the  Annual  General  Meeting  of the  status  of the
     Company's affairs and of their financial outcomes,  as set forth in Section
     173 of the Companies Law.

          (vii) appoint the General Manager and may terminate such  appointment,
     in accordance with Section 250 of the Companies Law;

                                     - 13 -

<PAGE>

          (viii) resolve in the matters on actions and transactions that require
     its approval according to Sections 255 and 268-275 of the Companies Law and
     of the provisions of these Articles;

          (ix) issue shares and convertible securities up to the total amount of
     the authorized share capital of the Company, in accordance with Section 288
     of the Companies Law;

          (x) decide on a "distribution" as set forth in Sections 307-308 of the
     Companies Law;

          (xi) express its opinion on a special  tender  offer,  as set forth in
     Section 329 of the Companies Law.

     (b)  The  powers  of  the  Board  of   Directors   described   in  Articles
29(a)(i)-29(a)(xi) above shall not be delegated to the General Manager(s) of the
Company.

30.  EXERCISE OF POWERS OF DIRECTORS

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

     (b) A resolution proposed at any meeting of the Board of Directors shall be
deemed adopted if approved by a simple  majority of the Directors then in office
who are  lawfully  entitled to  participate  in the meeting and vote thereon and
present when such resolution is put to a vote and voting thereon.

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

31.  DELEGATION OF POWERS

     The Board of Directors may, subject to the provisions of the Companies Law,
delegate its powers to committees,  each  consisting of two or more persons (all
of whose  members must be  Directors),  and it may from time to time revoke such
delegation or alter the  composition of any such  committee.  Any such Committee
authorized  to exercise  the powers of the Board of Directors  shall  include at
least one (1) External  Director.  Any  Committee  so formed (in these  Articles
referred to as a "Committee of the Board of Directors"),  shall, in the exercise
of the  powers so  delegated,  conform to any  regulations  imposed on it by the
Board of Directors.  The meetings and  proceedings  of any such Committee of the
Board of Directors shall, mutatis mutandis, be governed by the provisions herein
contained for regulating  the meetings of the Board of Directors,  so far as not
superseded  by any  regulations  adopted  by the Board of  Directors  under this
Article.  Unless  otherwise  expressly  provided  by the Board of  Directors  in
delegating powers to a Committee of the Board of Directors, such Committee shall
not be empowered to further delegate such powers.

                                     - 14 -

<PAGE>

32.  NUMBER OF DIRECTORS

     Until otherwise determined by resolution of the Company's shareholders, the
Board of  Directors  shall  consist  of not less  than  three  (3) nor more than
thirteen (13) Directors, including at least two (2) External Directors.

33.  ELECTION AND REMOVAL OF DIRECTORS

     Directors shall be elected at the Annual General Meeting by the vote of the
holders of a simple majority of the voting power  represented at such meeting in
person or by proxy or by written  ballot,  as shall be permitted,  and voting on
the election of directors.  The Directors so elected shall hold office until the
next Annual  General  Meeting.  The  holders of a simple  majority of the voting
power  represented at a General  Meeting and voting thereon shall be entitled to
remove  any  Director(s)  from  office,  to  elect  directors  in  place  of the
Director(s) so removed or to fill any vacancy,  however created, on the Board of
Directors.  Notwithstanding  anything  to the  contrary  herein,  the  term of a
Director  may  commence  as of a date  later  than the  date of the  shareholder
resolution  electing  said  Director,   if  so  specified  in  said  shareholder
resolution.

34.  CONTINUING DIRECTORS IN THE EVENT OF VACANCIES

     (a) Any vacancy in the Board of Directors,  however occurring,  including a
vacancy resulting from an enlargement of the Board, may be filled by a vote of a
majority of the Directors then in office,  even if less than quorum.  A Director
elected to fill a vacancy  shall be elected to hold office until the next annual
General Meeting.

     (b) If the  position of one or more  Directors is vacated,  the  continuing
Directors  shall be entitled to act in every  matter so long as their  number is
not less than the  statutory  minimum  number  required at the time.  If, at any
time, their number decreases below said statutory minimum number,  they will not
be entitled to act except in an emergency, and they may fill vacant positions on
the  Board of  Directors  pursuant  to  Article  34(a)  herein or call a General
Meeting  of the  Company  for the  purpose  of  electing  Directors  to fill any
vacancies.

35.  VACATION OF OFFICE

     (a) The  office  of a  Director  shall be  vacated,  ipso  facto,  upon the
occurrence  of any of the  following:  (i)  such  Director's  death,  (ii)  such
Director is convicted  of a crime as  described in Section 232 of the  Companies
Law, (iii) such Director is removed by a court or law in accordance with Section
233 or 247 of the Companies Law, (iv) such Director becomes legally incompetent,
(v) if such Director is an individual,  such Director is declared bankrupt, (vi)
if such  Director  is a  corporate  entity,  upon its  winding-up,  liquidation,
whether  voluntary or  involuntary  or (vii) upon a resolution  of the Company's
shareholders pursuant to Article 33(a) above.

                                     - 15 -

<PAGE>

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

36.  REMUNERATION OF DIRECTORS

     Each Director shall be paid remuneration by the Company for his services as
Director  as  such  remuneration  shall  have  been  approved  pursuant  to  the
provisions of the Companies Law.

37.  NO ALTERNATE DIRECTORS

     A Director may not appoint an alternate for himself.

                      PROCEEDINGS OF THE BOARD OF DIRECTORS

38.  MEETINGS

     (a) The Board of Directors  may meet and adjourn its meetings  according to
the Company's  needs but at least once in every three (3) months,  and otherwise
regulate such meetings and proceedings as the Directors  think fit.  Meetings of
the Board of  Directors  may be held  telephonically  or by any  other  means of
communication provided that each Director participating in such meeting can hear
and be heard by all other Directors participating in such meeting.

     (b) Any  Director  may at any  time  convene  a  meeting  of the  Board  of
Directors,  but not less than seven (7) days' notice (oral or written)  shall be
given of any  meeting so  convened.  The failure to give notice to a Director in
the manner  required  hereby may be waived by such Director.  Upon the unanimous
approval of the  Directors,  a meeting of the Board of Directors can be convened
without any prior  notice.  The notice of a meeting  shall include the agenda of
the meeting.

39.  QUORUM

     A quorum at a meeting of the Board of Directors shall be constituted by the
presence,  in  person  or by any  other  means of  communication  by  which  the
Directors  may hear each other  simultaneously,  of a majority of the  Directors
then in office who are lawfully  entitled to participate in the meeting and vote
thereon (as conclusively  determined by the Chairman of the Board of Directors).
No business  shall be transacted  at a meeting of the Board of Directors  unless
the  requisite  quorum is present as  aforesaid  when the  meeting  proceeds  to
business.

40.  CHAIRMAN OF THE BOARD OF DIRECTORS

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

                                     - 16 -

<PAGE>

     The General  Manager of the Company  shall not serve as the Chairman of the
Board of  Directors,  and the  Chairman of the Board of  Directors  shall not be
granted authorities of the General Manager,  unless such appointment,  or grant,
as the case may be, is  approved  by the  shareholders  in a General  Meeting in
accordance  with  Section  121(c) of the  Companies  Law. The office of Chairman
shall not entitle the holder to a second or casting vote.

41.  VALIDITY OF ACTS DESPITE DEFECTS

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

                                 GENERAL MANAGER

42.  GENERAL MANAGER

     (a) The  Board of  Directors  shall  appoint  from time to time one or more
persons as General Manager(s) of the Company.

     (b) The General Manager shall be responsible for the day-to-day  management
of the affairs of the Company within the framework of the policies determined by
the Board of Directors  from time to time and subject to the  discretion  of the
Board of Directors.

     (c)  The  General  Manager  shall  have  full  managerial  and  operational
authority to carry out all the activities  which the Company may carry on by law
and  under  these  Articles  and which  have not been  vested by law or by these
Articles in any other organ of the Company. The General Manager shall be subject
to the supervision of the Board of Directors.

     (d) The General  Manager may,  subject to the  provisions  of the Companies
Law, from time to time, appoint a Secretary to the Company, as well as officers,
agents, employees and independent contractors,  as the General Manager may think
fit, and may terminate the service of any such person.  The General Manager may,
subject to the provisions of the Companies Law, determine the powers and duties,
as well as the salaries and emoluments, of all such persons.

                                     MINUTES

43.  MINUTES

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

                                     - 17 -

<PAGE>

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

     (c) Subject to the provisions of the Companies Law, each shareholder  shall
have the right to inspect the minutes of the General Meetings.

                                    DIVIDENDS

44.  DECLARATION OF DIVIDENDS

     Subject to the Companies  Law, the Board of Directors may from time to time
declare,  and cause the  Company  to pay  dividends  out of the  profits  of the
Company.  Subject to the Companies Law, the Board of Directors  shall  determine
the time for payment of such dividends and the record date for  determining  the
shareholders entitled thereto.

45.  AMOUNT PAYABLE BY WAY OF DIVIDENDS

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

     (b) Shares which are fully paid up or which are credited as fully or partly
paid within any period which in respect thereof dividends are paid shall entitle
the  holders  thereof  to a dividend  in  proportion  to the  amount  paid up or
credited  as paid up in respect of the  nominal  value of such shares and to the
date of payment thereof (pro rata temporis).

46.  INTEREST

     No dividend shall carry interest as against the Company.

47.  UNCLAIMED DIVIDENDS

     All  unclaimed  dividends  payable in respect of a share may be invested or
otherwise  made use of by the Board of Directors  for the benefit of the Company
until  claimed.  The payment by the Directors of any  unclaimed  dividend 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  unclaimed  after a like period from the date the
same were payable, shall be forfeited and shall revert to the Company, PROVIDED,
HOWEVER,  that the Board of Directors may, at its discretion,  cause the Company
to pay any such dividend,  or any part thereof,  to a person who would have been
entitled thereto had the same not reverted to the Company.

                                     - 18 -

<PAGE>

                                    ACCOUNTS

48.  AUDITORS

     The outside  auditor(s)  of the Company shall be appointed by resolution of
the  Company's  shareholders  at the  General  Meeting  and  shall  serve  until
its/their re-election, removal or replacement by subsequent resolution, provided
that each term of service shall not extend beyond the third Annual Meeting after
the Annual Meeting at which such auditor was appointed. The authorities,  rights
and duties of the outside  auditor(s)  of the  Company,  shall be  regulated  by
applicable law. The Board of Directors shall have the power and authority to fix
the remuneration of the auditor(s).

                               RIGHTS OF SIGNATURE

49.  RIGHTS OF SIGNATURE

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

                                     NOTICES

50.  NOTICES

Without derogating from the provisions of Article 20:

     (a) In the event the  Company  elects to send any  written  notice or other
document to any of its shareholders  such notice may be served either personally
or by sending it by prepaid  registered mail (airmail if sent to a place outside
Israel)  addressed  to such  shareholder  at his  address  as  described  in the
Register of  Shareholders  or such other  address as he may have  designated  in
writing  for  the  receipt  of  notices  and  other  documents.  In the  event a
shareholder elects to send the Company any written notice or other document such
notice may be served by  tendering  the same in person to the  Secretary  or the
General  Manager of the  Company at the  principal  office of the  Company or by
sending it by prepaid  registered mail (airmail if posted outside Israel) to the
Company at its  Registered  Address.  Any such notice or other document shall be
deemed to have been  served  forty-eight  (48)  hours  after it has been  posted
(seven (7) business days if sent internationally),  or when actually received by
the  addressee if sooner than two days or seven days,  as the case may be, after
it has been posted, or when actually tendered in person, to such shareholder (or
to the Secretary or the General Manager),  provided, however, that notice may be
sent by cablegram,  telex,  telecopier (facsimile) or other electronic means (to
an  address  provided  to the  Company  by any  shareholder)  and  confirmed  by
registered mail as aforesaid, and such notice shall be deemed to have been given
twenty-four (24) hours after such cablegram, telex, telecopy or other electronic
communication  has been sent  (provided,  that  electronic  confirmation  of the
successful  sending of such notice was  received) or when  actually  received by
such shareholder (or by the Company),  whichever is earlier.  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 50(a).

                                     - 19 -

<PAGE>

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

     (c) Any  shareholder  whose  address is not  described  in the  Register of
Shareholders,  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.

                             INSURANCE AND INDEMNITY

51.  INDEMNITY AND INSURANCE

     (a)  Indemnification

          (i) Subject to the  provisions  of the  Companies  Law,  including the
     receipt of all approvals as required  therein or under any applicable  law,
     the Company may  indemnify an Office  Holder with respect to the  following
     liabilities and expenses,  provided that such  liabilities or expenses were
     incurred  by such  Office  Holder in such  Office  Holder's  capacity as an
     Office Holder of the Company:

               (1) a  monetary  liability  imposed on or  incurred  by an Office
          Holder pursuant to a judgment in favor of another person,  including a
          judgment  imposed  on such  Office  Holder  in a  settlement  or in an
          arbitration decision that was approved by a court of law;

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

               (3) reasonable legal expenses,  including  attorney's fees, which
          the Office Holder incurred or with which the Office Holder was charged
          by a court of law, in a proceeding  brought against the Office Holder,
          by the Company,  on its behalf or by another person,  or in a criminal
          prosecution in which the Office Holder was acquitted, or in a criminal
          prosecution  in which the Office  Holder was  convicted  of an offense
          that does not require proof of criminal intent.

          (ii) The foregoing  indemnification may be procured by the Company (a)
     retroactively  and (b) as a  commitment  in advance to  indemnify an Office
     Holder,  provided that, in respect of Article 51(a)(i)(1),  such commitment
     shall be limited  to (i) such  events  that in the  opinion of the Board of
     Directors are  foreseeable in light of the Company's  actual  operations at
     the time the undertaking to indemnify is provided,  and (ii) to the amounts
     or  criterion  that the  Board of  Directors  deems  reasonable  under  the
     circumstances,  and  further  provided  that such  events  and  amounts  or
     criterion are set forth in the undertaking to indemnify, and which shall in
     no  event  exceed,  in the  aggregate,  twenty  five  percent  (25%) of the
     Company's shareholder's equity at the time of the indemnification .

                                     - 20 -

<PAGE>

     (b)  Insurance

          (i) Subject to the  provisions  of the  Companies  Law,  including the
     receipt of all approvals as required  therein or under any applicable  law,
     the Company may enter into an agreement to insure an Office  Holder for any
     responsibility  or liability  that may be imposed on such Office  Holder in
     connection  with an act  performed  by such  Office  Holder in such  Office
     Holder's capacity as an Office Holder of the Company,  with respect to each
     of the following:

               (1)  violation of the duty of care of the Office  Holder  towards
          the Company or towards another person;

               (2) breach of the duty of loyalty  towards the Company,  provided
          that the Office Holder acted in good faith and with reasonable grounds
          to assume that the such action would not  prejudice the benefit of the
          Company; and

               (3) a financial  obligation  imposed on the Office Holder for the
          benefit of another person.

          (ii)  Articles  51(a) and  51(b)(i)  shall not apply  under any of the
     following circumstances:

               (1) a breach of an Office  Holder's  duty of  loyalty,  except as
          specified in Article 51(b)(i)(2);

               (2) a reckless or  intentional  violation  of an Office  Holder's
          duty of care;

               (3) an action intended to reap a personal gain illegally; and

               (4) a fine or ransom levied on an Office Holder.

          (iii) The Company may procure  insurance  for or indemnify  any person
     who is not an Office Holder,  including without  limitation,  any employee,
     agent, consultant or contractor, provided, however, that any such insurance
     or  indemnification  is in accordance with the provisions of these Articles
     and the Companies Law.

                                     - 21 -

<PAGE>

                                     MERGER

52.  MERGER

     A merger (as defined in the Companies Law) of the Company shall require the
approval  of the  holders of a majority  of seventy  five  percent  (75%) of the
voting  power  represented  at the  General  Meeting in person or by proxy or by
written ballot, as shall be permitted, and voting thereon in accordance with the
provisions of the Companies Law.

                                   WINDING UP

53.  WINDING UP

     If the  Company  be wound  up,  then,  subject  to  applicable  law,  after
satisfaction   of  the  Company's   liabilities  to  creditors,   the  Company's
liquidation  proceeds shall be distributed to the shareholders of the Company in
proportion  to the nominal value of their  respective  holdings of the shares in
respect of which such  distribution is being made. A voluntary winding up of the
Company  shall  require  the  approval  of the holders of a majority of at least
seventy five percent (75%) of the voting power  represented at a General Meeting
in person or by proxy or by written  ballot,  as shall be permitted,  and voting
thereon.

                           AMENDMENT OF THESE ARTICLES

54.  Any  amendment  of these  Articles  shall  require the  approval of the
holders of a simple  majority  of the voting  power  represented  at the General
Meeting in person or by proxy or by written ballot,  as shall be permitted,  and
voting thereon.

                                     - 22 -

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