Exhibit 3.2

                                    ARTICLES



                               IN ACCORDANCE WITH



                         THE COMPANIES LAW, 5759 - 1999

                                       OF

                       LIPMAN ELECTRONIC ENGINEERING LTD.



 Stamped:  THE MINISTRY OF JUSTICE
           THE REGISTRAR OF COMPANIES AND PARTNERSHIPS
           AUGUST 20, 2002
           RECEIVED









                                TABLE OF CONTENTS



SECTION   SUBJECT                                                                    PAGE
-------   -------                                                                    ----

1.        Name of the Company                                                          3
2.        Objects of the Company                                                       3
3.        Interpretation                                                               3
4.        The Company's Registered Share Capital and the Rights Attached to the        3
          Shares
5.        Public Company                                                               4
6.        Limited Liability                                                            4
7.        Jointly Held Shares and Share Certificates                                   4
8.        Remedies of the Company in relation to Shares Not Paid Up                    5
9.        Transfer of Shares                                                           6
10.       Alteration of Capital                                                        9
11.       Alteration of Rights of Classes of Shares                                    9
12.       General Meetings                                                            10
13.       Convening General Meetings                                                  11
14.       Proceedings at General Meetings                                             12
15.       Voting at the General Meetings                                              13
16.       The Majority Required for Votes at General Meetings                         15
17.       The Board of Directors                                                      17
18.       The Appointment of the Board of Directors and Termination of Office         17
19.       Meetings of the Board of Directors                                          20
20.       Voting at the Board of Directors                                            22
21.       Committees of the Board of Directors                                        23
22.       Audit Committee                                                             23
23.       Secretary                                                                   24
24.       General Manager                                                             24
25.       Exemption, Insurance and Indemnity                                          24
26.       Internal Auditor                                                            27
27.       Auditing Accountant                                                         27
28.       Signing on behalf of the Company                                            27
29.       Dividends and Bonus Shares                                                  28
30.       Redeemable Securities                                                       28
31.       Accounts                                                                    29
32.       Donations                                                                   29
33.       Notices                                                                     29



                                      -2-




1.     NAME OF THE COMPANY

       The name of the company is LIPMAN ELECTRONIC ENGINEERING LTD.

       Its number with the Registrar of Companies: 52 - 003894 - 4.

2.     OBJECTS OF THE COMPANY

       The object of the Company is to engage in any lawful business.

3.     INTERPRETATION

       3.1    Words importing the singular shall include the plural, and vice
              versa, and words importing the masculine shall include the
              feminine, and vice versa.

       3.2    Unless special definitions are included in these Articles for
              certain terms, each word and expression in these Articles shall
              have the meaning ascribed thereto in the Companies Law 5759 - 1999
              (in these Articles: "the Companies Law"), unless it contains a
              contradiction to the written subject, or the contents thereof.

       3.3    For the avoidance of doubt, it is hereby clarified that as regards
              matters formalized in the Companies Law in such manner that
              stipulations may be made with respect to the arrangements
              pertaining thereto in the Articles, and these Articles do not
              include provisions with respect thereto which are different to the
              provisions of the Companies Law - the provisions of the Companies
              Law shall apply with respect thereto.

4.     THE COMPANY'S REGISTERED SHARE CAPITAL AND THE RIGHTS ATTACHED TO THE
       SHARES


       4.1    The Company's share capital is NIS 35,000,000 (thirty five
              million) par value, divided into 35,000,000 (thirty five million)
              ordinary shares having a par value of NIS 1.00 each (hereinafter:
              "the Ordinary Shares").

       4.2    All the Ordinary Shares are of equal rights between them for all
              intents and purposes, and each Ordinary Share shall confer on the
              holder thereof:


                                      -3-


              4.2.1      The equal right to participate in and vote at the
                         Company's general meetings, whether ordinary meetings
                         or special meetings, and each of the shares in the
                         Company shall entitle the holder thereof, who is
                         present at the meeting and participating in the vote,
                         whether himself, by proxy or by absentee ballot, to one
                         vote;

              4.2.2      The equal right to participate in the distribution of
                         dividends, whether in cash or in bonus shares, in the
                         distribution of assets or in any other distribution -
                         according to the proportion of the par value of the
                         shares held by them;

              4.2.3      The equal right to participate in the distribution of
                         the Company's surplus assets at the time of dissolution
                         of the Company, according to the proportion of the par
                         value of the shares held by them.

    4.3       The Board of Directors may issue other shares and securities,
              which are convertible or may be exercised into shares, up to the
              limit of the Company's registered share capital. For the purpose
              of calculating the limit of the Company's registered share
              capital, securities which are convertible or may be exercised into
              shares shall be deemed to have been converted or exercised at the
              time of issue thereof.

5.     PUBLIC COMPANY

       The Company is a public company pursuant to the Companies Law.

6.     LIMITED LIABILITY

       The liability of the shareholders for the debts of the Company shall be
       limited to the full amount (par value together with premium) which they
       were required to pay to the Company for the shares, and which has not yet
       been paid by them.

7.     JOINTLY HELD SHARES AND SHARE CERTIFICATES

       7.1    In the event that two people or more are registered in the
              Register of Shareholders as the joint holders of a share, each one
              of them shall be entitled to give binding receipts for any
              dividend or other moneys in connection with the said share.


                                      -4-



       7.2    A shareholder who is registered in the Register of Shareholders is
              entitled to receive from the Company, without payment, within a
              period of three months after the allocation or registration of the
              transfer, one share certificate sealed with the seal with respect
              to all the shares registered in his name, which shall specify the
              number of the shares. In the event of a jointly held share, the
              Company shall issue one share certificate for all the joint
              holders of the share, and the delivery of such certificate to one
              of the joint holders shall be deemed to be delivery to all of
              them.

              Each share certificate shall bear the signature of two directors
              of the Company and/or the signature of one director and the
              secretary of the Company.

       7.3    A share certificate which is defaced, destroyed or lost may be
              renewed based on evidence and guarantees as the Company shall
              demand, from time to time.

8.     REMEDIES OF THE COMPANY IN RELATION TO SHARES NOT FULLY PAID UP

       8.1    Should the consideration not have been given, as the shareholder
              was required to pay to the Company in consideration of his shares,
              in whole or in part, upon such date and terms as determined in the
              terms of allocation of his shares and/or in the Call on Shares as
              stated in Article 8.2 below, the Company is entitled, by a
              resolution of the Board of Directors, to demand the forfeiture of
              the shares whose consideration was not paid in full. Forfeiture of
              the shares shall be implemented only in the event that the Company
              sent to the shareholder notice, in writing, of its intention to
              demand forfeiture of his shares within at least seven days from
              the date of receipt of the notice, in the event that the payment
              is not made during the period as determined in the said notice.

              The Board of Directors may, at any time prior to the date on which
              the forfeited share was sold, re-allocated or transferred in any
              other manner, cancel the forfeiture on such terms as it shall deem
              fit.

              The forfeited shares shall be held by the Company as dormant
              shares or shall be sold to another.


                                      -5-


       8.2    If, according to the terms of allocation of shares, there is no
              date scheduled for the payment of any part of the price payable
              therefor, the Board of Directors may make calls, from time to
              time, upon the shareholders in respect of any moneys as yet unpaid
              on the shares which they hold, and each shareholder shall be
              required to pay to the Company the amount called on his shares at
              the date scheduled therefor, provided that he shall receive
              fourteen days' prior notice of the date and place of payment
              ("Call on Shares"). The notice shall specify that non-payment on
              the scheduled date or prior thereto, at the specified place, may
              cause forfeiture of the shares in respect of which the call was
              made. A Call on Shares may be revoked or postponed to another
              date, all as shall be decided by the Board of Directors.

       8.3    In the absence of any other determination in the terms of
              allocation of the shares, a shareholder shall not be entitled to
              receive a dividend or use any right as a shareholder in respect of
              shares which have not yet been fully paid up.

       8.4    People who are the joint holders of a share shall be jointly and
              severally liable for the payment of the amounts due to the Company
              in respect of the share.

       8.5    Nothing stated in these Articles shall derogate from any other
              remedy of the Company with respect to a shareholder who has not
              paid his debt to the Company in respect of his shares.

9.     TRANSFER OF SHARES

       9.1    The shares of the Company are transferable.

       9.2    The transfer of shares must be made in writing, according to such
              draft as specified below, or as close as possible to the draft
              specified below:

              I, the undersigned (hereinafter: the "Transferor") of
              _____________ , in consideration of the total of NIS _____________
              (in words: ___________ New Israel Shekels) as paid to me by
              _____________ of ____________ (who shall be termed hereinafter:
              the "Transferee"), hereby transfer to the Transferee ________
              shares, each one of NIS ________ (in words: ___________ New Israel
              Shekels), which are marked by numbers from ___ to ___ , of the
              company ___________



                                      -6-


              Ltd., to be held by the Transferee, by the executors of his Will,
              the executors of his estate, his representatives and those who
              shall acquire the transfer from him, pursuant to the terms
              according to which I held these shares prior to the signing of
              this instrument.

              And I, the Transferee, hereby consent to receive the said shares
              pursuant to the said terms.

              IN WITNESS WHEREOF THE PARTIES HERETO HAVE HEREUNTO SET THEIR
              HANDS

              This ____________ day of ______________ , ______

              ----------------------                 ----------------------
              Signature of the Transferor            Witness to Signature

              ----------------------                 ----------------------
              Signature of the Transferee            Witness to Signature of the
                                                     Transferee

       9.3    The transfer of shares shall not be registered unless -

              9.3.1      The proper instrument of the transfer of shares shall
                         be delivered to the Company at its registered offices,
                         together with the certificates of the shares due to be
                         transferred, if issued. The instrument of transfer
                         shall be signed by the Transferor and signed by a
                         witness verifying the signature of the Transferor. In
                         the event of the transfer of shares which are not fully
                         paid up on the date of the transfer, the instrument of
                         transfer shall also be signed by the Transferee, and
                         signed by a witness verifying the signature of the
                         Transferee; or

              9.3.2      A court order shall be delivered to the Company for
                         amendment of the registration; or

              9.3.3      It was proven to the Company that the conditions in the
                         law for the assignment of title to the share were
                         satisfied.

       9.4    The transfer of shares which are not fully paid up is subject to
              the approval of the Board of Directors, which is entitled to
              withhold its approval at its absolute discretion, and without
              giving reasons therefor.


                                      -7-


       9.5    The administrators and executors of the estate of a sole
              shareholder who died, or in the event that there are no
              administrators or executors, people who have title in their
              capacity as the heirs of the sole shareholder who died, shall be
              the only persons recognized by the Company as having any title to
              the share which was registered in the name of the deceased.

       9.6    Should a share be registered in the name of two or more holders,
              the Company shall recognize only the surviving holder or the
              surviving holders as the people having title to the share or any
              benefit therein. Should a share be registered in the name of a
              number of holders jointly, each one of them shall be entitled to
              transfer his right therein.

       9.7    The Transferee shall be deemed to be the shareholder with respect
              to the transferred shares from the moment of registration of his
              name in the Register of Shareholders.

       9.8    The Company may close the transfer books and the Registers of
              Members for such period of time as the directors shall deem fit,
              provided that the period of closure of any such book shall not
              exceed thirty days each year. The Company shall notify the
              shareholders of the closure of the books in such manner as
              determined in Article 33 below.

       9.9    The Company may recognize a receiver or liquidator of a member in
              dissolution or in liquidation or a trustee in bankruptcy or an
              official receiver of a bankrupt member as having title to the
              shares registered in the name of the said member.

       9.10   The receiver or liquidator of a member in dissolution or in
              liquidation or the trustee in bankruptcy or the official receiver
              of a bankrupt member, upon producing evidence as the Board of
              Directors shall deem sufficient, which attests that he does indeed
              bear the position by virtue of which he acts pursuant to this
              Article, or which attests to a description of his possession -
              shall be entitled, with the consent of the Board of Directors
              (which shall be entitled to withhold its consent without giving
              any reason for such withholding) to be registered as a member with
              respect to the said shares, or shall be entitled to transfer the
              shares, subject to the provisions with respect to transfer
              contained in these Articles.


                                      -8-


10.    ALTERATION OF CAPITAL

       10.1   The general meeting may increase the Company's registered share
              capital by creating new shares of an existing class or of a new
              class, all as shall be determined by a resolution of the general
              meeting.

       10.2   The general meeting may cancel registered share capital not yet
              allocated, provided that the Company has made no commitment,
              including a conditional commitment, to allocate the shares.

       10.3   The general meeting may, subject to the provisions of any law:

              10.3.1     Consolidate and divide its share capital or any part
                         thereof into shares having a larger par value than that
                         of the existing shares.

              10.3.2     Divide its share capital, in whole or in part, by
                         sub-dividing its existing shares, into shares having a
                         smaller par value than that of the existing shares.

              10.3.3     Reduce its share capital and any reserve fund for
                         capital redemption in such manner, upon such terms and
                         upon receipt of such approval as the Companies Law
                         shall require.

       10.4   A resolution at the general meeting concerning the increase of the
              Company's registered share capital and/or the reduction thereof
              shall be passed with a simple majority of the votes of those
              shareholders voting at the meeting.

       10.5   Unless otherwise specified in these Articles or in the terms of
              issue of any shares, all new share capital shall be deemed to be
              part of the original share capital, and shall be subject to the
              same provisions of the Articles with respect to payment of Calls
              on Shares, transfer, forfeiture or any other provision which
              applies to the original share capital.

11.      ALTERATION OF RIGHTS OF CLASSES OF SHARES

       11.1   Until such time as determined otherwise in the terms of issue of
              the shares and subject to the provisions of any law, the rights of
              any class of shares may be


                                      -9-


              altered, after a decision is passed by the Company and with the
              approval of a resolution passed by a simple majority of those
              present at the general meeting of the shareholders of that class
              or consent, in writing, of all the shareholders of that class. The
              provisions of the Company's Articles with respect to general
              meetings shall apply, with the suitable modifications, to the
              general meeting of the holders of the class.

       11.2   The rights conferred on the holders of shares of a particular
              class issued with special rights shall not be deemed to have been
              altered by the creation or issue of additional shares of equal
              rank thereto, unless otherwise stipulated in the terms of issue of
              the said shares.

12. GENERAL MEETINGS

       12.1   The Company's resolutions with respect to the following matters
              shall be passed at the general meeting:

              12.1.1     Changes to the Articles.

              12.1.2     The exercise of the powers of the Board of Directors at
                         times when the Board of Directors is unable to perform
                         its duties;

              12.1.3     Appointment of an auditing accountant to the Company,
                         and termination of appointment;

              12.1.4     Appointment of directors, including outside directors;

              12.1.5     Approval of acts and transactions which are subject to
                         the approval of the general meeting pursuant to the
                         provisions of the Companies Law and any other law;

              12.1.6     Increase of registered share capital and reduction
                         thereof;

              12.1.7     A merger, as defined in the Companies Law.



                                      -10-


13. CONVENING GENERAL MEETINGS

       13.1   General meetings shall be convened at least once a year at such
              place and time as shall be determined by the Board of Directors,
              but not later than fifteen months after the last general meeting.
              These general meetings shall be termed "Annual Meetings", and the
              rest of the meetings of the Company shall be termed "Special
              Meetings".

       13.2   The agenda of the Annual Meeting shall include discussion of the
              Report of the Board of Directors and of the financial statements,
              as required by law. The Annual Meeting shall appoint an auditing
              accountant, shall appoint the Board of Directors pursuant to these
              Articles, and shall transact all the other business whose
              transaction is required at the Annual General Meeting of the
              Company, pursuant to these Articles or pursuant to the Companies
              Law, and any other matter as shall be determined by the Board of
              Directors.

       13.3   The Board of Directors may convene a Special Meeting by its
              resolution, and is required to convene a general meeting should it
              receive a requisition, in writing, of any of the following
              ("Requisition for Convening a Meeting"):

              13.3.1       Two directors or one-quarter of the directors in
                           office; and/or

              13.3.2       A shareholder, being one or more persons, who has at
                           least five percent of the issued capital and at least
                           one percent of the voting rights at the Company;
                           and/or

              13.3.3       A shareholder, being one or more persons, who has at
                           least five percent of the voting rights at the
                           Company.

       13.4       Any Requisition for Convening a Meeting must specify the
                  purposes for which the meeting is to be called, and shall be
                  signed by the persons requesting the meeting, and shall be
                  delivered to the Company's registered offices. The Requisition
                  for Convening a Meeting may consist of a number of instruments
                  having the identical form, when each one is signed by one or
                  more requisitioners.

       13.5       A Board of Directors which is requested to convene a general
                  meeting shall convene same within twenty-one days from the
                  date on which the Requisition


                                      -11-


                  for Convening a Meeting was submitted to it, provided that the
                  date of the meeting shall be not later than thirty five days
                  from the date of this publication.

       13.6       Notice of a general meeting shall be given in such manner as
                  set forth in the Companies Law.

                  The Company shall not give personal notice with respect to a
                  general meeting to shareholders who are registered in the
                  Register of Shareholders.

       13.7       The date of convening a general meeting, which is subject to
                  Article 7 of Chapter Two of the Third Part of the Companies
                  Law, shall be not later than sixty days from the date of
                  publication of the notice of the meeting.

14. PROCEEDINGS AT GENERAL MEETINGS

       14.1       Proceedings at the general meeting shall not commence unless a
                  quorum is present at the time of commencement of proceedings.
                  The presence of at least two shareholders, who have at least
                  one-third (33.3%) of the voting rights (including presence by
                  proxy or by absentee ballot) within half an hour from the time
                  scheduled for the commencement of the meeting shall constitute
                  a quorum.

       14.2       If a quorum is not present at the expiration of half an hour
                  from the time scheduled for the commencement of the meeting,
                  the meeting shall be adjourned by one week to the same day,
                  time and place, or to a later date, if stated in the
                  invitation to the meeting or in the notice of the meeting
                  ("the Adjourned Meeting").

       14.3       The quorum for the commencement of the Adjourned Meeting shall
                  be whatever the number of participants.

       14.4       At the Adjourned Meeting, solely that business shall be
                  transacted which was on the agenda of the meeting at which the
                  adjournment was decided upon.

       14.5       The chairman of the Board of Directors shall serve as the
                  chairman of the general meeting. Should the chairman of the
                  Board of Directors be absent from the meeting within fifteen
                  minutes from the time scheduled for the meeting or


                                      -12-



                  should he refuse to act as chairman of the meeting, the
                  chairman shall be elected by the general meeting.

       14.6       A general meeting where a quorum is present may decide to
                  adjourn the meeting to another date and place as it shall
                  determine, and in such an event, notices and invitations to
                  the Adjourned Meeting shall be given as stated in Article 13.6
                  above.

15. VOTING AT THE GENERAL MEETING

       15.1       A shareholder of the Company may vote at the general meetings
                  in person or by proxy or by absentee ballot.

                  Shareholders who are entitled to participate in and vote at
                  the general meeting are the shareholders at that time as shall
                  be determined by the Board of Directors in its resolution to
                  convene a general meeting, and subject to any law.

       15.2       In any vote, every shareholder shall have such number of votes
                  as corresponds to the number of shares of which he is the
                  holder.

       15.3       A declaration by the chairman of the meeting that a resolution
                  has been carried unanimously or by a particular majority or
                  lost or not carried by a particular majority shall be prima
                  facie evidence of this fact.

       15.4       In the case of an equality of votes at a meeting, the chairman
                  of the meeting shall not have an additional vote or a casting
                  vote, and the resolution put to the vote shall be rejected.

       15.5       The shareholders of the Company may, with respect to any
                  matter on the agenda of the meeting, vote at a general meeting
                  (including at a class meeting) by absentee ballot, provided
                  that the Board of Directors subject to any law did not
                  invalidate, in its resolution to convene the general meeting,
                  the possibility of voting on the said matter by means of
                  absentee ballot.

                  Should the Board of Directors prohibit voting by means of
                  absentee ballot, the fact of the invalidation of the
                  possibility of voting by means of absentee ballot


                                      -13-


                  shall be stated in the notice of convening the meeting,
                  pursuant to Article 13.6 above.

       15.6       A shareholder may state the manner of his voting in the
                  absentee ballot and deliver it to the Company by the time of
                  commencement of the meeting. An absentee ballot in which a
                  shareholder stated the manner of his voting, which reached the
                  Company by the time of commencement of the meeting (including
                  the Adjourned Meeting) shall be deemed to be presence at the
                  meeting for the purpose of constitution of a quorum as stated
                  in Article 14.1 above.

       15.7       The appointment of a proxy shall be in writing, signed by the
                  appointor. A corporation shall vote by means of its
                  representatives, who shall be appointed by a document duly
                  signed by the corporation.

       15.8       A vote in accordance with the terms of the power of attorney
                  shall be legal, even if prior to the vote, the appointor
                  passed away or became incapacitated, was dissolved, went
                  bankrupt, or revoked the instrument of appointment or
                  transferred the share in respect of which it was given, unless
                  notice, in writing, was received at the office prior to the
                  meeting that the shareholder had passed away, become
                  incapacitated, was dissolved, went bankrupt, or revoked the
                  instrument of appointment or transferred the said share.

       15.9       The instrument of appointment of a proxy and a power of
                  attorney or a copy approved by an attorney shall be deposited
                  at the Company's registered offices at least 48 (forty eight)
                  hours prior to the time scheduled for the meeting or for the
                  Adjourned Meeting at which the person named in the instrument
                  intends to vote pursuant thereto.

       15.10      An instrument appointing a proxy to vote (whether for a
                  particular meeting or otherwise) shall be drawn up in the
                  following form, or in another similar form, provided that all
                  the details specified below shall appear therein:

                  I, the undersigned, ______________ of __________________ ,
                  being a member of __________________ Ltd. (hereinafter: "the
                  Company") who is entitled to ____ votes in the Company, hereby
                  appoint ______________ of __________________ , or failing him,
                  ______________ of



                                      -14-


                  __________________ , as my proxy to vote in my name and on my
                  behalf at the (ordinary / extraordinary - as the case may be)
                  meeting of the Company to be held on the (date) ______________
                  of (month) ______________ , (year) _______ , and at any
                  adjournment thereof.

                  IN WITNESS WHEREOF THE PARTIES HERETO HAVE HEREUNTO SET THEIR
                  HANDS

                  This ____________ day of ______________ , ______

                  --------------------------
                  Signature of the Appointor

       15.11      A shareholder of the Company shall be entitled to vote at
                  meetings of the Company through a number of proxies, as shall
                  be appointed by him, provided that each proxy shall be
                  appointed in respect of different parts of the shares held by
                  the shareholder. There shall be no impediment to the situation
                  whereby each such proxy shall vote at the meetings of the
                  Company in a different manner.

       15.12      Should a shareholder be legally incapacitated, he may vote by
                  his board of trustees, receiver, natural guardian or other
                  legal guardian, and they may vote in person or by proxy or by
                  means of absentee ballot.

       15.13      In the event that two people or more are the joint holders of
                  a share, then in the vote on any matter, the vote shall be
                  accepted of the person whose name stands first in the Register
                  of Shareholders as the holder of the said share, either in
                  person or by proxy, and it is he who may deliver to the
                  Company absentee ballots.

16. THE MAJORITY REQUIRED FOR VOTES AT THE GENERAL MEETING

       16.1       A resolution at the general meeting shall be passed by a
                  simple majority, unless another majority is determined in the
                  Companies Law or in these Articles.

       16.2       Resolutions of the Company in the following matters shall be
                  passed at the general meeting by a special majority, as
                  specified beside them:


                                      -15-


                  16.2.1      In voluntary dissolution, the liquidator is
                              authorized to pay to any particular class of
                              creditors their full debt, to reach a compromise
                              or arrangement with creditors, and to reach a
                              compromise in the matter of Calls on Shares or
                              liability for Calls on Shares, and all of the
                              above shall be implemented solely if the
                              resolutions to implement same are passed at the
                              general meeting by a special majority of 75%
                              (seventy-five percent) of the votes cast at the
                              meeting.

                  16.2.2      A resolution on the appointment of the General
                              Manager to be the chairman of the Board of
                              Directors shall be passed by the majority
                              determined in section 121 of the Companies Law or
                              any other section as shall replace same.

                  16.2.3      A resolution on the appointment of outside
                              directors to the Company shall be passed at the
                              general meeting by the majority required in
                              section 239 of the Companies Law or any other
                              section as shall replace same.

                  16.2.4      A resolution on the approval of acts which are
                              deemed to be a breach of fiduciary duty by
                              officers shall be passed at the general meeting by
                              the majority required in section 255 of the
                              Companies Law or any other section as shall
                              replace same.

                  16.2.5      A resolution on the approval of an exceptional
                              transaction with a controlling shareholder of the
                              Company, and a resolution on the engagement of the
                              Company with a shareholder of the Company who is
                              also an officer, shall be passed at the general
                              meeting by the majority required in section 275 of
                              the Companies Law or any other section as shall
                              replace same.

                  16.2.6      A resolution on the approval of a merger shall be
                              passed at the Company by the majority specified in
                              section 320(c) and 320(d) of the Companies Law or
                              any other section as shall replace same.


                                      -16-



17. BOARD OF DIRECTORS

       The Board of Directors shall formulate the Company's policy and shall
       supervise the performance of the duties of the General Manager and his
       acts. Any power of the Company which was not granted by the Companies Law
       or these Articles to another organ, may be exercised by the Board of
       Directors.

18.    APPOINTMENT OF THE BOARD OF DIRECTORS AND TERMINATION OF OFFICE

       18.1       The number of directors of the Company (including outside
                  directors) shall be determined from time to time by the Annual
                  General Meeting, provided that it shall be not less than three
                  and shall not exceed fifteen.

       18.2       The directors of the Company shall be elected at the Annual
                  Meeting and/or a Special Meeting, and shall serve in office
                  until the end of the next Annual Meeting or until they cease
                  serving in office pursuant to the provisions of the Articles.
                  Should at a general meeting of the Company new directors not
                  be elected in the minimum number as determined by the
                  Articles, the directors who were in office until the said
                  meeting shall continue to serve in office until they are
                  replaced by the general meeting of the Company.

       18.3       In addition to that stated in Article 18.2 above, the Board of
                  Directors may appoint a director in place of a director whose
                  office is vacated and/or as an addition to the Board of
                  Directors, and subject to the maximum number of directors on
                  the Board of Directors as stated in Article 18.1 above. The
                  appointment of a director by the Board of Directors shall be
                  in effect until the next Annual Meeting or until he shall
                  cease serving in office pursuant to the provisions of the
                  Articles.

       18.4       A director whose term of office has expired may be re-elected.

       18.5       The term of office of a director shall commence on the date of
                  his appointment by the Annual Meeting and/or the Special
                  Meeting and/or the Board of Directors or on a later date,
                  should such date be determined in the resolution of
                  appointment of the Annual Meeting and/or the Special Meeting
                  and/or the Board of Directors.


                                      -17-


       18.6       With the exception of insofar as concerns a director whose
                  term of office has expired when the date of the meeting falls
                  due, or a person recommended to serve as a director by the
                  Board of Directors, a candidate for the office of director
                  shall not be proposed at a general meeting of the Company,
                  unless, not less than 48 (forty-eight) hours and not more than
                  21 (twenty-one) days prior to the time scheduled for the
                  general meeting, notice, in writing, is transferred to the
                  Company's office, signed by the member, qualified to
                  participate in the meeting for which the notice was sent and
                  to vote at the said meeting, of his intention to propose that
                  candidate for election to the office of director, when the
                  consent, in writing, of the candidate to be so elected shall
                  be attached thereto.

       18.7       The Board of Directors shall elect one of its number to be
                  chairman of the Board of Directors. If no chairman is elected
                  or if the chairman is not present at the expiration of fifteen
                  minutes after the time scheduled for the meeting, the
                  directors present shall elect one of their number to be
                  chairman of the said meeting, and the director so elected
                  shall run the meeting and sign the minutes of the meeting.

                  The chairman of the Board of Directors shall not be the
                  General Manager of the Company, unless the conditions exist as
                  listed in section 121(c) of the Companies Law.

       18.8       The general meeting may remove any director from his office
                  prior to the end of his term of office, whether the director
                  was appointed by the general meeting by virtue of Article 18.2
                  above or whether the director was appointed by the Board of
                  Directors by virtue of Article 18.3 above, provided that the
                  director was given a reasonable opportunity to present his
                  position to the general meeting.

       18.9       Should the office of a director be vacated, the remaining
                  directors may continue to act, provided that their number
                  shall be not less than the minimum number of directors as set
                  forth in the Articles. Should the number of directors be less
                  than the said minimum number, the remaining directors may act
                  solely in order to fill the office of the director which was
                  vacated as stated in Article


                                      -18-


                  18.3 above or in order to convene a general meeting of the
                  Company, and prior to the holding of the said meeting, they
                  may act in order to run the Company's business solely in those
                  matters which cannot be deferred.

       18.10      ALTERNATE DIRECTOR

                  18.10.1     Any member of the Board of Directors may, with the
                              consent of the Board of Directors, appoint for
                              himself a deputy (hereinafter: "Alternate
                              Director"), provided that the Alternate Director
                              so appointed shall not be a person who has been
                              appointed as an Alternate Director for another
                              director and/or a person who is already serving in
                              office as a director of the Company.

                  18.10.2     The appointment or termination of office of an
                              Alternate Director shall be made by written
                              document, signed by the director who appointed
                              same, however, in any event, the term of office of
                              an Alternate Director shall be terminated if one
                              of the events specified in the paragraphs of
                              Article 18.11 below shall occur to the Alternate
                              Director or if the office of the member of the
                              Board of Directors for whom he is serving as a
                              deputy shall be vacated for any reason.

                  18.10.3     An Alternate Director shall be deemed for all
                              purposes to be a director and shall be subject to
                              all the provisions of the law and the provisions
                              of these Articles, with the exception of the
                              provisions regarding the appointment and/or
                              removal of directors as set forth in these
                              Articles.

       18.11      The office of a director shall be vacated in any one of the
                  following events:

                  18.11.1     He resigned his office by notice, signed by him,
                              given to the Company, which specifies the reasons
                              for his resignation;

                  18.11.2     He was removed from his office by the general
                              meeting;

                  18.11.3     He was convicted of an offense as stated in
                              section 232 of the Companies Law;


                                      -19-


                  18.11.4     According to the decision of a court, as stated in
                              section 233 of the Companies Law;

                  18.11.5     He was declared bankrupt;

                  18.11.6     He was declared bankrupt and, in the event that it
                              is a corporation - it decided upon voluntary
                              dissolution or a dissolution order was granted in
                              respect thereof.

                  18.11.7     In the unfortunate event of his death.

       18.12      The terms of office of the members of the Board of Directors
                  shall be approved by the Audit Committee, the Board of
                  Directors and the general meeting, according to this
                  chronological order.

19. MEETINGS OF THE BOARD OF DIRECTORS

       19.1       The Board of Directors shall be convened for a meeting
                  according to the needs of the Company and at least once every
                  three months.

       19.2       The chairman of the Board of Directors may convene the Board
                  of Directors at any time. In addition, the Board of Directors
                  shall hold a meeting, on such matter as shall be specified, in
                  the following events:

                  19.2.1      At the requisition of two directors, however, if
                              at the said time the Board of Directors comprises
                              five directors or less - then at the requisition
                              of one director;

                  19.2.2      At the requisition of one director, if he stated
                              in his requisition for the convening of the Board
                              of Directors that a matter of the Company has come
                              to his attention which allegedly contains a
                              violation of the law or breach of proper business
                              procedure.

                  19.2.3      Should a notice or report of the General Manager
                              require an act of the Board of Directors.

                  19.2.4      Should the auditing accountant inform the chairman
                              of the Board of Directors of material defects in
                              the accounting audit of the Company.


                                      -20-


       19.3       Should a meeting of the Board of Directors not be convened
                  within thirty days from the date of the requisition, the
                  notice or the report as stated in Articles 19.2.1 - 19.2.4
                  above, any of the appointees in these Articles shall be
                  entitled to convene a meeting of the Board of Directors which
                  shall transact the business as specified in the requisition
                  and/or notice and/or report, as the case may be.

       19.4       Notice of a meeting of the Board of Directors shall be
                  delivered to all the members thereof at least 24 (twenty-four)
                  hours prior to the time of the meeting of the Board of
                  Directors. The notice shall be delivered to the address of the
                  director submitted in advance to the Company, and the notice
                  shall state the time of the meeting and the place at which it
                  shall be held, and reasonable details of all the issues on the
                  agenda.

                  Notwithstanding the foregoing, the Board of Directors may
                  gather for a meeting without notice, with the consent of all
                  the directors.

                  A director who is absent from the country shall not be
                  entitled, for the duration of his days of absence, to receive
                  notice of the convening of such meeting, however, the notice
                  shall be given to the Alternate Director who is acting as his
                  deputy, if such Alternate Director was appointed.

       19.5       The quorum for the commencement of the meeting of the Board of
                  Directors shall be a majority of the members of the Board of
                  Directors. If a quorum is not present at the meeting of the
                  Board of Directors at the expiration of half an hour from the
                  time scheduled for the commencement of the meeting, the
                  meeting shall be adjourned to another time as shall be decided
                  by the chairman of the Board of Directors, or in his absence,
                  the directors present at the meeting called, provided that
                  notice of 48 (forty-eight) hours in advance shall be given to
                  all the directors of the time of the adjourned meeting. The
                  quorum for the commencement of the adjourned meeting shall be
                  whatever the number of participants. Notwithstanding the
                  foregoing, the quorum for a discussion and resolution by the
                  Board of Directors on the termination or suspension of the
                  internal auditor from his duties shall be a majority of the
                  members of the Board of Directors.


                                      -21-


       19.6       No business shall be transacted at a meeting of the Board of
                  Directors unless the quorum as required shall be present at
                  the commencement of the meeting, and no resolution shall be
                  passed unless the quorum as required shall be present at the
                  time of voting on the resolution.

       19.7       The Board of Directors may hold meetings by using any means of
                  communication, provided that all the directors participating
                  may simultaneously hear each other.

       19.8       The Board of Directors may pass resolutions, even without
                  holding an actual meeting, provided that all the directors who
                  are entitled to participate in the discussion and to vote on
                  the matter submitted for resolution consented thereto. Should
                  resolutions be passed as stated in this Article, the chairman
                  of the Board of Directors shall make an entry in the protocol
                  of the resolutions, and the protocol shall state the manner of
                  voting of each director on the matters submitted for
                  resolution and the fact that all the directors consented to
                  the passing of the resolution without holding an actual
                  meeting. Such signed protocol shall be deemed for all purposes
                  to be the minutes of a meeting held in the regular manner.

       19.9       All acts conducted in good faith at a meeting of the Board of
                  Directors or by a committee of directors or by any person
                  acting as a director shall, notwithstanding that it be
                  afterwards discovered that there was a defect in the
                  appointment of any director or of any such person acting as
                  stated, or that any of them were disqualified from holding
                  office, be as valid as if every such person had been duly
                  appointed.

20. VOTING AT THE BOARD OF DIRECTORS

       20.1       In a vote of the Board of Directors, each director shall have
                  one vote.

       20.2       Resolutions of the Board of Directors shall be passed by a
                  majority of votes. The chairman of the Board of Directors
                  shall not have an additional vote or a casting vote, and in
                  the case of an equality of votes, the resolution put to the
                  vote shall be rejected.


                                      -22-


21. COMMITTEES OF THE BOARD OF DIRECTORS

       21.1       The Board of Directors may set up committees and appoint
                  thereto members from among the members of the Board of
                  Directors (hereinafter: "Committee of the Board of
                  Directors"). Should Committees of the Board of Directors be
                  set up, the Board of Directors shall determine, in the terms
                  of authorization thereof, whether certain powers of the Board
                  of Directors shall be delegated to the Committee of the Board
                  of Directors in such manner that a resolution of a Committee
                  of the Board of Directors shall be deemed to be a resolution
                  of the Board of Directors, or whether a resolution of a
                  Committee of the Board of Directors shall be deemed to be a
                  recommendation only, which is subject to the approval of the
                  Board of Directors, provided that the powers of decision in
                  the matters listed in section 112 of the Companies Law are not
                  delegated to the Committee.

       21.2       At least one outside director shall serve on any committee
                  authorized to exercise any of the powers of the Board of
                  Directors.

       21.3       The provisions contained in these Articles pertaining to
                  meetings of the Board of Directors and the voting at the said
                  meetings shall apply, mutatis mutandis, to the meetings and
                  discussions of any Committee of the Board of Directors which
                  comprises two members or more, subject to the resolutions of
                  the Board of Directors with respect to the procedures of
                  meetings of the Committee (should there be any such
                  resolutions).

22. AUDIT COMMITTEE

       22.1       The Board of Directors of the Company shall appoint from among
                  its members an Audit Committee. The number of members of the
                  Audit Committee shall be not less than three, and all the
                  outside directors shall be members thereof. The members of the
                  Committee shall not comprise the chairman of the Board of
                  Directors or any director employed by the Company or who
                  provides services to the Company on a regular basis and/or a
                  controlling shareholder or a relative thereof.

       22.2       The duties of the Audit Committee shall be:


                                      -23-


                  22.2.1      To detect defects in the business management of
                              the Company, inter alia, in consultation with the
                              Company's internal auditor, or with the auditing
                              accountant, and to propose ways to the Board of
                              Directors for remedying same;

                  22.2.2      To decide whether to approve acts and transactions
                              which are subject to the approval of the Audit
                              Committee pursuant to the Companies Law.

23. SECRETARY

       The Board of Directors may appoint to the Company a secretary as it shall
       deem fit. The powers of the secretary and his terms of employment shall
       be determined by the Board of Directors from time to time.

24. GENERAL MANAGER

       The General Manager shall be appointed and removed by the Board of
       Directors. The Board of Directors may appoint more than one General
       Manager. The General Manager shall be responsible for the day-to-day
       management of the Company's business, in accordance with the policy
       determined by the Board of Directors and subject to its directives.

25. EXEMPTION, INSURANCE AND INDEMNITY

       25.1   The Company may exempt, in advance, an officer of the Company from
              his liability, in whole or in part, in respect of damage following
              breach of his duty of care towards the Company.

       25.2   Subject to the provisions of the Companies Law, the Company may
              engage in a contract to insure the liability of an officer of the
              Company, including an officer of the Company who is serving or has
              served on its behalf or at its request as a director of another
              company in which the Company holds shares, directly or indirectly,
              or in which the Company has any interest (hereinafter: "Director
              of Another Company") in respect of any liability imposed upon him
              following an act


                                      -24-


              which he carried out in his capacity as an officer of the Company,
              in any one of the following events:

              25.2.1       Breach of the duty of care towards the Company or
                           towards any other person.

              25.2.2       Breach of fiduciary duty towards the Company,
                           provided that the officer acted in good faith and had
                           reasonable grounds to assume that the act would not
                           prejudice the Company's interests.

              25.2.3       Financial liability which shall be imposed upon him
                           in favor of another person.

    25.3      The Company may indemnify an officer of the Company on account of
              a liability or expense as specified in paragraphs 25.3.1 and
              25.3.2 below, which was imposed upon him following an act which he
              carried out in his capacity as an officer of the Company.

              25.3.1       Financial liability imposed upon him in favor of
                           another person pursuant to a judgment, including a
                           compromise judgment, or an arbitrator's award
                           approved by a court.

              25.3.2       Reasonable litigation expenses, including legal fees
                           paid by an officer or which he was required to pay by
                           a court, in a proceeding filed against him by the
                           Company or on its behalf or by another person, or in
                           criminal charges from which he was acquitted, or in
                           criminal charges in which he was convicted of an
                           offense which does not require proof of mens rea.

       25.4   The Company may give an undertaking in advance to indemnify an
              officer in respect of a liability or expense as specified in
              Article 25.3 above, provided that the undertaking is limited to
              types of events which, in the opinion of the Board of Directors,
              may be foreseen, at the time of giving the undertaking for
              indemnity, and to such amount as the Board of Directors shall
              determine to be reasonable given the circumstances of the matter,
              and provided that the total amount of the indemnity shall not
              exceed 25% of the shareholders' equity of the Company at the


                                      -25-


              time of the indemnity, according to the last financial statements,
              as of the date of making the actual payment of the indemnity.

    25.5      The Company may also indemnify an officer of the Company
              retroactively.

    25.6      Subject to the provisions of the Companies Law, the Company may
              indemnify any person, including an officer of the Company, who is
              serving or has served on its behalf or at its request as a
              director of another company in which the Company holds shares,
              directly or indirectly, or in which the Company has any interest
              (hereinafter: "Director of Another Company") in respect of any
              liability or expense as specified in Article 25.3 above which
              shall be imposed on him following an act which he carried out in
              his capacity as a Director of Another Company, by means of
              retroactive indemnity or by means of giving an undertaking to
              indemnify such person, provided that the said undertaking is
              limited to types of events which, in the opinion of the Board of
              Directors, may be foreseen, at the time of giving the undertaking
              for indemnity, and to such amount as the Board of Directors shall
              determine to be reasonable given the circumstances of the matter.

       25.7   Sections 25.1 to 25.6 shall not apply in respect of any of the
              following events -

              25.7.1       Breach of fiduciary duty, with the exception of that
                           stated in Article 25.2.2 above.

              25.7.2       Breach of the duty of care performed deliberately or
                           recklessly.

              25.7.3       An action committed with the intention of making
                           personal gain, unlawfully.

              25.7.4       A penalty or fine imposed on an officer.

       25.8   Resolutions with respect to giving an exemption, insurance,
              indemnity or giving an undertaking for indemnity to a director
              and/or an officer who is not a director shall be passed subject to
              any law.

       25.9   A resolution to approve an exemption, insurance or indemnity in
              the Articles of the Company and the alteration thereof shall be
              passed with such majority as


                                      -26-


              specified in section 262(b) of the Companies Law or any other
              section as shall replace same.

26. INTERNAL AUDITOR

       26.1   The Board of Directors of the Company shall appoint an internal
              auditor in accordance with a proposal of the Audit Committee. Any
              person having an interest in the Company, an officer of the
              Company, a relative of one of the above or the auditing accountant
              or an entity acting on its behalf shall not serve as an internal
              auditor of the Company.

       26.2   The Board of Directors shall determine which officer shall be the
              organizational superior of the internal auditor, and in the
              absence of such determination, it shall be the chairman of the
              Board of Directors.

       26.3   The internal audit plan, which shall be prepared by the auditor,
              shall be submitted for the approval of the Audit Committee,
              however, the Board of Directors may determine that the plan shall
              be submitted for the approval of the Board of Directors.

27. AUDITING ACCOUNTANT

       27.1   The Annual Meeting shall appoint an auditing accountant for the
              Company. The auditing accountant shall hold this office until the
              end of the subsequent Annual Meeting, or for a longer period, as
              shall be determined by the Annual Meeting, provided that the term
              of office shall not be longer than the end of the third Annual
              Meeting after the meeting at which the auditing accountant was
              appointed.

       27.2   The fees of the auditing accountant for the audit shall be
              determined by the Board of Directors. The Board of Directors shall
              report the fees of the auditing accountant to the Annual Meeting.

28.    SIGNING ON BEHALF OF THE COMPANY

       28.1   The signatory rights on behalf of the Company shall be determined
              from time to time by the Board of Directors of the Company.


                                      -27-


       28.2   The seal on behalf of the Company shall be made together with the
              stamping of the Company's stamp or its printed name.

29.    DIVIDEND AND BONUS SHARES

       29.1   A resolution on a distribution of a dividend and/or bonus shares
              shall be passed by the Board of Directors of the Company.

       29.2   Unless otherwise determined by the Board of Directors, it shall be
              permitted to pay any dividend by check or payment order which
              shall be sent by mail pursuant to the registered address of the
              shareholder or the person entitled thereto, or in the event of
              joint registered holders, to the shareholder whose name stands
              first in the Register of Shareholders in connection with the joint
              holding. Any such check shall be made in favor of the person to
              whom it is being sent. Receipt by a person whose name, on the date
              of declaration of the dividend, was registered in the Register of
              Shareholders as the holder of each share or, in the event of joint
              holders, by one of the joint holders, shall serve as confirmation
              with respect to all the payments made in connection with that
              share and in respect of which the receipt was received.

       29.3   For the purpose of implementation of any resolution pursuant to
              the provisions of this Article, the Board of Directors may settle,
              as it shall deem fit, any difficulty as shall arise with respect
              to the distribution of a dividend and/or bonus shares, including
              to determine the value for the purpose of the said distribution of
              certain assets, and to decide that payments in cash shall be made
              to the members based on the value so determined, and to determine
              provisions with respect to fractions of shares or with respect to
              the non-payment of sums less than NIS 50.



30.    REDEEMABLE SECURITIES

       The Company may, subject to any law, issue redeemable securities upon
       such terms as shall be determined by the Board of Directors.


                                      -28-


31.    ACCOUNTS

       31.1   The Company shall keep accounts and shall prepare financial
              statements pursuant to the Securities law 5738 - 1968, and
              pursuant to any law.

       31.2   The accounting books shall be kept at the office or at any other
              place as the Board of Directors shall deem fit, and shall always
              be open for inspection by the Board of Directors.

32.    DONATIONS

       The Company may make a donation of a reasonable amount of money for a
       purpose which the Board of Directors shall deem to be a worthy cause,
       even if the donation is not made in relation to business considerations
       for increasing the Company's profits.

33. NOTICES

       33.1   Subject to any law, notice or any other document which the Company
              shall deliver and which it is entitled or required to give
              pursuant to the provisions of these Articles and/or the Companies
              Law shall be delivered by the Company to any person, whether in
              person or dispatched by mail in a letter addressed in accordance
              with the address of the said shareholder as registered in the
              Register of Shareholders or any other address which the
              shareholder submitted in writing to the Company as the address for
              the submission of notices or other documents, whether by
              transmission by fax according to the number which the shareholder
              specified as the number for the delivery of notices by fax, or by
              publication in two daily newspapers which appear in Israel. The
              date of publication in the newspaper shall be deemed to be the
              date of delivery of the notice to all the shareholders.

       33.2   Any notices to be given to the shareholders shall be given,
              insofar as concerns joint shareholders, to the person whose name
              appears first in the Register of Shareholders as the holder of the
              said share, and any notice so given shall be sufficient notice for
              the holders of the said share.

       33.3   Any notice or other document which shall be sent shall be deemed
              to have reached their destination within three business days - if
              sent by registered mail and/or regular mail in Israel, and if
              delivered in person or transmitted by fax, shall be deemed to have
              reached its destination on the first business day after receipt


                                      -29-


              thereof. Should it be required to prove delivery, it shall be
              sufficient to prove that the letter which was sent by mail and
              which contains the notice or the document was addressed to the
              correct address and submitted to the Post Office as a letter
              bearing stamps or as a registered letter bearing stamps, and in
              the event of a fax, it shall be sufficient to produce the
              transmission confirmation page from the fax machine from which it
              was sent.

       33.4   Any registration made in accordance with standard practice in the
              Company's Register shall be deemed to be prima facie evidence of
              the dispatch as registered in the said Register.

       33.5   In cases where it is necessary to give advance notice of a
              particular number of days or notice which shall remain in effect
              for a particular period, the day of delivery shall be taken into
              account as regards the number of days or the period.



                                      -30-