Exhibit 10.19



                                 LOAN AGREEMENT



                                     between



                               BANK HAPOALIM B.M.



                                       and



                                  LUMENIS LTD.



                                      dated



                                 March 26, 2002


<PAGE>


                                      INDEX


Clause         Headings                                                     Page
------         --------                                                     ----

  1.           Interpretation                                                 4

  2.           Definitions                                                    5

  3.           Availability and Disbursement of the Loan                      7

  4.           Payment of Interest                                            8

  5.           Repayment of the Loan                                          8

  6.           Default Interest                                               8

  7.           Increased Costs                                                8

  8.           Prepayment                                                     9

  9.           Time, Place and Manner of Payment                              10

  10.          Collaterals                                                    11

  11.          Conditions Precedent                                           11

  12.          Representations and Warranties                                 12

  13.          Undertakings                                                   13

  14.          Events of Default                                              14

  15.          Unlawfulness, Substitute Basis                                 17

  16.          Set Off and Application of Payments                            18

  17.          The Borrower's Duty to Notify                                  19

  18.          Compensation for Broken Funding                                19

  19.          Remedies and Waivers                                           19

  20.          Assignment                                                     20

  21.          Administration of the Loan                                     20


                                      -2-
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Clause         Headings                                                     Page
------         --------                                                     ----

  22.          Disclosure of Information                                     20

  23.          Expenses                                                      21

  24.          Additional Provisions                                         21

  25.          Notices                                                       21

  26.          Governing Law and Jurisdiction                                22

  27.          Currency Indemnity                                            22

  28.          Severability                                                  23



                                      -3-
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This Loan Agreement is dated as of the 26th day of March, 2002 and made between:

BANK HAPOALIM B.M

                                  ("The Bank")

                                       and

                                  LUMENIS LTD.

a company duly established and existing under the laws of the State of Israel
("the Borrower").

Whereas the Borrower has requested the Bank to grant it the Additional Financing
as such term is defined in the Letter of Undertaking as defined below.

Whereas the Bank is prepared to accede to the Borrower's request and to provide
it with the Loan (as defined herein) upon the conditions hereinafter set forth.

Now, therefore, it is hereby agreed and declared between the parties as follows:

1.     Interpretation

       1.01   This Agreement forms an integral part of the Borrower's
              application to open an account and the general conditions for
              operating an account which have been signed by the Borrower in the
              Bank ("the Application to open an account") and of the Letter of
              Undertaking.

       1.02   Unless otherwise agreed the Borrower's obligations in this
              Agreement are in addition to those contained in the Application to
              open an account and in the Letter of Undertaking and nothing in
              this Agreement shall derogate from any of the Bank's rights under
              the Application to open an account and\or the Letter of
              Undertaking.

       1.03   Capitalised terms not defined herein shall have the meaning
              ascribed under the Letter of Undertaking. Definitions of
              capitalized terms under Clause 2 below shall not be used in the
              interpretation of the Letter of Undertaking.

       1.04   The provisions of Section 1(b) and Section 5 of the Letter of
              Undertaking shall not apply to the Loan hereunder.

       1.05   In the case of any contradiction between this Agreement and the
              Application to open an account and\or the Letter of Undertaking
              the provisions of this Agreement shall govern.


                                      -4-
<PAGE>

       1.06   The Preamble to this Agreement constitutes an inseparable part
              hereof.

       1.07   Clause headings and the table of contents are inserted for
              convenience of reference only and shall be ignored in the
              interpretation of this Agreement.

       1.08   In this Agreement, unless the context otherwise requires:

              (a)    reference to Clauses and Schedules are to be construed as
                     reference to the clauses of, and schedules to, this
                     Agreement and references to this Agreement include its
                     Schedules; and

              (b)    words importing the plural shall include the singular and
                     vice versa.

2.     Definitions

In this Agreement, the following words and expressions shall bear the following
meanings unless the context otherwise requires:-

"Bank" means - Bank Hapoalim B.M and any of its branches or offices existing on
the date hereof and or to be subsequently opened, whenever they may be, its
successors, assignees, or attorneys in fact, all as specifically permitted
hereunder;

"Banking Day" means - a day on which dealings in Dollar deposits are carried on
in the London Interbank Eurodollar market and (if payment is required to be made
on such day) on which banks are open for business in London and in Israel.

"Bank's Books" - shall be construed so as to include any book, record, statement
of account, and copy of any statement of account, loan agreement, deed of
undertaking, customers' bill, card index, page, film, any means of storage and
retrieval of data for purpose of electronic computers and any other means of
storage and retrieval of data;

"Compensation Fee" means a sum of $4,000,000 (Four Million Dollars).

"Disbursement Date" means - a Banking Day upon which the disbursement of the
Loan will be made but not later than September 1,2002.

"Dollars and "$" mean - the lawful currency of the United States of America.

"ESH Loan Agreement" means - a certain loan agreement between the Bank and
Energy Systems Holdings Inc. (now named Lumenis Holdings Inc.) signed on April
30 2001, as amended, supplemented or otherwise modified from time to time;

"Event of Default" means - any of the events or circumstances described in
Clause 14;


                                      -5-
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Interest means - LIBOR plus the Margin.

"Interest Period" Each Interest Period shall be of three months duration
commencing and including the Disbursement Date, Provided, however, that if any
Interest Period would otherwise end on a day which is not a Banking Day, the
termination thereof shall be postponed to the next day which is a Banking Day,
unless such Banking Day falls in the next calendar month, in which case such
Interest Period shall end on the immediately preceding day which is a Banking
Day.

"Letter of Undertaking" - means a certain agreement signed between the Bank and
the Borrower on April 30 2001.

"LIBOR", means the rate of interest (expressed as any annual rate) determined by
the Bank to be the arithmetic meaning (rounded up, if necessary to the nearest
whole multiple of 1/8%) of the (i) rates for Dollar deposits offered to the Bank
for the respective Interest Period which appears on the LIBOR1 page of the
Reuters Screen for Dollars as of 11:00 a.m. London time, two Banking Days prior
to the commencement of the respective Interest Period, or (ii) in the absence of
such page or if the Bank ceases to use such page for the above purpose, such
other page of Reuters as shall be determined by the Bank or in the event that
Reuters services ceases to be available, the Bank shall select a relevant page
of another recognised service displaying the applicable rate or if Clause (i)
above is inapplicable, the rates of interest communicated to, and at the request
of, the Bank, by or on behalf of the principal London offices of the Reference
Banks or any two of them, as being the rates at which they would offer to the
Bank deposits in Dollars in the London Interbank Eurodollar Market, for the
respective Interest Period as of 11:00 a.m London time two Banking Days prior to
the commencement of that respective Interest Period, or (iii) if Clauses (i) and
(ii) are inapplicable the rates of interest communicated to and at the request
of, the Bank, by at least two other banks in London Interbank Eurodollar Market,
at the rates at which such banks would offer the Bank a deposit in Dollars for
the respective Interest Period as of 11:00 a.m. London time, two Banking Days
prior to the commencement of that respective Interest Period.

"Loan" means - a loan in the sum of $ 70,667,000 (Seventy Million Six Hundred
and Sixty Seven Thousand Dollars)

"Margin" means -     1) until the end of the first anniversary from disbursement
                     of the Loan - 6.555% per annum.

                     2) from the end of the first anniversary from disbursement
                     of the Loan until the end of the second anniversary from
                     disbursement of the Loan - 7.055% per annum.

                     3) from the end of the second anniversary from disbursement
                     of the Loan until the end of the fourth anniversary from
                     disbursement of the Loan - 7.805% per annum.


                                      -6-
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"Notes" means Convertible Subordinated Notes issued by the Borrower on September
10 1997.

"Payment Date" means - the last day of each Interest Period.

Quarter" means each period commencing on the day after a Quarter Day and ending
on the next following Quarter Day; "Quarter Day" means March 31, June 30,
September 30 and December 31 in any year and Quarter Day means any of them.

"Reference Bank" means Barclays Bank PLC, National Westminster Bank PLC and
Bankers Trust Company (in its name or as Duetsche Bank)

"Security Documents" means - the Collateral referred to in Section 10 of this
Agreement, and any other documents as may have been executed or shall from time
to time after the date of this Agreement be executed to secure all or any part
of the Loan, interest thereon and other moneys from time to time owing by the
Borrower pursuant to this Agreement;

"Taxes" includes all present and future income and other taxes, levies, imposts,
deductions, charges and withholdings whatsoever, together with interest thereon
and penalties with respect thereto, if any, and any payment of principal,
interest, charges, fees or other amounts made on or in respect thereof and
"Tax", "Taxation" and similar words shall be construed accordingly.

3.     Availability and disbursement of the Loan

       3.01   Provided the obligations and conditions set forth in Clause 11
              have been fulfilled, the Bank shall make the Loan available to the
              Borrower on the Disbursement Date in one tranche provided, always,
              that the Borrower shall have given the Bank a request for
              disbursement in the form of Schedule "A" attached hereto, (the "
              Disbursement Request") not later than 2 (two) Banking Days prior
              to the Disbursement Date. The Loan shall be made available to the
              Borrower by crediting the Borrower's account with the Haifa
              Central Branch (700) of the Bank with the amount mentioned in the
              preamble. In case the Borrower has given the Bank the Disbursement
              Request but the Loan was not disbursed because the Borrower has
              cancelled it and\ or the Borrower has not complied with the
              conditions set forth in Clause 11 hereunder then the Borrower
              shall pay the Bank the actual loss and\or expenses of the Bank
              incurred as a consequence that the Bank has complied with the
              Disbursement Request;

       3.02   The Borrower declares and warrants that the proceeds of the Loan
              will be utilised solely for financing the acquisition and/or
              repayment of the Notes.


                                      -7-
<PAGE>

4.     Repayment of the Loan

              The Borrower shall repay the Loan to the Bank in one instalment on
              the fourth anniversary from the Disbursement Date.

5.     Payment of Interest

       5.01   The Borrower shall pay Interest on the outstanding balance of the
              principal amount of the Loan starting on the Disbursement Date at
              a rate equal to the aggregate of the Margin plus the LIBOR
              applicable for each Interest Period. Interest shall be paid by the
              Borrower to the Bank on each Payment Date.

              Interest shall accrue from day to day and be calculated on the
              basis of the actual number of days elapsed, divided by 360.

6.     Default Interest

       6.01   The Borrower shall pay default interest ("Default Interest") on
              sums not paid on the due date under this Agreement or the Security
              Documents from the due date and up to the date of actual payment (
              as well after as before judgement ) at a rate equal to two (2) per
              cent per annum above the Interest applicable at such date.

       6.02   Unless otherwise stipulated in any of the Security Documents the
              Borrower shall pay Default Interest on sums payable hereunder or
              under the Security Documents on demand if not paid within seven
              (7) Banking Days of the date of demand, from the date of demand up
              to the date of actual payment (as well after as before judgement)
              at the rate equal to two (2) per cent per annum above the Interest
              applicable at such date.

       6.03   Default Interest shall be due and payable on demand and calculated
              on the basis of actual number of days elapsed divided by 360 days.

7.     Increased Costs

              If by reason of any change in law or in its interpretation by any
              official authority of the State of Israel charged with the
              interpretation thereof , and/or by reason of compliance with any
              request from or requirement of the Bank of Israel, any
              governmental authority or other fiscal or monetary authority,
              after the date hereof and directed to Israeli commercial banks in
              general:

              (i)    the Bank incurs a cost as a result of its having entered
                     into and/or performing its obligations under this Agreement
                     and/or maintaining the outstanding balance of the Loan; or

              (ii)   there is any increase in the cost to the Bank of funding or
                     maintaining all or any of the outstanding balance of the
                     Loan; or


                                      -8-
<PAGE>

              (iii)  the Bank becomes liable to make any payment on account of
                     Tax or otherwise ( not being a tax imposed on the net
                     income of the Bank) on or calculated by reference to the
                     amount of the outstanding balance of the Loan and/ or by
                     reference to any sum received or receivable by it
                     hereunder.

              then the Borrower shall, from time to time, within 30 days from
              demand of the Bank, promptly pay to the Bank such additional
              amounts sufficient to indemnify the Bank against, as the case may
              be, (i) such cost, (ii) such increased cost and (iii) such
              liability, all as actually incurred;

              The Bank shall as soon as reasonably practicable deliver to the
              Borrower a certificate specifying in reasonable detail the event
              by reason of which it is entitled to make a claim pursuant to this
              Clause. The Bank shall however exercise its best endeavors to
              mitigate such cost, increased cost and liability.

              The Bank represents that it is not aware of any such circumstances
              or threats on the date hereof, which might give rise to a claim
              for increased cost pursuant to sub-clauses (i) through (iii)
              hereunder. Without derogating from the provisions of Clause 8
              hereof, the Borrower may, after receipt of the demand referred to
              in this clause, notify the Bank that it will prepay, on the last
              day of the Interest Period the whole (but not part only of the
              outstanding balance of the Loan); whereupon the Borrower shall
              prepay to the Bank the outstanding balance of the Loan together
              with accrued interest thereon and all other amounts owing to the
              Bank hereunder.

8.     Prepayment

       8.01   The Borrower may, on the last day of any Interest Period upon
              giving in each case at least 14 (fourteen) days' prior written
              notice to the Bank (which shall be irrevocable and shall
              constitute the Borrower's undertaking to prepay accordingly),
              prepay in whole or from time to time in part, (being in each
              instance not less than $1,000,000 One Million Dollars or a whole
              multiple thereof) of the principal amount of the Loan provided
              that together with such prepayment amount the Borrower will pay a
              sum (the "Fee") which is the result of multiplying the prepaid
              principal amount by 4.305 % and multiplied by the remaining number
              of days until the repayment of the Loan as specified in Section 4
              above, divided by 360, and discounted at LIBOR plus 3.05 %
              according to projected payments schedule.

       8.02   If the Borrower notifies the Bank of its intention to prepay any
              amount under the provisions of this Agreement but in fact does not
              pay in accordance with such notification then the Borrower shall
              indemnify the Bank against and on demand pay to the Bank the full
              amount of any loss or expenses which the Bank shall certify as
              actually sustained or incurred by it as a consequence of not
              having been prepaid in accordance with such notification.


                                      -9-
<PAGE>

       8.03   The Borrower may not prepay the Loan or any part thereof save as
              expressly provided in this Agreement.

9.     Time, Place and Manner of Payment

       9.01   All payments to be paid by the Borrower hereunder shall be made to
              the Bank free of any Taxes and without set-off or counterclaim, in
              funds available to the Bank at its Haifa Central Branch or at any
              other place in Israel nominated by the Bank and not prohibited for
              that purpose by any applicable law, provided that 15 (fifteen)
              days prior notice thereof shall have been given to the Borrower by
              the Bank.

       9.02   Notwithstanding the foregoing in the event that the Borrower is
              required under the laws of the State of Israel to deduct or
              withhold any amount in respect of income-tax on payments of
              interest payable hereunder, then the Borrower shall be entitled to
              make such deduction or withholding; provided always that in any
              such case the Borrower shall furnish to the Bank forthwith
              adequate tax receipts in respect of any such deduction or
              withholding, in form and substance acceptable to the income tax
              authorities, duly completed and signed as required by said
              authorities, for the purpose of treating same as a payment on
              account of income tax payable by the Bank.

              In the event that the Borrower shall not furnish to the Bank tax
              receipt as aforementioned and/or that the income tax authorities
              will not treat any such deduction or withholding as a payment on
              account of the Bank's income tax by reason of any defect in such
              receipt, then the payment of interest under this Agreement shall
              be increased to such amount as is necessary to yield and remit to
              the Bank the principal amount of the Loan and interest at the rate
              specified in this Agreement after provision for payment of such
              Tax. The Borrower shall at the request of the Bank execute and
              deliver to the Bank such instruments as may be necessary or
              desirable to give full force and effect to such increase in the
              rate of Interest.

       9.03   All payments to be paid by the Borrower to the Bank hereunder
              shall be made only on a Banking Day, as defined herein. If any
              payment is due on a day which is not a Banking Day, such payment
              shall be made on the next succeeding Banking Day unless it would
              thereby be made in the next calendar month, in which case such
              payment will be made on the immediately preceding Banking Day.

       9.04   If any sum to be paid hereunder shall be paid by the Borrower on a
              day other than a Banking Day it shall be considered as having been
              paid on the next succeeding Banking Day.


                                      -10-
<PAGE>

10.    Collaterals

     All Collateral as such term is defined in ESH Loan Agreement shall serve
also to secure the full and punctual payments of all sums now or hereafter to
become due and payable to the Bank from the Borrower under this Agreement.

     Promptly after the Borrower shall have repaid the Loan in full and shall
have paid and repaid to the Bank any and all of the sums due to the Bank
hereunder and under all other Loan Documents (as defined in ESH Loan Agreement),
and provided any and all of the sums due to the Bank under documents signed
between the Borrower and the Bank shall have been paid to the Bank in full, the
Bank shall release the Liens over the Collateral. Notwithstanding the above, the
Bank will release the Liens over the Collateral before any and all amounts were
so paid immediately at the request of the Borrower, provided the Borrower have
deposited and/or caused to be deposited with the Bank and charged and pledged in
favor of the Bank sums equal to the outstanding balance of any and all amount
due to the Bank together with all sums accrued and/or to be accrued thereon
until applied to the payment or prepayment, as requested by the Borrower, of the
said sums, according to documents signed between the Borrower and the Bank

11.    Conditions Precedent

       The obligation of the Bank to make the Loan available to the Borrower
       shall be subject to the condition that no Event of Default and/or any
       event which but for the giving of notice or the lapse of time would
       constitute such an event has occurred or be continuing and that on or
       before the Disbursement Date, the Borrower shall have delivered to the
       Bank the documents , and shall have completed all the actions listed
       hereunder to the full satisfaction of the Bank:

              (a)    Certified true copies of the resolutions of the Board of
                     Directors of the Borrower authorising the borrowing under
                     this Agreement, and providing for the persons authorised to
                     sign this Agreement and any document or instrument
                     hereunder in the name and on behalf of the Borrower, as per
                     the enclosed form.

              (b)    payment of the Compensation Fee.

              (c)    Execution and delivery by Lumenis Holdings Inc. of the
                     Subsidiary Guarantee, in form and substance satisfactory to
                     the Bank.

              (d)    Execution and delivery by Lumenis Holdings Inc. of the
                     Grantor Acknowledgment and Consent, in form and substance
                     satisfactory to the Bank.

              (e)    Execution and delivery by Lumenis Inc. of the Guarantor
                     Acknowledgment and Consent, in form and substance
                     satisfactory to the Bank.

              (f)    Execution and delivery of legal opinion of local counsel to
                     Lumenis Holdings Inc. and Lumenis Inc., in form and
                     substance satisfactory to the Bank.

12.    Representations and Warranties

       12.01  In addition to the representations of the Borrower under the
              Letter of Undertaking, the Borrower represents and warrants to the
              Bank in relation to the Borrower that:


                                      -11-
<PAGE>

              (a)    the Borrower is a public company duly incorporated and
                     validly existing under the laws of the State of Israel and
                     has the corporate power and authority to own its assets and
                     conduct its business as it is now being conducted.

              (b)    the Borrower has the full power, corporate authority and
                     legal right to enter into, exercise its rights and perform
                     its obligations under this Agreement;

              (c)    all necessary consents and authorities for the Borrower to
                     enter into and perform its obligations under this Agreement
                     have been obtained and no further consents or authorities
                     are necessary;

              (d)    the obligations of the Borrower under this Agreement, and
                     the obligations of the Borrower under all of the other
                     Security Documents executed by the Borrower are legal,
                     valid, binding and enforceable against the Borrower in
                     accordance with their terms, except as enforceability may
                     be limited by applicable bankruptcy, insolvency,
                     reorganization, moratorium or similar laws affecting the
                     enforcement of creditors' rights.

              (e)    the execution, delivery and performance by the Borrower of
                     its obligations assumed by it under this Agreement, and the
                     use of the proceeds of the Loan for the purposes set forth
                     herein, will not (i) violate any existing law, regulation
                     or authorisation to which the Borrower is subject (or, if
                     any action is required under any such law, regulation or
                     authorization, it will not have a material adverse effect
                     on the Borrower or result in the creation of Lien upon any
                     of the properties or assets of the Borrower or any of the
                     Subsidiaries), (ii) result in any breach of or default
                     under any material agreement or other instrument to which
                     the Borrower is a party or is subject, or if such breach or
                     default has occurred under such agreement or instrument, it
                     will not have a material adverse effect on the Borrower, or
                     (iii) violate any provision of the Borrower's Memorandum
                     and Articles of Association or other constituent documents;

              (f)    No action, litigation, arbitration or administrative
                     proceeding is currently pending, or, to the knowledge of
                     the Borrower threatened in writing against the Borrower
                     which could have a material adverse effect on its ability
                     to perform its obligations under this Agreement, except as
                     disclosed with Borrower's filings with the Securities and
                     Exchange Commission;

              (g)    no event has occurred, and is continuing that constitutes,
                     or that after the giving of notice or the lapse of time or
                     both, would constitute an Event of Default.

              (h)    Borrower has not granted any Lien over all or any part of
                     the present or future assets or revenues of the Borrower,
                     except for Liens permitted


                                      -12-
<PAGE>

                     hereunder or under the documents signed between the
                     Borrower and the Bank.

13.    Undertakings

       13.01  In addition to the undertakings of the Borrower under the Letter
              of Undertaking, the Borrower undertakes with the Bank that so long
              as any moneys are owing under this Agreement it will

              (i)    not to purchase any assets unless such purchase is made in
                     the ordinary course of the business of the Borrower or
                     against allotment of shares in the Borrower.

              (ii)   furnish the Bank with periodic financial statements, books
                     of account and other authorities and materials in relation
                     to the state of its affairs, as stated in Section 4 (j) of
                     the Letter of Undertaking.

       13.02  The Borrower undertakes with the Bank that, from the date of this
              Agreement and so long as any moneys are owing under this
              Agreement, without the prior written consent of the Bank:-

              (a)    it will retain in its consolidated financial statements the
                     financial ratios as stated herein:

                     1)     The ratio between the total debt to the Bank of the
                            Borrower and\or any of its Subsidiaries including
                            debt arising of this Loan Agreement divided by the
                            EBITDA will not be more than 3 (three).

                            For the purpose hereof, "EBITDA' shall mean, for any
                            calendar year, the net income, less interest income
                            and profits of an extraordinary , unusual or
                            nonrecurring nature, plus the sum of interest
                            expenses, taxes, depreciation, charges or losses of
                            any extraordinary, unusual or nonrecurring nature,
                            amortisation and all other non-cash charges as
                            evidenced by the audited financial statement of the
                            Borrower for the last four Quarters.

                     All the terms used in this section shall be interpreted
                     according to generally accepted accounting principles in
                     the United States of America from time to time.

14.    Events of Default

       In the case of the occurrence of, and during the continuance of, any of
the following events for any reason whatsoever, and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation of
law or pursuant to or in compliance with any judgement, decree or order of any
court or any order, rule or regulation of any governmental body or otherwise
(each herein sometimes called an "Event of Default"):


                                      -13-
<PAGE>

14.0114.01.1  Any representation or warranty made herein or in any certificate
              hereafter delivered to the Bank pursuant to this Agreement, or any
              other document signed by the Borrower in favor of the Bank shall
              prove to have been false or misleading in any material respect
              when made; provided, however, that with respect to circumstances
              that do not affect the validity, legality or enforceability of
              this Agreement, the circumstances to which such representation or
              warranty relates, if capable of being corrected so that such
              representation or warranty shall become correct again, shall not
              have been corrected until the earlier of 7 (seven) days from
              receipt of the Bank's notice or 7 (seven) days from the date upon
              the Borrower has become aware thereof; or

     14.01.2  Any default shall occur in the payment of principal of or
              interest under this Agreement, as and when the same shall become
              due and payable, whether at the due date thereof, by acceleration,
              or otherwise, and such default is not remedied until the later of
              30 (thirty) days from the due date of the respective sum or 7
              (seven) days from the date of Borrower's receipt of the Bank's
              notice to that effect; or

     14.01.3  Any default shall occur in the due observance or performance by
              the Borrower or any Material Subsidiary of any other covenant,
              agreement or condition contained herein or in other document
              signed by the Borrower and\or any Material Subsidiary in favor of
              the Bank, and such default, if capable of being cured, is not
              remedied until the later of 45 (forty five) days from the due date
              of the respective default or 14 (fourteen) days from the date of
              Borrower's receipt of the Bank's notice to that effect; or

     14.01.4  The Borrower, or any Material Subsidiary shall suspend or
              discontinue its business other than pursuant to a Permitted
              Restructure, or (ii) the Borrower or any Material Subsidiary shall
              call a meeting of its creditors for the purpose of postponing or
              adjusting its liabilities or seeking an arrangement with its
              creditors, shall make an assignment for the benefit of creditors
              or a composition with creditors, shall be unable or admit in
              writing its inability to pay its debts generally as they mature,
              shall generally not pay its debts when they are due, shall file a
              petition in bankruptcy, shall become insolvent (howsoever such
              insolvency may be evidenced), shall suffer an order for relief to
              be entered against it under any bankruptcy law which shall remain
              undismissed or unstayed for a period of 60 (sixty) days or more,
              shall petition or apply to any tribunal for the appointment of any
              receiver, custodian, liquidator or trustee of or for it or any
              substantial part of its property or other assets or shall commence
              any proceeding relating to it under any bankruptcy,
              reorganization, arrangement, readjustment of debt, receivership,
              dissolution or liquidation law or statute of any jurisdiction,
              whether now or hereafter in effect; or there shall be commenced
              against the Borrower or any Material Subsidiary any such
              proceeding which shall remain undismissed or unstayed for a period
              of 60 (sixty) days or more; or the Borrower or any of its


                                      -14-
<PAGE>

              Subsidiaries shall take any action for the purpose of effecting
              any of the foregoing; or

     14.01.5  Any order, judgment or decree shall be entered in any ex parte
              proceeding against the Borrower or any Material Subsidiary
              decreeing the dissolution of the Borrower or any of its
              Subsidiaries and such order, judgment or decree shall remain
              undischarged or unstayed for a period in excess of 60 (sixty)
              days; or

     14.01.6  Any Loan Document as such term is defined in the ESH Loan
              Agreement, shall become invalid or unenforceable, in whole or in
              part, and such unenforceability persists for a period of 30
              (thirty) days, or any default or event of default shall have
              occurred thereunder and such default persists for more than the
              period of grace, if any, specified therefor; or (A) any of the
              collaterals specified in Section 10 above shall cease for any
              reason to be in full force and effect, or the Borrower or any
              Material Subsidiary shall so assert, (B) any of the collaterals
              specified in Section 10 to this Agreement shall cease to be
              enforceable and of the same effect and priority purported to be
              created thereby;

     14.01.7  Any default (unless duly waived in writing by the obligee) shall
              occur with respect to any permitted Indebtedness of the Borrower
              or any Material Subsidiary for or relating to borrowed money
              (including, without limitation, for the deferred purchase price of
              property or for the payment of rent under any lease), or under any
              agreement under which any evidence of Indebtedness may be issued
              by the Borrower and such default shall continue for more than the
              period of grace, if any, specified therein, if the effect of such
              default is to accelerate the maturity of such Indebtedness or to
              permit the holder thereof, or any trustee, to cause the same to
              become due prior to its stated maturity or if any such
              Indebtedness shall not be paid when due (after giving effect to
              any grace period and other than Indebtedness contested in good
              faith), and as long as such default is continuing and involves
              liability in excess of US$500,000; or

     14.01.8  Final judgment for the payment of money in excess of $500,000 (to
              the extent not covered by insurance or bond) shall be rendered by
              a court of record against the Borrower or any Material Subsidiary,
              and the Borrower or the Material Subsidiary shall not discharge
              the same or provide for its discharge in accordance with its
              terms, or procure a stay of execution thereof within 30 (thirty)
              days from the date of entry thereof and within such period of 30
              (thirty) days, or such longer period during which execution of
              such judgment shall have been stayed, appeal therefrom and cause
              the execution thereof to be stayed during such appeal; or

     14.01.9  The Borrower or any of its Subsidiaries shall be in default under
              any other obligation to Bank Hapoalim B.M., including its New York
              Branches, and such default persists for more than the period of
              grace, if any, specified therefor, and as long as such default is
              continuing; or


                                      -15-
<PAGE>

    14.01.10  the Bank in its sole discretion considers that a material adverse
              change in the financial or business condition of the Borrower
              shall have occurred;

    14.01.11  Any of the documents for the Banking Services shall become invalid
              or unenforceable, in whole or in part, and such unenforceability
              persists for a period of 30 (thirty) days, or any default or event
              of default shall have occurred thereunder, and such default
              persists for more than the period of grace, if any, specified
              therefor;

    14.01.12  any default occurs under the Letter of Undertaking and such
              default persists for more than the period of grace, if any,
              specified therefor, and as long as such default is continuing;

       14.02  The Bank may, without prejudice to any of its other rights, at any
              time after the happening of an Event of Default, so long as the
              same is continuing, by notice to the Borrower declare that:

              (a)    the Loan and all interest accrued and all other sums
                     payable under this Agreement have become due and payable
                     whereupon the same shall, immediately or in accordance with
                     such notice, become due and payable; and/or

              (b)    the Loan and all other sums payable under this Agreement
                     shall bear interest at the rate specified in Clause 6 as if
                     such sums had not been paid on due date, whereupon interest
                     shall, immediately or in accordance with the terms of such
                     notice, become due and payable.

       14.03  Without prejudice to any of its other rights upon the happening of
              an Event of Default, after an Event of Default shall have occurred
              and as long as the same is continuing, the Bank shall have a lien
              on all monies, securities, claims, goods and other property,
              assets or rights of the Borrower held by the Bank, until payment
              in full of the Loan and all other amounts owing to the Bank
              hereunder provided such right does not contravene with any of the
              terms specified in the Security Documents or other documents
              signed between the Borrower and the Bank. The Bank shall notify
              the Borrower forthwith upon the exercise or purported exercise of
              any right of lien giving full details in relation thereto.

       14.04  Notwithstanding Section 6 of the Companies Law 5759-1999 ,the Bank
              hereby agrees that in any Event of Default (as such term is
              defined under this Agreement) it shall have no claim , demand or
              any recourse to the assets and rights of any of the shareholders
              of the Borrower.


                                      -16-
<PAGE>


15.    Unlawfulness, Substitute Basis

       15.01  This Agreement has been made in accordance with legal, regulatory,
              fiscal and monetary measures currently in force and in accordance
              with current market conditions. If the making or the continuation
              of the Loan by the Bank has become unlawful and the Bank is
              required to reduce the volume of its loans due to any change,
              after the date of this Agreement, in any applicable law or
              governmental regulation or order or in any requirement of any
              monetary authority directed to Israeli commercial banks in general
              , or in the interpretation made by any governmental or other
              fiscal or monetary authority charged with such interpretation
              after the date hereof and directed to Israeli banks in general of
              any of the same, then and in any such event the Bank may give
              notice to the Borrower and the Borrower agrees to prepay the full
              amount then outstanding as well as interest accrued thereon within
              90 (ninety) days or at the expire of the then current Interest
              Period whichever comes first but not less than within 30 ( thirty)
              days.

       15.02  (a)    If at any time subsequent to the date hereof by reason of
                     changes affecting the Eurodollar Interbank Market, the Bank
                     is unable, due to circumstances beyond its control, to
                     determine the LIBOR, or there shall be no objective
                     possibility for the Bank to refinance itself in United
                     States Dollars in respect of the then outstanding balance
                     of the principal amount of the Loan, then and in any such
                     event the Bank shall give notice to the Borrower to that
                     effect.

              (b)    The Bank shall then offer the Borrower an alternative basis
                     (the "Substitute Basis") for the continuation of the Loan.
                     The Substitute Basis may include alternative interest
                     periods, alternative currencies or alternative rates of
                     interest taking into account the outstanding balance of the
                     principal amount of the Loan. The Substitute Basis shall be
                     binding upon the Borrower and shall take effect in
                     accordance with its terms from the date specified in the
                     Bank's notice.

              (c)    If the Borrower determines that it does not wish to
                     continue to borrow the Loan or under the Substitute Basis
                     it shall so notify the Bank within 10 days of receipt of
                     the Bank's notice specifying such Substitute Basis
                     whereupon the outstanding balance of the principal amount
                     of the Loan coupled with interest accrued and accruing
                     thereon at a rate prevailing during the last Interest
                     Period in respect of which the LIBOR and the rate of the
                     Interest has been determined shall thereupon become
                     immediately due owing and payable.

              (d)    The Bank represents that it is not aware of any
                     circumstances or threats at the date hereof which might
                     cause the making or the continuation of the Loan by the
                     Bank to become impracticable or unlawful or which makes the
                     Bank unable to determine the LIBOR or to refinance itself
                     in Dollars.


                                      -17-
<PAGE>

16.    Set-Off and Application of Payments

       16.01  The Borrower hereby irrevocably authorises the Bank to apply any
              moneys standing to the credit of any account of the Borrower with
              the Bank at any of its branches (including such accounts held by
              the Borrower jointly or severally with other parties) in or
              towards satisfaction of any sum not paid on its due date by the
              Borrower to the Bank under this Agreement provided such sum is due
              to the Bank.

              For this purpose the Bank is authorised to purchase with the
              moneys standing to the credit of such account such other
              currencies as may be necessary to effect such application. The
              Bank shall not be obliged to exercise any right given to it by
              this Clause. The Bank shall notify the Borrower forthwith upon the
              exercise or purported exercise of any right of set-off giving full
              details in relation thereto.

       16.02  All moneys held or received by the Bank for or on account of the
              Borrower, whether hereunder, pursuant to any of the Security
              Documents or otherwise, notwithstanding that such monies may have
              been intended by the Borrower or any third party to be
              appropriated for or on account of any other amount, may be applied
              by the Bank to any amount owed by the Borrower under this
              Agreement and not paid on its due date , and if so applied, shall
              be applied in the following manner:

              (i)    first, in payment to the Bank of all costs, charges or
                     expenses, inter alia, those incurred by the Bank in
                     enforcing its rights hereunder or under any of the Security
                     Documents;

              (ii)   secondly, in or towards Interest/Default Interest owing in
                     respect of the Loan;

              (iii)  thirdly, to prepayment of instalments of principal on
                     account of the Loan in the inverse order of their maturity;

              The Bank shall notify the Borrower forthwith upon the exercise or
              purported exercise of any right given to it by this Clause, giving
              full details in relation thereto

17.    The Borrower's Duty to Notify

       The Borrower hereby undertakes to notify the Bank immediately:

              (a)    of any dispute of right to any security given or which may
                     be given to the Bank pursuant hereto or in connection
                     herewith

              (b)    of any of the events enumerated in Clause 14 above.


                                      -18-
<PAGE>

              (c)    of any change of address.

18.    Compensation for Broken Funding

              If the Loan or any part thereof or any interest thereon is for any
              reason whatsoever repaid, paid or recovered by the Bank under any
              security or otherwise, on any day other than the agreed date of
              payment, the Borrower shall upon demand pay to the Bank such
              amount or amounts as may be necessary to compensate the Bank for
              any actual loss incurred by it on account of funds borrowed in
              order to make, fund or maintain the Loan with respect to which
              repayment, payment or recovery is made and or any loss of profit
              caused thereby. The Bank shall however exercise its best
              endeavours to mitigate any such losses.

              For the avoidance of doubt if the Borrower effects payments or
              prepayments in full compliance with the provisions of Clauses
              4,,7,8 or 15 hereunder, the Borrower shall not be required to pay
              any amount under this Clause.

19.    Remedies and Waivers

       19.01  No delay or omission of the Bank in exercising any right, power,
              privilege or remedy pursuant to this Agreement or any Security
              Document shall impair such right, power, privilege or remedy or be
              construed as a waiver thereof nor shall any single or partial
              exercise of any such right, power, privilege or remedy preclude
              any other or further exercise thereof or the exercise of any other
              power, right or remedy.

       19.02  Unless otherwise agreed, the rights and remedies of the Bank
              provided in the Agreement and each Security Document are
              cumulative and not exclusive of any other rights or remedies
              provided by law.

20.    Assignment

       The Bank may at any time at its own discretion and without the Borrower's
       consent being required, assign all of its rights in relation to the Loan
       and arising from this Agreement, including the securities given or to be
       given, to any company in the Bank's Group, which is a banking institution
       registered according to the laws of the State of Israel and any such
       assignee may also reassign the said right as aforesaid within the Bank's
       Group without any further consent being required from the Borrower. Such
       assignment may be effected in any way which the Bank or any subsequent
       assignor deems fit provided however that at any time only one entity will
       be an assignee and provided that the Borrower's rights under this
       Agreement will not be prejudiced as a consequence of such an assignment.
       The Bank shall notify the Borrower of such an assignment promptly upon
       the execution of the assignment and the assignee shall assure the
       Borrower that it has assumed all rights and obligations under this
       Agreement.


                                      -19-
<PAGE>

       The "Bank's Group "means any company which the Bank possesses 51% or more
       of its outstanding share capital.

       The Borrower may not assign or transfer any of its rights or obligations
       under this Agreement without the prior written consent of the Bank which
       will not be unreasonably withheld.

21.    Administration of the Loan

       The Bank may administer the Loan or any part thereof by booking same with
       any of its branches, whether in Israel or abroad without prejudice to the
       Borrower and as long as such administration does not affect the Borrower.
       The Bank may at any time and from time to time at its own discretion and
       without any consent being required from the Borrower, transfer the
       administration of the Loan or any part thereof from one branch of the
       Bank to another, whether in Israel or abroad without prejudice to the
       Borrower and as long as such administration does not affect the Borrower.

22.    Disclosure of Information

       Any branch of the Bank administering the Loan may disclose to the Head
       Office of the Bank, ,or to any assignee according to Clause 20 above , or
       to the Bank of Israel, the Examiner of Bank, the Controller of Foreign
       Exchange or any person acting under their authority or to any other
       regulatory authority having jurisdiction over the Bank or over the Head
       Office of the Bank or to the Head Office of the Bank for delivery by the
       latter to any such regulatory authorities, such information about the
       Borrower, or the Loan as may be required by such regulatory authorities
       or as the branch or the Head Office of the Bank may deem appropriate,
       provided that upon the disclosure of information to any person who/which
       is not a regulatory authority such person will confirm to the Bank that
       such information will be treated in confidence.

23.    Expenses

       All of the expenses in stamping this Agreement, (including any interest
       and/or fines for late stamping), the registration of the Security
       Documents and all and any expenses involved in the enforcement thereof or
       in the realisation of the collaterals for the enforcement thereof, if
       interference by court is needed, including fees of the Bank's advocates,
       shall be paid by the Borrower to the Bank upon the Bank's first
       demand.and if not paid accordingly such sum shall bear Default Interest
       at the rate prescribed in Section 6 to this Agreement..

24.    Additional Provisions

       24.01  The Borrower hereby confirms that the Bank's books, accounts and
              entries shall be prima facie evidence against the Borrower in all
              their particulars.


                                      -20-
<PAGE>

       24.02  The Borrower hereby confirms receipt of the Bank's notification
              that according to the Protection of Privacy Law, 5741-1981:

              (i)    All the particulars furnished or which may be furnished by
                     the Borrower to the Bank may be used by the Bank in the
                     normal course of its operations at its own discretion
                     provided however that the Bank shall not disclose such
                     information except as provided in this Agreement.

              (ii)   All the particulars furnished or which may be furnished by
                     the Borrower to the Bank shall be stored in keeping with
                     the Bank's requirements from time to time in data bases of
                     the Bank and/or of suppliers to the Bank from time to time
                     of computer and data processing and warehousing services;

              and the Borrower hereby confirms its agreement thereto.

25     Notices

       25.01  Each communication to be made under this agreement shall be made
              in writing and, unless otherwise stated, may be made also by telex
              or facsimile transmission.

       25.02  Each communication or document to be made or delivered by one
              person to another pursuant to this Agreement shall (unless that
              other party has by fifteen (15) days' written notice specified
              another address) be made or delivered to that party, addressed as
              follows:

              (i)    if to the Borrower at:-
                     Yokneam Industrial Park
                     P.O.B. 240
                     Yokneam 20692
                     Israel
                     Fax No: 04-9599070
                     Att: Chief Executive Officer

              (ii)   if to the Bank at:-
                     Bank Hapoalim B.M
                     Head Office
                     41 Rothschild Boulevard
                     Tel-Aviv 66883
                     Fax no. 03-569-5699
                     Att: Corporate Division, Industrial Sector, Ms. Lea Landau

       and shall be deemed to have been made or delivered the next Banking Day
       after dispatch (in the case of any communication made by telex or any
       form of facsimile transmission) or (in the case of any communication made
       by letter) the next Banking Day after being physically left at that
       address.


                                      -21-
<PAGE>

26.    Governing Law and Jurisdiction

       (a)    This Agreement shall be governed by and construed in accordance
              with the laws of the State of Israel.

       (b)    For the purpose of this Agreement the exclusive place of
              jurisdiction shall be the competent courts of law in Tel
              Aviv-Jaffa. The Borrower hereby irrevocably submits to the
              jurisdiction of these courts.

27.    Currency Indemnity

       The Borrower agrees to indemnify the Bank against any loss incurred by it
       as a result of any judgement or order being given or made for the payment
       of any amount due under this Agreement and of such judgement or order
       being expressed in a currency other than the currency in which such
       amount is payable and as a result of any variation having occurred in the
       rates of exchange between the date on which any such amount becomes due
       under this Agreement and the date of actual payment thereof. The
       foregoing indemnity shall constitute a separate and independent
       obligation of the Borrower and shall apply irrespective of any indulgence
       granted to the Borrower from time to time and shall continue in full
       force and effect notwithstanding any such judgement or order.


                                      -22-
<PAGE>


28.    Severability

       If at any time any provision of this Agreement is or becomes invalid,
       illegal or unenforceable in any respect under the laws of the State of
       Israel neither the legality, validity or the enforceability of the
       remaining provisions hereof shall in any way be affected or impaired
       thereby.

In Witness Whereof the Borrower and the Bank have caused this Agreement to be
duly executed and delivered as of March 26, 2002



/s/ Yacha Sutton                           /s/ Lea Landau  /s/ Liora Ben-Ami
-------------------------                  ---------------------------------
Lumenis Ltd.                               Bank Hapoalim B.M.

By: Yacha Sutton                           By: Lea Landau
                                               Liora Ben-Ami


                                      -23-
<PAGE>

                                  Schedule "A"

                              DISBURSEMENT REQUEST

                                                             Date: _____________

To: Bank Hapoalim B.M
     Tel Aviv

Dear Sirs,




                                      -24-