<PAGE>

                                    DEBENTURE


                    ENTERED INTO AND SIGNED ON JUNE 16, 1998


             WHEREAS I, THE UNDERSIGNED, NOGATECH LTD. (51-164409-8)
                         (hereinafter: the "Mortgagor")

OF 11, BEN GURION ST., GIVAT SHMUEL 54017


have received and will receive from time to time credit, documentary credit,
various loans, overdrafts in a checking account, a debit account or another
account, a letter of indemnification and guarantees for the Mortgagor or for
others pursuant to the Mortgagor's request, discount of notes, extensions and
miscellaneous banking relief and other various banking services (hereinafter,
jointly and severally - the "Banking Services") from Bank Hapoalim B.M.
(hereinafter: the "Bank"), under terms agreed upon and/or to be agreed upon
from time to time with respect to each such Banking Service;

THEREFORE, it has been agreed that the Mortgagor shall guarantee the
repayment of various amounts of money which the Mortgagor owes and/or shall
owe to the Bank in connection with the rendering of the Banking Services
and/or in connection with other obligations other than the Banking Services
and/or otherwise, all in accordance with the following terms:

NATURE OF THE DEBENTURE

1.       This debenture is entered into in order to guarantee the full and
         accurate payment of all the amounts due and to be due to the Bank from
         the Mortgagor in connection with the rendering of the Banking Services
         by the Bank to the Mortgagor and/or in connection with other
         obligations other than the Banking Services and/or in any other manner,
         whether due from the Mortgagor alone or jointly with others, whether
         the Mortgagor has already undertaken or shall undertake the same in the
         future, whether as a debtor and/or as a guarantor and/or as an endorser
         or otherwise, due and/or which shall be due in future, due prior to the
         exercise of the guarantees received as of the date hereof or at a later
         date, due absolutely or contingently, due directly or indirectly, THE
         AMOUNT THEREOF BEING UNLIMITED, in addition to interest, commissions,
         various expenses, including foreclosure costs, legal fees, insurance
         fees, stamping and other payments pursuant to this debenture and in
         addition to differences of indexation of any kind due and to be due
         from the Mortgagor and/or from the guarantee to the Bank in any form or
         manner for linked principal and interest (all of the foregoing amounts,
         jointly and severally, shall be referred to hereinafter as the
         "Guaranteed Sums").

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                                           2

THE SECURITY INTEREST

2.       For the assurance of the full and accurate repayment of the Guaranteed
         Sums, the Mortgagor hereby awards to the Bank and to the substitutes
         thereof a senior security interest to the assets and the proceeds
         thereof, as specified hereunder (hereinafter: the "Assets Subject to
         the Security Interest"):

         a.       All the assets, moneys, property and rights of any kind,
                  without exception, which the Mortgagor has at present and
                  shall have in the future at any time, in any form or manner;

         b.       All the current property, without exception, which the
                  Mortgagor has at present and shall have in the future at any
                  time, in any form or manner, the current property meaning all
                  assets, moneys, property and rights of any kind save for real
                  estate, buildings and fixed equipment;

         c.       All the fixed property which the Mortgagor has at present and
                  shall have in the future, such property including, INTER ALIA,
                  real estate, buildings and fixed equipment;

         d.       All the securities and other documents in the possession of
                  the Bank and which shall be in the possession thereof from
                  time to time;

         e.       All the rights to real estate and/or all contractual rights
                  pursuant to agreements between the Mortgagor and the Israel
                  Land Administration and/or the Israel Development Authority
                  and/or the Jewish National Fund, existing at present and which
                  shall exist at any time in the future.

3.       As an additional collateral for the full and accurate repayment of all
         the Guaranteed Sums, the Mortgagor hereby mortgages and awards a senior
         fixed security interest in favor of the Bank and the substitutes
         thereof, to the Mortgagor's share capital not yet called and/or called
         and not yet paid-up and the goodwill thereof, as being at present and
         as being at any time (hereinafter, jointly and severally - the "Pledged
         Assets").

4.       As an additional collateral for the full and accurate repayment of the
         Guaranteed Sums, the Mortgagor hereby mortgages and awards a security
         interest in favor of the Bank to all the securities, documents, others'
         notes, which the Mortgagor has delivered or will deliver from time to
         time to the Bank, whether for collection, safekeeping or otherwise
         (hereinafter: the "Pledged Documents"), and upon delivery thereof they
         shall be and shall be deemed to be mortgaged and pledged to the Bank as
         collateral and as a senior fixed security interest pursuant to the
         terms of this debenture, and the provisions hereof shall apply to the
         pledge and encumbrance thereof, MUTATIS MUTANDIS. The Bank shall not be
         required to take any act in connection with the Pledged Documents and
         shall not be liable for any damage caused in

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                                           3

         connection therewith, and the Mortgagor undertakes to indemnify the
         Bank in any event in which the Bank shall be sued for such damage by
         others. The Mortgagor hereby waives any claim of prescription in
         advance.

5.       The Assets Subject to the Security Interest, the Pledged Assets and the
         Pledged Documents shall be referred to hereinafter as the "Pledged
         Property".

THE MORTGAGOR'S DECLARATIONS

6. The Mortgagor hereby declares that:

         a.       The Pledged Property is not pledged, mortgaged or attached in
                  favor of others;

         b.       All of the Pledged Property is exclusively owned and possessed
                  thereby or by the Bank;

         c.       No lawful or contractual limitation or condition apply to the
                  transfer or pledge of the Pledged Property;

         d.       It is entitled to give a security interest in the Pledged
                  Property;

         e.       No assignment of right or any other act derogating from the
                  value of the Pledged Property has been made.

THE MORTGAGOR'S UNDERTAKINGS

7. The Mortgagor hereby undertakes as follows:

         a.       To hold the Pledged Property in accordance with the
                  instructions of the Bank alone;

         b.       To use and to tend to the Pledged Property with extreme
                  caution and to inform the Bank of any incident of damage or
                  defect thereto and to repair any damage, defect or malfunction
                  occurring to the Pledged Property due to the use thereof or
                  for any other reason, and to be liable to the Bank for any
                  incident of such breakage, damage, defect or malfunction;

         c.       To enable the representative of the Bank to visit and to
                  inspect the condition of the Pledged Property at any time at
                  the location thereof;

         d.       In any event in which the Bank shall make the Guaranteed Sums
                  payable immediately, as set forth in Section 18 hereunder, to
                  deliver the Pledged Assets and/or the Pledged Documents to the
                  Bank or to a guard on its behalf, at the Bank's first demand.
                  In the event that the Mortgagor shall refuse to comply with
                  the provisions of this subsection, the Bank may, without need
                  for the Mortgagor's consent,

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                                           4

                  remove the Pledged Assets and/or the Pledged Documents from
                  the Mortgagor's possession and hold the same or deliver the
                  same to a guard on its behalf at the Mortgagor's expense.
                  In the event that the Pledged Assets and/or the Pledged
                  Documents shall have been delivered to a guard as aforesaid,
                  the Bank shall not be liable for any damage caused to the
                  Pledged Assets and/or to the Pledged Documents for any reason;

         e.       Not to sell, not to transfer, not to lease for a long term,
                  not to lease and not to deliver the Assets Subject to the
                  Security Interest or any part thereof and not to allow any use
                  thereof in any way - save for sales and transfers made in the
                  ordinary course of the Mortgagor's business - without the
                  Bank's prior written consent thereto;

         f.       To immediately notify the Bank of any attachment placed on the
                  Pledged Property, to immediately notify the attacher of the
                  security interest in favor of the Bank and to immediately
                  take, at its expense and without delay, all measures required
                  for the removal of the attachment;

         g.       To give no security interest and not to mortgage the Pledged
                  Property with rights equal, prior or later to or than the
                  Bank's rights in any form or manner and not to assign any of
                  the Mortgagor's rights to the Pledged Property without the
                  Bank's prior written consent;

         h.       To be liable for the truthfulness and veracity of all the
                  signatures, endorsements and details of notes, documents and
                  securities given or to be given to the Bank as collateral;

         i.       To timely pay all taxes and obligatory payments imposed on the
                  Pledged Property under any law and to provide the Bank, at the
                  demand thereof, with the invoices for all such payments; in
                  the event that the Mortgagor shall fail to pay such payments
                  on time, the Bank shall be entitled to pay the same at the
                  Mortgagor's expense and to charge it with the payment thereof,
                  in addition to expenses and Interest at the Highest Rate. Such
                  payments are guaranteed by this debenture;

         j.       To maintain books of account and to allow the Bank or a
                  representative thereof to inspect the books at any time. The
                  Mortgagor undertakes to assist the Bank or the attorneys
                  thereof, and to deliver balance sheets, documents and any
                  information required by them to them at their first demand,
                  including explanations relating to the financial and
                  operational condition of the Mortgagor and/or the business
                  thereof. Not to sell, not to transfer, not to lease for a long
                  term, not to lease, not to deliver, not to remove from the
                  possession thereof, not to forgo and not to waive, whether
                  fully or partially, any asset, claim or right which the
                  Mortgagor has or shall have from time to time, other than
                  within the framework of a transaction made in the ordinary
                  course of the

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                                           5

                  Mortgagor's business and against full consideration, without
                  the Bank's prior written consent;

         k.       Not to lend to the Mortgagor's shareholders and not to pay
                  existing or future loans of the Mortgagor's shareholders in
                  any year, so long as the Mortgagor shall not have repaid to
                  the Bank the payments due therefrom to the Bank for the
                  Guaranteed Sums in that year, without the Bank's prior written
                  consent. The Mortgagor undertakes to cause the shareholders
                  thereof to undertake to the Bank not to demand or require
                  payment of such loans, save for the payment of existing loans
                  and subject to the aforesaid;

         l.       Not to institute any proceedings in connection with the
                  Guaranteed Sums which would potentially injure the Bank's
                  ability to exercise this debenture.

8.       The Mortgagor undertakes to notify the Bank immediately:

         a.       of any event in which a right shall be claimed for any
                  collateral given or to be given to the Bank pursuant to this
                  debenture and/or of any proceedings for the execution or other
                  foreclosure of such collateral;

         b.       of any act listed in Section 18 hereunder;

         c.       of the devaluation of any collateral given and/or to be given
                  thereby;

         d.       of any application to be filed for the winding-up of the
                  Mortgagor or for receivership of the assets thereof and of any
                  resolution with respect to a Change of the Mortgagor's
                  Structure or of any intention of so doing;

         e.       of a change of address.

INSURANCE

9.       The Mortgagor hereby undertakes to keep all of the Pledged Property
         insured at all times for the full value thereof against all common
         risks which the Bank shall name from time to time, as commonly
         practiced in the Mortgagor's line of business, with such insurance
         companies and under such terms as the Bank shall agree, and to transfer
         to the Bank, up to the amount of this debenture, the rights deriving
         from the insurance certificates, according to a form to be approved by
         the Bank, to timely pay all the insurance fees and to deliver to the
         Bank all the insurance certificates and the receipts for the payment of
         the insurance fees.

10.      Without derogating from the aforesaid, and in addition thereto, the
         Mortgagor hereby undertakes to provide the insurance company, through
         which the Pledged Property was guaranteed, with the following
         provisions:

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                                           6

         a.       An irrevocable determination of the Bank as a beneficiary
                  under the insurance contract (the insurance policy) and a
                  provision including the Bank in the actual insurance contract,
                  without the Bank being required to pay any premiums.

         b.       Payment of the insurance proceeds for the Pledged Asset,
                  whenever the insurance company shall be liable for the payment
                  of such compensation pursuant to the insurance contract or any
                  law, directly to the Bank.

         c.       Provision of a copy of the insurance contract to the Bank,
                  after naming it as a beneficiary as aforesaid.

                  All of the aforesaid shall apply without the need for any
                  additional consent on behalf of the Mortgagor or on behalf of
                  the substitutes and/or successors thereof.

                  The Mortgagor further undertakes to provide the Bank with a
                  confirmation from the insurance company and with an
                  undertaking on its part to act in accordance with the
                  foregoing provisions and to notify the Bank of any revocation
                  or expiration of the insurance contract, at least 30 (thirty)
                  days prior to such revocation or expiration - despite and
                  notwithstanding any provision to the contrary in the Insurance
                  Contract Law, 5741-1981, such notice constituting a condition
                  precedent to the revocation or expiration of the insurance
                  contract.

11.      In each of the cases listed hereunder, the Bank shall be entitled, at
         the sole discretion thereof, to insure the Pledged Property in the
         Bank's name and to charge the Mortgagor's account for the expenses and
         fees of the insurance:

         a.       The Mortgagor shall fail to insure the Pledged Property as set
                  out in the foregoing provisions of this debenture;

         b.       The Mortgagor shall fail to provide to the Bank, within 14
                  days from the date of signing of this debenture, insurance
                  certificates for the Pledged Property under such terms and for
                  such period as the Bank shall deem satisfactory at the sole
                  discretion thereof, in accordance with the provisions of this
                  debenture;

         c.       30 days prior to the expiration of the insurance of the
                  Pledged Property, the Mortgagor shall fail to provide to the
                  Bank certificates of insurance for the Pledged Property under
                  such terms and for such period as the Bank shall deem
                  satisfactory at the sole discretion thereof, in accordance
                  with the provisions of this debenture;

                  In the event that the insurance shall be arranged by the Bank
                  as aforesaid, the Bank shall not be liable for any defect or
                  fault to be

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                                           7

                  found in connection with the insurance. Amounts to be paid as
                  expenses and fees of such insurance are guaranteed by this
                  debenture.

12.      In any event in which the Bank shall make the Guaranteed Sums payable
         immediately as set forth in Section 18 hereunder in connection with the
         insurance of the Pledged Property, the Mortgagor hereby appoints the
         Bank as the sole attorney thereof, and confers thereon the exclusive
         rights to negotiate in the name of the Mortgagor, to file claims, to
         agree to arrangements, to settle, to waive, to receive moneys from
         insurance companies and to credit the same against repayment of the
         Guaranteed Sums. The above power of attorney is irrevocable, since the
         rights of the Bank and the rights of a third party are contingent
         thereon. The Mortgagor shall entertain no claim in connection with
         arrangements, waivers and settlements which the Bank shall make with
         insurance companies.

13.      All of the Mortgagor's rights deriving from the insurance of the
         Pledged Property, including rights pursuant to the Property Tax and
         Compensation Fund Law, 5721-1961, as in effect at any time and pursuant
         to any other law, whether or not transferred to the Bank as aforesaid,
         are hereby pledged to the Bank as a senior fixed security interest and
         encumbrance.

14.      The Mortgagor hereby undertakes to sign all of the certificates and
         necessary documents for the performance of this chapter's undertakings,
         at the Bank's first demand. In addition, the Mortgagor undertakes not
         to revoke or modify in any form any condition or conditions of said
         insurance, without the Bank's prior written consent.

INTEREST

15.      a.       The Bank shall be entitled to calculate interest on the
                  Guaranteed Sums according to a rate agreed upon or to be
                  agreed upon from time to time between it and the Mortgagor. In
                  cases in which the interest rate shall not have been agreed
                  upon, the Bank shall be entitled to determine the rate of
                  interest and to notify the Mortgagor thereof. The Mortgagor
                  shall be liable for such interest rates and the Bank may add
                  them to the principal at the end of each month or of any other
                  period, as the Bank may determine;

         b.       Upon any delay in the payment of the Guaranteed Sums or any
                  part thereof, the Guaranteed Sums shall bear arrears interest
                  at a rate agreed upon in the agreement for the rendering of
                  the Banking Services. In the lack of determination with
                  respect to arrears interest, the Guaranteed Sums shall be
                  subject to Interest at the Highest Rate.

         c.       Whenever the Bank shall be entitled to foreclose the
                  collateral pursuant to this debenture, the Bank shall be
                  entitled to raise the rates of interest on the Guaranteed Sums
                  up to the Interest at the Highest Rate charged by the Bank at
                  the time being, or by (sic) irregular interest in debit

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                                           8

                  accounts or checking account interest (hereinafter: "Interest
                  at the Highest Rate").

DATES OF PAYMENT

16.      The Mortgagor hereby undertakes to accurately repay the Guaranteed Sums
         and any part thereof to the Bank on the date of repayment thereof, as
         determined and as to be determined from time to time.

17.      The Mortgagor shall be entitled to make early payment of the Guaranteed
         Sums or any part thereof prior to the due date thereof, subject to that
         the Mortgagor shall pay the Bank all the amounts which the Bank would
         have received from the Mortgagor on account of the Guaranteed Sums, if
         early payment of such amount would not have been made, and any expense
         resulting from the early payment, if any.

18.      Without derogating from the generality of the provisions of this
         debenture, the Bank shall be entitled, in each of the following cases,
         to make the Guaranteed Sums payable immediately and to charge such
         amount to any of the Mortgagor's accounts, and the Mortgagor undertakes
         to pay all of the Guaranteed Sums, and the Bank may take any means it
         shall deem fit in order to collect the Guaranteed Sums, and in
         particular, to foreclose the collateral in any manner lawfully
         permissible, at the Mortgagor's expense:

         a.       The Mortgagor shall breach or shall fail to fulfill any
                  condition hereof, or the Mortgagor shall breach other
                  undertakings assumed or to be assumed by the Mortgagor towards
                  the Bank, or any of the Mortgagor's declarations herein or any
                  other declaration given or to be given to the Bank by the
                  Mortgagor in connection with the Guaranteed Sums shall
                  transpire to be incorrect or inaccurate;

         b.       The Mortgagor shall resolve to wind-up voluntarily and/or a
                  winding-up order shall be issued against it and/or a temporary
                  liquidator or a special manager shall be appointed for each of
                  them (sic) and/or the Mortgagor's name shall be erased from
                  any register maintained by law, or shall be scheduled to be
                  erased;

         c.       A receiver shall be appointed for all or part of the
                  Mortgagor's property, or a receivership order shall be issued;

         d.       An attachment shall be placed or a similar execution act
                  instituted with respect to a material part of the Mortgagor's
                  property or to any of the collateral given by the Mortgagor;

         e.       The Mortgagor shall cease to pay its debts or to conduct its
                  business;

         f.       All or a substantial part of the work conducted at the
                  Mortgagor's shall be suspended for a period of two months or
                  more;

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                                           9

         g.       The Bank, at the sole discretion thereof, shall deem that a
                  material event shall have occurred, which may considerably
                  undermine the Mortgagor's financial ability;

         h.       The Mortgagor shall fail to pay any of the Guaranteed Sums for
                  more than 21 days;

         i.       The Pledged Property or any part thereof shall have been
                  destroyed, burnt, devaluated or lost.

         j.       The number of stockholders of the Mortgagor and/or the number
                  of members constituting the Mortgagor shall fall below the
                  minimal number required by law;

         k.       The Mortgagor shall have died or shall have become
                  incapacitated, bankrupt or incarcerated or shall have departed
                  the country, or upon the occurrence of death, incapacitation,
                  bankruptcy, winding-up, incarceration or departure from the
                  country or breach of an undertaking by any party to the notes,
                  documents and securities given or to be given to the Bank as
                  collateral;

         l.       The value of the collateral given in order to assure repayment
                  of the Guaranteed Sums or the repayment ability of the
                  Mortgagor's guarantors shall, at the Bank's sole discretion
                  and according to the exclusive estimate thereof, have been
                  adversely modified, including death, bankruptcy or departure
                  of the guarantor from the country;

         m.       The Mortgagor shall be required to make early repayment of
                  debts owed by the Mortgagor to other creditors;

         n.       One of the foregoing events listed in this Section shall have
                  occurred to any guarantor for the repayment of the Guaranteed
                  Sums, MUTATIS MUTANDIS.

THE BANK'S RIGHTS

19.      The Bank is entitled to the rights of possession, lien, offset and
         security interest to all of the amounts, assets and rights, including
         securities, coins, gold, bank notes, documents of commodities,
         insurance policies, notes, assignments, obligations, deposits,
         collateral and the consideration therefor, to be found at the Bank at
         any time in the Mortgagor's credit or therefor, including those
         delivered for collection, security, safekeeping or otherwise. The Bank
         may withhold such assets pending repayment in full of the Guaranteed
         Sums or sell them and use the consideration, in full or in part, in
         order to repay the Guaranteed Sums. In the event that the amounts
         set-off are deposited in foreign currency, the Mortgagor hereby
         authorizes the Bank and instructs it in advance to sell the credit
         balance of the foreign currency at the

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                                           10

         rate obtainable by the Bank therefor at such time, and to offset the
         sale consideration against the Guaranteed Sums.

20.      The Bank may at any time charge any of the Mortgagor's accounts for any
         amount due therefrom and to be due therefrom in any manner, and to
         credit any amount received therefrom or therefor to such account as it
         shall deem fit, and to transfer any amount to his credit to any other
         account as it shall deem fit.

21.      The Mortgagor confirms that the books and accounts of the Bank are
         reliable in its eyes, shall be deemed correct and shall serve as PRIMA
         FACIA evidence against it in all details thereof, INTER ALIA, in all
         matters pertaining to the calculation of the Guaranteed Sums, the
         details of the bills, guarantees and other collateral and any other
         matter related to this debenture.

22.      The Bank shall be entitled, at the sole discretion thereof, to accept
         or to decline to accept any order or notice given thereto verbally,
         over the telephone or in any manner other than in a clear and legible
         writing. In the event that the Bank shall agree to act pursuant to the
         Mortgagor's instructions given other than by a written instruction in
         the acceptable manner, the Mortgagor assumes responsibility for all
         errors, misunderstandings or discrepancies and for damage and/or loss
         and/or breach to be caused due to the rendering of such instructions.

23.      Without derogating from the other provisions of this debenture, any
         waiver, extension, discount, reticence, non-action (hereinafter:
         "Waiver") on the part of the Bank with respect to the non-fulfillment
         or partial or incorrect fulfillment of any of the Mortgagor's
         undertakings under this debenture and/or any other undertakings of the
         guarantee, shall not be deemed as a Waiver on the part of the Bank of
         any right, but as a limited consent for the special circumstances in
         which it was made. No Waiver given by the Bank to any party to a note
         to be held by the Bank for the assurance of the Guaranteed Sums shall
         in any way affect the Mortgagor's undertaking.

24.      a.       In each of the cases listed in Section 18 above, the Bank
                  shall be entitled to take all measures it shall deem fit in
                  order to collect the Guaranteed Sums and to exercise all of
                  the rights thereof pursuant to this debenture, including
                  foreclosing the Pledged Property, in whole or in part, and
                  using the proceeds in order to repay the Guaranteed Sums,
                  without the Bank being required to exercise any other
                  guarantee or collateral, if any shall be held by the Bank;

         b.       In the event that the Bank shall decide to realize securities,
                  notes or other negotiable instruments - an advance notice of
                  three days with respect to the measures about to be taken by
                  the Bank shall be deemed as a reasonable period of time for
                  the purpose of Article 19 of the Pledge Law, 5727-1967 or any
                  other statutory provision replacing it.

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                                           11

         c.       As the Mortgagor's attorney, and for the purposes of this
                  Section the Mortgagor irrevocably appoints the Bank as its
                  attorney, the Bank may sell the Pledged Property subject to
                  the terms of this debenture or any part thereof, by auction or
                  otherwise, either itself or through others, in consideration
                  for cash, installments or otherwise, for such price and under
                  such conditions as the Bank shall determine at the sole
                  discretion thereof; the Bank may further foreclose the Pledged
                  Property or any other property, either itself, through the
                  Courts or through an Execution Office by, INTER ALIA,
                  appointing a receiver or a receiver and manager on behalf of
                  the Bank who shall be entitled, among his other authorities:

                  1)      To gain possession of all or part of the Pledged
                          Property;

                  2)      To manage the Mortgagor's business or take part in the
                          management thereof, as he shall deem fit;

                  3)      To sell or agree to the sale of the Pledged Property,
                          in whole or in part, to transfer the same or agree to
                          the transfer thereof in any other manner, under such
                          conditions as he shall deem fit;

                  4)      To make any other arrangement with respect to the
                          Pledged Property and/or any part thereof, as he shall
                          deem fit.

         d.       Any revenue to be received by the receiver or by the receiver
                  and manager from the Pledged Property, and any proceeds to be
                  received by the Bank and/or by the receiver or the receiver
                  and manager from the sale of the Pledged Property or any part
                  thereof shall be applied as follows:

                  1)      First, for the payment of the expenses incurred and
                          which shall be incurred with respect to the collection
                          of the Guaranteed Sums, including the costs of the
                          receiver or the receiver and manager and the fees
                          thereof, at a rate to be determined by the Bank or
                          approved by the Courts or an Execution Office.

                  2)      Second, for the payment of the additional amounts due
                          to the Bank pursuant to the provisions for indexation,
                          interest, damages, commissions and expenses due and to
                          be due to the Bank pursuant to this debenture.

                  3)      Third, for the payment of the principal of the
                          Guaranteed Sums.

                          Or in any other order of application to be determined
                          by the Bank.

25.      In the event that the Guaranteed Sums or any part thereof shall not yet
         have become due at the time of sale of the Pledged Property, or that
         the Guaranteed

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                                           12

         Sums shall be received by the Bank only contingently, the Bank shall
         be entitled to collect the amount sufficient to cover the Guaranteed
         Sums from the proceeds of the sale, and the amount collected shall be
         pledged to the Bank for the assurance thereof and shall remain in the
         Bank's possession until payment thereof.

NATURE OF THE COLLATERAL

26.      The collateral given to the Bank pursuant to this debenture are of a
         permanent nature and shall remain in effect until the Bank shall
         approve in writing that this debenture is void.

27.      In the event that other collateral or guarantees were given or shall be
         given to the Bank for the payment of the Guaranteed Sums, all such
         collateral and guarantees shall be independent of each other.

28.      In the event that the Bank shall compromise or shall grant the
         Mortgagor an extension or a relief, or shall change the Mortgagor's
         undertakings in connection with the Guaranteed Sums, shall release or
         shall waive other collateral or guarantees - such acts shall not change
         the nature of the collateral created pursuant to this debenture and all
         of the collateral and the Mortgagor's undertakings pursuant to the
         debenture shall remain in full force and effect.

RIGHT OF TRANSFER

29.      The Bank may at any time, at the discretion thereof, and without
         requiring the Mortgagor's consent, transfer this debenture and its
         rights hereunder, including the collateral, in whole or in part, and
         the transferee too shall be entitled to transfer such right to another
         without the need for any additional consent from the Mortgagor. The
         transfer may be made by an endorsement on the margins of or on this
         debenture, or in any other manner deemed fit by the Bank or the
         transferee.

30.      The Bank may deposit the collateral given or to be given pursuant to
         this debenture, or part thereof, with a guard, according to its
         discretion and at the Mortgagor's expense, and may replace the guard
         from time to time; the Bank shall further be entitled to register such
         collateral, in whole or in part, with any competent authority pursuant
         to any law and/or in any public registry.

NOTICE OF PROTESTS

31.      The Mortgagor undertakes to notify the Bank in writing of any protest
         or objection it may have, if any, in connection with any account,
         account summary, confirmation or notice it shall receive from the Bank.
         If the Mortgagor shall fail to protest or object within 21 days from
         the date of dispatch of the said account, account summary, confirmation
         or notice, the Bank shall be entitled to deem it as having approved the
         correctness thereof.

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                                           13

EXPENSES

32.      All of the expenses incurred in connection with the preparation of this
         debenture, the stamping and registration thereof, foreclosure of the
         collateral and institution of collection proceedings (including the
         issuance of warning letters, search of address, investigations and the
         legal fees of the Bank's attorney), insurance, guarding, maintenance
         and repair of the Pledged Property - shall be paid by the Mortgagor to
         the Bank at the first demand thereof, in addition to Interest at the
         Highest Rate. Pending payment thereof in full, all of the said expenses
         shall be guaranteed by this debenture.

INTERPRETATION

35.      In this debenture - (a) the singular shall import the plural, and vice
         versa; (b) the masculine form shall import the feminine form, and vice
         versa; (c) the "Bank" shall mean Bank Hapoalim B.M. and each and every
         one of the branches thereof existing on the date hereof and/or to be
         opened at any location in the future, the transferees and substitutes
         thereof and others acting on behalf of the Bank; (d) "Notes" shall mean
         promissory notes, notes of exchange, checks, undertakings, guarantees,
         collateral, assignments, bills of lading, bills of deposit and any
         other negotiable document; (e) "Interest at the Highest Rate" shall
         mean interest at the highest rate charged by the Bank at the time being
         and from time to time for overdrafts and arrears in debit accounts or
         in checking accounts, whichever is the higher; (f) "Change of
         Structure" shall mean, with respect to the Mortgagor - a merger or a
         spin-off (as these terms are defined in Section E2 of the Income Tax
         Ordinance or any other statutory provision replacing it), and the
         transfer of assets in consideration for shares, whether pursuant to the
         said Section E2 or otherwise; (g) the headings of the sections are
         inserted for the sake of orientation only and shall not be used for the
         interpretation of this debenture; (h) the preamble to this debenture
         constitutes an integral part hereof.

NOTICES AND WARNINGS

34.      Any notice mailed by the Bank to the Mortgagor in a registered or
         ordinary letter at the address entered after the name thereof, or at
         the address of the Mortgagor's registered office or at another address
         of which the Mortgagor shall notify the Bank in writing, shall be
         deemed as a lawful notice received by the Mortgagor 48 hours from the
         time at which the letter containing the notice shall have been sent.

         A written declaration by the Bank shall serve as evidence with respect
         to the time of dispatch of the notice. Any notice to be given to the
         Mortgagor in any manner of written notice (sic) shall be deemed to have
         been received thereby at the time of issuance or publication thereof.

VENUE

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                                           14

35.      The venue for the purposes of this debenture is hereby determined as
         the competent court closest to the place of signing of this debenture,
         or the competent court in any one of the following cities:
         Jerusalem, Tel Aviv Jaffa, Haifa, Beer Sheva or Nazareth.




                 IN WITNESS WHEREOF, I HAVE HERETO SET MY HAND:




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